Stock Repurchase Agreement
EXHIBIT
10.5
This
Stock Repurchase Agreement (this “Agreement”) is made as of March 18,
2009, by and between Xxxx
Burnie Bancorp, a Maryland corporation (the “Buyer”), and Xxxxxx
X. Xxxx, Xxx 00, Xxxxxxxxxx Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxx 00000
(the “Seller”).
Explanatory
Statement
The
Seller is the record and beneficial holder of 274,179 shares of common stock,
par value $1.00 per share (“Common Stock”), of the Buyer (the
“Shares”). The Buyer desires to purchase the Shares from the Seller
and the Seller desires to sell the Shares to the Buyer.
now,
therefore, in consideration of the foregoing and the mutual agreements
set forth herein, the Buyer and the Seller hereby agree as follows:
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1.
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Purchase
and Sale of Shares; Consideration
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1.1.
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Purchase and Sale of
Shares.
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(a) Upon
the terms and subject to the conditions of this Agreement, on the Closing Date
the Seller shall sell, transfer, assign, convey and deliver to the Buyer, and
the Buyer shall purchase from the Seller, the Shares, free and clear of all
Encumbrances.
(b)
For purposes of this Agreement, “Encumbrances” shall mean all liens, claims,
charges, assessments, options, security interests, proxies, agreements to vote
and other legal and equitable encumbrances.
1.2. Consideration. In
consideration for the Shares, the Buyer will pay to the Seller $9.30 per Share,
for a total purchase price of $2,549,864.70.
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2.
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Closing
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2.1. Closing
Date. The purchase and sale of the Shares (the “Closing”)
shall take place on or before March 25, 2009 at the offices of the Buyer at 000
Xxxxx Xxxxxxx, X.X., Xxxx Xxxxxx, Xxxxxxxx, or at such other location or
locations as the Buyer and the Seller may agree. The time and date on which the
Closing is actually held is referred to herein as the “Closing
Date.”
2.2. Delivery of Shares and
Consideration. At the Closing, the Seller shall take all
necessary actions and make all necessary arrangements to transfer the Shares to
the Company directly, or to or through a designated agent of the Company, so
that the transfer of the Shares to the Company is properly reflected on the
books and records of the Company. At the Closing, the Buyer shall pay
to the Seller the cash amount set forth in Section 1.2, by wire transfer of
immediately available funds to an account designated by the Seller.
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3.
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Representations,
Warranties and Agreements of the
Parties
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3.1.
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Representations,
Warranties and Agreements of the Seller.
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(a) Authority of
Seller. The Seller has the requisite power and authority to
execute, deliver and perform this Agreement. This Agreement has been
duly executed and delivered by Seller and is the legal, valid and binding
obligation of the Seller enforceable in accordance with its terms.
(b)
No
Conflict. Neither the execution and delivery of this Agreement
or the consummation of any of the transactions contemplated hereby nor
compliance with or fulfillment of the terms, conditions and provisions hereof
will conflict with, result in a breach of the terms, conditions or provisions
of, or constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under, or result
in the creation or imposition of any Encumbrance upon any of the Shares, under
(A) any material note, instrument, agreement, mortgage, lease, license,
franchise, permit or other authorization, right, restriction or obligation to
which the Seller is a party or the Shares are subject or by which the Seller is
bound, (B) any court order to which the Seller is a party or any of the
Shares are subject or by which the Seller is bound, or (C) any requirements
of laws, rules or regulations affecting the Seller or the Shares or
otherwise applicable to the transactions contemplated by this
Agreement.
(c) Title to
Shares. The Seller represents and warrants to the Buyer that
the Seller is the sole record and beneficial owner of the Shares, free and clear
of all Encumbrances, and that the delivery and/or release, as applicable, of the
Shares to the Buyer pursuant to this Agreement will transfer and convey good and
valid title thereto to the Buyer, free and clear of all
Encumbrances. The Seller represents and warrants to the Buyer that
the Shares constitute all of the equity interests of the Buyer owned, directly
or indirectly, by the Seller.
(d)
Economic Risk;
Sophistication.
(i) The
Seller represents and warrants that he has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the proposed sale of the Shares to the Buyer and that he has made an
independent decision to sell the Shares to the Buyer based on the Seller’s
knowledge about the Buyer and its business and other information available to
the Seller, which it has determined is adequate for that purpose. The
Seller represents and warrants that he (A) has not received or relied upon any
information (in any form, whether written or oral) furnished by the Buyer or on
behalf of the Buyer in making that decision, or (B) requested any such
information from the Buyer which the Buyer has not furnished to the
Seller.
(ii)
The Seller represents, warrants, acknowledges and agrees that the Buyer and its
affiliates, officers and directors, may possess material non-public information
not known to the Seller regarding or relating to the Buyer, including, but not
limited to, information concerning the business, financial condition, results of
operations or prospects of the Buyer, and the Seller represents, warrants,
acknowledges and agrees that the Seller has not received or requested any such
information, including any information with respect to the Buyer’s fiscal
quarter ending March 31, 2009, and agrees that neither the Buyer nor its
affiliates, officers or directors shall have any liability whatsoever with
respect to the nondisclosure of any such material non-public information,
whether before or after the date of this Agreement.
(e)
Value of the
Shares. The Seller acknowledges and confirms that it is aware
that the closing sale price of the Common Stock (the “Stock Price”) has
fluctuated since the Seller purchased the Shares and is likely to continue to
fluctuate after the date of this Agreement, including possible increases to such
Stock Price. The Seller further acknowledges and confirms that he is
aware that future changes and developments in (A) the Buyer’s business and
financial condition and operating results, and (B) overall market and
economic conditions, may have a favorable impact on the value of the Common
Stock after the sale by the Seller of the Shares to the Buyer pursuant to terms
of this Agreement.
(f)
The Seller represents and warrants that it is not relying on any representation
or warranty by the Buyer in connection with the transactions contemplated by
this Agreement except as expressly set forth in this Agreement.
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3.2.
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Representations,
Warranties and Agreements of the
Buyer.
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(a)
Authority of
Buyer. The Buyer has the requisite corporate power and
authority to execute, deliver and perform this Agreement. This Agreement
has been duly authorized, executed and delivered by the Buyer and is the legal,
valid and binding obligation of the Buyer enforceable in accordance with its
terms.
(b)
No
Conflict. Neither the execution and delivery of this Agreement
or the consummation of any of the transactions contemplated hereby nor
compliance with or fulfillment of the terms, conditions and provisions hereof
will conflict with, result in a breach of the terms, conditions or provisions
of, or constitute a default, an event of default or an event creating rights of
acceleration, termination or cancellation or a loss of rights under (A) the
certificate of incorporation or by-laws of the Buyer, (B) any material note,
instrument, agreement, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which the Buyer is a party or
by which the Buyer is bound, (C) any court order to which the Buyer is a
party or by which the Buyer is bound, or (D) any requirements of laws,
rules or regulations affecting the Buyer or otherwise applicable to the
transactions contemplated by this Agreement.
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4.
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Covenants
of the Parties
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4.1. No Proxy and Voting of the
Shares. The Seller covenants and agrees that it shall not
grant to any person or entity any proxy with respect to any of the Shares (other
than to a designated representative of the Buyer pursuant to a proxy statement
of the Buyer). The Seller further covenants and agrees that it shall
cause all of the Shares for which it has the right to vote as of the record date
for any meeting of stockholders of Buyer to be present for quorum purposes and
to be voted at any such meeting or at any adjournments or postponements thereof,
(x) in favor of each director nominated and recommended by the Board of
Directors of Buyer (the “Board”) for election at any such meeting and
(y) in accordance with the recommendation of the Board for each other
matter that is subject to a vote of the stockholders at any such
meeting.
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4.2.
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Mutual
Releases.
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(a) The
Seller, and anyone claiming through him or on his behalf, as the case may be,
agrees to irrevocably and unconditionally release, waive and forever discharge
the Buyer and his Affiliates (as hereinafter defined) from, and covenants not to
xxx the Buyer Released Parties (as hereinafter defined) with respect to, any and
all actions, causes of action, claims, demands, rights, remedies, expenses and
liabilities of whatever kind or character, at law or in equity, whether now
known or unknown, that the Seller now has, has ever had, or may ever have
against any of the Buyer Released Parties with respect to the Buyer, arising
from or related to the operations of the Buyer or the purchase by the Buyer of
the Shares from the Seller as contemplated by the terms of this Agreement other
than a breach by the Buyer of its representations and warranties
hereunder.
(b)
The Buyer, and anyone claiming through it or on its behalf, as the case may be,
agrees to irrevocably and unconditionally release, waive and forever discharge
the Seller and its Affiliates from, and covenants not to xxx the Seller Released
Parties (as hereinafter defined) with respect to, any and all actions, causes of
action, claims, demands, rights, remedies, expenses and liabilities of whatever
kind or character, at law or in equity, whether now known or unknown, that such
Seller now has, has ever had, or may ever have against any of the Seller
Released Parties with respect to the Seller, arising from or related to the sale
by the Seller of the Shares to the Buyer as contemplated by the terms of this
Agreement other than a breach by the Seller of his representations and
warranties hereunder.
4.3. Definitions. As
used in this Section 4, the terms set forth below shall be defined as
follows:
(a)
“Affiliates” shall mean a person or entity that directly or indirectly,
controls, is controlled by or is under common control with the Buyer or the
Seller, as the case may be, and with respect to the Buyer, its past, present and
future officers, directors, stockholders, employees and agents.
(b)
“Buyer Released Parties” shall mean the Buyer and its Affiliates.
(c)
“Seller Released Parties” shall mean the Seller and his Affiliates.
5.
Miscellaneous
5.1. Confidentiality. The
Seller agrees that it will treat in confidence all documents, materials and
other information which he shall have obtained in regards to this Agreement and
the transactions being effected hereby (whether obtained before or after the
date of this Agreement). Except as required by law (including
applicable federal securities laws), the Seller agrees that he shall not
disclose the terms or the nature of this Agreement or the transactions or
consents being effected hereby. The Seller acknowledges that the
Buyer may disclose the terms or nature of this Agreement as required to comply
with applicable securities laws in the Buyer’s reasonable
discretion.
5.2. Successors and
Assigns. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto, their legal representatives, heirs,
executors, administrators, successors, assigns and transferees.
5.3. Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland.
5.4. Amendment. This
Agreement may not be amended, modified or supplemented except by a writing
signed by an authorized representative of each of the parties
hereto.
5.5. Specific
Performance. The parties hereto acknowledge and agree that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. Accordingly, each of the Seller and the Buyer agrees that,
in the event of any breach of the provisions of this Agreement by such party,
the non-breaching party, without prejudice to any rights to judicial relief it
may otherwise have, shall be entitled to seek equitable relief, including
injunction, and to enforce specifically the terms and provisions of this
Agreement in any court of the United States of America or any state having
jurisdiction. Each of the parties hereto (to the extent such party is
the breaching party) further agrees that it will not oppose the granting of such
relief on the basis that the non-breaching party has an adequate remedy at
law.
5.6. Severability. Wherever
possible, each provision hereof shall be interpreted in such manner as to be
effective and valid under applicable law, but in case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such provision shall be ineffective in
the jurisdiction involved to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be
unreasonable.
5.7. Entire
Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
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5.8. Third
Parties. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been
executed for the benefit of, any person or entity that is not a party hereto or
a successor or permitted assign of such a party.
5.9. Execution;
Counterparts. This Agreement may be executed by facsimile
signature and in two counterparts, each of which shall be deemed to be an
original, but both of which together shall constitute one and the same
instrument; and shall become binding when both counterparts have been signed by
the parties hereto and delivered to both of the parties hereto.
in
witness whereof, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
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Xxxx
Burnie Bancorp
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By:
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/s/
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Xxxxxxx
X. Xxxxxxxxxx
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President
and Chief Executive Officer
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/s/
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Xxxxxx
X. Xxxx
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