AGREEMENT AND PLANOF MERGER By andbetween OLDLINE BANCSHARES, INC. And DCBBANCSHARES, INC. Datedas of February 1, 2017

 

 

 

 

 

 

 

 

THIS AGREEMENT AND PLAN OF MERGER (“Agreement”), dated as of February 1, 2017, is made by and between Old Line Bancshares, Inc., a Maryland corporation (“OLB”), and DCB Bancshares, Inc., a Maryland corporation (“DCB”).

1.           DCB owns directly all of the outstanding capital stock of Damascus Community Bank, a Maryland-chartered commercial bank (“Damascus”).

2.           OLB owns directly all of the outstanding capital stock of Old Line Bank, a trust company with commercial banking powers chartered under the laws of the State of Maryland (“Old Line”).

3.           OLB and DCB desire for DCB to merge with and into OLB, with OLB surviving the Merger, in accordance with the applicable laws of the State of Maryland and this Agreement.

4.           As an additional condition and inducement to OLB to enter into this Agreement, each of the individuals listed on Exhibit A has executed a Support Agreement in the form attached as Exhibit B.

5.           Each of the parties, by signing this Agreement, adopts it as a plan of reorganization as defined in IRC Section 368(a) and intends the Merger to be a reorganization as defined in IRC Section 368(a).

6.           OLB and DCB desire to provide for certain undertakings, conditions, representations, warranties, and covenants in connection with the transactions contemplated hereby and governing the transactions contemplated herein.

 

NOW THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained, the parties, intending to be legally bound hereby, agree as follows:

The Background information is a substantive part of this Agreement and is incorporated herein and made a part hereof by reference.

As used in this Agreement, the following terms shall have the indicated meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

Acquisition Proposal means a bona fide written proposal by a Person other than OLB for: (a) a merger or consolidation of, a share exchange involving, or an acquisition of 50% or more of the assets or liabilities of, DCB or any DCB Subsidiary, or any other business combination involving DCB or any DCB Subsidiary, in a single transaction or series of related transactions; or (b) a transaction that involves the transfer of beneficial ownership of securities representing, or the right to acquire beneficial ownership of or to vote securities representing, 10% or more of the then outstanding shares of DCB Common Stock or the then outstanding equity securities of any DCB Subsidiary.

Affiliate means, with respect to any Entity, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Entity and, without limiting the generality of the foregoing, includes any executive officer, director, manager or Person who beneficially owns more than ten percent of the equity or voting securities of the Entity.

AFTAP means adjusted funding target attainment percentage.

Agreement means this Agreement and Plan of Merger, including the exhibits and schedules hereto and any amendment or supplement hereto.

Application means an application for regulatory approval that is required to consummate the Contemplated Transactions.

Article III Standard has the meaning given to the term in Article III of this Agreement.

Article IV Standard has the meaning given to the term in Article IV of this Agreement.

Articles of Merger means the articles of merger to be executed by OLB and DCB and filed with SDAT in accordance with the MGCL.

Average NASDAQ Bank Stock Index Value For The Price Determination Period has the meaning given to the term in Section 7.1(j) of this Agreement.

Average Price has the meaning given to the term in Section 2.1(b) of this Agreement.

Bank Certificates has the meaning given to the term in Section 2.5(e) of this Agreement.

Bank Merger has the meaning given to the term in Section 1.6 of this Agreement.

Bank Merger Agreement has the meaning given to the term in Section 1.6 of this Agreement.

BHC Act means the Bank Holding Company Act of 1956, as amended.

Burdensome Condition has the meaning given to the term in Section 5.4(a) of this Agreement.

Business Day(s) means any day or days other than (i) Saturday, (ii) Sunday or (iii) a day on which Damascus or Old Line is authorized or obligated by applicable law or executive order to close.

Calculation Date has the meaning given to the term in Section 2.2(a) of this Agreement.

Cause means: (a) any act or failure to act that constitutes fraud, incompetence, willful misconduct, dishonesty, breach of fiduciary duty, intentional failure to adequately perform his or her duties as an officer or employee of the employer, or violation of any Law (other than a traffic violation or similar offense) or any final regulatory order or agreement with the employer; (b) the conviction of the employee of a felony or crime involving moral turpitude; (c) the employee’s entering into any employment or similar relationship with a Person other than DCB or a DCB Subsidiary; (d) the employee’s diversion of any business opportunity from employer (other than on behalf of employer or with the prior written consent of employer’s board of directors); or (e) conduct by employee that results in removal or suspension of employee as an officer or employee of employer pursuant to a written order by any Regulatory Authority with authority or jurisdiction over employer.

CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601, et seq.

CFPB means the Consumer Financial Protection Bureau.

CIC Agreement has the meaning given to the term in Section 5.7(c)(ii)(C) of this Agreement.

CIC Payment has the meaning given to the term in Section 5.7(c)(ii)(C) of this Agreement.

Closing has the meaning given to the term in Section 1.3(a) of this Agreement.

Closing Date has the meaning given to the term in Section 1.3(a) of this Agreement.

Commercial Law Article has the meaning given the term in Section 3.23(b) of this Agreement.

Commissioner means the Maryland Office of the Commissioner of Financial Regulation.

Confidentiality Agreement means that certain Confidentiality Agreement, dated as of November 3, 2016, by and between OLB and DCB.

Contemplated Transactions means all of the transactions contemplated by this Agreement, including the (a) Merger, (b) Bank Merger, and (c) performance by OLB and DCB of their respective covenants and obligations under this Agreement.

CRA has the meaning given to the term in Section 3.22 of this Agreement.

Credit Extension means any loan, lease, advance, credit facility, credit enhancement, guarantee, commitment, line of credit or letter of credit.

Damascus has the meaning given to the term in the Background section of this Agreement.

DCB has the meaning given to the term in the Background section of this Agreement.

DCB Benefit Plans means all employee pension benefit plans within the meaning of ERISA Section 3(2), profit sharing plans, stock purchase plans, deferred compensation and supplemental income plans, supplemental executive retirement plans, annual incentive plans, group insurance plans, and all other employee welfare benefit plans within the meaning of ERISA Section 3(1) (including vacation pay, sick leave, short-term disability, long-term disability, and medical plans) and all other employee benefit plans, policies, agreements and arrangements currently maintained or contributed to for the benefit of the employees or former employees (including retired employees) and any beneficiaries thereof or directors or former directors of DCB or any other Entity that, together with DCB, is treated as a single employer under IRC Sections 414(b), (c), (m) or (o).

DCB Certificate means a certificate that immediately prior to the Effective Time represents issued and outstanding shares of DCB Common Stock.

DCB Common Stock has the meaning given to the term in Section 3.2(a) of this Agreement.

DCB Common Stockholder is any holder of record of DCB Common Stock immediately prior to the Effective Time.

DCB Common Stockholders’ Meeting means the meeting of the holders of DCB Common Stock to consider and vote on the Agreement and the Merger, and any postponement or adjournment thereof.

DCB Companies means DCB, Damascus and any other DCB Subsidiary, collectively.

DCB Disclosure Schedule means, collectively, the disclosure schedules delivered by DCB to OLB at or prior to the execution and delivery of this Agreement, as may be updated pursuant to Section 5.6 of this Agreement.

DCB Employee has the meaning given to the term in Section 5.7(c)(ii)(A) of this Agreement.

DCB ERISA Affiliate means any Entity that, together with DCB, is treated as a single employer under IRC Sections 414(b), (c), (m) or (o).

DCB Financials means (a) the consolidated balance sheets of DCB at December 31, 2015 and 2014 and the consolidated statements of income, statements of stockholders’ equity and consolidated statements of cash flows for DCB for the years ended December 31, 2015, 2014 and 2013, and the notes thereto, as audited by Smith Elliott Kearns & Company, LLC, (b) the unaudited interim financial statements of DCB and the notes thereto for the calendar quarter ending September 30, 2016, (c) the consolidated balance sheet of DCB at December 31, 2016 and 2015 and the consolidated statements of income, statements of stockholders’ equity and consolidated statements of cash flows for DCB for the years ended December 31 2016, 2015 and 2014, and the notes thereto, as audited by Smith Elliott Kearns & Company, LLC, and to be delivered within 120 days of December 31, 2016, (d) the unaudited consolidated financial statements of DCB and the notes thereto for each calendar quarter commencing with the calendar quarter ending March 31, 2107, to be delivered within 45 days after the end of the respective quarter, (e) unaudited, internally-prepared consolidated financial statements for each of October 31, 2016, November 30, 2016 and December 31, 2016, and (f) unaudited, internally-prepared consolidated financial statements for each month commencing with the month ended January 31, 2017, to be delivered within 20 days after the end of the respective month (the financial statements described in items (e) and (f) are collectively referred to herein as the “Internal DCB Financials”).

DCB Governing Documents has the meaning given to the term in Section 3.1(f) of this Agreement.

DCB Intellectual Property has the meaning given to the term in Section 3.17 of this Agreement.

DCB IT Assets has the meaning given to the term in Section 3.17 of this Agreement.

DCB Nominees has the meaning given to the term in Section 1.3(d) of this Agreement.

DCB Real Property has the meaning given to the term in Section 3.15(a) of this Agreement.

DCB Regulatory Agreement has the meaning given to the term in Section 3.11(e)(iii) of this Agreement.

DCB Returns has the meaning given to the term in Section 3.7(e) of this Agreement.

DCB Subsidiaries means the subsidiaries of DCB and Damascus as set forth in DCB Disclosure Schedule 3.1(d).

DCB Tangible Equity has the meaning given to the term in Section2.1(a) of this Agreement.

DCB Taxes has the meaning given to the term in Section 3.7(e) of this Agreement.

DCB Termination Fee has the meaning given to the term in Section 8.1(b) of this Agreement.

Effective Date means the date that includes the Effective Time, which shall be as soon as practicable after the Closing Date.

Effective Time means the time at which the Articles of Merger are filed with SDAT and become effective in accordance with the MGCL.

Entity means any corporation, limited liability company, partnership, sole proprietorship, trust, joint venture, or other form of organization.

Environmental Assessment means an environmental assessment that is consistent with ASTM 1527-05 or 40 C.F.R. Part 312 and that may include an assessment of the (a) presence of hazardous, toxic, radioactive, or dangerous materials or other materials regulated under Environmental Laws, or (b) presence, amount, physical condition and location of asbestos-containing materials and lead-based paint or an assessment of indoor environmental issues.

Environmental Laws means any applicable federal, state or local Law, statute, ordinance, rule, regulation, code, license, permit, authorization, common law, agency requirement, approval, consent, order, judgment, decree, injunction or agreement with any governmental entity relating to (a) the protection, preservation or restoration of the environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), health and safety as it relates to Hazardous Materials or natural resource damages, (b) the use, presence, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or threatened release or disposal of Hazardous Materials, and/or (c) noise, odor, wetlands, indoor air, pollution, contamination or any injury to persons or property from exposure to Hazardous Materials. Environmental Laws include without limitation: (i) CERCLA; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et seq; the Clean Air Act, as amended, 42 U.S.C. §7401, et seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. §1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C. §2601, et seq; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001, et seq; the Safe Drinking Water Act, 42 U.S.C. §300f, et seq; and all comparable state and local Laws; and (ii) any common law (including without limitation common law that may impose strict liability) that may impose liability or obligations for injuries or damages due to the presence of or exposure to any Hazardous Materials.

ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Exchange Agent means American Stock Transfer & Trust Company, or such other agent as shall be designated by OLB to act as the exchange agent for purposes of conducting the exchange procedure described in Section 2.5 of this Agreement.

Exchange Fund has the meaning given to the term in Section 2.5(a) of this Agreement.

Exchange Ratio has the meaning given to the term in Section 2.1(b) of this Agreement.

FDIC means the Federal Deposit Insurance Corporation.

FHA means the Federal Housing Administration.

FHLB means the Federal Home Loan Bank of Atlanta.

FRB means the Board of Governors of the Federal Reserve System.

GAAP means U.S. generally accepted accounting principles.

Hazardous Materials means: (a) any petroleum or petroleum products, natural gas, or natural gas products, radioactive materials, asbestos, urea formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing levels of polychlorinated biphenyls (PCBs), and radon gas; (b) any chemicals, materials, waste or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Laws; and (c) any other chemical, material, waste or substance that is in any way regulated for the protection of human health or environment by any Regulatory Authorities, including mixtures thereof with other materials, and including any regulated building materials such as asbestos and lead.

Indemnified Parties has the meaning given to the term in Section 5.7(c)(iv) of this Agreement.

Indemnifying Party has the meaning given to the term in Section 5.7(c)(iv) of this Agreement.

Index Ratio has the meaning given to the term in Section 7.1(j) of this Agreement.

Insured Persons has the meaning given to the term in Section 5.7(c)(vi) of this Agreement.

Internal DCB Financials has the meaning given to the term in the definition of “DCB Financials” set forth in this Section 1.2.

IRC means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

IRS means the Internal Revenue Service.

Knowledge of DCB means the actual knowledge of DCB’s and Damascus’ Chairman of the Board of Directors, Chief Executive Officer, Executive Vice President and Chief Lending Officer, Executive Vice President and Chief Financial Officer, Chief Credit Officer and, with respect to Section 3.13 only, Damascus’ Vice President – Human Resources, or, if no individual is named to any of such positions, the individual or individuals who perform a similar function for DCB or Damascus, as applicable, and includes any facts, matters or circumstances set forth in any written notice or other correspondence from any Regulatory Authority or any other written notice received by that Person.

Knowledge of OLB means the actual knowledge of OLB’s Chairman of the Board, President and Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, and Old Line’s Chairman of the Board, President and Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Credit Officer and Chief Lending Officer and, with respect to Section 4.13 only, OLB’s and Old Line’s Director of Human Resources, or, if no individual is named to any of such positions, the individual or individuals who perform a similar function for OLB or Old Line, as applicable, and includes any facts, matters or circumstances set forth in any written notice or other correspondence from any Regulatory Authority or any other written notice received by that Person.

Law means any and all foreign, federal, state and local laws, statutes, ordinances, rules, regulations, codes, and rules of common law, in each case as amended to date, and any and all judicial and administrative interpretations thereof, any judicial and administrative orders, decrees, judgments, injunctions and writs, any and all policies and directives (including, without limitation, any directive relating to minimum capital levels) issued by any Regulatory Authority, and any and all written legally permissible waivers or exceptions granted by any Regulatory Authorities with respect to compliance with any of the foregoing.

Letter of Transmittal has the meaning given to the term in Section 2.5(b) of this Agreement.

Liens means all liens, pledges, charges, security interests, mortgages, claims, or other encumbrances of any kind.

Material Adverse Effect means, with respect to OLB or DCB, respectively, any effect change, circumstance, development or occurrence that individually, or taken in the aggregate together with all other effects, changes, circumstances, developments or occurrences, that (a) is or is reasonably likely to be material and adverse to the financial condition, results of operations or business of OLB and the OLB Subsidiaries taken as a whole, or DCB and the DCB Subsidiaries taken as a whole, respectively, or (b) materially impairs the ability of either OLB, on the one hand, or DCB, on the other hand, to perform its obligations under this Agreement or otherwise materially threatens or materially impedes or delays the consummation of the Contemplated Transactions, other than, in each case, any change, circumstance, development, occurrence or effect relating to (i) any change in the value of the respective loan or investment portfolios of the OLB Companies or the DCB Companies resulting from a change in interest rates generally, (ii) any change occurring after the date hereof in any Law or interpretations thereof by Regulatory Authorities or in GAAP or applicable regulatory accounting principles, which change affects banking institutions generally, including any change affecting the Deposit Insurance Fund, (iii) changes in general economic (except in the context of determining a Material Adverse Effect for purposes of asset quality), capital market (except in the context of determining a Material Adverse Effect for purposes of asset quality), legal, regulatory or political conditions affecting banking institutions generally, (iv) the effects of compliance with this Agreement on the operating performance of OLB or DCB, as the case may be, including the reasonable expenses incurred in connection with this Agreement and the Contemplated Transactions, (v) actions or omissions of a party (or any of its Subsidiaries) taken pursuant to the terms of this Agreement in contemplation of the Contemplated Transactions, (vi) any effect with respect to a party hereto caused, in whole or in substantial part, by the other party, (vii) any change resulting from any natural disaster or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof, (viii) the impact of the Agreement and the Contemplated Transactions on relationships with customers or employees (including the loss of personnel subsequent to the date of this Agreement), and (ix) the public disclosure of this Agreement or the Contemplated Transactions; except, in any such case, to the extent any such change, effect, development, occurrence or circumstance has or would have a disproportionate effect on the business of DCB or OLB, as the case may be, relative to other similarly-situated Entities.

Maximum Premium has the meaning given to the term in Section 5.7(c)(vi) of this Agreement.

Merger has the meaning given to the term in Section 1.3(b)(v) of this Agreement.

Merger Consideration has the meaning given to the term in Section 2.1(b) of this Agreement.

MGCL means the Maryland General Corporation Law, as amended.

NASDAQ means the NASDAQ Stock Market LLC.

NASDAQ Bank Index has the meaning given the term in Section 7.1(j) of this Agreement.

Non-Operational Subsidiaries has the meaning given to the term in Section 3.1(g) of this Agreement.

Non-Residential Credit Extension means a Credit Extension other than for an owner-occupied residence.

Notice of Superior Proposal has the meaning given to the term in Section 5.7(a)(ii) of this Agreement.

Objecting DCB Shares means any shares of DCB Common Stock issued and outstanding immediately prior to the Closing Date, the holder of which has not voted in favor of the Merger and who has properly followed the procedures set forth in Section 3-203 of the MGCL.

OLB has the meaning given to the term in the Background section of this Agreement.

OLB Benefit Plans means all employee pension benefit plans within the meaning of ERISA Section 3(2), profit sharing plans, stock purchase plans, deferred compensation and supplemental income plans, supplemental executive retirement plans, annual incentive plans, group insurance plans, and all other employee welfare benefit plans within the meaning of ERISA Section 3(1) (including vacation pay, sick leave, short-term disability, long-term disability, and medical plans) and all other material employee benefit plans, policies, agreements and arrangements currently maintained or contributed to for the benefit of the employees or former employees (including retired employees) and any beneficiaries thereof or directors or former directors of OLB or any other Entity that, together with OLB, is treated as a single employer under IRC Sections 414(b), (c), (m) or (o).

OLB Common Stock has the meaning given to the term in Section 4.2(a) of this Agreement.

OLB Companies means OLB, Old Line, and any other OLB Subsidiary, collectively.

OLB Disclosure Schedule means, collectively, the disclosure schedules delivered by OLB to DCB at or prior to the execution and delivery of this Agreement, as may be updated pursuant to Section 5.6 of this Agreement.

OLB ERISA Affiliate means any Entity that, together with OLB, is treated as a single employer under IRC Sections 414(b), (c), (m) or (o).

OLB Financials means (a) the consolidated balance sheets of OLB at December 31, 2015 and 2014 and the consolidated statements of income, statements of comprehensive income, statements of changes in stockholders’ equity and consolidated statements of cash flows for OLB for the years ended December 31, 2015, 2014 and 2013, and the notes thereto, as audited by Dixon Hughes Goodman LLP and as set forth in OLB’s Annual Report on Form 10-K for the year ended December 31, 2015, (b) the consolidated balance sheet of OLB at December 31, 2016 and 2015 and the consolidated statements of income, statements of comprehensive income, statements of changes in stockholders’ equity and consolidated statements of cash flows for OLB for the years ended December 31, 2016, 2015 and 2014, and the notes thereto, as audited by Dixon Hughes Goodman LLP and as will be set forth in OLB’s Annual Report on Form 10-K for the year ended December 31, 2016, to be delivered or made available within 90 days of December 31, 2016, (c) the unaudited interim consolidated financial statements and notes thereto included in OLB’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, and (d) the unaudited interim consolidated financial statements and notes thereto included in OLB’s Quarterly Reports on Form 10-Q for each calendar quarter commencing with the quarter ended March 31, 2017, to be delivered or made available within 45 days after the end of the respective quarter.

OLB Governing Documents has the meaning given to the term in Section 4.1(f) of this Agreement.

OLB Intellectual Property has the meaning given to the term in Section 4.30 of this Agreement.

OLB IT Assets has the meaning given to the term in Section 4.30 of this Agreement.

OLB Preferred Stock has the meaning given to the term in Section 4.2 of this Agreement.

OLB Price Ratio has the meaning given to the term in Section 7.1(j) of this Agreement.

OLB Real Property has the meaning given to the term in Section 4.15(a) of this Agreement.

OLB Regulatory Agreement has the meaning given to the term in Section 4.11(e)(iii) of this Agreement.

OLB Reports has the meaning given to the term in Section 4.11 of this Agreement.

OLB Returns has the meaning given to the term in Section 4.7(c) of this Agreement.

OLB Subsidiaries means the subsidiaries of OLB and Old Line as set forth in OLB Disclosure Schedule 4.1(d).

OLB Taxes has the meaning given to the term in Section 4.7(c) of this Agreement.

OLB Termination Fee has the meaning given to the term in Section 8.1(c) of this Agreement.

Old Line has the meaning given to the term in the Background section of this Agreement.

PBGC has the meaning given to the term in Section 3.13(b) of this Agreement.

Per Share Consideration has the meaning given to the term in Section 2.1(b) of this Agreement.

Per Share Value has the meaning given to the term in Section 2.1(b)(ii) of this Agreement.

Permitted Employees means officers and employees of any of the DCB Companies at the level of Vice President or below.

Person means an individual, an Entity and any Regulatory Authority; provided, however, that if any provision of this Agreement in which the term “person” is used specifies a particular definition of “person” for purpose of that provision, then the term shall have the meaning so defined.

Plan of Reorganization has the meaning given to the term in Section 2.5(e) of this Agreement

Pre-Closing Period means the period commencing on the date of execution of this Agreement through the earlier of (a) the Closing Date, and (b) the date this Agreement is terminated pursuant to Article VII herein.

Price Determination Period has the meaning given to the term in Section 7.1(j) of this Agreement.

Prospectus/Proxy Statement means the prospectus/proxy statement, together with any supplements thereto, to be sent to holders of DCB Common Stock in connection with the Merger and the DCB Common Stockholders’ Meeting.

Registration Statement means the registration statement on Form S-4, including any pre-effective or post-effective amendments or supplements thereto, as filed by OLB with the SEC under the Securities Act with respect to the OLB Common Stock to be issued to the DCB Common Stockholders in connection with the Merger.

Regulatory Authority means any federal, state or local governmental authority, agency or instrumentality, or any self-regulatory organization, including, without limitation, the SEC, the Commissioner, the FRB, the FDIC, NASDAQ, and the respective staffs thereof.

REO means, with respect to the DCB Companies and the OLB Companies, real property that the DCB Companies or the OLB Companies, as the case may be, classify as other real estate owned for financial statement reporting and regulatory purposes.

Replacement Nominee has the meaning given to the term in Section 5.7(c)(i) of this Agreement.

Representatives means, with respect to an Entity, such Entity’s officers, directors, or employees, or any investment bankers, financial advisors, attorneys, accountants, consultants, agents or other representative retained by any of them.

Residential Credit Extension has the meaning given to the term in Section 5.1(aa) of this Agreement.

Retained Employees has the meaning given to the term in Section 5.7(c)(ii)(A) of this Agreement.

Rights means warrants, options, rights, convertible securities, stock appreciation rights, other capital stock equivalents and other arrangements or commitments that obligate an Entity to issue or dispose of any of its capital stock or other ownership interests or that provide for compensation based on the equity appreciation of its securities.

SDAT means the Maryland State Department of Assessments and Taxation.

SEC means the U.S. Securities and Exchange Commission.

SEC Reports has the meaning given to the term in 4.11(c) of this Agreement.

Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Securities Laws means the Securities Act, the Exchange Act, and any applicable state blue sky laws, collectively.

Starting Price has the meaning given to the term in Section 7.1(j) of this Agreement.

Subsidiary means any Entity, 50% or more of the equity or other ownership interest of which is owned, either directly or indirectly, by another Entity, except any Entity the interest in which is held in the ordinary course of the lending or fiduciary activities of a bank.

Superior Proposal has the meaning given to the term in Section 5.7(a)(ii) of this Agreement.

Support Agreement means the Agreement as set forth in Exhibit B hereto to be signed by the persons set forth on Exhibit A hereto.

Tail Policy has the meaning given to the term in Section 5.7(c)(vi) of this Agreement.

Taxing Authority means any federal, state, local or foreign government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising tax regulatory authority.

Trading Days means the days on which NASDAQ is open for trading.

At and after the Effective Time, the Merger shall have the effects set forth in Section 3-114 of the MGCL.

If, at any time after the Effective Time, OLB shall consider or be advised that any further deeds, assignments or assurances in law or any other acts are necessary or desirable to (a) vest, perfect or confirm, of record or otherwise, in OLB its right, title or interest in, to or under any of the rights, properties or assets of DCB or Damascus, or (b) otherwise carry out the purposes of this Agreement, DCB, Damascus and their officers and directors shall be deemed to have granted to OLB and Old Line an irrevocable power of attorney to execute and deliver all such deeds, assignments or assurances in law or any other acts as are necessary or desirable to (i) vest, perfect or confirm, of record or otherwise, in OLB or Old Line its right, title or interest in, to or under any of the rights, properties or assets of DCB or (ii) otherwise carry out the purposes of this Agreement, and the officers and directors of OLB and Old Line are authorized in the name of DCB, Damascus or otherwise to take any and all such action.

Subject to the terms and conditions of the Agreement and Plan of Merger attached hereto as Exhibit C (the “Bank Merger Agreement”) and in accordance with Title 3, Subtitle 7 of the Financial Institutions Article of the Annotated Code of Maryland and applicable federal law, immediately after the Merger, Damascus shall be merged with and into Old Line and the separate existence of Damascus shall cease (the “Bank Merger”). Old Line shall be the surviving Entity in the Bank Merger and shall continue its existence as a trust company with commercial banking powers under the laws of the State of Maryland, and as a wholly-owned operating subsidiary of OLB, subject to the provisions of this Section 1.6.

 

Example: Assume that the DCB Tangible Equity is $25,332,000, that 1,613,180 shares of DCB Common Stock are issued and outstanding immediately prior to the Effective Time, and the Average Price is $25.09. In such case, the Per Share Value would be $25.13 (i.e., ($25,332,000 x 1.6) / 1,613,180), the Exchange Ratio would be 1.0016 (i.e., $25.13 / $25.09) and, thus, the Per Share Consideration would be 1.0016 shares of OLB Common Stock.

Exhibit D hereto is an example of how the Exchange Ratio and Per Share Consideration could be calculated under various Average Price scenarios. One day prior to the Closing Date, OLB shall provide DCB with its calculation of the Exchange Ratio and any supporting documentation necessary for DCB to review such calculation.

The aggregate Per Share Consideration is sometimes referred to herein as the “Merger Consideration.”

Each share of OLB Common Stock issued and outstanding immediately prior to the Effective Date shall, on and after the Effective Date, continue to be issued and outstanding.

Notwithstanding anything to the contrary contained herein, no fractional shares of OLB Common Stock and no scrip or certificates therefor shall be issued in connection with the Merger, no dividend or distribution with respect to OLB Common Stock shall be payable on or with respect to any fractional share interest, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of OLB. In lieu of the issuance of any such fractional share, OLB shall pay to each former holder of DCB Common Stock who otherwise would be entitled to receive a fractional share of OLB Common Stock an amount in cash, rounded to the nearest whole cent and without interest, equal to the product of (a) the fraction of a share of OLB Common Stock to which such holder would otherwise have been entitled and (b) the Average Price. For purposes of determining any fractional share interest, all shares of DCB Common Stock owned by a DCB Common Stockholder shall be combined so as to calculate the maximum number of whole shares of OLB Common Stock issuable to such DCB Common Stockholder.

In the event OLB changes (or establishes a record date for changing) the number of, or provides for the exchange of, shares of OLB Common Stock issued and outstanding prior to the Effective Time as a result of a stock split, reverse stock split, stock dividend, reclassification, or similar transaction with respect to the outstanding OLB Common Stock, an appropriate adjustment shall be made to the Exchange Ratio so as to provide the holders of the DCB Common Stock the same economic benefit as contemplated by this Agreement prior to such event; provided that, for the avoidance of doubt, no such adjustment shall be made with regard to the Exchange Ratio if (a) OLB issues additional shares of OLB Common Stock and receives consideration for such shares in a bona fide third party transaction, (b) OLB issues employee or director stock grants or similar equity awards in the ordinary course of business consistent with past practice, or (c) shares of OLB Common Stock are repurchased by or on behalf of OLB.

Nothing set forth in this Agreement or any exhibit or schedule to this Agreement shall be construed to:

DCB represents and warrants to OLB, for itself and with respect to and on behalf of each of the DCB Subsidiaries (to the extent applicable), that the statements contained in this Article III (and as reflected on the DCB Disclosure Schedules) are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article III, except that those representations and warranties that by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date); provided, however, that no representation or warranty contained in this Article III shall be deemed untrue or incorrect, and DCB shall not be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts, circumstances or events inconsistent with any paragraph of Article III, has had or is reasonably expected to have a Material Adverse Effect on DCB, disregarding for these purposes (i) any qualification or exception for, or reference to, materiality in any such representation or warranty and (ii) any use of the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or warranty; provided, however, that the foregoing standard shall not apply to representations and warranties contained in Sections 3.1, 3.2, 3.3, 3.6, 3.14, 3.18, 3.27, 3.32 and 3.38, which shall be deemed untrue, incorrect and breached if they are not true and correct in all material respects (the “Article III Standard”).

DCB has made a good faith effort to ensure that the disclosure on each schedule of the DCB Disclosure Schedules corresponds to the section referenced herein. For purposes of the DCB Disclosure Schedules, however, any item disclosed on any schedule therein is deemed to be fully disclosed with respect to all schedules under which such item may be relevant as and to the extent that it is reasonably clear on the face of such schedule that such item applies to such other schedule.

Except as described in Section 3.3(b) of this Agreement and as described in DCB Disclosure Schedule 3.4, no consents, waivers or approvals of, or filings or registrations with, any Regulatory Authorities or other third parties are necessary in connection with the execution and delivery of this Agreement by DCB or the consummation of the Contemplated Transactions by DCB. DCB has no reason to believe that it will not be able to obtain all requisite consents, waivers or approvals from the Regulatory Authorities or any third party in order to consummate the Contemplated Transactions on a timely basis. To the Knowledge of DCB, no fact or circumstance exists, including any possible other transaction pending or under consideration by DCB or any DCB Company, that would (a) reasonably be expected to prevent or delay in any material respect, any filings or registrations with, or consents, waivers or approvals required from, any Regulatory Authority, or (b) cause a Regulatory Authority acting pursuant to applicable Law to seek to prohibit or materially delay consummation of the Contemplated Transactions or impose a Burdensome Condition.

Except as disclosed on DCB Disclosure Schedule 3.6, neither DCB nor any DCB Subsidiary has suffered any adverse change in its assets (including loan portfolio), liabilities (whether absolute, accrued, contingent or otherwise), liquidity, net worth, property, financial condition or results of operations, or any damage, destruction or loss, whether or not covered by insurance, since December 31, 2015, that in the aggregate has had or is reasonably likely to have a Material Adverse Effect on the DCB Companies taken as a whole.

Except as described in DCB Disclosure Schedule 3.10, there are no legal, quasi-judicial, administrative, suit, arbitration or other proceedings, claims (whether asserted or unasserted), actions or governmental investigations or inquiries of any kind or nature now pending or, to the Knowledge of DCB, threatened, before any court, administrative, regulatory, arbitration or similar body in any manner against any of the DCB Companies or any of their properties, and to the Knowledge of DCB there are no facts that reasonably could be expected to be the basis for any such suit, arbitration, other proceeding, claim, action, investigation or inquiry. To the Knowledge of DCB, no pending or threatened suit, arbitration proceeding claim, action, investigation or inquiry described in DCB Disclosure Schedule 3.10 could reasonably be expected to (a) have a Material Adverse Effect, (b) question the validity of any action taken or to be taken in connection with this Agreement or the Contemplated Transactions, or (c) materially impair or delay the ability of the DCB Companies to perform their obligations under this Agreement. Except as described in DCB Disclosure Schedule 3.10, none of the DCB Companies is in default with respect to any judgment, order, writ, injunction, decree, award, rule, or regulation of any court, arbitrator or Regulatory Authority.

Except as disclosed on DCB Disclosure Schedule 3.11:

There are no labor or collective bargaining agreements to which any of the DCB Companies is a party. There is no union organizing effort pending or, to the Knowledge of DCB, threatened, against any of the DCB Companies. There is no labor strike, labor dispute (other than routine employee grievances that are not related to union employees), work slowdown, stoppage or lockout pending or, to the Knowledge of DCB, threatened, against any of the DCB Companies. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or, to the Knowledge of DCB, threatened, involving employees of any of the DCB Companies. No arbitration or proceeding asserting that any of the DCB Companies has committed an unfair labor practice (within the meaning of the National Labor Relations Act of 1935) or seeking to compel any of the DCB Companies to bargain with any labor organization as to wages or conditions of employment is pending or, to the Knowledge of DCB, threatened, with respect to any of the DCB Companies before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Regulatory Authority (other than routine employee grievances that are not related to union employees). Each of the DCB Companies is in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice. None of the DCB Companies has made any commitments to others inconsistent with or in derogation of any of the foregoing. Except as described in DCB Disclosure Schedule 3.12, there are no pending or, to the Knowledge of DCB, threatened, claims or suits against any of the DCB Companies under any applicable labor or employment Law or brought or made by a current or former employee or applicant for employment.

Except as set forth on DCB Disclosure Schedule 3.14, none of the DCB Companies and, to the Knowledge of DCB, no officer, director, employee, independent contractor or agent of any DCB Company on its behalf, has employed any broker, finder, investment banker or financial advisor, or incurred any liability for any fees or commissions to any broker, finder, investment banker or financial advisor, in connection with the Contemplated Transactions

With respect to DCB and each DCB Subsidiary:

The allowance for loan losses reflected in reports by the DCB Companies to each Regulatory Authority has been and will be established in compliance with the requirements of all regulatory criteria, and the allowance for loan losses shown in the DCB Financials has been and will be established and maintained in accordance with GAAP and applicable Law and in a manner consistent with Damascus’ internal policies. The allowance for loan losses reflected in such reports and the allowance for loan losses shown in the DCB Financials, in the opinion of management, was or will be adequate as of the dates thereof. DCB has disclosed to OLB on DCB Disclosure Schedule 3.21 all Credit Extensions (including participations) by and all interest-bearing assets of the DCB Companies (a) that have been accelerated during the past 12 months, (b) that have been terminated during the past 12 months by reason of a default or adverse development in the condition of the borrower or other events or circumstances affecting the credit of the borrower, (c) pursuant to which a borrower, customer or other party has notified any of the DCB Companies during the past 12 months of, or has asserted against any of the DCB Companies, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of DCB, each borrower, customer or other party that has given any of the DCB Companies any oral notification of, or orally asserted to or against any of the DCB Companies, any such claim, (d) that are contractually past due 90 days or more in the payment of principal and/or interest, (e) that are on non-accrual status, (f) that are classified as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import by any DCB Company or any Regulatory Authority, (g) to the Knowledge of DCB, as to which a reasonable doubt exists as to the timely future collectability of principal and/or interest, whether or not interest is still accruing or the loans are less than 90 days past due, (h) where, during the past three years, the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the agreement under which the loan was originally created due to concerns regarding the borrower’s ability to pay in accordance with such initial terms, (i) where a specific reserve allocation exists in connection therewith, (j) that are required to be accounted for as a troubled debt restructuring in accordance with Statement of Financial Accounting Standards No. 15, (k) that were made pursuant to an exception to policy, and (l) that, to the extent not already disclosed pursuant to the foregoing items (a) through (k), have been charged-off at any time since January 1, 2014, together with true, complete and materially correct copies of reports containing the principal amount and accrued and unpaid interest of each such Credit Extension and interest-bearing asset and the identity of the obligor thereunder, and DCB shall provide an updated DCB Disclosure Schedule 3.21 promptly to OLB after the end of each month after the date hereof and on the Business Day prior to the Closing Date. The REO and in-substance foreclosures included in any of Damascus’ non-performing assets are carried at fair value based on current independent appraisals or current management appraisals.

Damascus is the only DCB Company that is subject to the Community Reinvestment Act (12 U.S.C. §§ 2901 et seq.) (the “CRA”). To the Knowledge of DCB, Damascus is in compliance in all material respects with the CRA and all regulations promulgated thereunder. DCB has supplied OLB with a copy of Damascus’ current CRA Statement, all letters and written comments received by Damascus since January 1, 2016 pertaining thereto and any responses by Damascus to such comments. Damascus has a rating of “satisfactory” or better as of its most recent CRA compliance examination and DCB and Damascus have received no communication from any Regulatory Authority that would lead DCB to believe that Damascus will not receive a rating of “satisfactory” or better pursuant to its next CRA compliance examination or that any Regulatory Authority would seek to restrain, delay or prohibit any of the Contemplated Transactions as a result of any act or omission of Damascus under the CRA.

To the Knowledge of DCB, the officers, employees and agents of the DCB Companies are now, and at all times in the past have been, in compliance with all applicable Laws that relate to securities activities conducted by such officers, employees and agents, including Laws relating to licenses and permits.

Each of the DCB Companies has good and marketable title to all securities that it owns. None of the investment securities reflected in the DCB Financials under the headings “Securities Available for Sale” and “Securities Held to Maturity” and, except as described in DCB Disclosure Schedule 3.26 or otherwise provided for by this Agreement, none of the investment securities that any of the DCB Companies acquired after September 30, 2016, are subject to any restrictions, whether contractual or statutory, that materially impair such DCB Company’s ability to freely dispose of such investment securities at any time, and such DCB Company was permitted by applicable Law to acquire such investment securities at the time they were acquired.

As of the date hereof, DCB does not have any reason to believe that the Merger will fail to qualify as a tax-free reorganization within the meaning of Section 368(a) of the IRC. None of the DCB Companies will take any action that will cause, cause any action to be taken that will cause, or fail to take any action or fail to cause any action to be taken if such failure to act will have the effect of causing, the Merger not to qualify as a tax-free reorganization within the meaning of Section 368(a) of the IRC, nor have any of the DCB Companies taken, caused, agreed to take or cause, or failed to take or cause any such action.

DCB’s board of directors has received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated no later than the date of this Agreement) from RP Financial, LC. to the effect that, as of the date thereof, and subject to the terms, conditions and qualifications set forth therein, the consideration to be received by the stockholders of DCB pursuant to the terms of this Agreement is fair, from a financial point of view, to the stockholders of DCB. Such opinion has not been amended or rescinded as of the date of this Agreement.

All proxy materials used in connection with the meetings of DCB’s stockholders held in 2014, 2015 and 2016, if any, along with any other form of correspondence between DCB and its stockholders during those years, including, without limitation, any annual or quarterly reports provided to stockholders, have been made available to OLB.

Except as disclosed in DCB Disclosure Schedule 3.30 and provided for or contemplated in this Agreement, since December 31, 2015:

None of the DCB Companies has any obligation or liability that is material to its financial condition or operations or that, when combined with all similar obligations or liabilities, would be material to its financial condition or operations except (a) as disclosed in the DCB Financials delivered to OLB prior to the date of this Agreement, or (b) as contemplated under this Agreement. Except as disclosed on DCB Disclosure Schedule 3.31, since December 31, 2015, none of the DCB Companies has incurred or paid any obligation or liability that would be material to its financial condition or operations, except for obligations that are (a) fully reflected or reserved against on the most recent balance sheet contained in the DCB Financials or (b) paid in connection with transactions made in the ordinary course of its business consistent with past practice and applicable Law.

None of the DCB Companies maintains any form of equity plan, including without limitation, an equity compensation or other stock option plan, that might entitle any Person to receive Rights from it, and no Rights with respect to any equity plan of any DCB Company are outstanding.

Except as described in DCB Disclosure Schedule 3.33, none of Damascus’ deposits is a “brokered deposit” as defined in 12 C.F.R. Section 337.6(a)(2).

All interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management arrangements, whether entered into for DCB’s own account or for the account of one or more of DCB’s Subsidiaries or their customers (all of which are set forth in DCB Disclosure Schedule 3.34), were in all material respects entered into in compliance with all applicable Laws, and with counterparties believed to be financially responsible at the time; and to the Knowledge of DCB each of them constitutes the valid and legally binding obligation of DCB or such DCB Subsidiary, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles), and is in full force and effect. Neither DCB nor any DCB Subsidiary, nor, to the Knowledge of DCB, any other party thereto, is in breach of any of its obligations under any such agreement or arrangement in any material respect.

Except as described in DCB Disclosure Schedule 3.35, none of the DCB Companies has trust powers or acts as a trustee, agent, custodian, personal representative, guardian, conservator or investment adviser.

None of the DCB Companies originates, maintains or administers credit card accounts. Except as described in DCB Disclosure Schedule 3.36, none of the DCB Companies provides, or has provided, merchant credit card processing services to any merchants.

The DCB Companies have taken all actions required to exempt OLB, the Agreement, the Bank Merger Agreement, the Contemplated Transactions and the Bank Merger from any provisions of an anti-takeover nature contained in the DCB Organizational Documents, and the provisions of any federal or state “anti-takeover,” “fair price,” “moratorium,” “control share acquisition” or similar Laws.

Attached hereto as DCB Disclosure Schedule 3.38 is a list of holders of shares of the DCB Common Stock complied and provided by Computershare, Inc., the registrar and transfer agent in respect of the DCB Common Stock, containing their names, addresses and number of shares held of record. To the Knowledge of DCB, such stockholders’ list is complete and accurate in all material respects.

Each issued and outstanding Bank Certificate that has not been surrendered pursuant to Section 4(b) of the Plan of Reorganization constitutes and is deemed for all corporate purposes as evidence and ownership of an equal number of shares of DCB Common Stock. Each such Bank Certificate has been cancelled by Damascus and does not entitle any holder thereof to exercise any rights as a stockholder of Damascus.

The schedules delivered by DCB pursuant to this Article III and elsewhere in this Agreement, which have been delivered concurrently with the execution and delivery of this Agreement, are true and correct in all material respects and contain no untrue statements of material fact or omit any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

OLB represents and warrants to DCB, for itself and with respect to and on behalf of each of the OLB Subsidiaries (to the extent applicable), that the statements contained in this Article IV (and as reflected on the OLB Disclosure Schedules) are true and correct as of the date of this Agreement and will be true and correct as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article IV, except that those representations and warranties that by their terms speak as of the date of this Agreement or some other date shall be true and correct as of such date); provided, however, that no representation or warranty of OLB contained in this Article IV shall be deemed untrue or incorrect, and OLB shall not be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts, circumstances or events inconsistent with any paragraph of Article IV, has had or is reasonably expected to have a Material Adverse Effect on OLB, disregarding for these purposes (i) any qualification or exception for, or reference to, materiality in any such representation or warranty and (ii) any use of the terms “material,” “materially,” “in all material respects,” “Material Adverse Effect” or similar terms or phrases in any such representation or warranty; provided, however, that the foregoing standard shall not apply to representations and warranties contained in Sections 4.1, 4.2, 4.3, 4.6, 4.14, 4.17 and 4.25, which shall be deemed untrue, incorrect and breached if they are not true and correct in all material respects (the “Article IV Standard”).

OLB has made a good faith effort to ensure that the disclosure on each schedule of the OLB Disclosure Schedules corresponds to the section referenced herein. For purposes of the OLB Disclosure Schedules, however, any item disclosed on any schedule therein is deemed to be fully disclosed with respect to all schedules under which such item may be relevant as and to the extent that it is reasonably clear on the face of such schedule that such item applies to such other schedule.

Except as described in OLB Disclosure Schedule 4.4, no consents, waivers or approvals of, or filings or registrations with, any Regulatory Authorities or other third parties are necessary in connection with the execution and delivery of this Agreement by OLB or the consummation of the Contemplated Transactions by OLB. OLB has no reason to believe that it will not be able to obtain all requisite consents, waivers or approvals from the Regulatory Authorities or any third party in order to consummate the Contemplated Transactions on a timely basis. To the Knowledge of OLB, no fact or circumstance exists, including any possible other transaction pending or under consideration by OLB or any OLB Company, that would (a) reasonably be expected to prevent or delay in any material respect, any filings or registrations with, or consents, waivers or approvals required from, any Regulatory Authority, or (b) cause a Regulatory Authority acting pursuant to applicable Law to seek to prohibit or materially delay consummation of the Contemplated Transactions or impose a Burdensome Condition.

Neither OLB nor any OLB Subsidiary has suffered any adverse change in its assets (including loan portfolio), liabilities (whether absolute, accrued, contingent or otherwise), liquidity, net worth, property, financial condition or results of operations, or any damage, destruction or loss, whether or not covered by insurance, since December 31, 2015, that in the aggregate has had or is reasonably likely to have a Material Adverse Effect on the OLB Companies taken as a whole.

Except as described in OLB Disclosure Schedule 4.8 or in the SEC Reports, neither OLB nor any OLB Subsidiary is a party to or subject to:

Except as set forth in OLB Disclosure Schedule 4.10, there are no legal, quasi-judicial, administrative, arbitration or other proceedings, claims (whether asserted or unasserted), actions or governmental investigations or inquiries of any kind or nature now pending or, to the Knowledge of OLB, threatened, before any court, administrative, regulatory, arbitration or similar body in any manner against any of the OLB Companies or any of their properties, and to the Knowledge of OLB there are no facts that reasonably could be expected to be the basis for any such suit, arbitration, other proceeding, claim, action, investigation or inquiry. To the Knowledge of OLB, no pending or threatened suit, arbitration, proceeding claim, action, investigation or inquiry described in OLB Disclosure Schedule 4.10 could reasonably be expected to (a) have a Material Adverse Effect, (b) question the validity of any action taken or to be taken in connection with this Agreement or the Contemplated Transactions, or (c) materially impair or delay the ability of the OLB Companies to perform their obligations under this Agreement. Except as disclosed on OLB Disclosure Schedule 4.10, none of the OLB Companies is in default with respect to any judgment, order, writ, injunction, decree, award, rule, or regulation of any court, arbitrator or Regulatory Authority.

There are no labor or collective bargaining agreements to which any of the OLB Companies is a party. There is no union organizing effort pending or, to the Knowledge of OLB, threatened, against any of the OLB Companies. There is no labor strike, labor dispute (other than routine employee grievances that are not related to union employees), work slowdown, stoppage or lockout pending or, to the Knowledge of OLB, threatened, against any of the OLB Companies. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or, to the Knowledge of OLB, threatened, involving employees of any of the OLB Companies. No arbitration or proceeding asserting that any of the OLB Companies has committed an unfair labor practice (within the meaning of the National Labor Relations Act of 1935) or seeking to compel any of the OLB Companies to bargain with any labor organization as to wages or conditions of employment is pending or, to the Knowledge of OLB, threatened, with respect to any of the OLB Companies before the National Labor Relations Board, the Equal Employment Opportunity Commission or any other Regulatory Authority (other than routine employee grievances that are not related to union employees). Each of the OLB Companies is in compliance in all material respects with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice. None of the OLB Companies has made any commitments to others inconsistent with or in derogation of any of the foregoing. Except as described in OLB Disclosure Schedule 4.12, there are no pending or, to the Knowledge of OLB, threatened, claims or suits against any of the OLB Companies under any applicable labor or employment Law or brought or made by a current or former employee or applicant for employment.

Other than Ambassador Financial Group, Inc., none of the OLB Companies and, to the Knowledge of OLB, no officer, director, employee, independent contractor or agent of any OLB Company on its behalf, has employed any broker, finder, investment banker or financial advisor, or incurred any liability for any fees or commissions to any broker, finder, investment banker or financial advisor, in connection with the Contemplated Transactions.

With respect to OLB and each OLB Subsidiary:

Except as set forth on OLB Disclosure Schedule 4.18, as is disclosed in the OLB Financials, and/or as disclosed in the SEC Reports, neither OLB nor any OLB Subsidiary is a party to any transaction (including any loan or other credit accommodation but excluding deposits in the ordinary course of business) with any Affiliate of OLB or any OLB Subsidiary, and all such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons who are not related to or Affiliates of OLB or any OLB Subsidiary.

The allowance for loan losses reflected in reports by the OLB Companies to each Regulatory Authority has been and will be established in compliance with the requirements of all regulatory criteria, and the allowance for loan losses shown in the OLB Financials has been and will be established and maintained in accordance with GAAP and applicable Law and in a manner consistent with Old Line’s internal policies. The allowance for loan losses reflected in such reports and the allowance for loan losses shown in the OLB Financials, in the opinion of management, was or will be adequate as of the dates thereof. The REO and in-substance foreclosures included in any of Old Line’s non-performing assets are carried net of reserves at the lower of cost or market value based on current independent appraisals or current management appraisals. OLB has disclosed to DCB on OLB Disclosure Schedule 4.20 all Credit Extensions (including participations) by and all interest-bearing assets of the OLB Companies (a) that are in an amount of at least $1 million and have been accelerated during the past 12 months, (b) that are in an amount of at least $1 million and have been terminated during the past 12 months by reason of a default or adverse development in the condition of the borrower or other events or circumstances affecting the credit of the borrower, and (c) pursuant to which a borrower, customer or other party has notified any of the OLB Companies during the past 12 months of, or has asserted against any of the OLB Companies, in each case in writing, any “lender liability” or similar claim, and, to the Knowledge of OLB, each borrower, customer or other party that has given any of the OLB Companies any oral notification of, or orally asserted to or against any of the OLB Companies, any such claim, and OLB shall provide an updated OLB Disclosure Schedule 4.20 promptly to DCB after the end of each month after the date hereof and on the Business Day prior to the Closing Date.

Old Line is the only OLB Company that is subject to the CRA. To the Knowledge of OLB, OLB is in compliance in all material respects with the CRA and all regulations promulgated thereunder. OLB has supplied DCB with a copy of Old Line’s current CRA Statement, all letters and written comments received by Old Line since July 8, 2013 pertaining thereto and any responses by Old Line to such comments. Old Line has a rating of “satisfactory” or better as of its most recent CRA compliance examination and OLB and Old Line have received no communication from any Regulatory Authority that would lead OLB to believe that Old Line will not receive a rating of “satisfactory” or better pursuant to its next CRA compliance examination or that any Regulatory Authority would seek to restrain, delay or prohibit any of the Contemplated Transactions as a result of any act or omission of Old Line under the CRA.

To the Knowledge of OLB, the officers, employees and agents of the OLB Companies are now, and at all times in the past have been, in compliance with all applicable Laws that relate to securities activities conducted by such officers, employees and agents, including Laws relating to licenses and permits.

Each of the OLB Companies has good and marketable title to all securities that it owns. None of the investment securities reflected in the OLB Financials under the headings “investment securities available for sale” and “investment securities held to maturity” and, except as described in OLB Disclosure Schedule 4.24, none of the investment securities acquired by the OLB Companies since September 30, 2016, are subject to any restrictions, whether contractual or statutory, that materially impair such OLB Company’s ability to freely dispose of such investment securities at any time, and such OLB Company was permitted by applicable Law to acquire such investment securities at the time they were acquired.

As of the date hereof, OLB does not have any reason to believe that the Merger will fail to qualify as a tax-free reorganization within the meaning of Section 368(a) of the IRC. None of the OLB Companies will take any action that will cause, cause any action to be taken that will cause, or fail to take any action or fail to cause any action to be taken if such failure to act will have the effect of causing, the Merger not to qualify as a tax-free reorganization within the meaning of Section 368(a) of the IRC, nor have any of the OLB Companies taken, caused, agreed to take or cause, or failed to take or cause any such action.

OLB’s board of directors has received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated no later than the date of this Agreement) from Ambassador Financial Group, Inc. to the effect that, as of the date thereof, and subject to the terms, conditions and qualifications set forth therein, the consideration payable by OLB to stockholders of DCB pursuant to the terms of this Agreement are fair, from a financial point of view, to the stockholders of OLB. Such opinion has not been amended or rescinded as of the date of this Agreement.

All proxy materials used in connection with the meetings of OLB’s stockholders held in 2014, 2015 and 2016, along with any other form of correspondence between OLB and its stockholders during that time period, either have been filed with the SEC and are publicly available to DCB via the SEC’s Electronic Data Gathering and Retrieval system or have been provided to DCB.

None of the OLB Companies has any obligation or liability that is material to its financial condition or operations or that, when combined with all similar obligations or liabilities, would be material to its financial condition or operations except (a) as disclosed in the OLB Financials delivered or made available to DCB prior to the date of this Agreement, or (b) as contemplated under this Agreement. Except as disclosed in OLB Disclosure Schedule 4.28, since September 30, 2016, none of the OLB Companies has incurred or paid any obligation or liability that would be material to its financial condition or operations of, except for obligations paid in connection with transactions made by them in the ordinary course of its business consistent with past practice and applicable Law.

Each of the OLB Companies owns or possesses valid, binding and assignable licenses and other rights to use without payment all trademarks, trade dress, trade names, service marks, domain names, patents, technology, inventions, trade secrets, know-how and copyrights and works of authorship owned by or licensed to each of the OLB Companies for use in its business, and all licenses or other agreements relating thereto and all agreements relating to third party intellectual property that it is licensed or authorized to use in its business, including without limitation any software licenses other than “shrink wrap” or force placed software licenses (collectively, the “OLB Intellectual Property”), that is used in the conduct of its existing businesses free and clear of all Liens and any claims of ownership by current or former employees or contractors, other than royalties or payments with respect to off-the-shelf software. With respect to each item of OLB Intellectual Property that any of the OLB Companies is licensed or authorized to use, the license, sublicense or agreement covering such item is legal, valid, binding, enforceable and in full force and effect. To the Knowledge of OLB, none of the OLB Companies is infringing, diluting, misappropriating or violating the intellectual property of any other Person, and none of the OLB Companies has received any communications alleging that it has infringed, diluted, misappropriated or violated any such intellectual property. None of the OLB Companies has sent any communications alleging that any Person has infringed, diluted, misappropriated or violated any OLB Intellectual Property and, to the Knowledge of OLB, no Person is infringing, diluting, misappropriating or violating any of the OLB Intellectual Property. Each of the OLB Companies has taken all commercially reasonable actions to protect and maintain (a) all material OLB Intellectual Property and (b) the security and integrity of its software, databases, networks, systems, equipment and hardware and to protect the same against unauthorized use, modification or access thereto, or the introduction of any viruses or other unauthorized or damaging or corrupting elements. To the Knowledge of OLB, the computers, computer software, other information technology equipment, information technology passwords and other credentials, and all associated documents and records owned or leased by the OLB Companies (the “OLB IT Assets”) operate and perform in all material respects in accordance with their documentation and functional specifications as required by them in connection with their business, and none of the OLB IT Assets has materially malfunctioned or failed to meet its requirements within the past two years except for such malfunctions or failures that have been remediated. To the Knowledge of OLB, no Person has gained unauthorized access to the OLB IT Assets. The OLB Companies have implemented commercially reasonable backup and disaster recovery technology consistent with industry practices for institutions of comparable size and complexity.

The schedules delivered by OLB pursuant to this Article IV and elsewhere in this Agreement, which have been delivered concurrently with the execution and delivery of this Agreement, are true and correct in all material respects and contain no untrue statements of material fact or omit any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

OLB and the OLB Subsidiaries are engaged in all material respects only in the business described in the SEC Reports, and the SEC Reports contain a complete and accurate description in all material respects of the business of OLB and the OLB Subsidiaries, taken as a whole.

Through the Effective Time, DCB shall, and shall cause each DCB Subsidiary to, in all material respects, conduct its businesses and engage in transactions only in the usual, regular and ordinary course and consistent with past practice, except as otherwise required or contemplated by this Agreement or with the prior written consent of OLB. DCB shall, and shall cause each DCB Subsidiary to, use its commercially reasonable good faith efforts to preserve its business organization intact, maintain good relationships with employees and preserve the good will of its customers and others with whom business relationships exist, provided that, other than in the case of a Permitted Employee that DCB determines, in good faith, is necessary to comply with the foregoing requirements, job vacancies that occur prior to the Effective Date through attrition shall not be filled and new officers and employees shall not be hired without the prior written consent of OLB, which shall not be unreasonably conditioned, withheld or delayed. Through the Effective Time, without the consent in writing of OLB (such consent not to be unreasonably withheld, conditioned or delayed), as permitted by this Agreement or except as may be required, in writing, by any Regulatory Authority (in which case DCB shall immediately provide OLB with a copy of such written document), DCB shall not, and shall not permit any DCB Subsidiary to:

Through the Effective Time, except as otherwise consented to in writing by DCB or as permitted by this Agreement, and except as may be required by Law or, in writing, by any Regulatory Authority (in which case OLB shall immediately provide DCB with a copy of such written document), OLB shall not, and shall not permit any OLB Subsidiary to:

Through the Effective Time:

Through the Effective Time, in addition to the specific agreements contained herein, each party hereto shall use their reasonable best efforts to take, or cause to be taken by each of its Subsidiaries, all actions, and to do, or cause to be done by each of its Subsidiaries, all things necessary, proper or advisable under applicable Law to consummate and make effective the Contemplated Transactions as soon as practicable after the date hereof including, if necessary, appealing any adverse ruling with respect to any Application.

Through the closing date, each of DCB and OLB shall promptly advise the other of any change or event having or reasonably likely to have a Material Adverse Effect or that it believes would or would be reasonably likely to cause or constitute a material breach of any of its representations, warranties or covenants set forth herein. Through the Closing Date, DCB shall update the DCB Disclosure Schedules, and OLB shall update the OLB Disclosure Schedules, as promptly as practicable after the occurrence of any event that, if such event had occurred prior to the date hereof, would have been disclosed on such schedule. In addition, DCB shall update and deliver to OLB the DCB Disclosure Schedule 3.20(a), and OLB shall update and deliver to DCB the OLB Disclosure Schedule 4.20, promptly after the end of each calendar month during the Pre-Closing Period and on the Business Day immediately preceding the Closing Date. The delivery of such updated Disclosure Schedules shall not relieve either party from liability for any breach or violation of this Agreement and shall not have any effect for the purposes of determining the satisfaction of the condition set forth in Sections 6.1(b) or 6.2(b).

Notwithstanding the foregoing, prior to the approval of the Agreement and the Merger by DCB’s stockholders at the DCB Common Stockholders’ Meeting, DCB may respond to an inquiry, furnish nonpublic information regarding itself and the DCB Subsidiaries to, or enter into discussions with, any Person in response to an unsolicited Acquisition Proposal that is submitted to DCB by such Person (and not withdrawn) if: (A) DCB’s board of directors determines in good faith, after consultation with and having considered the advice of its outside legal counsel and the advice of RP Financial, LC., that such Acquisition Proposal constitutes or is reasonably likely to lead to a Superior Proposal (as defined below); (B) DCB has not violated any of the restrictions set forth in this Section 5.7(a)(ii); (C) DCB’s board of directors determines in good faith, after consultation with and based upon the advice of its outside legal counsel and the advice of RP Financial, LC., that such action is required in order for the board of directors to comply with its fiduciary obligations under applicable Law; and (D) at least two Business Days prior to furnishing any nonpublic information to, or entering into discussions with, such Person, DCB provides OLB with written notice of the identity of such Person and of DCB’s intention to furnish nonpublic information to, or enter into discussions with, such Person and DCB receives from such Person an executed confidentiality agreement on terms no more favorable to such Person than the Confidentiality Agreement, which confidentiality agreement shall not provide such Person with any exclusive right to negotiate with DCB. DCB shall promptly provide to OLB any non-public information regarding DCB or any DCB Subsidiary provided to any other Person that was not previously provided to OLB, such additional information to be provided no later than the date of provision of such information to such other Person.

DCB shall promptly (and in any event within 24 hours) notify OLB in writing if any proposals or offers are received by, any information is requested from, or any negotiations or discussions are sought to be initiated or continued with, DCB, any DCB Subsidiary or any of their Representatives, in each case in connection with any Acquisition Proposal, and such notice shall indicate the name of the Person initiating such discussions or negotiations or making such proposal, offer or information request and the material terms and conditions of any proposals or offers (and, in the case of written materials relating to such proposal, offer, information request, negotiations or discussion, providing copies of such materials (including e-mails or other electronic communications)). DCB agrees that it shall keep OLB informed, on a current basis, of the status and terms of any such proposal, offer, information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or request). DCB further agrees that it will provide OLB with the opportunity to present its own proposal to the DCB board of directors in response to any such proposal or offer and negotiate with OLB in good faith with respect to any such proposal.

For purposes of this Agreement, “Superior Proposal” means any unsolicited, bona fide written proposal (or its most recently amended or modified terms, if amended or modified) made by a third party to consummate an Acquisition Proposal on terms that the DCB board of directors determines in its good faith judgment, after consultation with and having considered the advice of DCB’s outside legal counsel and RP Financial, LC.: (A) would, if consummated, result in consideration that is more favorable to the stockholders of DCB than the Contemplated Transactions (taking into account all legal, financial, regulatory and other aspects of the Acquisition Proposal and the Person making the proposal); (B) is not conditioned on obtaining financing (and with respect to which DCB has reasonably assured itself of such Person’s ability to fully finance its Acquisition Proposal); (C) would, if consummated, result in the acquisition of all, but not less than all, of the issued and outstanding shares of DCB Common Stock or all or substantially all of the assets and liabilities of the DCB Companies on a consolidated basis; and (D) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of the proposal.

Neither the DCB board of directors nor any committee thereof shall: (A) withdraw, qualify or modify, or propose to withdraw, qualify or modify, in a manner adverse to OLB in connection with the Contemplated Transactions (including the Merger), its recommendation to the stockholders of DCB to approve the Agreement and the Merger, or make any statement, filing or release, in connection with the DCB Common Stockholders’ Meeting or otherwise, inconsistent with the recommendation to the stockholders of DCB to approve the Agreement and the Merger (it being understood that taking a neutral position or no position with respect to an Acquisition Proposal shall be considered an adverse modification of such recommendation); (B) approve or recommend, or publicly propose to approve or recommend, any Acquisition Proposal; or (C) enter into (or cause DCB or any DCB Subsidiary to enter into) any letter of intent, agreement in principle, acquisition agreement or other agreement (1) related to any Acquisition Proposal or (2) requiring DCB to abandon, terminate or fail to consummate any of the Contemplated Transactions.

Notwithstanding the foregoing, prior to the date of the DCB Common Stockholders’ Meeting, DCB’s board of directors may approve or recommend to the stockholders of DCB a Superior Proposal and withdraw, qualify or modify its recommendation in connection with the Agreement and the Merger or take any of the other actions otherwise prohibited by this Section 5.7(a)(ii) after the third Business Day following the receipt by OLB of a notice (the “Notice of Superior Proposal”) from DCB advising OLB that the DCB board of directors has decided that a bona fide unsolicited written Acquisition Proposal that it received (that did not result from a breach of this Section 5.7(a)(ii)) constitutes a Superior Proposal (it being understood that DCB shall be required to deliver a new Notice of Superior Proposal in respect of any materially revised Superior Proposal from such third party or its affiliates that DCB proposes to accept and the subsequent notice period shall be three Business Days) if, but only if, (A) the DCB board of directors has reasonably determined in good faith, after consultation with and having considered the advice of outside legal counsel and the advice of RP Financial, LC., that the failure to take such actions would be inconsistent with its fiduciary duties under applicable law and (B) at the end of such three Business Day period, after taking into account any adjusted, modified or amended terms as may have been committed to in writing by OLB since OLB’s receipt of such Notice of Superior Proposal (provided, however, that OLB shall not have any obligation to propose any adjustments, modifications or amendments to the terms and conditions of this Agreement), the DCB board of directors has again in good faith made the determination (1) in clause (A) of this paragraph, and (2) that such Acquisition Proposal constitutes a Superior Proposal.

(i)           Public Announcements. OLB and DCB shall consult upon the form and substance of any press release or public statement related to this Agreement and the Contemplated Transactions and shall not issue any press release or make any public statement without the prior consent of the other party, which shall not be unreasonably delayed or withheld, but nothing contained herein shall prohibit either party, following notification to the other party, from making any disclosure that its counsel deems necessary under applicable Law.

(ii)           Maintenance of Insurance. OLB and each OLB Subsidiary, and DCB and each DCB Subsidiary, shall maintain insurance in such amounts as OLB and DCB, respectively, believe are reasonable to cover such risks as are customary in relation to the character and location of its and their respective Subsidiaries’ properties and the nature of its and their respective Subsidiaries’ businesses.

(iii)           Maintenance of Books and Records. OLB and each OLB Subsidiary, and DCB and each DCB Subsidiary, shall maintain books of account and records in accordance with GAAP and on a basis consistent with past practice.

(iv)           Taxes. OLB and each OLB Subsidiary shall file all OLB Returns, and DCB and each DCB Subsidiary shall file all DCB Returns, required to be filed by them, respectively, on or before the date such returns are due, including any extensions, and pay all taxes shown to be due on such returns on or before the dates such payments are due, except those being contested in good faith.

(v)           In-House Operations. OLB and DCB shall cooperate with each other in the interest of an orderly, cost-effective consolidation of operations.

(vi)           Delivery of Financial Statements. OLB and DCB shall each deliver, or in the case of OLB, make available to the other, promptly upon their completion, but in each case by each respective delivery date, financial statements that fairly present, in all material respects, its consolidated financial condition, results of operations for the periods then ended in accordance with GAAP, subject to year-end audit adjustments and notes thereto.

(vii)           Delivery of Regulatory Filings and Documents. Except where prohibited by Law or the regulations of any Regulatory Authority, OLB and DCB shall each deliver to the other copies of all reports filed with Regulatory Authorities promptly upon the filing thereof.

(c)           Undertakings of OLB.

On and after the Effective Time, (A) the directors of OLB duly elected and holding office immediately prior to the Effective Time, and (B) provided the DCB Nominees agree to serve as a director of OLB, the DCB Nominees, shall be the directors of OLB, each to hold office until his or her successor is elected and qualified or otherwise in accordance with applicable Law and the articles of incorporation and bylaws of OLB and Old Line, as applicable; further provided, that in no event shall OLB’s obligations under this section apply with respect to either of the DCB Nominees if such DCB Nominee shall be subject to a Disqualification Event.

As used in this Agreement, the term “Disqualification Event” means, as to the DCB Nominees, the occurrence of any of the following events: (i) such nominee shall be prohibited by Law or otherwise from serving as a director of OLB; (ii) such nominee shall have been charged with or convicted of any felony or a crime of moral turpitude; (iii) such nominee shall file (or any Entity of which such nominee shall have been an executive officer or controlling person within the 90 days prior to filing shall file) a voluntary petition under any applicable federal or state bankruptcy or insolvency law, or such nominee shall become (or any Entity indebted to OLB of which such nominee shall have been an executive officer or controlling person within the 90 days prior to filing shall become) the subject of an involuntary petition filed under any such law that is not dismissed within 90 days; (iv) such nominee shall be involved in any of the events or circumstances enumerated in Item 401(f)(3)-(6) of Regulation S-K (or any successor or substitute provision of similar import) promulgated by the SEC, or similar provisions of state “blue sky” laws; (v) the death, disability or other personal reasons beyond the control of such nominee that prevents him from serving, as determined by OLB in its sole discretion, as a nominee; or (vi) such nominee shall violate any covenant or agreement contained in the Support Agreement. OLB will (i) take such actions as are necessary to cause Old Line, subject to the fiduciary duties of the Old Line board of directors, Old Line’s articles of incorporation and bylaws and the eligibility requirements of any Regulatory Authority relating to Old Line, and provided that the DCB Nominees are not subject to a Disqualification Event, to nominate the DCB Nominees to serve as directors of Old Line during any time, and for the same term, that the DCB Nominees serve as directors of OLB, in compliance with Section 1.3(d), and (ii) will, as the sole stockholder of Old Line, vote to elect the DCB Nominee so nominated by Old Line.

The Prospectus/Proxy Statement and the Registration Statement shall comply as to form in all material respects with the applicable provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder. DCB and OLB shall promptly notify the other party if at any time it becomes aware that the Prospectus/Proxy Statement or the Registration Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. In such event, DCB shall cooperate with OLB in the preparation of a supplement or amendment to such Prospectus/Proxy Statement or Registration Statement that corrects such misstatement or omission, and OLB shall file an amended Registration Statement or supplement to the Registration Statement with the SEC, and DCB shall mail a Prospectus/Proxy Statement and any required amendment or supplement to holders of DCB Common Stock. OLB will provide DCB and its counsel with a reasonable opportunity to review and comment on the Registration Statement and the Prospectus/Proxy Statement and all responses to requests for additional information by and replies to comments of the SEC prior to filing such with, or sending such to, the SEC, and will provide DCB and its counsel with a copy of all such filings made with the SEC.

The obligations of DCB hereunder shall be subject to satisfaction at or prior to the Closing Date of each of the following conditions, unless waived by DCB pursuant to Section 8.3 hereof:

The obligations of OLB hereunder shall be subject to satisfaction at or prior to the Closing Date of each of the following conditions, unless waived by OLB pursuant to Section 8.3 hereof:

Section 6.3                               Frustration of Closing Conditions.

Neither OLB nor DCB may rely on the failure of any condition set forth in Section 6.1 or 6.2, as the case may be, to be satisfied if such failure was caused by such party’s failure to use its commercially reasonable best efforts to consummate and to make effective the Contemplated Transactions, as required by and subject to Section 5.5.

Notwithstanding any other provision of this Agreement, and notwithstanding receipt of the approval by the stockholders of DCB of the Agreement and the Merger, this Agreement may be terminated on or at any time prior to the Closing Date:

If DCB elects to exercise its termination right pursuant to this Section 7.1(j), it shall give prompt (but in any case within 24 hours of such determination) written notice thereof to OLB. During the five Business Day period commencing with its receipt of such notice, OLB may, at its option, increase the Merger Consideration to an amount to be calculated as if the Average Price were equal to $16.68. If OLB makes the election contemplated by the preceding sentence within such five Business Day period, it shall give prompt written notice to DCB of such election and the revised Per Share Consideration, whereupon no termination shall have occurred pursuant to this Section 7.1(j) and this Agreement shall remain in effect in accordance with its terms (except as the Per Share Common Stock Consideration shall have been so modified), and any references in this Agreement to the Per Share Consideration and the amount thereof shall thereafter be deemed to refer to the Per Share Consideration and the amount thereof as adjusted pursuant to this Section 7.1(j).

If the outstanding shares of OLB Common Stock or any company belonging to the NASDAQ Bank Stock Index shall be changed into a different number of shares by reason of any stock dividend, reclassification, split-up, combination, exchange of shares or similar transaction between the date of the Agreement and the end of the Price Determination Period, the Starting Price, the Closing Market Price and the other amounts in this Section 7.1(j) shall be appropriately adjusted.

For purposes of this Section 7.1(j), the following terms shall have the meanings set forth below:

“Starting Price” shall mean $27.21, which was the volume weighted average of the closing prices of OLB Common Stock for the ten Trading Days ending Two Trading Days prior to the date of this Agreement.

 “Closing Market Price” shall be the volume weighted average of the closing prices of OLB Common Stock, calculated to two decimal places, for the Price Determination Period, as reported on the NASDAQ Capital Market.

“OLB Price Ratio” shall mean the quotient (multiplied by 100 to express such quotient as a percentage) obtained by dividing the Closing Market Price by the Starting Price, calculated to four decimal places.

“Index Ratio” shall mean the quotient (multiplied by 100 to express such quotient as a percentage) obtained by dividing the Average NASDAQ Bank Stock Index Value For The Price Determination Period by $3,783.767, which was the closing index value of the NASDAQ Bank Index on that date that was two Trading Days prior to the date of this Agreement, as quoted by NASDAQ, calculated to three decimal places.

“Average NASDAQ Bank Stock Index Value For The Price Determination Period” shall mean the average closing index value of the NASDAQ Bank Index for the Price Determination Period, as quoted by NASDAQ.

“Price Determination Period” means the ten consecutive Trading Days immediately preceding the date that is five Trading Days before the Closing Date.

If this Agreement is terminated pursuant to Section 7.1 hereof or otherwise, this Agreement shall forthwith become void, other than Sections 5.3(b), 5.7(b)(i), 8.1, 8.2, 8.4, 8.5, 8.6, 8.9, 8.10, 8.11, 8.12 and 8.13 hereof and this Section 7.2, which shall remain in full force and effect, and there shall be no further liability on the part of OLB or DCB to the other with respect to the Contemplated Transactions, except for any liability of OLB or DCB under such applicable sections of this Agreement.

(i)           if OLB terminates this Agreement pursuant to: (A) Section 7.1(b); (B) Section 7.1(c) because the Closing failed to occur prior to October, 31, 2017 or November 30, 2017, as applicable and such failure resulted from the knowing, willful and intentional actions or inactions of DCB or Damascus (provided that OLB is not then in material breach of any representation, warranty, covenant, or other agreement contained in this Agreement); (C) Section 7.1(d) because a Regulatory Authority refused to issue a consent or approval required for the consummation of any of the Contemplated Transactions and such refusal resulted from the knowing, willful and intentional actions or inactions of DCB or Damascus (provided that OLB is not then in material breach of any representation, warranty, covenant, or other agreement contained in this Agreement); or (D) Section 7.1(i) (provided that OLB is not then in material breach of any representation, warranty, covenant, or other agreement contained in this Agreement), DCB shall pay the DCB Termination Fee as promptly as practicable (but in any event within three Business Days) after termination of the Agreement; or

(ii)           if OLB or DCB terminates this Agreement pursuant to Sections 7.1(f) or 7.1(g), DCB shall pay the DCB Termination Fee at or prior to the time of such termination.

 

All representations, warranties and, except to the extent specifically provided otherwise herein, agreements and covenants shall terminate as of the Closing. Notwithstanding the foregoing, Sections 1.3(b), 1.3(c), 1.3(d), 1.5, 1.6, 2.5(b) through (i), 5.3(b) and 5.7(c)(i) through (iv) and (vi) shall survive the Closing.

(i)           Amend this Agreement;

(ii)           Extend the time for the performance of any of the obligations or other acts of either party hereto;

(iii)           Waive any term or condition of this Agreement, any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto; or

(iv)           Waive compliance with any of the agreements or conditions contained in Articles V and VI hereof or otherwise.

This Agreement, the schedules and exhibits hereto, and any other documents to be executed in connection herewith, including, without limitation, the Bank Merger Agreement, and the Confidentiality Agreement, contain the entire, complete, and integrated agreement between the parties with respect to the subject matter hereof, and supersede any prior or contemporaneous arrangements, agreements or understandings between the parties, written or oral, express or implied, that may have related to the subject matter hereof in any way other than the Confidentiality Agreement.

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their successors; provided, however, that, except for (a) the Indemnified Parties’ rights under Section 5.7(c)(iv), and (b) the Insured Person’s rights with respect to the Tail Policy under Section 5.7(c)(vi), which are expressly intended to be for the irrevocable benefit of, and shall be enforceable by, each Indemnified Party and Insured Person, respectively, and his or her heirs and Representatives, nothing in this Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto and their respective successors, any rights, remedies, obligations or liabilities.

All notices under this Agreement shall be in writing and shall be deemed sufficient and duly given: (a) when delivered personally to the recipient; (b) upon confirmation of good transmission if sent by facsimile; or (c) when delivered to the last known address of the recipient (i) one Business Day after delivery to a reputable express courier service for next-day delivery (charges prepaid), or (ii) three days after being sent to the recipient by certified mail, return receipt requested and postage prepaid, addressed as follows:

James W. Cornelsen

President and Chief Executive Officer

Old Line Bancshares, Inc.

1525 Pointer Ridge Place

Bowie, MD 20716

Fax: (301) 430-2531

 

with a copy to:

Frank C. Bonaventure, Jr., Esquire

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

100 Light Street

Baltimore, Maryland 21202

Fax: (443) 263-7505

 

Stephen J. Deadrick

Chairman of the Board

DCB Bancshares, Inc.

26500 Ridge Road

Damascus, Maryland 20872

E-mail: ***@***

 

with a copy to:

Andrew D. Bulgin, Esquire

Gordon Feinblatt LLC

233 East Redwood Street

Baltimore, MD 21202

Fax: (410) 576-4196

 

Information contained on either the DCB Disclosure Schedule or the OLB Disclosure Schedule shall be deemed to cover the express disclosure requirement contained in a representation or warranty of this Agreement and any other representation or warranty of this Agreement of such party where it is readily apparent it applies to such provision. The mere inclusion of an item in a Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by a party that such item represents a material exception or fact, event or circumstance or that such item is or could result in a Material Adverse Effect.

Notwithstanding anything else in this Agreement to the contrary, each party hereto (and its Representatives) may disclose to any and all Persons, without limitation of any kind, the federal income tax treatment and federal income tax structure of any and all Contemplated Transactions and all materials of any kind (including opinions or other tax analyses) that are or have been provided to any party (or to any Representative of any party) relating to such tax treatment or tax structure; provided, however, that this authorization of disclosure shall not apply to restrictions reasonably necessary to comply with Securities Laws. This authorization of disclosure is not effective until the earlier of (a) the date of the public announcement of discussions relating to the Contemplated Transactions, (b) the date of the public announcement of the Contemplated Transactions, or (c) the date of execution of an agreement (with or without conditions) to enter into the Contemplated Transactions.

Neither party hereto may assign any of its rights or obligations hereunder to any other person, without the prior written consent of the other party hereto.

When a reference is made in this Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. The Background Section hereof constitutes an integral part of this Agreement. References to Sections include subsections, which are part of the related Section. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the Recitals to this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise specifically noted, the words “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular Section, subsection, paragraph, clause or other subdivision of this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

This Agreement may be executed simultaneously in counterparts, each of which shall be deemed to be an original copy of this Agreement and all of which together will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile or other electronic transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or other electronic transmission shall be deemed to be their original signatures for all purposes.

The parties agree that the provisions and covenants contained in each of the Sections of this Agreement, and within the Sections themselves, are intended to be separate and divisible provisions and covenants and if, for any reason, any one or more of them shall be held to be invalid or unenforceable, in whole or in part, by a court of competent jurisdiction, then (a) the same shall not be held to affect the validity of any other provision or covenant contained in this Agreement and (b) the same shall be deemed to be modified to the minimum extent necessary for it to be legally enforceable. The parties hereby expressly request any court of competent jurisdiction to enforce any such provision or covenant or to modify any provision thereof so that it shall be enforced by such court to the fullest extent permitted by applicable Law.

With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.