<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 4)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
GLEN BURNIE BANCORP
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(Name of Issuer)
Common Stock, par value $10.00 per share
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(Title of Class of Securities)
377407 10 1
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(CUSIP Number)
Edwin F. Hale, Sr.
First Mariner Bancorp
1801 South Clinton Street
Baltimore, Maryland 21224
(410) 342-1500
with a copy to:
Melissa Allison Warren, Esquire
Ober, Kaler, Grimes & Shriver
129 East Baltimore Street
Baltimore, Maryland 21202
(410) 685-1120
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 17, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
(Continued on following pages)
Page 1 of 11 Pages
<PAGE>
CUSIP No. 377407 10 1 13D Page 2 of 11 Pages
- --------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS OF ABOVE PERSONS (ENTITIES ONLY)
First Mariner Bancorp (I.R.S. No. 52-1834860)
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) /X/
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SEC USE ONLY
3
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Maryland
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0 Shares (1)
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0 Shares
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0 Shares (1)
------------------------------------------------
10 SHARED DISPOSITIVE POWERS
0 Shares
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 Shares (1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
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14 TYPE OF REPORTING PERSON*
CO
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(1) Excludes shares held by two directors or their minor children. See item 5
herein.
<PAGE>
The entire text of the Schedule 13D originally filed by the Reporting
Person on January 28, 1998, as amended to date (the "Initial Schedule 13D"), is
amended and restated as follows:
Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common stock, par value $10.00 per share (the "Common Stock") of Glen Burnie
Bancorp, a Maryland corporation (the "Company"), which has its principal
executive offices at 101 Crain Highway, S.E., Glen Burnie, Maryland 21061.
Item 2. Identity and Background
This Report is being filed by First Mariner Bancorp, a Maryland
corporation ("FMB" or the "Reporting Person").
FMB's principal business is the operation of a bank holding company.
The business address of FMB is 1801 South Clinton Street, Baltimore,
Maryland 21224.
Edwin F. Hale, Sr. is the Chairman and Chief Executive Officer of FMB
and, as of October 26, 1998, owns 15.05% of the equity securities of FMB (or
24.11% including options and warrants exercisable within 60 days).
FMB is subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and is required
to file reports and other information with the Securities and Exchange
Commission relating to its business, financial condition and other matters. Such
reports and other information may be inspected at the Commission's office at 450
Fifth Street, N.W., Washington, D.C. 20549, and also are available for
inspection and copying at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661, and 7 World Trade Center, 13th Floor, New York, NY 10048.
The name, business address and present principal occupation or
employment and the name, address and principal business of any corporation or
other organization in which such employment is conducted, of (i) each of the
executive officers and directors of FMB; (ii) each person controlling FMB, and
(iii) the executive officers and directors of any corporation controlling FMB
are set forth in Schedule l attached hereto and incorporated herein by
reference.
During the last five years, neither FMB nor, to the best of its
knowledge, any executive officer, director or controlling person of FMB has (i)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities law or finding any violation with respect to such law.
Page 3
<PAGE>
To the best knowledge of FMB, each of its executive officers and
directors is a citizen of the United States.
Item 3. Source and Amount of Funds or other Consideration
FMB, Ethel D. Webster, a Maryland resident, and Neil C. Williams, a
Maryland resident, entered into a Stock Purchase Agreement dated January 26,
1998 (the "Agreement"). The form of the Agreement was attached as Exhibit A to
the Initial Schedule 13D and the discussion in this Report of any provisions of
the Agreement is qualified by reference to that Exhibit. Ms. Webster and Mr.
Williams are referred to collectively herein as the "Sellers." Pursuant to the
Agreement, FMB purchased from the Sellers on October 19, 1998 207,548 shares of
Common Stock (the "GBB Shares") for an aggregate purchase price of
$4,509,936.70. The source of the payment of the purchase price was cash on hand.
As a result, FMB was deemed to be the beneficial owner of greater than five
percent (5%) of the Common Stock.
On April 15 and 17, 1997, FMB purchased a total of 4,491 shares of
Common Stock in open market purchases. Pursuant to stock dividends issued on
July 1, 1997, October 1, 1997 and December 31, 1997, a stock split issued on
January 10, 1998, and the acquisition of shares in 1998 under the Company's
Dividend Reinvestment Plan, FMB has received an aggregate of 1,129 shares of
Common Stock. Prior to the purchase of GBB Shares pursuant to the Agreement, FMB
beneficially owned a total of 5,620 shares of Common Stock or approximately
0.5%. Upon the purchase of the GBB Shares, FMB beneficially owns a total of
213,169 shares of Common Stock or approximately 19.5%.
A total of $110,736 in working capital funds was used to purchase the
4,491 shares of Common Stock held by FMB prior to entering into the Agreement.
The 1,129 shares of Common Stock received by FMB as a result of dividends or
splits were received at no cost to FMB or through the reinvestment of dividends
pursuant to the Company's Dividend Reinvestment Plan.
On November 17, 1998, FMB sold its entire holdings of Common Stock to
the Company, upon the terms described in Items 4 and 5 hereof. As a result, FMB
does not have a continuing interest in the Common Stock.
Item 4. Purpose of Transaction
FMB entered into the Agreement with the Sellers for the purpose of
acquiring a significant equity interest in the Company as an investment. The
Chairman and Chief Executive Officer of FMB also had stated that FMB would
ultimately like to merge with the Company and to take control of the Company.
On November 17, 1998 FMB sold 213,169 shares of Common Stock to the
Company for $5,580,764 pursuant to a Stock Redemption Agreement between the
parties dated as of November 17, 1998. FMB also entered into a Standstill
Agreement with the Company whereby, among other things, FMB agreed not to
purchase any shares of the Company's stock or attempt to influence any of the
Company's affairs for a ten year period. The Company will pay FMB $675,000 over
the next
Page 4
<PAGE>
five years as consideration for the Standstill Agreement and the dismissal of
all pending litigation between the parties.
Other than as set forth in this Item 4, FMB has no present plans or
proposals that could result in or relate to the items enumerated in paragraphs
(a) - (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) As of November 17, 1998, FMB has no beneficial ownership of the
Common Stock of the Company.
To the knowledge of FMB, no shares of Common Stock are beneficially
owned by its executive officers, directors and controlling persons listed on
Schedule 1 hereto, other than 2,383 shares (0.22%) owned by Director Michael
Lynch and 1,932 shares (0.18%) owned by Mr. Lynch's minor children, and 972
shares (0.09%) owned by the minor children of Director R. Andrew Larkin. The
percentages set forth in this Item 5(a) are based on the number of shares of
Common Stock outstanding contained in the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998.
(b) FMB has no sole or shared dispositive power or voting power with
respect to the shares of Common Stock of the Company. Director Lynch has sole
dispositive and voting power with respect to shares owned by him and his minor
children. Director Larkin has sole dispositive and voting power with respect to
shares owned by him and his minor children.
(c) Except for the transactions described in Item 3 hereof, FMB has not
effected any transactions in the Common Stock reported on herein during the past
sixty (60) days, and FMB is not aware of any other transactions in such
securities by any of the persons listed on Schedule l hereto attributable to
FMB.
(d) Not applicable.
(e) On November 17, 1998, FMB ceased to be the beneficial owner of more
than five percent of the outstanding shares of the Common Stock of the Company.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
the Securities of the Issuer
The information concerning the Agreement contained in Item 3 above is
incorporated herein by reference. The description contained herein of the
Agreement is qualified in its entirety by reference to such agreement.
FMB, the Sellers and Albert W. Woodfield, III entered into an Escrow
Agreement dated January 26, 1998 pursuant to which the GBB shares and the
purchase price therefor were held in escrow pending closing of the purchase. The
description of this agreement is qualified in its entirety by reference to such
agreement, a copy of which was filed as Exhibit B to the Initial Schedule 13D.
Page 5
<PAGE>
FMB and the Company entered into a Stock Redemption Agreement and a
Standstill Agreement, each dated as of November 17, 1998. Pursuant to the Stock
Redemption Agreement, the Company redeemed the shares of Common Stock held by
FMB for an aggregate price of $5,580,764. In addition each party indemnified the
other for certain claims.
Pursuant to the Standstill Agreement, FMB agreed that it shall not,
shall cause each of its majority-owned subsidiaries not to, and shall use its
best efforts to cause certain affiliates and associates not to, directly or
indirectly, acquire voting securities of the Company or take other enumerated
actions which would affect the voting of the Company's securities or otherwise
influence the management or affairs of the Company. The agreement does not apply
if the Company is acquired, and FMB has not been involved in such acquisition.
The Company and FMB agreed to dismiss pending litigation between the parties, to
indemnify each other for certain claims and to release each other from any
claims against the other. The Company agreed to pay FMB $675,000 in five
installments without interest in consideration for the agreement.
The foregoing summary of the transactions contemplated by the Stock
Redemption Agreement and the Standstill Agreement is qualified in its entirety
by reference to the provisions of these agreements attached as Exhibits to this
Amendment No. 4 to Schedule 13D and incorporated herein by reference.
To the knowledge of FMB, no person listed on Schedule 1 has any
contracts, agreements, understandings, or relationships with respect to the
Common Stock.
Item 7. Material to be Filed as Schedules and Exhibits
Schedules:
---------
Schedule 1 - Executive officers, directors and controlling
persons of FMB (filed herewith)
Exhibits:
--------
Exhibit A - Stock Purchase Agreement dated January 26,
1998 among Ethel D. Webster, Neil C. Williams
and First Mariner Bancorp (previously filed)
Exhibit B - Escrow Agreement dated January 26, 1998 among
First Mariner Bancorp, Ethel D. Webster, Neil
C. Williams and Albert W. Woodfield, III.
(previously filed)
Exhibit C - Press Release dated January 27, 1998
(previously filed)
Exhibit D - Stock Redemption Agreement dated as of
November 17, 1998 between First Mariner
Bancorp and Glen Burnie Bancorp
Exhibit E - Standstill Agreement dated as of November 17,
1998 between First Mariner Bancorp and Glen
Burnie Bancorp
Page 6
<PAGE>
SIGNATURE
After reasonable inquiry, and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
FIRST MARINER BANCORP
Dated: November 20, 1998 By: /s/ Edwin F. Hale, Sr.
---------------------------
Edwin F. Hale, Sr.
Chairman and Chief
Executive Officer
Page 7
<PAGE>
SCHEDULE 1
DIRECTORS, EXECUTIVE OFFICERS AND CONTROLLING PERSONS
OF FIRST MARINER BANCORP ("FMB")
<TABLE>
<CAPTION>
Principal Business in Which
Principal Occupation and Business Such Employment is
Name Address Conducted
---- --------------------------------- ---------------------------
<S> <C> <C>
Edwin F. Hale, Sr. Chairman of the Board and Chief Commercial Banking
Executive Officer of FMB and First
Mariner Bank (the "Bank"); Chairman
and Chief Executive Officer of Hale Transportation
Trans.; Managing Member of Peterbilt Truck Sales
of Maryland LLC; President and Chief
Executive Officer of Baltimore Blast Professional Soccer
Corporation;
1801 South Clinton Street
Baltimore, MD 21224
George H. Mantakos President and Director of the Bank; Commercial Banking
Director of FMB
1801 South Clinton Street
Baltimore, MD 21224
Joseph A. Cicero President, Chief Operating Officer and Commercial Banking
Director of FMB; Director and Chief
Operating Officer of the Bank
1801 South Clinton Street
Baltimore, MD 21224
Barry B. Bondroff Director of FMB and the Bank; Accounting
Managing Officer of Grabush,
Newman & Co., P.A.
515 Fairmount Avenue, Suite 400
Baltimore, MD 21286
Edie Brown Director of FMB and the Bank; Public Relations
Director of Public and Community
Relations of the Baltimore Arena
201 West Baltimore Street
Baltimore, MD 21201
</TABLE>
Page 8
<PAGE>
<TABLE>
<CAPTION>
Principal Business in Which
Principal Occupation and Business Such Employment is
Name Address Conducted
---- --------------------------------- ---------------------------
<S> <C> <C>
Rose M. Cernak Director of FMB and the Bank; Restaurant
President of Olde Obrycki's Crab-
house, Inc.
P.O. Box 38218
Baltimore, MD 21231
Christopher F. Director of FMB and the Bank; Vice Supermarket Chain
D'Anna President of Mars Super Markets, Inc.
7183 Holabird Avenue
Baltimore, MD 21222
Bruce H. Hoffman Director of FMB and the Bank; Sports-Related Real Estate
Executive Director of Maryland Development
Stadium Authority Warehouse
Camden Yards
333 West Camden Street
Suite 500
Baltimore, MD 21201
Melvin S. Kabik Director of FMB and the Bank; Owner Commercial Real Estate
of a commercial real estate company
3711 Gardenview Road
Baltimore, Maryland 21208
R. Andrew Larkin Director of FMB and the Bank; Real Estate Development
President of Maryland Realty
Investment Corp.
325 West 23rd Street
Baltimore, MD 21211
Michael Lynch Director of FMB and the Bank; Vice Ship Repair
President of the General Ship Repair
Corporation
1449 Key Highway
Baltimore, MD 21230
Jay J.J. Matricciani Director of FMB and the Bank; Utility and Paving; Heavy
President of The Matricciani Equipment Rental
Company; Partner of Matro Properties
4070 Old North Point Road
Baltimore, MD 21222
</TABLE>
Page 9
<PAGE>
<TABLE>
<CAPTION>
Principal Business in Which
Principal Occupation and Business Such Employment is
Name Address Conducted
---- --------------------------------- ---------------------------
<S> <C> <C>
Walter L. McManus, Director of FMB and the Bank; Commercial Real Estate
Jr. President of Castlewood Realty Co.,
Inc.
204 East Joppa Road, Penthouse 5
Towson, MD 21286
James P. O'Conor Director of FMB and the Bank; Commercial Real Estate
Chairman and Chief Executive Officer
of O'Conor, Piper & Flynn
22 West Padonia Road
Timonium, MD 21093
John J. Oliver, Jr. Director of FMB and the Bank; Newspaper Publishing
Chairman, Chief Executive Officer
and Publisher of Baltimore Afro-
American Newspaper
2519 North Charles Street
Baltimore, MD 21218
Hanan Y. Sibel Director of FMB and the Bank; Food Brokerage
Chairman and Chief Executive Officer
of Chaimson Brokerage Co., Inc.
6822 Oak Hall Lane
Columbia, MD 21045
Leonard Stoler Director of FMB and the Bank; Owner Automobile Dealership
and President of Len Stoler Inc.
11275 Reisterstown Road
Owings Mills, MD 21117
Michael Watson Director of FMB and the Bank; Marine Pilots
President of the Association of
Maryland Pilots
3720 Dillon Street
Baltimore, MD 21224
</TABLE>
Page 10
<PAGE>
<TABLE>
<CAPTION>
Principal Business in Which
Principal Occupation and Business Such Employment is
Name Address Conducted
---- --------------------------------- ---------------------------
<S> <C> <C>
Kevin M. Healey Senior Vice President and Chief Commercial Banking
Financial Officer of FMB and the
Bank
1801 South Clinton Street
Baltimore, Maryland 21224
</TABLE>
Page 11
<PAGE>
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 GLEN 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.
<PAGE>
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
2
<PAGE>
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.
3
<PAGE>
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, Grimes & Shriver, 120 East Baltimore Street,
Baltimore, Maryland 21202, 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
4
<PAGE>
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: 1801 S. Clinton Street
Baltimore, Maryland 21224
Attn: President
with copy to: Ober, Kaler, Grimes & Shriver
120 East Baltimore Street
Baltimore, Maryland 21202-1643
Attn: Frank C. Bonaventure, Jr., Esq.
(ii) If to the Corporation: Glen Burnie Bancorp
101 Crain Highway
P.O. Box 307
Glen Burnie, Maryland 21061
Attn: F. William Kuethe, Jr.
with copy to: Price Gielen, Esquire
Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
27th Floor
One South Street
Baltimore, Maryland 21202-3201
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/ Frank C. Bonaventure, Jr.
- ------------------------------ By: /s/ Joseph A. Cicero (SEAL)
------------------------------------
PURCHASER:
GLEN BURNIE BANCORP.
/s/ Paul Trice
- ------------------------------ By: /s/ F. William Kuethe, Jr. (SEAL)
------------------------------------
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Exhibit E
STANDSTILL AGREEMENT
THIS STANDSTIILL AGREEMENT (this "Agreement"), dated November 17, 1998,
is made by and between FIRST MARINER BANCORP, a Maryland corporation ("First
Mariner") and GLEN BURNIE BANCORP, a Maryland corporation ("Glen Burnie").
WHEREAS, contemporaneously with the execution of this Agreement, First
Mariner and Glen Burnie have entered into a Stock Redemption Agreement pursuant
to which Glen Burnie is redeeming from First Mariner all securities of Glen
Burnie owned by First Mariner (the "Stock Redemption Agreement"); and
WHEREAS, pursuant to this Agreement, the parties desire to agree on the
manner of their future dealings with one another.
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:
1. Definitions. The following capitalized terms shall have the meanings
specified in this Section 1.
(a) "Affiliate" means a person that directly or indirectly
controls or is controlled by, or is in common control with, First Mariner,
including, but not limited to, any director or executive officer of First
Mariner or any person that is the Beneficial Owner of more than 10% of its
outstanding Voting Securities.
(b) "Associate" has the meaning set forth in Section 12b-2 of
the Securities Exchange Act of 1934, as amended.
(c) "Beneficial Owner" of a Voting Security means any person
who beneficially owns such security within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended.
(d) "Borrower" means any person or entity that obtains a Loan.
(e) "Claim" means all manner of actions, causes of action,
suits, debts, covenants, accounts, trespasses, contracts, agreements of damages,
judgments, liabilities, losses, costs, expenses and claims of any nature
whatsoever, in law or in equity, whether or not now or hereafter known,
suspected or claimed.
(f) "Voting Securities" mean the shares of common and any
other securities of Glen Burnie entitled to vote in the election of directors,
or securities convertible into, or exercisable or exchangeable for such common
stock or other securities, whether or not subject to the passage of time or
other contingencies.
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(g) "Loan" means and includes any and all loans and financial
accommodations to any Borrower, however evidenced.
(h) "Solicitation" has the meaning set forth in Rule 14a- 1
promulgated under the Securities Exchange Act of 1934, as amended and shall
include any action which causes a person to become a participant in such a
solicitation within the meaning of Instruction 3 of Item 4 of Schedule 14A
promulgated under the Securities Exchange Act of 1934, as amended.
2.1. No Actions Regarding Glen Burnie's Voting Securities.
From the date of this Agreement until November 17, 2008 except as provided in
Section 2.2, First Mariner shall not, and shall cause each of its majority-owned
subsidiaries and shall use best efforts to cause its Affiliates and Associates
not to, directly or indirectly:
(a) acquire, offer, propose to acquire, agree to acquire,
purchase, or make a tender or exchange offer for any Voting Securities of Glen
Burnie such that First Mariner or such Affiliate would become, as a result of
such transaction, a Beneficial Owner of Glen Burnie's Voting Securities.
(b) engage or participate in any Solicitation of proxies or
consents regarding Glen Burnie's Voting Securities or induce or attempt to
induce any other Person to initiate any stockholder proposals, or otherwise
communicate with Glen Burnie's stockholders or others pursuant to Rule
14a-1(l)(2)(iv) under the Securities Exchange Act of 1934, as amended.
(c) advise, seek to advise, encourage, seek to encourage,
influence or seek to influence any person or entity with respect to the voting
of any of Glen Burnie's Voting Securities.
(d) seek, propose or make any public statements with respect
to, any merger, consolidation, business combination, tender or exchange offer,
sale or purchase of assets, sale or purchase of securities, dissolution,
liquidation, restructuring, recapitalization or similar transactions involving
Glen Burnie or any of its Affiliates;
(e) form, join or in any way participate in any "group"
(within the meaning of Section 13d(3) of the Exchange Act) with respect to Glen
Burnie's Voting Securities;
(f) deposit any of Glen Burnie's Voting Securities in any
voting trust or subject any of Glen Burnie's Voting Securities to any
arrangement or agreement with respect to the voting of any of Glen Burnie's
Voting Securities;
(g) otherwise act, alone or in concert with others, to control
or seek to control or influence or seek to influence the management, the Board
or policies of Glen Burnie;
(h) seek, alone or in concert with others, (a) to call a
meeting of stockholders of Glen Burnie, (b) representation on the Board of Glen
Burnie (the "Board"), or (c) the removal of any member of the Board;
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(i) support financially, or through the giving of services or
information except in response to a request by a governmental agency with
jurisdiction or authority over First Mariner, a validly issued subpoena or
otherwise as required by law, any entity or Person who is suing or contemplating
suing Glen Burnie or its Affiliates, or is conducting or contemplating a
Solicitation in opposition to a proposal by the Board or management of Glen
Burnie;
2.2 Acquisition of Glen Burnie. If there is an acquisition of
Glen Burnie (acquisition is defined as a merger of Glen Burnie or its
subsidiary, the Bank of Glen Burnie, wherein either Glen Burnie or the Bank of
Glen Burnie is not the surviving entity, an acquisition of substantially all of
the voting stock of Glen Burnie or the sale of substantially all of the assets
of Glen Burnie), as long as the acquiror of Glen Burnie acted independently of
and without any information, assistance or involvement from First Mariner
regarding any such acquisition, the provisions of Section 2.1 shall not be
applicable to First Mariner regarding such acquiror or such acquiror's
securities. Notwithstanding the foregoing, if First Mariner or its subsidiaries
provides information or assistance to any entity in response to a request by a
governmental agency with jurisdiction or authority over First Mariner, a validly
issued subpoena or otherwise as required by law, First Mariner shall not have
breached the provisions of Section 2.1.
3. No Loans. From the date of this Agreement until November 17, 2008,
First Mariner shall not, and shall cause its Affiliates and Associates not to
make any Loan if (a) Voting Securities of Glen Burnie are used as collateral for
the Loan; (b) the Borrower expressly states to First Mariner or the Affiliate
that the Borrower's intended use of the proceeds of the Loan is to acquire or
hold Voting Securities of Glen Burnie or (c) First Mariner knows or should
reasonably know that the intended use of the proceeds of the Loan is to acquire
or hold Voting Securities of Glen Burnie.
4. Payment to First Mariner.
(a) For Value Received, Glen Burnie promises to pay to the
order of First Mariner the principal amount of SIX HUNDRED SEVENTY-FIVE THOUSAND
FIVE HUNDRED TEN AND 12/100 DOLLARS ($675,510.12) (the "Principal Amount")
without interest, as follows: five (5) annual installments beginning on January
15, 1999 and continuing thereafter on the 15th day of January every year for
four (4) consecutive years, with the first such installment being for One
Hundred Fifty Thousand Dollars ($150,000), and each subsequent installment being
for One Hundred Thirty One Thousand Three Hundred Seventy Seven Dollars and
53/100 ($131,377.53). Unless sooner paid, the entire unpaid balance of the
Principal Amount, plus all accrued and unpaid default interest thereon, shall be
due and payable in full on January 15, 2003.
(b) Glen Burnie may prepay the Principal Amount in whole or in
part at any time and from time to time without penalty. Any payments on account
of this Section 4, when paid, shall be applied (a) first to any costs, fees,
late fees and expenses due hereunder, (b) second to the payment of all interest
(if any) then due on the unpaid balance of the Principal Amount, and (c) third
the balance shall be applied in reduction of the unpaid balance of the Principal
Amount.
(c) In the event that First Mariner breaches its obligations
hereunder, Glen Burnie shall have the right to withhold payment of and to offset
against any amount due hereunder. The
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exercise of this right of offset shall be deemed as payment of the Principal
Amount in the amount of the offset, and in no event shall the exercise of this
right of offset ever be deemed nonpayment of the Principal Amount.
(d) Upon the occurrence of a default hereunder and/or after
the maturity of the obligations of Glen Burnie under this Section 4 (whether by
acceleration, declaration, extension or otherwise), Glen Burnie promises to pay
to First Mariner whenever demanded by First Mariner, interest on the unpaid
balance of the Principal Amount and all other amounts then and thereafter due
and payable hereunder at a per annum rate of interest equal to the lesser of
fifteen percent (15%) per annum or the highest rate permitted by law, from the
date of such default for so long as such default continues to exist, or, from
the date of such maturity until payment in full of the unpaid balance of the
Principal Amount, and all accrued and unpaid interest thereon and all other
amounts due and payable hereunder. Interest on the unpaid Principal Amount shall
be computed on the basis of a 360- day year and the actual number of days that
have elapsed.
(e) Glen Burnie promises to pay, at the option of First
Mariner, a "late fee" equal to five percent (5%) of any scheduled payment
required by this Section 4, if such payment is made more than five (5) days
after the due date thereof, but such five (5) day period shall not be construed
as in any way extending the due date of any payment. The "late fee" is imposed
for the purpose of defraying First Mariner's expenses incident to handling such
delinquent payment. This charge shall be in addition to, and not in lieu of, any
other remedy First Mariner may have and is in addition to any fees and charges
of any agents or attorneys that First Mariner may employ upon any default
hereunder, whether authorized herein or by law. Such "late fee" if not
previously paid, shall, at the option of First Mariner, be added to and become
part of the next succeeding payment to be made pursuant to this Section 4.
(f) Upon the occurrence of the failure of Glen Burnie to pay
as and when due and payable in accordance with this Agreement any portion of the
Principal Amount and such failure continues unremedied for ten (10) days
thereafter or upon the occurrence of any other default or event of default
hereunder, which default or event of default remains uncured for ten (10) days
after written notice thereof, First Mariner may, at its option, accelerate the
maturity of the obligations of Glen Burnie under this Section 4 and declare the
unpaid balance of the Principal Amount then outstanding together with interest
accrued and unpaid thereon to be immediately due and payable, then and in that
event the entire balance of the Principal Amount then outstanding together with
interest accrued and unpaid thereon shall be immediately due and payable by Glen
Burnie to First Mariner. Glen Burnie and all endorsers, guarantors, and other
parties who may now or in the future be primarily or secondarily liable for the
payment of the indebtedness evidenced by this Section 4 hereby severally waive
presentment, protest and demand, notice of protest, notice of demand and of
dishonor and non-payment of this Agreement and expressly agree that the
obligations of Glen Burnie under this Section 4 or any payment hereunder may be
extended from time to time without in any way affecting the liability of Glen
Burnie, such guarantors and endorsers.
(g) All payments and prepayments of the unpaid balance of the
Principal Amount, interest thereon and any other amounts payable hereunder shall
be paid in lawful money of the United States of America in immediately available
funds to First Mariner at 1801 S. Clinton Street,
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Baltimore, Maryland 21224, or at such other place as First Mariner may at any
time or from time to time designate in writing to Glen Burnie.
(h) Glen Burnie promises to pay to First Mariner on demand by
First Mariner all costs and expenses incurred by First Mariner in connection
with the collection and enforcement of this Agreement, including, without
limitation, all reasonable attorney's fees and expenses and all court costs.
(i) By accepting payment after the due date of any amount
payable under the terms of this Agreement, First Mariner shall not be deemed to
have waived the right either to require prompt payment when due of all other
amounts payable under the terms of this Agreement or to declare a default for
the failure to effect such prompt payment of any such other amount. No course of
dealing or conduct shall be effective to amend, modify, waive, release or change
any provision of this Agreement.
5. First Mariner Release. Except as provided in Section 7 of this
Agreement and except for any Claim that arises as a result of the breach by Glen
Burnie of any covenant, representation or warranty of Glen Burnie set forth in
this Agreement or in the Stock Redemption Agreement, First Mariner does hereby
remise, release, acquit and forever discharge Glen Burnie and its successors and
assigns, its wholly owned Subsidiary and all stockholders, directors, officers,
employees and agents of Glen Burnie, of and from all Claims which First Mariner
ever had, now has, or which First Mariner can, shall or may have or allege
against Glen Burnie or any such stockholder, director or officer, from the
beginning of the world to the date hereof, upon or by reason of any matter,
cause or thing concerning or relating in any way whatsoever to First Mariner and
Glen Burnie's relationship with one another.
6. Glen Burnie Release. Except as provided in Section 7 of this
Agreement and except for any Claim that arises as a result of the breach by
First Mariner of any covenant, representation or warranty of First Mariner set
forth in this Agreement or in the Stock Redemption Agreement, Glen Burnie does
hereby remise, release, acquit and forever discharge First Mariner and its
successors and assigns, its wholly-owned subsidiaries and all stockholders,
directors, officers employees and agents of Glen Burnie, of and from all Claims
which Glen Burnie ever had, now has, or which Glen Burnie can, shall or may have
or allege against First Mariner or any such stockholder, director or officer,
from the beginning of the world to the date hereof, upon or by reason of any
matter, cause or thing concerning or relating in any way whatsoever to Glen
Burnie and First Mariner's relationship with one another.
7. Indemnification.
(a) First Mariner's Indemnification. First Mariner shall
indemnify and hold harmless Glen Burnie, 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
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incurred as the result of the breach by First Mariner of any covenant,
representation or warranty of First Mariner set forth in this Agreement.
(b) First Mariner's Defense of Actions. In connection with any
claim that Glen Burnie 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, First
Mariner shall, upon written notice to Glen Burnie, assume the defense of such
claim or legal proceeding, to the extent that First Mariner gives notice to Glen
Burnie with respect to all material elements thereof and sets forth that the
claim is one that gives rise to indemnity under Section 7(a). When First Mariner
assumes the defense of any such claim or legal proceedings, First Mariner shall
take all steps necessary in the defense or settlement thereof and shall hold
Glen Burnie harmless from and against any losses, damages, expenses or liability
caused by or arising out of any settlement approved by First Mariner or any
judgment in connection with such claim or legal proceeding. Glen Burnie agrees
that it will cooperate with First Mariner in the defense of any such action, the
defense of which is assumed by First Mariner. Glen Burnie 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
Glen Burnie unless: (i) the employment thereof has been specifically authorized
by First Mariner in writing; or (ii) First Mariner has failed to assume the
defense of such action or to employ counsel reasonably satisfactory to Glen
Burnie. Except with the consent of Glen Burnie, First Mariner 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 Glen Burnie of a release from all
liability in respect thereof, unless First Mariner has actually paid to Glen
Burnie the full amount of such judgment or settlement. If First Mariner does not
assume the defense of any claim or litigation, Glen Burnie 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 First Mariner, on such terms as Glen Burnie may deem appropriate.
First Mariner will promptly reimburse Glen Burnie in accordance with the
provisions hereof.
(c) Glen Burnie's Indemnification. Glen Burnie shall indemnify
and hold harmless First Mariner, 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 Glen Burnie of any covenant, representation
or warranty of Glen Burnie set forth in this Agreement or (2) as the result of
any derivative claim asserted by any stockholder of Glen Burnie on behalf of
Glen Burnie that is in any way related to the execution and performance of this
Agreement or the Stock Redemption Agreement to be entered into by the parties
contemporaneously with this Agreement or the transactions contemplated hereby
and thereby.
(d) Glen Burnie's Defense of Actions Obligations. In
connection with any claim that First Mariner 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, Glen Burnie shall, upon written notice to First Mariner, assume
the defense
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of such claim or legal proceeding, to the extent that Glen Burnie gives notice
to First Mariner and sets forth that the claim is one that gives rise to
indemnity under Section 7(c). When Glen Burnie assumes the defense of any such
claim or legal proceeding, Glen Burnie shall take all steps necessary in the
defense or settlement thereof and shall hold First Mariner 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. First Mariner agrees that it will cooperate
with Glen Burnie in the defense of any such action, the defense of which is
assumed by Glen Burnie. First Mariner shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, for claims
under Section 7(c)(1) but the fees and expenses of such counsel shall be at the
expense of First Mariner 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. First Mariner shall
also have the right to employ separate counsel and to participate in the defense
thereof for claims against First Mariner under Section 7(c)(2). The fees and
expenses of such counsel for claims under Section 7(c)(2) shall be paid in 50%
equal shares by First Mariner and Glen Burnie on monthly bills submitted by
counsel until Glen Burnie's payments in the aggregate equal $50,000.00 for all
such claims. Glen Burnie's responsibility for fees and expenses of separate
counsel employed by First Mariner shall in no event exceed $50,000.00 in the
aggregate, regardless of the number of claims. Except with the consent of First
Mariner, Glen Burnie 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
First Mariner of a release from all liability in respect thereof, unless Glen
Burnie has actually paid to First Mariner the full amount of such judgment or
settlement. If Glen Burnie does not assume the defense of any claim or
litigation, First Mariner 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 Glen Burnie, on such
terms as First Mariner may deem appropriate. Glen Burnie will promptly reimburse
First Mariner in accordance with the provisions hereof.
(e) 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 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
7(b) and 7(d), respectively.
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8. 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.
So long as this Agreement remains in effect, neither Glen Burnie nor First
Mariner nor their respective affiliates shall make any public statement or issue
any press release concerning the subject matter of this Agreement or the Stock
Redemption Agreement which contains derogatory information or statements
regarding the other or their affiliates or directors or executive officers. 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.
9. Equitable Remedies: Remedies for Certain Breaches.
(a) The parties acknowledge and agree that money damages would
not be a sufficient remedy for any breach or threatened breach of the provisions
of Sections 2, 3, 7 or 8, 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 breach of any such section. 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, including the remedies set forth
in Section 9(b) of this Agreement. Each party waives any requirement for the
securing or posting of any bond in connection with any such remedy.
(b) In the event First Mariner breaches any of the provisions
of Section 2 or 3 of this Agreement, such date of breach being defined herein as
the "Breach Date," First Mariner shall be obligated, in addition to any other
damages, to pay to Glen Burnie that amount of money (the "Breach Amount")
determined by multiplying the Principal Amount by a fraction, the numerator of
which shall be the amount determined by subtracting from 120 the number of full
months, beginning on the date of this Agreement, for which First Mariner was in
compliance with its obligations pursuant to the provisions of Section 2 and 3
hereof, and the numerator which shall be 120. For example, if First Mariner
breaches its obligations under Section 2 or 3 in the 61 month after the date of
this Agreement, First Mariner shall owe Glen Burnie $337,755 ($675,510
*((120-60)/120)).
(c) The rights and remedies of the parties under this
Agreement shall be cumulative and concurrent and may be pursued and exercised
singularly, successively or concurrently at the sole discretion of the
exercising party and may be exercised as often as such party shall deem
necessary or desirable, and the nonexercise by a party of any such rights and
remedies in any particular instance shall not in any way constitute a waiver or
release thereof in that or any subsequent instance.
10. No Reliance. Except as expressly set forth in any representation,
warranty or covenant made by a party in this Agreement, each party expressly
disclaims and shall not be deemed
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to have made any representation, warranty or covenant, express or implied, to
the other party, in connection with or related to the transactions contemplated
by this Agreement.
11. No Admission of Liability. The parties agree that no provision of
this Agreement or act required by this Agreement shall be construed as an
admission of any obligation or liability by any party hereto.
12. Authority to Enter Agreement. Each party represents and warrants to
the other that:
(a) it 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 it has been duly authorized and
approved by its Board of Directors;
(b) neither the execution and delivery of this Agreement by
it, 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 its charter or bylaws; (b) except as disclosed in
writing to the other party, 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 it is a party, or (c) to its
knowledge, a violation by it of any statute, rule, regulation, ordinance, code,
order, judgment, writ, injunction, decree or award;
(c) any consents, approvals or authorizations of, or
declarations, filings or registrations with, any governmental or regulatory
authority required to be made or obtained by it in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been made or obtained; and
(d) there is no claim, action, suit or proceeding pending or,
to its knowledge, threatened against it 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.
13. Miscellaneous.
(a) Expenses and Taxes. Etc. All expenses incurred by First
Mariner or Glen Burnie in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such expenses,
including, but not limited to, all professional expenses.
(b) Non-Assignability. This Agreement may not be assigned by
any party hereto without the prior written consent of the other party.
(c) 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. Except as otherwise expressly provided herein, 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
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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.
(d) Entire Agreement. This Agreement and the Stock Redemption
Agreement contains the entire understanding of the parties with respect to the
subject matter of such Agreements. This Agreement and the Stock Redemption
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.
(e) 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.
(f) Survival of Covenants, Representations and Warranties. The
covenants, representations and warranties given by the parties hereto and
contained herein shall survive this Agreement.
(g) Dismissal of Claims. Contemporaneous with the execution of
this Agreement, the parties will execute joint stipulations of dismissals with
prejudice (and any other documents necessary to effectuate the terms of Sections
5 or 6 of this Agreement), substantially in the form of Exhibit A, attached
hereto and incorporated by reference herein, with respect to all existing
litigation between the parties, including, but not limited to, the following
three pending lawsuits: (1) McCafferty's, Inc. v. First Mariner Bank, CA No.
98-257 1, pending in the United States Court of Appeals for the Fourth Circuit
(the "McCafferty's Litigation"); (2) Glen Burnie Bancorp et al. v. First Mariner
Bancorp, PHC 836, September Term 1998, pending in the Court of Special Appeals
of Maryland and (3) Glen Burnie Bancorp, et al. v. First Mariner Bancorp, et
al., Civil No. C- 9844772, pending in the Circuit Court for Anne Arundel County.
(h) 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.
(i) 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:
(1) If to First Mariner: 1801 S. Clinton Street
Baltimore, Maryland 21224
Attn: President
with copy to: Ober, Kaler, Grimes & Shiver
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A Professional Corporation
120 East Baltimore Street
Baltimore, Maryland 21202-1643
Attn: Frank C. Bonaventure,
Jr., Esq.
(2) If to Glen Burnie: 101 Crain Highway
P.O. Box 307
Glen Burnie, Maryland 21061
Attn: F. William Kuethe, Jr.,
President
with copy to: Price Gielen, Esquire
Neuberger, Quinn, Gielen,
Rubin & Gibber, P.A.
27th Floor
One South Street
Baltimore, Maryland 21202-3201
Addresses may be changed by notice in writing signed by the addressee.
(j) 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.
(k) 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.
(l) 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.
(m) 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.
(n) 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,
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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.
(o) The Parties' Understanding. The parties to this Agreement
have carefully read the foregoing, know and understand the content and meaning
of all provisions herein, and have executed the same as their own free act after
consultation with their attorneys. The parties intend to be legally bound by
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: FIRST MARINER BANCORP
/s/ Frank C. Bonaventure, Jr. By: /s/ Joseph A. Cicero (SEAL)
- ------------------------------------- -------------------------------------
GLEN BURNIE BANCORP
/s/ Paul Trice By: /s/ F. William Kuethe, Jr. (SEAL)
- ------------------------------------- -------------------------------------
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EXHIBIT A
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