EXHIBIT 8.1
[MULDOON, MURPHY & FAUCETTE LLP LETTERHEAD]
February 18, 2000
Provident Bankshares Corporation
114 East Lexington Street
Baltimore, Maryland 21202
Re: Provident Bankshares Corporation
Provident Trust II
Registration Statement on Form S-3
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Gentlemen:
We have acted as special counsel for Provident Bankshares Corporation, a
Maryland corporation (the "Company"), and Provident Trust II (the "Trust"), a
statutory business trust created under the laws of Delaware, in connection with
the above-captioned registration statement on Form S-3, initially filed with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Act"), on February 18, 2000 (such registration
statement, as amended, being hereinafter referred to as the "Registration
Statement"), for the purpose of registering the Preferred Securities issued by
the Trust and the Subordinated Debentures issued by the Company to the Trust in
connection with such issuance of the Preferred Securities. All capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Registration Statement.
In rendering this opinion, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of (i) the certificate of trust
(the "Certificate of Trust") filed by the Trust with the Secretary of State of
the State of Delaware on February 11, 2000; (ii) the Declaration of Trust, dated
as of February 11, 2000, with respect to the Trust; (iii) the form of the
Amended and Restated Declaration of Trust with respect to the Trust; (iv) the
form of the Preferred Securities of the Trust; (v) the form of Guarantee between
the Company and Bankers Trust Company, as trustee; (vi) the form of Subordinated
Debentures; and (vii) the form of the indenture (the "Indenture") between the
Company and Bankers Trust Company, as trustee, in each case in the form filed as
an exhibit to the Registration Statement. We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates, and records as we have deemed necessary or appropriate
for purposes of rendering the opinions set forth herein.
Provident Bankshares Corporation
February 18, 2000
Page 2
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. In addition, we have assumed that the Amended and
Restated Trust Agreement, the Preferred Securities, the Guarantee, the
Subordinated Debentures and the Indenture when executed, will be executed in
substantially the form reviewed by us and that the terms of the Subordinated
Debentures when established in conformity with the Indenture will not violate
any applicable law. As to any facts material to the opinions expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representations of officers, trustees, and other
representatives of the Company, the Trust and others.
We hereby confirm that, although the discussion set forth under the heading
"Certain Federal Income Tax Consequences" in the form of Prospectus for the
offering of Preferred Securities constituting a part of the Registration
Statement ("Prospectus") does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership and disposition of
Preferred Securities, in our opinion, such discussion constitutes, in all
material respects, a fair and accurate summary, in general terms, of the United
States federal income tax consequences of the purchase, ownership and
disposition of the Preferred Securities, based upon current laws as they relate
to holders described therein. It is possible that contrary positions with
regard to the purchase, ownership and disposition of the Preferred Securities
may be taken by the Internal Revenue Service and that a court may agree with
such contrary positions.
Additionally, based upon the facts, assumptions and representations set
forth or referred to herein, and the accuracy of such facts, assumptions and
representations as of the date hereof, it is our opinion that the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, each holder of
Preferred Securities will be treated as owning an undivided beneficial interest
in the Subordinated Debentures.
The opinions expressed in this letter are based on the Internal Revenue
Code of 1986, as amended, the Income Tax Regulations promulgated by the Treasury
Department thereunder and judicial authority reported as of the date hereof. We
have also considered the position of the Internal Revenue Service (the
"Service") reflected in published and private rulings. There can be no
assurances that future legislation or administrative changes, court decisions or
Service Interpretations would not significantly modify the statements or
opinions expressed herein.
Provident Bankshares Corporation
February 18, 2000
Page 3
Our opinion is limited to those federal income tax issues specifically
considered herein and is addressed to and is only for the benefit of the Company
and the Trust in connection with the filing of the Registration Statement and,
except as set forth below, is not to be used, circulated, quoted or otherwise
referred to for any other purpose or relied upon by any other person for any
purpose without our written consent. We do not express any opinion as to any
other United States federal income issues, or any state, local or foreign tax
issues. Although the opinions herein are based upon our best interpretation of
existing sources of law and express what we believe a court would properly
conclude if presented with these issues, no assurance can be given that such
interpretations would be followed if they were to become the subject of judicial
or administrative proceedings.
We hereby consent to the use of our name under the captions "Certain
Federal Income Tax Consequences" and "Validity of Securities" in the Prospectus
and the filing of this opinion as an exhibit to the Registration Statement. In
giving this consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder. This opinion is expressed
as of the date hereof and applies only to the disclosures set forth in the
Prospectus and Registration Statement. We disclaim any undertaking to advise
you of any subsequent changes of the facts stated or assumed herein or any
subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law.
Very truly yours,
/s/ Muldoon, Murphy & Faucette LLP
MULDOON, MURPHY & FAUCETTE LLP