Exchange Agency Agreement

Exhibit 10.7
EXCHANGE AGENCY AGREEMENT


September 1, 1999


Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration


Re: USA Capital Trust I


Ladies and Gentlemen:


USABancShares, Inc., a Pennsylvania corporation, as Sponsor (the "Company"), and USA Capital Trust I, a Delaware business trust (the "Trust"), hereby appoint Wilmington Trust Company ("Wilmington Trust") to act as exchange agent (the "Exchange Agent") in connection with an exchange offer by the Company and the Trust to exchange up to $10,000,000 of the Trust's Series A 9.50% Capital Securities, liquidation amount $1,000 per Capital Security (the "Series A Capital Securities"). The terms and conditions of the exchange offer are set forth in a Preliminary Prospectus, dated May 13, 1999 (as the same may be amended or supplemented from time to time, the "Prospectus"), and in the related Letter of Transmittal, which together constitute the "Exchange Offer." The registered holders of the Capital Securities are hereinafter referred to as the "Holders." Capitalized terms used herein and not defined shall have the respective meanings described thereto in the Prospectus.


On the basis of the representations, warranties and agreements of the Company, the Trust and Wilmington Trust contained herein and subject to the terms and conditions hereof, the following sets forth the agreement among the Company, the Trust and Wilmington Trust as Exchange Agent for the Exchange Offer:


1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.


a. The Company and the Trust hereby authorize Wilmington Trust to act as Exchange Agent in connection with the Exchange Offer and Wilmington Trust agrees to act as Exchange Agent in connection with the Exchange Offer. As Exchange Agent, Wilmington Trust will perform those services as are outlined herein, including, but not limited to, accepting tenders of Series A Capital Securities, and communicating generally regarding the Exchange Offer with brokers, dealers, commercial banks, trust companies and other persons, including Holders of the Series A Capital Securities.


b. The Company and the Trust acknowledge and agree that Wilmington Trust has been retained pursuant to this Agreement to act solely as Exchange Agent in connection with the Exchange Offer, and in such capacity, Wilmington Trust shall perform such duties in good faith as are outlined herein.


c. Wilmington Trust will examine each of the Letters of Transmittal and certificates for Series A Capital Securities and any other documents delivered or mailed to Wilmington Trust by or for Holders of the Series A Capital Securities, and any book entry confirmations received by Wilmington Trust with respect to the Series A Capital Securities, to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with the instructions set forth therein and that such book entry confirmations are in due and proper form and contain the information required to be set forth therein, (ii) the Series A Capital Securities have otherwise been properly tendered, (iii) Series A Capital Securities tendered in part are tendered in liquidation amounts of $1,000 per Capital Security and that if any Series A Capital Securities are tendered for exchange in part, the untendered liquidation amount thereof is $1,000, and (iv) Holders have provided their correct Tax Identification Number or required certification. Determination of all questions as to validity, form, eligibility and acceptance for exchange of any Series A Capital Securities shall be made by the Company and the Trust, which determination shall be final and binding. In each case where the Letters of Transmittal or any other documents have been improperly completed or executed of where book-entry conformations are not in due and proper form or omit certain information, or any of the certificates for Series A Capital Securities are not in proper form for transfer or some other irregularity in connection with the tender or acceptance of the Series A Capital Securities exists, Wilmington Trust will endeavor, upon request of the Company or the Trust, to advise the tendering Holders of the irregularity and to take any other action as the Company or the Trust may request to cause such irregularity to be corrected. Notwithstanding the above, Wilmington Trust shall not be under any duty to give any notification of any irregularities in tenders or incur any liability for failure to give any such notification.


d. With the approval of the Trust and the President, any Senior Vice President, any Executive Vice President, any Vice President or the Treasurer or any Assistant Treasurer of the Company, (such approval, if given orally, to be confirmed in writing) or any other party designated by any such officer, Wilmington Trust is authorized to waive any irregularities in connection with any tender of Series A Capital Securities pursuant to the Exchange Offer.


e. Tenders of Series A Capital Securities may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer" and Series A Capital Securities shall be considered properly tendered only when tendered in accordance with such procedures set forth therein. Notwithstanding the provisions of this paragraph, Series A Capital Securities which the Trust and the President, any Senior Vice President, any Executive Vice President, any Vice President or the Treasurer, any Assistant Treasurer or any other designated officer of the Company, shall approve (such approval, if given orally, to be confirmed in writing) as having been properly tendered shall be considered to be properly tendered.


f. Wilmington Trust shall advise the Company and the Trust with respect to any Series



A Capital Securities received as soon as possible after 5:00 p.m., New York City time, on the Expiration Date and accept its instructions with respect to disposition of such Series A Capital Securities.


g. Wilmington Trust shall deliver certificates for Series A Capital Securities tendered in part to the transfer agent for split-up and shall return any untendered Series A Capital Securities or Series A Capital Securities which have not been accepted by the Company and the Trust to the Holders promptly after the expiration or termination of the Exchange Offer.


h. Upon acceptance by the Company and the Trust of any Series A Capital Securities duly tendered pursuant to the Exchange Offer (such acceptance if given orally, to be confirmed in writing), the Company and the Trust will cause Series B Capital Securities in exchange therefor to be issued as promptly as practicable and Wilmington Trust will deliver such Series B Capital Securities on behalf of the Company and the Trust at the rate of $1,000 liquidation amount of Series B Capital Securities for each $1,000 liquidation amount of Series A Capital Securities tendered as promptly as practicable after acceptance by the Company and the Trust of the Series A Capital Securities for exchange and notice (such notice if given orally, to be confirmed in writing) of such acceptance by the Company and the Trust. Unless otherwise instructed by the Company or the Trust, Wilmington Trust shall issue Series B Capital Securities only in denominations of $1,000 or any integral multiple of $1,000 in excess thereof.


i. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and the conditions set forth in the Prospectus and the Letter of Transmittal, Series A Capital Securities tendered pursuant to the Exchange Offer may be withdrawn at any time on or prior to the Expiration Date in accordance with the terms of the Exchange Offer.


j. Notice of any decision by the Company and the Trust not to exchange any Series A Capital Securities tendered shall be given by the Company and the Trust either orally (if given orally, to be confirmed in writing) or in a written notice to Wilmington Trust.


k. If, pursuant to the Exchange Offer, the Company and the Trust do not accept for exchange all or part of the Series A Capital Securities tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer -- Conditions to the Exchange Offer" or otherwise, Wilmington Trust shall, upon notice from the Company and the Trust (such notice if given orally, to be confirmed in writing), promptly after the expiration or termination of the Exchange Offer return such certificates for unaccepted Series A Capital Securities (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in Wilmington Trust's possession, to the persons who deposit ...