VALUE APPRECIATION INSTRUMENT AGREEMENT by and between BOND STREET HOLDINGS, INC. and FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER OF FIRST NATIONAL BANK OF CENTRAL FLORIDA, WINTER PARK, FLORIDA Dated as of April 29, 2011
Exhibit 10.21
by and between
BOND STREET HOLDINGS, INC.
and
and
FEDERAL DEPOSIT INSURANCE CORPORATION,
RECEIVER OF FIRST NATIONAL BANK OF CENTRAL FLORIDA,
WINTER PARK, FLORIDA
RECEIVER OF FIRST NATIONAL BANK OF CENTRAL FLORIDA,
WINTER PARK, FLORIDA
Dated as
of April 29, 2011
This VALUE APPRECIATION AGREEMENT (this “Agreement”), dated as of April 29, 2011, is by and
between Bond Street Holdings, Inc., a Delaware corporation, and the Federal Deposit Insurance
Corporation, in its capacity as receiver (the “FDIC”).
RECITALS
WHEREAS, as of April 29, 2011, FDIC and Premier American Bank, National Association, a wholly
owned subsidiary of the Company (the “Buyer”) entered into that certain Purchase and Assumption
Agreement (as amended from time to time in accordance with its terms, the “P&A Agreement”),
pursuant to which Buyer purchased and assumed certain assets, deposits and certain other
liabilities of First National Bank of Central Florida, Winter Park, Florida (the “Failed Bank”)
from FDIC; and
WHEREAS, pursuant to the bid of the Company and the Buyer to acquire the Failed Bank, FDIC is
entitled to receive a value appreciation payment in respect of one hundred thousand (100,000) Units
as provided in, and subject to the terms and conditions of, this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings indicated:
“Agreement” shall have the meaning set forth in the preamble.
“Business Day” means any day commencing at 9 A.M., New York City time and ending at 5
P.M., New York City Time, that is not a Saturday or Sunday or a legal holiday on which banks are
authorized or required by law to be closed.
“Buyer” shall have the meaning set forth in the recitals.
“Company” shall have the meaning set forth in the recitals.
“Determination Price” shall mean, in respect of each
Unit:
(i) if a Public Float Event occurs, the Company’s two(2) day
volume weighted average price (“VWAP”) per Unit as of the date of
the Exercise Notice;
(ii) if a Sale Event occurs, the value of the
consideration received per Unit upon the closing of such Sale Event.
“Exercise Notice” shall have the meaning set forth in Section 3(d).
“Exercise Period” shall have the meaning set forth in Section 3(c).
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“Exercise Price” means $19.66 per Unit subject to adjustment pursuant to Section
2(b).
“Failed Bank” shall have the meaning set forth in the preamble.
“FDIC” shall have the meaning set forth in the preamble.
“Initial Exercise Date” shall have the meaning set forth in Section 3(c).
“Initial Public Offering” shall mean the first underwritten public offering of common
stock of the Company after which it will both (i) trade on a national securities exchange (which
includes, but is not limited to, NYSE, NASDAQ and NYSE Amex Equities) and (ii) have a post-offering
public float in excess of Fifty Million United States Dollars ($50,000,000).
“Public Float Event” shall mean the increase of the Company’s public float to more
than Fifty Million United States Dollars ($50,000,000) for a consecutive 30-trading-day period by
means of either (i) an Initial Public Offering or (ii) appreciation of public market price of
shares of the Company.
“Sale Event” shall mean a business combination in which the Company is designated as the
selling entity or a disposition of all or substantially all of the Company’s assets.
“Settlement Price” means the Determination Price minus the Exercise Price.
“Tangible Book Value” shall mean the quotient of the Company’s tangible common
equity divided by the Company’s total common shares outstanding.
“Term” shall mean the period commencing on the Initial Exercise Date and ending on the earlier
of (i) the first anniversary of the Public Float Event or (ii) April 29, 2013.
“Transfer” shall mean any transfer, sale, exchange, assignment, pledge, or hypothecation of,
creation of a lien or other encumbrance or security interest in or upon, or other disposition of,
the VAI Right; provided, that such a Transfer shall be made pursuant to Section 4, and the
term “Transferred” shall have the meaning correlative to the foregoing.
“Trigger Event” shall have the meaning set forth in Section 3(a).
“Trigger Notice” shall have the meaning set forth in Section
3(b).
“Unit” shall mean an accounting device which mirrors one share of the Company’s
common stock.
“VAI Payment” shall have the meaning set forth in
Section 2(a).
“VAI Right” shall have the meaning set
forth in Section 2(a).
“VWAP” means the Volume Weighted Average Price displayed under the heading
“Bloomberg VWAP” on the Bloomberg Page for the Company (or its equivalent
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successor page if such page is not available) for the two (2) trading days immediately prior to the
day of FDIC’s delivery of the Exercise Notice to the Company.
2. VAI Right.
(a) Upon the occurrence of a Trigger Event (as defined below), FDIC will have the right
(the “VAI Right”), which may be exercised, in whole or in part, at any time during the Term
in accordance with the provisions of Section 3, to receive a
payment in cash or in stock (the
“VAI Payment”) in respect of one hundred thousand (100,000) Units, in the aggregate,
as follows: (1) if payment in cash is elected, the VAI Payment shall be equal to the product
of (i) the Settlement Price per Unit and (ii) the number of Units in respect of which the VAI Right
is being exercised as set forth in the applicable Exercise Notice, or (2) if payment in stock
is elected, the VAI Payment shall be the number of shares of the Company’s common stock equal to (X)
the product of (i) the number of Units in respect of which the VAI Right is being exercised as set
forth in the applicable Exercise Notice and (ii) the Settlement Price per Unit, divided by (Y) the
Determination Price.
(b) Adjustments for Stock Splits, etc. The number of Units to which the VAI Right
relates shall be appropriately adjusted, as determined by the managing board of the Company, to
reflect fully the effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into Units), reclassification, reorganization,
recapitalization or similar transaction occurring after the date hereof and prior to the expiration
of the Term.
3. Exercise of VAI Right.
(a) Conditions to Exercise. The VAI Right shall become exercisable, in whole or
in part, only upon the earlier of (i) the occurrence of a Public Float Event, or (ii) the closing of
a Sale Event (any such event in clause (i) or (ii), a “Trigger Event”).
(b) Trigger Notice. Within five (5) Business Days of the occurrence of a Trigger Event,
the Company shall send FDIC a written notice stating that a Trigger Event has occurred (a “Trigger
Notice”). Such Trigger Notice shall be delivered pursuant to Section 7 below.
(c) Exercise Period. The VAI Right may be exercised in whole or in part at any time
commencing on the delivery date of the Trigger Notice (the “Initial Exercise Date”) and continuing
until the expiration of the Term at which time the VAI Right or any unexercised portion thereof
shall be extinguished.
(d) Manner of Exercise. In order to exercise the VAI Right, FDIC shall deliver to the
Company a written notice in the form of Exhibit A hereto (the “Exercise Notice”), at any time on or
after the date on which the VAI Right becomes exercisable as provided in Section 3(c). Such Exercise
Notice shall be delivered pursuant to Section 7 below.
(e) Settlement of Right; Payment by Company. After receipt of the Exercise Notice in
the manner set forth above, on the first Business Day following the Company’s receipt of the
Exercise Notice, the Company shall deliver to the FDIC or any other holder of the VAI
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Right as a result of a Transfer, the VAI Payment in the form that such holder may elect pursuant to
Section 2(a).
(f) Alternative Consideration Fee. In the event that a Trigger Event does not
occur prior to the expiration of the Term or a Trigger Event occurs but the FDIC does not exercise
fully the VAI Right, then upon the expiration of the Term the Company shall pay to the FDIC a cash
fee equal to the product of (1) the number of Units attributable to the unexercised VAI Right and
(2) the per Unit price equal to the product of (x) the Company’s Tangible Book Value per common
share as of the most recent quarter prior to the expiration of the Term and (y) the prevailing
average price to tangible book multiple of the components underlying the Nasdaq Bank Index at such
date.
4. Transfers Prior to the Expiration of the Term. FDIC may Transfer its right, title
and interest in and to all or part of the VAI Right without the consent of the Company (provided
that FDIC shall notify the Company pursuant to Section 7 below prior to any such Transfer) at any
time prior to the expiration of the Term, so long as such Transfer does not violate any applicable
law, rule or regulation.
5. Binding Effect. This Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the parties hereto and their respective heirs, personal representatives, legatees,
successors and permitted assigns.
6. No Impairment. The Company will not, by amendment of its operating agreement or
through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Agreement, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of FDIC against impairment.
7. Notices. Any notice, demand or request which may be permitted, required or desired
to be given in connection with herewith shall be given in writing and directed to the parties hereto
as follows:
if to FDIC, to:
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Manager, Special Programs Division of Resolutions and Receiverships Federal Deposit Insurance Corporation 000 00xx Xxxxxx, XX (Xxxx F-7028) Xxxxxxxxxx, X.X. 00000-0000 Attention: Xxxxxx Xxxxxxx E-mail Address: XXxxxxxx@xxxx.xxx |
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with a copy to:
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Senior Counsel FDIC Legal Division Federal Deposit Insurance Corporation Special Issues Xxxx 0000 Xxxxxxx Xxxxx (Xxxx E-7056) Xxxxxxxxx, Xxxxxxxx 00000 Attention: Xxxxx Xxxxxx E-mail Address: XXxxxxx@xxxx.xxx |
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if to the Company, to:
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President and COO Bond Street Holdings, Inc. 0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxx, Xxxxxxx 00000 Attention: Xxxx X. Xxxxxx Fax: (000) 000-0000 Phone: (000) 000-0000 E-Mail Address: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx |
Notices shall be deemed properly delivered and received when delivered to both the primary notice
party and copied parties (i) if personally delivered, upon receipt or refusal to accept
delivery, (ii) if sent by a commercial overnight courier for delivery on the next Business Day, on
the first Business Day after deposit with such courier service (or the third Business Day if sent
to an address not in the United States), or (iii) if sent by registered or certified mail, five (5)
days after deposit thereof in the U.S. mail. Any party may change its address for delivery of
notices by properly notifying the others pursuant to this Section 7. For the avoidance of doubt,
e-mail notices and notices sent via facsimile shall not be deemed proper delivery for purposes of
this Agreement.
8. Amendment. This Agreement may be modified or amended only by an instrument in
writing, duly executed by the Company on the one hand, and the FDIC, on the other hand.
9. Governing Law. This Agreement shall be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and, insofar as
there may be no applicable federal law, shall be governed in accordance with the laws of the State
of New York. Each of the Company and FDIC agrees (a) to submit to the exclusive jurisdiction and
venue of the federal courts located in the State of New York for any civil action, suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and
(b) that notice may be served upon the Company and FDIC at the addresses in Section 7 above. To the
extent permitted by applicable law, each of the Company and FDIC hereby unconditionally waives trial
by jury in any civil legal action or proceeding relating to this Agreement or the transactions
contemplated hereby.
10. Severability. If any provision of this Agreement is found by a court of
competent jurisdiction to be invalid or unenforceable, such provision shall not affect the other
provisions, but such invalid or unenforceable provision shall be deemed modified to the extent
necessary to render it valid or enforceable, preserving to the fullest extent permissible the intent
of the parties set forth herein.
11. Headings. The headings in this Agreement are inserted for convenience only
and shall not constitute a part hereof.
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12. Counterparts; Facsimile. For the convenience of the parties, any number of counterparts
hereof may be executed, each such executed counterpart shall be deemed an original, and all such
counterparts together shall constitute one and the same instrument. Facsimile transmission or other
electronic transmission of any signed original counterpart and/or retransmission of any signed
facsimile transmission or other electronic transmission shall be deemed the same as the delivery of
an original.
13. Entire Agreement. This Agreement and the P&A Agreement (including the exhibits and
schedules of each of the foregoing) contain the entire understanding of the parties hereto with
respect to the subject matter hereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
| BOND STREET HOLDINGS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer | |||
| FEDERAL DEPOSIT INSURANCE CORPORATION, RECEIVER OF FIRST NATIONAL BANK OF CENTRAL FLORIDA, WINTER PARK, FLORIDA |
||||
| By: | /s/ Xxx X. Xxxx | |||
| Name: | XXX X. XXXX | |||
| Title: | RECEIVER-IN-CHARGE | |||
[Signature Page to Value Appreciation Instrument Agreement]
Exhibit A
FORM OF EXERCISE NOTICE
To: Bond Street Holdings, Inc. (the “Company”):
The undersigned hereby gives notice pursuant to Section 3(d) of that certain Value
Appreciation Instrument Agreement by and between the Company and the undersigned of its election to
exercise its VAI Right, in whole or in part, such exercise to be consummated on the tenth business
day following delivery of this notice, all in accordance with the terms and provisions of the Value
Appreciation Instrument Agreement.
Number of Units to which this exercise applies:
| By: | ||||
| Name: | ||||
| Title: | ||||
