Exhibit 10.2

 

SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

 

THIS SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this “Agreement”),
dated as of February 10, 2014, is made by and between FIRST MARINER BANCORP, a
Maryland corporation and a debtor and debtor in possession in a case pending
under Chapter 11 of the Bankruptcy Code (the “Borrower”), and RKJS Bank, a
Maryland corporation, as lender (together with its successors and assigns, the
“Lender”).

 

PRELIMINARY STATEMENTS

 

1.                                           The Borrower intends to file a
voluntary petition with the Bankruptcy Court on or after the date this Agreement
is executed (the date of such filing being referred to herein as the “Petition
Date”) initiating the Case and has continued in the possession of its assets and
in the management of its business pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.

 

2.                                           The Borrower has requested that the
Lender provide a delayed-draw term loan facility to the Borrower in an aggregate
principal amount not to exceed the Commitment (as defined herein).

 

3.                                           The proceeds of the Loans (as
defined herein) will be used solely in the manner set forth in Section 5.2
hereof.

 

4.                                           To provide security for the
repayment of all obligations of the Borrower hereunder and under the other Loan
Documents (as defined herein), the Borrower will provide to the Lender the
following (all as more fully described herein):

 

(a)                                 pursuant to Section 364 (c)(1) of the
Bankruptcy Code and the Order, as applicable, a Superpriority Claim in the Case
having priority over any administrative claims of any entity, including, without
limitation, any claims specified in or ordered pursuant to Sections 105, 326,
330, 331, 503(b), 506(c), 507, 726, 1113, 1114 or any other provisions of the
Bankruptcy Code,

 

(b)                                 pursuant to Section 364(c)(2) of the
Bankruptcy Code and the Order, a perfected first priority Lien on all
unencumbered property and assets of the Borrower of any kind (other than
Avoidance Actions and the proceeds therefrom), and

 

(c)                                  pursuant to Section 364(c)(3) of the
Bankruptcy Code, a perfected Lien on the property of the Borrower as more fully
described herein subject to (i) Liens for taxes not yet due and payable, and
(ii) any validly attached and properly perfected unavoidable prepetition Liens
on property of the Borrower (the Liens described in clauses (i) and (ii), the
“Permitted Liens”).

 

The parties hereto hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

1.1                               Defined Terms. As used in this Agreement
(including the recitals hereof), the terms listed in this Section 1.1 shall have
the respective meanings set forth in this Section 1.1.

 

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“Acquisition Agreement”:  the Merger and Acquisition Agreement, dated as of
February 7, 2014, by and among the Lender, the Borrower and FMBank relating to
the acquisition by the Lender of all the issued and outstanding shares of FMBank
and certain other assets of the Borrower and its Subsidiaries, which acquisition
shall be structured as a merger of the Lender with and into FMBank, and the
other transactions contemplated thereby.

 

“Acquisition Closing”:  as defined in this Section 1.1 in the definition of
Maturity Date.

 

“Affiliate”:  with respect to any Person, any Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person.  For the purposes of this definition, “control” (including, with
correlative meaning, the terms “controlled by” and “under common control with”)
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.

 

“Agreement”:  as defined in the preamble hereto.

 

“Alternative Transaction”: any plan, agreement or arrangement, other than the
Acquisition Agreement, or agreement to support or propose to the Bankruptcy
Court any plan, agreement or arrangement, other than the Acquisition Agreement,
the effect and/or results of which involve the recapitalization or acquisition
of FMBank and/or Borrower by any Person other than the “Investors” (as defined
in the Acquisition Agreement) through Lender.

 

“Alternative Transaction Order”:  as defined in this Section 1.1 in the
definition of “Maturity Date.”

 

“Applicable Rate”:  six percent (6.00%) per annum.

 

“Assignee”:  as defined in Section 8.7.

 

“Avoidance Actions”:  claims and causes of action arising under sections 502(d),
544, 545, 547, 548, 550 or 551 of the Bankruptcy Code.

 

“Bank Subsidiaries”:  the Subsidiaries of FMBank.

 

“Bankruptcy Code”:  Title 11 of the United States Code entitled “Bankruptcy”, as
now and hereafter in effect, or any successor statute.

 

“Bankruptcy Court”:  the United States Bankruptcy Court (or, as applicable, the
District Court) for the District of Maryland.

 

“Board”:  the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

“Borrower”:  as defined in the preamble hereto.

 

“Business”:  the business currently carried on by the Borrower and its
Subsidiaries.

 

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“Business Day”:  a day that FMBank is open to the public for the conduct of
banking business.

 

“Capital Lease Obligations”:  as to any Person, the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation), including
member interests, partnership interests and joint venture interests, and any and
all warrants, rights or options to purchase (or convertible into, or
exchangeable for) any of the foregoing.

 

“Case”:  the case of the Borrower to be filed (or, currently pending, as the
case may be) under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

 

“Cash Collateral”:  “cash collateral” as such term is defined in
Section 363(a) of the Bankruptcy Code, or any successor provision.

 

“Code”:  the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral”:  all of the “Collateral” referred to in the Order or the other
Security Documents and all of the other property and assets that are or are
intended under the terms of the Order or the other Security Documents to be
subject to Liens in favor of the Lender.

 

“Commitment”:  the obligation of the Lender to make Loans to the Borrower in an
aggregate principal amount at any time outstanding of up to $2,500,000.00, as
such amount may be reduced from time to time in accordance with the terms of
this Agreement.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code or the regulations thereunder.

 

“Contemplated Transactions”:  all of the transactions among the Borrower, FMBank
and the Lender contemplated by the Acquisition Agreement.

 

“Contractual Obligation”:  as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

 

“Creditors’ Committee”:  any official committee of unsecured creditors appointed
in the Case.

 

“Debtor Relief Laws”:  the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or

 

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other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

 

“Default”:  any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Disposition” or “Dispose”:  (a) the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property of
the Borrower or any of its Subsidiaries (other than FMBank) (or the granting of
any option or other right to do any of the foregoing), including any sale,
assignment, transfer or other disposal, with or without recourse, of any Capital
Stock owned by the Borrower or any of its Subsidiaries (other than FMBank), or
any notes or accounts receivable or any rights and claims associated therewith,
and (b) the issuance of Capital Stock by the Borrower or any of its Subsidiaries
to any Person (in the case of any such Subsidiary, other than the Borrower or
any of its Subsidiaries).

 

“Dollars” and “$”:  dollars in lawful currency of the United States.

 

“Effective Date”:  as defined in Section 4.1(a).

 

“Environmental Laws”:  the Legal Requirements relating to pollution or
protection of public or employee health or safety or the environment, including
laws relating to (i) emissions, discharges, releases or threatened releases of
Hazardous Materials, into the environment (including ambient air, indoor air,
surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials, and (iii) underground
and above ground storage tanks containing Hazardous Materials, and related
piping, and emissions, discharges, releases or threatened releases therefrom.

 

“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

“Event of Default”:  any of the events specified in Section 7, provided that any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

 

“Facility”:  the Commitment and the Loans made hereunder.

 

“First Day Orders”:  as defined in Section 4.1(d).

 

“FMBank”: First Mariner Bank, a Maryland chartered trust company.

 

“GAAP”:  generally accepted accounting principles in the United States as in
effect from time to time.

 

“Governmental Approval”:  any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.

 

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“Governmental Authority”:  any federal, state, municipal, county or regional
government or governmental or regulatory authority, domestic or foreign, and
includes any department, commission, bureau, board, administrative agency or
regulatory body of any of the foregoing or any non-governmental regulatory body
that provides standards for certification.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees or in effect guarantees, any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the Ordinary Course of
Business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

 

“Hazardous Material”:  any pollutant, contaminant or toxic or hazardous
substance, constituent, material or waste regulated under Environmental Laws,
including petroleum, crude oil or any fraction thereof or any petroleum product,
but does not include nominal quantities of any chemical used in the ordinary
course of business as office or cleaning supplies.

 

“Indebtedness”:  of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses
(a) through (g) above, and (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent

 

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or otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor.

 

“Investment”:  as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Capital Stock or debt of another Person, (b) a loan, advance or
capital contribution to, Guarantee Obligation or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor incurs
debt of the type referred to in clause (h) of the definition of “Indebtedness”
set forth in this Section 1.1 in respect of such Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit of, or all of a substantial part
of the business being conducted by, such Person.

 

“Legal Requirement”:  any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of
common law, code, regulation, statute or treaty.

 

“Lender”:   as defined in the preamble hereto.

 

“Lien”:  means any lien, pledge, mortgage, deed of trust, hypothecation,
interest, security interest, claim, lease, charge, option, right of first
refusal, levy, right of first offer, easement, servitude, transfer restriction
under any shareholder or similar agreement, tax (including foreign, federal,
state and local tax), order of any Governmental Authority, encumbrance or any
other restriction or limitation whatsoever of any kind or nature, whether
secured or unsecured, choate or inchoate, filed or unfiled, perfected or
unperfected, scheduled or unscheduled, noticed or unnoticed, recorded or
unrecorded, contingent or non-contingent, material or non-material, known or
unknown.

 

“Loan(s)”:  an extension of credit by the Lender to the Borrower pursuant to
Section 2.1.

 

“Loan Documents”:  this Agreement, the Security Documents, the Note, and any
other agreement, instrument, certificate, report and other document executed and
delivered pursuant hereto or thereto or otherwise evidencing or securing any
Loan or any other Obligation and any amendment, waiver, supplement or other
modification to any of the foregoing.

 

“Material Adverse Change”:  any fact, circumstance, event, effect, development,
occurrence or change that (1) has had, or would be reasonably likely to have, a
material and adverse effect on the business, results of operations, financial
condition, assets, properties, employees, liabilities (absolute, accrued,
contingent or otherwise) or reserves of FMBank, excluding any change with
respect to, or effect on, FMBank resulting from (i) changes in Legal
Requirements, GAAP or regulatory accounting requirements, as such would apply to
banks, (ii) changes after the date of this Agreement in national or regional
political conditions or general economic or market

 

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conditions (including changes in prevailing interest rates, credit availability
and liquidity) generally affecting banks and bank holding companies, except to
the extent that such change has a disproportionately adverse effect on FMBank as
compared to similarly situated banks, (iii) any actions or omissions expressly
required by this Agreement or that are taken at the written request of or with
the prior informed written consent of FMIB in contemplation of the Contemplated
Transactions, and (iv) any pre-Closing restriction or conditions imposed on
FMBank as a result of regulatory agreements to which FMBank is a party as of the
date of this Agreement, or (2) prevents or materially impairs the ability of
either or both of the Companies to timely consummate the Contemplated
Transactions.  For purposes of determining whether a Material Adverse Change has
occurred based on an increase in FMBank’s classified loans or other real estate
owned, such determination shall be made from the date of this Agreement.  The
conditions resulting in and from the filing of the Bankruptcy Case will not be
deemed to be a Material Adverse Change.

 

“Maturity Date”:  the date which is the earliest of (a) the date that is
four (4) months from the date of the first Loan under this Agreement, provided,
that, if the Lender is the winning bidder in the Sale Hearing, but there is a
delay in closing the Contemplated Transactions due to the need for Governmental
Approval(s), such date shall automatically be extended to the earlier of (i) the
“Closing” (as defined in the Acquisition Agreement) of the Contemplated
Transactions (the “Acquisition Closing”), and (ii) if under the Acquisition
Agreement the Lender has the ability to terminate due to a failure or inability
to obtain government approvals, the date of termination of the Acquisition
Agreement by the Lender under section 8.01(b)(ii) thereof, (b) the Acquisition
Closing, (c) the first Business Day following entry by the Bankruptcy Court of
an order approving an Alternative Transaction (an “Alternative Transaction
Order”), (d) the effective date as of which the Acquisition Agreement terminates
in accordance with its terms (so long as such termination is not due to a breach
thereof by the Lender), (e) the earlier of the effective date or the substantial
consummation (as defined in Section 1101(2) of the Bankruptcy Code) of a Plan of
Reorganization that has been confirmed by an order of the Bankruptcy Court,
(f) such earlier date on which all Loans and other Obligations for the payment
of money shall become due and payable in accordance with the terms of this
Agreement and the other Loan Documents, including Section 7 hereof, and (g) the
date that the Federal Deposit Insurance Corporation (or any successor thereto)
is appointed receiver or conservator of FMBank.

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Net Cash Proceeds”:  with respect to any Disposition by the Borrower or any of
its Subsidiaries (other than FMBank), the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
the Borrower of such Subsidiary, in connection therewith after deducting
therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien
on any asset (other than Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such Disposition
(other than Indebtedness under this Agreement), (ii) reasonable expenses related
thereto incurred by the Borrower or such Subsidiary in connection therewith
(including, without limitation, attorneys’ fees and accountants’ fees),
(iii) transfer taxes paid to any taxing authorities by the Borrower or such
Subsidiary in connection therewith, and (iv) income and franchise taxes to be
paid in connection with such

 

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Disposition (after taking into account any tax credits or deductions and any tax
sharing arrangements); in each case, to the extent, but only to the extent, that
the amounts so deducted are (x) actually paid or required to be paid (and
reserved for such purpose) to a Person that, except in the case of reasonable
out-of-pocket expenses, is not an Affiliate of the Borrower or any of its
Subsidiaries and (y) properly attributable to such transaction or to the asset
that is the subject thereof

 

“Non-Excluded Taxes”:  as defined in Section 2.7.

 

“Note”:  a Promissory Note in form and substance reasonably satisfactory to the
Lender.

 

“Notice of Borrowing”:  a notice of a borrowing substantially in the form of
Exhibit A.

 

“Obligations”:  the unpaid principal of and interest on (including interest
accruing after the maturity of the Loans) the Loans, and all other obligations
and liabilities of the Borrower to the Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses, or otherwise.

 

“Order”:  an order of the Bankruptcy Court in the Case in substantially the form
attached hereto as Exhibit B authorizing and approving this Credit Agreement and
the other Loan Documents, which order has not been reversed, stayed, or vacated
pursuant to applicable law or by an order of the Bankruptcy Court or other court
of competent jurisdiction.

 

“Ordinary Course of Business” or “in the Ordinary Course”:  the conduct of the
Business in substantially the same manner as the Business was operated on the
date of this Agreement, including operations in conformance with FMBank’s
practices and procedures as of such date.

 

“Other Taxes”:  any and all present or future stamp or documentary taxes or any
other excise taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

 

“Patriot Act”:  the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, Title III of Pub. L. 107-56, signed into law October 26, 2001.

 

“PBGC”:  the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Liens”:  as defined in the preliminary statements hereto.

 

“Permitted Uses” as defined in Section 5.2.

 

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“Person”:  means an individual, legal personal representative, corporation,
limited liability company, partnership, firm, trust, trustee, syndicate, joint
venture, unincorporated organization or Governmental Authority or other entity
of whatever nature.

 

“Petition Date”:  as defined in the preliminary statements hereto.

 

“Plan”:  at a particular time, any employee benefit plan that is covered by
ERISA and in respect of which the Borrower or a Commonly Controlled Entity
(i) is (or, if such plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA,
(ii) is a sponsor, (iii) is obligated to contribute thereto, or (iv) otherwise
has any liability with respect thereto.

 

“Plan of Reorganization”:  a plan or plans of reorganization with respect to the
Case.

 

“Properties”:  the facilities and properties owned, leased or operated by the
Borrower.

 

“Regulation U”:  Regulation U of the Board as in effect from time to time.

 

“Reorganization”:  with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event”:  any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
of PBGC Reg. § 4043.

 

“Requirement of Law”:  as to any Person, the Bylaws and Certificate of
Incorporation or other organizational or governing documents of such Person, and
any Legal Requirement, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president, chief financial
officer, treasurer or assistant treasurer of the Borrower or any of the other
individuals designated in writing to the Lender by an existing Responsible
Officer of the Borrower as an authorized signatory of any certificate or other
document to be delivered hereunder.

 

“Sale Hearing”:  a sale hearing conducted by the Bankruptcy Court to consider
the approval of the Contemplated Transactions.

 

“Sale Milestones”:  the following milestones with respect to the Contemplated
Transactions, in each case, in a manner satisfactory to the Lender in its sole
and absolute discretion:

 

(a)                                 the Petition Date shall have occurred no
later than one Business Day after the date of the Acquisition Agreement;

 

(b)                                 the Borrower shall file a motion in form and
substance satisfactory to the Lender in its sole and absolute discretion seeking
approval of procedures for an auction (the “Auction”) with respect to the sale
contemplated by the Acquisition Agreement (the “Auction Procedures Motion”) on
the Petition Date;

 

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(c)                                  a hearing of the Bankruptcy Court to
approve the Auction Procedures Motion shall be held and entry of the Auction
Procedures Order (as such term is defined in the Acquisition Agreement) shall
occur not later than 25 days after the Petition Date;

 

(d)                                 the deadline for submission of qualified
bids for the Auction shall occur not later than 30 days after the hearing to
approve the Auction Procedures Motion is held (the “Bid Deadline”);

 

(e)                                  the Auction shall be held not later than 5
days after the Bid Deadline; and

 

(f)                                   a hearing of the Bankruptcy Court to
approve the successful bid in the Auction shall be held not later than 2
Business Days after the Auction, or if there are no Qualified Bidders (as
defined in the Acquisition Agreement), no later than 5 days following the Bid
Deadline.

 

“SEC”:  the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Secured Obligations”:  as defined in the Security Agreement.

 

“Securities Act”:  the Securities Act of 1933, as amended from time to time and
any successor statute.

 

“Security Agreement”:  that certain Superpriority Debtor-In-Possession Security
Agreement dated of even date herewith by the Borrower to and for the benefit of
Lender, as it may be amended, supplemented or otherwise modified from time to
time.

 

“Security Documents”:  the collective reference to the Security Agreement, the
Order, any guaranty, and all other security documents hereafter delivered to the
Lender granting a Lien on any property of any Person to secure the Obligations.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

 

“Subsidiary”:  when used with reference to an entity, any corporation, a
majority of the outstanding voting securities of which are owned directly or
indirectly by such entity or any partnership, joint venture or other enterprise
in which any entity has, directly or indirectly, a majority equity interest.

 

“Superpriority Claim”:  a claim under Section 364(c)(1) of the Bankruptcy Code
against the Borrower in the Case which is an administrative expense claim having
priority over any or all administrative expenses, including, without limitation,
administrative expenses of the kind specified in Sections 503(b), 506(c) or
507(b) of the Bankruptcy Code.

 

“Uniform Commercial Code” or “UCC”:  the Uniform Commercial Code (or any similar
or equivalent legislation) as in effect from time to time in the State of
Maryland or any other applicable jurisdiction.

 

“United States”:  the United States of America.

 

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“UST”:  the Office of the United States Trustee.

 

1.2                               Other Definitional Provisions.

 

(a)                                 Unless otherwise specified therein, all
terms defined in this Agreement shall have the meanings set forth herein when
such terms are used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.

 

(b)                                 As used herein and in the other Loan
Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, (i) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (ii) the word “incur”
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words “incurred” and “incurrence” shall
have correlative meanings), (iii) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights and
(iv) references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time.

 

(c)                                  The words “hereof’, “herein” and
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

 

(d)                                 The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.

 

SECTION 2.  AMOUNT AND TERMS OF COMMITMENT

 

2.1                               Commitment.

 

(a)                                 Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, the Lender
agrees to make Loans to the Borrower at any time and from time to time from the
Effective Date to the Maturity Date, or until the earlier reduction of its
Commitment to zero in accordance with the terms hereof, in an aggregate
principal amount of Loans at any time outstanding not to exceed the amount of
the Commitment.

 

(b)                                 Notwithstanding the foregoing:

 

(i)                                     The aggregate principal amount of Loans
outstanding at any time to the Borrower shall not exceed the Commitment in
effect at such time.

 

(ii)                                  The Commitment shall automatically and
permanently be reduced to zero on the Maturity Date.  Within the limits set
forth herein, the Borrower may borrow, prepay and repay Loans, on or after the
Effective Date and prior to the Maturity Date, subject to the terms, provisions
and limitations set forth herein; provided, however, that amounts repaid or
prepaid may not be reborrowed.

 

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2.2                               Making the Loans.

 

(a)                                 The Borrower shall give the Lender prior
telephonic notice (immediately confirmed in writing by e-mail, in substantially
the form of Exhibit A hereto (a “Notice of Borrowing”)), not later than 12:00
noon (Maryland time) on the date which is three (3) Business Days prior to the
date of the proposed Loan (or such shorter period as the Lender is willing to
accommodate from time to time, but in no event later than 12:00 noon (Maryland
time) on the borrowing date of the proposed Loan).  Such Notice of Borrowing
shall be irrevocable and shall specify (i) the aggregate principal amount of the
proposed Loan and line-item amounts for each of the proposed uses of the
proposed Loan, (ii) the use(s) of the proposed Loan, in reasonable detail (which
use(s) must be Permitted Uses) and (iii) the proposed borrowing date, which must
be a Business Day.  The Lender may act without liability upon the basis of
written, electronic, telecopied, or telephonic notice believed by the Lender in
good faith to be from the Borrower (or from any Responsible Officer thereof
designated in writing purportedly from the Borrower to the Lender).  The
Borrower hereby waives the right to dispute the Lender’s record of the terms of
any such telephonic Notice of Borrowing.  The Lender shall be entitled to rely
conclusively on any Responsible Officer’s authority to request a Loan on behalf
of the Borrower until the Lender receives written notice to the contrary.  The
Lender shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing.

 

(b)                                 Each Loan shall be made in a minimum amount
of $100,000.

 

2.3                          Repayment of the Loans.  The Loans shall mature on
the Maturity Date and shall be indefeasibly repaid in full in immediately
available funds (subject to Sections 2.02 and 5.20(n) of the Acquisition
Agreement) on the Maturity Date. Unless otherwise provided under this Agreement,
all payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 noon (Maryland
time) on the due date thereof to the Lender at the office of the Lender
specified in Section 8.2 (or such other office as may be specified from time to
time by the Lender by written notice to the Borrower), in Dollars and in
immediately available funds. If any payment hereunder becomes due and payable on
a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. In the case of any extension of any payment of
principal pursuant to the preceding sentence, interest thereon shall be payable
at the then applicable rate during such extension.

 

2.4                          Reduction of Commitment; Prepayments.

 

(a)                                 Termination; Reduction of Commitment.

 

(i)                   The Commitment shall terminate on the Maturity Date.

 

(ii)                The Borrower may, without premium or penalty, reduce the
Commitment to an amount (which may be zero) not less than the sum of (A) the
aggregate unpaid principal amount of all Loans then outstanding and (B) the
aggregate principal amount of all Loans not yet made as to which a Notice of
Borrowing has been given by the Borrower under Section 2.2.  Each such reduction
(1) shall be in an amount which is an integral multiple of $100,000 (unless the
Commitment in effect immediately prior to such reduction is less than

 

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$100,000), (2) shall be made by providing not less than three (3) Business Days’
prior written notice to the Lender and (3) shall be irrevocable.

 

(iii)                               The Commitment shall automatically be
reduced to the “Maximum DIP Loan Amount” (as such term is defined in the
Acquisition Agreement) in accordance with the terms of the Acquisition
Agreement; provided, however that if the Lender is approved at the Sale Hearing
as the winning bidder with respect to the Contemplated Transaction, the
Commitment shall be automatically, upon the entry of the Sale Order, increased
to $2.500,000.

 

(iv)                              Except as provided in Section 2.4(a)(iii),
once reduced, the Commitment may not be increased.

 

(b)                                 Optional Prepayment.  The Borrower may at
any time and from time to time prepay the principal of any Loan, in whole or in
part without penalty or premium.

 

(c)                                  Mandatory Prepayment.

 

(i)                                     If at any time the aggregate principal
amount of all Loans exceeds the Commitment, the Borrower shall immediately
prepay the Loans to the full extent of any such excess.

 

(ii)                                  Immediately upon any Disposition by the
Borrower or any of its Subsidiaries (other than FMBank), the Borrower shall
prepay the outstanding principal amount of the Loans in an amount equal to 100%
of the Net Cash Proceeds received by such Person in connection with such
Disposition.  Nothing contained in this subsection (ii) shall permit the
Borrower or any of its Subsidiaries (other than FMBank) to make a Disposition of
any property other than in accordance with Section 6.5.

 

2.5                          Interest Rates and Payment Dates.  Each Loan shall
bear interest at a rate per annum equal to the Applicable Rate. All computations
of interest shall be made on the basis of a 360- day year and actual days
elapsed.

 

(a)                                 (i) On or prior to the Maturity Date, if any
Event of Default shall occur, the Loans (whether or not overdue) shall bear
interest at a rate per annum equal to the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%,
(ii) after the Maturity Date, the Loans shall bear interest at a rate per annum
equal to the rate then applicable to the Loans under the Facility plus 2% and
(iii) if all or a portion of any interest payable on any Loan or any other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to the Loans under the
Facility plus 2%, in each case, with respect to clauses (i), (ii) and
(iii) above, from the date of such non-payment until such amount is indefeasibly
paid in full in immediately available funds (as well after as before judgment).

 

(b)                                 Interest shall accrue and be payable on the
Maturity Date, provided that interest accruing pursuant to paragraph (a) of this
Section shall be payable from time to time on demand.

 

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(c)                                  Notwithstanding the foregoing, if the
Lender is the winning bidder in the Sale Hearing, and subject to the occurrence
of the Acquisition Closing, any interest or fees that have accrued shall be
forgiven by the Lender and the Borrower shall have no obligation to make any
interest payments hereunder. For the avoidance of doubt, however, interest or
fees that have accrued shall not be forgiven by the Lender, and the Borrower
shall have an obligation to make all interest payments hereunder in accordance
with the terms hereof, including with respect to all interest and fees accrued
prior to the Sale Hearing, if the Lender is not the winning bidder in the Sale
Hearing or if the Lender is the winning bidder in the Sale Hearing but the
Acquisition Agreement is terminated prior to the Acquisition Closing for any
reason other than pursuant to Section 8.01(b)(ix) of the Acquisition Agreement.

 

2.6                               [Reserved].

 

2.7                               Taxes.

 

(a)                                 All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding:  (i) taxes imposed on or measured by net income and
franchise taxes (imposed in lieu of net income taxes) imposed on the Lender as a
result of (x) such Lender being organized under the laws of, or having its
principal office located in, the jurisdiction imposing such tax or (y) such
Lender having a present or former connection between the Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document), (ii) U.S. withholding taxes imposed on
any amount payable to a Lender pursuant to a law in effect on the date such
Lender becomes a party to this Agreement, (iii) taxes that are attributable to
the Lender’s failure to comply with the requirements of Section 2.7(d) of this
Agreement, and (iv) taxes that are attributable to the gross negligence of
Lender. If any taxes that are not described in clauses (i) through (iv) of the
prior sentence (such taxes, the “Non-Excluded Taxes”) or Other Taxes are
required to be deducted or withheld from any amounts payable to the Lender
hereunder, the amounts so payable to the Lender shall by way of additional
interest be increased to the extent necessary to pay to the Lender (after
payment of all Non-Excluded Taxes and Other Taxes) a sum equal to the amount
such Lender would have received had no such deduction of withholding been
required.

 

(b)                                 In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

(c)                                  Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Lender for its own account a certified copy of an
original official receipt received by the Borrower showing payment thereof.  If
the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other

 

14

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required documentary evidence, the Borrower shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure.

 

(d)                                 Each Lender that is organized under the laws
of:  (i) the United States shall execute and deliver to the Borrower two of more
completed originals of IRS form W-9 on or prior to the Effective Date and
(ii) the laws of a jurisdiction other than the United States shall execute and
deliver to the Borrower two or more (as the Borrower may request) completed
originals of IRS form W-8ECI, W-8BEN, or W-8IMY (and any supporting
documentation requested by the Borrower), as applicable, or other applicable
form, certificate or document prescribed by the United States IRS certifying as
to such Lender’s entitlement to exemption from U.S. withholding taxes on or
prior to becoming a Lender under this Agreement.

 

(e)                                  The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

2.8                               Evidence of Indebtedness.  The Lender shall
maintain an account or accounts evidencing the Obligations of the Borrower to
the Lender resulting from each Loan made by the Lender, including the amounts of
principal and interest payable and paid to the Lender from time to time
hereunder.  The entries made in such accounts. to the extent permitted by
applicable law, shall be prima facie evidence of the existence and amounts of
the obligations recorded therein, absent manifest error; provided, that the
failure of the Lender to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement and the other Loan Documents.  The
Lender may request that the Loans be evidenced by a Note and, in such event, the
Borrower shall promptly execute and deliver a Note to the Lender.

 

2.9                               Priority and Liens.

 

(a)                                 Superpriority Claims and Liens.  The
Borrower hereby covenants, represents and warrants that, upon entry of the
Order, the Obligations of the Borrower to the Lender under the Loan Documents:

 

(i)                                     pursuant to Section 364(c)(1) of the
Bankruptcy Code, shall at all times constitute an allowed Superpriority Claim of
the Lender;

 

(ii)                                  pursuant to Section 364(c)(2) of the
Bankruptcy Code, shall at all times be secured by a perfected first priority
Lien on all tangible and intangible property of the Borrower that is not subject
to Permitted Liens (other than Avoidance Actions and the proceeds therefrom);
and

 

(iii)                               pursuant to Section 364(c)(3) of the
Bankruptcy Code, shall be secured by a perfected Lien upon all tangible and
intangible property of the Borrower that is subject to Permitted Liens.

 

(b)                                 Real Property. Subject in all respects to
the terms of the Order, and the priorities set forth in Section 2.9(a) above,
the Borrower grants to the Lender a security interest in, and mortgage on, all
of the right, title and interest of the Borrower in all real property owned by
the Borrower (including leasehold interests), including the real property
described on

 

15

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Exhibit C attached hereto, together with all of the right, title and interest of
the Borrower in and to all buildings, improvements, and fixtures related thereto
(the “Real Property”), all general intangibles relating thereto and all proceeds
thereof, to secure repayment of the Obligations. The Borrower acknowledges that,
pursuant to the Order, the Liens in favor of the Lender on the Real Property
shall be perfected without the recordation of any instruments of mortgage or
assignment. The Borrower agrees that (i) upon the reasonable request of the
Lender, the Borrower shall promptly enter into separate mortgages on all Real
Property having a value (together with improvements thereof) of at least
$250,000 in recordable form with respect to such properties on terms reasonably
satisfactory to the Lender, and (ii) the Borrower shall pay any and all
transfer, documentary, stamp, registration and other such taxes and fees
(including any penalties and interest) incurred in connection with the filing
and/or recordation of any and all instruments of mortgage or assignment with
respect to the Loans. The Borrower hereby assents to the passage of a decree for
the sale of the Real Property upon the occurrence and continuation of an Event
of Default.

 

(c)                                  Set-Off. Subject to Section 7 hereof, upon
the occurrence and during the continuance of any Event of Default, the Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable Legal Requirements and without further order of or
application to the Bankruptcy Court, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, other than payroll,
trust, withholding and tax accounts) at any time held by, or on behalf of,
Lender, and other indebtedness at any time owing by the Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower under the Loan Documents, whether or not such obligations are then
due. The Lender shall notify the Borrower of such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of the Lender under this
Section 2.9(c) are in addition to other rights and remedies which it may have on
the Maturity Date or upon the occurrence and during the continuance of any Event
of Default under the Loan Documents or the Order.

 

(d)                                 Discharge. The Borrower agrees that (i) its
obligations hereunder shall not be discharged by the entry of an order
confirming a Plan of Reorganization (and the Borrower, pursuant to
Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and
(ii) the Superpriority Claim granted to the Lender pursuant to the Order, and
described in Section 2.9(a) and the Liens granted to the Lender pursuant to the
Order, and the Security Documents shall not be affected in any manner by the
entry of an order confirming a Plan of Reorganization.

 

2.10                        Security.  Upon entry of the Order, as security for
the prompt payment and performance of all Secured Obligations of the Borrower,
the Borrower has granted, in accordance with the provisions hereof, the Security
Documents applicable to the Borrower and the Order, to the Lender a security
interest in all of its right, title and interest in and to all of the
Collateral.

 

SECTION 3.  REPRESENTATIONS AND WARRANTIES

 

To induce the Lender to enter into this Agreement and to make the Loans, the
Borrower hereby represents and warrants to the Lender that:

 

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3.1                               Continued Compliance with the Acquisition
Agreement.  Each of the representations and warranties made by the Borrower and
FMBank in or pursuant to the Acquisition Agreement is true and correct in all
respects (in the case of any representation or warranty that is subject to a
materiality or Material Adverse Change qualifier) or in all material respects
(in the case of any representation or warranty that is not subject to a
materiality or Material Adverse Change qualifier), and Borrower and FMBank have
performed and complied with all of their obligations and agreements under the
Acquisition Agreement in all respects (in the case of any representation or
warranty that is subject to a materiality or Material Adverse Change qualifier)
or in all material respects (in the case of any representation or warranty that
is not subject to a materiality or Material Adverse Change qualifier).

 

3.2                               No Legal Bar. Subject to the entry of the
Order (which shall have occurred prior to the making of the Loan), the
execution, delivery and performance of this Agreement and the other Loan
Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate in any material respect any Requirement of Law or any Contractual
Obligation of the Borrower and will not result in, or require, the creation or
imposition of any Lien on any of its properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents).

 

3.3                               No Default. The Borrower is not in default
under or with respect to any of its Contractual Obligations in any respect that
could reasonably be expected to result in a Material Adverse Change, except as
set forth on Schedule 3.3.

 

3.4                               Federal Regulations. No part of the proceeds
of the Loans, and no other extensions of credit hereunder, will be used (a) for
“buying” or “carrying” any “margin stock” within the respective meanings of each
of the quoted terms under Regulation U as now and from time to time hereafter in
effect for any purpose that violates the provisions of the Regulations of the
Board or (b) for any purpose that violates the provisions of the Regulations of
the Board. If requested by the Lender, the Borrower will furnish to the Lender a
statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

 

3.5                               Investment Company Act; Other Regulations. The
Borrower is not an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Requirement of
Law (other than Regulation X of the Board) that limits its ability to incur
Indebtedness, except for any such limitations that are otherwise generally
applicable to bank holding companies.

 

3.6                               Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished by or on behalf of the Borrower to
the Lender for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading.

 

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3.7                               Financial Statements; No Material Adverse
Change.

 

(a)                                 The Borrower has furnished or made available
to the Lender true and complete copies of the consolidated financial statements
of the Borrower and its Subsidiaries for the periods ending December 31, 2012,
December 31, 2011 and September 30, 2013 (the “Financial Statements”).  The
Financial Statements (i) fairly present, in all material respects, the financial
position of the Borrower and its Subsidiaries as of the respective dates and the
results of their respective operations for the periods indicated in such
Financial Statements in conformity with GAAP applied on a consistent basis, and
(ii) do not contain any items of special or nonrecurring income or any other
income not earned in the Ordinary Course of Business except as expressly
specified therein.

 

(b)                                 There is no fact known to the Borrower that
could reasonably be expected to result in a Material Adverse Change that has not
been expressly disclosed in the Acquisition Agreement, in this Agreement, in the
other Loan Documents or in any other documents, certificates and statements
furnished to the Lender for use in connection with the transactions contemplated
hereby and by the other Loan Documents.

 

3.8                               Ownership Of Property; Liens; Investments.

 

(a)                                 The Borrower has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the Ordinary Course of Business, except for such defects in
title as could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change.

 

(b)                                 The property of the Borrower is not subject
to any Liens, other than Liens permitted by Section 6.1.

 

3.9                               Secured Superpriority Obligations. On and
after the Effective Date and the entry of the Order, the Order and the Loan
Documents are sufficient to provide the Superpriority Claims and Liens described
in, and with the priority provided in, Section 2.9 of this Agreement and the
Order.  From and after entry of the Order, the Order shall be in full force and
effect and shall not have been vacated, reversed, modified, amended, rescinded
or stayed without the prior written consent of the Lender.

 

SECTION 4.  CONDITIONS PRECEDENT

 

4.1                               Conditions to Effective Date.  This Agreement
shall become effective as of the Business Day (the “Effective Date”) when each
of the following conditions precedent shall have been satisfied or waived in a
manner satisfactory to the Lender in its sole and absolute discretion:

 

(a)                                 The Lender shall have received each of the
following, each of which shall be originals or telecopies (followed promptly by
originals), each dated on or prior to the Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Effective Date)
each in form and substance satisfactory to the Lender and in such number of
copies as may be requested by the Lender:

 

(i)                                     duly executed counterparts of this
Agreement;

 

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(ii)                                  the Security Agreement, duly executed by
the Borrower;

 

(iii)                               such duly executed certificates of
resolutions or consents, incumbency certificates and/or other duly executed
certificates of Responsible Officers of the Borrower as the Lender may
reasonably require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents;

 

(iv)                              such documents and duly executed
certifications as the Lender may reasonably require to evidence that the
Borrower is duly organized or formed, and that the Borrower is validly existing
and in good standing in the jurisdiction where it is formed;

 

(v)                                 a certificate signed by a Responsible
Officer of the Borrower certifying, as of the Effective Date, that since the
Petition Date there has been no change, event, circumstance or development that,
individually or in the aggregate, has resulted in, or would reasonably be
expected to result in, a Material Adverse Change.

 

(b)                                 All Governmental Approvals and all third
party consents and approvals necessary in connection with the transactions
contemplated hereby shall have been obtained (without the imposition of any
conditions that are not reasonably acceptable to the Lender) and shall remain in
effect; all applicable governmental filings shall have been made and all
applicable waiting periods in connection with the transactions contemplated
hereby shall have expired without, in either case, any action being taken by any
Governmental Authority, and no law or regulation shall be applicable in the
reasonable judgment of the Lender that restrains, prevents or imposes materially
adverse conditions upon the transactions contemplated hereby.

 

(c)                                  The Order shall have been entered by the
Bankruptcy Court, shall be in full force and effect and shall not have been
amended, modified, stayed or reversed without the prior written consent of the
Lender.

 

(d)                                 All of the “first day motions” and related
orders submitted on or about the date of the commencement of the Case shall be
in form and substance reasonably satisfactory to the Lender and the Borrower
and, as entered, shall not deviate from the form thereof approved by the Lender
in any material respect which is adverse to the interests of the Lender (such
orders hereinafter being referred to as “First Day Orders”; it being understood
and agreed that notwithstanding anything herein to the contrary, the relief
sought in all such First Day Orders approved by the Lender shall be permitted
herein and the consent of the Lender to such relief therein shall be deemed to
have been obtained).

 

(e)                                  The Sale Motion (as defined in the
Acquisition Agreement) and the related exhibits (including the Sale Order, as
defined in the Acquisition Agreement) shall be in form and substance acceptable
to the Lender in its sole discretion.

 

(f)                                   The Lender shall have received, at least
one Business Day prior to the Effective Date, all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the Patriot Act.

 

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(g)                                  Each of the representations and warranties
made by the Borrower in or pursuant to the Loan Documents shall be true and
correct in all respects (subject to any qualification provided therein) or in
all material respects (in the case of any representation or warranty not
otherwise qualified) on and as of such date as if made on and as of such date.

 

(h)                                 No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.

 

(i)                                     All proceedings in connection with the
making of such Loan and the other transactions contemplated by this Agreement
and the other Loan Documents, and all documents incidental hereto and thereto,
shall be satisfactory to the Lender, and the Lender shall have received all such
agreements, instruments, approvals, opinions, and other documents, each in form
and substance satisfactory to the Lender, as the Lender may reasonably request.

 

4.2                               Conditions Precedent to All Loans.  The
obligation of the Lender to make any Loan on or after the Effective Date is
subject to the fulfillment of each of the following conditions precedent:

 

(a)                                 The Order shall have been entered by the
Bankruptcy Court, shall be in full force and effect and shall not have been
amended, modified, stayed or reversed without the prior written consent of the
Lender.

 

(b)                                 Each of the representations and warranties
made by the Borrower in or pursuant to the Loan Documents shall be true and
correct in all respects (subject to any qualification provided therein) or in
all material respects (in the case of any representation or warranty not
otherwise qualified) on and as of such date as if made on and as of such date.

 

(c)                                  No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.

 

(d)                                 The Lender shall have received a Notice of
Borrowing pursuant to Section 2.2 hereof.

 

SECTION 5.  AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitment remains in effect or
any Loan or Obligations or other amounts are owing to the Lender hereunder or
under the other Loan Documents, the Borrower shall:

 

5.1                               Further Assurances.  At any time or from time
to time upon the request of the Lender, at the expense of the Borrower, promptly
execute, acknowledge and deliver such additional instruments, certificates or
documents, and do all such other acts and things as the Lender may reasonably
request for purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, of providing for payment of the
Obligations in accordance with the terms of this Agreement, the Notes and the
other Loan Documents, or of more fully perfecting or renewing the rights of the
Lender with respect to the Collateral (or with respect to any additions thereto
or replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by the Borrower which may be deemed to be

 

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part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower shall
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Lender may be required to obtain from the Borrower for such governmental
consent, approval, recording, qualification or authorization (to the extent the
Borrower is permitted by applicable law to do so). The Borrower shall fully
preserve or cause to be fully preserved the Liens granted by the Security
Documents.

 

5.2                               Use Of Proceeds. Use the proceeds of the Loans
to pay the Borrower’s reasonable and documented out-of-pocket third party fees
and expenses actually incurred in connection with the Contemplated Transactions
and the Case, including without limitation professional fees and expenses of the
Borrower and other court-approved professionals in the Chapter 11 Case (as may
be subject to approval by the Bankruptcy Court), and fees and expenses of the
United States Trustee pursuant to 28 U.S.C. § 1930(a)(6) (collectively, the
“Permitted Uses”).

 

5.3                               Preservation Of Existence; Business, Etc. 
(a) Preserve, renew and maintain in full force and effect its legal existence
and good standing under the laws of the jurisdiction of its organization;
(b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary in the normal conduct of its business;
(c) preserve or renew all of its material registered patents, trademarks, trade
names and service marks; and (d) maintain and operate its business in
substantially the manner in which it is presently conducted and operated, and in
compliance with all covenants of the Borrower set forth in the Acquisition
Agreement.

 

5.4                               Financial Information; Default Notices. 
Deliver to the Lender, in form satisfactory to the Lender:

 

(a)                                 as soon as reasonably practicable after
request by the Lender, such consolidated balance sheets of the Borrower and its
Subsidiaries, related consolidated statements of income or operations,
shareholders’ equity, and cash flows, cash balance reports, Reports of Condition
and Income of FMBank and its Subsidiaries, or any other financial reports as
reasonably requested by the Lender; and

 

(b)                                 promptly (and in any event within two
Business Days) provide written notice to the Lender of the occurrence of any
Default or Event of Default, describing the nature of such Default or Event of
Default and any remedial actions being taken with respect thereto.

 

5.5                               Sale Milestones.  The Borrower and its
Subsidiaries shall comply with and achieve the Sale Milestones.

 

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SECTION 6.  NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitment remains in effect or
any Loan or other Obligations or other amounts are owing to the Lender hereunder
or under any other Loan Document, the Borrower shall not, directly or
indirectly:

 

6.1                               Liens.  Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, or sign or file or suffer to exist under the Uniform
Commercial Code of any jurisdiction a financing statement that names the
Borrower as debtor, or sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign any accounts or other right to receive income, other than the following:

 

(a)                                 Liens pursuant to any Loan Document and the
Order;

 

(b)                                 Permitted Liens, provided that in the case
of taxes not yet due and payable, only if such taxes are being contested in good
faith and by appropriate proceedings diligently conducted, and only if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

 

(c)                                  pledges or deposits in the Ordinary Course
of Business in connection with workers’ compensation, unemployment insurance and
other social security legislation, other than any Lien imposed by ERISA; and

 

(d)                                 deposits to secure the performance of bids,
trade contracts and leases (other than Indebtedness), statutory obligations,
surety bonds (other than bonds related to judgments or litigation), performance
bonds and other obligations of a like nature incurred or arising in the Ordinary
Course of Business.

 

6.2                               Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:

 

(a)                                 Indebtedness under the Loan Documents; and

 

(b)                                 Indebtedness outstanding on the date hereof
and listed on Schedule 6.2.

 

6.3                               Investments. Make or hold any Investments,
except:

 

(a)                                 Investments held by the Borrower in the form
of cash or cash equivalents;

 

(b)                                 Investments consisting of extensions of
credit in the nature of accounts receivable or notes receivable arising from the
grant of trade credit in the Ordinary Course of Business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss; and

 

(c)                                  Investments existing on the date hereof.

 

6.4                               Fundamental Changes.  Merge, dissolve,
liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or

 

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substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, other than the Contemplated Transactions.

 

6.5                               Dispositions.  Make any Disposition or enter
into any agreement to make any Disposition, except:

 

(a)                                 Dispositions of obsolete or worn out
property or property no longer used or useful in the Business of the Borrower,
whether now or hereafter owned or leased, in the Ordinary Course of Business of
such Person;

 

(b)                                 Dispositions of inventory in the Ordinary
Course of Business;

 

(c)                                  Dispositions of equipment, software or real
property to the extent that (i) such property is exchanged for credit against
the purchase price of similar replacement property or (ii) the proceeds of such
Disposition are reasonably promptly applied to the purchase price of such
replacement property; and

 

(d)                                 the marketing for sale and the sale of the
capital stock of FMBank in accordance with the Acquisition Agreement, the
Auction Procedures Order, and the transactions contemplated thereby.

 

6.6                               Change In Nature Of Business.  Engage in any
line of business different from those lines of business conducted by the
Borrower on the date hereof.

 

6.7                               Transactions With Affiliates.  Enter into any
transaction of any kind with any Affiliate of the Borrower, whether or not in
the Ordinary Course of Business, other than on fair and reasonable terms
substantially as favorable to the Borrower as would be obtainable by the
Borrower at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that the foregoing restriction shall not apply
to transactions, arrangements, fees reimbursements and indemnities specifically
and expressly permitted between or among such parties under this Agreement.

 

6.8                               Accounting Changes.  Make any change in
(i) accounting policies or reporting practices in a manner that could materially
affect the results of computation of any financial ratio or data for a given
reporting period, except (x) as required by generally accepted accounting
principles, (y) as required for compliance with the Sarbanes-Oxley Act or (z) as
pre-approved by the Lender, or (ii) fiscal year.

 

6.9                               Partnerships, Etc.  Become a general partner
in any general or limited partnership or joint venture.

 

6.10                        Speculative Transactions.  Engage in any transaction
involving any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement (including caps and collars
with respect to interest rates, currency exchange rates or commodity prices) or
futures contracts for speculative purposes or any similar speculative
transactions, which are, in any case, inconsistent with prior practice and not
otherwise made in the Ordinary Course of Business.

 

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6.11                        Formation Of Subsidiaries. Organize or invest in any
new Subsidiary.

 

6.12                        Administrative Priority; Lien Priority; Payment.

 

(a)                                 At any time, suffer to exist a priority for
any administrative expense, secured claim or unsecured claim against the
Borrower (now existing or hereafter arising of any kind or nature whatsoever),
including without limitation any administrative expense of the kind specified
in, or arising or ordered under, Sections 105, 326, 328, 330, 331, 503(b),
506(c), 507(a), 507(b), 546(c) 726 or 1114 of the Bankruptcy Code equal or
superior to the priority of the Lender in respect of the Obligations.

 

(b)                                 At any time, suffer to exist any Lien on the
Collateral having a priority equal or superior to the Lien in favor of the
Lender in respect of the Collateral, except for Permitted Liens.

 

(c)                                  Prior to the date on which the Obligations
have been paid in full in cash, pay any administrative expense claims except
(i) Obligations due and payable hereunder, and (ii) other administrative expense
and professional claims incurred in the ordinary course of the business of the
Borrower or the Case.

 

SECTION 7.  EVENTS OF DEFAULT

 

7.1                               Events of Default. If any of the following
events shall occur and be continuing:

 

(a)                                 the Borrower shall fail to pay any principal
of any Loan when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan or any other amount payable hereunder or
under any other Loan Document, within two Business Days after any such interest
or other amount becomes due in accordance with the terms hereof, or the Borrower
shall use the proceeds of any Loan for purposes other than as described in the
corresponding Notice of Borrowing; or

 

(b)                                 any representation or warranty made or
deemed made by the Borrower herein or in any other Loan Document or that is
contained in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any respect (subject to any
qualification provided therein) or in any material respect (in the case of any
representation or warranty not otherwise qualified) on or as of the date made or
deemed made; or

 

(c)                                  the Borrower fails to perform or observe
any term, covenant or agreement contained in any of Sections 2.9 or 2.10,
Section 5 or Section 6; or

 

(d)                                 the Borrower shall Default in the observance
or performance of any other provision contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section), and such Default shall continue unremedied for a period of
three (3) Business Days after notice to the Borrower from the Lender; or

 

(e)                                  (i) any Person shall engage in any
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any “accumulated

 

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funding deficiency” (as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Lender, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Lender is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses
(i) through (vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the Lender,
reasonably be expected to result in a Material Adverse Change; or

 

(f)                                   one or more judgments or decrees shall be
entered against the Borrower involving in the aggregate a liability (not paid or
fully covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $250,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
five (5) Business Days from the entry thereof; or

 

(g)                                  any of the Security Documents shall cease,
for any reason, to be in full force and effect, or the Borrower or any Affiliate
of the Borrower shall file a proceeding or take any other action to revoke or
invalidate the Security Documents without the express written consent of the
Lender, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or

 

(h)                                 an order (which has not been stayed) with
respect to the Case shall be entered by the Bankruptcy Court appointing, or the
Borrower shall file an application for an order with respect to the Case seeking
the appointment of, (i) a trustee under Section 1104 of the Bankruptcy Code, or
(ii) an examiner with enlarged powers relating to the operation of the business
(powers beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy
Code) under Section 1106(b) of the Bankruptcy Code; or

 

(i)                                     an order with respect to the Case shall
be entered by the Bankruptcy Court converting the Case to a Chapter 7 case or
the Borrower shall file a motion or not oppose a motion seeking such relief,
unless such motion is consented to by the Lender; or

 

(j)                                    the Bankruptcy Court shall enter an order
or orders granting relief from the automatic stay applicable under Section 362
of the Bankruptcy Code to the holder or holders of any security interest to
permit foreclosure (or the granting of a deed in lieu of foreclosure or the
like) on any Collateral of the Borrower which has a value in excess of $100,000
in the aggregate or permits any third party to commence or continue any
litigation against the Borrower involving a potential liability not covered by
insurance in excess of $100,000 in the aggregate; or

 

25

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(k)                                 an order shall be entered by any court,
tribunal, or governmental authority or agency, or the Borrower shall apply for
authority, to revoke, reverse, stay, modify, supplement or amend the Order
without the express prior written consent of the Lender; or

 

(l)                                     an order with respect to the Case shall
be entered by the Bankruptcy Court without the express prior written consent of
the Lender (i) to permit any administrative expense or any claim (now existing
or hereafter arising, of any kind or nature whatsoever) to have administrative
priority as to the Borrower equal or superior to the priority of the Lender in
respect of the Obligations, except for allowed administrative expenses to the
extent set forth in the Order, or (ii) to grant or permit the grant of a Lien on
the Collateral, other than a Permitted Lien or any Lien in favor of the Lender;
or

 

(m)                             the Borrower shall make any payment of principal
or interest or otherwise on account of any prepetition Indebtedness or trade
payable (excluding payments effected by a setoff of obligations as permitted by
Section 553 of the Bankruptcy Code) in excess of $10,000 without the express
prior written consent of the Lender and the approval of the Bankruptcy Court
other than as provided for in any First Day Orders; or

 

(n)                                 the Borrower shall file a motion in the Case
(i) to use Cash Collateral of the Lender under Section 363(c) of the Bankruptcy
Code without the express prior written consent of the Lender (it being
understood and agreed that the Lender consents to the proposed use of Cash
Collateral on the terms and conditions set forth in the form of Order attached
hereto), (ii) to recover from any portions of the Collateral any costs or
expenses of preserving or disposing of such Collateral under Section 506(c) of
the Bankruptcy Code, to cut off rights in the Collateral under Section 552(b) of
the Bankruptcy Code, or (iii) to take any other action or actions materially
adverse to the Lender or its rights and remedies hereunder or under any of the
other Loan Documents or the Lender’s interest (as lender under the Loan
Documents) in any of the Collateral; or

 

(o)                                 an order shall be entered by the Bankruptcy
Court dismissing the Case which does not contain a provision for termination of
the Commitment, and payment in full in cash of all Obligations of the Borrower
hereunder and under the other Loan Documents upon entry thereof;

 

(p)                                 the Borrower shall fail to comply with the
Order in any respect;

 

(q)                                 the Acquisition Agreement shall have
terminated in accordance with its terms (other than as a result of a breach by
the Lender); or

 

(r)                                    by not later than the first Business Day
following entry by the Bankruptcy Court of an Alternative Transaction Order, the
Borrower shall fail to indefeasibly pay in full to Lender all Obligations,
including, without limitation, the outstanding principal, interest, and other
obligations of the Borrower under this Agreement;

 

then, (i) in the case of an Event of Default under any of Sections
7.1(b) through 7.1(q) hereof, Lender may, by five (5) Business Days’ prior
written notice to the Borrower (with a copy to counsel for the Borrower, counsel
for the Creditors’ Committee, the UST and the Bankruptcy Court), declare the
Loans (with accrued interest thereon) and all other amounts owing under this

 

26

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Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable in full and the
Commitment terminated, and (ii) in the case of an Event of Default under
Section 7.1(a) or (r) hereof, the Loans (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents, shall
immediately become due and payable in full without need for notice or demand and
the Commitment shall terminate.  Without limiting the foregoing, immediately
upon the earlier of entry of an Alternative Transaction Order or any termination
of the Acquisition Agreement, the Commitment shall terminate.  Notwithstanding
anything in this Agreement or the other Loan Documents to the contrary, the
Lender shall not foreclose on Collateral consisting of Capital Stock of FMBank
without the prior consent of the Board of Governors of the Federal Reserve
System.

 

Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower. 
Notwithstanding the foregoing, any Event of Default under clause (m) above may
be cured through the return to the Borrower, within five days following notice
from the Lender of such Event of Default, of all sums paid which constitute or
caused an Event of Default under clause (m) above. Upon the return of all such
sums, the Borrower shall provide notice thereof to the Lender, along with such
other evidence the Lender may reasonably require to confirm that such payment
has been made to the Borrower, and upon delivery of such items such Event of
Default shall then be cured and cease to be in effect or continuing.

 

7.2                               Application of Proceeds.  If an Event of
Default shall have occurred and be continuing, the Lender may at any time apply
(a) all payments received by the Lender under the Loan Documents, whether from
the Borrower or otherwise and (b) all or any part of proceeds constituting
Collateral received by the Lender, in payment of the Obligations in the
following order:

 

(a)                                 first, to the payment of all costs and
expenses of such sale, collection or other realization, all other expenses,
liabilities and advances made or incurred by the Lender in connection therewith,
and all amounts for which the Lender is entitled to compensation, reimbursement
and indemnification under any Loan Document and all advances made by the Lender
thereunder for the account of the Borrower, and to the payment of all costs and
expenses paid or incurred by the Lender in connection with the Loan Documents,
all in accordance with Section 8.5 and the other terms of this Agreement and the
Loan Documents;

 

(b)                                 second, thereafter, to the payment of all
other Obligations; and

 

(c)                                  third, thereafter, to the payment to or
upon the order of the Borrower or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.

 

SECTION 8.  MISCELLANEOUS

 

8.1                               Amendments and Waivers.  No amendment,
supplement, modification or waiver of any of the provisions of this Agreement or
any other Loan Document shall be deemed to be made unless the same shall be in
writing signed on behalf of the Borrower and the Lender and

 

27

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each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the parties making
such waiver or the obligations of the other parties to such party in any other
respect or at any other time. Any such waiver and any such amendment, supplement
or modification shall be binding upon the Borrower, the Lender and all future
holders of the Loan. In the case of any waiver, each of the Borrower and the
Lender shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.

 

8.2                               Notices.  Any and all notices, requests,
instructions and other communications required or permitted to be given under
this Agreement after the date of this Agreement by any party hereto to any other
party may be delivered personally or by nationally recognized overnight courier
service or sent by mail or (except in the case of payments) by facsimile
transmission or electronic mail, at the respective addresses or transmission
numbers set forth below and is deemed delivered (a) in the case of personal
delivery, facsimile transmission or electronic mail, when received; (b) in the
case of mail, upon the earlier of actual receipt or five (5) Business Days after
deposit in the United States Postal Service, first class certified or registered
mail, postage prepaid, return receipt requested; and (c) in the case of an
overnight courier service, one (1) Business Day after delivery to such courier
service with and instructions for overnight delivery. The parties may change
their respective addresses and transmission numbers by written notice to all
other parties, sent as provided in this Section. All communications must be in
writing and addressed as follows:

 

Borrower:                                                                                         
First Mariner Bancorp

1501 S. Clinton Street,
Baltimore, MD 21224

Attention:  Mark A. Keidel

Joseph Howard

Telephone:  410-558-4281

Facsimile:  443-573-4912

Electronic Mail:

MKEIDEL@1stMarinerBank.com

 

JHOWARD@1stMarinerBank.com

 

With a copy to:

 

Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, NY 10036

Attention:  Robert T. Schmidt

Joshua K. Brody

Telephone: 212-715-9100

Facsimile:  212-715-8100

Electronic Mail:

rschmidt@kramerlevin.com

 

jbrody@kramerlevin.com

 

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Lender:                                                                                                     
RKJS Bank

12997 Jerome Jay Drive

Cockeysville, MD  21030

Attention:  Robert D. Kunisch, Jr.

Telephone:  410-241-0839

Electronic Mail:  kunisch@comcast.net

 

With a copy to:

 

Venable LLP

750 E. Pratt Street. Suite 900

Baltimore, MD  21202

Attention:  Michael D. Schiffer, Esq.

Telephone: 410-244-7546

Facsimile:  410-244-7742

Electronic Mail:   mschiffer@venable.com

 

provided that any notice, request or demand to or upon the Lender shall not be
effective until received. Notices and other communications to the Lender
hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Lender.

 

8.3                               No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

 

8.4                               Survival of Representations and Warranties.
All representations and warranties made hereunder, in the other Loan Documents
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.

 

8.5                               Payment of Fees and Expenses; and
Indemnification.

 

(a)                                 In the event that an Alternative Transaction
is consummated or this Bankruptcy Court enters an Alternative Transaction Order,
on the Maturity Date, the Borrower shall reimburse the Lender for its reasonable
documented costs, fees (including reasonable attorneys’ fees), charges, and
expenses incurred in connection with the Loans, whether incurred prepetition or
postpetition (collectively, the “Fees and Expenses”).  The obligation to pay the
Fees and Expenses shall not reduce or otherwise affect the amount of the
Commitment available to the Borrower.  In connection with the Fees and Expenses,
no later than seven (7) calendar prior to the hearing to approve the Alternative
Transaction Order (the “Sale Hearing”), the Lender shall transmit (subject to
confidentiality and applicable claims of privilege) summary invoices of the Fees
and Expenses to the Borrower, the counsel to any Committee and the United States
Trustee, each of whom shall have four (4) calendar days from receipt thereof to
review

 

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and object to such invoices.  In the event of an objection, the parties shall
confer with one another and attempt to reach agreement regarding the payment to
be made.  If agreement cannot be reached between the parties, the objecting
party shall reasonably promptly submit to the Bankruptcy Court a written
objection setting forth the precise nature of the objection and the monetary
amount at issue, which objection shall be heard and determined by the Bankruptcy
Court at the Sale Hearing.  Absent a written objection to any summary invoice,
the Lender’s Fees and Expenses reflected in the applicable invoice shall not be
subject to Bankruptcy Court approval and shall be paid in the amount reflected
on such invoices.  If there is a timely objection, the Lender will get paid such
Fees and Expenses that are agreed to by the parties or are approved by the
Bankruptcy Court. The Lender shall not be required to file any interim or final
fee application(s) with the Bankruptcy Court, provided, that the Bankruptcy
Court shall have jurisdiction to determine any disputes concerning the Lender’s
summary invoices.  Notwithstanding anything to the contrary contained herein, in
the event that closing of the Contemplated Transactions occurs, including the
merger as set forth in the Acquisition Agreement, the Borrower shall have no
obligation to reimburse the Lender for the Fees and Expenses.

 

(b)                                 In the event it is necessary for Lender to
file a motion or adversary proceeding to seek the enforcement or preservation of
any rights under this Agreement, the other Loan Documents and any such other
documents, or defend any challenge to Lender’s claims or Liens, the Borrower
will (i) pay or reimburse the Lender for all its reasonable documented costs and
expenses incurred in connection with such motion or adversary proceeding,
including the reasonable fees and disbursements of counsel to the Lender and
(ii) pay, indemnify, and hold the Lender, and the officers, directors, trustees,
employees, agents, advisors and Affiliates of the Lender and its officers,
directors, employees, affiliates, agents and controlling persons (each, an
“Indemnitee”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
enforcement of this Agreement, the other Loan Documents and any such other
documents (regardless of whether any Indemnitee is a party hereto and regardless
of whether any such matter is initiated by a third party, the Borrower or any
other Person), including any of the foregoing relating to the use of proceeds of
the Loan or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower or any of the
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against the Borrower under
any Loan Document (all the foregoing in this clause (b), collectively, the
“Indemnified Liabilities”), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this
Section 8.5 shall be payable not later than 10 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section 8.5 shall
be submitted to the address of the Borrower set forth in Section 8.2, or to

 

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such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Lender. The agreements in this Section 8.5 shall survive
repayment of the Loan and all other amounts payable hereunder.

 

8.6                               Payments Set Aside.  To the extent that any
payment by or on behalf of the Borrower is made to the Lender, or the Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, or otherwise avoided and recovered by the Borrower,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and any Lien corresponding thereto, shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred.

 

8.7                               Successors and Assigns; Assignments.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder (x) without the prior written consent of the
Lender (and any attempted assignment or transfer by the Borrower without such
consent shall be null and void) or (y) to any Person that is not a “United
States person” as defined in Section 7701(a)(30) of the Code and (ii) the Lender
may assign to one or more assignees (each, an “Assignee”) all or a portion of
its rights and obligations under this Agreement with notice to the Borrower. The
Borrower shall maintain a register containing the name and address of each
Lender and Assignee under this Agreement and its interest in the Loans and the
amounts of the Obligations of the Borrower owing to such Person.

 

8.8                               Set-off.  In addition to any rights and
remedies of the Lender provided by applicable Legal Requirements and/or the
Acquisition Agreement, the Lender and its Affiliates shall have the right,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable Legal Requirements, upon any
amount becoming due and payable by the Borrower hereunder (whether at the
Maturity Date or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in each
case, whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by, or on behalf of, the Lender or any Affiliate of
the Lender to or for the credit or the account of the Borrower, as the case may
be. The Lender agrees promptly to notify the Borrower after any such setoff and
application made by the Lender or any Affiliate, provided that the failure to
give such notice shall not affect the validity of such setoff and application.

 

8.9                               Conflicts Between this Agreement and the
Order. To the extent any term or provision of this Agreement conflicts or is
inconsistent with any term of the Order, the terms of the Order shall control
and govern.

 

8.10                        Counterparts.  This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken

 

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together shall be deemed to constitute one and the same instrument. Delivery of
an executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Lender.

 

8.11                        Severability.  If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future Legal
Requirements, then (a) this Agreement is to be construed and enforced as if such
illegal, invalid or unenforceable provision were not a part hereof; (b) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by such illegal, invalid or unenforceable provision or by
its severance from this Agreement; and (c) there will be added automatically as
a part of this Agreement a provision mutually agreed to which is similar in
terms to such illegal, invalid or unenforceable provision as may be possible and
still be legal, valid and enforceable.

 

8.12                        Integration.  This Agreement and the other Loan
Documents represent the entire agreement of the Borrower and the Lender with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

 

8.13                        GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MARYLAND,
AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

 

8.14                        Submission To Jurisdiction; Waivers.

 

(a)                                 SUBMISSION TO JURISDICTION.  THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE BANKRUPTCY COURT, OR IN THE EVENT THAT THE BANKRUPTCY COURT DOES NOT HAVE
JURISDICTION OVER ANY MATTER OR IF IT HAS JURISDICTION BUT DOES NOT EXERCISE
SUCH JURISDICTION FOR ANY REASON, THEN TO THE NONEXCLUSIVE JURISDICTION OF ANY
MARYLAND STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
BALTIMORE, MARYLAND, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN THE BANKRUPTCY COURT, ANY SUCH MARYLAND STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL

 

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AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE
COURTS OF ANY JURISDICTION.

 

(b)                                 WAIVER OF VENUE.  THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN ANY
MARYLAND STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(c)                                  SERVICE OF PROCESS.  THE BORROWER
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 8.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF THE LENDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

8.15                        Acknowledgements.  The Borrower hereby acknowledges
that:

 

(a)                                 it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b)                                 the Lender does not have a fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Lender, on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Borrower and the Lender.

 

8.16                        Releases of Liens.  At such time as the Loans and
the other Obligations under the Loan Documents shall have been indefeasibly paid
in full in immediately available funds and the Commitment has been terminated,
the Collateral shall be released from the Liens created by the Security
Documents and the Order, and the Security Documents and all obligations (other
than those expressly stated to survive such termination) of the Lender and the
Borrower under the Security Documents shall terminate, all without delivery of
any instrument or performance of any act by any Person.

 

8.17                        WAIVERS OF JURY TRIAL.  EACH OF THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

 

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8.18                        Regulatory.  The Borrower will, and will cause each
of its Subsidiaries to, provide, to the extent commercially reasonable or
required by any Requirement of Law, such information and take such actions as
are reasonably requested by the Lender to assist the Lender in maintaining
compliance with applicable Legal Requirements.

 

[Signature page Follows]

 

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be signed
by their duly authorized officers as of the date first above written.

 

BORROWER:

 

FIRST MARINER BANCORP,

a Maryland corporation

 

By:

/s/ Mark A. Keidel

(SEAL)

Name:

Mark A. Keidel

 

Title:

Interim Chief Executive Officer

 

 

[NOTARY ACKNOWLEDGEMENT]

 

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LENDER:

 

RKJS Bank,

a Maryland chartered trust company

 

By:

/s/ Robert D. Kunisch, Jr.

(SEAL)

Name:

Robert D. Kunisch, Jr.

 

Title:

President, Chief Operating Officer and Secretary

 

 

[NOTARY ACKNOWLEDGEMENT]

 

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