Attached files
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| EX-2.1 - CAPITAL TRUST HOLDINGS INC. | v162638_ex2-1.htm |
| EX-99.1 - CAPITAL TRUST HOLDINGS INC. | v162638_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT TO
SECTION
13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): October
7, 2009
FIRST
MARINER BANCORP
(Exact
name of Registrant as specified in Charter)
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Maryland
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000-21815
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52-1834860
|
|
(State
or other Jurisdiction
|
(Commission
File Number)
|
(IRS
Employer Identification
|
|
of
incorporation)
|
No.)
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1501
S. Clinton Street, Baltimore, MD 21224
(Address
of Principal Executive Offices/Zip Code)
Registrant's
telephone number, including area code: (410)
342-2600
Not
Applicable
(Former
name or former address of Registrant, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
INFORMATION
TO BE INCLUDED IN THE REPORT
Item
1.01. Entry into a
Material Definitive Agreement.
On October 7, 2009, First Mariner
Bancorp (the “Company”) entered into a Contribution and Joint Venture Agreement
(the “Contribution Agreement”) with MF Holdco, LLC, a newly formed Delaware
limited liability company (“Holdco”) sponsored by Milestone Partners, a middle
market private equity firm, pursuant to which the Company will contribute all of
its equity interest in its consumer finance company subsidiary, Mariner Finance,
LLC (“Mariner Finance”), to MF Raven Holdings, Inc., a newly formed Delaware
corporation (“JV Corp”), in exchange for 5% of JV Corp’s common stock, valued at
$675,000 (the “Stock Consideration”), and $9.825 million in cash, subject to
adjustment based on the net assets of Mariner Finance at the time of closing
(the “Cash Consideration” and, together with the Stock Consideration, the
“Contribution Consideration”). Holdco will contribute $12.825 million
to JV Corp in exchange for 95% of JV Corp’s common stock. Mariner
Finance and JV Corp are also parties to the Contribution Agreement, a copy of
which is filed herewith as Exhibit 2.1.
The Contribution Agreement contemplates
that approximately $8.775 million of the Cash Consideration will be paid to the
Company at the closing and the remaining $1.05 million of the Cash Consideration
will be placed into an escrow account (the “Escrow Funds”). One-half
of the Escrow Funds will be distributed to the Company after the final
determination of Mariner Finance’s closing net assets, and the remaining
one-half will be distributed 18 months after the closing. In each
case, however, the funds distributed to the Company from the escrow account will
be reduced, pursuant to the Company’s indemnification obligations contained in
the Contribution Agreement and subject to the limitations discussed below, by
any losses suffered by JV Corp and its affiliates because of any inaccurate
representation or breach of any covenant made by the Company in the Contribution
Agreement. JV Corp has likewise agreed to indemnify the Company and
its affiliates for any losses they suffer because of any inaccurate
representation or breach of any covenant made by JV Corp in the Contribution
Agreement. Subject to certain customary exceptions, (ii) the
Company’s maximum indemnification liability for inaccurate representations and
breaches of covenants is capped at $5.25 million, and (iii) JV Corp’s maximum
indemnification liability for inaccurate representations and breaches of
covenants is capped at 50% of the value of the Contribution
Consideration.
In connection with these transactions,
Mariner Finance’s outstanding demand promissory note issued to the Company,
representing subordinated debt, will be modified at the closing to (i) reflect
the current principal balance of $4 million, (ii) reflect a maturity date of
five years after the closing date, (iii) change the rate of interest payable on
the outstanding principal balance to 7.00% per annum, from the current 6.75% per
annum, (iv) prohibit the Company from assigning the note to any third party
(other than to First Mariner Bank) unless the Company first gives JV Corp and
its affiliates the right to purchase it from the Company, and (v) provide that
JV Corp has the right to reduce the balance due under the note by the amount of
any losses suffered by JV Corp and its affiliates which are subject to
indemnification under the Contribution Agreement. The foregoing
set-off right will be available, however, only if all the Escrow Funds have been
exhausted or disbursed to the Company.
The Company agreed in the Contribution
Agreement that, until the date that is five years after the closing date, it
will not directly or indirectly engage in any business activity in which Mariner
Finance is engaged (or intends to engage) as of the closing date, it will not
solicit or employ any employee of Mariner Finance, and it will not otherwise
disrupt Mariner Finance’s business relationships. The foregoing
restriction on competing business activities does not apply to any activities
conducted by the Company and/or its other affiliates as of the date of the
Contribution Agreement, and it also does not apply to the activities of First
Mariner Bank. JV Corp, Mariner Finance and their affiliates agreed in
the Contribution Agreement that, for five years after the closing date, they
will not solicit or employ the employees of the Company and its other affiliates
and will not otherwise disrupt the Company’s business
relationships.
Although the Company expects the
transaction to close by December 15, 2009, the closing is subject to various
customary closing conditions, including, without limitation, (i) the accuracy of
the representations and warranties of each party and the performance by each
party of its covenants, (ii) the parties’ receipt of all required third-party
approvals, including approvals from certain state regulators that license and
supervise Mariner Finance and approvals from Mariner Finance’s primary lenders,
(iii) the absence of any pending or threatened action or proceeding by or before
any court or other governmental authority seeking to prohibit the consummation
of the transactions, or which might materially effect the Company’s ability to
contribute its interest in Mariner Finance to JV Corp or JV Corp’s ability to
own such interest, and (iv) the receipt by the Company of a tax opinion
regarding the intended tax treatment of the contributions by the Company and
Holdco. Accordingly, there can be no assurance that the parties will
consummate the transactions when expected, if at all.
If the transactions are not consummated
by December 15, 2009, then the Contribution Agreement provides that it may be
terminated by the Company or JV Corp (provided that the terminating party is not
then in breach under the Contribution Agreement). The Contribution
Agreement may also be terminated with the mutual consent of the Company and JV
Corp, and by either the Company or JV Corp if there is a breach of a covenant or
an inaccurate representation made by the other party that remains uncured for 30
days after notice and that is reasonably likely to have a Material Adverse
Effect (as defined in the Contribution Agreement) on a party to the Contribution
Agreement.
The Company expects that its consolidated results of operations for
the fiscal quarter in which the transaction closes will reflect a pretax loss of
approximately $10 million relating to the contribution, as the Company has a
higher recorded basis in Mariner Finance than the value of the Contribution
Consideration. The transaction will not, however, result in any
current gain or loss for federal income tax purposes. The Company
anticipates that any deferred income tax benefit that results from this
transaction will be assigned a full valuation allowance.
The Company issued a press release on
October 13, 2009 announcing the Contribution Agreement, a copy of which is filed
herewith as Exhibit 99.1
2
The foregoing information relating to
the Contribution Agreement is intended only as a summary and is qualified in its entirety by reference
to the terms of the Contribution Agreement. The Company has
included the Contribution Agreement as an exhibit to this report pursuant to
Item 601 of the Securities and Exchange Commission’s Regulation S-K and to
provide investors and security holders with information regarding its
terms. It is not intended to provide any other factual or financial
information about the Company, JV Corp or Holdco, or their respective
subsidiaries and affiliates. The representations, warranties and
covenants contained in the Contribution Agreement were made only for purposes of
that agreement and as of specific dates; were solely for the benefit of the
parties to the Contribution Agreement; may be subject to limitations agreed upon
by the parties, including being qualified by confidential disclosures made for
the purposes of allocating contractual risk between the parties to the
Contribution Agreement instead of establishing these matters as facts; and may
be subject to standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Investors should not
rely on the representations, warranties and covenants or any description thereof
as characterizations of the actual state of facts or condition of the Company,
JV Corp or Holdco or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after the date of the
Contribution Agreement, which subsequent information may or may not be fully
reflected in public disclosures by the Company, JV Corp or Holdco.
This report contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements about (i) the benefits of the contribution by the Company of its
equity interest in Mariner Finance and receipt by the Company of JV Corp common
equity and cash in exchange therefor, including future financial condition or
operating results that may be impacted by the transactions contemplated by the
Contribution Agreement, (ii) the plans, objectives, expectations and intentions
of the Company and other statements contained in this report that are not
historical facts, and (iii) other statements identified by words such as
“expects”, “anticipates”, “intends”, “plans”, “believes”, “should” or words of
similar meaning generally intended to identify forward-looking
statements. These forward-looking statements are based upon the
current beliefs and expectations of the Company and are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company’s control. In addition, these
forward-looking statements are subject to assumptions with respect to future
business strategies and decisions that are subject to change. Actual
results may differ materially from the anticipated results discussed in these
forward-looking statements because of numerous possible
uncertainties. Factors that could contribute to those differences
include, but are not limited to, changes in regulations applicable to the
business of the Company and Mariner Finance, JV Corp, Holdco and their
affiliates, changes in laws and/or in rules, policies and positions of the
Company’s federal and state regulators, future impacts of the current economic
recession (which could impact credit quality, adequacy of loan loss reserve and
loan growth), changes in the general interest rate environment, competitive
factors in the marketplace, and business risk associated with credit extensions
and other banking activities. For a more complete discussion of these
and other risk factors, please see Item 1A of Part I of the Annual Report of
First Mariner Bancorp on Form 10-K for the year ended December 31,
2008.
The Company cautions that the foregoing
list of factors is not exclusive. All subsequent written and oral
forward-looking statements concerning the proposed transactions or other matters
attributable to the Company, JV Corp or Holdco, or any person acting on their
behalf, are expressly qualified in their entirety by the cautionary statements
above. The Company does not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date the forward-looking statements are made.
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Item
9.01. Financial
Statements and Exhibits
(d) Exhibits
The exhibits filed with this report are
listed in the Exhibit Index that immediately follows the signatures hereto,
which index is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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FIRST
MARINER BANCORP
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Date:
October 13, 2009
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By:
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/s/ Mark A. Keidel
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Mark
A. Keidel
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President/Chief
Operating Officer
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EXHIBIT
INDEX
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Exhibit No.
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Description
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2.1
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Contribution
and Joint Venture Agreement, dated as of October 7, 2009, by and among
First Mariner Bancorp, Mariner Finance, LLC, MF Raven Holdings, Inc. and
MF Holdco, LLC (filed herewith)*
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99.1
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Press
release dated October 13, 2009 (filed
herewith)
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* All schedules to
the Contribution Agreement have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The Company hereby agrees to furnish supplementally a
copy of any omitted schedule to the Securities and Exchange Commission upon
request.
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