UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 4, 1999
-------------------------
MBNA Corporation
--------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-10683 52-1713008
--------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Wilmington, Delaware 19884
--------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (800) 362-6255
-----------------------
--------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Item 5. Other Events
On March 2, 1998, MBNA Corporation filed a Registration Statement on
Form S-3 (File NO. 333-47179), which Registration Statement was declared
effective on April 7, 1998. On January 4, 1999, the prospectus included in
the Registration Statement was supplemented in connection with the issuance
and sale, pursuant to such prospectus as so supplemented, of 50,000,000 shares
of Common Stock. Attached hereto as Exhibit 1(h) is the underwriting
agreement with respect to the Common Stock.
Item 7. Financial Statements, Pro Forma Information and Exhibits.
The following exhibit is filed with this report:
Exhibit Number Description
- -------------- -----------
1(h) Underwriting agreement for Common Stock
MBNA CORPORATION
Common Stock, $.01 Par Value Per Share
Underwriting Agreement
January 4, 1999
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time MNBA Corporation, a Maryland corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I
to the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain shares of its common stock, $.01 par value per share (the "Shares"),
specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Firm Shares"). If specified in such Pricing Agreement,
the Company may grant to the Underwriters the right to purchase at their
election an additional number of shares, specified in such Pricing Agreement as
provided in Section 3 hereof (the "Optional Shares"). The Firm Shares and the
Optional Shares, if any, which the Underwriters elect to purchase pursuant to
Section 3 hereof are herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall be
as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to the
Underwriters of such Shares, for whom the firms designated as representatives
of the Underwriters of such Shares in the Pricing Agreement relating thereto
will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase any of the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of the
Underwriters to purchase any of the Shares shall be evidenced by the Pricing
Agreement with respect to the Designated Shares specified therein. Each
Pricing Agreement shall specify the aggregate number of the Firm Shares, the
maximum number of Optional Shares, if any, the initial public offering price of
such Firm and Optional Shares or the manner of determining such price, the
purchase price to the Underwriters of such Designated Shares, the names of the
Underwriters of such Designated Shares, the names of the Representatives of
such Underwriters, the number of such Designated Shares to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm and Optional Shares, if any, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the registration
statement and prospectus with respect thereto) the terms of such Designated
Shares. A Pricing Agreement shall be in the form of an executed writing (which
may be in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No 333-47179) (the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for each
of the other Underwriters have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed, or transmitted for filing, with the Commission (other
than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of
the Commission under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part of the
Initial Registration Statement became effective, each as amended at the time
such part of the Initial Registration Statement became effective, are
hereinafter collectively called the "Registration Statement"; the prospectus
relating to the Shares, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the date of this
Agreement, is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment to
the Initial Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable Designated
Shares in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder 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; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Shares through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares;
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of the Company's subsidiaries, other than
those in the ordinary course of business, which are material with respect to
the Company and its subsidiaries considered as one enterprise, (C) except for
regular dividends, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock and (D)
there has been no material increase in the long-term debt of the Company,
except such increases as are listed in the Pricing Agreement relating to the
Designated Securities;
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(f) Each subsidiary of the Company which is a significant subsidiary, as
defined in Rule 405 of Regulation C of the regulations promulgated under the
1933 Act (each, a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation except for MBNA America Bank, National
Association (the "Bank") and any other national bank subsidiary, each of which
has been duly organized and is validly existing as a national bank under the
laws of the United States, with power and authority (corporate and other) to
own its properties and to conduct its business as described in the Prospectus;
(g) The Company and each Significant Subsidiary has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require qualification;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable;
(i) The Shares have been duly and validly authorized, and, when the Firm
Shares are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Shares and, in the case of any
Optional Shares, pursuant to Over-allotment Options (as defined in Section 3
hereof) with respect to such Shares, such Designated Shares will be duly and
validly issued and fully paid and non-assessable; the Shares conform to the
description thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares;
(j) The issue and sale of the Shares and the compliance by the Company with
all of the provisions of this Agreement, any Pricing Agreement and each
Over-allotment Option, if any, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, other than
such conflicts, breaches, violations or defaults that would not have a material
adverse effect on the consolidated financial position, stockholders' equity (or
net assets, as the case may be) or results of operations of the Company and its
subsidiaries, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental agency or body
(including, without limitation, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency and the Federal Deposit
Insurance Corporation) having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, except such as have been, or will have
been prior to each Time of Delivery (as defined in Section 4 hereof), obtained
under the Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject, which, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders' equity (or
net assets, as the case may be) or results of operations of the Company and its
subsidiaries; and, to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
(l) Each of the Company and the Bank is in substantial compliance with, and
conducts its business in substantial conformity with, all applicable laws and
governmental regulations;
(m) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(n) The statements set forth in the Prospectus as amended or supplemented
under the caption "Description of Common Stock", insofar as they purport to
constitute a summary of the terms of the stock, and under the caption "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(o) The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(p) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes;
(q) Ernst & Young LLP, who have certified certain financial statements of
the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;
and
(r) The Company has reviewed its operations and that of its subsidiaries and
has made reasonable inquiries of any third parties with which the Company or
any of its subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem. As a result of such review, the Company
has no reason to believe, and does not believe, that the Year 2000 Problem will
have a material adverse effect on the consolidated financial position,
stockholders' equity (or net assets, as the case may be) or results of
operations of the Company and its subsidiaries or result in any material loss
or interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware or
software used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates or
time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to January
1, 2000.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Shares and authorization by the Representatives of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any Designated
Shares that the Company thereby grants to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless the Representatives and the Company otherwise agree in writing,
earlier than or later than the respective number of business days after the
date of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to be
purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives
may determine to the nearest 100 shares). The total number of Designated
Shares to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the aggregate number of Firm Shares set forth in Schedule I
to such Pricing Agreement plus the aggregate number of Optional Shares which
the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be purchased by
each Underwriter pursuant to the Pricing Agreement relating thereto, in the
form specified in such Pricing Agreement and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of immediately available funds to the
account specified by the Company to the Representatives at least forty-eight
hours in advance as specified in such Pricing Agreement, (i) with respect to
the Firm Shares, all in the manner and at the place and time and date specified
in such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by
the Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called the "Second
Time of Delivery". Each such time and date for delivery is herein called a
"Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated Shares:
(a) To prepare the Prospectus as amended and supplemented in relation to the
applicable Designated Shares in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Shares or, if applicable, such earlier time as may be required by
Rule 424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Shares and prior to any Time of Delivery for
such Shares which shall be disapproved by the Representatives for such Shares
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after any Time of Delivery for
such Shares and furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such Shares,
and during such same period to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Shares, of the suspension
of the qualification of such Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in the
event of the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Shares or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Shares for offering and sale under the
securities laws of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended or
supplemented in New York City in such quantities as the Representatives may
from time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Shares and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange
Act, to notify the Representatives and upon their request to file such document
and to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement and
continuing to and including the date 90 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially
similar to the Designated Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to
receive, common stock or any such substantially similar securities (other than
pursuant to employee stock option plans existing on, or upon the conversion of
convertible or exchangeable securities outstanding as of, the date of the
Pricing Agreement for such Designated Shares) without the prior written consent
of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the first business day
following the date of the Pricing Agreement, and the Company shall at the time
of filing either pay the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the reasonable expenses of mailing and delivering of copies thereof
to the Underwriters and dealers; (ii) the cost of printing or producing any
Agreement among Underwriters, this Agreement, any Pricing Agreement, any Blue
Sky Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection
with the qualification of the Shares for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any filing
fees incident to any required reviews by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (v) the cost of preparing
certificates for the Shares; (vi) the cost and charges of any transfer agent or
registrar or dividend disbursing agent; and (vii) all other reasonable costs
and expenses incident to the performance of its obligations hereunder and under
any Over-allotment Options which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Shares are, at
and as of each Time of Delivery for such Designated Shares, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such Designated
Shares shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a) hereof; if the
Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the first business day following the date of the Pricing Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the Representatives
such written opinion or opinions, dated each Time of Delivery for such
Designated Shares, with respect to the matters covered in paragraphs (i), (iv),
(vi), (ix), (x) and (xi) of subsection (c) below as well as such other related
matters as the Representatives may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) John W. Scheflen, Executive Vice President and General Counsel of the
Company, shall have furnished to the Representatives written opinions, dated
each Time of Delivery for such Designated Shares, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or supplemented;
(ii) Each Significant Subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, except for the Bank and any other national bank
subsidiary, which has been duly organized and is validly existing under the
laws of the United States, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus
(such counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its subsidiaries, provided that such
counsel shall state that he believes that both you and he are justified in
relying upon such opinions and certificates);
(iii) The Company and each Significant Subsidiary has been duly qualified
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require qualification, or is
subject to no material liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);
(iv) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of capital
stock of the Company (including the Designated Shares being delivered at such
Time of Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Designated Shares conform to the
description thereof in the Prospectus as amended or supplemented;
(v) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries; and to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company;
(vii) The issue and sale of the Designated Shares being delivered at such
Time of Delivery and the compliance by the Company with all of the provisions
of this Agreement and the Pricing Agreement with respect to the Designated
Shares and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound or to which
any of the property or assets of the Company is subject, other than such
conflicts, breaches, violations or defaults that would not have a material
adverse effect on the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute or any
order, rule or regulation known to such counsel of any court or governmental
agency or body (including, without limitation, the Board of Governors of the
Federal Reserve System, the Office of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation) having jurisdiction over the Company or
any of its properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Shares being delivered at
such Time of Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement, except such as have
been obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Designated Shares by the Underwriters;
(ix) The statements set forth in the Prospectus under the caption
"Description of Common Stock", insofar as they purport to constitute a summary
of the terms of the Shares, and under the captions "Dividend Limitations",
"Plan of Distribution" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(x) The Company is not an "Investment Company", as such term is defined in
the Investment Company Act;
(xi) The documents incorporated by reference in the Prospectus as amended
or supplemented (other than the financial statements related schedules and
other financial and statistical data contained therein, as to which such
counsel need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that any of
such documents, when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading; and
(xii) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements,
related schedules and other financial and statistical data contained therein,
as to which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although such counsel has not independently verified
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in subsection (ix) of
this Section 7(c), such counsel has no reason to believe that, as of the later
of its effective date or the date of filing of the Company's most recent Annual
Report on Form 10-K incorporated by reference therein, the Registration
Statement or any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements, related schedules and
other financial and statistical data contained therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its
date, the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements, related schedules and other financial and
statistical data contained therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of such
Time of Delivery, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements, related schedules and other
financial and statistical data contained therein, as to which such counsel need
express no opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and such counsel
does not know of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by reference or
described as required;
(d) Counsel for the Company satisfactory to the Representatives, which
counsel may rely as to all matters of Maryland law on the opinions given by
John W. Scheflen pursuant to Section 7(c), shall have furnished to the
Representatives its written opinions, dated each Time of Delivery for such
Designated Shares, in form and substance satisfactory to the Representatives,
to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to conduct its business as
described in the Prospectus as amended or supplemented;
(ii) All outstanding shares of the Company's common stock, including the
Designated Shares, have been duly authorized, and all outstanding shares of the
Company's common stock have been, and upon payment and delivery in accordance
with this Agreement, the Designated Shares will be, validly issued, fully paid
and non-assessable;
(iii) The Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company;
(iv) The statements set forth in the Prospectus under the caption
"Description of Common Stock", insofar as they purport to constitute a summary
of the terms of the Shares, and under the captions "Dividend Limitations",
"Plan of Distribution" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(v) The Company is not an "Investment Company", as such term is defined in
the Investment Company Act;
(vi) The documents incorporated by reference in the Prospectus as amended
or supplemented (other than the financial statements, related schedules and
other financial and statistical data contained therein, as to which such
counsel need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and
(vii) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements,
related schedules and other financial and statistical data contained therein,
as to which such counsel need express no opinion), comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; although such counsel has not independently verified
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in subsection (iv) of
this Section 7(d), such counsel has no reason to believe that, as of the later
of its effective date or the date of filing of the Company's most recent Annual
Report on Form 10-K incorporated by reference therein, the Registration
Statement or any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements, related schedules and
other financial and statistical data contained therein, as to which such
counsel need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of its
date, the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements, related schedules and other financial and
statistical data contained therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or that, as of such
Time of Delivery, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements, related schedules and other
financial and statistical data contained therein, as to which such counsel need
express no opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and such counsel does
not know of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by reference or
described as required;
(e) On the date of the Pricing Agreement for such Designated Shares and at
each Time of Delivery for such Designated Shares, the independent accountants
of the Company who have audited the consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a letter,
dated the effective date of the Registration Statement or the date of the most
recent report filed with the Commission containing consolidated financial
statements and incorporated by reference in the Registration Statement, if the
date of such report is later than such effective date, and a letter dated such
Time of Delivery, respectively, to the effect set forth in Annex II hereto, and
with respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there shall have been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there shall have
been no transactions entered into by the Company or any of the Company's
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise, (C) except for regular dividends, there shall have been no dividend
or distribution of any kind declared, paid or made by the Company on any class
of its capital stock and (D) there shall have been no material increase in the
long-term debt of the Company, except such increases as are listed in the
Pricing Agreement relating to such Securities, the effect of which, in any such
case described in Clause (A), (B), (C), or (D), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Underwriters' Securities on the terms and in the manner contemplated in the
Prospectus;
(g) On or after the date of the Pricing Agreement relating to the Designated
Shares (i) no downgrading shall have occurred in the rating accorded the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities or
preferred stock (the parties hereto acknowledge that, prior to the date hereof,
Standard & Poor's Corporation and Moody's Investors Service, Inc. have placed
the ratings of the long-term debt of the Company on watch for possible
downgrade following the announcement of the purchase by the Company of PNC
National Bank).
(h) On or after the date of the Pricing Agreement relating to the Designated
Shares there shall not have occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Firm Shares or Optional
Shares or both on the terms and in the manner contemplated in the Prospectus as
first amended or supplemented relating to the Designated Shares;
(i) The Shares at each Time of Delivery shall have been duly listed, subject
to notice of issuance, on the Exchange;
(j) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses; and
(k) The Company shall have furnished or caused to be furnished to the
Representatives at each Time of Delivery for the Designated Shares certificates
of officers of the Company satisfactory to the Representatives as to the
accuracy of the representations and warranties of the Company herein at and as
of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (f) of this Section and as to
such other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any reasonable legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter of Designated Shares through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Shares.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Shares on
the other from the offering of the Designated Shares to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Shares on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable
Designated Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Shares in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Shares and not joint.
(e) The obligations of the Company under this Section 8 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter the Representatives do not arrange for the
purchase of such Firm Shares or Optional Shares, as the case may be, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Representatives
to purchase such Shares on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting
Underwriter to purchase the number of Firm Shares or Optional Shares, as the
case may be, which such Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Shares and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Firm Shares or Optional Shares, as the case may be, which such Underwriter
agreed to purchase under such Pricing Agreement) of the Firm Shares or Optional
Shares, as the case may be, of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of Firm Shares or Optional Shares, as the case
may be, which remains unpurchased exceeds one-eleventh of the aggregate number
of the Firm Shares or Optional Shares, as the case may be, to be purchased at
the respective Time of Delivery, as referred to in subsection (b) above, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Firm Shares or Optional Shares with
respect to which such Pricing Agreement shall have been terminated except as
provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in writing,
and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Chief Financial Officer; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
MBNA CORPORATION
By: /s/ M. Scot Kaufman
---------------------------
Name: M. Scot Kaufman
Title: Executive Vice President
and Chief Financial Officer
ANNEX I
Pricing Agreement
[Names and Addresses
of Representatives]
[Date]
Ladies and Gentlemen:
MNBA Corporation, a Maryland corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
January 4, 1999, relating to the Company's Common Stock, $0.01 Par Value Per
Share (the "Underwriting Agreement"), which is attached hereto and incorporated
herein by reference, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Shares specified in Schedule II hereto (the
"Designated Shares" [consisting of Firm Shares and any Optional Shares the
Underwriters may elect to purchase]). Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and
warranty which refers to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as of the date of
the Underwriting Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Prospectus as amended or supplemented relating to the
Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated
to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Shares, in the form heretofore
delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, [(a)] the Company agrees to issue
and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto [and, (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company at the purchase price to the Underwriters set
forth in Schedule II hereto that portion of the number of Optional Shares as to
which such election shall have been exercised].
[The Company hereby grants to each of the Underwriters the right to purchase at
their election up to the number of Optional Shares set forth opposite the name
of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such
notice.]
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and one for each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
MBNA CORPORATION
By:
--------------------------
Name:
Title:
Accepted as of the date hereof:
By:
--------------------------------
SCHEDULE I
Number of Firm Maximum
Shares to be Number of
Purchased Optional
Shares to be
Repurchased
- ------------------------------------------------------------------------
[Representatives]
[Other Underwriters]
Total
SCHEDULE II
Title of Designated Shares:
Common stock, $.01 par value per share
Number of Designated Shares:
Number of Firm Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
[$ per Share] [Formula]
-----
Purchase Price by Underwriters:
[$ per Share] [Formula]
-----
[Commission Payable to Underwriters:
$ per Share in [specify same form of funds as in Specified Funds below]]
-----
Form of Designated Shares:
Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian] [the Representatives]
Specified Funds for Payment of Purchase Price:
Federal (same-day) funds
[Describe any blackout provisions with respect to the Designated Shares]
Time of Delivery:
a.m. (New York City time), [specify date]
-----
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, prospective
financial statements and/or pro forma financial information examined) by them
and included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial statements derived
from audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have been
[separately] furnished to the representatives of the Underwriters (the
"Representatives") [and are attached hereto];
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or included in the
Company's quarterly reports on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] [are attached hereto]; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as
a result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of items 301, 302, 402 and 503(d), respectively, of Regulation S-
K;
(vi) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries 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) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with the
basis for the audited consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus or
included or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Prospectus and referred to in Clause
(B) were not determined on a basis substantially consistent with the basis for
the audited financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(E) 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 (other
than issuances of capital stock upon exercise of options which were outstanding
on the date of the latest balance sheet included or incorporated by reference
in the Prospectus) or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated net current
assets or net assets or other items reasonably specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements included
or incorporated by reference in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net income
or other items reasonably specified by the Representatives, or any increases in
any items reasonably specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of,
or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
Pricing Agreement
Goldman, Sachs & Co.
125 Broad Street
New York, New York 10004.
January 4, 1999
Ladies and Gentlemen:
MNBA Corporation, a Maryland corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
January 4, 1999, relating to the Company's Common Stock, $0.01 Par Value Per
Share (the "Underwriting Agreement"), which is attached hereto and incorporated
herein by reference, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Shares specified in Schedule II hereto (the
"Designated Shares"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Shares which are the
subject of this Pricing Agreement. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Shares pursuant to Section
12 of the Underwriting Agreement and the address of the Representatives
referred to in such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus,
as the case may be, relating to the Designated Shares, in the form heretofore
delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us four (4) counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination, upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
MBNA CORPORATION
By: /s/ M. Scot Kaufman
---------------------------
Name: M. Scot Kaufman
Title: Executive Vice President
and Chief Financial Officer
Accepted as of the date hereof:
/s/ Goldman, Sachs & Co.
- ------------------------
Goldman, Sachs & Co.
SCHEDULE I
Number of Firm Maximum
Shares to be Number of
Purchased Optional
Shares to be
Purchased
- -----------------------------------------------------------------------
Goldman, Sachs & Co. 50,000,000 N/A
Total 50,000,000 N/A
SCHEDULE II
Title of Designated Shares:
Common stock, $.01 par value per share
Number of Designated Shares:
50,000,000
Number of Firm Shares:
50,000,000
Maximum Number of Optional Shares:
N/A
Initial Offering Price to Public:
$24.00 per Share
Purchase Price by Underwriters:
$23.50 per Share
Commission Payable to Underwriters:
$0.50 per Share, plus normal brokerage commissions received from purchasers
of the Shares in amounts agreed with such purchasers
Form of Designated Shares:
Definitive form, to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company
or its designated custodian
Specified Funds for Payment of Purchase Price:
Wire transfer in immediately available funds
Describe any blackout provisions with respect to the Designated Shares
During the period beginning from the date of this Pricing Agreement and
continuing to and including the date 90 days after the date of the Prospectus
Supplement, the Company agrees not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Designated Shares, including
but not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, common stock or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion of convertible or
exchangeable securities outstanding as of, the date of the Pricing Agreement
for such Designated Shares) without the prior written consent of the
Representatives.
Time of Delivery:
9:00 a.m. (New York City time), January 7, 1999
Closing Location:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Names and Addresses of Representatives:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Designated Representatives:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Address for Notices, etc.:
Goldman, Sachs & Co.
32 Old Slip
New York, New York 10005
Attention: Registration Department
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, prospective
financial statements and/or pro forma financial information examined) by them
and included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial statements derived
from audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have been
[separately] furnished to the representatives of the Underwriters (the
"Representatives") [and are attached hereto];
(iii) They have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or included in the
Company's quarterly reports on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] [are attached hereto]; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for such five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as
a result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of items 301, 302, 402 and 503(d), respectively, of Regulation S-
K;
(vi) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries 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) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with the
basis for the audited consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus or
included or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Prospectus and referred to in Clause
(B) were not determined on a basis substantially consistent with the basis for
the audited financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(E) 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 (other
than issuances of capital stock upon exercise of options which were outstanding
on the date of the latest balance sheet included or incorporated by reference
in the Prospectus) or any increase in the consolidated long-term debt of the
Company and its subsidiaries, or any decreases in consolidated net current
assets or net assets or other items reasonably specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements included
or incorporated by reference in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net income
or other items reasonably specified by the Representatives, or any increases in
any items reasonably specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of,
or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MBNA CORPORATION
Date: January 4, 1999 By: /s/ M. Scot Kaufman
---------------------------
M. Scot Kaufman
Executive Vice President
and Chief Financial Officer
