SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
Exhibit 99.1
Old Line Bancshares, Inc.
Old Line Bancshares, Inc.
SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
THIS SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY (this “Agreement”) is made by and
between Old Line Bancshares, Inc., a Maryland corporation (the “Company”), and the
undersigned subscriber whose name and address are set forth on the signature page to this Agreement
(“Subscriber”).
WITNESSETH:
WHEREAS, up to 776,872 shares of common stock, $0.01 par value per share (the
“Shares”) in the Company are to be sold at a price of $8.25 per Share (the
“Offering”), as more fully described in the Confidential Private Placement Memorandum dated
November 30, 2010, as supplemented and heretofore delivered to Subscriber (the
“Memorandum”) together with the exhibits attached to the Memorandum; and
WHEREAS, Subscriber desires to purchase a specified number of Shares and, in consideration
thereof, to make a capital contribution to the Company in the amount set forth on the signature
page hereof, all upon and subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual promises, covenants and
agreements as hereinafter contained, the parties hereto agree as follows:
1. Subscription.
1.1 Payment for Shares. Subscriber hereby irrevocably subscribes for and irrevocably
agrees to purchase, and the Company agrees to issue and sell to Subscriber if the Company accepts
this subscription and does not cancel the Offering prior to the Expiration Date (as that term is
defined in the Memorandum), the number of Shares for the consideration set forth on the signature
page below.
1.2 Acceptance. The Company will determine, in its sole discretion, which
subscriptions, if any, will be accepted, in whole or in part, and in what amounts. Subscriber shall
not have any of the rights of a stockholder of the Company, and any sale of Shares to Subscriber
shall not be deemed to occur, until Subscriber’s offer is accepted in writing by the Company.
Subscriber shall not have any recourse against the Company if a purchase offer is rejected in whole
or part or canceled by the Company prior to the Expiration Date. The Company shall notify
Subscriber in writing of the acceptance or rejection of a purchase offer, or the cancellation of a
subscription. If the offer is rejected in whole or in part, or if the subscription is canceled, the
Company will promptly return to Subscriber all or a ratable portion of the purchase price, as the
case may be, without interest. If the offer is rejected in part only, Subscriber shall immediately
complete, execute, and deliver to the Company new subscription documents for the appropriate
reduced amount subscribed for.
2. Subscriber’s Performance. The failure of any other Subscriber to perform his or
her obligations under any agreement or instrument to which he or she is a party shall not excuse
Subscriber from performing in full his or her obligations under this Agreement.
3. Representations and Warranties of Subscriber. Subscriber acknowledges, agrees,
covenants, represents, warrants and certifies, as appropriate:
3.1 Subscriber (and his or her purchaser representative(s), if any) has carefully read,
reviewed and understands the Memorandum and all other documents provided by the Company
in connection with an investment in the Shares and has carefully evaluated the merits and risks of
investing in the Shares, and Subscriber is fully cognizant of and understands all of the risks
related to a purchase of the Shares, including, but not limited to, those risk factors set forth
under the caption “Risk Factors” in the Memorandum.
3.2 Subscriber: (i) is willing and able to bear the economic and other risks associated with
the proposed investment, including, but not limited to, the risk of losing his or her entire
investment in the Company; (ii) is able to hold the Shares for an indefinite period of time; (iii)
is able presently to afford a complete loss of his or her investment; (iv) has adequate net worth
and means of providing for his or her current needs and possible personal contingencies; (v) has no
need for liquidity in the proposed investment; and (vi) believes his or her overall commitment to
investments which are not readily marketable is reasonable in relation to his or her net worth.
3.3 Subscriber (either alone or with his or her purchaser representative(s), if any) has
sufficient knowledge and experience in financial and business matters, particularly in investments,
to evaluate the merits and risks associated with an investment in the Company.
3.4 Subscriber and his or her advisor(s) have had a reasonable opportunity, at a reasonable
time prior to the investment in the Company, to ask questions of representatives of the Company and
to obtain additional information from the Company concerning the terms and conditions of the
offering of the Shares, the Company and its present and proposed operations or as otherwise
necessary to (i) verify the information provided in the Memorandum, (ii) analyze the nature and
consequences of an investment in the Company, and (iii) evaluate the merits and risks of the
investment in the Shares. The Company has answered or responded to all such questions and requests
for information to the full satisfaction of Subscriber (and Subscriber’s purchaser
representative(s), if any). No representations, oral or written, have been made and no
information, oral or written, has been furnished or made available to Subscriber or Subscriber’s
advisor(s) that were in any way inconsistent with the information contained in the Memorandum.
3.5 The Shares have not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or under the securities laws of any states (the “State Acts”),
and Subscriber understands that the Company has not agreed to register the Shares for distribution
in accordance with the provisions of the Securities Act or any State Acts and that the Company has
not agreed to comply with any exemption under the Securities Act or the State Acts for the resale
of the Shares. The Company is under no obligation to register the Shares on behalf of Subscriber
or to assist Subscriber in complying with any exemption from registration.
3.6 The Shares have not been registered under the Securities Act or under the State Acts
pursuant to exemptions therefrom for nonpublic offerings in reliance upon, among other things, the
representations and warranties made by Subscriber herein and in Subscriber’s Purchaser
Questionnaire, and that a breach of such representations and warranties could cause the Company to
not qualify for such exemptions.
3.7 The Shares may not be sold, assigned, pledged, exchanged, hypothecated or otherwise
transferred unless registered under the Securities Act or the State Acts, or unless an exemption
from registration under the Securities Act and any applicable State Act is available.
3.8 Subscriber and his or her advisor(s) have neither relied upon nor seen any form of
advertising or general or public solicitation (including, but not limited to, communications
published in or broadcast by any print or electronic medium or mass mailings) in connection with
the offering of the Shares, and are aware of no such advertisement or solicitation received by
others.
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Subscriber has attended no seminar or meeting in connection with the offering of the
Shares, and Subscriber is aware of no such seminar or meeting attended by others, except for
meetings of one or more potential subscribers with representatives of the Company for the purpose
of responding to inquiries as provided in Section 3.4 above.
3.9 Subscriber is acquiring the Shares for which Subscriber is subscribing solely for
investment, solely for his or her own account, not for the account of any other person, and not for
distribution, assignment or resale to others and no other person has a direct or indirect
beneficial interest in any Shares so acquired.
3.10 Subscriber confirms that he or she has not paid any commission, success fee or other
remuneration to any person or entity engaged by or working with Subscriber regarding the purchase
of the Shares.
3.11 The tax consequences arising from Subscriber’s investment in the Company are not
susceptible of absolute prediction, and audit adjustments to Company income tax returns, new
rulings of the Internal Revenue Service, court decisions, legislative changes and the like may have
an adverse effect on one or more of the tax consequences. No representation is made, and no
assurances are given, that any benefits will be available for purposes of federal income taxes or
otherwise as a result of Subscriber’s investment in the Company.
3.12 Subscriber is not relying on any information, written or oral, provided by or on behalf
of the Company with respect to the tax consequences of an investment in the Company or the
suitability of this investment for Subscriber, but is relying on its own evaluation and that of its
own advisors to make such determinations based on Subscriber’s particular circumstances.
3.13 Subscriber understands that no federal or state agency has passed on or made any
recommendation or endorsement of the Shares or made any finding or determination as to the fairness
of this investment.
3.14 Subscriber has not distributed any materials, including the Memorandum, furnished to
Subscriber by the Company to anyone other than Subscriber’s professional advisors.
3.15 If Subscriber is an individual, (i) Subscriber is at least 21 years of age, a citizen and
resident of the United States of America and of sufficient legal capacity to execute this
Agreement, (ii) Subscriber has the full right, power and authority to execute this Agreement, and
to perform his or her obligations hereunder and thereunder, (iii) this Agreement has been duly
executed and delivered by Subscriber and constitute valid and binding obligations of Subscriber,
and (iv) the execution and delivery by Subscriber of this Agreement, and the performance by
Subscriber of its obligations hereunder and thereunder, do not and will not violate or a conflict
with the terms of any agreement or instrument to which Subscriber is a party or by which it is
bound.
3.16 If Subscriber is a corporation, trust, partnership, limited liability company or other
entity, (i) Subscriber has the full right, power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder, (ii) this Agreement has been duly executed and
delivered by Subscriber and constitutes a valid and binding obligation of Subscriber, (iii) the
execution and delivery by Subscriber of this Agreement, and the performance by Subscriber of
its obligations hereunder does not and will not violate or a conflict with the terms of any
agreement or instrument to which Subscriber is a party or by which it is bound, and (iv) unless the
prior written approval of the Company has been obtained, Subscriber was not organized for the
specific purpose of acquiring the Shares. Subscriber has reviewed all corporate charter documents,
bylaws, or other
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organizational documents necessary to confirm the representations and warranties
made in the previous sentence, and, upon the request of the Company, Subscriber will deliver copies
of all such documents to the Company.
3.17 Subscriber is not an employee benefit plan or individual retirement account. Subscriber
is not, and is not acting on behalf of (i) an organization or any affiliate thereof which is exempt
from federal income tax, (ii) a foreign government, any international organization or any agency or
instrumentality of the foregoing or (iii) the United States of America, any state or political
subdivision thereof, any possession of the United States of America, or any agency or
instrumentality of the foregoing. (If Subscriber is an entity described in this Section 3.17, then
Subscriber should contact the Company for further instructions.)
3.18. Subscriber certifies that the social security or taxpayer identification number provided
herein is correct and that Subscriber is not subject to backup withholding either because (a)
Subscriber is exempt from backup withholding, or (b) Subscriber has not been notified by the
Internal Revenue Service that Subscriber is subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the Internal Revenue Service has notified Subscriber
that Subscriber is no longer subject to backup withholding. Subscriber further certifies that he
or it is not a “foreign person” within the meaning of Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended, and agrees to so notify the Company prior to becoming a foreign person as
so defined.
4. Representations and Warranties of the Company. The Company represents and warrants
to the Subscriber that the following representations are true and complete as of the date on which
the Company accepts the Subscriber’s subscription.
4.1 Organization, Good Standing, Power. The Company is a corporation validly existing
and in good standing under the laws of the State of Maryland and has the corporate power and
authority to carry on its business as currently conducted.
4.2 Authorization. All corporate action required to be taken by the Company in order
to authorize the Company to issue and sell the Shares to be sold in the Offering, has been taken or
will be taken prior to the issuance of the Shares to Subscriber. This Agreement and the other
agreements to be executed by the Company in connection with the Offering (the “Related
Agreements”), when executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in accordance with their
respective terms except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of creditors’ rights, (b)
general principles of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of indemnification provisions may be limited by applicable laws.
4.3 Valid Issuance of Shares. The Shares, when issued, sold and delivered in
accordance with the terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under the applicable state and federal securities laws and liens or
encumbrances created by or imposed by the Subscriber.
5. Additional Covenants and Agreements. Subscriber hereby covenants and agrees as
follows:
5.1 Subscriber will not take or cause to be taken any action that would cause Subscriber to be
deemed an underwriter, as defined in Section 2(11) of the Securities Act, of the
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Shares.
Subscriber has made no contract, undertaking, agreement or arrangement, and has no plan to enter
into any contract, undertaking, agreement or arrangement, to sell, transfer or pledge its Shares to
any other person or entity.
5.2 Subscriber shall not transfer or assign this Agreement or any interest of Subscriber
herein.
5.3 In the event the principal residence of Subscriber is changed prior to the purchase of the
Shares, Subscriber will promptly notify the Company, and if the change is to a state in which
offers or sales of the Shares in the manner contemplated by the Company are prohibited by
applicable law, any offer to sell the Shares to Subscriber prior to notification of the change
shall be deemed rescinded and Subscriber shall no longer be entitled to purchase the Shares
pursuant to such offer.
5.4 Subscriber agrees promptly to provide such information and promptly to execute and deliver
such documents as the Company may request (i) to comply with any and all laws and ordinances to
which the Company is subject or (ii) to verify any financial, personal or other information
regarding Subscriber, Subscriber’s experience or sophistication, or other information regarding
Subscriber. The Company may condition any acceptance of this subscription on the receipt and
satisfactory content of any such documentation.
6. Indemnification. Subscriber understands and acknowledges that the Company is
relying on the representations, warranties and agreements made by Subscriber in this Agreement and
the Purchaser Questionnaire, and Subscriber agrees to indemnify and hold harmless the Company, its
directors, officers, managers, shareholders, members, employees, agents, and affiliates from and
against all damages, losses, costs and expenses (including reasonable attorneys’ fees) which they
may incur by reason of Subscriber’s failure to fulfill any of the terms or conditions of this
Agreement, or by reason of any breach of the representations and warranties made by Subscriber
herein, in the Purchaser Questionnaire, or in any document provided by Subscriber to the Company.
7. Restatement of Acknowledgments, Covenants, Representations and Warranties. Each of
the acknowledgments, covenants, representations, warranties, certifications, conditions and
restrictions in this Agreement shall be deemed to have been restated at and as of the date of the
acceptance of the subscription and the sale of the Shares subscribed for hereunder. If in any
respect such representations, warranties or information shall not be true and accurate at any time
prior to Subscriber taking possession of the Shares, the Subscriber will give written notice of
such fact to the Company, specifying which representations, warranties or information are not true
and accurate and the reasons therefor.
8. Power of Attorney. Subscriber hereby irrevocably makes, constitutes and appoints
the President of the Company, with full power of substitution and resubstitution, as its true and
lawful attorney and agent, with full power and authority in its name, place and stead to complete,
sign, execute, deliver, consent to, certify, acknowledge, swear to, file, publish, record and
register on Subscriber’s behalf (i) all documents necessary to organize and/or continue the Company
as a corporation as required by the laws of the State of Maryland and/or to evidence Subscriber’s
ownership of Shares; and (ii) all instruments which the Company deems appropriate or as
required by the laws of the State of Maryland.
The foregoing Power of Attorney is hereby declared to be irrevocable and a power coupled with
an interest and, to the extent permitted by applicable law, it shall survive the incapacity of
Subscriber or, if Subscriber is a corporation, partnership, limited liability company, trust or
other
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entity, the dissolution or termination thereof. For further clarification, this power
of attorney shall not be subject to Title 17 of the Maryland General and Limited Power of Attorney
Act. The foregoing Power of Attorney may be exercised by the President by reference to any
list of Subscriber and any other subscribers of Shares with the single signature of such person
acting as attorney-in-fact for all of them. The foregoing Power of Attorney shall survive the
delivery of any assignment by Subscriber of its Shares, and the foregoing power of attorney shall
survive the delivery of such assignment for the sole purpose of enabling the President to execute,
acknowledge, and file any instrument to effectuate such assignment. Subscriber hereby agrees to be
bound by any representations made by the President and any successor thereto, acting in good faith
pursuant to such Power of Attorney, and Subscriber hereby waives any and all defenses which may be
available to contest, negate or disaffirm the actions of such person, and any successor thereto,
taken in good faith under such Power of Attorney.
9. Irrevocability of Subscription. This Agreement is irrevocable and is subject to
all the terms contained herein and in the Memorandum.
10. Joint and Several Obligation. If more than one person is executing this
Agreement, the obligations of each shall be joint and several and the representations and
warranties contained in this Agreement and Subscriber’s Purchaser Questionnaire shall be deemed to
be made by, and be binding upon, each of these persons and his or her heirs, executors,
administrators, successors and assigns.
11. Notices and Addresses. All notices, requests, demands, or other
communications required or permitted to be given in accordance with this Agreement will be in
writing and deemed delivered by: (a) personal delivery, (b) confirmed delivery by a standard
overnight courier or when delivered by hand, or (c) transmitter’s confirmation of a receipt of a
facsimile transmission, to the address set forth below each Party’s signature line to this
Agreement or to such other address as may be specified by either Party to the other in accordance
with this Section 11.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland (without giving effect to its conflicts
of laws provisions).
13. Assignment; Binding Effect. This Agreement may not be assigned by any party
without the express written consent of all other parties. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective legal representatives, heirs,
successors and assigns.
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will constitute one and the
same instrument and may be delivered by facsimile or electronic transmission.
15. Entire Agreement; Modifications. This Agreement, along with the
Memorandum, Purchaser Questionnaire and any Related Agreements, constitutes the entire
understanding and agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior discussions, understandings, and agreements (whether oral or written) relating
thereto. No amendment to, or modification or waiver of, any of the terms of this Agreement shall
be valid unless in writing signed by the party against whom enforcement of such amendment,
modification, or waiver is sought.
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16. Severability. Each provision of this Agreement shall be considered separable and
if for any reason any provision or provisions hereof are determined to be invalid or contrary to
applicable law, such invalidity shall not impair the operation of or affect the remaining portions
of this Agreement.
17. Rules of Construction. In this Agreement the singular shall include the plural
and the masculine gender shall include the feminine and neuter and vice versa, as the context
requires. Paragraph titles are for descriptive purposes only and shall not control or alter the
meaning of this Agreement as set forth in the text. Capitalized terms used herein but not
otherwise defined herein shall have the meaning ascribed to such terms in the Memorandum.
18. Survival. This Agreement, its provisions and the acknowledgments,
representations, warranties, agreements and indemnities contained herein shall survive and continue
after acceptance of the subscription and the issuance of the Share(s) to the Subscriber, and shall
be binding upon the heirs, legal representatives, successors and assigns of Subscriber.
[SIGNATURE PAGE FOLLOWS]
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Old Line Bancshares, Inc.
IN WITNESS WHEREOF, the undersigned has executed this Subscriber Signature Page on this
day of
, 20 .
Number of Shares Subscribed For: |
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Total Subscription Amount: |
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Subscriber Name(s) In Which Shares
Should Be Registered: |
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State of Residence or Organization: |
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Typed or printed address of Subscriber: |
Preferred address for receiving communications (Do not complete if already listed on prior column): | |
Facsimile No.: _______________________________________ |
Facsimile No.: ___________________________________________ | |
Telephone No.: ______________________________________ |
Telephone No.: ___________________________________________ | |
Social Security No. or Taxpayer |
Type of Entity (e.g., individual, corporation, partnership, | |
Identification No.: |
limited liability company, estate, trust, nominee, or custodian): | |
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SIGNATURE: |
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Date
, 20 |
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ACCEPTANCE
The subscription contained in the foregoing Subscription Agreement is hereby accepted, subject
to the terms and conditions set forth therein, as of this day of , 20 .
| Old Line Bancshares, Inc. |
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| By: | ||||||
| Name: | ||||||
| Title: | ||||||
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