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EXHIBIT 10.20
STOCK SUBSCRIPTION AGREEMENT
This STOCK SUBSCRIPTION AGREEMENT (this "Agreement") is made
and entered into as of the 27th day of December, 1996, by and among Franklin
Bancorporation, Inc., a Delaware corporation (the "Company"), Rock Creek
Corporation, a Delaware Corporation (the "Investor") and Xxxxx X. Xxxxxxxx, a
resident of the District of Columbia, ("Aburdene").
WHEREAS, the Company desires to issue and sell to the Investor 125,000
shares (the "Shares") of Common Stock, par value $0.10 per share ("Common
Stock") for the purchase price of $8.00 per share or $1,000,000 in the
aggregate (the "Purchase Price");
WHEREAS, the Investor desires to subscribe for and purchase from the
Company the Shares for the Purchase Price;
WHEREAS, Aburdene is the President and controls all of the voting
power of the Investor;
WHEREAS, Aburdene has served as a consultant to the Company in
connection with development of the Company's international private banking
operations; and
WHEREAS, the Investor desires that Aburdene serve as a director of
Franklin National Bank of Washington, D.C. ("FNB"), a wholly owned subsidiary
of the Company.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
Section 1.1 Issuance and Sale of the Shares. Subject to the
terms and conditions of this Agreement, the Investor hereby subscribes for and
agrees to purchase at the Closing (as defined below) the Shares for the
Purchase Price, and the Company agrees to issue and sell to the Investor at the
Closing the Shares for the Purchase Price.
Section 1.2 Closing. The purchase and sale of the Shares
shall be made at a closing (the "Closing") at the offices of Xxxxxx, Flyer &
Xxxxx, 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. at 1:00 p.m. on the
date that is one business day after the day on which the last of the conditions
set forth in Articles IV and V shall have been satisfied or waived, or on such
other date and/or at such other time and place as the Company and the Investor
may agree (the "Closing Date"). On the Closing Date, (i) the Company shall
deliver to the Investor one or more stock certificates representing the Shares
subscribed for by the Investor, duly registered in the name of the Investor,
and (ii) the Investor shall deliver or cause to be delivered to the Company the
Purchase Price, in cash, or by a certified or bank cashier's check, or by a
wire transfer to a bank account designated by the Company, in lawful currency
of the United States of America.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants that:
Section 2.1 Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and authority to own
its properties and to carry on its business as now conducted and as proposed to
be conducted. The Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect. "Material Adverse Effect" means any material adverse effect on the
operations, properties, or financial condition of the Company.
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Section 2.2 Authorization. The Company has the requisite
corporate power and authority to enter into, deliver and perform this Agreement
and to issue the Shares in accordance with the terms hereof. All corporate
action on the part of the Company and its officers and directors necessary for
the authorization, execution and delivery of this Agreement and the performance
of all obligations of the Company under this Agreement required to be performed
at or prior to the Closing and for the authorization, issuance and delivery of
the Shares being sold under this Agreement has been taken. This Agreement
(when duly executed and delivered by the parties hereto) shall constitute the
valid and legally binding obligation of the Company, except to the extent
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally.
Section 2.3 Validity of the Shares. The Shares, when issued,
sold and delivered in accordance with the terms of this Agreement, shall be
duly and validly issued, fully paid and nonassessable.
Section 2.4 Capitalization. The authorized capital stock of
the Company consists of 25,000,000 shares of Common Stock of which 6,347,107
shares of Common Stock were issued and outstanding as of September 30, 1996.
Except for options to purchase 641,437 shares of Common Stock issued pursuant
to the Amended and Restated Stock Option Plan, the Nondiscretionary Stock
Option Plan and certain stock option agreements, there are no outstanding
warrants, options, commitments, preemptive rights, rights to acquire or
purchase, conversion rights or demand of any character relating to the Common
Stock or other securities of the Company. The Company has furnished to the
Investor true and correct copies of the Company's Certificate of Incorporation
as in effect on the date hereof (the "Certificate of Incorporation"), and the
Company's Bylaws, as in effect on the date hereof (the "Bylaws").
Section 2.5 No Conflicts. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby or relating hereto do not and
will not (i) result in a violation of the Company's Certificate of
Incorporation or Bylaws or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Company is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and federal banking laws) applicable to the Company, or by which
any property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or governmental agency in order for it to execute, deliver or perform any of
its obligations under this Agreement or issue and sell the Shares in accordance
with the terms hereof.
Section 2.6 SEC Reports. All forms, reports, schedules,
statements and other documentation which were required to be filed by the
Company under the Securities Exchange Act since January 1, 1996 (the "SEC
Reports") have been duly and timely filed by the Company, were in compliance
with the requirements of their respective report forms and were complete and
correct in all material respects, as of the dates at which the information was
furnished. The Investor has received copies of the SEC Reports.
Section 2.7 Material Adverse Changes. Except as disclosed in
writing to the Investor prior to Closing, the Company has no knowledge of any
event or condition that would have a material adverse effect on the Company's
results of operations or financial condition for the fiscal year ending on
December 31, 1996.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR AND ABURDENE
The Investor and Aburdene represent and warrant that:
Section 3.1 Organization and Standing. The Investor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and authority to own
its properties and to carry on its business as now conducted and as proposed to
be conducted. The Investor is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary.
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Section 3.2 Authorization.
(a) The Investor has the requisite corporate
power and authority to enter into, deliver and perform this Agreement and to
purchase the Shares in accordance with the terms hereof. All corporate action
on the part of the Investor and its officers and directors necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of the Investor under this Agreement required to be performed
at or prior to the Closing and for the authorization, issuance and delivery of
the Shares being sold under this Agreement has been taken. This Agreement
(when duly executed and delivered by the parties hereto) shall constitute the
valid and legally binding obligation of the Investor, except to the extent
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally.
(b) Aburdene has full right, power, legal
capacity and authority to enter into, deliver and perform this Agreement and to
consummate the transaction contemplated hereby. This Agreement, when executed
and delivered by all parties hereto, will constitute a valid and legally
binding obligation of Aburdene, except to the extent that such enforceability
may be limited by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally.
Section 3.3 No Conflicts. The execution, delivery and
performance of this Agreement by the Investor and Aburdene and the consummation
by the Investor and Aburdene of the transactions contemplated hereby or
relating hereto do not and will not conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture or instrument to which the
Investor or Aburdene is a party, or result in a violation of any material law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Investor or Aburdene, or by
which any property or asset of the Investor or Aburdene is bound or affected.
Section 3.4 Capitalization. The authorized capital stock
of the Investor consists of 1,000 shares of common stock, par value $0.10 (the
"Investor's Stock) of which 100 shares of the Investor's Stock were issued and
outstanding as of the date of this Agreement. There are no outstanding
warrants, options, commitments, preemptive rights, rights to acquire or
purchase, conversion rights or demand of any character relating to the
Investor's Stock. The Investor has furnished to the Company true and correct
copies of the Investor's Certificate of Incorporation as in effect on the date
hereof.
Section 3.5 Investment Representations.
(a) This Agreement is entered into by the Company
with the Investor and Aburdene in reliance upon the Investor's and Aburdene's
representations to the Company that (i) the Shares to be received by the
Investor will be acquired for investment for its own account, not as a nominee
or agent, and not with a view to the sale or distribution of any part thereof
in violation of applicable Federal and state securities laws, (ii) the Investor
does not have a present intention of selling, granting participation in or
otherwise distributing the same in violation of applicable Federal and state
securities laws and (iii) the Investor is an "accredited investor" as that term
is defined in Regulation D promulgated under the Securities Act of 1933 (the
"Securities Act"). By executing this Agreement, the Investor and Aburdene
further represent that they do not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person, or to any third person, with respect to any of the Shares in violation
of applicable Federal and state securities laws.
(b) The Investor and Aburdene understand that the
Shares are not registered under the Securities Act on the basis that the sale
provided for in this Agreement and the issuance of securities hereunder is
exempt from registration under the Securities Act pursuant to Section 4(2)
thereof and regulations issued thereunder, and that the Company's reliance on
such exemption is predicated on representations of the Investor set forth
herein.
(c) The Investor represents that it has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment. The Investor further
represents that it has had access, during the course of the transaction and
prior to the Investor's purchase of the Shares, to the same kind of information
that is specified in Rule 502(b)(2)(ii) of Regulation D promulgated under the
Securities Act and that it has had, during the course of the transaction and
prior to the Investor's purchase of the Shares, the opportunity to ask
questions of and to receive answers from the Company concerning the terms and
conditions of the offering and to obtain
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additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify
the accuracy of any information furnished to it or to which it had access.
(d) The Investor and Aburdene understand that the
Shares may not be sold, transferred or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in
the absence of an effective registration statement covering the Shares or an
available exemption from registration under the Securities Act, the Shares must
be held indefinitely. The Investor represents that, in the absence of an
effective registration statement covering the Shares, it will sell, transfer or
otherwise dispose of the Shares only in a manner consistent with its
representations set forth herein.
Section 3.6 Investor Control. Aburdene is the President of the
Investor and holds exclusive voting power over all of the Investor's
outstanding capital stock. Neither the Investor, Aburdene nor any of their
Affiliates (as such term is defined pursuant to Rule 12b-2 under the Securities
Exchange Act of 1934, as amended) beneficially own any shares of Common Stock.
Aburdene has been authorized by each of the shareholders of the Investor to
execute and deliver the Escrow Agreement on their behalf.
ARTICLE IV
CONDITIONS TO OBLIGATIONS OF
THE INVESTOR AT CLOSING
The obligations of the Investor under Article I of this
Agreement are subject to the fulfillment on or before the Closing of each of
the following conditions:
Section 4.1 Representations and Warranties. The
representations, warranties and agreements of the Company contained in Article
II hereof shall be true on and as of the Closing with the same force and effect
as if they had been made at the Closing.
Section 4.2 Performance. The Company shall have
performed in all material respects all of its respective obligations and
materially complied with each and all of its respective covenants required to
be performed or complied with on or prior to the Closing, including without
limitation the execution and delivery of any agreements and undertakings
provided for in this Agreement.
Section 4.3 Qualifications. All authorizations,
approvals or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful issuance and sale of the Shares pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing.
Section 4.4 No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of the transaction contemplated
by this Agreement.
Section 4.5 Share Price. The average of the closing bid
and ask prices for the Common Stock as correctly reported in any stock
quotation report provided by the NASDAQ System of the National Association of
Securities Dealers, Inc. on the day before the Closing shall be greater than or
equal to eight dollars ($8.00) per share.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS
OF THE COMPANY AT CLOSING
The obligations of the Company under Articles I and IX of this
Agreement are subject to the fulfillment on or before the Closing of each of
the following conditions:
Section 5.1 Representations. The representations,
warranties and agreements of the Investor and Aburdene contained in Article III
hereof shall be true on and as of the Closing with the same force and effect as
if they had been made at the Closing.
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Section 5.2 Qualifications. All authorizations, approvals
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
issuance and sale of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing.
Section 5.3 Performance. The Investor and Aburdene shall
have performed in all material respects all of its respective obligations and
materially complied with each and all of its respective covenants required to
be performed or complied with on or prior to the Closing, including without
limitation the execution and delivery of any agreements and undertakings
provided for in this Agreement.
Section 5.4 No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of the transaction contemplated
by this Agreement.
Section 5.5 Escrow. Aburdene, the Investor, the Company
and the Escrow Agent shall have executed the Escrow Agreement in the form
attached as Exhibit 1 and all the Investor's Stock shall have been delivered to
the Escrow Agent thereunder.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be
terminated (as to the party electing to so terminate it) at any time prior to
the Closing:
(a) by the Investor if any of the conditions
specified in Article IV of this Agreement have not been met or waived by the
Investor pursuant to the terms of this Agreement by December 31, 1996 or at
such earlier date that it becomes apparent that any such condition can no
longer be satisfied; or
(b) by the Company if any of the conditions
specified in Article V of this Agreement have not been met or waived by it
pursuant to the terms of this Agreement by December 31, 1996 or at such earlier
date that it becomes apparent that any such condition can no longer be
satisfied.
ARTICLE VII
RESTRICTIONS UPON TRANSFER
Section 7.1 Transfer Restrictions. Except as otherwise
provided in this Agreement, the Investor shall not sell, exchange, deliver or
assign, dispose of, gift, pledge, mortgage, hypothecate or otherwise encumber,
transfer or permit to be transferred, whether voluntarily, involuntarily or by
operation of law (including, without limitation, the laws of bankruptcy,
insolvency or succession) any of the Shares.
Section 7.2 Legends; Stop Transfer.
(a) The Investor agrees that it will not make a
transfer, disposition or pledge of any of the Shares other than pursuant to an
effective registration statement under the Securities Act, unless and until (i)
the Investor shall have notified the Company of the proposed disposition and
shall have furnished the Company with a statement of the circumstances
surrounding the disposition, and (ii) at the expense of the Investor or
transferee, the Investor shall have furnished to the Company an opinion of
counsel, reasonably satisfactory to the Company, to the effect that such
transfer may be made without registration of the Shares under the Securities
Act.
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(b) The Investor acknowledges that all
certificates evidencing the Shares shall bear a legend substantially similar to
the following:
"The voluntary or involuntary encumbering, transfer or other
disposition (including, without limitation, any disposition
pursuant to the laws of bankruptcy, insolvency or succession)
of the shares of common stock evidenced by the within
certificate is restricted under the terms of the Stock
Subscription Agreement, dated December 27, 1996. A copy of
this agreement is on file at the principal office of the
company. Upon written request of any holder of this
certificate, the company shall furnish, without charge to such
holder, a copy of such agreement.
The shares of Common Stock represented by this certificate
have not been registered under the Securities Act of 1933 (the
"Securities Act") and may not be transferred unless (i) a
registration statement for the shares under the Securities Act
is in effect or (ii) the corporation has received an opinion
of counsel, which opinion is reasonably satisfactory to the
corporation, to the effect that such registration is not
required under the Securities Act or the securities laws of
any state."
(c) The certificates evidencing the Shares shall also
bear any legend necessitated by law.
(d) The Company shall make a notation regarding
the restrictions on transfer of the Shares in its stock books, and the Shares
shall be transferred on the books of the Company only if transferred or sold
pursuant to an effective registration statement under the Securities Act
covering such Shares or pursuant to and in compliance with the provisions of
this Article VII.
Section 7.3 Option.
(a) Subject to the terms and conditions set forth
herein, the Investor hereby grants to the Company an irrevocable option (the
"Option") to purchase the Shares at a price per share as set forth in Section
7.3(b).
(b) The Company (or its designee) may exercise
the Option (i) within ten (10) business days beginning one business day after
(x) the expiration or termination (by the Company or Aburdene) of the agreement
between Aburdene and the Company, dated July 17, 1996 (the "Letter Agreement"),
or (y) Aburdene or the Company has terminated his or its association with the
other, as evidenced by the termination without renewal of any consulting
agreement, employment agreement or any other agreement or understanding that
defines such association, or (ii) at any time after Aburdene no longer
exclusively controls all of the voting power of the Investor's outstanding
capital stock. The purchase price for each share of Common Stock purchased by
the Company (or its designee) pursuant to this Article VII (the "Option
Purchase Price") shall be at the Fair Market Value. For the purposes of this
Agreement, "Fair Market Value" shall mean: (A) the average of the closing bid
and asked prices for the class of Common Stock over a period of 10 consecutive
trading days ending on the third trading day prior to the date of the Option
Closing, as correctly reported in any stock quotation report provided by the
NASDAQ System of the National Association of Securities Dealers, Inc. or, if
the Common Stock is traded on an exchange, the average of the closing prices
over the same period of the sales of the class of Common Stock on all
securities exchanges on which such Common Stock may at the time be listed, or,
if there have been no sales on any such exchange in any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day; or (B) if at any time such Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
Fair Market Value will be the fair value of such Common Stock determined in
good faith by the Board of Directors of the Company.
(c) The Option Purchase Price for the Shares
acquired pursuant to the Option shall be payable in cash, or by a certified or
bank cashier's check, or by wire transfer to a bank account designated by the
Investor, in the lawful currency of the United States of America at a closing
(the "Option Closing") and shall be in the amount determined pursuant to
Section 7.3(b). At the Option Closing, the Investor shall deliver to the
Company (or its designee) a certificate or certificates representing the Shares
and the Company (or its designee) shall deliver to the Investor the Option
Purchase Price per share. The Shares shall be free and clear of all liens,
security interests, charges, encumbrances, conditional sales agreements or
other obligations relating to their sale or transfer.
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Section 7.4 Right of First Refusal.
(a) If at any time the Investor desires to sell
or otherwise transfer all or any part of the Shares pursuant to a Bona Fide
Offer (as defined below) from a third party (the "Proposed Transferee"), the
Investor shall submit a written offer (the "Offer") to the Company to sell such
shares (the "Offered Shares") to the Company (or its designee) at a price and
upon terms and conditions not less favorable than those contained in the Bona
Fide Offer. The Offer shall disclose the identity of the Proposed Transferee,
the number of Offered Shares proposed to be sold, the total number of Shares to
be sold or transferred by the Investor, the terms and conditions, including
price, of the proposed sale, and any other material facts relating to the
proposed sale. The Offer shall further state that the Company (or its
designee) may acquire, in accordance with the provisions of this Agreement, the
Offered Shares upon the terms and conditions set forth therein. "Bona Fide
Offer" shall mean a legally enforceable offer in writing, made and signed by a
bona fide third-party offeror or offerors who is a person or persons or entity
or entities that is not an Affiliate of Aburdene or the Investor and is
believed by the Investor to be financially capable of carrying out the terms of
such offer.
(b) If the Company (or its designee) desires to
purchase the Offered Shares, it shall communicate in writing, within 20 days of
the date the Offer was made, its election to purchase the Offered Shares to the
Investor.
(c) If the Company does not purchase the Offered
Shares, all, but not fewer than all, of the Offered Shares may be sold by the
Investor at any time within 45 days after the date the Offer was made. Any
such sale shall be to the Proposed Transferee, at not less than the price and
upon other terms and conditions, if any, not more favorable to the Proposed
Transferee than those specified in the Offer. The sale by the Investor must be
fully consummated within 45 days after the date the Offer; and, in the event
that such sale is not fully consummated within such period, the provisions of
this Article VII must again be complied with by the Investor before the
Investor may sell the Offered Shares.
Section 7.5 Piggyback Registrations.
(a) Right to Piggyback. Whenever Company
proposes to register or qualify for distribution by prospectus any of its
shares of Common Stock under the Securities Act (other than pursuant to a
registration under the Securities Act on Form S-4 or S-8 or any successor or
similar forms) and the registration form or prospectus to be used may be used
for the registration or qualification for distribution of the Shares (a
"Piggyback Registration"), for sale for its own account, the Company shall give
prompt written notice to the Investor of its intention to file such prospectus
and shall include in such registration or qualification the Shares with respect
to which Company has received a written request for inclusion therein from the
Investor within 15 days after the receipt of Company's notice.
(b) Piggyback Expenses. The Investor shall pay
his pro rata share of the registration expenses in all Piggyback Registrations
to the fullest extent permitted by applicable law, including any Underwriting
fees or commissions.
(c) Priority on Registrations. If a Piggyback
Registration is an underwritten registration or distribution by prospectus on
behalf of Company, and the managing underwriter advises Company in writing
(with a copy to each party hereto requesting registration or qualification for
distribution by prospectus) that marketing factors require a limitation of the
number of shares to be underwritten, Company shall include in such registration
or prospectus (a) first, the securities Company proposes to sell (b) second,
pro rata (x) Shares held by the Investor requested by Investor to be included
in such registration or prospectus and (y) other securities requested to be
included in such registration or prospectus.
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ARTICLE VIII
RESTRICTIONS UPON TRANSFER
OF THE INVESTOR'S STOCK
Section 8.1 Transfer Restrictions.
(a) So long as the Investor holds the Shares, the
Investor and Aburdene shall take all reasonable steps to assure that none of
the shareholders of the Investor sell, exchange, deliver or assign, dispose of
or gift, pledge, mortgage, hypothecate or otherwise encumber, transfer or
permit to be transferred, whether voluntarily, involuntarily or by operation of
law (including, without limitation, the laws of bankruptcy, insolvency, and
succession) any of the shares of the Investor's Stock; except for transfers
(i) to other shareholders of the Investor and (ii) to heirs of a shareholder of
the Investor through the laws of intestacy, descent and distribution, provided
any such heirs agree to be bound by the terms and conditions of this Agreement.
(b) So long as the Investor holds the Shares, the
Investor shall not issue any additional shares of the Investor's Stock or any
other class of capital stock.
(c) Aburdene shall retain voting power over all
of the outstanding Investor's Stock and all of the Investor's voting stock and
retain day-to-day control over the Investor's corporate actions. Aburdene
shall not grant any proxies with respect to the Investor's Stock or enter into
any voting trust arrangement with respect to the Investor's Stock.
(d) Neither the Investor nor Aburdene shall take
any actions in contradiction to or which are inconsistent with any of their
representations, covenants or agreements contained herein.
Section 8.2 Escrow. So long as the Investor retains ownership of
the Shares, the Investor's Stock shall be placed into escrow with Xxxxxx &
Xxxxxxx, as escrow agent, pursuant to an Escrow Agreement in the form attached
hereto as Exhibit 1. Upon the disposition by the Investor of all of the Shares
in accordance with the terms of this Agreement, the Company and Aburdene shall
issue joint written instructions to the Escrow Agent to release the Investor's
Stock to the holders thereof.
ARTICLE IX
REPRESENTATION ON THE BOARD OF DIRECTORS
The Company shall take all necessary actions to cause Aburdene
to be elected as a member of the board of directors of FNB as soon as possible
after the Closing but no later than the next regularly scheduled or special
meeting of the Board of Directors of the Company. If Aburdene is not elected
by such date, the Investor may elect to rescind its purchase of the Shares made
pursuant to this Agreement. Aburdene shall be entitled to serve as a member of
the Board of Directors of FNB until the first to occur of the following events:
(i) the expiration or termination (by the Company or Aburdene) of the Letter
Agreement, (ii) Aburdene or the Company shall have terminated his or its
association with the other, as evidenced by the termination without renewal of
any consulting agreement, employment agreement or any other agreement or
understanding that defines such association, (iii) the sale of more than 75% of
the Shares by the Investor, (iv) Aburdene no longer controls 100% of the voting
power of the Investor or (v) Aburdene shall no longer qualify to be a director
of FNB under the regulations of the Office of the Comptroller of the Currency.
Immediately after the occurrence of any of the events listed in clauses (i)
through (v) of the preceding sentence, Aburdene shall immediately resign as a
director of FNB, and any resulting positions thereof.
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ARTICLE X
MISCELLANEOUS
Section 10.1 No Waiver; Modifications in Writing. No failure
or delay on the part of the Company or the Investor in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Company or to the Investor at law
or in equity or otherwise. No waiver of or consent to any departure by the
Company from any provision of this Agreement shall be effective unless signed
in writing by the party entitled to the benefit thereof, provided that notice
of any such waiver shall be given to each party hereto as set forth below.
This Agreement sets forth the entire understanding of the parties, and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
each party. Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement, and any
consent to any departure by either party from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which made or given.
Section 10.2 Notices. All notices, demands and other
communications provided for hereunder shall be in writing, and shall be deemed
given when received, by registered or certified mail, return receipt requested,
telex, telegram, telecopy, courier service or personal delivery, addressed to:
if to the Company:
Franklin Bancorporation, Inc.
0000 X (Xxx) Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Flyer & Xxxxx, P.C.
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
if to the Investor or to Aburdene:
Rock Creek Corporation
c/o Xxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx, Esquire
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 10.3 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses regardless of the
termination of this Agreement or the failure to consummate the transactions
contemplated hereby; provided, however, that immediately upon consummation of
the Closing, the Investor shall pay all reasonable legal fees and expenses of
the Company that are in the aggregate in excess of $15,000 in connection with
the preparation, execution and delivery of this Agreement and the transactions
contemplated hereby.
Section 10.4 Execution of Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 10.5 Binding Effect: Assignment. The rights and
obligations of the parties under this Agreement may not be assigned to any
other person. Except as expressly provided in this Agreement, this Agreement
shall not be construed so as to confer any right or benefit upon any person
other than the parties to this Agreement. This Agreement shall be binding upon
and inure to the benefit of the Company and the Investor and its respective
successors and assigns.
Section 10.6 Governing Law. This agreement shall be deemed
to be a contract made under the laws of the State of Delaware and for all
purposes shall be construed in accordance with the laws of that state, without
regard to principles of conflicts of law. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the District of Columbia in any
action or proceeding arising out of or relating to this Agreement.
Section 10.7 Severability of Provisions. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
appropriate jurisdiction.
Section 10.8 Headings. The Article and Section headings used
or contained in this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement.
Section 10.9 Publicity. No party to this Agreement shall
make any press release or other public statements with respect to the
transactions contemplated hereby, except as required by applicable law or
governmental entity or by order of a court of competent jurisdiction.
Section 10.10 Gender. The use of any gender herein shall be
deemed to be or include the other genders and the use of singular herein shall
be deemed to include the plural (and vice versa), wherever appropriate.
Section 10.11 Force Majeure. Neither party shall be in
default if failure to perform any obligation hereunder is caused solely by
supervening conditions beyond that party's control, including acts of God,
civil commotions, strikes, labor disputes, and suspension of trading on the
national stock exchanges.
Section 10.12 Further Assurances. The parties hereto shall
from time to time execute and deliver all such further documents and do all
acts as the other party may reasonably require to effectively carry out the
full intent and meaning of this Agreement.
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Section 10.13 Specific Performance. Each of the parties
hereto acknowledges and agrees that in the event of any breach of this
Agreement, the non-breaching party would be irreparably harmed and could not be
made whole by monetary damages. It is accordingly agreed that the parties
hereto will waive the defense in any action for specific performance that a
remedy at law would be adequate and that the parties hereto, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having
subject matter jurisdiction of such action.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FRANKLIN BANCORPORATION, INC.
By: Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
ROCK CREEK CORPORATION
By: Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
Xxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxx X. Xxxxxxxx
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