FORM OF UNDERWRITING AGREEMENT Old Line Bancshares, Inc. Common Stock ($0.01 par value) August __, 2005
Exhibit 1.1
FORM OF
Old Line Bancshares, Inc.
Common Stock
($0.01 par value)
($0.01 par value)
August __, 2005
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Gentlemen:
Old Line Bancshares, Inc., a corporation organized under Maryland law (the “Company”),
proposes to employ you (“you” or the “Underwriter”), as agent to the Company, to assist the Company
in the public offerings of the Company’s Common Stock, par value $0.01 per share (the “Common
Stock”) on a best efforts basis of up to 1,500,000 shares of the Company’s Common Stock in the
public offering (the “Public Offering”). In addition, the Company may increase the number of
shares to be sold in the Public Offering by up to an additional 225,000 shares of Common Stock.
The shares of Common Stock to be issued in the Public Offering are referred to herein as the
“Shares.”
You have advised the Company (a) that you are authorized to enter into this Agreement and (b)
that you are willing to sell the Shares on a best efforts basis as agent for the Company.
In consideration of the mutual agreements contained herein and of the interests of the parties
in the transactions contemplated hereby, the Company and the Underwriter hereby agree as follows:
1. Representations and Warranties of the Company. The Company represents and warrants
as follows:
(a) The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) in accordance with the provisions of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a
registration statement on Form SB-2 (File No. 333-
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relating to the Shares to be sold in the Public Offering. Such registration statement as amended
at the time that it becomes effective is referred to collectively in this Agreement as the
“Registration Statement,” and the prospectus in the form filed with the Commission as part of the
Registration Statement or pursuant to its Rule 424(b) filing, if any, after the Registration
Statement becomes effective is referred to collectively as the “Prospectus.”
(b) Each preliminary Prospectus that is filed as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto and distributed by the
Underwriter or a selected dealer to potential purchasers complied, when so filed, in all material
respects with the provisions of the Securities Act; except that this representation and warranty
does not apply to statements in or omissions from information relating to the Underwriter in the
last paragraph on the front cover of the Prospectus and in the section of the Prospectus entitled
“Plan of Distribution” that were made in reliance upon and conformity with information furnished to
the Company by such Underwriter expressly for use therein.
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(c) The Registration Statement in the form in which it becomes effective and also in such form
as it may be when any post-effective amendment thereto shall become effective, and the Prospectus
filed as part of such Registration Statement and in the form first filed with the Commission under
its Rule 424(b) filing, if any, and when any supplement thereto is filed with the Commission, will
comply in all material respects with the provisions of the Securities Act and will not contain at
any such times an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from information relating
to the Underwriter in the last paragraph on the front cover of the Prospectus and in the section of
the Prospectus entitled “Plan of Distribution” that were made in reliance upon and conformity with
information furnished to the Company by the Underwriter expressly for use therein.
(d) The Company has the capitalization set forth in the Prospectus under the caption
“Capitalization.” All of the outstanding shares of Common Stock are duly authorized and validly
issued, fully paid and non-assessable and free of preemptive or similar rights. The Shares to be
issued and sold by the Company have been duly authorized, and upon delivery to the purchasers
thereof against payment therefor in accordance with the terms hereof, will have been validly issued
and fully paid and will be non-assessable and free of preemptive or similar rights; and the Common
Stock conforms in all material respects to the description thereof in the Registration Statement
and the Prospectus (or any amendment or supplement thereto). None of the Company’s issued and
outstanding shares of Common Stock was issued in violation of the Securities Act.
(e) The Company and its wholly owned subsidiary, Old Line Bank (the “Bank”), are duly
organized and validly existing and in good standing under Maryland law. There are no other
subsidiaries of the Company. The Company and the Bank are duly qualified to do business and are in
good standing in all jurisdictions that require such qualification or in which the failure to
qualify in such jurisdictions could have, in the aggregate, any material adverse effect on the
business, condition (financial or otherwise) or properties of the Company or the Bank. The Company
and the Bank hold all material licenses, certificates, permits and other authorizations from
governmental authorities necessary for the conduct of their businesses as described in the
Prospectus and own, or possess adequate rights to use, all material rights necessary for the
conduct of their business and have not received any notice of conflict with the asserted rights of
others in respect thereof; and the Company and the Bank have the corporate power and authority to
own their properties and conduct their businesses as described in the Prospectus. The Company is
duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.
The deposit accounts of the Bank are insured by the Bank Insurance Fund administered by the Federal
Deposit Insurance Corporation up to the maximum amount provided by law, and no proceedings for the
modification, termination or revocation of any such insurance are pending or, to the knowledge of
the Company, threatened.
(f) All of the outstanding shares of capital stock of the Bank are owned by the Company, have
been duly authorized and are validly issued, fully paid and non-assessable and are owned by the
Company free and clear of any lien, claim, security interest or other encumbrance.
(g) The Company and the Bank have good and marketable title to all property described in the
Prospectus as being owned by them, free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto or in a document filed as an exhibit to the Registration Statement)
or such as are not material and do not interfere in any material respect with the use of the
property or the conduct of the business of the Company and the Bank taken as a whole, and the
property held under lease by the Company or the Bank is held by them under valid and enforceable
leases with only such exceptions as in the aggregate are not material and do not interfere in any
material respect with the conduct of the business of the Company and the Bank taken as a whole;
provided that no representation or warranty is made hereby to the title of the lessor of any such
property.
(h) There are no legal or governmental proceedings pending, or to the knowledge of the Company
threatened, required to be described in the Registration Statement or the Prospectus (or any
amendment or
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supplement thereto) that are not described as required, and there is no contract or document of a
character required to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement that is not described or filed as required.
(i) Neither the Company nor the Bank is in violation of its articles of incorporation or
bylaws or in default in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which the Company or the Bank is a party or by
which its assets are bound, or in violation of any law, administrative regulation or ruling or
court decree applicable to the Company or the Bank or any of their properties. Neither the
issuance nor the sale of the Shares nor the execution and delivery of this Agreement nor the
performance of the obligations of the Company set forth herein nor the consummation of the
transactions herein contemplated requires any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body (except such as may be
required under the Securities Act or other securities laws or Blue Sky laws or rules of the
National Association of Securities Dealers, Inc. (the “NASD”) that may be applicable to the
Underwriter) or will conflict with the articles of incorporation or bylaws of the Company or the
Bank, or constitute a breach or default under any agreement, indenture or other instrument to which
the Company or the Bank is a party or by which either of them or their property is bound, or any
law, administrative regulation or ruling or court decree applicable to the Company or the Bank or
any of their properties, which conflict, breach or default would have a material adverse effect on
the business, condition (financial or otherwise) or property of the Company and the Bank taken as a
whole.
(j) Except as disclosed in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as of which such information is given in
the Registration Statement and the Prospectus (or any amendment or supplement thereto), the Company
has not incurred any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to the Company and the Bank
taken as a whole, and there has not been any material change in the capital stock, or material
increase in the short-term debt or long-term debt, of the Company or the Bank, or any material
adverse change, or any development involving a prospective material adverse change, in the
condition (financial or otherwise), business, net worth or results of operations of the Company and
the Bank taken as a whole.
(k) ▇▇▇▇▇▇ & Company, LLP, who have certified certain of the financial statements filed with
the Commission as part of the Registration Statement and the Prospectus, have consented in writing
to the inclusion of their report in the Prospectus and have informed the Company that they are an
independent registered public accounting firm as required by the Securities Act.
(l) The Company’s financial statements, together with related schedules and notes, forming
part of the Registration Statement and the Prospectus, present fairly the financial position and
the results of operations of the Company and the Bank at the respective dates or for the respective
periods to which they apply; such statements and related notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the financial and statistical information and data set forth in
the Registration Statement and the Prospectus is fairly presented and prepared on a basis
consistent with such financial statements and the books and records of the Company and the Bank;
provided, however, that any interim unaudited financial statements of the Company included in the
Registration Statement and the Prospectus are subject to normal year-end adjustments and lack
footnotes and other presentation items. The Company and the Bank have no material contingent
obligations that are not disclosed in the Registration Statement and the Prospectus (or any
amendment or supplement thereto).
(m) No holders of securities of the Company have rights to the registration of such securities
for sale in the Public Offering.
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(n) The Company and the Bank have filed all federal, state and foreign income tax returns that
have been required to be filed and have paid all taxes indicated by such returns and all
assessments received by them or any of them to the extent that such taxes have become due, and are
not being contested in good faith.
(o) The Company and the Bank hold all material licenses, certificates and permits from
governmental authorities that are necessary to the conduct of their businesses; and neither the
Company nor the Bank has infringed any patents, patent rights, trade names, trademarks or
copyrights in any manner material to the business of the Company and the Bank taken as a whole.
(p) The Company and the Bank are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary in the business in
which it is engaged; all policies of insurance and fidelity or surety bonds insuring the Company
and the Bank and their businesses, assets, employees, officers and directors, if any, are in full
force and effect; the Company and the Bank are in compliance with the terms of any such policies
and instruments in all material respects; and there are no claims by the Company or the Bank under
any such policy or instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; the Company and the Bank have not been refused any insurance
coverage sought or applied for; and the Company and the Bank have no reason to believe that they
will not be able to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue their businesses at a
cost that would not have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of them taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any amendment or supplement thereto).
(q) The Company and the Bank maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted accounting principles and
to maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(r) The Company has not taken, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in, under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of the Shares.
(s) No relationship, direct or indirect, exists between or among the Company on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company on the other hand,
that is required to be described in the Prospectus that is not so fully and accurately described.
(t) The Company is not and, after giving effect to the offer and sale of the Shares, will not
be an “investment company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended.
(u) Any statistical and market-related data included in the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources to the extent required.
(v) All employee benefit plans established, maintained or contributed by the Company and the
Bank comply, to the extent they are required to comply, in all material respects with requirements
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and no such plan
incurred or assumed
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any “accumulated funding deficiency” within the meaning of Section 302 of ERISA or has incurred or
assumed any material liability to the Pension Benefit Guaranty Corporation.
(w) This Agreement has been duly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable in accordance with its terms.
2. Sale of the Shares. On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Company agrees to issue and
sell up to 1,500,000 shares of the Common Stock in the Public Offering. The Company reserves the
right to increase the total number of shares of Common Stock in the Public Offering by up to an
additional 225,000 shares of Common Stock. All Shares to be offered and sold in the Public
Offering shall be issued and sold through the Underwriter, as agent for the Company, to the public
and the Underwriter agrees to use its best efforts to sell the Shares as agent for the Company, at
the price per share set forth on the cover page of the Final Prospectus for the Public Offering
(the “Public Offering Price”). The Company agrees to pay the Underwriter a commission (“Selling
Commission”) equal to five percent (5%) of the Public Offering Price of all Shares sold through the
Underwriter in the Public Offering (including Shares sold through selected dealers). It shall be
the Underwriter’s responsibility to compensate any selected dealers out of the commissions that it
receives from the Company. The Underwriter may reject any offer to purchase the Shares made
through the Underwriter or a selected dealer in whole or in part, and any such rejection shall not
be deemed a breach of the Underwriter’s agreement contained herein.
3. Sales by the Underwriter. It is understood that, after the Registration Statement
becomes effective, the Underwriter proposes to sell the Shares to the public as agent for the
Company upon the terms and conditions set forth in the Prospectus. The escrow procedures
established by the Underwriter shall comply with Commission Rule 15c2-4 promulgated under the
Exchange Act. All purchasers to whom the Underwriter directly sells Shares shall be instructed to
make their check for payment of the Shares payable to “Old Line Bancshares, Inc. Public Offering
Escrow Account.” In addition, the Underwriter shall comply with Rule 15c2-4. The Underwriter
shall transmit all funds that it receives from purchasers to SunTrust Bank, the escrow agent (the
“Escrow Agent”) by noon of the next business day following receipt thereof. Only broker/dealers
who are either (i) members in good standing of the NASD that are registered with the NASD and
maintain net capital pursuant to Rule 15c3-1 promulgated under the Exchange Act of not less than
$25,000 or (ii) dealers with their principal places of business located outside the United States,
its territories and its possessions and not registered as brokers or dealers under the Exchange
Act, who have agreed not to make any sales within the United States, its territories or its
possessions or to persons who are nationals thereof or residents therein shall be designated
selected dealers by the Underwriter. The Underwriter shall require all selected dealers to comply
with Rule 15c2-4.
4. Payment and Delivery. The Underwriter shall direct the Escrow Agent to make
payment for the Shares sold hereunder by wire transfer. Such payment is to be made at the offices
of Old Line Bancshares, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. local
time, on or about ______, 2005, or at such other time, date and place as you and the Company
shall agree upon, such time and date being herein referred to as the “Closing Date.” Unless the
transaction is closed book-entry through The Depository Trust Company and no certificates are
requested, in which case the procedures applicable thereto shall be complied with, the certificates
for the Shares will be delivered in such denominations and in such registrations as the Underwriter
requests in writing not later than the third (3rd) full business day prior to the Closing Date, and
will be made available for inspection by the Underwriter at least twenty-four (24) hours prior to
the Closing Date. Any such certificates will be delivered by the Company to its transfer agent, or
the Depository Trust Company, as applicable, by 12:00 p.m. on the day prior to the Closing Date,
along with addressed labels to be used to mail the certificates to the purchasers thereof. The
Company shall direct the Escrow Agent to deliver (i) payment of the portion of the Selling
Commission due to the Underwriter by wire transfer or certified or bank cashier’s check drawn to
the order of the Underwriter in next day funds, to the Underwriter on the Closing Date and (ii)
payment of the portion of the Selling Commission due to each selected dealer by wire transfer or
certified or bank cashier’s check drawn to the order of such selected dealer in next day funds, to
each selected dealer on the Closing Date.
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5. Covenants of the Company. The Company covenants and agrees with the Underwriter as
follows:
(a) The Company will endeavor to cause the Registration Statement to become effective and will
advise you promptly and, if requested by you, will confirm such advice in writing (i) when the
Registration Statement has become effective and when any amendment thereto thereafter becomes
effective, (ii) of any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the initiation or
contemplation of any proceeding for such purposes and (iv) within the period of time referred to in
Section 5(e) below, of the happening of any event that makes any statement made in the Registration
Statement or the Prospectus (as then amended or supplemented) untrue in any material respect or
that requires the making of any addition to or change in the Registration Statement or the
Prospectus (as then amended or supplemented) to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply with the Securities Act or
any other law. If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(b) The Company will furnish you, without charge, three signed copies of the Registration
Statement as originally filed with the Commission and of each amendment to it, including financial
statements and all exhibits thereto, and will also furnish to you, such number of conformed copies
of the Registration Statement (without exhibits) as originally filed and of each amendment thereto
as you may reasonably request.
(c) The Company will not file any amendment to the Registration Statement or make any
amendment or supplement to the Prospectus of which you shall not have been advised previously or to
which you shall reasonably object in writing promptly after being so advised.
(d) Prior to the effective date of the Registration Statement, the Company has delivered or
will deliver to you, without charge, in such quantities as you have requested or may hereafter
reasonably request, copies of each form of preliminary prospectus. The Company consents to the
use, in accordance with the provisions of the Securities Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the Underwriter and by dealers to whom
Shares may be sold, prior to the effective date of the Registration Statement, of each preliminary
prospectus so furnished by the Company.
(e) On the effective date of the Registration Statement and thereafter from time to time, for
such period as in the opinion of counsel for the Underwriter a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, the Company will deliver to you
and each dealer through whom Shares may be sold without charge (except as provided below) as many
copies of the Prospectus (and of any amendment or supplement thereto) as they may reasonably
request. The Company consents to the use of such Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Securities Act and with the securities or Blue
Sky laws of the jurisdictions in which the Shares are offered by the Underwriter and by dealers
through whom Shares may be sold, both in connection with the offering or sale of the Shares and for
such period of time thereafter as the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur that in the judgment of the
Company, or in the opinion of counsel for the Underwriter, requires that a material fact be stated
in the Prospectus (as then amended or supplemented) in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with the Securities Act or any other law, the Company
at its own expense (except as provided below) will forthwith prepare and file with the Commission
an appropriate amendment or supplement thereto, and will furnish to the Underwriter and each dealer
through whom Shares may be sold without charge (except as provided below), a reasonable number of
copies thereof.
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(f) The Company will cooperate with you and your counsel in connection with the registration
or qualification of the Shares for offer and sale by you and by dealers through whom Shares may be
sold under the securities or Blue Sky laws of such jurisdictions as you may reasonably designate
and will file such consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to the service of process in suits, other than those arising out
of the offer and sale of the Shares, in any jurisdiction where it is not now so subject.
(g) The Company will file all reports and other information that it is required to file after
the Closing Date pursuant to Section 13 or Section 15(d), as the case may be, of the Exchange Act
as necessary to permit the Underwriter to serve, in its sole discretion, as a market maker with
respect to the Common Stock.
(h) The Company will make generally available to its security holders an earnings statement,
which need not be audited, covering a 12-month period commencing after the effective date of the
Registration Statement and ending no later than 15 months thereafter, as soon as practicable after
the end of such period, which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and any applicable regulation.
(i) During the period of five years hereafter, the Company will furnish to you without charge
(i) as soon as available, a copy of each report of the Company mailed to shareholders or filed with
the Commission and (ii) from time to time such other proper information concerning the business and
financial condition of the Company as you may reasonably request.
6. Costs and Expenses.
(a) The Company will pay all costs and expenses incident to the performance by it of its
obligations hereunder, including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits), each preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, during the period specified
in Section 5(e) above but not exceeding nine months after the date on which the Shares are first
offered to the public, (ii) the preparation, printing, authentication, issuance and delivery of
certificates for the Shares, including any stamp tax in connection with the original issuance of
the Shares, (iii) the preparation and delivery by counsel to the underwriter of the preliminary and
supplemental Blue Sky Memoranda (including the reasonable fees and disbursements of counsel for the
Underwriter relating thereto), (iv) the registration or qualification, if required, of the Shares
for offer and sale under the securities or Blue Sky laws of the several states as provided in
Section 5(f) above (including the fees and disbursements of counsel for the Underwriter relating
thereto), (v) the fees and expenses of the Company’s accountants and the fees and expenses of
counsel for the Company and the reasonable fees and expenses of counsel for the Underwriter, (vi)
during the period specified in Section 5(e) above but not exceeding nine months after the date on
which the Shares are first offered to the public, delivery to the Underwriter and dealers through
whom Shares may be sold (including postage, air freight and the expenses of counting and packaging)
of such copies of the Registration Statement, the Prospectus, each preliminary prospectus and
amendments or supplements to the Registration Statement and the Prospectus as may be requested for
use by the Underwriter or by dealers through whom Shares may be sold in connection with the
offering and sale of the Shares and during such period of time thereafter as the Prospectus is
required, in the judgment of the Company or in the opinion of counsel for the Underwriter, to be
delivered in connection with the offer and sale of the Shares by you and by dealers, (vii) filing
fees with the NASD in connection with the Public Offering, (viii) filing fees and costs associated
with the inclusion of the shares for trading on the NASDAQ SmallCap Market; (ix) the costs of all
informational and/or investor due diligence meetings and (x) the performance by the Company of its
other obligations under this Agreement. The Underwriter shall pay its own costs and expenses
except as otherwise provided in this Agreement.
(b) If this Agreement shall be terminated pursuant to any of the provisions hereof (other than
by notice given by you terminating this Agreement pursuant to Section 11 below), or if this
Agreement shall be terminated by you because of any failure or refusal on the part of the Company
to comply in any material respect
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with the terms, or fulfill in any material respect any of the conditions, of this Agreement, the
Company agrees without further obligation to reimburse you for all out-of-pocket expenses
(including fees and expenses of your counsel, as provided in Section 6(a) above) reasonably and
actually incurred in connection herewith.
7. Conditions to the Obligations of the Underwriter. Your obligations hereunder are
subject to the following conditions:
(a) That the Registration Statement shall have become effective not later than 5:00 p.m., on
the date hereof, or at such later date and time as shall be consented to by you.
(b) That subsequent to the effective date of the Registration Statement, there shall not have
occurred any change, or any development involving a prospective change, in or affecting
particularly the condition (financial or otherwise), business, properties, net worth or results of
operations of the Company or the Bank not contemplated by the Prospectus (or any amendment or
supplement thereto) that, in your opinion, would materially adversely affect the market for the
Shares.
(c) That you shall have received on the Closing Date an opinion dated the Closing Date, from
Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation, counsel to the Company, to the effect
that:
(i) the Company and the Bank have been duly organized, are validly existing under the laws of
their respective state or other jurisdiction of incorporation or organization, are in good standing
under applicable law and are duly qualified to do business and are in good standing in all
jurisdictions that require such qualification or in which the failure to qualify in such
jurisdictions could, in the aggregate, have any material adverse effect on the business, condition
or properties of the Company or the Bank;
(ii) all of the shares of Common Stock of the Company outstanding prior to the issuance of the
Shares to be issued and sold by the Company hereunder have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) all of the outstanding shares of capital stock of the Bank are owned by the Company,
have been duly authorized and validly issued, and are fully paid and non-assessable and, to the
knowledge of such counsel, are owned by the Company free and clear of any lien, claim, security
interest or other encumbrance, except as otherwise described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or such as are not material;
(iv) the Shares to be issued and sold by the Company hereunder have been duly authorized, and
when issued and delivered in accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and non-assessable, and the issuance of such Shares is not subject to
any preemptive rights or, to the knowledge of such counsel, similar rights;
(v) except as described in the Prospectus, there are no warrants or options to purchase any
securities of the Company; to the knowledge of such counsel, the offering or sale of the Shares as
contemplated by this Agreement does not give rise to any rights for the offering or sale of other
shares of capital stock of the Company;
(vi) the certificates for the Shares are in proper legal form;
(vii) this Agreement has been duly authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery by the Underwriter) is a valid and binding
agreement of the Company enforceable in accordance with its terms, except in all cases as rights of
indemnity or contribution hereunder may be limited under applicable law and except as the
enforceability hereof may be limited
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by bankruptcy, receivership, moratorium, conservatorship, reorganization or other laws of general
application affecting the rights of creditors generally or general equitable principles;
(viii) neither the Company nor the Bank, to the knowledge of such counsel, is in violation of
its articles of incorporation or bylaws, in default in any material respect in the performance of
any obligation, agreement or condition contained in any bond, debenture, note or other evidence of
indebtedness or in any agreement, indenture or other instrument known to such counsel that is
material to the conduct of the business of the Company and the Bank taken as a whole, or in
violation of any law, administrative regulation or ruling or court decree applicable to the Company
or the Bank or any of their respective properties, and the execution, delivery and performance of
this Agreement, compliance by the Company with all provisions hereof and the consummation of the
transactions contemplated hereby will not conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the articles of incorporation or bylaws of the Company or the
Bank or, to the knowledge of such counsel, any material agreement, indenture or other instrument to
which the Company or the Bank is a party or by which either of them is bound, or (assuming
compliance with the Securities Act and other securities or Blue Sky laws) violate any law,
administrative regulation or ruling (except as the indemnification or contribution provisions in
this Agreement may be limited by applicable law) or, to the knowledge of such counsel, court decree
applicable to the Company or the Bank or any of their respective properties;
(ix) the Registration Statement has been declared effective by the Commission under the
Securities Act and, to the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and no proceedings for such
purpose have been instituted or are pending or are contemplated or threatened by the Commission;
(x) except for the order of the Commission making the Registration Statement effective and any
permits and similar authorizations required under other securities or Blue Sky laws, no consent,
approval, authorization or other order of any court, regulatory body, administrative agency or
other governmental body is required for the consummation of the sale of the Shares to the
purchasers through the Underwriter as contemplated by this Agreement;
(xi) the Company is not and, after giving effect to the offer and sale of the Shares, will not
be an “investment company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended.
(xii) the statements in the Prospectus under “Business — Legal Proceedings”, “Description of
Capital Stock” and “Supervision and Regulation” insofar as such statements constitute a summary of
the documents, legal matters or proceedings referred to therein, fairly and accurately present in
all material respects the information with respect to such documents, legal matters or proceedings;
(xiii) to the knowledge of such counsel, there are no pending or threatened legal or
governmental proceedings to which the Company or the Bank is a party or of which any property of
the Company or the Bank is the subject, which, if determined adversely to the Company or the Bank,
would individually or in the aggregate have a material adverse effect on the financial position or
results of operations of the Company and the Bank taken as a whole.
Subject to its customary practices and limitations relating to the scope of such counsel’s
participation in the preparation of the Prospectus and its investigation or verification of
information contained therein, Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation also shall
state that nothing has come to its attention to cause it to believe that the Prospectus (except for
financial statements, schedules and other financial data included therein, as to which such counsel
need not express any belief) contained any untrue statement of any material fact or omitted to
state any material fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus and any amendment or supplement thereto (except as aforesaid)
as of their respective dates
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contains any untrue statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading.
In rendering the opinions required by this section, such counsel may rely, as to matters of
fact, upon certificates and representations of officers of the Company and the Bank and on
certificates of public officials.
(d) That you shall have received on the Closing Date the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as
special counsel to you, dated the Closing Date, covering such matters as you may have reasonably
requested.
(e) That you shall have received letters addressed to you and dated the date hereof and the
Closing Date from ▇▇▇▇▇▇ & Company, LLP, independent registered public accountants, substantially
in the form heretofore approved by you.
(f) That (i) no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company, shall be contemplated by the Commission at or prior to the Closing Date;
(ii) there shall not have been any material change in the capital stock of the Company nor any
material increase in long-term debt of the Company or the Bank from that set forth or contemplated
in the Registration Statement and the Prospectus (or any amendment or supplement thereto); (iii)
there shall not have been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), any material adverse change in the condition (financial or otherwise),
business, properties, net worth or results of operations of the Company and the Bank, taken as a
whole; (iv) neither the Company nor the Bank shall have any material liability or obligation,
direct or contingent, other than those liabilities or obligations reflected in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) or incurred or arising in the
ordinary course of business; and (v) all of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects on and as of the
date hereof and the Closing Date as if made on and as of such date, and you shall have received a
certificate, dated the Closing Date and signed by the principal executive officer and the principal
financial officer of the Company, to the effect set forth in this Section 7(f) and Section 7(g)
below.
(g) That the Company shall not have failed at or prior to the Closing Date to have performed
or complied in any material respect with any of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(h) The Company shall have furnished you such further certificates and documents confirming
the representations and warranties contained herein and related matters as you may reasonably have
requested.
8. Conditions to the Obligations of the Company. The obligations of the Company to
sell and deliver the portion of the Shares required to be delivered as and when specified in this
Agreement are subject to the conditions that at or before 5:00 p.m., on the date of this Agreement,
or such later time and date to which the Company and the Underwriter may from time to time consent,
the Registration Statement shall have become effective; at the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been issued and be then in
effect or proceedings therefor initiated or threatened; and the Escrow Agent shall have tendered to
the Company payment for the Shares.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act from and against any and all losses, claims, damages, liabilities or expenses
(including reasonable
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costs of investigation) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement based upon information relating to the Underwriter in the
last paragraph on the front cover of the Prospectus and in the section of the Prospectus entitled
“Plan of Distribution” that was made in reliance upon and conformity with information furnished to
the Company by or on behalf of the Underwriter expressly for use in connection therewith; provided
that the indemnification contained in this paragraph with respect to any preliminary prospectus
shall not inure to the benefit of the Underwriter (or any person controlling the Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the sale of the Shares
by the Underwriter to any person if a copy of the Prospectus shall not have been delivered or sent
to such person with or prior to the written confirmation of the sale involved (or any supplement to
the Prospectus at the time of such confirmation was not so delivered or sent) and the statement or
omission giving rise to such loss, claim, damage, liability or expense was contained in the
preliminary prospectus and corrected in the Prospectus (or any supplement thereto at the time such
confirmation was delivered or sent).
(b) If any action or claim shall be brought against the Underwriter or any person controlling
the Underwriter, in respect of which indemnity may be sought against the Company in accordance with
Section 9(a) above, the Underwriter shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel and payment of all reasonable
fees and expenses. The Underwriter or any such person controlling the Underwriter shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the
reasonable fees and expenses of such counsel shall be at the expense of the Underwriter or such
controlling person unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel or (iii) the named parties to any
such action (including any impleaded party) include both the Underwriter or controlling person and
the Company and representations of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them (in which case, if such Underwriter or
controlling person notifies the Company in writing that it elects to employ separate counsel at the
expense of the Company, the Company shall not have the right to assume the defense of such action
on behalf of the Underwriter or such controlling person, it being understood, however, that the
Company shall not, in connection with any such action or separate but substantially related actions
in the same jurisdiction arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of attorneys at any time for
the Underwriter and controlling persons, which firm shall be designated in writing by you). The
Company shall not be liable for any settlement of any such action effected without the written
consent of the Company, but if settled with such written consent, or if there be a final judgment
for the plaintiff in any such action, the Company agrees to indemnify and hold harmless the
Underwriter and any such controlling person from and against any loss, liability, damage or expense
by reason of such settlement or judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and any person controlling the Company to the same
extent as the foregoing indemnity from the Company to the Underwriter, but only with respect to
information in the last paragraph on the front cover of the Prospectus and in the section of the
Prospectus entitled “Plan of Distribution” that was furnished by or on behalf of the Underwriter
expressly for use in the Registration Statement, the Prospectus or any preliminary prospectus, or
any amendment or supplement thereto. If any action or claim shall be brought or asserted against
the Company, its directors, any such officer or any such controlling person based on the
Registration Statement, the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto and in respect of which indemnity may be sought against the Underwriter, the
Underwriter shall have the rights and duties given to the Company by Section 9(b) above (except
that if the Company shall have assumed the defense thereof, the Underwriter shall not be required
to do so, but may employ separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of the Underwriter), and the
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Company, its directors, any such officer, any such controlling person shall have the rights and
duties given to the Underwriter by Section 9(b) above.
(d) If the indemnification of the Underwriter or the Company provided for in this Section 9 is
unavailable as a matter of law to the Underwriter or the Company, as the case may be, in respect of
any loss, claim, damage, liability or expense referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage, liability or expense (i)
in such proportion as is appropriate to reflect the relative benefits received by the Company, as
the case may be, on the one hand and the Underwriter on the other from the Public Offering or (ii)
if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the Underwriter on the
other in connection with the statements or omissions that resulted in such loss, claim, damage,
liability or expense, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriter on the other shall be deemed
to be in the same proportion as the total net proceeds from the Public Offering (before deducting
expenses) received by the Company, bear to the total underwriting commissions received by the
Underwriter as set forth in the table on the cover page of the Prospectus (as amended or
supplemented) and in the section entitled “Plan of Distribution” in the Prospectus (as amended or
supplemented). The relative fault of the Company on the one hand and of the Underwriter on the
other shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact related
to information supplied by the Company on the one hand or by the Underwriter on the other and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriter agree that it would not be just and equitable if contribution
pursuant to this Section 9(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities and expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth above, any legal or
other expenses actually and reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 9(d), the Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares sold by it as agent for the Company exceeds the
amount of any damages that the Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentations.
(e) In any proceeding relating to the Registration Statement, any preliminary prospectus, the
Prospectus or any supplement or amendment thereto, each party against whom contribution may be
sought under this Section 9 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court may be served upon
him or it by any other contributing party and consents to the service of such process and agrees
that any other contributing party may join him or it as an additional defendant in any such
proceeding in which such other contributing party is a party.
(f) The indemnity and contribution agreements contained in this Section 9 and the respective
agreements, representations, warranties and other statements of the Company or its officers and the
Underwriter set forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf of the Underwriter or
the Company or any person controlling the Underwriter, the Company or its directors, officers (or
any person controlling the Company), (ii) acceptance of any Shares and payment therefor hereunder
and (iii) any termination of this Agreement. A successor of the Underwriter or the Company or its
directors or officers referred to above (or of any person controlling the Underwriter or the
Company) shall be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
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10. Effective Date of Agreement. This Agreement shall become effective when signed by
the parties to it.
11. Termination of Agreement. This Agreement shall be subject to termination in your
sole discretion, without liability on your part, by notice given to the Company, if prior to the
Closing Date (i) trading in securities generally on the New York Stock Exchange or the Nasdaq Stock
Market, Inc. shall have been suspended or materially limited, (ii) a general moratorium on
commercial banking or thrift activities in Maryland or the United States shall have been declared
by either federal or state authorities or (iii) there shall have occurred any major outbreak or
escalation of hostilities or other international or domestic calamity or crisis or major change in
political, financial or economic conditions, the effect of which on the financial markets of the
United States is such as to make it, in your reasonable judgment, impracticable or inadvisable to
proceed with the Public Offering. Notice of such cancellation shall be given to the Company by
telegraph or telephone but shall be subsequently confirmed by letter.
12. Notices. All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered or telecopied and confirmed as follows: if to
the Underwriter, to ▇▇▇▇▇▇▇▇ & Company, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.; if to the Company, to Old Line Bancshares,
Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
13. Successors. This Agreement has been and is made solely for the benefit of the
Underwriter, the Company and their respective successors, executors, administrators, heirs and
assigns, and the officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term “successor” shall not include any
purchaser of the Shares merely because of such purchase.
14. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
15. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Virginia without reference to the conflict of laws principles
thereof.
If the foregoing letter is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement
between the Company and the Underwriter in accordance with its terms.
| Very truly yours, | ||||||
| Old Line Bancshares, Inc. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written. |
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▇▇▇▇▇▇▇▇ & COMPANY, INC. |
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By: |
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Name: |
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Title: |
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