EXHIBIT 10.3

 

SECOND AMENDMENT TO OPERATING AGREEMENT

AND AGREEMENT TO REDEEM

MEMBERSHIP RIGHTS

 

THIS SECOND AMENDMENT TO OPERATING AGREEMENT AND AGREEMENT TO REDEEM MEMBERSHIP
RIGHTS (this “Agreement”), is made as of the 6th day of May, 1998 (the
“Effective Date”), by and between David D. Smith (“David”), Beaver Dam Limited
Liability Company, a Maryland limited liability company, and J. Duncan Smith,
Frederick G. Smith and Robert E. Smith (the “Remaining Members”).

 

Explanatory Statement

 

A.            Beaver Dam Limited Liability Company, a Maryland limited liability
company (the “Company”), is governed by the provisions of an Operating Agreement
(the “Operating Agreement”) dated May 30th 1996, by and between David, Duncan,
Frederick, and Robert. Except as otherwise defined herein, capitalized terms
used herein shall have the respective meanings ascribed to them in the Operating
Agreement.

 

B.            The Percentages are held as follows:

 

Member

 

Percentages

 

 

 

 

 

David

 

13.75

%

Frederick

 

28.75

%

Duncan

 

28.75

%

Robert

 

28.75

%

 

C.            David desires to sell, assign, transfer and convey all of his
Membership Rights as hereinafter set forth, and the Company desires to buy the
same as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the parties agree as follows:

 

1.             Assignment; Deliveries.  For the payment by the Company to David
of One Hundred Thirty-Five Thousand Five Hundred Forty-One Dollars and
Forty-Nine Cents ($135,541.49), receipt of which is hereby acknowledged by
David, David hereby sells, assigns, transfers and conveys to the Company all
rights, title and interest in any and all Membership Rights that he owns either
directly or indirectly, effective as of the Effective Date. It is understood and
agreed by the parties hereto that from and after the Effective Date, David shall
no longer be a Member (or be an Interest Holder) or have any Membership Rights
whatsoever and that as of the Effective Date, David has withdrawn from the
Company.

 

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2.             Liability, Profits and Assets.  David shall be relieved of (and
is hereby released by the Company and the Remaining Members from) any liability
for any and all debts, obligations and liabilities of the Company or under the
Operating Agreement, to the extent that, on or after the Effective Date, such
debts, obligations or liabilities arise, increase or accrue (collectively, the
“Future Debts, Obligations and Liabilities”), and David shall not be entitled to
any share of the profits losses, assets or distributions of the Company (except
for David’s share of the profits, distributions, assets and losses, if any, that
David was entitled to on or before the Effective Date). The Remaining Members
shall be entitled to all of the profits, distributions, assets and losses of the
Company that David would have otherwise been entitled to but for this Agreement
and the transactions contemplated hereby, and the Remaining Members hereby
assume from David all Future Debts, Obligations and Liabilities that David would
have been liable for but for this Agreement and the transactions contemplated
hereby. The Remaining Members hereby jointly and severally agree to defend,
indemnify, and hold harmless David from, against, and in respect of, any and all
claims, costs, expenses, fees (including, without limitation, the reasonable
fees of counsel), liabilities, obligations, losses, damages, actions, suits, or
proceedings, of any nature, in connection with or arising from under or out of
the Future Debts, Obligations and Liabilities.

 

3.             Amendment to Operating Agreement; Consent.  The parties hereto
agree that the provisions of Exhibit A to the Operating Agreement are hereby
amended as of the Effective Date by deleting them in their entirety and by
inserting in lieu thereof the provisions of Exhibit A to this Amendment. The
Remaining Members all consent to the Company entering into this Agreement

 

4.             Attorneys’ Fees.  In the event of a breach or threatened breach
of this Agreement, the breaching party or the party threatening to breach, as
the case may be, shall pay the reasonable attorneys’ fees, costs and other
expenses of the other party incurred as a result of or in connection with such
breach or threatened breach, including, without limitation, any such attorneys’
fees, costs or other expenses incurred by such other party in any litigation to
recover damages hereunder or to otherwise enforce this Agreement.

 

5.             Miscellaneous.

 

5.1           Section Headings.  Section headings are inserted for convenience
only and shall not limit or otherwise affect any of the provisions of this
Agreement.

 

5.2.          Entire Agreement.  This Agreement, any supplements hereto or
thereto, and any instruments or documents delivered or to be delivered in
connection herewith or therewith represents the entire agreement and
understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understanding,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written.

 

5.3           Waivers; Amendments.  Any of the terms or conditions of this
Agreement may be waived but only in writing by the party which is entitled to
the benefit thereof, and this Agreement may be amended or modified in whole or
in part only by an agreement in writing, executed by all of the parties to this
Agreement.

 

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5.4.          Binding Nature of Amendment.  This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
heirs, personal representatives, successors, and assigns.

 

5.5           Word Usage.  As used herein, any reference to the masculine,
feminine or neuter gender shall include all genders, the plural shall include
the singular, and the singular shall include the plural.

 

5.6           Governing Law.  This Agreement shall be governed by, and
interpreted in accordance with, the law of the State of Maryland.

 

5.7           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

5.8           Severability.  In the event that any provision of this Agreement
shall be found to be unenforceable in any action or proceeding, the remaining
provisions shall remain in full force and effect.

 

5.9           Survival.  This Agreement shall survive the closing of the
transactions contemplated hereby.

 

5.10         Arbitration.  The parties hereto agree that the provisions of the
Maryland Uniform Arbitration Act and the Federal Arbitration Act are applicable
to this Agreement. Any question, dispute, claim and/or controversy arising out
of, relating to or in connection with this Agreement (including, without
limitation, the scope or applicability of this Section 4.10) or any breach or
alleged breach of this Agreement, shall be submitted to arbitration conducted in
accordance with the rules and procedures of the American Arbitration Association
(and if there is a conflict between such rules and procedures on the one hand,
and/or the Federal Arbitration Act or the Maryland Uniform Arbitration Act on
the other hand, the rules and procedures of the American Arbitration Association
shall control). Arbitration proceedings shall be held in Baltimore, Maryland.
The decision in the arbitration proceeding shall be final and may be entered and
enforced in any court of competent jurisdiction. Nothing within this
Section 4.10 shall be deemed to preclude any party hereto from seeking interim
or provisional relief or protection from a court of competent jurisdiction,
whether before, during or after any arbitration proceeding.

 

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IN WITNESS WHEREOF, each party hereto has executed and sealed this Agreement or
caused it to be executed and sealed on its behalf by its duly authorized
representative, as of the day and year first above written.

 

WITNESS:

 

 

 

/s/ Hyris Feldman

 

/s/ David D. Smith

(SEAL)

 

David D. Smith, individually

 

 

 

 

/s/ Hyris Feldman

 

/s/ Frederick G. Smith

(SEAL)

 

Frederick G. Smith, Member

 

 

 

 

/s/ Hyris Feldman

 

/s/ J. Duncan Smith

(SEAL)

 

J. Duncan Smith, Member

 

 

 

 

/s/ Hyris Feldman

 

/s/ Robert E. Smith

(SEAL)

 

Robert E. Smith, Member

 

 

 

 

 

BEAVER DAM LIMITED LIABILITY COMPANY

 

 

 

 

/s/ Cam Smart

 

By:

/s/ J. Duncan Smith

(SEAL)

 

 

J. Duncan Smith, Member

 

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Beaver Dam Limited Liability Company

Operating Agreement

 

Exhibit A

 

List of Members, Capital, and Percentages

(as of May 6, 1998)

 

Name, Address,
and Taxpayer
I.D. Number

 

Cash Capital
Contribution

 

Percentages

 

 

 

 

 

 

 

Frederick G. Smith

 

$

500,508.32

 

33 1/3

%

7 Timber Park Court

 

 

 

 

 

Lutherville, MD 21093

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

J. Duncan Smith

 

$

500,508.34

 

33 1/3

%

1345 Ivy Hill Road

 

 

 

 

 

Cockeysville, MD 21030

 

 

 

 

 

###-##-####

 

 

 

 

 

 

 

 

 

 

 

Robert E. Smith

 

$

500,508.33

 

33 1/3

%

3600 Butler Road

 

 

 

 

 

Glyndon, MD 21071

 

 

 

 

 

###-##-####

 

 

 

 

 

 

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