Exhibit 10.1
MEMBERSHIP INTEREST PURCHASE AGREEMENT
Among
BIMINI CAPITAL MANAGEMENT, INC.,
ORCHID ISLAND TRS, LLC
and
CITIGROUP GLOBAL MARKETS REALTY CORP.
Dated as of May 27, 2008
TABLE OF CONTENTS
|
ARTICLE I
|
DEFINITIONS
|
1
|
|
Section
1.1.
|
Definitions
|
1
|
|
Section
1.2.
|
Other
Defined Terms; Interpretation
|
3
|
|
ARTICLE II
|
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
|
4
|
|
Section
2.1.
|
Purchase
and Sale
|
4
|
|
Section
2.2.
|
Purchase
Price
|
4
|
|
Section
2.3.
|
Closing
|
4
|
|
Section
2.4.
|
Expiration
of Option
|
5
|
|
Section
2.5.
|
Cancellation
of Rights
|
5
|
|
ARTICLE III
|
REPRESENTATIONS AND WARRANTIES OF SELLER
|
5
|
|
Section
3.1.
|
Organization
and Qualification
|
6
|
|
Section
3.2.
|
Authority;
Binding Effect of Agreement
|
6
|
|
Section
3.3.
|
No
Conflicts
|
6
|
|
Section
3.4.
|
Consents
and Approvals
|
6
|
|
Section
3.5.
|
Ownership
of Purchased Membership Interests
|
6
|
|
Section
3.6.
|
Non-Foreign
Status
|
7
|
|
Section
3.7.
|
No
Other Representations
|
7
|
|
ARTICLE IV
|
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND THE
COMPANY
|
7
|
|
Section
4.1.
|
Organization
and Qualification
|
7
|
|
Section
4.2.
|
Authority;
Binding Effect of Agreement
|
7
|
|
Section
4.3.
|
No
Conflicts
|
7
|
|
Section
4.4.
|
Consents
and Approvals
|
8
|
|
Section
4.5.
|
Financial
Statements
|
8
|
|
Section
4.6.
|
Ownership
of Company Membership Interests
|
8
|
|
Section
4.7.
|
Operating
Agreement
|
8
|
|
Section
4.8.
|
Restricted
Securities
|
9
|
|
Section
4.9.
|
Subscriber
Bears Economic Risk
|
9
|
|
Section
4.10.
|
Acquisition
For Own Account
|
9
|
|
Section
4.11.
|
Accredited
Investor
|
9
|
|
Section
4.12.
|
Information
|
9
|
|
Section
4.13.
|
No
Public Market
|
9
|
|
Section
4.14.
|
Legends
|
9
|
|
Section
4.15.
|
No
Other Representations
|
10
|
|
ARTICLE V
|
COVENANTS AND OTHER AGREEMENTS
|
10
|
|
Section
5.1.
|
Transfer
Taxes
|
10
|
|
Section
5.2.
|
Public
Announcements
|
10
|
|
Section
5.3.
|
Further
Assurances; Post-Closing Cooperation
|
10
|
|
Section
5.4.
|
Financial
Statements for 2008
|
10
|
|
Section
5.5.
|
Transfer
Approved
|
10
|
|
Section
5.6.
|
Withdrawal
as a Member of the Company
|
10
|
|
ARTICLE VI
|
CONDITIONS TO OBLIGATIONS OF PARTIES
|
11
|
|
Section
6.1.
|
Conditions
Precedent to Each Party’s Obligations at the
Closing
|
11
|
|
Section
6.2.
|
Conditions
Precedent to the Obligations of Seller at Closing
|
11
|
|
Section
6.3.
|
Conditions
to the Obligations of Purchaser at Closing
|
12
|
|
ARTICLE VII
|
DISPUTE RESOLUTION
|
12
|
|
Section
7.1.
|
Survival
of Representations and Warranties
|
12
|
|
Section
7.2.
|
Damages.
|
13
|
|
ARTICLE VIII
|
MISCELLANEOUS
|
13
|
|
Section
8.1.
|
Notices
|
13
|
|
Section
8.2.
|
Entire
Agreement
|
14
|
|
Section
8.3.
|
Expenses
|
14
|
|
Section
8.4.
|
Waiver
|
14
|
|
Section
8.5.
|
Amendment
|
14
|
|
Section
8.6.
|
No
Third-Party Beneficiary
|
14
|
|
Section
8.7.
|
Assignment;
Binding Effect
|
14
|
|
Section
8.8.
|
Consent
To Jurisdiction And Service Of Process
|
15
|
|
Section
8.9.
|
Invalid
Provisions
|
15
|
|
Section
8.10.
|
Governing
Law
|
15
|
|
Section
8.11.
|
Counterparts
|
15
|
|
Section
8.12.
|
Interpretation
|
15
|
MEMBERSHIP INTEREST PURCHASE AGREEMENT
MEMBERSHIP
INTEREST PURCHASE AGREEMENT, dated as of May 27, 2008, by and
among CITIGROUP GLOBAL MARKETS REALTY CORP., a New York
corporation (“ Seller
”), BIMINI CAPITAL MANAGEMENT, INC., a Maryland
corporation (“ Purchaser
”), and ORCHID ISLAND TRS, LLC, a Delaware limited
liability company (the “ Company
”).
BACKGROUND
WHEREAS,
pursuant to a Membership Interest Purchase, Option and
Investor Rights Agreement, dated as of December 21, 2006, by
and among Seller, Purchaser and the Company (the “
Initial Purchase
Agreement ”), Seller purchased a non-voting Class
B membership interest in the Company constituting 7.5% of the
issued and outstanding limited liability company interests of
the Company (the “ Purchased
Membership Interests ”) from Purchaser;
and
WHEREAS,
Seller now wishes to sell and dispose of, and Purchaser wishes
to purchase, the Purchased Membership Interests on the terms
and subject to the conditions set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained and other valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section
1.1.
Definitions .
(a)
As
used in this Agreement, the following terms shall have the
following meanings:
“
Affiliate
” means, with respect to any Person, any other Person
that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under
common control with the Person specified. The term
“control” (including the terms
“controlling,” “controlled by” and
“under common control with”) means possession,
direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
“
Agreement
” means this Membership Interest Purchase Agreement
together with the Exhibits attached hereto.
“
Business
Day ” means any day other than a Saturday, Sunday
or any day on which banks located in New York City, New York
are authorized or required to be closed for the conduct of
regular banking business.
“
Closing
” means the closing of the sale and purchase of the
Purchased Membership Interests as contemplated by this
Agreement.
“
Company
Membership Interests ” means the issued and
outstanding limited liability company interests in the Company
regardless of class or series.
“
Encumbrances
” means any and all liens, encumbrances, charges,
security interests, mortgages, pledges, options, title
defects, or other adverse claims or restrictions on title of
any nature whatsoever and, when used with respect to the
Purchased Membership Interests, shall include without
limitation, any rights of first refusal or first offer,
proxies, voting trusts or agreements.
“
GAAP
” means United States generally accepted accounting
principles as in effect on the date of this
Agreement.
“
Governmental
Authority ” means any international,
supranational, national, provincial, regional, federal, state,
municipal or local government, any instrumentality,
subdivision, court, administrative or regulatory agency or
commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental
authority.
“
Losses
” means any and all damages, fines, fees, penalties,
deficiencies, liabilities, claims, losses (excluding loss of
value), demands, judgments, settlements, actions, obligations
and costs and expenses (including interest, court costs and
the reasonable fees and costs of attorneys, accountants and
other experts).
“
Material Adverse
Effect ” or “ Material Adverse
Change ” means any effect or change that would be
materially adverse to the business of the Company, taken as a
whole, or to the ability of any party to consummate timely the
transactions contemplated hereby; provided
that none of the following shall be deemed to constitute, and
none of the following shall be taken into account in
determining whether there has been, a Material Adverse Effect
or Material Adverse Change: any adverse change,
event, development, or effect arising from or relating to (1)
national or international political or social conditions,
including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or
terrorist attack upon the U.S., or any of its territories,
possessions, or diplomatic or consular offices or upon any
military installation, equipment or personnel of the U.S., (2)
changes in U.S. generally accepted accounting principles, (3)
changes in laws, rules, regulations, orders, or other binding
directives issued by any Governmental Authority, (4) the
taking of any action contemplated by this Agreement and the
other agreements contemplated hereby, or (5) the announcement
or consummation of the transactions contemplated by this
Agreement.
“
Operating
Agreement ” means the Seventh Amended and
Restated Limited Liability Company Agreement of the Company
dated as of July 20, 2007, attached hereto as Exhibit
A.
“
Ordinary Course
of Business ” means the ordinary course of
business consistent with past practice (including with respect
to quantity and frequency).
“
Person
” means any natural person, corporation, general
partnership, limited partnership, limited or unlimited
liability company, proprietorship, joint venture, other
business organization, trust, business trust, union,
association, Governmental Authority or other
entity.
“
Securities
Act ” means the Securities Act of 1933, as
amended from time to time, and the rules and regulations
promulgated thereunder.
“
Subsidiary
” means, with respect to any Person, any other Person
(i) of which the first Person owns directly or indirectly
50% or more of the outstanding voting stock or other equity
interest in the other Person; (ii) of which the first
Person or any other Subsidiary of the first Person is a
general partner or (iii) of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions with respect to the other Person are at the
time owned by the first Person and/or one or more of the first
Person’s Subsidiaries.
“
Tax
” or “ Taxes
” means (a) any and all U.S. federal, state, local, or
foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar,
including the Federal Insurance Contributions Act),
unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind or any
charge of any kind in the nature of (or similar to) taxes
whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not and (b) any liability for the
payment of any amounts of the type described in clause (a) of
this definition as a result of being a member of an
affiliated, consolidated, combined or unitary group for any
period, as a result of any tax sharing or tax allocation
agreement, arrangement or understanding, or as a result of
being liable for another person’s taxes as a transferee
or successor, by contract or otherwise.
Section
1.2.
Other Defined Terms; Interpretation .
(a)
Other
terms defined are in the other parts of this Agreement indicated
below:
|
“
Amended and Restated
Guaranty ”
|
6.2(c)
|
|
“
Closing Date
”
|
2.3
|
|
“
Company
”
|
Preamble
|
|
“
Financial Projections
”
|
4.5(b)
|
|
“
Financial Statements
”
|
4.5(a)
|
|
“
Initial Purchase
Agreement ”
|
Recitals
|
|
“
Parent Guaranty
”
|
6.2(c)
|
|
“
Purchase Price
”
|
2.2
|
|
“
Purchased Membership
Interests ”
|
Recitals
|
|
“
Purchaser
”
|
Preamble
|
|
“
Repurchase Agreement
”
|
6.2(c)
|
|
“
Seller
”
|
Preamble
|
(b)
For
the purposes of this Agreement, except to the extent that the
context otherwise requires:
(i) when
a reference is made in this Agreement to an Article, Section
or Exhibit, such reference is to an Article or Section of, or
an Exhibit to, this Agreement unless otherwise
indicated;
(ii) the
table of contents and headings for this Agreement are for
reference purposes only and do not affect in any way the
meaning or interpretation of this Agreement;
(iii) whenever
the words “include,” “includes” or
“including” (or similar terms) are used in this
Agreement, they are deemed to be followed by the words
“without limitation”;
(iv) the
words “hereof,” “herein” and
“hereunder” and words of similar import, when
used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this
Agreement;
(v) all
terms defined in this Agreement have their defined meanings
when used in any certificate or other document made or
delivered pursuant hereto, unless otherwise defined
therein;
(vi) the
definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such
terms;
(vii) if
any action is to be taken by any party hereto pursuant to
this Agreement on a day that is not a Business Day, such
action shall be taken on the next Business Day following such
day;
(viii) references
to a Person are also to its heirs, personal representatives,
permitted successors and assigns;
(ix) the
use of “or” is not intended to be exclusive
unless expressly indicated otherwise;
(x) “contract”
includes any note, bond, mortgage, indenture, deed of trust,
loan, credit agreement, franchise concession, contract,
agreement, permit, license, lease, purchase order, sales
order, arrangement or other commitment, obligation or
understanding, whether written or oral;
(xi) “assets”
shall include “rights,” including rights under
contracts; and
(xii) “reasonable
efforts” or similar terms shall not require the waiver
of any rights under this Agreement.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTERESTS
Section
2.1.
Purchase and Sale . At the Closing, upon the
terms and subject to the conditions of this Agreement, Seller shall
sell, transfer, assign, convey and deliver to Purchaser, and
Purchaser shall purchase from Seller, the Purchased Membership
Interests, free and clear of all Encumbrances (other than
Encumbrances created by Purchaser or arising under this Agreement,
the Initial Purchase Agreement, the Operating Agreement, the
Securities Act or any applicable state law).
Section
2.2.
Purchase Price . The purchase price (the “
Purchase
Price ”) to be paid to Seller by Purchaser for the
Purchased Membership Interests at the Closing shall be US $50,000,
to be paid in immediately available funds.
Section
2.3.
Closing . The Closing shall be held at the
offices of Thacher Proffitt & Wood LLP, Two World Financial
Center, New York, New York 10281, at any time after the
satisfaction or waiver of all of the conditions (other than those
conditions that by their nature are to be satisfied by actions
taken at Closing, but subject to the fulfillment or waiver of those
conditions) set forth in ARTICLE VI, but no later than on May 27,
2008 (the “ Closing Date
”).
Section
2.4.
Expiration of Option . Seller
acknowledges that the right to purchase Company Membership
Interests from Purchaser constituting 7.49% of all of the Company
Membership Interests then outstanding, which right Purchaser
granted to Seller pursuant to the Initial Purchase Agreement, has
expired and is of no further effect.
Section
2.5.
Cancellation of
Rights .
Each of Seller, Purchaser and the Company agrees that each
of their respective rights pursuant to Sections 2.6, 2.7, 2.8 and
2.9 of the Initial Purchase Agreement shall be terminated and of no
further effect as of the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller
hereby makes the representations and warranties to Purchaser
set forth in this Article III. For purposes of this
Article III, the term “knowledge,” when used below
with respect to Seller, shall mean the actual knowledge of
Seller’s executive officers and directors, as the case
may be.
Section
3.1.
Organization and Qualification . Seller is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of New York and has all
requisite corporate power and authority to own, license, use, lease
and operate its assets and properties and to carry on its business
as it is now being conducted.
Section
3.2.
Authority; Binding Effect of Agreement . Seller
has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations and
consummate the transactions contemplated by this
Agreement. This Agreement has been duly executed and
delivered by Seller and, assuming the due authorization, execution
and delivery of this Agreement by Purchaser and the Company,
constitutes a valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms (subject to
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors’ rights generally and to
general principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law).
Section
3.3.
No Conflicts . The execution and delivery by
Seller of this Agreement and the performance of the transactions
contemplated by this Agreement do not and will not
(i) conflict with or result in a violation of any provision of
the organizational documents of Seller, (ii) to the knowledge of
Seller, result in
a violation or breach of or constitute a default (or an event
which, with or without notice or lapse of time or both, would
constitute a default) under, or result in the termination,
modification or cancellation of, or the loss of a benefit under or
accelerate the performance required by, or result in a right of
termination, modification, cancellation or acceleration under the
terms, conditions or provisions of any contract or other instrument
of any kind to which Seller is now a party or by which any of its
assets or properties may be bound or affected, or
(iii) violate any order, writ, injunction, decree, statute,
treaty, rule or regulation applicable to Seller, except with
respect to clauses (ii) and (iii) for such violations, breaches and
defaults as would not individually or in the aggregate reasonably
be expected to result in a Material Adverse Effect or for which
Seller has obtained a valid waiver; provided ,
however , that
any such violation, breach or default shall be deemed to be a
Material Adverse Effect in the event that such violation, breach or
default entitles any person to take an action to invalidate the
transactions contemplated by this Agreement.
Section
3.4.
Consents and Approvals . No declaration, filing
or registration with, or notice to, or authorization, consent,
order or approval of, any Governmental Authority is required to be
obtained or made in connection with or as a result of the execution
and delivery of this Agreement by Seller or the performance by
Seller of the transactions contemplated by this Agreement, except
for such consents, approvals, orders, authorizations,
registrations, declarations and filings as are required to be made
under the U.S. federal securities laws and, for those, the failure
of which to obtain would not individually or in the aggregate
reasonably be expected to result in a Material Adverse Effect;
provided ,
howeve
r
, that any
such failure to obtain any required authorization, consent, order,
or approval of any Governmental Authority with respect to the
transactions contemplated hereby which failure would entitle such
Governmental Authority to take any action seeking to invalidate
such transactions shall be deemed to be a Material Adverse
Effect.
Section
3.5.
Ownership of Purchased Membership Interests
. Seller is the lawful record and beneficial owner of
the Purchased Membership Interests and owns such Purchased
Membership Interests free and clear of all Encumbrances whatsoever,
except for any Encumbrances created by this Agreement, the Initial
Purchase Agreement, the Operating Agreement, Purchaser, the Company
and restrictions on transfer under federal and state securities
laws. Upon the assignment of the Purchased Membership
Interests by Seller to Purchaser in the manner contemplated under
ARTICLE II, and the payment by Purchaser of the Purchase Price to
Seller, Purchaser will acquire the beneficial and legal title to
the Purchased Membership Interests, free and clear of all
Encumbrances, except for any Encumbrances created by this
Agreement, the Initial Purchase Agreement, the Operating Agreement,
Purchaser, the Company or restrictions on transfer under federal
and state securities laws.
Section
3.6.
Non-Foreign Status . Seller is not a foreign
person as such term is used in U.S. Treasury Regulation Section
1.1445-2.
Section
3.7.
No Other
