EXHIBIT 99.1
STOCK REDEMPTION AGREEMENT
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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 ▇▇▇▇
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
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SECTION 1.1 Redemption of Shares. At the Closing (as
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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
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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.
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
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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
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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,
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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, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other time and place as
the parties hereto shall mutually agree (the "Closing").
ARTICLE V
OTHER AGREEMENTS
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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.
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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
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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
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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
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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.
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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
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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
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SECTION 7.1 Expenses and Taxes, Etc. Except as otherwise
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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
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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
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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
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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,
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representations and warranties given by the parties hereto and
contained herein shall survive the Closing.
SECTION 7.7 Headings. The article and section headings
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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,
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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: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
with copy to: Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
(ii)If to the Corporation: ▇▇▇▇ Burnie Bancorp
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
with copy to: Price Gielen, Esquire
Neuberger, Quinn, Gielen, Rubin &
Gibber, P.A.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Addresses may be changed by notice in writing signed by the
addressee.
SECTION 7.9 Severability. A determination that any
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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
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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
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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
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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
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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
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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
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essence with regard to all dates and time periods set forth or
referred to in this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be duly executed under seal as of the day and
year first above written.
WITNESS: SELLER:
FIRST MARINER BANCORP
/s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
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PURCHASER:
▇▇▇▇ BURNIE BANCORP
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. By:/s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.(SEAL)
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