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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 24, 1998 (November 17, 1998)
GLEN BURNIE BANCORP
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(Exact name of registrant as specified in its charter)
MARYLAND 0-24047 52-1782444
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
101 CRAIN HIGHWAY, S.E., GLEN BURNIE, MARYLAND 21227
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410)766-3300
-------------
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
------------
On November 17, 1998, the Registrant repurchased 213,169
shares of its common stock, par value $10 per share (the "Common
Stock"), or approximately 19.5% of shares outstanding for an
aggregate purchase price of $5,580,764.68 pursuant to a Stock
Redemption Agreement, dated November 17, 1998, between First
Mariner Bancorp ("First Mariner") and Glen Burnie Bancorp (the
"Redemption Agreement"). Contemporaneously with the Redemption
Agreement, the Registrant entered into a Standstill Agreement
with First Mariner which provides that, until November 17, 2008,
First Mariner will not, and will cause its majority-owned
subsidiaries not to and will use its 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 Registrant such that First
Mariner or such affiliate would become, as a result of
such transaction, a beneficial owner of Registrant's
voting securities;
(b) engage or participate in any solicitation of
proxies or consents regarding Registrant's voting
securities or induce or attempt to induce any other person
to initiate any stockholder proposals, or otherwise
communicate with Registrant's stockholders or others
pursuant to Rule 14a-1(1)(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 Registrant'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 assets, sale or purchase of
securities, dissolution, liquidation, restructuring,
recapitalization or similar transactions involving
Registrant or any of its affiliates;
(e) form, join or in any way participate in any
"group"(within the meaning of Section 13(d)(3) of the
Securities Exchange Act) with respect to Registrant's
voting securities;
(f) deposit any of Registrant's voting securities in
any voting trust or subject any of Registrant's voting
securities to any arrangement or agreement with respect to
the voting of any of Registrant'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 of Directors or
policies of Registrant;
(h) seek, alone or in concert with others, (a) to
call a meeting of stockholders of Registrant, (b)
representation on the Board of Directors of Registrant, or
(c) the removal of any member of the Board of Directors; or
(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 Registrant or its Affiliates,
or is conducting or contemplating
2
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a solicitation in opposition to a proposal by the Board or
management of Registrant.
The foregoing provisions will not be applicable in the
event of an acquisition of Registrant by a party that has acted
independently of and without the assistance or involvement of
First Mariner. In addition, First Mariner has agreed not to
make any loan secured by Registrant's voting securities or for
the purpose of acquiring or holding Registrant's voting
securities.
Registrant and First Mariner have agreed to release each
other and to release the directors, officers, employees and
stockholders of each other from all claims that Registrant or
First Mariner may have against the other except for claims
arising under either the Redemption Agreement or the Standstill
Agreement. Registrant and First Mariner have agreed to execute
joint stipulations of dismissal with prejudice with respect to
all existing litigation between the parities including but not
limited to McCafferty's, Inc. v. First Mariner Bank, CA No. 98-
257 (4th Cir.), Glen Burnie Bancorp et al. v. First Mariner
Bancorp, PHC 836 (Md. Ct. Sp. App.) and Glen Burnie Bancorp v.
First Mariner Bancorp et al., Civil Action 9844772 (Cir. Ct.
Anne Arundel). Registrant and First Mariner have further agreed
to indemnify each other and their directors, officers and
employees for claims arising from breaches of the Standstill
Agreement and (in the case of First Mariner) derivative claims
arising from the performance of the Redemption Agreement.
Under the Standstill Agreement, Registrant will make
payments over five years totaling $675,510.12 beginning with a
payment of $150,000 on January 15, 1999 with four additional
payments of $131,377.53 each beginning on January 15, 2000.
Registrant has the right to withhold payment and to offset
against any amount due for a breach by First Mariner under the
Standstill Agreement.
The foregoing discussion is qualified entirely by the
terms of the Redemption Agreement and Standstill Agreement which
are attached as Exhibits 99.1 and 99.2 to this report on Form 8-
K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
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(a) Financial Statements of Businesses Acquired. None
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(b) Pro Forma Financial Information. None
-------------------------------
(c) Exhibits. The following exhibits are filed as part of
-------- this report on Form 8-K:
EXHIBIT NO. DESCRIPTION
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99.1 Stock Redemption Agreement, dated
November 17, 1998, by and between
First Mariner Bancorp and Glen
Burnie Bancorp.
99.2 Standstill Agreement, dated
November 17, 1998, by and between
First Mariner Bancorp and Glen
Burnie Bancorp.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, hereunto duly
authorized.
GLEN BURNIE BANCORP
Date: November 24, 1998 By: /s/ F. William Kuethe, Jr.
--------------------------
F. William Kuethe, Jr.
President
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EXHIBIT 99.1
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
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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 Thousands 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
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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.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
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OF SELLER
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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 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
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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
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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 actions 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
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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 Approval. Any consents,
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approvals or authorizations of, or declarations, filings or
registrations with, any governmental or regulatory authority
required to be
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made or obtained by Seller 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 Seller.
SECTION 2.6 Litigation. There is no claim, action, suit
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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
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OF THE CORPORATION
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The Corporation represents and warrants to the Seller as
follows.
SECTION 3.1 Organization. The Corporation is a
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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
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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 by the Corporation; (b) except as disclosed in
writing to Seller, a breach of, or a default under, the terms
and 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
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or proceeding pending or, to the Corporation's knowledge,
threatened against the Corporation or any of its properties
which seeks
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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 IV
THE CLOSING
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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
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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
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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
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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 such remedy.
ARTICLE VI
INDEMNIFICATION
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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 delivery by the
claimant or the plaintiff to Corporation of a release from all
liability in respect thereof, unless Seller has actually paid to
the 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
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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
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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, representations 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 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 the 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
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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 any 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 Section 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 of 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.
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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.
SECTION 7.8 Notices. All notices, claims, certificates,
-------
requests, demand 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.
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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.
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 OR 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.
[SIGNATURES ON NEXT PAGE]
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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 V. Trice, Jr. By:/s/ F. William Kuethe, Jr.(SEAL)
- ---------------------------- --------------------------
11
<PAGE>
EXHIBIT 99.2
STANDSTILL AGREEMENT
--------------------
THIS STANDSTILL 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
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or exchangeable for such common stock or other securities,
whether or not subject to the passage of time or other
contingencies.
(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(1)(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;
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(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;
(i) support financially, or through the giving of
services or information except in response to a request by
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 requried 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 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
3<PAGE>
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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 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,
as 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 Principle
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
4<PAGE>
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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, 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 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.
5<PAGE>
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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 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 claims 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
6<PAGE>
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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 indemnify 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 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 that 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
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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.
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
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)).
8<PAGE>
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(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 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.
9<PAGE>
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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
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 principals 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 herein.
(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 Section 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 Marinier Bancorp, et
----------------------------------------------------
al., Civil No. C-9844772, pending in the Circuit Court for Anne
Arundel County.
10<PAGE>
<PAGE>
(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
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.
11<PAGE>
<PAGE>
(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, 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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12<PAGE>
<PAGE>
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 V. Trice, Jr. By:/s/ F. William Kuethe, Jr.(SEAL)
- ---------------------- --------------------------
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