AGREEMENT OF PURCHASE AND SALE OF MEMBERSHIP INTERESTS
Exhibit
10.42
This AGREEMENT OF PURCHASE AND SALE OF
MEMBERSHIP INTERESTS (this "Agreement") is made as of the
1st day of
November, 2008 (the "Effective
Date") by and between CHESAPEAKE CUSTOM HOMES, L.L.C., a
Maryland limited liability company (the "Seller") and OLD LINE BANCSHARES, INC., a Maryland
corporation (the "Purchaser").
Explanatory
Statement
A. Seller
is the owner of twelve and one-half percent (12.5%) of the Member Interest and
rights (collectively hereinafter referred to as "Membership Interest" and as
defined in the Company's Operating Agreement, as amended) in Pointer Ridge
Office Investment, LLC, a Maryland limited liability company (the "Company").
B.
Seller has agreed to sell to Purchaser and Purchaser has agreed to purchase from
Seller, an twelve and one-half percent (12.5%) Membership Interest and
Percentage of Membership Interest (as defined in the Company's Operating
Agreement, as amended) in the Company from the Seller's Membership
Interest.
C. The
parties desire to set forth in this Agreement the terms and conditions for such
sale.
D. Capitalized
terms used in this Agreement, including but not limited to the terms "Member" and "Interest" not otherwise
defined when first used shall have the meanings defined in the Maryland Limited
Liability Company Act set forth in Title 4A of the Corporations and Associations
Articles of the Annotated Code of Maryland (the "Act").
NOW, THEREFORE, in
consideration of the provisions of the Explanatory Statement (which shall
constitute a substantive part of this Agreement) and TEN DOLLARS ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties prior to the execution and delivery hereof, the
parties hereto hereby agree as follows:
1. Purchase
and Sale. Seller agrees to sell and assign to the Purchaser
and Purchaser agrees to purchase from the Seller, upon the terms and conditions
hereinafter set forth, all of Seller's twelve and one-half percent (12.5%)
Membership Interest (as defined in the Company's Operating
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Agreement,
as amended) and Percentage of Membership Interest (as defined in the Company's
Operating Agreement, as amended) from the Seller's Membership Interest (the
"Transferred 12.5% Interest and
Percentage").
2. Purchase
Price. The total purchase price ("Purchase Price") for the
Transferred 12.5% Interest and Percentage is Two Hundred five Thousand
($205,000.00) Dollars.
3. Seller's
Warranties and Representations. Seller, to the best of its
knowledge, warrants and represents to the Purchaser, as of the date hereof and
as of the Closing Date, and acknowledges that the Purchaser has relied thereon
that:
i. The
Seller is the owner and holder absolutely of the Membership Interest and has
good and marketable title to the Membership Interest free and clear of any and
all security interests, agreements, restrictions, conditions, equitable
interests, claims, adverse claims, options, charges, liens, pledges, rights of
first refusal (due to a waiver agreed upon by the Members of the Company), and
other encumbrances of any nature or kind whatsoever including, but not limited
to, any restrictions on use, voting, transfer, receipt of income, or exercise of
any other attribute of ownership. Seller does
not directly or indirectly own of record or beneficially or have any direct or
indirect interest in any other securities [as defined in the federal Securities
Act of 1933 (the "Act") and hereinafter referred to as "Securities"] or any
indebtedness of the Company.
ii. The
Transferred 12.5% Interest and Percentage constitutes a twelve and one-half
percent (12.5%) Member Interest in the Company.
iii. The
Seller has not filed, voluntarily or involuntarily, for bankruptcy relief under
the United States Bankruptcy Code or any state insolvency statute.
iv. Neither
the entering into of this Agreement nor the consummation of the transactions
contemplated hereby will constitute or result in a violation or breach by Seller
of any judgment, order, writ, injunction or decree issued against or imposed
upon it, or to Seller's knowledge will result in a violation of any applicable
law, order, rule or regulation or any governmental authority. There
is no action, suit, proceeding or investigation pending or, to Seller's
knowledge, threatened, which would prevent any action contemplated by this
Agreement or which questions the validity or enforceability of the transaction
contemplated by this Agreement or any action taken pursuant
hereto. No approval, consent, order or authorization of, or
designation, registration or filing (other than for recording purposes) with any
governmental authority is required in connection with the due and valid
execution and delivery of this Agreement and compliance with the provisions
hereof and the consummation of the transactions contemplated
hereby.
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v. The
Seller has the full, absolute and unrestricted right, power and authority to
execute, acknowledge, seal and deliver this Agreement and to perform the
transactions contemplated by this Agreement.
vi. Seller
is not a "foreign person" within the meaning of Section 1445 of the Internal
Revenue Code, as amended.
vii. This
Agreement (including the Exhibits) does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements contained herein not misleading. There is no fact known to the Seller
which is not disclosed in this Agreement which materially adversely affects the
accuracy of the representations and warranties contained in this
Agreement.
The representations and warranties
contained in this Section 3(i) through 3(vii) shall survive Closing for a period
of one (1) year. The representations and warranties of Seller shall
be true and correct as of the Effective Date and as of the Closing
Date.
4. Purchaser’s
Warranties and Representations. Purchaser, warrants and
represents to the Seller, as of the date hereof and as of the Closing Date, and
acknowledges that the Purchaser has relied thereon that:
i. It
is a corporation, duly organized, validly existing, and in good standing under
the laws of the State of Maryland.
ii. The
persons executing this Agreement and all instruments in connection therewith
are, or at the appropriate time will be, duly authorized to execute such
instruments on behalf of Purchaser and to bind Purchaser.
The
representations and warranties contained in this Paragraph 4(i) and 4(ii) shall
survive Closing. The representations and warranties of Purchaser
shall be true and correct as of the Effective Date and as of the Closing
Date.
5. Conditions
Precedent.
i. Conditions
Precedent to Purchaser's Obligations. The obligation of
Purchaser under this Agreement to purchase the Transferred 12.5% Interest and
Percentage is subject to the fulfillment by Seller or waiver by Purchaser of the
following:
a. On
the Closing Date, the Seller shall have delivered those documents required of
Seller under this Agreement.
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b. On
the Closing Date, the Seller must execute and deliver to the Purchaser (and all
other parties to the same must execute) a Third Amendment to Operating Agreement
in the form attached hereto as Exhibit 2.
ii. Conditions
Precedent to Seller's Obligations. The obligation of Seller
under this Agreement to sell the Transferred 12.5% Interest and Percentage and
to go to Closing hereunder is subject to the fulfillment by Purchaser or waiver
by Seller of the following:
a. Delivery
to the Seller of the Purchase Price, the Closing costs and any other monies and
documents required to be paid, executed or provided by the Purchaser
hereunder.
b. On
the Closing Date, the Purchaser must execute and deliver (and all other parties
to the same must execute) to the Purchaser a Third Amendment to Operating
Agreement in the form attached hereto as Exhibit 2.
6. Time and
Expenses of Closing.
i. The
Closing hereunder shall take place promptly after this Agreement is executed by
all of the parties (the "Closing Date"). On
the Closing Date, the Seller will execute and deliver to the Purchaser (and
Purchaser shall execute) an Assignment of Membership Interest and Percentage in
the form attached hereto as Exhibit 1. On
the Closing Date, both parties shall deliver an executed original Third
Amendment to Operating Agreement (and shall cause the other parties to the same
to execute and deliver) in the form attached hereto as Exhibit 2.
ii.
On the Closing Date and from time to time after the Closing Date, the Seller
shall execute such other and further documents as may be reasonably necessary or
required in order to consummate Closing in accordance with the provisions of
this Agreement, including standard title company questionnaires and affidavits
and closing statements.
iii. Seller
and Purchaser assume and contemplate that no realty transfer or recordation
taxes fees shall be due or payable either to the State of Maryland, any county
of the State of Maryland, or to any other governmental authority by reason of
this transaction. Notwithstanding such assumption, however, in the
event that either Seller or Purchaser shall be required to pay to any
governmental authority a transfer tax or recordation tax or fee as a result of
this transaction, the parties shall pay all of such taxes or fees and any
interest and penalties accruing thereon in equal portions (50/50).
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7. Termination;
Default; Remedies.
i. If
the Seller fails to consummate the Closing of this Agreement when required to do
so in accordance with the terms of this Agreement, which default by the Seller
shall remain uncured for a period of fifteen (15) Business Days after written
notice by the Purchaser to the Seller, the Purchaser shall be entitled, as its
sole remedy, to enforce specific performance of this Agreement.
ii. If
Purchaser fails to consummate the Closing of this Agreement when required to do
so in accordance with the terms of this Agreement, which default shall remain
uncured for a period of fifteen (15) Business Days after written notice by the
Seller to the Purchaser, the Seller shall be entitled, as its sole remedy, to
enforce specific performance of this Agreement.
iii. The
provisions of paragraph 7(i) and (ii) shall govern and control with respect to a
default by a party to this Agreement in failing to Close but shall not be deemed
a limitation of the rights of Seller or Purchaser subsequent to the Closing Date
based on a default by the other party which rights and remedies shall be without
limitation.
8. Notices.
All notices, demands and requests and other communications required or permitted
hereunder shall be in writing, and shall be deemed received by the party to whom
such notice is directed (i) if by hand-delivered, the
date of delivery;
(ii) if sent by facsimile, on the date of transmission
provided that the machine sending any notice by facsimile must generate a
confirmation of transmission contemporaneously with the sending of such notice
and a copy of such notice must also be sent on the same day by one of the other
means specified in this paragraph 8; or (iii) if sent by private
overnight express carrier, such as Federal Express, on the first Business Day
after the deposit of same with such private overnight express carrier sent for
next Business Day delivery, addressed to the parties and their facsimile numbers
as follows:
If
to Seller:
Chesapeake
Custom Homes, LLC
c/o Xxxx
Xxxxx, General Manager
0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx,
Xxxxxxxx 00000
Fax No.:
(000) 000-0000
With
a Copy to:
Xxxxx X.
Xxxxxx, Esquire
Xxxxxxxxx
& Saas, P.C.
0000
Xxxxx Xxxxxx
5
Suite
200
Chevy
Xxxxx, Xxxxxxxx 00000
Fax No.
000-000-0000
If
to Purchaser:
Old Line
Bancshares, Inc.
c/o Xxxxx
X. Xxxxxxxxx, President
0000
Xxxxxxx Xxxxx Xxxxx
Xxxxx XX
00000
Each party may change their address for
notice purposes by a notice sent in accordance with the provisions this
paragraph 8. No notice shall be deemed sent or effective unless a copy such
notice is also sent to any person or entity designated to receive a
copy.
9. Complete
Agreement. This Agreement embodies the complete agreement
between the parties hereto and cannot be varied or modified except by the
written agreement of the parties.
10. Parties
Bound. This Agreement shall be binding upon and inure to the
benefit of Seller and Purchaser, and their respective heirs, personal
representatives, successors and assigns. This Agreement may be
assigned by the Purchaser.
11. Survival
of Representations and Warranties. The representations,
provisions and warranties set forth in this Agreement shall survive Closing
hereunder for a period of one (1) year and shall not be merged in the Assignment
of the Membership Interest and Percentage by the Seller to the
Purchaser.
12. Commissions.
Each party warrants to each other that no realtor or third party has been the
procuring cause of this Agreement or is entitled to the receipt of any
commission or payment of money as a result of the execution of this
Agreement. Each party agrees to indemnify and hold harmless the other
from and against any and all loss, cost, damage or expense, including reasonable
attorney fees, as a result of any claims made for a fee or commission from any
party as a result of any action by one of the parties to this
Agreement.
13. Governing
Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of Maryland.
14. Indemnification
of Purchaser. The Seller agrees to indemnify and hold harmless
the Purchaser from and against any and all actual losses, damages, liabilities,
obligations, costs and expenses of any kind and nature whatsoever, including,
without limitation, interest, penalties, court costs and reasonable
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attorneys’
fees and expenses (collectively “Damages”) suffered by, imposed
upon or incurred by the Purchaser by reason of or arising out of any
misrepresentation or breach of any representation, warranty, obligation,
agreement or covenant made by the Seller in this Agreement.
15. Binding
Effect. This Agreement shall be binding on and inure to the
benefit of the parties, and their and each of their respective successors and
assigns.
16. Date of
Performance. As used in this Agreement, the term "Business Day" shall mean any
day which is not a Saturday, Sunday, Maryland State or Federal holiday. If the
date of any act, notice, or other matter contained within this Agreement shall
fall on day which is not a Business Day (the "Performance Date"), the
Performance Date shall automatically be extended to the first day thereafter
which is a Business Day.
17. Litigation. The
parties agree that in the event of any litigation between the parties pertaining
to this Agreement, the party prevailing in such litigation (as determined by the
Judge or tribunal hearing such litigation) shall be entitled to receive from the
non-prevailing party reasonable attorney fees and costs of
litigation.
18. Fair
Construction. The parties hereby agree that they have had the
opportunity to be represented by counsel in connection with this transaction and
that this Agreement shall be interpreted (if any interpretation be required)
according to its fair meaning and shall not be construed against either party as
the draftsman hereof.
19. Miscellaneous. Whenever
used herein and as the context so requires, the singular shall include the
plural, and any gender shall include all genders and the
neuter. Captions to this Agreement are intended for the convenience
of the parties only and shall not be deemed to reflect any substitutive meaning
to this Agreement.
20. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but all of which shall be deemed to be one and the same
document.
(Balance
of this page intentionally left blank)
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IN WITNESS WHEREOF, the
parties have set their hands and seals as of the year and day below
written.
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SELLER:
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CHESAPEAKE
CUSTOM HOMES L.L.C.,
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a
Maryland limited liability company
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By: ______________________________(SEAL)
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Xxxx
X. Xxxxx, General Manager
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PURCHASER:
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OLD
LINE BANCSHARES, INC.,
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a
Maryland corporation
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By: ______________________________(SEAL)
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Xxxxx
X. Xxxxxxxxx,
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President
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8
Exhibit
1
FORM
OF ASSIGNMENT OF MEMBERSHIP INTEREST AND PERCENTAGE
9
Exhibit
2
FORM
OF THIRD AMENDMENT TO OPERATING AGREEMENT
10
