OLB 8k
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Current
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of
Report (Date of Earliest Event Reported): November
3, 2005
Old
Line Bancshares, Inc.
(Exact
Name of Registrant as Specified in its Charter)
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Maryland
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000-50345
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20-0154352
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(State
of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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2995
Crain Highway
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Waldorf,
Maryland
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20601
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: 301-645-0333
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N/A
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(Former
name or former address, if changed since last
report)
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Check
the
appropriate box below if the Form 8-k filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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____
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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____
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CRF
240.14a-12)
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____
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
SFR
240.14d-2 (b))
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____
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Pre-commencement
communications pursuant to Rule 13e-4 (c) under the Exchange Act
(17 CFR
240.13e- 4 (c))
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ITEM
1.01. ENTRY
INTO A MATERIAL DEFINITIVE AGREEMENT
Old
Line
Bancshares, Inc. has an approximately $732,000 equity investment in a real
estate investment limited liability company named Pointer Ridge Office
Investment, LLC (“Pointer Ridge”). Old Line Bancshares, Inc. owns 50% of Pointer
Ridge. Frank Lucente, a director of Old Line Bancshares, Inc. and Old Line
Bank,
controls twenty five percent of Pointer Ridge and controls the manager of
Pointer Ridge. The purpose of Pointer Ridge is to acquire, own, hold for profit,
sell, assign, transfer, operate, lease, develop, mortgage, refinance, pledge
and
otherwise deal with real property located at the intersection of Pointer Ridge
Road and Route 301 in Bowie, Maryland. Pointer Ridge has acquired the property
and plans to construct a commercial office building containing approximately
40,000 square feet. Old Line Bancshares, Inc. plans to lease approximately
50%
of this building for its main office (moving its existing main office from
Waldorf, Maryland) and a branch of Old Line Bank. Construction of the building
began in May 2005.
On
November 3, 2005, Pointer Ridge entered into a loan agreement with an unrelated
bank, pursuant to which the bank agreed to make a construction loan to Pointer
Ridge in a principal amount not to exceed $5.88 million to finance the
construction of the building. Subject to the satisfaction of certain conditions
precedent, the bank agreed to convert the construction loan to a permanent
loan.
The construction loan accrues interest monthly at an interest rate equal to
one
month LIBOR (currently 4.08%) plus 185 basis points per annum, is interest
only
and matures on December 1, 2006, unless it converts to a permanent loan.
The
loan
agreement provides that on or before December 1, 2006, subject to the
satisfaction of certain conditions precedent, Pointer Ridge may convert the
construction loan to either a five-year or ten- year permanent loan. If
converted, the permanent loan will accrue interest monthly at an interest rate
equal to one month LIBOR plus 185 basis points per annum. The principal amount
of the permanent loan will be repaid in 60 or 120 consecutive level monthly
installments, as applicable, with a balloon payment of principal on the maturity
date. Payments of principal will be based on a 25-year amortization.
Pursuant
to the terms of a guaranty between the bank and Old Line Bancshares, Inc. dated
November 3, 2005, Old Line Bancshares, Inc. has guaranteed the construction
of
the building in accordance with the terms of the loan agreement and has
guaranteed the payment of up to fifty percent (50%) of all costs and expenses
incurred in completing the construction of the building.
Specifically,
if Pointer Ridge (a) fails to complete the building free of liens except those
permitted by any of the loan documents and by the completion date in accordance
with the plans and specifications and all material laws, rules, regulations
and
requirements of all governmental authorities having jurisdiction, or (b) fails
to keep the property free from all liens and claims that may be filed or made
for performing work and labor thereon or furnishing materials therefor in
connection with the construction thereof, or both, except to the extent any
of
the same are permitted by the loan documents, Old Line Bancshares, Inc.,
provided that the bank continues to advance sums under the loan agreement in
the
manner therein provided, would become primarily liable for the construction
of
the building in accordance with the terms of the loan agreement and for the
payment of up to fifty percent (50%) of all costs and expenses incurred in
completing the construction of the building.
ITEM
2.03. CREATION
OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET
ARRANGEMENT OF A REGISTRANT
(a) Not
Applicable.
(b) The
information set forth in Item 1.01 of this Current Report on Form 8-K is hereby
incorporated into this Item 2.03 by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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OLD
LINE BANCSHARES, INC.
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November
8, 2005
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By:
/s/James
W. Cornelsen
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James
W. Cornelsen, President
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