Document:

ex10-13.htm

Exhibit 10.13

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (the “Agreement”) is made and entered into effective as of the April 30, 2012 (the “Effective Date”) by and among ProGreen Properties, Inc., a Delaware corporation (“Seller” and sometimes referred to here as “Member”), and American Residential Gap LLC (“Purchaser”) and ProGreen Properties III LLC, ProGreen Properties IV LLC, ProGreen Properties VII LLC, ProGreen Properties VIII LLC and ProGreen Properties XI LLC, Michigan liability companies (collectively “Companies”).

 

BACKGROUND:

 

	
1.  

	
The Companies are validly organized, existing, and in good standing under the laws of the State of Michigan.

 

	
2.  

	
The Companies were set up as individual holding companies to hold title to the properties as follows:

 

	
(i)  

	
ProGreen Properties III, LLC, owner on record of 7648, Woodview Drive, Waterford, Michigan 48327.

 

	
(ii)  

	
ProGreen Properties IX, LLC, owner on record of 1840, East 13 Mile Road, Madison Heights, Michigan, 48071.

 

	
(iii)  

	
ProGreen Properties VII, LLC, owner on record of 29791, Rollcrest Road, #13, Farmington Hills, Michigan 48334.

 

	
(iv)  

	
ProGreen Properties VIII, LLC, owner on record of 23647, Stonehenge, Novi, Michigan 48375.

 

	
(v)  

	
ProGreen Properties XI, LLC, owner on record of 29108, Tessmer Court, Madison Heights, Michigan 49071

 

Copies of each Deeds for the above-referenced properties are attached as Exhibit A hereto.

 

C.           The Companies membership interests are currently held, as follows:

 

	
Member

	
Membership Percentage

	
ProGreen Properties, Inc.

A Delaware corporation

	
100%

 

 

	
  

	
D.

	
Seller has agreed to sell to Purchaser and Purchaser has agreed to purchase from Seller all of the Seller’s membership interest in the Companies (the “Purchased Membership Interest”) under the terms and conditions set forth below.

 

  

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NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:

 

1.           Purchase of Purchased Membership Interest.  On the Closing Date (as defined herein), Seller shall sell, transfer, deliver and assign all of the Purchased Membership Interest to Purchaser, free and clear of any and all liens, claims, security interests, and encumbrances of any kind, in exchange for payment of the Purchase Price (as defined herein).

 

2.           Purchase Price.  The purchase price for the Purchased Membership Interest shall be Three Hundred and Eighty Four Thousand ($384,000) Dollars (the “Purchase Price”), which shall be paid by Purchaser in cash by wire transfer for the amount of One Hundred and Forty Four Thousand ($144,000) Dollars within ten business days the date of the closing date as defined below. Two Hundred and Forty Thousand ($240,000) Dollars shall be paid in the form of Forty-Eight (48) American Residential Gap ApS  Corporate Bonds with a nominal value of Five Thousand ($5,000) Dollars each

 

3.           Closing Date.  The Closing of the transactions described herein shall take place on April 30, 2012 (the “Closing Date”) at the offices of the Purchaser, when a settlement of funds calculation will be made and the original deeds of the properties will be handed over.

 

4.           Membership Interest Assignment.  On the Closing Date, Seller shall deliver to Purchaser an Assignment of the Purchased Membership Interest in the form attached as Exhibit B which authorizes the transfer to the Purchaser of the Purchased Membership Interest.

 

5.           Assignment of Leases and Rents.  On the Closing Date, Seller shall deliver to Purchaser an Assignment of Leases and Rents in the form attached as Exhibit C which effectively transfers all of Seller’s right, title and interest in and to all of the Lease Agreements referred to.

 

6.           Representations and Warranties.  Seller represents and warrants to Purchaser that the following statements are true and correct as of the Effective Date and will be true and correct as of the Closing Date:

 

A.           Title.  Seller is the lawful owner of and has good and marketable legal title to the Purchased Membership Interest and that the Companies are the legal owner of the properties listed under B. i-v, and that they are free and clear of any and all liens, claims, security interests, and encumbrances of any kind

 

B.           Encumbrances.  The Purchased Membership Interest is free and clear of any and all mortgages, pledges, liens, claims, security interests, and encumbrances of any kind, and Seller has the full power and authority to tender, sell, and transfer all of the Purchased Membership Interest to Purchaser.

 

C.           Authority.  Seller has full power and authority to execute this Agreement and to carry out its terms and conditions and the execution of this Agreement and the consummation of the transactions contemplated under this Agreement will not constitute a breach of any document or Agreement by which Seller is bound.

 

7.           General Provisions.

 

A.           Specific Performance. It is expressly agreed by and between the parties to this Agreement that the subject matter of this Agreement is unique and that the failure of any party hereto to comply with the obligations and/or covenants contained herein constitutes irreparable injury if not fully and completely performed; accordingly, any party seeking to enforce the terms and covenants contained in this Agreement shall be entitled to the equitable relief of specific performance and/or such other equitable relief as decreed and/or ordered by a court of competent jurisdiction.

 

  

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       B.           Governing Law. This Agreement and its performance shall be construed and interpreted in accordance with the laws of the State of Michigan.

 

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

 

D.           Additional Documents.  Purchaser and Seller agree that each will execute and deliver to the other any and all documents and instruments, in addition to those provided for in this Agreement, that may be necessary and/or appropriate to effectuate the provisions of this Agreement whether before, on, or after the Closing Date.

 

E.           Miscellaneous. This Agreement may be executed in counterparts, and each such counterpart shall constitute an original and all such counterparts shall constitute one instrument.

 

WHEREFORE, the undersigned have executed this Agreement as of the Effective Date.

PURCHASER:                                                                           SELLER:

	
 

AMERICAN RESIDENTIAL GAP, LLC

A Michigan limited liability company

 

 

By:   AMERICAN RESIDENTIAL GAP ApS

Its:  Sole Member

     

                /s/ Henrik Wagenius

By:_________________________________

          Henrik Wagenius

Its:    Chairman

 

 

COMPANIES:

 

PROGREEN PROPERTIES III, LLC

PROGREEN PROPERTIES IX, LLC

PROGREEN PROPERTIES VII, LLC

PROGREEN PROPERTIES VIII, LLC

PROGREEN PROPERTIES XI, LLC

 

By:           PROGREEN PROPERTIES, INC.,

Sole Member

 

         /s/ Jan Telander

By: _____________________________

            Jan Telander

Its:       President/CEO

	
 

PROGREEN PROPERTIES, INC.

 

          /s/ Jan Telander

By: ______________________________

             Jan Telander

Its:        President/CEO

 

 

  

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EXHIBIT A

 

COPIES OF DEEDS

 

  

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EXHIBIT B

 

ASSIGNMENT OF MEMBERSHIP INTEREST

 

FOR VALUE RECEIVED, the receipt and sufficiency of which is acknowledged, ProGreen Properties, Inc. (“Seller”), does hereby sell, assign and transfer to American Residential Gap LLC (the “Purchaser”), pursuant to and in accordance with the terms set forth in a certain Membership Interest Purchase Agreement effective as of April 30, 2012 between Seller and Purchaser and the Companies, a copy of which is attached hereto, all of Seller’s right, title and interest in and to the One Hundred (100%) percent of the Membership Interest in ProGreen Properties III LLC, ProGreen Properties IX LLC, ProGreen Properties VII LLC, ProGreen Properties VIII LLC and ProGreen Properties XI LLC, Michigan liability companies that are owned by Seller.

 

Dated:  April 30, 2012

 

SELLER:

 

PROGREEN PROPERTIES, INC.,

 

A Delaware corporation

 

/s/ Jan Telander

________________________________________

 

By:           Jan Telander

Its:           President/CEO

 

PURCHASER:

AMERICAN RESIDENTIAL GAP, LLC

A Michigan limited liability company

 

By:   AMERICAN RESIDENTIAL GAP ApS

 

 

Its:  Sole Member

 

By:_________________________________

 

          Henrik Wagenius

 

Its:     Chairman

  

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EXHIBIT C

 

ASSIGNMENT AND ASSUMPTION OF LEASES

AND SECURITY DEPOSITS

 

  

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ASSIGNMENT AND ASSUMPTION OF LEASES

AND SECURITY DEPOSITS

This Assignment, effective as of the 1st day of May, 2012, is made by and between ProGreen Properties, Inc., a Delaware corporation (“Assignor”), and American Residential Gap LLC (“Assignee”):

 

In consideration of the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Property.  The “Property” means the real property described below:

	
(vi)  

	
7648, Woodview Drive, Waterford, Michigan 48327, owned by ProGreen Properties III, LLC;

	
(vii)  

	
East 13 Mile Road, Madison Heights, Michigan, 48071, owned by ProGreen Properties IX, LLC;

	
(viii)  

	
29791, Rollcrest Road, #13, Farmington Hills, Michigan 48334, owned by ProGreen Properties VII, LLC;

	
(ix)  

	
23647, Stonehenge, Novi, Michigan 48375, owned by ProGreen Properties VIII, LLC; and

	
(x)  

	
29108 Tessmer Court, Madison Heights, Michigan 49071 owned by ProGreen Properties XI, LLC.

2.           Leases.  The “Leases” means the leases affecting the Property, more particularly described in the Exhibit A attached to this Assignment.

3.           Security Deposits.  “Security Deposits” means the refundable security and other refundable deposits held by or for Assignor on account of tenants under the Leases with respect to which Assignee received a credit at the closing of the transaction pursuant to this Assignment.  The Security Deposits are also set forth in the Exhibit A hereto.

4.           Assignment.  Assignor hereby grants, transfers and assigns to Assignee the entire right, title and interest of Assignor in and to the Leases and the Security Deposits.

5.           Assumption.  Assignee hereby assumes the covenants, agreements and obligations of Assignor as landlord or lessor under the Leases which are applicable to the period and required to be performed from and after the date of this Assignment, and Assignee further assumes all liability of Assignor for the proper refund or return of the Security Deposits if, when and as required by the Leases.  No person or entity, other than Assignor shall be deemed a beneficiary of the provisions of this Section 5.

6.           Indemnification.  Assignor shall indemnify, protect, defend and hold Assignee harmless from and against all obligations of the “lessor” or “landlord” under the Leases to the extent such obligations were applicable to the period and required to be performed prior to the date of this Assignment, and all expenses incurred in connection therewith, including without limitation reasonable attorneys’ fees and costs.  Assignee shall indemnify, protect, defend and hold Assignor harmless from and against all obligations of the “lessor” or the “landlord” under the Leases to the extent that such obligations are applicable to the period and required to be performed from and after the date of this Assignment, and all expenses incurred in connection therewith, including without limitation reasonable attorneys’ fees and costs.

7.           Legal Expenses.  If either party to this Assignment brings suit or otherwise becomes involved in any legal proceedings seeking to enforce the terms of this Assignment, or to recover damages for their breach, the prevailing party shall be entitled to recover its costs and expenses (including fees of attorneys, expert witnesses, accountants, court reporters and others) incurred in connection therewith including all such costs and expenses incurred in: (a) in trial and appellate court proceedings, (b) in connection with any and all counterclaims asserted by one party to this Assignment against another whether or not such counterclaims arise out of or are otherwise related to this Assignment, (c) in bankruptcy or other insolvency proceedings, and (d) in post-judgment collection proceedings.

8.           Successors and Assigns.  This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and assigns.

9.           Power and Authority.  Each party represents and warrants to the other that it is fully empowered and authorized to execute and deliver this Assignment, and the individual signing this Assignment on behalf of such party represents and warrants to the other party that he or she is fully empowered and authorized to do so.

  

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IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of the date first written above.

 

 

ASSIGNOR:

PROGREEN PROPERTIES, INC.

        /s/ Jan Telander

By: ______________________________

             Jan Telander

Its:        President/CEO

ASSIGNEE:

AMERICAN RESIDENTIAL GAP, LLC

A Michigan limited liability company

By:   AMERICAN RESIDENTIAL GAP ApS

Its:  Sole Member

     

By:_________________________________

          Henrik Wagenius

Its:    Chairman.

 

  

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LEASE GUARANTY

The undersigned, ProGreen Properties, Inc. (the “Guarantor”), in consideration of the leasing of the properties referred to below, hereby covenant and agree to act as Guarantor as follows:

The Guarantor guarantees to the Landlord (American Residential Gap LLC) all payments for 12 months from May 1, 2012, as per each lease agreement described in Exhibit A.

Properties:

 

	
(i)  

	
7648, Woodview Drive, Waterford, Michigan 48327, owned by ProGreen Properties III, LLC;

	
(ii)  

	
East 13 Mile Road, Madison Heights, Michigan, 48071, owned by ProGreen Properties IX, LLC;

	
(iii)  

	
29791, Rollcrest Road, #13, Farmington Hills, Michigan 48334, owned by ProGreen Properties VII, LLC;

	
(iv)  

	
23647, Stonehenge, Novi, Michigan 48375, owned by ProGreen Properties VIII, LLC; and

	
(v)  

	
29108 Tessmer Court, Madison Heights, Michigan 49071 owned by ProGreen Properties XI, LLC.

PROGREEN PROPERTIES, INC.

         /s/ Jan Telander

By: ______________________________

             Jan Telander

Its:        President/CEO

  

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EXHIBIT A

 

LEASESex10-14.htm

Exhibit 10.14

 

MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT (this “Management Agreement”) entered into as of April 30, 2011 by and between ProGreen Property Management LLC, a Michigan limited liability company (herein called “Manager”) having an address of 380 N. Old Woodward Ave., Ste. 226, Birmingham, Michigan 48009, Email: propertymanagement@progreenproperties.com, and American Residential Gap LLC, a Michigan limited liability company (“Owner”), having an address of 380 N. Old Woodward Ave., Ste 300, Birmingham, Michigan 48009, Email: info@amrega.com.

 

W I T N E S S E T H:

 

WHEREAS, Owner owns multiple residential properties commonly known as; set forth in Appendix 1 (herein the “Properties”), additional Properties may be added under this Agreement, by the making of a dated amendment to Appendix 1, duly signed by both parties; and

 

WHEREAS, Owner desires to engage the services of an independent management company to manage, lease, operate, maintain and repair the Property for and on behalf of Owner, all in accordance with the terms and provisions hereof; and

 

WHEREAS, Manager has represented to Owner that Manager is experienced in the management, leasing, operation, maintenance and repair of property similar to the Property;

 

NOW, THEREFORE, Owner and Manager covenant and agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

All terms used in this Management Agreement which are not defined in this Article 1 shall have the meanings set forth elsewhere in this Management Agreement.  As used in this Management Agreement, the following terms shall have the following meanings (such meaning to be applicable to both the singular and plural form of the terms defined):

 

Section 1.1                            “Applicable Law” shall mean all building codes, zoning ordinances, laws, orders, writs, ordinances, rules and regulations of any Federal, state, county, city, borough or municipality, or of any division, agency, bureau, court, commission or department thereof, or of any public officer or official, having jurisdiction over or with respect to the Property.

 

       Section 1.2                                “Insurance Requirements ” shall mean the requirements of any insurance policies from time to time in effect in respect of the Property, or of any insurance carriers or boards of fire underwriters or similar insurance rating organizations having jurisdiction in respect of the Property.

 

  

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Section 1.3                           “Rents ” shall mean all rents and other payments received under Leases, excluding security deposits, advance rents and amounts paid by reason of the breach of any Lease, and any other income of the Property.

 

Section 1.4                           “Service Contracts ” shall mean all service, maintenance and other contracts respecting maintenance or operation of the Property.

 

Section 1.5                           “Term ” shall mean the duration of this Agreement as set forth in Section 2.2 hereof.

 

ARTICLE 2

 

APPOINTMENT OF MANAGER; TERM

 

Section 2.1 Appointment of Manager.  Owner hereby appoints Manager as an independent contractor, and Manager hereby accepts such appointment as an independent contractor, with sole and exclusive right to lease, operate, maintain, manage and repair the Property, and Manager agrees, for and in consideration of the Management Fee, as hereinafter defined, to perform its obligations hereunder with due diligence, in an efficient and proper manner and in accordance with the terms and conditions herein set forth.  Manager shall be, at law, an independent contractor, and this Agreement shall not create any employment relationship, either express or implied, or any relationship of principal and agent, between Manager (or any Person employed by Manager) and Owner.

 

Section 2.2 Term.  The services of Manager hereunder shall commence on the date Owner acquires title to the Property.  Unless sooner terminated pursuant to Article 5 hereof, this Agreement shall continue in full force and effect for a term of one year, thereafter shall automatically be extended for consecutive one year periods on the same terms as are contained herein unless, within ninety (90) days by Owner or one hundred and eighty (180) days by Manager, prior to the end of the original term or any extension thereof, either Manager or Owner shall deliver to the other party a notice of its intention not to continue this Agreement after the end of such original term or any extension thereof.

 

ARTICLE 3

 

DUTIES; NO SERVICES BY OWNER; DISCLOSURE OF INTEREST

 

Section 3.1 Duties.  During the Term, Manager agrees to lease, operate, maintain, manage and repair the Property in a first class, high-quality manner in keeping with the standards maintained by other first class, high-quality Property of similar kind and location, all of which shall be done with due diligence and in good faith.

 

Section 3.2 Collection of Rents: Payment of Expenses.  Manager shall bill and assert a diligent effort to collect the Rents and, disburse therefrom the reasonable and necessary expenses of operations, upkeep and maintenance of the Property, including compensation of Manager and all payments due to the Owner pursuant to this Agreement.

 

Section 3.3 Bank Accounts.  Manager shall deposit in a banking institution in A general account (the “Rent Account ”), the Rents and all other sums received by Manager for the Account, to be held for the payment of expenses which Manager is permitted to pay hereunder.  Excess funds after payment of expenses, shall be paid to the Owner on a monthly basis. Security deposits required by Applicable Law are to be held by Manager in a separate account.

 

Section 3.4 Insurance.  Manager shall procure for Owner and maintain through the term of this Agreement insurance for the Property.

 

  

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Section 3.5 Enforcement of Contracts.  Manager shall enforce all of the provisions of the Leases and the Service Contracts.

 

Section 3.6 Record Keeping.  Manager shall establish, maintain and supervise record keeping as shall be necessary to provide to Owner information necessary in order for Owner to keep such books and accounts and provide the financial statements required.

 

Section 3.7 Payment of Taxes and Debts.  Manager shall pay before due, on behalf of and without the direction of Owner, real estate taxes, water or sewer charges, association fees and other assessments, and, additionally, Manager shall prepare and file all property tax returns and any necessary business licenses to insure the legal operation of the Property.

 

ARTICLE 4

 

COMPENSATION OF MANAGER

 

Section 4.1 Management Fee.  As Manager’s sole compensation for the services performed by Manager pursuant to this Agreement, Manager shall be entitled to a monthly management fee (herein called the “Management Fee ”) equal to ten (10%) of the Rents actually collected and received by Manager monthly under the Leases.

 

ARTICLE 5

 

TERMINATION

 

Section 5.1 Automatic Termination.  Notwithstanding anything contained herein to the contrary, this Agreement shall terminate on the date of the occurrence of any of the following events:

 

5.1.1 Sale or other transfer of the Property by Owner;

 

5.1.2 The  dissolution or liquidation of Manager or inability to continue to serve as Manager; or

 

Section 5.2 Termination by Owner.  Owner shall have the right to terminate this Agreement at any time upon the occurrence of any one or more of the following events:

 

5.2.1 If Manager shall default under the terms of this Agreement, and written notice setting forth the details of such default shall be given to Manager, and Manager shall not cure such default (a) within five (5) days after such notice; or

 

5.2.2 Owner shall at any time have the right on ninety (90) days’ notice to terminate this Agreement without cause.

 

Section 5.3 Termination by Manager.  Manager shall have the right to terminate this Agreement upon not less than one hundred and eighty (180) days’ written notice.

  

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ARTICLE 6

 

CASUALTY

 

Section 6.1 Damage or Destruction.  In the event of any damage or loss to the Property by fire or other casualty, Manager agrees to give immediate written notice thereof to Owner.

 

ARTICLE 7

 

MISCELLANEOUS

 

Section 7.1 Notices.  All notices or other communications given under this Agreement to be effective shall be in writing, shall be given to Owner or Manager at the address first set forth above.

 

Section 7.2 Applicable Law.  This Agreement shall be interpreted and construed under and governed by the laws of the State of Michigan.

 

IN WITNESS WHEREOF, Owner and Manager have executed this Agreement under seal as of the date first above written.

 

	 	
 
OWNER: 
 

AMERICAN RESIDENTIAL GAP, LLC

A Michigan limited liability company

By:   AMERICAN RESIDENTIAL GAP ApS

Its:  Sole Member

     

       /s/ Henrik Wagenius

By:_________________________________

          Henrik Wagenius

Its:      Chairman

 

MANAGER:

 

ProGreen Property Management, LLC

 

/s/ Jan Telander

 

By:__________________________________

 

Jan Telander

 

Its:       Managing Member

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