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) August 14, 2000
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MBNA Corporation
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(Exact name of registrant as specified in its charter)
Maryland 1-10683 52-1713008
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Wilmington, Delaware 19884
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (800) 362-6255
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(Former name or former address, if changed since last report.)
Item 5. Other Events
On August 14, 2000, MBNA Corporation ("the Corporation") and
First Union Corporation ("First Union") executed a definitive
agreement for the purchase by the Corporation of First Union's
consumer revolving credit portfolio of $5.3 billion in loans and
more than 3 million accounts, and its commercial credit card
portfolio of $215 million in loans and approximately 300,000
accounts as of June 30, 2000. The purchase price represents a
premium on the loan receivables of approximately $1 billion,
subject to adjustment. The transaction is expected to close in
late September 2000. The Corporation and First Union also
entered into agreements with terms of seven years for the
Corporation to market personal, business, corporate and
purchasing cards to First Union's 16 million Customers. The
Corporation intends to fund the acquisition from the proceeds of
the issuance of 50 million shares of common stock by MBNA
Corporation on August 14, 2000, from the securitization of loan
receivables and the issuance of senior notes.
On August 14, 2000, MBNA Corporation entered into an
underwriting agreement and pricing agreement for the sale of 50
million shares of its common stock to Goldman, Sachs & Co.
("Goldman Sachs"), for $32 per share. Goldman Sachs
is re-offering the shares to investors. The closing of the
sale is subject to satisfaction of customary closing conditions.
Attached hereto as Exhibit 1(h) is the underwriting and pricing
agreements 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
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1(h) Underwriting and pricing
agreements for common
stock
MBNA CORPORATION
Common Stock, $.01 Par Value Per Share
Underwriting Agreement
August 14, 2000
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time MBNA 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-
74919) (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, other
than documents incorporated by reference into the Prospectus
(as defined below), 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"); and
(p) 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.
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;
(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: ______________________
Name:
Title:
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 August 14, 2000, 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 Purchased
[Representation]
[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
August 14, 2000
Ladies and Gentlemen:
MBNA Corporation, a Maryland corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and
in the Underwriting Agreement, dated August 14, 2000, 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: Senior Executive Vice
President
Accepted as of the date hereof:
_______________________________
(Goldman, Sachs & Co.)
SCHEDULE I
Number of Firm Maximum
Shares to be Optional
Purchased 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
Purchase Price by Underwriters:
$32.00 per Share
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), August 18, 2000
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
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: August 14, 2000 By: /s/ Vernon H. C. Wright
-------------------------------
Vernon H. C. Wright
Executive Vice President
and Chief Corporate Finance
Officer
