Exhibit D
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (this "Agreement") is made as of the
17th day of November, 1998, by and between FIRST MARINER BANCORP, a Maryland
corporation ("Seller") and XXXX BURNIE BANCORP, a Maryland corporation (the
"Corporation").
EXPLANATORY STATEMENT
WHEREAS, Seller is the record owner of Two Hundred Thirteen Thousand
One Hundred Sixty Nine (213,169) shares of the issued and outstanding $10.00 par
value common stock of the Corporation (the "Common Stock");
WHEREAS, Corporation desires to redeem the Common Stock and believes
that it is in the Corporation's best interests that the Common Stock owned by
Seller be redeemed and Seller desires that the Corporation redeem said shares of
Common Stock; and
WHEREAS, except as otherwise expressly defined in this Agreement,
capitalized terms used herein, shall have the respective meanings ascribed to
such terms in the Standstill Agreement, dated the date hereof, by and between
the parties hereto.
NOW, THEREFORE, in consideration of the promises and covenants
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
REDEMPTION OF SHARES
SECTION 1.1. Redemption of Shares. At the Closing (as hereinafter
defined), Seller shall sell, convey, assign and transfer to the Corporation, and
the Corporation hereby agrees to redeem, all of Seller's right, title and
interest in and to the Two Hundred Thirteen Thousand One Hundred Sixty Nine
(213,169) shares of the Common Stock of the Corporation of which the Seller is
the record owner (the "Shares").
SECTION 1.2. Redemption Price. The aggregate redemption price (the
"Redemption Price") due to Seller from the Corporation for the Shares is
Twenty-Six Dollars and 18/100 ($26.18) per share, for an aggregate payment of
Five Million Five Hundred Eighty Thousand Seven Hundred Sixty Four and 68/100
Dollars ($5,580,764.68), payable in cash in immediately available funds at
Closing (as hereinafter defined).
SECTION 1.3. Delivery of Certificates by Seller. The transfer of the
Shares shall be effected by the delivery to the Corporation at Closing by
appropriate instructions in form and content acceptable to the parties to the
Corporation's transfer agent and/or registrar to make the appropriate "book
entry" transfer of the Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to the Corporation as follows:
SECTION 2.1. The Shares. (a) Seller (i) is the sole record and
Beneficial Owner of the Shares, which are held in book entry form; (ii) to its
knowledge, has good and marketable title to the Shares and (iii) to its
knowledge, has the right to sell the Shares free and clear of any liens,
pledges, security interests or similar encumbrances ("Liens").
(b) The Shares represent all of the issued and outstanding capital
stock or equity securities of the Corporation Beneficially owned by Seller.
(c) Seller and its majority-owned subsidiaries do not have any option,
warrant, or other right to acquire, directly or indirectly, any shares of the
Common Stock, or any securities which are convertible into or exchangeable or
exercisable for any shares of the Common Stock, or any other rights with respect
to securities of the Corporation, nor are they subject to any offer, contract,
arrangement, understanding or relationship which allows or obligates them to
vote or acquire any securities of the Corporation, including agreements to act
in concert or as part of a group with respect to securities of the Corporation.
SECTION 2.2. Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland.
Seller has full corporate power and authority to conduct its business as it is
presently being conducted and to own and lease its properties and assets.
SECTION 2.3. Authority. Seller has all necessary corporate power and
authority to enter into and perform its obligations under this Agreement and the
execution, delivery and performance of this Agreement by Seller has been duly
authorized and approved by Seller's Board of Directors and no other corporate
action is necessary for Seller's due authorization of this Agreement and
performance of its obligations hereunder.
SECTION 2.4. No Conflict or Violation. Neither the execution and
delivery of this Agreement by Seller, nor the consummation of the transactions
contemplated hereby, will, with or without notice or the passage of time or
both, result in (a) a violation of or a conflict with any provision of the
charter or bylaws of Seller; (b) a breach of, or a default under, the terms or
provisions of any contract, agreement, note, bond, mortgage, indenture, lease,
license, permit or other instrument to which Seller is a party, or (c) a
violation by Seller of any statute, rule, regulation, ordinance, code, order,
judgment, writ, injunction, decree or award.
SECTION 2.5. Consents and Approvals. Any consents, approvals or
authorizations of, or declarations, filings or registrations with, any
governmental or regulatory authority required to be made or obtained by Seller
in connection with the execution, delivery and performance of this
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Agreement and the consummation of the transactions contemplated hereby have been
made or obtained by Seller.
SECTION 2.6. Litigation. There is no claim, action, suit or proceeding
pending or, to Seller's knowledge, threatened against Seller or any of its
properties which seeks to prohibit, restrict or delay or would have the effect
of prohibiting, restricting or delaying the consummation of the transactions
contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE CORPORATION
The Corporation represents and warrants to the Seller as follows.
SECTION 3.1. Organization. The Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland. The Corporation has full corporate power and authority to conduct its
business as it is presently being conducted and to own and lease its properties
and assets.
SECTION 3.2. Authority. The Corporation has all necessary corporate
power and authority to enter into and perform its obligations under this
Agreement and the execution, delivery and performance of this Agreement by the
Corporation has been duly authorized and approved by the Corporation's Board of
Directors.
SECTION 3.3. No Conflict or Violation. Neither the execution and
delivery of this Agreement by the Corporation, nor the consummation of the
transactions contemplated hereby, will, with or without notice or the passage of
time or both, result in (a) a violation of or a conflict with any provision of
the charter or bylaws of the Corporation; (b) except as disclosed in writing to
Seller, a breach of, or a default under, the terms or provisions of any
contract, agreement, note, bond, mortgage, indenture, lease, license, permit or
other instrument to which the Corporation is a party, or (c) a violation by the
Corporation of any statute, rule, regulation, ordinance, code, order, judgment,
writ, injunction, decree or award, including, but not limited to, the provisions
of Section 2-311 of the Maryland General Corporation Law.
SECTION 3.4. Consents and Approvals. Any consents, approvals or
authorizations of, or declarations, filings or registrations with, any
governmental or regulatory authority required to be made or obtained by the
Corporation in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
made or obtained by the Corporation.
SECTION 3.5. Litigation. There is no claim, action, suit or proceeding
pending or, to the Corporation's knowledge, threatened against the Corporation
or any of its properties which seeks to prohibit, restrict or delay or would
have the effect of prohibiting, restricting or delaying the consummation of the
transactions contemplated by this Agreement.
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ARTICLE IV
THE CLOSING
The closing of the transaction contemplated by this Agreement shall
take place contemporaneously with the execution of this Agreement, which date
shall not be later than November 17, 1998 at 10:00 a.m. at the offices of
Seller's attorney, Ober, Kaler, Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, or at such other time and place as the parties hereto
shall mutually agree (the "Closing").
ARTICLE V
OTHER AGREEMENTS
SECTION 5.1. Disclaimer. Except as expressly set forth in any
representation, warranty or covenant made by Seller in this Agreement or in the
Standstill Agreement (between the parties hereto and dated of even date
herewith), Seller expressly disclaims and shall not be deemed to have made any
representation, warranty or covenant, express or implied, to the Corporation, in
connection with or related to the transactions contemplated by this Agreement.
SECTION 5.2. Due Diligence. The Corporation acknowledges and agrees
that prior to the Closing, for purposes of the Corporation's due diligence
investigation in connection with the transactions contemplated by this
Agreement, the Corporation has had full and complete access to the executive
officers of Seller, and has had the opportunity to ask questions of such
officers and obtain information and material from Seller regarding the
transactions contemplated by this Agreement.
SECTION 5.3. Publicity and Confidentiality Agreement. Each of the
parties hereto agrees that it may not issue any press release with respect to
the transactions contemplated by this Agreement without the prior written
consent of the other party, which consent may be given or withheld in the sole
discretion of the requested party, provided that nothing herein shall restrict
any party hereto from making any public announcement or other disclosure
required under the federal securities laws or by the rules of any securities
exchange or inter-dealer quotation system on which its securities may be traded
or listed. The parties hereby agree that the Confidentiality Agreement entered
into by the parties hereto on or about November 2, 1998, is hereby terminated
and is of no further force or effect as of the date of this Agreement
SECTION 5.4 Equitable Remedies. The parties acknowledge and agree that
money damages would not be a sufficient remedy for any breach or threatened
breach of the provisions of Section 5.3 and Article VI by a party, and that the
non-breaching party shall be entitled to specific performance and injunctive
(preliminary or permanent) or other equitable relief as remedies for any such
breach. Such remedies shall not be deemed to be the exclusive remedies but shall
be in addition to all other remedies available at law or in equity. Each party
waives any requirement for the securing or posting of any bond in connection
with any such remedy.
ARTICLE VI
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INDEMNIFICATION
SECTION 6.1. Seller's Indemnification. The Seller shall indemnify and
hold harmless the Corporation, each officer, director, employee or agent
thereof, and their respective estates, successors and assigns (each an
"Indemnified Party") from and against any and all claims, losses, damages,
liabilities, costs or expenses (including, without limitation, settlement costs
and any legal or other expenses for investigating or defending any actions or
threatened actions) suffered or incurred as the result of the breach by Seller
of any covenant, representation or warranty of Seller set forth in this
Agreement.
SECTION 6.2. Seller's Defense of Actions. In connection with any claim
that Corporation believes gives rise to indemnity hereunder resulting from or
arising out of any claim or legal proceeding by a person who is not a party to
this Agreement, at its sole cost and expense except as noted below, Seller
shall, upon written notice to Corporation, assume the defense of such claim or
legal proceeding, to the extent that Seller gives notice to Corporation with
respect to all material elements thereof and sets forth that the claim is one
that gives rise to indemnity under Section 6.1. When Seller assumes the defense
of any such claim or legal proceedings, Seller shall take all steps necessary in
the defense or settlement thereof and shall hold Corporation harmless from and
against any losses, damages, expenses or liability caused by or arising out of
any settlement approved by Seller or any judgment in connection with such claim
or legal proceeding. Corporation agrees that it will cooperate with Seller in
the defense of any such action, the defense of which is assumed by Seller.
Corporation shall have the right to employ separate counsel in any such action
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of Corporation unless: (i) the employment
thereof has been specifically authorized by Seller in writing; or (ii) Seller
has failed to assume the defense of such action or to employ counsel reasonably
satisfactory to Corporation. Except with the consent of Corporation, the Seller
shall not consent to the entry of any judgment arising from any such claim or
legal proceeding which, in each case, does not include as an unconditional term
thereof the delivering by the claimant or the plaintiff to Corporation of a
release from all liability in respect thereof, unless Seller has actually paid
to Corporation the full amount of such judgment or settlement. If Seller does
not assume the defense of any claim or litigation, Corporation may defend
against such claim or litigation in such manner as it may deem appropriate,
including, but not limited to, settling such claim or litigation, after giving
notice of the same to Seller, on such terms as Corporation may deem appropriate.
Seller will promptly reimburse Corporation in accordance with the provisions
hereof.
SECTION 6.3. Corporation's Indemnification. The Corporation shall
indemnify and hold harmless Seller, each officer, director, employee or agent
thereof, and their respective estates, successors and assigns (each an
"Indemnified Party") from and against any and all claims, losses, damages,
liabilities, costs or expenses (including, without limitation, settlement costs
and any legal or other expenses for investigating or defending any actions or
threatened actions) suffered or incurred (1) as the result of any claim that
arises as a result of the breach by the Corporation of any covenant,
representation or warranty of the Corporation set forth in this Agreement or (2)
as the result of any derivative claim asserted by any stockholder of the
Corporation on behalf of Corporation that is in any way related to the execution
and performance of this Agreement or the Standstill
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Agreement to be entered into by the parties contemporaneously with this
Agreement or the transactions contemplated hereby and thereby.
SECTION 6.4. Corporation's Defense of Actions Obligations. In
connection with any claim that Seller believes gives rise to indemnity hereunder
resulting from or arising out of any claim or legal proceeding by a person who
is not a party to this Agreement, at its sole cost and expense except as noted
below, ("Claim" as used herein is defined at Section 1(e) of the Standstill
Agreement) Corporation shall, upon written notice to Seller, assume the defense
of such claim or legal proceeding, to the extent that Corporation gives notice
to Seller and sets forth that the claim is one that gives rise to indemnity
hereunder. When Corporation assumes the defense of any such claim or legal
proceeding, Corporation shall take all steps necessary in the defense or
settlement thereof and shall hold Seller harmless from and against any losses,
damages, expenses or liability caused by or arising out of any settlement
approved by the indemnifying party or any judgment in connection with such claim
or legal proceeding. Seller agrees that it will cooperate with Corporation in
the defense of any such action, the defense of which is assumed by Corporation.
Seller shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
for claims under Section 6.3(2) shall be at the expense of Seller unless: (i)
the employment thereof has been specifically authorized by the indemnifying
party in writing; or (ii) the indemnifying party has failed to assume the
defense of such action or to employ counsel reasonably satisfactory to the
Indemnified Party. Seller shall also have the right to employ separate counsel
and to participate in the defense thereof for claims against Seller under
Section 6.3(2). The fees and expenses of such counsel for claims under Section
6.3(1) shall be paid in 50% equal shares by Seller and Corporation on monthly
bills submitted by counsel until Corporation's payments in the aggregate equal
$50,000.00 for all such claims. Corporation's responsibility for fees and
expenses of separate counsel employed by Seller shall in no event exceed
$50,000.00 in the aggregate, regardless of the number of claims. Except with the
consent of Seller, the Corporation shall not consent to the entry of any
judgment arising from any such claim or legal proceeding which, in each case,
does not include as an unconditional term thereof the delivering by the claimant
or the plaintiff to Seller of a release from all liability in respect thereof,
unless Corporation has actually paid to Seller the full amount of such judgment
or settlement. If Corporation does not assume the defense of any claim or
litigation, Seller may defend against such claim or litigation in such manner as
it may deem appropriate, including, but not limited to, settling such claim or
litigation, after giving notice of the same to the Corporation, on such terms as
Seller may deem appropriate. Corporation will promptly reimburse Seller in
accordance with the provisions hereof.
SECTION 6.5. Notification. Whenever any claim shall arise for
indemnification hereunder, the Indemnified Party shall notify the indemnifying
party promptly after such Indemnified Party has actual knowledge of the facts
constituting the basis for such claim, except that in the event of any claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceedings by a third party, such Indemnified Party shall give prompt
notice to the indemnifying party of such claim or the commencement of legal
proceedings in respect of which recovery may be sought against the indemnifying
party pursuant to the provisions of this Article VI. The notice to the
indemnifying party shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. The failure to notify the
indemnifying party shall only relieve the indemnifying
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party from liability hereunder to the extent that it is actually prejudiced
thereby and shall not relieve the indemnifying party of any liability which it
may otherwise have to an indemnified party. The Indemnified Party shall not
settle or compromise any such claim without the prior written consent of the
indemnifying party unless suit shall have been instituted against the
Indemnified Party and the indemnifying party shall have failed, within fifteen
(15) days after notice of institution of the suit to take control of such suit
as provided in Sections 6.2 and 6.4, respectively.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Expenses and Taxes, Etc. Except as otherwise provided
herein, all expenses incurred by Seller or the Corporation in connection with
this Agreement shall be borne by the party incurring such expenses, including,
but not limited to, all professional expenses.
SECTION 7.2. Non-Assignability. This Agreement may not be assigned by
any party hereto without the prior written consent of the other party.
SECTION 7.3. Binding on Successors and Assigns. This Agreement shall
inure to the benefit of and bind the respective successors and permitted assigns
of the parties hereto. Nothing expressed or referred to in this Agreement is
intended or shall be construed to give any person other than the parties to this
Agreement or their respective successors or permitted assigns any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein, it being the intention of the parties to this
Agreement that this Agreement shall be for the sole and exclusive benefit of
such parties or such successors and assigns and not for the benefit of any other
person.
SECTION 7.4. Entire Agreement. This Agreement and the Standstill
Agreement contains the entire understanding of the parties with respect to the
subject matter of such Agreements. This Agreement and the Standstill Agreement
supersede all prior agreements and understandings between the parties with
respect to their subject matter. This Agreement may be amended only by a written
instrument duly executed by the parties. Any condition to a party's obligations
hereunder may be waived in writing by such party to the extent permitted by law.
SECTION 7.5. Applicable Law. This Agreement is being executed in, and
shall be governed by the laws of the State of Maryland, without regard to
principles of conflict of laws. The parties hereby submit to the jurisdiction
and venue of the courts of Maryland, and any legal or equitable action to
enforce this or any related agreements may only be brought in the circuit courts
therein.
SECTION 7.6. Survival of Representations. The covenants,
representations and warranties given by the parties hereto and contained herein
shall survive the Closing.
SECTION 7.7. Headings. The article and section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
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SECTION 7.8. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
deemed to have been duly given upon delivery personally, or three days after
deposit if by mail (registered or certified mail postage prepaid, return receipt
requested) or one day after deposit if by overnight courier service, as follows:
(i) If to Seller: 0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
with copy to: Ober, Kaler, Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxxxx, Xx., Esq.
(ii) If to the Corporation: Xxxx Burnie Bancorp
000 Xxxxx Xxxxxxx
X.X. Xxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
Attn: F. Xxxxxxx Xxxxxx, Xx.
with copy to: Price Gielen, Esquire
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
00xx Xxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Addresses may be changed by notice in writing signed by the addressee.
SECTION 7.9. Severability. A determination that any provision of this
Agreement is invalid or unenforceable shall not affect the validity or
enforceability of any other provision hereof. In the event it shall be
determined by any court or governmental agency or authority that any provision
of this Agreement is invalid for any reason, such provision shall be considered
to be modified to the extent required to cure such invalidity.
SECTION 7.10. Broker. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement (oral or
written) binding upon the Seller or the Corporation. Each party will pay, and
hold the others harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys' fees and out-of-pocket expenses)
arising in connection with any such claim.
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SECTION 7.11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 7.12. Construction. This Agreement has been prepared by all
parties hereto, and the language used herein shall not be construed in favor of
or against any particular party.
SECTION 7.13. No Waiver. No delay or failure on the part of any party
to (i) insist upon the strict performance of any of the terms of this Agreement
or (ii) exercise any rights or remedies hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any subsequent exercise thereof or the exercise of any other
right or remedy at any later time or times.
SECTION 7.14. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH IT MAY BE A PARTY, ARISING OUT OF OR
IN ANY WAY PERTAINING TO THIS AGREEMENT. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES
TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES HERETO. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH
PARTY, AND EACH HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER REPRESENTS THAT IT HAS
HAD THE OPPORTUNITY TO BE REPRESENTED IN THE EXECUTION OF THIS AGREEMENT AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
SECTION 7.15. Time of Essence. Time shall be of the essence with regard
to all dates and time periods set forth or referred to in this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed under seal as of the day and year first above
written.
WITNESS: SELLER:
FIRST MARINER BANCORP
/s/ Xxxxx X. Xxxxxxxxxxx, Xx.
------------------------------ By: /s/ Xxxxxx X. Xxxxxx (SEAL)
------------------------------------
PURCHASER:
XXXX BURNIE BANCORP.
/s/ Xxxx Xxxxx
------------------------------ By: /s/ F. Xxxxxxx Xxxxxx, Xx. (SEAL)
------------------------------------
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