EXHIBIT 10.11
EXECUTION FORM
ASSET PURCHASE AGREEMENT
DATED AS OF OCTOBER 9, 2003
BY AND AMONG
GULF BANK, MIAMI, FLORIDA
AND
PAN AMERICAN BANK, HOLLYWOOD, FLORIDA
TABLE OF CONTENTS
PAGE
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ARTICLE I.
DEFINITIONS
1.01 DEFINITIONS............................................................ 1
ARTICLE II.
SALE OF ASSETS AND CLOSING
2.01 ASSETS................................................................. 8
2.02 LIABILITIES............................................................ 8
2.03 TRANSFER TO AFFILIATES OF PURCHASER.................................... 9
2.04 PURCHASE PRICE: ALLOCATION; ADDITIONAL PAYMENTS; ADJUSTMENT............ 10
2.05 CLOSING:............................................................... 11
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
3.01 ORGANIZATION OF SELLER................................................. 12]
3.02 AUTHORITY.............................................................. 12
3.03 No CONFLICTS........................................................... 12
3.04 GOVERNMENTAL APPROVALS AND FILINGS..................................... 12]
3.05 CERTAIN TAXES.......................................................... 12
3.06 LEGAL PROCEEDINGS...................................................... 13
3.07 REAL PROPERTY.......................................................... 13
3.08 CONTRACTS.............................................................. 13]
3.09 ENVIRONMENTAL MATTERS.................................................. 14
3.10 BROKERS................................................................ 14]
3.11 ASSETS TITLE........................................................... 14]
3.12 LOAN SCHEDULE.......................................................... 18
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.01 ORGANIZATION........................................................... 14
4.02 AUTHORITY.............................................................. 14
4.03 No CONFLICTS........................................................... 14]
4.04 GOVERNMENTAL APPROVALS AND FILINGS..................................... 15
4.05 BROKERS................................................................ 15
ARTICLE V.
COVENANTS OF SELLER AND SHAREHOLDERS
5.01 REGULATORY AND [OTHER] APPROVALS....................................... 15]
5.02 INVESTIGATION BY PURCHASER............................................. 20
5.03 CONDUCT OF BUSINESS.................................................... 20
5.04 CERTAIN RESTRICTIONS................................................... 16]
5.05 DELIVERY OF BOOKS AND RECORDS', ETC.; REMOVAL OF PROPERY............... 17]
5.06 FULFILLMENT OF CONDITIONS.............................................. 17]
5.07 PURCHASER'S OPTION TO PURCHASE SELLER'S PERSONAL PROPERTY.............. 17]
5.08 ESCROW................................................................. 18]
5.09 BUSINESS TRANSACTIONS.................................................. 18]
ARTICLE VI.
COVENANTS OF PURCHASER
6.01 REGULATORY AND OTHER APPROVALS........................................ 18
6.02 FULFILLMENT OF CONDITIONS............................................. ERROR BOOKMARK NOT DEFINED.]
ARTICLE VII.
CONDITIONS TO OBLIGATIONS OF PURCHASER
7.01 REPRESENTATIONS AND WARRANTIES........................................ 19]
7.02 PERFORMANCE........................................................... 19]
7.03 OFFICERS' CERTIFICATES................................................ 19]
7.04 ORDERS AND LAWS....................................................... 19]
7.05 REGULATORY CONSENTS AND APPROVALS..................................... 20]
7.06 OPINION OF COUNSEL.................................................... 24
7.08 REAL PROPERTY LEASE AGREEMENTS........................................ 20]
7.09 MINIMUM AMOUNT OF PERFORMING LOANS.................................... 25
7.10 REVIEW OF BOOKS, BUSINESS AND LEGAL MATTERS........................... 25
ARTICLE VIII.
CONDITIONS TO OBLIGATIONS OF SELLER AND SHAREHOLDERS
8.01 REPRESENTATIONS AND WARRANTIES........................................ 20]
8.02 PERFORMANCE........................................................... 20]
8.03 OFFICERS' CERTIFICATES................................................ 20]
8.04 ORDERS AND LAWS....................................................... 21]
8.05 REGULATORY CONSENTS AND APPROVALS..................................... 21]
8.06 CORPORATE ACTION...................................................... 21]
8.07 DELIVERIES............................................................ 21]
ARTICLE IX.
ARRANGEMENTS RESPECTING EMPLOYEES OF SELLER
9.01 OFFERS OF EMPLOYMENT.................................................. 21]
9.02 TRANSFERRED EMPLOYEES................................................. 21]
9.03 THIRD-PARTY RIGHTS.................................................... 22]
ARTICLE X.
SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
10.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS..... 22]
ARTICLE XI.
INDEMNIFICATION
11.01 INDEMNIFICATION OF PURCHASER.......................................... 23]
11.02 INDEMNIFICATION BY PURCHASER OF SELLER AND SHAREHOLDERS............... 28
11.03 METHOD OF ASSERTING CLAIMS............................................ 24]
11.04 INDEMNIFICATION; THIRD PARTY CLAIMS................................... 24]
ARTICLE XII.
TERMINATION
12.01 TERMINATION........................................................... 25]
12.02 EFFECT OF TERMINATION................................................. 26]
ARTICLE XIII. MISCELLANEOUS
13.01 NOTICES............................................................... 27]
13.02 FURTHER ASSURANCES; POST-CLOSING COOPERATION.......................... 27]
13.03 EXPENSES.............................................................. 28]
13.04 PUBLIC ANNOUNCEMENTS.................................................. 28]
13.05 CONFIDENTIALITY....................................................... 28]
13.06 WAIVER................................................................ 28]
13.07 AMENDMENT............................................................. 29]
13.08 NO THIRD PARTY BENEFICIARY............................................ 29]
13.09 No ASSIGNMENT; BINDING EFFECT......................................... 29]
13.10 HEADINGS.............................................................. 29]
13.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS........................ 29]
13.12 INVALID PROVISIONS.................................................... 29]
13.13 GOVERNING LAW......................................................... 30]
13.14 COUNTERPARTS.......................................................... 30]
13.15 CONSTRUCTION.......................................................... 30]
13.16 BREAK-UP FEES......................................................... 30]
13.17 BULK SALE ACT......................................................... 36
EXHIBITS
Exhibit A Escrow Provisions
Exhibit B Officers' Certificate of Seller
Exhibit C Assistant Secretary's Certificate of Seller
Exhibit D Matters to be Covered in Opinion of Counsel for Seller
Exhibit E "Left Blank"
Exhibit F New Real Estate Leases
Exhibit G Officers' Certificate of Purchaser
Exhibit H Assistant Secretary's Certificate of Purchaser
This ASSET PURCHASE AGREEMENT dated as of October 9, 2003 is made and
entered into by and among Pan American Bank, a banking corporation organized
under the laws of the State of Florida ("Purchaser"), on the one hand, and Gulf
Bank, a banking corporation organized under the laws of the State of Florida
("Seller"), on the other hand. Capitalized terms not otherwise defined herein
have the meanings set forth in Section 1.01.
RECITALS
- Seller is engaged in the business of providing commercial and
consumer banking and other financial services to its customers (the "Business")
from its head office located at 0000 Xxxxx Xxx, Xxxxx, Xxxxxxx (the "Main
Office") and from its two branches located at (i) 0000 X.X. 00xx Xxxxxx, Xxxxx,
Xxxxxxx (the "Doral Branch"), and (ii) 0000 X.X. 0xx Xxxxxx, Xxxxx, Xxxxxxx (the
"Little Havana Branch" and, together with the Doral Branch, the "Branch
Offices").
- Certain Shareholders own, in the aggregate, in excess of 22%
of the voting securities of Seller.
- Seller desires to sell, transfer and assign to Purchaser and
the other Purchasing Companies (as defined below), and Purchaser and the other
Purchasing Companies desire to purchase and acquire from Seller, certain of the
assets of Seller relating to the operation of the Business of Seller as set
forth below (the "Transferred Assets"). In connection therewith, Purchaser and
the other Purchasing Companies desire to assume certain of the Liabilities of
Seller relating to the Business, all on the terms set forth herein.
- Purchaser is engaged in the business of providing commercial
and consumer banking and other financial services to its customers from its head
office located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000, and is a
wholly-owned subsidiary of Pan American Bancorp, a Delaware corporation
("Parent").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following defined
terms have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning
fifty percent (50%) or more of the voting securities of another Person shall be
deemed to control that Person.
"Agreement" means this Asset Purchase Agreement and the Exhibits and
the Schedules hereto, as the same shall be amended from time to time.
"Assets" of any Person means all assets and properties of every kind,
nature, character and description (whether real, personal or mixed, whether
tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person,
including without limitation cash, cash equivalents, Investment Assets, accounts
and notes receivable, chattel paper, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and Intellectual Property.
"Assignment Instruments" has the meaning ascribed to it in Section
2.04.
"Associate" means, with respect to any Person, any corporation or other
business organization of which such Person is an officer, director or partner or
is the beneficial owner, directly or indirectly, of fifty percent (50%) or more
of any class of equity securities, any trust or estate in which such Person has
a substantial beneficial interest or as to which such Person serves as a
trustee, or in a similar capacity and any relative or spouse of such Person, or
any relative of such spouse, who has the same home as such Person.
"Assumed Liabilities" has the meaning ascribed to it in Section
2.02(a).
"Assumption Agreement" has the meaning ascribed to it in Section 2.04.
"Assumption Instruments" has the meaning ascribed to it in Section
2.04.
"Benefit Plan" means any Plan established by Seller, existing at the
Closing Date or prior thereto, to which Seller contributes or has contributed on
behalf of any Employee, former Employee or director, or under which any
Employee, former Employee or director of Seller or any beneficiary thereof is
covered, is eligible for coverage or has benefit rights.
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and Assets of such
Person, including without limitation financial statements, Tax Returns and
related work papers and letters from accountants, budgets, pricing guidelines,
ledgers, journals, deeds, title policies, minute books, stock certificates and
books, stock transfer ledgers, Contracts, Licenses, original customer and/or
client lists and files, computer files and programs, retrieval programs,
operating data and plans and environmental studies and plans.
"Business" has the meaning ascribed to it in the forepart of this
Agreement.
"Business Combination" means with respect to any Person, any merger,
consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other equity interests
of such Person such that control of such person (as such term is used in the
definition of "Affiliate" herein) is acquired by another person or any sale,
dividend or other disposition of all or substantially all of the Assets of such
Person.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of Florida are authorized or obligated to
close.
"Certain Shareholders" means those shareholders of Seller who are
listed on Exhibit A attached hereto.
"Closing" means the closing of the transactions contemplated by Section
2.04.
"Closing Date" means the date which is twenty (20) Business Days after
all regulatory approvals required from Governmental or Regulatory Authorities in
order to close this transaction have been obtained, but in no event shall the
Closing Date be later than January 31, 2004, unless the Closing Date is
otherwise extended pursuant to Sections 12.01(b) or 12.03(b) hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Computer Equipment" means the equipment and software listed in
"Schedule 1.01 - Computer Equipment, which is located at, installed or used in
connection with the operation of the Main Office or the Branch Offices or
otherwise in connection with the Transferred Assets.
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"Condition of the Transferred Business" means the Business, condition
(financial or otherwise), results of operations and Assets of the Transferred
Business.
"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"Deposit Schedule" has the meaning ascribed to it in Section
2.02(a)(iii).
"Deposits" means the unpaid balances of money or their equivalents
received or held by Seller as of the Closing as defined in 12 U.S.C. Section
1813(l), together with the terms thereof and any agreements relating thereto
(including all accrued but uncredited interest and dividends on Deposits up to
the Closing without deduction for reserves maintained on deposit with the
Federal Reserve System and including official checks and certified checks). For
purposes of this Agreement, Deposits shall not include amounts subject to any
legal process or an administrative "block" or "hold" which in any fashion
restrict the payment of such sums to the order of the account holder, other than
amounts subject to a "block" placed by Seller because such amounts serve as
collateral for extensions of credit.
"Employee" means each employee of Seller engaged in the conduct of the
Business.
"Environmental Claim" means, with respect to any Person, any written or
oral notice, claim, demand or other communication (collectively, a "claim") by
any other Person alleging or asserting such Person's Liability for investigatory
costs, cleanup costs, Governmental or Regulatory Authority response costs,
injunctive relief, damages to natural resources or other property, personal
injuries, fines or penalties arising out of, based on or resulting from (a) the
presence, or Release into the environment, of any Hazardous Material at any
location, whether or not owned by such Person, or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall also include, without limitation, any claim by any
Governmental or Regulatory Authority for enforcement, injunctive relief,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" means any Law or Order relating to the regulation
or protection of human health, safety or the environment or to emissions,
discharges, Releases or threatened Releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes, including, but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, and the rules and regulations promulgated thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" has the meaning ascribed to it in Section 2.01(b).
"Excluded Liabilities" has the meaning ascribed to it in Section
2.02(b).
"Financial Asset Documents" means all loan agreements, notes, Security
Agreements, guarantees, Uniform Commercial Code financing statements and other
agreements and documents underlying, supporting or comprising the Loans funded
prior to the Closing.
"GAAP" means generally accepted accounting principles, consistently
applied throughout the specified period and in the immediately prior comparable
period.
"General Assignment" has the meaning ascribed to it in Section 2.04.
3
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Material" means (A) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants" or words of similar import under any Environmental Law; and
(C) any other chemical or other material or substance, exposure to which is now
or hereafter prohibited, limited or regulated by any Governmental or Regulatory
Authority under any Environmental Law.
"Indebtedness" of any Person means all obligations of such Person (i)
for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnification Notice" has the meaning ascribed to it in Section
11.03(b).
"Indemnified Party" means any Person claiming indemnification under any
provision of Article XI.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article XI.
"Intangible Personal Property" has the meaning ascribed to it in
Section 2.01(b)(ix).
"Investment Assets" means all debentures, notes and other evidences of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by Seller (other
than the Loans).
"IRS" means the United States Internal Revenue Service.
"Knowledge of Seller or Certain Shareholders" or "Known to Seller or
Certain Shareholders" means the actual (but not imputed or constructive)
knowledge of (i) any officer, or director of Seller holding the title of Vice
President or higher with responsibility over the management or financial
reporting of the Business or the Transferred Assets or (ii) Certain
Shareholders.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other liabilities
of a Person (whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to become due).
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, deed of trusts, assessment,
security interest, lease, lien, adverse claim, levy, encumbrance, easement,
cloud on title, right of first refusal, charge or other encumbrance of any kind,
or any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Loan Schedule" has the meaning ascribed to it in Section 2.01(a)(i).
4
"Loans" means all loans, overdrafts, guarantee facilities, letters of
credit and other, extensions of credit made by Seller in the ordinary course of
its business.
"Loss" means any and all damages, fines, fees, penalties, deficiencies,
losses and expenses (including without limitation interest, court costs,
reasonable fees of attorneys, accountants and other experts or other reasonable
expenses of litigation or other proceedings or of any claim, default or
assessment).
"Operative Agreements" means, collectively, the General Assignment and
the other Assignment Instruments, the Assumption Agreement and the other
Assumption Instruments and any support or other agreements to be entered into in
connection with the transaction contemplated hereby.
"Order" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Parent" has the meaning ascribed to it in the forepart of this
Agreement.
"Performing Loans" means active loans accruing interest not in default
of required payments by more than thirty (30) days, except that all Loans which
are fully collateralized by cash or marketable securities shall be deemed
Performing Loans.
"Permitted Lien" means (i) any Lien for Taxes not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP and (ii) any statutory
Lien arising in the ordinary course of business by operation of Law with respect
to a Liability that is not yet due or delinquent.
"Person" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"Personal Property Leases" has the meaning ascribed to it in Section
2.01(b)(xii).
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Purchase Price" has the meaning ascribed to it in Section 2.04.
"Purchaser" has the meaning ascribed to it in the forepart of this
Agreement
"Purchasing Companies" has the meaning ascribed to it in Section 2.03.
"Real Property Leases" has the meaning ascribed to it in Section
2.01(a)(ii).
"Release" means any spill, emission, leaking, pumping, deposit,
disposal, discharge, dispersal, or migration into the indoor or outdoor
environment, including, without limitation, the movement of Hazardous Materials
through air, soil, surface water, or ground water.
"Representatives" has the meaning ascribed to it in Section 5.02.
"Security Agreements" means any security agreements, guarantees, or
other arrangements for security or collateral securing the repayment or other
satisfaction of Indebtedness.
5
"Seller" has the meaning ascribed to it in the forepart of this
Agreement.
"Seller Banking License" has the meaning ascribed to it in Section
2.01(b)(vii).
"Tangible Personal Property" means the furniture, fixtures, equipment,
machinery and other tangible personal property used or held for use in the
conduct of the Transferred Business located at Seller's Main Office or Seller's
Branch Offices, including but not limited to, the Tangible Personal Property
listed on "Schedule 1.01 - Tangible Personal Property." In no event shall the
Tangible Personal Property include artwork.
"Tax Returns" means all returns and reports, including accompanying
schedules, with respect to Taxes.
"Taxes" means all federal, state, local and foreign income, payroll,
withholding, excise, sales, use, real and personal property, use and occupancy,
business and occupation, mercantile, real estate, capital stock, franchise,
transfer and other taxes of any kind whatsoever, including interest and
penalties thereon and all estimated taxes.
"Transferred Assets" has the meaning ascribed to it in Section 2.01.
"Transferred Business" has the meaning ascribed to it in the forepart
of this Agreement.
"Transferred Books and Records" has the meaning ascribed to it in
Section 2.01(a)(iv).
"Transferred Contracts" has the meaning ascribed to it in Section
2.01(a)(iii).
"Transferred Customers" means all current customers of Seller which
relate to the Transferred Business, or who otherwise become a customer of a
Purchasing Company after the Closing as a result of, or in connection with, the
transactions contemplated hereby.
"Transferred Employee" has the meaning ascribed to it in Section 9.01.
ARTICLE II
SALE OF ASSETS AND CLOSING
2.01 Assets.
(a) Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, Seller will sell, transfer, convey,
assign and deliver to Purchaser and/or certain of the other Purchasing
Companies, and Purchaser shall, and/or shall cause certain of the other
Purchasing Companies to, purchase and pay for, at the Closing, free and clear of
all Liens, all of Seller's right, title and interest in, to and under the
following Assets of Seller, except as otherwise excluded in Section 2.01(b), as
the same shall exist on the Closing Date (collectively, the "Transferred
Assets"):
(i) Loans. The rights of Seller in and to any Loans to
any Financial Asset Document relating to the Loans as such Loans exist
on the Closing Date (including all accrued interest thereon), which
such Loans, as they existed on September 24, 2003, are identified on
Schedule 2.01(a)(i) (the "Loan Schedule"):
(ii) Transferred Contracts. All of the rights, title,
interest and benefits accruing under the Contracts listed in Schedule
2.01(a)(ii) (the "Transferred Contracts"):
(iii) Books and Records. All Books and Records relating to
the Transferred Assets, including without limitation, all customer
lists and copies of customer files related to the Transferred
Customers, but excluding the minute books, stock certificate and
transfer books, corporate seal, Tax Returns of Seller and any Financial
Asset Documents of customers other than the Transferred Customers (the
"Transferred Books and Records");
6
(iv) Certain Cash. That certain amount of cash equal to
the difference between the Loans (assets) received and the Deposit
Liabilities assumed by Purchaser; and
(v) Tangible Personal Property. The Tangible Personal
Property and Computer Equipment described in Section 5.07 hereof.
To the extent any of the Transferred Books and Records are items susceptible to
duplication and are either used in connection with any of Seller's businesses
other than the Transferred Assets or are required by Law to be retained by
Seller, Seller may deliver photostatic copies or other reproductions thereof and
in any event information solely concerning Seller's businesses other than the
Transferred Assets may be deleted from such copies or reproductions.
(b) Excluded Assets. Notwithstanding anything in this
Agreement to the contrary, all Assets of Seller other than the Transferred
Assets (the "Excluded Assets") shall be excluded from and shall not constitute
Transferred Assets, which Excluded Assets include, without limitation, the
following:
(i) Cash, Cash Equivalents, Etc. The cash due from banks,
interest-bearing deposits, federal funds sold, interest receivable with
respect thereto, and all other cash equivalents (except that certain
cash described in Section 2.01(a)(iv) above);
(ii) Insurance. Life insurance policies of officers and
other employees of Seller and all other insurance policies relating to
the operation of the Transferred Business;
(iii) Tax Refunds. All refunds or credits, if any, of Taxes
due to or from Seller;
(iv) Corporate Records. The minute books, stock transfer
books and corporate seal of Seller;
(v) Litigation and Insurance Claims. Any rights
(including indemnification) and claims and recoveries under litigation
of Seller against third parties or claims under insurance policies of
Seller arising out of or relating to events prior to the Closing Date;
(vi) Excluded Obligations. The rights of Seller in, to and
under all Contracts of any nature, the obligations of Seller under
which are not assumed by a Purchasing Company pursuant to Section
2.02(a) (the "Excluded Contracts"), including without limitation,
insurance claims made by Seller with respect to certain defalcations by
former employees;
(vii) Banking License of Seller. The banking charter of
Seller issued by the State of Florida Department of Financial Services
(or any predecessor thereto) (the "Seller Banking License");
(viii) Tradename and Trademark. All of Seller's right, title
and interest in, to and under any and all trade names and trade marks
related to "Gulf Bank" and the right to ownership and use of which is
retained by Seller;
(ix) Intangible Personal Property. The Intellectual
Property used or held for use in the conduct of or relating or
pertaining to the Transferred Business or the Transferred Assets
(including Seller's goodwill therein), including but not limited to the
items listed in Schedule 2.01(b)(ix)(the "Intangible Personal
Property");
(x) This Agreement. Seller's rights under this Agreement;
(xi) INTENTIONALY DELETED;
(xii) Personal Property Leases. Subject to Purchaser's
obligation to assume such leases pursuant to Section 5.07 hereof, the
leases or subleases of tangible personal property described in Schedule
2.01(b)(xii) as to which Seller is the lessee or sublessee, together
with any options to purchase the underlying personal property (the
"Personal Property Leases");
7
(xiii) INTENTIONALLY DELETED;
(xiv) Loan Loss or Other Reserve. Any loan loss or other
reserve maintained by Seller;
(xv) Investment Portfolio. Any Investment Assets of the
Seller;
(xvi) Real Estate. Any interests Seller has in any real
estate whether in fee, pursuant to leasehold interests or otherwise;
(xvii) Capital of Seller. All issued and outstanding capital
stock, voting securities and other ownership interests in Seller; and
(xviii) Capital Stock in Other Entities. All capital stock
and other equity interests owned by Seller in its subsidiaries and in
any other entities.
(xix) Other Excluded Assets. All other Assets of Seller
used or held for use in connection with the Transferred Business except
as otherwise provided in Section 2.01 (a), including but not limited to
the items listed in Schedule 2.01(b)(xix).
2.02 Liabilities.
(a) Assumed Liabilities. In connection with the sale,
transfer, conveyance, assignment and delivery of the Transferred Assets pursuant
to this Agreement, on the terms and subject to the conditions set forth in this
Agreement, at the Closing, Purchaser shall, and/or shall cause certain of the
other Purchasing Companies to, assume and agree to pay, perform and discharge
when due, the following liabilities, and none other (collectively, the "Assumed
Liabilities"):
(i) Doral Branch Sublease. Purchaser shall enter
into a Sublease Agreement with Seller ("Doral Branch Sublease")
pursuant to which it shall sublease from Seller the Doral Branch for
the remainder of the term of the Lease dated September 9, 1998 between
Seller and International Point Development Co. relating to the Doral
Branch ("Doral Property Lease"), which Doral Branch Sublease shall be
upon the same terms as the Doral Property Lease, but Purchaser shall
not acquire any of Seller's rights relating to its option to purchase
the property on which the Doral Branch is located, and Parent shall
execute a Guaranty of Purchaser's obligations under the Doral Branch
Sublease in form and substance satisfactory to Seller;
(ii) Assumed Contracts. All obligations of Seller
arising and to be performed on or after the Closing Date relating to
the Transferred Contracts; and
(iii) Deposit Liabilities. All deposit liabilities
maintained at the Main Office and the Branch Offices, in accordance
with the terms of the agreements pertaining to such deposits, as shown
on the books and records of Seller as of the close of business on the
Closing Date, including accrued but unpaid interest thereon through the
Closing Date and, including, without limitation, any deposit, borrowing
or advance from the Federal Home Loan Bank which is fully
collateralized (the "Deposits" or "Deposit Liabilities"). Seller shall
provide a list of such Deposit Liabilities, as they existed on
September 24, 2003, which list shall be attached hereto as Schedule
2.02(a)(iii). Schedule 2.02(a)(ii) (the "Deposit Schedule") shall be
divided into the following categories: Demand Deposits, Saving Deposits
and CD and Time Deposits and shall include any Deposit Liabilities that
are individual retirement accounts ("XXX Accounts") and any Deposit
Liabilities that serve as collateral for obligations of the applicable
depositor to Seller ("Pledged Deposits"). As used in this Agreement,
the term "Deposit Liabilities" shall include all of the deposit
products offered by Seller from the Main Office and the Branch Offices,
including, without limitation, passbook accounts, statement accounts,
checking accounts, money market accounts and certificates of deposit.
8
(b) Excluded Liabilities. Except for the Assumed Liabilities,
neither the Purchaser nor any of the Purchasing Companies shall assume by virtue
of this Agreement or the transactions contemplated hereby, and shall have no
Liability for, any Liabilities of Seller (including, without limitation, those
related to the Business) of any kind, character or description whatsoever
including, but not limited to, the following Liabilities (the "Excluded
Liabilities");
(i) Liabilities relating to any Action or Proceeding
arising from events occurring prior to the Closing Date;
(ii) Liabilities relating to any Taxes of Seller;
(iii) any Liabilities relating to any Environmental Claim
or violation of any Environmental Law arising from events occurring or
circumstances existing prior to the Closing Date;
(iv) any Liabilities with respect to the Employees of
Seller arising from acts or omissions arising prior to the Closing Date
and, with respect to any Employees who do not become Transferred
Employees, after the Closing Date;
(v) Liabilities associated with or related to any
Excluded Asset;
(vi) any Liabilities arising under any Excluded Contract;
(vii) all Intercompany Payables;
(viii) all accounts payable arising in the ordinary course
of business with respect to the period prior to Closing;
(ix) all Liabilities due and owning to any Affiliate or
arising out of or relating to any agreement with an Affiliate which
does not constitute an Assumed Contract;
(x) all Liabilities for severance pay with respect to any
employee of Seller;
(xi) all Liabilities for expenses relating to the
negotiation and preparation of this Agreement and the transactions
contemplated herein to the extent incurred by Seller and including
those related to Seller's legal counsel, accounting, brokerage and
investment advisors fees and disbursements;
(xii) any other Liability which is not an Assumed
Liability; and
(xiii) any Liabilities relating to the operation of the
Business prior to the Closing, except Assumed Liabilities.
Seller shall discharge in a timely manner or shall make adequate provision for
all of the Excluded Liabilities, provided that Seller shall have the ability to
contest, in good faith, any such claim of Liability asserted in respect thereof
by any Person. Purchaser shall be responsible, from and after the Closing, for
discharging in a timely manner or making adequate provision for all of the
Assumed Liabilities; provided, however, that Purchaser shall have the ability to
contest, in good faith, any such claim of Liability asserted by any Person.
2.03 Transfer to Affiliates of Purchaser. Notwithstanding anything
herein to the contrary, Purchaser shall have the right to designate by written
notice given prior to the Closing, that certain of the Transferred Assets be
transferred to, and certain of the Assumed Liabilities be assumed by, or that
all or certain of Purchaser's other obligations under this Agreement be carried
out by, one or more of Purchaser's Affiliates (Purchaser and any such designated
Affiliates being collectively referred to as the "Purchasing Companies"), on the
Closing Date, as determined solely by Purchaser; provided, however, that
Purchaser shall remain jointly and severally liable to Seller with any such
Affiliate for any such Assumed Liabilities or for any Liability to Seller
relating to the Transferred Business.
9
2.04 Purchase Price: Allocation; Additional Payments; Adjustment.
(a) Purchaser will pay Seller at closing an amount equal
to 4.85% of the total Performing Loan portfolio of Seller net of allowance for
loan losses relating to the Performing Loans assigned to Purchaser (it being
understood that no premium shall be payable with respect to those Loans
transferred to Purchaser which are not Performing Loans). (At the present time,
the total Performing Loan portfolio net of allowance for loan losses is
anticipated to be approximately $40,000,000 at the time of closing. This would
result in a payment by Purchaser to Seller of $1,940,000.) Seller may, in its
discretion, make additional loans ("New Loans") after the date of this
agreement; however, Purchaser shall not be obligated to purchase such New Loans
and pay the fee for the same, unless either (i) Purchaser approved such New
Loans prior to Closing, (ii) any such New Loans are secured by real estate and
loan to appraised value of the security must not exceed 80%, or (iii) are fully
secured by liquid assets.
(b) Purchaser will pay Seller at closing an amount equal
to 2.1% of the total deposits, excluding any deposit, borrowing or advance from
the Federal Home Loan Bank. (At the present time, the total deposits are
anticipated to be $65,000,000 at the time of closing. This would result in a
payment by Purchaser to Seller of $1,365,000).
(c) The average net interest margin for the six (6)
months prior to the month in which the Closing occurs (the "Calculation Period")
shall be greater than 3.2%. If the average net interest margin for the
Calculation Period falls below 3.2% the percentage to be paid for deposits,
being 2.1%, shall be reduced by the same percentage.
(d) Purchaser will pay Seller an amount equal to the book
value of the Tangible Personal Property and Computer Equipment; provided,
however, that such payment shall not exceed $525,000 in the aggregate. See
Section 5.07.
(e) Purchaser shall have thirty (30) days from the
signing of this agreement to inspect and confirm that the Tangible Personal
Property and Computer Equipment are in the same condition as they were during
its prior inspection, ordinary wear and tear excepted. If such inspection
reveals that Seller does not, in fact, have in its possession the Tangible
Personal Property and Computer Equipment listed in Schedule 1.01 hereto, or that
such Tangible Personal Property and Computer Equipment is, as a whole, in a
condition which would not permit the Business of Seller to operate in the normal
course, then Purchaser may by written notice delivered within thirty-five (35)
days after the execution of this Agreement, elect to eliminate from the
Purchased Assets those items of Tangible Personal Property and Computer
Equipment which are not in reasonable working order. During the period from
execution of this Agreement to Closing, Seller will maintain its Tangible
Personal Property and Computer Equipment in the ordinary and usual course
consistent with its past practices.
(f) Seller shall provide Purchaser with the most up to
date financial statements of Seller and shall permit Purchaser to examine all of
the books and records of Seller (other than any of the same which Seller is
required to keep confidential) to confirm the accuracy of the financial
statements and other relevant information. Purchaser shall have the right to
inspect the Loans. All such inspections by Purchaser shall be upon reasonable
prior notice to Seller and shall be conducted in a manner which shall not
unreasonably interfere with the conduct of the Business.
(g) Within 72 hours of acceptance of this proposal,
Purchaser shall place into escrow with Xxxx & Xxxxxxx, P.A. ("Escrow Agent") a
$500,000 deposit as a good faith performance deposit, which deposit, together
with all interest earned thereon, is hereinafter referred to as the "Deposit."
The Escrow Agent shall disburse the Deposit as hereinafter provided in this
Agreement. The parties hereto agree to the Escrow Provisions attached hereto as
Exhibit A, which Escrow Provisions are incorporated herein by reference.
(h) At least five Business Days prior to the Closing,
Seller shall deliver to Purchaser a letter executed by the Chief Financial
Officer of Seller on behalf of Seller, setting forth a good faith estimate
calculated in the following manner: the difference between the total unpaid
balance of the Loans being transferred to Purchaser by
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Seller and the amount of Deposits being transferred to Purchaser by Seller, as
reflected in the Books and Records of the Seller as of the Closing Date,
including back-up information concerning such calculation.
(i) At Closing, if and to the extent the amount of
Deposits being transferred to Purchaser exceeds the total unpaid balance of the
Loans (without deduction for loan loss reserves, unearned discounts and loan
fees) being transferred to Purchaser by Seller as of Closing, it being
anticipated that this will be the case) Seller shall pay Purchaser at Closing an
amount equal to the amount by which the Deposits exceed the Loans (the "Paid
Deposit Excess"). If and to the extent, at Closing, that the total unpaid
balance of the Loans exceeds the amount of Deposits, the Purchaser shall have
the right to terminate this Agreement and the Escrow Agent shall return the
Deposit to Purchaser. All payments shall be made by wire transfer of immediately
available funds to the account specified by Purchaser as of the Closing Date.
(j) As promptly as practicable after the Closing Date,
but in no event later than sixty (60) days thereafter, Xxxxxxxx, Xxxxx & Xxxxx
(the "Auditor") shall prepare and deliver to Seller and Purchaser, a detailed
calculation of the difference between the total unpaid balance of the Loans and
the Deposits transferred to Purchaser by Seller, as of the Closing Date. In the
absence of manifest error, the Auditor's determination of such difference shall
be final and binding upon both Purchaser and Seller. The costs and fees of the
Auditor shall be borne equally by Seller and Purchaser.
(k) Within three Business Days after receipt by both
Purchaser and Seller of the Auditor's calculation, if the Auditor determines
that Deposits transferred to Purchaser exceed Loans transferred to Purchaser
(the "Calculated Deposit Excess"), Purchaser shall pay Seller the amount, if
any, by which the Paid Deposit Excess exceeds the Calculated Deposit Excess, or
Seller shall pay Purchaser the amount, if any, by which the Calculated Deposit
Excess exceeds the Paid Deposit Excess. If the Auditor determines that Loans
transferred to Purchaser exceed Deposits transferred to Purchaser (the
"Calculated Loan Excess") and at Closing the Chief Financial Officer's
calculations had determined there to be a Loan Excess, then the Seller Retained
Loans shall remain the property of Seller. If the Auditor determines a
Calculated Loan Excess exists and, at Closing, the Chief Financial Officer's
calculations had resulted in Seller paying to Purchaser an amount equal to a
Paid Deposit Excess, then Purchaser shall pay back to Seller the amount by which
Seller had paid to Purchaser as a Paid Deposit Excess and Purchaser shall
transfer to Seller the Seller Retained Loans (as determined by Seller). All
payments shall be made by wire transfer of immediately available funds to the
account specified by the party to whom such payment is owed.
2.05 Closing. The Closing (the "Closing") will take place at the
offices of Xxxxxxxxx Traurig, P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000,
or at such other place as Purchaser and Seller mutually agree, at 10:00 A.M.
Miami time, on the Closing Date. At the Closing Purchaser will deliver to Seller
payment as provided herein. Simultaneously, (a) Seller will (i) assign and
transfer to Purchaser good and valid title in and to the Transferred Assets
(free and clear of all Liens, other than Permitted Liens) by delivery of (A) a
General Assignment and Xxxx of Sale in form and substance reasonably acceptable
to both Purchaser and Seller (the "General Assignment"), duly executed by
Seller, and (B) such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance reasonably acceptable to
Purchaser's counsel, as shall be effective to vest in Purchaser good title to
the Transferred Assets (the General Assignment and the other instruments
referred to in clause (B) being collectively referred to herein as the
"Assignment Instruments"), (ii) pay to Purchaser via wire transfer of
immediately available funds to the account specified by Purchaser as of the
Closing Date an amount equal to the Paid Deposit Excess, and (iii) execute and
deliver to Purchaser the New Real Estate Leases (as defined in Section 7.12) and
(b) Purchaser will (i) assume from Seller the due payment, performance and
discharge of the Assumed Liabilities by delivery of (A) an Assumption Agreement
in form and substance reasonably acceptable to all parties (the "Assumption
Agreement"), duly executed by Purchaser, or certain of the other Purchasing
Companies, and (B) such other good and sufficient instruments of assumption, in
form and substance reasonably acceptable to Seller's counsel, as shall be
effective to cause Purchaser or certain of the other Purchasing Companies to
assume the Assumed Liabilities as and to the extent provided in Section 2.02(a)
(the Assumption Agreement and such other instruments referred to in clause (B)
being collectively referred to herein as the "Assumption Instruments") and (ii)
execute and deliver to Seller the New Real Estate Leases and the Doral Branch
Sublease. At the Closing, there shall also be delivered to Seller and Purchaser
the opinions, certificates and other contracts, documents and instruments
required to be delivered under Article VII and Article VIII. At the Closing,
Seller shall also provide Purchaser with an updated Loan Schedule and Deposit
Schedule reflecting the Loans, and Deposits existing as of the Closing Date.
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ARTICLE IIII.
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
Seller hereby represents and warrants to Purchaser as follows:
3.01 Organization of Seller. Seller is a banking corporation duly
organized, validly existing and in good standing under the Laws of the State of
Florida, and has all requisite corporate power and authority to conduct the
Business as and to the extent now conducted and to own, use and lease the
Transferred Assets and to carry on its business as and where such Transferred
Assets are presently located and such business is presently conducted; and
neither the character of the Seller's Transferred Assets nor the nature of the
Seller's Business requires the Seller to be duly qualified to do business as a
foreign corporation outside those identified in Schedule 3.01 attached hereto,
and the Company is qualified as a foreign corporation and in good standing in
each listed jurisdiction.
3.02 Authority. Seller has full corporate power and authority to
execute and deliver this Agreement and the Operative Agreements to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including without limitation to
sell and transfer (pursuant to this Agreement) the Transferred Assets. The
execution and delivery by Seller of this Agreement and the Operative Agreements
to which each is a party, and the performance by Seller of its obligations
hereunder and thereunder, have been duly and validly authorized by the Board of
Directors of Seller, with approval by the shareholders of Seller being the only
other corporate action on the part of Seller which is necessary. This Agreement
has been duly and validly executed and delivered by Seller and constitutes, and
upon the execution and delivery by Seller of the Operative Agreements to which
it is a party, such Operative Agreements will constitute, legal, valid and
binding obligations of Seller enforceable against Seller in accordance with
their terms, except as limited by bankruptcy, reorganization, insolvency,
moratorium or other similar Laws presently or hereafter in effect affecting the
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.03 No Conflicts. The execution and delivery by Seller of this
Agreement does not, and the execution and delivery by Seller of the Operative
Agreements to which each is a party, the performance by Seller of each of its
obligations under this Agreement and such Operative Agreements, and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the corporate charter documents or
by-laws of Seller;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in Schedule 3.04,
conflict with or result in a material violation or breach of any term or
provision of any Law or Order applicable to Seller or any of the Transferred
Assets or Assumed Liabilities; or
(c) except as disclosed in Schedule 3.03, (i) conflict
with or result in a material violation or breach of, (ii) constitute (with or
without notice or-lapse of time or both) a default under, or (iii) require
Seller or Certain Shareholders to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, any Contract or License applicable to the Transferred Business.
3.04 Governmental Approvals and Filings. Except as disclosed in
Schedule 3.04. no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of Seller is required in
connection with the execution, delivery and performance of this Agreement or any
of the Operative Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except for those requirements as
would be required solely as a result of the identity or the legal or regulatory
status of Purchaser, or any of its Affiliates.
3.05 Certain Taxes. No transaction contemplated by this Agreement
is subject to withholding under Section 1445 of the Code, and no sales Taxes,
use Taxes, real property transfer or gains Taxes or other similar Taxes will be
imposed on the transfer of the Transferred Assets or the assumption of the
Assumed Liabilities pursuant to this Agreement.
12
3.06 Legal Proceedings. Except for any Actions or Proceedings which
may result from past violations by Seller of the Bank Secrecy Act, and except as
disclosed in Schedule 3.06 (with paragraph references corresponding to those set
forth below):
(a) there are no Actions or Proceedings pending or, to
the Knowledge of Seller, threatened against, relating to or affecting Seller
which (i) could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements, or (ii) if determined adversely to Seller, could
reasonably be expected to result in any injunction or other equitable relief
that would interfere in any material respect with the Transferred Assets; and
(b) there are no actions or proceedings pending or, to
the knowledge of Seller, threatened against Seller with respect to the
Transferred Assets or Assumed Liabilities.
3.07 Real Property. Seller has good and defensible title to the
facilities located at the Main Office and the Little Havana Branch, free and
clear of all Liens, charges and encumbrances, except for Permitted Liens and
title exceptions which do not impair the use of the Main Office and the Little
Havana Branch as banking facilities. Seller has a valid and subsisting leasehold
estate in and the right to quiet enjoyment of the real property on which the
Doral Branch is located subject to the terms of the Doral Property Lease for the
full term thereof (and any renewal option related thereto). The Doral Property
Lease is a legal, valid and binding agreement of Seller, enforceable in
accordance with its terms except as limited by bankruptcy, reorganization,
insolvency, moratorium or other similar Laws presently or hereafter in effect
affecting the enforcement of creditors' rights generally, and, to the Knowledge
of Seller, there is no default (or any condition or event which, after notice or
lapse of time or both, would constitute a default) thereunder. Except as
disclosed in Schedule 3.06, other than the Doral Property Lease or the
facilities that will be subject to the New Real Estate Leases, Seller does not
own any right, title, or interest whatsoever in any real property or in any
option to acquire any real property.
3.08 Contracts.
(a) Schedule 3.08(a) contains a true and complete list of
each of the following Contracts or other arrangements relating to the
Transferred Assets to which Seller is a party or by which any of the Transferred
Assets is bound:
(i) all Contracts relating to the future
disposition or acquisition of any Transferred Assets; and
(ii) all Transferred Contracts.
(b) Except as otherwise set forth in Schedule 3.08(a), to
the Knowledge of Seller each Contract required to be disclosed in Schedule
3.08(a) is in full force and effect and constitutes a legal, valid and binding
agreement, enforceable in accordance with its terms, of each party thereto,
except to the extent that enforcement of such Contract may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles and except as disclosed in Schedule 3.08(b)
neither Seller nor, to the Knowledge of Seller, any other party to such Contract
is, or has received notice that it is, in violation or breach of or default
under any such Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Contract) in any material
respect.
(c) Except as disclosed in Schedule 3.08(c), the
execution, delivery and performance by Seller of this Agreement and the
Operative Agreements to which each is a party, and the consummation of the
transactions contemplated hereby and thereby, will not (A) result in or give to
any Person any right of termination, cancellation, acceleration or modification
in or with respect to, (B) result in or give to any Person any additional rights
or entitlement to increased, additional, accelerated or guaranteed payments
under, or (C) result in the creation or imposition of any Lien upon Seller or
any of its Assets under[,] any Transferred Contract or of any Transferred
Contract.
13
3.09 Environmental Matters.
(a) No Order has been issued, no Environmental Claim has
been filed, no penalty has been assessed and no investigation or review is
pending under any Environmental Laws with respect to the premises of Seller
located at the Main Office or the Branch Offices, and to the Knowledge of
Seller, there are no threats of any Environmental Claims.
(b) To the Knowledge of Seller, Seller has not generated,
transported or arranged for the transportation of any Hazardous Material in
connection with the Business that has been recycled, treated, stored, disposed
of or Released at any location that is or reasonably might be expected to be the
subject of any Environmental Claim.
(c) To Seller's Knowledge, there have been no
environmental investigations, audits or other analyses conducted by, for or that
are in the possession of Seller in relation to the premises of Seller located at
the Main Office or the Branch Offices.
3.10 Brokers. Except as provided for in Schedule 3.10, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by Seller and Certain Shareholders directly with Purchaser
or Purchaser's attorney, Xxxxx X. Xxxxxx, without the intervention of any Person
on behalf of Seller or Certain Shareholders in such manner as to give rise to
any valid claim by any Person against Purchaser or any of the other Purchasing
Companies for a finder's fee, brokerage commission or similar payment. Any fees
owing to Xxxxx Xxxxxx shall be the sole responsibility of Purchaser.
3.11 Assets Title. The Transferred Assets are owned free and clear
of all Liens and Liabilities, other than the Permitted Liens and the Assumed
Liabilities.
3.12 Loan Schedule. To Seller's Knowledge, except as set forth in
Schedule 3.12, all loans set forth in the Loan Schedule were, as of September
19, 2003, Performing Loans, accruing interest, in good standing and not in
payment default by thirty (30) days or more.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller and Certain
Shareholders as follows:
4.01 Organization. Purchaser is a banking corporation duly
organized, validly existing and in good standing under the Laws of the State of
Florida and has full corporate power and authority to enter into this Agreement
and the Operative Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
4.02 Authority. The execution and delivery by Purchaser of this
Agreement and the Operative Agreements to which it is a party, and the
performance by Purchaser of its obligations hereunder and thereunder, has been
duly and validly authorized by the Board of Directors of Purchaser, no other
corporate action on the part of Purchaser or its shareholders being necessary.
This Agreement has been duly and validly executed and delivered by Purchaser and
constitutes, and upon the execution and delivery by Purchaser of the Operative
Agreements to which they may be a party, such Operative Agreements will
constitute, legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their terms, except as limited by
bankruptcy, reorganization, insolvency, moratorium or other similar Laws
presently or hereafter in effect affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement does not, and the execution and delivery by Purchaser of the Operative
Agreements to which it is a party, the performance by
14
Purchaser of its respective obligations under this Agreement and such Operative
Agreements and the consummation of the transactions contemplated hereby and
thereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate of incorporation
or by-laws (or other comparable corporate charter document) of Purchaser;
(b) subject to obtaining all required and necessary
consents, approvals and actions, making the filings and giving the notices
disclosed in Schedule 4.04 hereto, conflict with or result in a violation or
breach of any term or provision of any Law or Order applicable to Purchaser or
any of its Assets; or
(c) except as disclosed in Schedule 4.03 hereto, (i)
conflict with or result in a violation or breach of, (ii) constitute (with or
without notice or lapse of time or both) a default under, (iii) require
Purchaser to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon Purchaser or any of their Assets
under, any Contract or License to which Purchaser is a party or by which any of
their Assets is bound.
4.04 Governmental Approvals and Filings. Except as disclosed in
Schedule 4.04 hereto, no consent, approval or action of, filing with or notice
to any Governmental or Regulatory Authority on the part of Purchaser is required
in connection with the execution, delivery and performance of this Agreement or
the Operative Agreements to which it is a party or the consummation of the
transactions contemplated hereby or thereby, except where the failure to obtain
such consent, approval, action, filing or notice would not adversely affect
Purchaser's ability to consummate the transactions contemplated hereby or could
reasonably be expected to have a material adverse effect on the Business, and
except for those requirements as would be required solely as a result of the
identity or the legal or regulatory status of Seller or any of its Affiliates.
4.05 Brokers. Except as provided in Schedule 4.05, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried out by Purchaser directly with Seller and Certain Shareholders without
the intervention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person against Seller or Certain Shareholders for
a finder's fee, brokerage commission or similar payment.
4.06 Financing. At Closing, Seller will have sufficient funds
available to consummate the transactions contemplated by this Agreement and to
hold regulatory capital in compliance with all terms of supervisory and
regulatory requirements to continue the Business and Purchaser's existing
banking business immediately following the Closing.
4.07 Regulatory Approval. Purchaser knows of no reason why it would
not be approved by applicable Governmental or Regulatory Authorities to
consummate the transactions contemplated hereby. Without limiting the foregoing,
there are no pending, or to the Knowledge of Purchaser, threatened disputes or
controversies between Purchaser and any Governmental or Regulatory Authority
that could be expected to prevent or materially delay Purchaser's performance of
this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE V.
COVENANTS OF SELLER
Seller hereby covenants and agrees with Purchaser that, at all times
from and after the date hereof until the Closing and, with respect to any
covenant or agreement by its terms to be performed in whole or in part after the
Closing, for the period specified herein or, if no period is specified herein,
six (6) months after the Closing Date, Seller will comply with all covenants and
provisions of this Article V, except to the extent otherwise set forth herein.
5.01 Regulatory and Other Approvals. Seller will (a) proceed
diligently and in good faith and use its best efforts, as promptly as
practicable, to obtain all consents, approvals or actions of, to make all
filings with and to give all notices to Governmental or Regulatory Authorities
or any other Person required of Seller to consummate the
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transactions contemplated hereby and by the Operative Agreements, including
without limitation those described in Schedules 3.03 and 3.04, (b) provide such
other information and communications to such Governmental or Regulatory
Authorities or other Persons as Purchaser or such Governmental or Regulatory
Authorities or other Persons may reasonably request in connection therewith and
(c) cooperate with Purchaser as promptly as practicable in obtaining all
consents, approvals or actions of, making all filings with and giving all
notices to Governmental or Regulatory Authorities or other Persons required of
Purchaser to consummate the transactions contemplated hereby and by the
Operative Agreements. Seller will provide prompt notification to Purchaser when
any such consent, approval, action, filing or notice referred to in clause (a)
above is obtained, taken, made or given, as applicable, and will advise
Purchaser of any communications (and, unless precluded by Law, provide copies of
any such communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement or any of the Operative Agreements.
5.02 Investigation by Purchaser. Seller and Certain Shareholders
will (a) provide Purchaser, and its officers, directors, employees, agents,
counsel, accountants, financial advisors, consultants and other representatives
(collectively, "Representatives") with reasonable access, upon reasonable prior
notice and during normal business hours, to the Employees and such other
officers, employees and agents of Seller who have any responsibility for the
conduct of the Business, to Seller's accountants to discuss matters pertaining
to the Transferred Assets and Assumed Liabilities, (b) provide Purchaser and/or
its Representatives with (i) all responses of counsel to auditors' requests for
information delivered in connection with the Annual Financial Statements
(together with any updates provided by such counsel) regarding Actions or
Proceedings pending or threatened against, relating to or affecting the
Transferred Assets, (ii) true and complete copies of the Doral Property Lease
(including any amendments and renewal letters or agreements), each Transferred
Contract listed in Schedule 2.01(a)(ii), together with all amendments and
supplements thereto and all waivers of any terms thereof, and each Financial
Asset Document, and (iv) within thirty (30) Business Days following the date
hereof, a list of each Loan, including the original and the then outstanding
principal amount and obligor of each, and a description of any related
collateral, and a list of each Deposit held by Seller, including the amount and
maker of each, and (c) furnish Purchaser and its Representatives with all such
information and data concerning the Transferred Assets and the Assumed
Liabilities as Purchaser or any of its Representatives reasonably may request in
connection with such investigation, including any information relating to any
pending litigation; provided, however, that nothing herein shall give Purchaser
and its Representatives access to the Seller's confidential supervisory
information as that term is defined in 12 C.F.R. Section 26 1.2(c) or to any
other information to which Seller is not permitted by applicable law to disclose
to Purchaser.
5.03 Conduct of Business. Seller will operate the Business only in
the ordinary course consistent with past practice. Without limiting the
generality of the foregoing, Seller will:
(a) use best efforts to (i) preserve intact the present
business organization and reputation of the Transferred Business, (ii) maintain
the good will of customers, suppliers, lenders and other Persons to whom Seller
provides services or with whom Seller otherwise has significant business
relationships in connection with the Transferred Business, (iii) continue all
current sales, marketing and promotional activities relating to the Transferred
Business, and (iv) causing the number of employees and operating expenses to be
reduced to a level consistent with the current size of Seller;
(b) except to the extent required by applicable Law, (i)
cause the Books and Records of the Business to be maintained in the usual,
regular and ordinary manner, and (ii) not permit any material change in any
pricing, investment, accounting, financial reporting, inventory, credit,
allowance or Tax practice or policy of Seller that would adversely affect the
Transferred Assets or the Assumed Liabilities;
(c) use its best reasonable efforts to comply, in all
material respects, with all Laws and Orders applicable to the Transferred Assets
and promptly following receipt thereof, give Purchaser copies of any notice
received from any Governmental or Regulatory Authority or other Person alleging
any violation of any such Law or Order.
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5.04 Certain Restrictions. Seller will refrain from:
(a) disposing of any Loans (other than repayment thereof
in the ordinary course of Business) or creating or incurring any Lien, other
than a Permitted Lien, on any Transferred Assets;
(b) entering into, amending, modifying, terminating
(partially or completely), granting any waiver under or giving any consent with
respect to any Transferred Contract;
(c) violating, breaching or defaulting under in any
material respect, or taking or failing to take any action that (with or without
notice or lapse of time or both) would constitute a material violation or breach
of, or default under, any term or provision of any Transferred Contract;
(d) incurring, purchasing, canceling, prepaying or
otherwise providing for a complete or partial discharge in advance of a
scheduled payment date with respect to, or waiving any right of Seller under,
any Loan of or owing to Seller in connection with the Transferred Business,
other than in the ordinary course of business consistent with past practice;
(e) engaging with any Person in any Business Combination,
unless such Person agrees in a written instrument in form and substance
reasonably satisfactory to Purchaser to adopt and comply with the terms and
conditions of this Agreement as though such Person was an original signatory
hereto;
(f) engaging in any transaction with respect to the
Transferred Business with any officer, director, Affiliate or Associate of
Seller or Certain Shareholders, or any Associate of any such officer, director
or Affiliate, either outside the ordinary course of business consistent with
past practice or other than on an arm's-length basis;
(g) entering into any Contract to do or engage in any of
the foregoing (provided, however, that the foregoing shall not prohibit Seller
from entering into a Back-Up Contract with respect to the sale of Seller's
Business) following the expiration of the Exclusivity Period (as hereinafter
defined);
(h) make any change in Seller's accounting methods,
policies or practices, unless mandated by GAAP.
5.05 Delivery of Books and Records, etc.; Removal of Property.
(a) On the Closing Date, Seller will deliver or make
available to Purchaser at the locations at which the Business is conducted all
of the Transferred Books and Records and such other Transferred Assets as are in
Seller's possession at other locations, and if at any time after the Closing
Seller or Certain Shareholders discovers in its possession or under its control
any other Transferred Books and Records or other Transferred Assets, Seller will
forthwith deliver such Transferred Books and Records or other Transferred Assets
to Purchaser.
(b) Within 90 days after the Closing Date, Seller shall
remove all Assets not being sold to Purchaser hereunder from the offices leased
to Purchaser under the New Real Estate Leases and the Doral Branch Sublease.
Such removal shall be at the sole cost and risk of Seller, including risk of
loss and damage to such Assets. Purchaser shall not be liable to Seller with
respect to such removal and transportation. Seller shall be responsible for all
repairs to the real property covered by the Doral Branch Sublease and to any
improvements thereto due to damage caused by Seller or any of its employees and
agents in connection with the removal of Seller's Assets.
5.06 Fulfillment of Conditions. Seller will execute and deliver at
the Closing each Operative Agreement that Seller is required hereby to execute
and deliver as a condition to the Closing, will take all commercially reasonable
steps necessary or desirable and proceed diligently and in good faith to satisfy
each other condition to the obligations of Purchaser contained in this Agreement
and will not take or fail to take any action that could reasonably be expected
to result in the nonfulfillment of any such condition.
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5.07 Purchaser's Obligation to Purchase Seller's Personal Property.
At Closing, Purchaser agrees to purchase and Seller agrees to sell all of the
Tangible Personal Property (excluding artwork) and Computer Equipment (including
Seller's Compliance Software Program) located at and used by Seller in the
conduct of its business at the Main Office and the Branch Offices. In the case
of items of Tangible Personal Property and Computer Equipment, Purchaser shall
pay Seller by wire transfer of immediately available funds to the account
specified by Seller an amount equal to the total book value of such items as
reflected on the Books and Records of the Seller, but in no event more than
$525,000 in the aggregate. No later than five (5) business days prior to
Closing, Purchaser shall have the right to inspect the Tangible Personal
Property and Computer Equipment to verify its existence and condition. In no
event will Purchaser be required to pay for any items which are missing or are
non-functional and the book value of any such items shall be deducted from the
amount paid by the Purchaser at Closing for the Tangible Personal Property and
Computer Equipment. Purchaser shall also have the option to assume any Personal
Property Leases of Seller (which determination by Purchaser shall be made within
15 days after the date hereof), to the extent the same are freely assignable to
Purchaser. In the case of Personal Property Leases, Purchaser and Seller shall
execute appropriate assignment and assumptions instruments whereby Seller shall
assign, and Purchaser shall assume, Seller's obligations under such Personal
Property Leases.
5.08 Escrow. Within 72 hours of the execution of this Agreement,
and as evidence of its intent to perform in good faith and to take all
reasonable efforts to consummate the transactions contemplated hereby, Purchaser
shall deposit with Escrow Agent the sum of $500,000 (the "Escrow Amount"), which
amount shall be held by the Escrow Agent in accordance with the terms hereof,
and delivered by Escrow Agent to Purchaser or released back to Seller upon the
occurrence of certain events as set forth in this Agreement.
5.09 Business Transition. Seller shall use its best efforts prior
to closing and for a period of 6 months thereafter to encourage existing
customers of the bank to maintain their deposits and loans with Purchaser.
5.10 Exclusivity Period. During the 90-day period following the
execution of this Agreement by the parties hereto ("Exclusivity Period"), Seller
agrees that it will not authorize or knowingly permit any of its
representatives, directly or indirectly, to initiate, solicit, encourage, engage
in, or participate in, negotiations with any person or entity, or any group of
persons or entities, other than Purchaser or its affiliates, concerning any
Acquisition Proposal (as hereinafter defined). Seller will promptly inform
Purchaser of any serious, bona fide inquiry it may receive with respect to any
Acquisition Proposal. Seller shall immediately cease and cause to be terminated
all existing discussions and negotiations, if any, with any parties conducted
heretofore with respect to any Acquisition Proposal. Seller further agrees that
until and including the Closing Date (unless this Agreement has been terminated
before the Closing Date in accordance with the provisions of Section 12.01(a)
hereof, other than as a result of a material breach by Seller, in which case,
until and including the date of termination of this Agreement) Seller will not
enter into a written contract which obligates Seller to consummate an
Acquisition Proposal. As used in this Agreement, "Acquisition Proposal" means
any (i) proposal pursuant to which any individual or entity, other than
Purchaser, would acquire or participate in a merger or other business
combination involving Seller, (ii) proposal by which any individual or entity,
other than Purchaser, would acquire the right to vote 50% or more of the capital
stock of Seller, or (iii) proposal for the acquisition of all or substantially
all of the loans and deposit liabilities of Seller. Nothing herein shall
restrict Seller from efforts to raise additional capital, provided the same does
not result in any individual or entity who is not presently a shareholder of
Seller from acquiring 50% or more of the capital stock of Seller.
ARTICLE VI.
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller that, at all times from and
after the date hereof until the Closing, Purchaser will comply with all
covenants and provisions of this Article VI, except to the extent Seller may
otherwise consent in writing.
6.01 Regulatory and Other Approvals. Purchaser will (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, and without
limiting the foregoing will,
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within fifteen (15) days of the execution of this Agreement, make all filings
with and give all notices to Governmental or Regulatory Authorities and give all
notices to Governmental or Regulatory Authorities or any other Person required
of Purchaser to consummate the transactions contemplated hereby and by the
Operative Agreements, including without limitation those described in Schedules
4.03 and 4.04 hereto, (b) provide such other information and communications to
such Governmental or Regulatory Authorities or other Persons as Seller or such
Governmental or Regulatory Authorities or other Persons may reasonably request
in connection therewith and (c) cooperate with Seller as promptly as practicable
in obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or other Persons
required of Seller to consummate the transactions contemplated hereby and by the
Operative Agreements. Purchaser shall promptly, and in any event within 15 days,
respond to all inquiries or requests for information made by any Governmental or
Regulatory Authorities with respect to any regulatory approval of the
transactions contemplated hereby. Purchaser shall not knowingly take any action
that could adversely affect or delay the regulatory approval of the transactions
contemplated hereby. Purchaser will take all actions reasonably requested and
necessary to demonstrate to all applicable Governmental or Regulatory
Authorities that it has adequate capital and management to consummate the
transactions contemplated hereby. Purchaser will provide prompt notification to
Seller when any such consent, approval, action, filing or notice referred to in
clause (a) above is obtained, taken, made or given, as applicable, and will
advise Seller of any communications (and, unless precluded by Law, provide
copies of any such communications that are in writing) with any Governmental or
Regulatory Authority or other Person regarding any of the transactions
contemplated by this Agreement or any of the Operative Agreements.
6.02 Fulfillment of Conditions Seller and/or Purchaser will each
execute and deliver at the Closing each Operative Agreement that Seller and/or
Purchaser are hereby required to execute and deliver as a condition to the
Closing, will take all commercially reasonable steps necessary or desirable and
proceed diligently and in good faith to satisfy each other condition to the
obligations to close contained in this Agreement and will not take or fail to
take any action that could reasonably be expected to result in the
non-fulfillment of any such condition.
ARTICLE VII.
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder are subject to the fulfillment,
at or before the Closing, of each of the following conditions (all or any of
which may be waived in whole or in part by Purchaser in its sole discretion):
7.01 Representations and Warranties. Each of the representations
and warranties made by Seller in this Agreement (other than those made as of a
specified date earlier than the Closing Date) shall be true and correct in all
material respects on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct in all material respects on and as of such earlier date.
7.02 Performance. Seller shall have performed and complied with, in
all material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by Seller or Certain Shareholders
at or before the Closing.
7.03 Officers' Certificates. Seller shall have each delivered to
Purchaser a certificate, dated the Closing Date and executed by the President or
the Chief Financial Officer of Seller, in the form of Exhibit B, and a
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Seller, in the form of Exhibit C.
7.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding or any other action in, before or by any Governmental
or Regulatory Authority which could reasonably be expected
19
to result in the issuance of any such Order or the enactment, promulgation or
deemed applicability to Purchaser or the transactions contemplated by this
Agreement or any of the Operative Agreements of any such Law.
7.05 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Purchaser and Seller to perform their obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement and the Operative Agreements shall have occurred.
7.06 Opinion of Counsel. Purchaser shall have received the opinion
of Xxxx & Xxxxxxx, P.A., outside counsel to Seller, dated as of the Closing
Date, as to matters listed on Exhibit D.
7.07 Doral Branch Sublease. The owner of the Doral Branch Property
shall have consented to the Doral Branch Sublease.
7.08 Real Property Lease Agreements. Purchaser shall have entered
into new lease agreements (the "New Real Estate Leases") with Seller for the
first, second and seventh floors of the Main Office and for the entire Little
Havana Office, both of which are owned by Seller, providing for, among other
provisions, (i) with respect to the Main Office, monthly rental payments of
$24.00 per square foot for the first floor, and $20.00 per square foot for the
second and seventh floors, (ii) with respect to the Little Havana Office, $23.00
per square foot, (iii) with respect to both the Main Office and the Little
Havana Office, the initial term shall be three (3) years and the Purchaser shall
have the option, in its discretion, to extend the term for one additional period
of three (3) years, upon the same terms as the initial term, except that the
rental during the first year of the option term shall be increased by a
percentage equal to the Cost of Living Increase since the beginning of the
initial term, and the rental for the second year of the option term shall be
increased by a percentage equal to the Cost of Living Increase for the first
year of the option term, and (iv) with respect to the Main Office and the Little
Havana Office, the lease shall be a triple net lease, but with Seller being
responsible to maintain the roof and structural components. The forms of such
lease agreements are attached hereto as Exhibit F. Parent shall have executed a
Guaranty in form and substance satisfactory to Seller of Purchaser's obligations
under the New Real Estate Leases ("Lease Guaranty").
7.09 Minimum Amount of Performing Loans and Deposits. At Closing,
the total unpaid balance of Performing Loans to be transferred to Purchaser
and/or the Purchasing Companies shall in no event be less than $20,000,000, and
the Deposit Liabilities to be assumed by Purchaser at Closing shall not be less
than $20,000,000.
ARTICLE VIII.
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject to the fulfillment, at
or before the Closing, of each of the following conditions (all or any of which
may be waived in whole or in part by Seller in each of their sole discretion):
8.01 Representations and Warranties. Each of the representations
and warranties made by Purchaser in this Agreement shall be true and correct in
all material respects on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date.
8.02 Performance. Purchaser shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by Purchaser at or before the
Closing.
8.03 Officers' Certificates. Purchaser shall have delivered to
Seller a certificate, dated the Closing Date and executed by the Chairman of the
Board or the President of Purchaser, in the form of Exhibit G, and a
certificate,
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dated the Closing Date and executed by the Secretary or any Assistant Secretary
of Purchaser, in the form of Exhibit H.
8.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law that became effective after the date of this Agreement
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
8.05 Regulatory Consents and Approvals. All consents, approvals and
actions of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit Seller and Purchaser to perform their obligations under this
Agreement and the Operative Agreements and to consummate the transactions
contemplated hereby and thereby (a) shall have been duly obtained, made or
given, (b) shall not be subject to the satisfaction of any condition that has
not been satisfied or waived and (c) shall be in full force and effect, and all
terminations or expirations of waiting periods imposed by any Governmental or
Regulatory Authority necessary for the consummation of the transactions
contemplated by this Agreement and the Operative Agreements.
8.06 Corporate Action. The shareholders of Seller shall have taken
all action necessary to approve the transactions contemplated by this Agreement,
and Seller shall have furnished Purchaser with certified copies of resolutions
adopted by such shareholders in connection with such transactions.
8.07 Deliveries. The Purchasing Companies shall have executed and
delivered to Seller the Assumption Agreement and the other Assumption
Instruments, and Parent shall have executed and delivered to Seller the Lease
Guaranty and a Guaranty of the Purchaser's obligations under the Doral Branch
Sublease.
ARTICLE IX.
ARRANGEMENTS RESPECTING EMPLOYEES OF SELLER [AND SELLER NON-SOLICIATION]
9.01 Offers of Employment.
(a) Schedule 9.01 sets forth a list of the Employees of
Seller to which Purchaser may offer employment (the "Eligible Employees"').
Seller acknowledges and agrees that Purchaser shall not be required to offer
employment to the Eligible Employees listed on Schedule 9.01. Seller shall not:
(i) interfere with Purchaser's efforts to attract the Eligible Employees, or
(ii) offer such Eligible Employees other positions with Seller prior to the
Closing Date. Seller will afford Purchaser a reasonable opportunity during the
period between the date hereof up to and including the Closing Date (the
"Transition Period") to discuss the possibility of employment at Purchaser with
the Eligible Employees; provided, however, that Purchaser shall notify Seller of
its intent to communicate with such Employee at least one (1) Business Day
before any scheduled telephonic or in-person interview of any Eligible Employee
it is recruiting.
(b) Other than the Executives, it is generally
anticipated that the Transferred Employees (as defined below) will begin
employment with Purchaser on the first Business Day immediately following the
Closing Date. The parties understand that the Transferred Employees will
continue to work with Seller until the Closing Date. Purchaser agrees not to
hire any Eligible Employees to become employees or otherwise provide services
for Purchaser or any of its affiliates prior to the Closing Date, and further
agrees not to solicit any Customers of Seller to cease doing business with
Seller prior to the Closing Date or, if this Agreement is terminated for any
reason, for a period of two (2) years after such termination. During the
Transition Period, Purchaser and Seller shall coordinate the transition of the
Transferred Employees from Seller to Purchaser, so as to allow Seller to
continue servicing its deposit and loan accounts. Any Eligible Employee who is
employed by Purchaser as a result of the transactions contemplated herein is
hereinafter referred to as a "Transferred Employee." Notwithstanding the
foregoing, Purchaser may, prior to Closing, make offers to Eligible Employees to
work for Purchaser following the Closing and conditioned upon the Closing
occurring.
9.02 Transferred Employees. Seller shall be responsible for all
amounts and benefits due to Transferred Employees and arising or accruing on or
before the Closing Date, including without limitation, any liability under or
relating to Benefit Plans, salary, wages, vacation pay, severance, business
expenses, workmen's
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compensation payment and claims, and all taxes related thereto, and Purchaser
shall not assume any liability for such payments or amounts. Purchaser shall be
responsible for all amounts and benefits due to Transferred Employees and
arising or accruing after the Closing Date, including without limitation, any
liability under or relating to Purchaser's benefit plans, salary, wages,
vacation pay, business expenses, workmen's compensation payment and claims, and
all taxes related thereto, and Seller shall not assume or have any liability for
such payments or amounts.
9.03 Third-Party Rights. No provision of this Article IX shall
create any third-party beneficiary rights in any Employee (including any
beneficiary or dependant thereof) in respect of continued employment (or resumed
employment) for any specified period of any nature or kind whatsoever, and no
provision of this Article IX shall create such third-party beneficiary rights in
any such persons in respect of any benefits that may be provided, directly or
indirectly, under any Benefit Plan. Nothing in this Article IX is intended or
shall be deemed to (a) require Purchaser to employ any Person for any fixed or
pre-determined time after the Closing Date, or (b) confer upon any Employee,
past, present, or future, any rights of employment of any nature, it being
understood and agreed that the provisions of this Article IX are intended to set
forth an agreement among Purchaser and Seller only, and are not intended to
benefit any Person not party to this Agreement, including Employees.
9.04 Nonsolicitation. For a period of one (1) year following the
Closing Date:
(a) Seller shall not use any list of customers of Seller
as a means to offer the same or similar banking products and services of the
Main Office and the Branch Offices as was provided to such customers by the Main
Office and Branch Offices immediately prior to the Closing Date to any customer
whose Loan or Deposit Liability was transferred to Purchaser at the Closing;
(b) Seller shall not solicit, encourage or induce any
Customer to transfer such Customer's business from Purchaser; and
(c) Seller shall not solicit, directly or indirectly, any
Transferred Employee to leave his or her employment with Purchaser, except as
part of a general solicitation for employment in newspaper advertisements or
other periodicals of general circulation not specifically targeted to employees
of Purchaser.
Seller shall cause the following officers, directors and key
employees to execute Non-Solicitation and Non-Disparagement Agreements for the
benefit of Purchaser, which non-solicitation shall be for a period of one (1)
year following the Closing. At Closing, Xxxxxxxx Xxxxxxx-Xxxxx' and the
directors of Seller (other than Xxxxx X. Xxxxxxxx) who were not newly elected to
Seller's Board of Directors at the Shareholders' meeting of Seller held on
September 22, 2003, shall execute an agreement to the foregoing effect in favor
of Purchaser. At Closing, the three Branch Managers and the Chief Operating
Officer of Seller shall execute an agreement to the foregoing effect in favor of
Purchaser, provided that Purchaser has offered to employ such individuals in
their present positions and for at least their current salaries and benefits for
at least one (1) year following the Closing.
ARTICLE X.
SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
10.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of Purchaser (whether or not exercised) to
investigate the Business or any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Agreement, each of Seller and Certain Shareholders, on
the one hand, and Purchaser, on the other hand, have the right to rely fully
upon the representations, warranties, covenants and agreements of the other
contained in this Agreement, but subject to the limitation contained in the
following sentence. The representations, warranties, covenants and agreements of
Seller and Purchaser contained in this Agreement and the Operative Agreements
will survive the Closing for a period of one year only. Notwithstanding anything
in this Agreement to the contrary, if a claim for breach of any representation
or warranty is not made by the injured party prior to the first anniversary of
the Closing Date, such claim shall be forever waived.
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ARTICLE XI.
INDEMNIFICATION
11.01 Indemnification of Purchaser.
(a) General. Provided the Closing has occurred, Seller
shall indemnify each Purchasing Company and its Affiliates and its and their
officers, directors, employees and agents against and hold them harmless from
any Loss, Liability, cost or expense (including reasonable fees and expenses of
counsel, interest, court costs, fees of accountants and other experts or other
expenses of litigation or other Actions or Proceedings or of any claim, default
or assessment) incurred by any such indemnified party to the extent arising from
(i) any breach in any material respect of any representation or warranty of
Seller contained in this Agreement and the Operative Agreements (any statement
contained in any certificate of Seller or of any officer thereof delivered to
Purchaser pursuant to or in connection with this Agreement or the transactions
contemplated hereby being considered a representation by Seller in the Agreement
and the Operative Agreements); (ii) any breach in any material respect of any
covenant of Seller contained in this Agreement and the Operative Agreements;
(iii) any Excluded Liability (including any Liability of Seller that becomes a
Liability of a Purchasing Company under any common law doctrine of successor
Liability, or otherwise, by operation of law); (iv) except as otherwise provided
in Section 9.02 hereof, any Benefit Plans, employee practices, programs or
arrangements (including the establishment, operation or termination thereof)
established or maintained by Seller (including any Losses, Liabilities, costs,
or expenses arising from the failure of Seller to meet its obligations under
Article IX); (v) the failure by Seller to deliver title (or, to the extent
provided for herein, leases or Licenses) to the Transferred Assets free and
clear of all Liens (except for Permitted Liens), claims, charges or
encumbrances.
(b) Exceptions: Notwithstanding anything herein to the
contrary, Seller shall not have any Liability for any Loss enumerated in Section
11.01(a):
(i) Unless and until an Indemnified Party has
suffered, incurred, sustained or become subject to Losses
referred to in such Section in excess of $100,000 in the
aggregate, in which event the Indemnified Party shall be
entitled to indemnity from Seller for the full amount of such
Losses, subject to clause (ii) below;
(ii) To the extent that such Losses are in excess
of $3,700,000 in the aggregate; or
(iii) If Seller shall not have received notice
within one year from the Closing Date as to such Loss;
provided, however, that the time limitation set forth in paragraph (iii) above
shall not apply to matters arising in respect of Section 2.04 (with respect to
delivery of title to the Transferred Assets), 3.10 or 13.02.
11.02 Indemnification by Purchaser of Seller.
(a) General. Provided the Closing has occurred, Purchaser
shall, and shall cause Parent and each of the other Purchasing Companies to,
indemnify Seller and its Affiliates and its officers, directors, employees and
agents against and hold them harmless from any Loss, Liability, cost or expense
(including reasonable fees and expenses of counsel, interest, court costs, fees
of accountants and other experts or other expenses of litigation or other
proceedings or of any claim, default or assessment) incurred by any such
indemnified party to the extent arising from (i) any breach of any
representation or warranty of Purchaser contained in this Agreement and the
Operative Agreements (any statement contained in any certificate of a Purchasing
Company or of any officer thereof delivered to Seller or Certain Shareholders
pursuant to or in connection with this Agreement or the transactions
contemplated hereby being considered a representation by Purchaser in the
Agreement and the Operative Agreements); (ii) any breach of any covenant of
Purchaser or Parent contained in this Agreement and the Operative Agreements;
and (iii) any obligations relating to the Assumed Liabilities that arise after
the Closing.
(b) Exceptions: Notwithstanding anything herein to the
contrary, neither Purchaser, nor any of the other Purchasing Companies shall
have any Liability for any Loss .enumerated in Section 11.02(a):
23
(i) Unless and until an Indemnified Party has suffered,
incurred, sustained or become subject to Losses referred to in such
Section in excess of $100,000 in the aggregate, in which event the
Indemnified Party shall be entitled to indemnity from a Purchasing
Company for the full amount of such Losses, subject to clause (ii)
below;
(ii) To the extent that such Losses are in excess of
$3,700,000 in the aggregate; or
(iii) If neither Purchaser, nor a Purchasing Company shall
have received notice within one year from the Closing Date as to such
Loss;
provided, however, that the limitations set forth in paragraph (ii) and (iii)
above shall not apply to matters arising in respect of Section 13.02.
11.03 Method of Asserting Claims.
(a) Right of Defense. Each Indemnifying Party shall be
given prompt notice of and shall have the right to defend, compromise and settle
any Actions or Proceedings in connection with any event which may result in a
Loss with respect to which such Indemnifying Party shall be liable to an
Indemnified Party hereunder; provided that the Indemnifying Party shall have
provided notice to the Indemnified Party of its exercise of such right of
defense, compromise or settlement and, in the case of settlement, the
Indemnified Party shall have consented thereto, which consent shall not be
unreasonably withheld. The Indemnifying Party shall have the right to appoint
counsel (reasonably satisfactory to the Indemnified Party) to defend, compromise
and settle any third party claim, or Action or Proceeding in connection with a
Loss with respect to which an Indemnifying Party shall be liable to an
Indemnified Party hereunder.
(b) Payment of Loss. In the event any Indemnified Party
should have a claim under Section 11.01 or 11.02 against any Indemnifying Party,
such Indemnified Party shall provide notice to the Indemnifying Party thereof,
which notice shall specify the nature of and basis for such claim, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of the Loss (the "Indemnification Notice"). Unless
within 60 days after receipt of the Indemnification Notice the Indemnifying
Party notifies the Indemnified Party that it does not concur with the
Indemnified Party's determination with respect to such Loss, such determination
shall be final. If the Indemnifying Party shall notify the Indemnified Party
within 60 days after it receives the Indemnification Notice, that it does not
concur with the Indemnified Party's determination with respect to such Loss, the
Indemnified Party and the Indemnifying Party shall have 30 days in which to
negotiate in good faith to resolve the issue or issues which form the basis of
such disagreement. If no resolution with respect to such disagreement has been
reached by the Indemnified Party and the Indemnifying Party within such 30-day
period, such disagreement shall be resolved by litigation in a court of
competent jurisdiction.
(i) Any Loss payable hereunder by an Indemnifying Party
as established in accordance with the foregoing procedure shall be
paid, upon demand, directly by such Indemnifying Party, against whom an
Indemnified Party shall have full recourse.
(ii) Any payment to be made under this Section 11.03 shall
be in an amount which, after taking into account any federal, state or
local tax payable or saved by the Indemnified Party in respect thereof
(as increased or decreased hereby), will yield an amount to the
Indemnified Party equal to the amount of net loss to which such payment
relates.
11.04 Indemnification: Third Party Claims.
(a) If any Action or Proceeding under this Article XI is
brought against an Indemnified Party and it gives written notice to the
Indemnifying Party of the commencement of such Action or Proceeding, the
Indemnifying Party shall be entitled to participate in such Action or Proceeding
and, to the extent that it wishes (unless (x) the Indemnifying Party is also a
party to such Action or Proceeding and the Indemnified Party determines in good
faith that joint representation would be inappropriate, or (y) the Indemnifying
Party fails to provide reasonable assurance to the Indemnified Party of its
financial capacity to defend such Action or Proceeding and provide
indemnification with respect to the same), to assume the defense of such Action
or Proceeding with counsel
24
consented to by the Indemnified Party, which consent shall not be unreasonably
withheld, and after written notice from the Indemnifying Party to the
Indemnified Party of its election to assume the defense of such Action or
Proceeding, the Indemnifying Party will not, as long as it diligently conducts
such defense be liable to the Indemnified Party under this Article XI for any
fees of other counsel or any other expenses with respect to the defense of such
Action or Proceeding, in each case subsequently incurred by the Indemnified
Party in connection with the defense of such Action or Proceeding, other than
reasonable costs of investigation. If the Indemnifying Party assumes the defense
of an Action or Proceeding, (i) no compromise or settlement of such claims may
be effected by the Indemnifying Party without the Indemnified Party's consent,
unless there is no finding or admission of any violation of legal requirements
or any violation of the rights of any Person and no effect on any other claims
may be made against the Indemnified Party, and the sole relief provided is
monetary damages that are paid in by the Indemnifying Party; and (ii) the
Indemnified Party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If written notice is
given by an Indemnified Party to an Indemnifying Party of the compromise of any
Action or Proceeding and the Indemnifying Party does not, within [twenty]
days after receipt of such written notice, give notice to the Indemnified Party
of its election to assume the defense of such Action or Proceeding, the
Indemnifying Party will be bound by any determination made in such Action or
Proceeding or any compromise or settlement effected by the Indemnified Party.
For purposes of this Article XI, the term "defense" shall mean the
investigation, defense, settlement, compromise or appeal of any Action or
Proceeding.
(b) Notwithstanding the foregoing, if an Indemnified
Party determines in good faith that there is a reasonable probability that an
Action or Proceeding may adversely affect it other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the Indemnified Party may, by written notice to the Indemnifying Party, assume
the exclusive right to defend, compromise, or settle such Action or Proceeding,
but the Indemnifying Party will not be bound by any determination of an Action
or Proceeding so defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
ARTICLE XII.
TERMINATION
12.01 Termination.
(a) This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(i) at any time before the Closing, by mutual written
agreement of Seller and Purchaser;
(ii) at any time before the Closing, by Seller or
Purchaser, (a) in the event of a material breach hereof by a
non-terminating party if such non-terminating party fails to cure such
breach within twenty Business Days following notification thereof by
the terminating party or (b) upon notification to the non-terminating
party by the terminating party that the satisfaction of any condition
to the terminating party's obligations under this Agreement becomes
impossible or impracticable with the use of commercially reasonable
efforts if the failure of such condition to be satisfied is not caused
by a breach hereof by the terminating party; or
(iii) at the Closing, by Purchaser, in the event that the
total unpaid balance of the Loans transferred to Purchaser pursuant to
this Agreement are in an amount that is less than $20 million.
(b) This Agreement shall terminate, and the transactions
contemplated hereby shall be abandoned on January 31, 2004, if (i) the Closing
shall not have occurred on or before such date and such failure to consummate is
not caused by a breach of this Agreement by either party, and (ii) Seller has
not consented in writing to extend the date of the Closing past such date. If
Purchaser is not in default hereunder and is ready, willing and able to close on
January 31, 2004, and is unable to do so solely as a result of the failure of
the regulatory authorities to have
25
approved this transaction by that date, and Purchaser has not consented, in
writing, to extend the date of Closing past such date, Purchaser shall have its
Deposit returned to it.
12.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 12.01(a)(i), 12.01(a)(iii) or 12.01(b), this Agreement will
forthwith become null and void, and there will be no Liability or obligation on
the part of Seller or Purchaser (or any of their respective officers, directors,
employees, agents or other representatives or Affiliates), except that the
provisions with respect to expenses in Section 13.04 and confidentiality in
Section 13.06, will continue to apply following any such termination.
Notwithstanding any other provision in this Agreement to the contrary, upon
termination of this Agreement pursuant to Section 12.01(a)(ii), Seller will
remain liable to Purchaser for any breach of this Agreement by Seller existing
at the time of such termination, and Purchaser will remain liable to Seller for
any breach of this Agreement by Purchaser existing at the time of such
termination, and Seller and Purchaser may seek such remedies, including damages
and reasonable fees of attorneys, against the other party with respect to any
such breach as are provided in this Agreement or as are otherwise available at
Law or in equity, including specific performance, but in no event shall either
party be liable to the other for an amount in excess of $500,000 (including any
forfeited deposits).
12.03 Forfeit of Deposit.
(a) Notwithstanding anything herein to the contrary, on
the Closing Date, if Purchaser refuses to close, is unable to close because it
does not have sufficient funds to consummate the transactions contemplated
hereby or has been advised, in writing, by any applicable regulatory authority
that it does not hold sufficient regulatory capital in compliance with all terms
of supervisory and regulatory requirements to continue the Business and
Purchaser's existing banking business immediately following the Closing,
breaches its representations or warranties hereunder or otherwise fails to
perform its obligations under this Agreement thereby causing this Agreement to
be terminated, Purchaser shall forfeit its Deposit to Seller as complete
liquidated damages therefor and Escrow Agent shall pay such Deposit to Seller
upon written notice therefor.
(b) Notwithstanding anything contained in this Agreement
to the contrary, if, by the Closing Date of no later than January 31, 2004,
Purchaser has not yet received regulatory approval to close the transaction
contemplated hereby due to concerns on the part of the Regulators that Purchaser
does not have sufficient capital to operate both the Business and Purchaser's
existing banking business ("Insufficient Capital Concern"), then Purchaser may
either (i) elect to terminate this Agreement and thereby Purchaser shall forfeit
its Deposit as provided in Section 12.03(a), above, or (ii) Purchaser may elect
to extend this Agreement for an additional seventy-five (75) days during which
time Purchaser shall have the opportunity to satisfy the Insufficient Capital
Concern. In the event Purchaser elects to extend the Closing Date for an
additional seventy-five (75) days, Purchaser shall give written notice to Seller
to that effect no later than January 31, 2004, and shall simultaneously with
such notice instruct the Escrow Agent to deliver to Seller the $500,000 Deposit
then being held by the Escrow Agent pursuant to this Agreement, and Purchaser
shall also deliver to the Escrow Agent the entire amount of the purchase price
to be paid to Seller hereunder, less the $500,000 Deposit ("Remainder of the
Purchase Price"). Upon receipt of such notice, the $500,000 Deposit shall be
delivered by the Escrow Agent to Seller and the Remainder of the Purchase Price
shall be placed in escrow and invested by the Escrow Agent in an
interest-bearing account. In the event that Purchaser receives regulatory
approval to close the transaction contemplated hereby prior to the expiration of
the seventy-five (75) day extension period, the Closing shall take place within
three (3) business days thereafter. At Closing, Escrow Agent shall deliver the
Remainder of the Purchase Price to Seller and the appropriate party shall make
any adjusting payment to the other to the extent that the actual amount to be
paid to Seller at Closing differs from the amount so delivered by the Escrow
Agent. In the event that the Purchaser does not receive regulatory approval to
close the transaction contemplated hereby prior to the expiration of such
seventy-five (75) day extension period, the Escrow Agent shall immediately
thereafter return the Remainder of the Purchase Price to the Purchaser, but
shall deliver all interest earned on the Remainder of the Purchase Price to
Seller. It is understood that upon delivery of the $500,000 Deposit to Seller on
January 31, 2004 (in the event Purchaser elects the extension option
contemplated hereby), the same shall be deemed fully earned by Seller and shall
not be subject to forfeit.
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ARTICLE XIII
MISCELLANEOUS
13.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
Pan American Bank
If to Purchaser 0000 Xxxxxxxx Xxxxxx
or any other Purchasing Xxxxxxxxx, Xxxxxxx 00000
Company, to: Facsimile No. 000-000-0000
Attention: Xxxxxxx Xxxxxx, President
and Chief Executive
Officer
Xxxxx X. Xxxxxx. P.A.
with a copy to: 0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Facsimile No. 000-000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Gulf Bank
If to Seller, to: 0000 Xxxxx Xxx
Xxxxx, Xxxxxxx 00000
Facsimile No. 000-000-0000
Attention: Xxxxxxxx Xxxxxxx-Xxxxx,
Chairman of the Board
of Directors
with a copy to: Xxxx & Xxxxxxx, P.A.
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
Facsimile No. 000-000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally or by reputable overnight courier to the address as provided in this
Section, be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section, be deemed
given upon receipt, and (iii) if delivered by mail in the manner described above
to the address as provided in this Section, be deemed given upon receipt (in
each case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
13.02 Further Assurances; Post-Closing Cooperation.
(a) At any time or from time to time after the Closing,
at a Purchasing Company's request and without further consideration, Seller
shall execute and deliver to such Purchasing Company such other instruments of
sale, transfer, conveyance, assignment and confirmation, provide such materials
and information and take such other actions as such Purchasing Company may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to such Purchasing Company, and to confirm such Purchasing
Company's title to, all of the Transferred Assets, and, to the full extent
permitted by Law, to put such Purchasing Company in actual possession and
operating control of the Transferred Assets and to assist such Purchasing
Company in
27
exercising all rights with respect thereto, and otherwise to cause Seller to
fulfill its obligations under this Agreement and the Operative Agreements.
(b) Following the Closing, each party will afford the
other parties and their Representatives, during normal business hours,
reasonable access to the books, records and other data relating to the
Transferred Assets in its possession with respect to periods prior to the
Closing and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party in connection
with (i) the preparation of Tax Returns, (ii) the determination or enforcement
of rights and obligations under this Agreement, (iii) compliance with the
requirements of any Governmental or Regulatory Authority, (iv) the determination
or enforcement of the rights and obligations of any Indemnified Party, or (v) in
connection with any actual or threatened Action or Proceeding. Further each
party agrees for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any such books, records and other data unless
such party shall first offer in writing to surrender such books, records and
other data to the other parties and such other parties shall not agree in
writing to take possession thereof during the ten day period after such offer is
made.
(c) If, in order properly to prepare its Tax Returns,
other documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a party be furnished with additional information, documents
or records relating to the Transferred Assets not referred to in paragraph (c)
above, and such information, documents or records are in the possession or
control of another party, such other party shall use its best efforts to furnish
or make available such information, documents or records (or copies thereof) at
the recipient's request, cost and expense. Any information obtained by any party
in accordance with this paragraph shall be held confidential by such party in
accordance with Section 13.06.
(d) Notwithstanding anything to the contrary contained in
this Section, if the parties are in an adversarial relationship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with paragraphs (c) or (d) of this Section shall be subject to applicable rules
relating to discovery.
13.03 Entire Agreement. This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof (including without limitation that
certain letter of intent by and among Parent and Seller, dated March 5, 2003,
and contain the sole and entire agreement between the parties hereto with
respect to the subject matter hereof and thereof.
13.04 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 12.02), whether
or not the transactions contemplated hereby are consummated, each party will pay
its own costs and expenses, including attorneys' fees, incurred in connection
with the negotiation, execution and closing of this Agreement and the Operative
Agreements and the transactions contemplated hereby and thereby.
13.05 Public Announcements. At all times at or before the Closing,
Seller and Purchaser will not issue or make any reports, statements or releases
to the public or generally to the employees, customers, suppliers or other
Persons to whom Seller provides services in connection with the Transferred
Business or with whom Seller otherwise has significant business relationships in
connection with the Transferred Business with respect to this Agreement or the
transactions contemplated hereby without the express written consent of the
other party, which consent shall not be unreasonably withheld. If any party is
unable to obtain the approval of its public report, statement or release from
the other party and such report, statement or release is, in the reasonable
opinion of legal counsel to such party, required by Law in order to discharge
such party's disclosure obligations, then such party may make or issue the
legally required report, statement or release and promptly furnish the other
parties with a copy thereof. Purchaser may make any press release to be issued
following the Closing announcing the consummation of the transactions
contemplated by this Agreement.
13.06 Confidentiality. Each party hereto will hold, and will use its
best efforts to cause its Affiliates, and their respective Representatives to
hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all
28
documents and information concerning the other party or any of its Affiliates
furnished to it by the other party or such other party's Representatives in
connection with this Agreement or the transactions contemplated hereby, except
to the extent that such documents or information can be shown to have been (a)
previously known by the party receiving such documents or information, (b) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party or (c) later
acquired by the receiving party from another source if such source is not under
an obligation to another party hereto to keep such documents and information
confidential; provided that following the Closing the foregoing restrictions
will not apply to Purchaser's use of documents and information concerning the
Transferred Assets or the Assumed Liabilities furnished by Seller hereunder. In
the event the transactions contemplated hereby are not consummated, upon the
request of the other party, each party hereto will, and will cause its
Affiliates and their respective Representatives to, promptly (and in no event
later than five Business Days after such request) redeliver or cause to be
redelivered all copies of documents and information furnished by the other party
in connection with this Agreement or the transactions contemplated hereby and
destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon prepared by the
party which furnished such documents and information or its Representatives. The
parties hereby confirm the validity and continuing effect of the Confidentiality
and Non-Disclosure Agreement dated January 30, 2003 between Parent and Seller
("Confidentiality Agreement") and agree that to the extent there is any conflict
between the provisions of the Confidentiality Agreement and this Section, the
provisions of the Confidentiality Agreement shall control.
13.07 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
13.08 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
13.09 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article XI.
13.10 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights, but not its
obligations, under Article XI to (i) a wholly-owned subsidiary, provided that
any such subsidiary agrees in writing to be bound by all of the terms,
conditions and provisions contained herein, or (ii) any post-closing purchaser
of the Transferred Business or a substantial part of the Transferred Assets, but
no such assignment shall relieve Purchaser or Parent of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
13.11 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
13.12 Consent to Jurisdiction and Service of Process. Each party
hereby irrevocably submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of Florida sitting in Miami-Dade
County or any court of the State of Florida sitting in Miami-Dade County, in any
such action, suit or proceeding arising out of or relating to this Agreement or
any of the Operative Agreements or any of the transactions contemplated hereby
or thereby, and agrees that any such action, suit or proceeding shall be brought
only in such court, provided, however, that such consent to jurisdiction is
solely for the purpose referred to in this Section and shall not be deemed to be
a general submission to the jurisdiction of said courts or in the State of
Florida other than for such purpose. Each party hereby irrevocably waives, to
the fullest extent permitted by Law, any objection that it
29
may now or hereafter have to the laying of the venue of any such action, suit or
proceeding brought in such a court and any claim that any such action, suit or
proceeding brought in such a court has been brought in an inconvenient forum.
13.13 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance here from and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
13.14 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Florida applicable to a
contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
13.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. Facsimile transmission of
an executed original shall be deemed to be effective delivery of such original.
13.16 Construction. Purchaser, Holdings and Seller have participated
jointly in the negotiation and drafting of this Agreement. In the event that an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by Purchaser, Holdings and Seller and no
presumption or burden of proof shall arise favoring or disfavoring either
Purchaser, Holdings or Seller by virtue of the authorship of any of the
provisions of this Agreement. Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; (v) the
phrases "ordinary course of business" and "ordinary course of business
consistent with past practice" refer to the business and practice of Seller and
Holdings in connection with the Business; and (vi) the symbol "$" shall refer to
U.S. dollars. Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified. All accounting
terms used herein and not expressly defined herein shall have the meanings given
to them under GAAP.
13.17 Break-Up Fee. In the event that (i) Purchaser is prepared to
close the transactions contemplated hereby (notwithstanding any failure of a
condition precedent to Purchaser's obligation to close to have been satisfied)
and Seller nonetheless refuses to close this transaction, or (ii) this
transaction fails to close as a result of a material breach by Seller of its
obligations or representations and warranties under this Agreement (other than a
breach of Section 9.03 hereof), and within twenty-four (24) months after the
Closing should have occurred, the Seller closes a transaction involving an
Acquisition Proposal, then immediately upon such closing, Seller shall pay to
Purchaser the sum of $500,000, less any amounts previously paid by Seller to
Purchaser pursuant to Section 12.02 hereof.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party as of the date first above written.
[PURCHASER:]
PANAMERICAN BANK
BY: /s/ XXXXXXX XXXXXX
-----------------------------------------
NAME: XXXXXXX XXXXXX
TITLE: VICE CHAIRMAN
AND BY: /s/ HUGE XXXXXX
-----------------------------------------
HUGE XXXXXX, PRESIDENT
[SELLER:]
GULF BANK
BY: /s/ XXXXXXXX XXXXXXX-XXXXX
-----------------------------------------
NAME: XXXXXXXX XXXXXXX-XXXXX
TITLE: CHAIRMAN OF THE BOARD
AND BY: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Name: XXXXX X. XXXXXXXX
TITLE: CHIEF EXECUTIVE OFFICER AND PRESIDENT
GUARANTY OF PARENT
The undersigned, Pan American Bancorp, a Delaware corporation,
hereby irrevocably and unconditionally guarantees the payment and performance by
its subsidiary, Pan American Bank, of its obligations under the foregoing Asset
Purchase Agreement dated as of October 9, 2003 ("Asset Purchase Agreement"),
between Pan American Bank and Gulf Bank. This guaranty shall remain in full
force and effect regardless of any amendments or modifications to the Asset
Purchase Agreement or any waiver or accommodations granted by either party to
the other thereunder.
PAN AMERICAN BANCORP
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
31
EXHIBIT "A"
ESCROW PROVISIONS
The terms defined in the Asset Purchase
Agreement dated October 9, 2003 ("Agreement"),
between Pan American Bank ("Purchaser") and Gulf
Bank ("Seller") to which these Escrow Provisions
are attached are used herein as so defined.
a. All funds delivered to Escrow Agent shall be invested in an
interest-bearing account under the tax identification number
of Purchaser which is 00-0000000.
b. Escrow Agent shall disburse the Escrowed Funds as provided in
the Agreement. If any disagreement or dispute shall arise
between or among the Parties and/or any other persons
resulting in adverse claims and demands being made for the
Escrowed Funds, whether or not litigation has been instituted,
then, in any such event, at the Escrow Agent's option, (i) the
Escrow Agent may refuse to comply with any claims or demands
on it and continue to hold the Escrowed Funds until the Escrow
Agent receives written notice signed by the Parties and any
other person who may have asserted a claim to or made a demand
for the Escrowed Funds directing the disbursement of the
Escrowed Funds, in which case the Escrow Agent shall not be or
become liable in any way or to any persons for its refusal to
comply with any claims or demands; or (ii) if the Escrow Agent
shall receive a written notice advising that a litigation over
entitlement to the Escrowed Funds has commenced, the Escrow
Agent may deposit the Escrowed Funds together with interest
earned thereon, if any, with the Clerk of the Court in which
said litigation is pending, the costs thereof to be borne
equally by the Parties, and thereupon the Escrow Agent shall
be released of and from all liability hereunder; or (iii) the
Escrow Agent may, at its option, terminate its duties as
Escrow Agent, by depositing the Escrowed Funds with interest
earned thereon, if any, in a court of competent jurisdiction
in Miami-Dade County, Florida and the commencement of any
action of interpleader, the costs thereof to be borne equally
by the parties, and thereupon the Escrow Agent shall be
released of and from any, liability hereunder.
c. The escrow provided for by this Agreement is being made for
the accommodation of the Parties and for no other purpose. The
Escrow Agent shall not be liable to any the Parties in
connection with its performance as the Escrow Agent, except
for its gross negligence or willful misconduct, and upon
delivery of the Escrowed Funds together with interest earned
thereon, if any, as provided in this Agreement, the Escrow
Agent shall be relieved of all liability with respect to the
Escrowed Funds.
32
d. Notwithstanding the Escrow Agent's responsibilities hereunder,
the Escrow Agent shall be entitled to represent Seller in
connection with or related to the Agreement and the
transactions contemplated hereby, including, without
limitation, any litigation arising in connection with the
Agreement.
e. The Parties, jointly and severally, shall indemnify and hold
Escrow Agent free and harmless from and against any and all
claims, losses, fines, penalties, settlements, damages,
liabilities and expenses, including reasonable costs of
investigations, attorneys' fees (including Escrow Agent's
normal legal charges should it act as its own counsel) and
disbursements which may be imposed upon or incurred by Escrow
Agent in connecting with its acting as such hereunder or in
any litigation or dispute arising hereunder or involving the
Escrowed Funds, unless the same results from Escrow Agent's
gross negligence or willful misconduct hereunder. This
indemnification shall survive the termination of Escrow
Agent's responsibilities hereunder and the termination of the
Agreement.
f. The Escrow Agent is hereby granted a lien upon the Escrowed
Funds to secure the payment to it of any amounts which may be
owed to it in connection with its acting as an Escrow Agent
hereunder, including, without limitation, any fees owed to it
and indemnification payments or reimbursements of costs for
interpleading the Escrowed Funds which may be owing to Escrow
Agent, and Escrow Agent may apply the Escrowed Funds against
any amounts which may be so owing to Escrow Agent hereunder.
g. The Escrow Agent may rely on signatures, documents or
certificates that appear on their face to be genuine without
the Escrow Agent having a duty to inquire further with respect
to same.
33
SCHEDULES
TO
ASSET PURCHASE AGREEMENT
DATED
OCTOBER 9, 2003
BY AND BETWEEN
GULF BANK,
A FLORIDA BANKING ORGANIZATION
AND
PAN AMERICAN BANK, HOLLYWOOD, FLORIDA
SCHEDULE 1.01 - COMPUTER
COMPUTER HARDWARE AND SOFTWARE
See attached lists.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 1.01 - PERSONAL PROPERTY
TANGIBLE PERSONAL PROPERTY
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 2.01(a)(i)
LOANS
A list of all loans made by Gulf Bank as existing on September 24,
2003, is attached hereto. This list contains both Performing Loans and
Nonperforming Loans.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 2.01 (a)(ii)
TRANSFERRED CONTRACTS
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 2.01(b)(ix)
INTANGIBLE PERSONAL PROPERTY
None.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 2.01(b)(xii)
PERSONAL PROPERTY LEASES
Personal property leases are included within Schedule 2.01(a)(ii).
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 2.01(b)(xix)
OTHER EXCLUDED ASSETS
All personal property of Xxxxxxxx Xxxxxxx-Xxxxx located at any of the
Branches, including but not limited to artwork and certificates of appreciation
or recognition.
SCHEDULE 2.02(a)(iii)
DEPOSIT LIABILITIES
A list of deposit liabilities are attached hereto, broken down into the
following categories and reflected as of the following dates:
1. Demand Deposits (as of 9/24/03)
2. Savings Deposits (as of 9/24/03)
3. CD and Time Deposits (as of 9/24/03)
4. XXX Deposits (as of 9/25/03)
5. Pledged Deposits (as of 8/29/03)
Note that the XXX Deposits are also included within the list of CD and
Time Deposits.
Gulf Bank has also borrowed the amount of $3,000,000 from the Federal
Home Loan Bank, which obligation is collateralized by certain securities, a list
of which are attached to this Schedule 2.02(a)(iii).
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 3.03
SELLER ADVERSE CONSEQUENCES
None.
SCHEDULE 3.04
SELLER'S GOVERNMENTAL CONSENTS
Gulf Bank must file with the Florida Department of Banking and Finance
a plan of purchase and assumption pursuant to Section 655.414 of the Florida
Statutes. See Rule 3C-105 Part VI of the Florida Administrative Code concerning
the approval right of the Florida Department of Banking and Finance.
SCHEDULE 3.06
LEGAL PROCEEDINGS
1. JAL Consultants, Inc. v. Gulf Bank. Attached is the Complaint
and Demand for Jury Trial. Counsel for Gulf Bank has submitted to the court an
Order for dismissal. Awaiting Judge's execution of Order. Gulf Bank has also
submitted a motion for attorneys' fees.
2. The Board of Governors of the Federal Reserve System issued to
Gulf Bank, on November 28, 2001, a Cease and Desist Order. The Cease and Desist
Order is attached hereto. There have been numerous written communications
between Gulf Bank and the applicable administrative agencies involved arising
out of or in connection with the Cease and Desist Order. These documents shall
be made available to Pan American Bank for review upon its request.
3. There may be civil, criminal or administrative actions, suits
or proceedings against or affecting Gulf Bank as a result of certain alleged
violations by Gulf Bank of the Bank Secrecy Act.
TO: Xxxx Xxxxxxxx COMPANY: Xxxx & "copy not readable"
FAX: 000-000-0000 PHONE:
FROM: Xxxxxxx X. Xxxxxx DATE: July 25, 2003
REF #: 0255-013899.0035 # OF PAGES: 15
[ ] Urgent [ ] For Review
[ ] Please Reply [ ] Please Comment
Comments:
Attached is a copy of the Complaint JAL Consultants filed against Gulf Bank.
"copy not readable"
ALL THE PAGES WHICH CONSTITUTE THIS FACSIMILE TRANSMISSION CONTAIN INFORMATION
WHICH IS CONFIDENTIAL AND COVERED BY ATTORNEY-CLIENT PRIVILEGE. THE INFORMATION
IS "copy not readable" SOLELY FOR THE USE OF THE PERSON TO WHOM IT IS ADDRESSED
OR DIRECTED. IF THE READER OF THIS NOTICE IS NOT LISTED ABOVE, OR IF THE READER
IS NOT AN EMPLOYEE OF AGENT RESPONSIBLE FOR DELIVERING THE FACSIMILE
TRANSMISSION TO THE ADDRESSEE, "copy not readable" YOU ARE HEREBY NOTIFIED THAT
ANY DISSEMINATION, DISTRIBUTION OR REPRODUCTION OF ANY OR ALL OF THESE PAGES IS
STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS FACSIMILE TRANSMISSION IN ERROR
PLEASE NOTIFY AS IMMEDIATELY BY TELEPHONE COLLECT AT "copy not readable" AND
RETURN THE ORIGINAL FACSIMILE TRANSMISSION TO US AT "copy not readable" & XXXX,
P.A., 0000 X. XXXXXXXX XXXXX, XXXXX 0000, XXXXX XXXXXXX 00000 VIA THE U.S.
POSTAL SERVICE. WE WILL REIMBURSE YOU FOR THE POSTAGE. THANK YOU.
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
CASE NO.: 01-5483 CA 21
JAL CONSULTANTS, INC., a Florida
Corporation,
Plaintiff,
vs.
NATIONAL PAWN HOLDINGS A,
INC.. d/b/a CASH SOLUTION
STORE H, a Florida corporation
GULF BANK, a Florida corporation
LABRADA PAINTER, INC.., a Florida
Corporation and XXXXXX XXXXXXX,
a Florida resident, jointly, individually
and severally.
Defendant(s).
_________________________________/
COMPLAINT AND DEMAND FOR JURY TRIAL
Plaintiff, JAL. Consultants, Inc. sues Defendants, National Pawn
Holdings A., Inc. d/b/a Cash Solution Store H. Xxxxxx Xxxxxxx. Labrada Painter,
Inc. and Gulf Bank and alleges:
PARTIES AND VENUE
1. This is an action by the Plaintiff for negligence and the
wrongful conversion of a negotiable instrument.
2. This action seeks damages in excess of $15,000.00 exclusive of
interest, costs and attorney's fees.
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX, XXXXX 0000, XXXXX, XX 00000
1
3. Plaintiff, JAL Consultants, Inc. is a Florida corporation with
its principal place of business in Miami-Dade County, Florida. At all relevant
times, Xxxx X. Xxxx, Xx., served as an officer of JAL Consultants, Inc. and is
a resident of Miami County, Florida.
4. Defendant, Gulf Bank, is a corporation organized and existing
under the laws of Florida with its principal place of business in Miami-Dade
County, Florida.
5. Defendant, National Pawn Holdings A., Inc., is a Florida
corporation with its principle place of business in Miami-Dade County, Florida.
At all relevant times, Defendant, National Pawn Holdings A., Inc. was doing
business as Cash Solution Store H, a check cashing store.
6. Labrada Painter, Inc. is a Florida corporation with its
principal place of business in Miami-Dade County, Florida.
7. Co-defendant, Xxxxxx Xxxxxxx, is an officer of Labrada
Painter, Inc., and is a resident of Miami-Dade County, Florida.
8. All conditions precedent to the filing of this action have
occurred, been satisfied, or excused.
9. Venue is proper in this forum as all the causes of action
accrued in this county.
BACKGROUND
10. On or about July 9, 1999, Plaintiff, JAL Consultants, Inc.,
entered into an agreement with Ocean Point Associations, Inc. whereby the
Plaintiff and [COPY NOT READABLE], Labrada Painter, Inc., agreed to perform all
the work and supply all the labor for the concrete restoration of the balconies
at the Ocean Point Condominiums.
11. On or about July 13, 0000, Xxxxx Xxxxx Associations, Inc.
issued a negotiable instrument [hereinafter "the subject check" or "a check"] in
the amount of $21,680.00 to "JAL
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
2
Consultants/Contractor" as an advance for the construction work to be performed.
(A copy of Check No. 1018 is attached hereto as Exhibit "A").
12. JAL Consultants, Inc. [hereinafter "JAL Consultants"] received
the check from Ocean Point Condominiums.
13. JAL Consultants, by and through Xxxx X. Xxxx, Xx., its
President, specially indorsed the check by both signing it, and by writing above
the signature, words identifying the person to whom the instrument is made
payable: "JAL Consultants." (See copy of the indorsement attached hereto as
Exhibit "B").
14. Upon information and belief, Xxxxxx Xxxxxxx, the president of
Labrada Painters, Inc. took subsequent possession of the check and remitted it
to National Pawn Holdings A, Inc. for payment.
15. Xxxxxx Xxxxxxx is neither an employee or agent of JAL
Consultants, nor was Xx. Xxxxxxx ever authorized by the Plaintiff to cash the
check.
16. National Pawn Holdings A. Inc. tendered payment to Xxxxxx
Xxxxxxx, even though the payee listed on the check was "JAL Consultant/
Contractor" and the check was specially endorsed by Xxxx X. Xxxx, as president
of JAL Consultants. No other indorsement is evident on the check.
17. Upon information and belief, the check cashiers at National
Pawn Holdings A, Inc. failed to obtain proper identification from Xxxxxx
Xxxxxxx.
18. The check also carried a "signature guarantee" stamp
purportedly issued by Citibank.
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
3
19. At all relevant times, neither Xxxx X. Xxxx, Xx. or JAL
Consultants ever had an account with Citibank and neither Losa nor any
other representative of JAL Consultants appeared before Citibank to indorse this
check.
20. Upon information and belief, National Pawn Holding A, Inc.
deposited the check in their account at Gulf Bank.
21. Subsequent thereto, Gulf Bank drew the funds from The SkyLake
State Bank even though the "signature guarantee" stamp was purportedly issued by
Citibank, an entity other than the money transmitter, National Pawn Holdings A,
Inc.
22. Upon discovering the events described heretofore, Plaintiff,
JAL Consultants, by and through Xxxx A, Xxxx, Jr., informed Ocean Point
Associations, Inc., Gulf Bank, National Pawn Holdings A, Inc., and The SkyLake
State Bank that the proceeds for the check were not tendered to the rightful
payee, J.A.L. Consultants.
23. Plaintiff made written demand for payment to Defendant
National Pawn Holding A., Inc. which has failed to adequately respond.
24. As a result, the Plaintiff was forced to retain the
undersigned and has agreed to pay Broad and Xxxxxx their reasonable attorney's
fees and costs.
COUNT 1
CONVERSION UNDER FLA. STAT. 673.4201
AGAINST XXXXXX XXXXXXX AND XXXXXXX XXXXXXX. INC.
25. The Plaintiff re-alleges and re-avers Paragraphs 1 though 24
as is fully set forth herein and further states:
26. Xxxxxx Xxxxxxx converted the subject check in that he took
possession of the specially endorsed check, other than through a negotiation,
from the person entitled to enforce the instrument: Xxxx X. Xxxx. Jr.
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
4
27. Xxxxxx Xxxxxxx was neither authorized nor entitled to enforce
the instrument or receive payment.
28. Upon information and belief, Xxxxxx Xxxxxxx fraudulently
tendered the check to National Pawn Holdings A. Inc. for payment.
29. Xxxxxx Xxxxxxx and/or Labrada Painters, Inc. received the
proceeds from the check, a $21, 680.00 payment, from National Pawn Holdings A,
Inc.
30. At no point in time have any proceeds from the check been
tendered to the rightful payee, JAL Consultants.
31. As a result of Xxxxxx Xxxxxxx'x actions, the Plaintiff has
been damaged.
WHEREFORE, Plaintiff, JAL Consultants, Inc., hereby requests this
honorable Court to enter judgment against Defendants Xxxxxx Xxxxxxx and Labrada
Painter, Inc. and award the Plaintiff the value of the converted check plus
interest, attorney's fees and costs associated with this action and for such
other relief as this Court deems just and proper under the circumstances.
COUNT II
COMMON LAW CONVERSION
AGAINST XXXXXX XXXXXXX AND XXXXXXX XXXXXXX, INC.
32. The Plaintiff re-alleges and re-avers Paragraphs 1 though 24
as is fully set forth herein and further states:
33. Xxxxxx Xxxxxxx committed the wrongful act of appropriating the
specially endorsed check with the intent to permanently deprive the payee, JAL
Consultants, of the proceeds of the check.
34. Neither Xxxxxx Xxxxxxx nor Labrada Painter, Inc. was
authorized or entitled to enforce the instrument or receive payment.
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
5
35. Nevertheless, Xxxxxx Xxxxxxx fraudulently tendered the check
to National Pawn Holdings A, Inc. for payment.
36. Xxxxxx Xxxxxxx and/or Labrada Painters, Inc. received the
proceeds from the check, a $21, 680.00 payment, from National Pawn Holdings A,
Inc.
37. At no point in time have any proceeds from the check been
tendered to the rightful payee, JAL Consultants.
38. Xxxxxx Xxxxxxx and/or Xxxxxx Xxxxxxx for or on behalf of
Labrada Painter, Inc., permanently deprived JAL Consultants of the proceeds of
the check.
39. As a result of Xxxxxx Xxxxxxx'x actions, the Plaintiff has
been damaged.
WHEREFORE, Plaintiff, JAL Consultants, Inc., hereby request this
honorable Court to enter judgment against Defendants Xxxxxx Xxxxxxx and Labrada
Painter, Inc. and award the Plaintiffs the value of the converted check
$21,680.00 plus interest, attorney's fees and costs associated with this action
and for such other relief as this Court deems just and proper under the
circumstances.
COUNT III
NEGLIGENCE
AGAINST NATIONAL, PAWN HOLDINGS A, INC.
40. The Plaintiff re-alleges and re-avers Paragraphs 1 though 24
as is fully set forth herein and further states:
41. On or about July 20, 1999, after wrongfully taking possession
of the check from its payee. Xxxxxx Xxxxxxx presented the subject check to
National Pawn Holdings A, Inc., for payment.
42. National Pawn Holdings A, Inc. had a duty to exercise
reasonable and ordinary care in the performance of its service, including the
duty to verify that the instrument is indorsed
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
6
and the duty to obtain some form of identification from the person presenting
the check to be cashed.
43. National Pawn Holdings A, Inc. failed to obtain
identification from Xxxxxx Xxxxxxx before it remitted payment on the check
and/or National Pawn Holdings A, Inc. remitted payment on the check without due
care as to the genuineness of the endorsement or the identity of the person
presenting the check for payment.
44. National Pawn Holdings A, Inc. failed to act in a commercially
reasonable manner and failed to exercise ordinary care in taking the instrument
from and/or paying the instrument to Xxxxxx Xxxxxxx, someone other than the
listed payee and/or the identified person in the special indorsement.
45. National Pawn Holdings A, Inc. failed to act in a commercially
reasonable manner and failed to exercise ordinary care by tendering payment to
Xxxxxx Xxxxxxx, notwithstanding the fact that the instrument lacked any
indorsement by JAL Consultants to Xx. Xxxxxxx.
46. National Pawn Holdings A, Inc.'s failure to act in a
commercially reasonable manner and/or failure to exercise ordinary care
substantially contributed to the Plaintiff's loss.
47. JAL Consultants was damaged by National Pawn Holdings A,
Inc.'s failure to perform its duties in a commercially reasonable manner.
48. As a result of National Pawn Holdings A. Inc.'s actions and/or
omissions, the Plaintiff has been damaged.
WHEREFORE, Plaintiff, JAL Consultants, Inc., hereby requests this
honorable Court to enter judgment against the Defendant, National Pawn Holdings
A, Inc. and award the Plaintiff
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
7
the value of the check, $21, 680,00, plus interest, attorney's fees and costs
associated with this action and for such other relief as this Court deems just
and proper under the circumstances.
COUNT IV
CONVERSION UNDER FLA. STAT. 673,4201
AGAINST NATIONAL PAWN HOLDINGS A. INC.
49. The Plaintiff re-alleges and re-avers Paragraphs 1 though 24
as is fully set forth herein and further states:
50. National Pawn Holdings At, Inc. converted the subject check in
chat caused a transfer, other than through negotiation, from a person not
entitled to enforce the instrument and/or made payment with respect to the
instrument for a person not entitled to enforce the instrument or receive
payment.
51. National Pawn Holdings A., Inc. took the check from and made
payment on the check to Xxxxxx Xxxxxxx, who is neither an employee nor an agent
of the payee, JAL Consultants.
52. National Pawn Holdings A., Inc. remitted payment on the
subject check to a person other than the payee, JAL Consultants, the only entity
entitled to enforce the instrument or receive payment.
53. As a result of National Pawn Holding A., Inc. 's actions
and/or omissions, the Plaintiff has been damaged:
"WHEREFORE, Plaintiff, JAL Consultants, Inc., hereby requests this
honorable Court to enter judgement against the Defendent National Pawn Holdings
A, Inc. and award the plaintiff the value of the converted check 321,680.00 plus
interest, attorney's fees and costs associated with this action and for such
other relief as this Court deems just and proper under the circumstances.
BROAD AND XXXXXX, 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
8
COUNT V
NEGLIGENCE
AGAINST GULF BANK
54. The Plaintiff re-alleges and re-avers the statements contained
in Paragraphs 1 through 24 as if set forth fully herein and further allege:
55. At all relevant times, Defendant National Pawn Holdings A,
Inc. held a bank account with Gulf Bank.
56. On or about July 13, 1999, Gulf Bank accepted the subject
check with full notice that the signature was guaranteed by an entity other
than National Pawn Holdings A, Inc., the money transmitter
57. Gulf Bank owed a duty to the Plaintiffs, the payees of the
Check, to provide them them with the amount paid for the check.
58. Gulf Bank failed to act in a commercially reasonable manner
and/or failed to exercise ordinary care in accepting the negotiable instrument
and remitting it to the drawee bank, The SkyLake State Bank, for payment.
59. Gulf Bank accepted the check without due care as to the
genuineness of the "signature guarantee" stamp following the endorsement, the
endorsement itself or the identity of the person who presented the check for
payment to National Pawn Holdings, A, Inc.
60. Gulf Bank's failure to exercise ordinary care and, in a way
which was not commercially reasonable substantially contributed to the
plaintiff's loss.
61. As a result of Gulf Bank's actions and/or omissions, the
Plaintiff has been damaged.
WHEREFORE. Plaintiff. JAL consultants, Inc., hereby requests this
honorable court to enter judgment against the Defendent, Gulf Bank and award the
Plaintiff the value of the check,
BROAD AND XXXXXX, 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
9
$21, 680.00, plus interest attorney's fees and costs associated with this
action and for such Other relief as this Court deems just and proper under the
circumstances.
JURY DEMAND
62. Plaintiff demands a trial by jury of all issues so enable.
Date: March, 5, 2001
Respectfully submitted,
BROAD AND XXXXXX.
Attorneys for Plaintiff
Suite 3000, Miami Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Phone (000) 000-0000
Fax(305) 000-0000
-s- Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, P.A
Florida Bar No. 817805
Xxxxxx X. Xxxxxxx, Esq.
Florida Bar No.
Xxxx Xxxxxx. Esq.
Florida Bar No. 0117552
BROAD AND XXXXXX 000 XXXXX XXXXXXXX XXXX. XXXXX 0000 XXXXX, XX 00000
10
EXHIBIT A
OCEAN POINT ASSOC., INC.,
SPECIAL ASSESSMENT
"copy not readable"
EXHIBIT B
"copy not readable"
XXXXXX & XXXX
A PROFESSIONAL ASSOCIATION
0000 XXXXX XXXXXXXX XXXXX, XXXXX 0000
XXXXX, XXXXXXX 00000
TELEPHONE (3O5) "copy not readable"
XXX.XXXXXX.XXX
GREGOR, X. XXXXXX FACSIMILE
DIRECT LINE (000) 000-0000 (000) 000-0000
July 17, 2003
HAND DELIVERY
Xxxx Xxxxxx, Esquire
AV Professional Association
0000 X. Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Re: JAL Consultants, Inc. Y. Gulf Bank
Case Number 01-5483 CA 21
Dear Xx. Xxxxxx:
I am enclosing a copy of the proposed Order of Dismissal with
Prejudice. Unless you advise me of any objection as to the text of this proposed
Order by 2:00 p.m. tomorrow, Friday, July 18, 2003, I intend to submit the
Order to Judge Gerstein for entry.
Very truly yours,
-s- Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
GAM:dgb
enc.
IN THE CIRCUIT COURT OF THE 11TH
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
CASE NO.:01-5483 CA 21
JAL CONSULTANTS, INC., a Florida
Corporation,
Plaintiff,
vs.
NATIONAL PAWN HOLDINGS A,
INC., d/b/a CASH SOLUTION
STORE H, a Florida corporation
GULF BANK, a Florida corporation
LABRADA PAINTER, INC., a Florida
Corporation and XXXXXX XXXXXXX,
a Florida resident, jointly, individually
and severally.
Defendant(s),
_________________________/
ORDER
OF DISMISSAL WITH PREJUDICE
THIS CAUSE having come before the Court on July 17, 2003 on Defendent
Gulf Bank's Motion for Status Conference, the Court having considered the Motion
for Status Conference, having previously heard argument on Gulf Bank's Motion
to Strike Pleadings; Motion for Order of Dismissal and Motion for Sanctions, and
the Court being otherwise duly advised in the premises, it is
ORDERED as follows:
1. This action is hereby dismissed with prejudice as to Defendant
Gulf Bank.
2. Should Defendant Gulf Bank seek to recover costs or attorneys'
fees, it may file an appropriate motion.
CASE NO.: 01-5483 CA 21
DONE AND ORDERED in Xxxxxxxx at Miami-Dade, Florida this_________ of
July, 2003.
______________________________________
CIRCUIT COURT JUDGE
Copies furnished to:
Xxxxxxx X. Xxxxxx, Esquire
Xxxx Xxxxxx, Esquire
[FEDERAL RESERVE SYSTEM LOGO]
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
XXXXXXXXXX, X.X. 00000
DIVISION OF BANKING
SUPERVISION AND REGULATION
November 30, 2001
Xx. Xxxxxxxx Xxxxxxx-Xxxxx
President and C.E.O
Gulf Bank
0000 Xxxxx Xxx
Xxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxxx-Xxxxx:
This is to advise you that the Board of Governors of the Federal
Reserve System issued the enclosed Cease and Desist Order against the Gulf Bank,
Miami, Florida on November 23, 2001.
The effective date of the Order is November 23, 2001
Sincerely,
-s- Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Special Counsel
Enclosure
cc: Xx. Xxxxxx X.Xxxxxx
Assistant Vice President
Federal Reserve Bank of Atlanta
C.Xxxx Xxxxx
Director, Division of Banking
Florida Department of Banking and Finance
UNITED STATES OF AMERICA
BEFORE THE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
FLORIDA DEPARTMENT OF BANKING AND FINANCE
In the Matter of ) Docket No. 01-016-B-SM
)
GULF BANK ) Order to Cease and Desist
Miami, Florida ) Issued Upon Consent
)
WHEREAS, in recognition of the common goal of the Board of Governors of
the Federal Reserve System (the "Board of Governors"), the Florida Department
of Banking and Finance (the "Department"), and the Gulf Bank, Miami, Florida,
(the "Bank"), a state chartered bank that is a member of the Federal Reserve
System, to restore and maintain the financial soundness of the Bank, and to
ensure the Bank's compliance with all applicable federal and state laws, rules,
and regulations, the Bank has consented to the issuance of this Cease and Desist
Order (the "Order").
WHEREAS, as the result of the identification of deficiencies in its
operations, the Bank is taking steps to enhance and improve its policies and
procedures for compliance with all applicable laws and regulations, including
the Currency and Foreign Transactions Reporting Act (31 X.X.X 0000 et sea.)
and the regulations issued thereunder by the U.S. Department of the Treasury (31
C.F.R. 103.11 et sea.) (collectively referred to as the Bank Secrecy Act (the
"ESA"),) Section 655.50. Fla. Stat. (2001) and the applicable provisions of
Regulation H of the Board of Governors, 12 C.F.R. 208-52 and 208.53.
WHEREAS, on Nov. 7, 2001, the board of directors of the Bank adopted a
resolution authorizing and directing Xxxxxxxx Xxxxxxx-Xxxxx to enter into this
Order on behalf of the Bank and consenting to compliance by the board of
directors of the Bank and the Bank's institution-affiliated parties, as defined
in section 3(u) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1813
(u)) and Section 655.005(h) and (i), Fla. Stat. (2001), to comply with each and
every provision of this Order; and waiving any and all rights that the Bank may
have pursuant to 12 U.S.C. 1818 and Sections 120.68 and 655.003(2), Fla. Stat.
(2001): to the issuance of a notice of charges and of hearing on any matter set
forth in this Order; to a hearing for the purpose of taking evidence on any
matters set forth in this Order; to judicial review of this Order; and to
challenge or contest, in any manner, the basis, issuance, validity, terms,
effectiveness or enforceability of this Order or any provision hereof.
NOW, THEREFORE, before the taking of any testimony or adjudication of,
or finding on any issue of fact or law herein, and without this Order
constituting an admission of any allegation made or implied by the Board of
Governors or the Department, and solely for the purpose of settlement of this
proceeding without protracted hearing or testimony and pursuant to the
aforementioned regulations:
IT IS HEREBY ORDERED that the Bank and its institution-affiliated
parties cease and desist and take affirmative action as follows:
2
MANAGEMENT
1. (a) Within 90 days of this Order, the board of directors
shall conduct a review of the functions and performance of the Bank's management
and shall forward to the Federal Reserve Bank of Atlanta (the "Reserve Bank")
and the Department a written report that includes findings conclusions, and a
description of specific actions that the board of directors proposes to take to
strengthen the Bank's management. The primary purpose of the review shall be to
assure the development of a management structure that is adequately staffed by
qualified and trained personnel suitable to the Bank's needs. The review shall,
at a minimum, address, consider, and include:
(i) an evaluation of each officer to determine
whether the individual possesses the ability, experience, and other
qualification required to perform competently present and anticipated duties,
including the ability to adhere to the Bank's established policies and
procedures, restore and maintain the Bank to safe and sound condition and comply
with the requirements of this Order;
(ii) a plan to recruit, hire, or appoint
additional or replacement personnel with the requisite ability, experience, and
other qualifications required to perform competently their assigned duties; and
(iii) the use of independent contractors in the
performance of Bank operations, and appropriate contracts and documentation for
such personnel.
(b) Within 180 days of this Order, and semi-annually
thereafter, the board of directors shall review management's adherence to the
Bank's established policies and procedures and shall prepare written findings
and conclusions of this review. Along with written descriptions of any
management or operational changes that are to be made as a result of the
3
review. These written findings shall be included in the minutes of the
directors' meetings.
2. Within 90 days of this Order, the Bank shall submit to the
Reserve Bank and the Department a written plan providing for orderly management
succession, particularly in all areas relating to compliance. The plan shall, at
a minimum, identify the individual(s) at the Bank who are considered to have the
potential for advancement or promotion, the area(s) in which such individual(s)
may assume new duties or responsibilities or the position(s) to which they may
be promoted, and the training to be provided the individual(s) to assure
adequate successor management.
3. During the term of this Order, or as otherwise required by
law, the Bank shall comply with the provisions of section 32 of the FDI Act (12
U.S.C. 18311); Subpart H of Regulation Y of the Board of Governors (12 C.F.R.
Part 225, Subpart H); and Section 655.0385, Fla. Stat. (2001) with respect to
the appointment of any new directors or the hiring or promotion of any senior
executive officers as defined in Regulation O of the Board of Governors (12
C.F.R. Part 215) and Sections 655.005(f) and 655.948 Fla. Stat. (2001).
CAPITAL AND DIVIDENDS
4. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department an acceptable written plan to maintain
sufficient capital at the Bank. The plan shall, at a minimum address, consider
and include:
4
(a) The Bank's current and future capital requirements,
including compliance with the Capital Adequacy Guidelines of the Board of
Governors (12 C.F.R. Part 208, App. A and B);
(b) any planned asset growth;
(c) the volume of adversely classified assets and the
potential for additional asset quality problems at the Bank;
(d) the anticipated level of retained earnings of the
Bank, with particular attention to maintaining adequate loan loss reserves and
to the overhead costs associated with improving the Bank's BSA program as
required by the provisions of this Order;
(e) the level and trend of both on- and off-balance sheet
risks, including but not limited to the levels of operational, legal, and
reputational risks; and
(f) the source and timing of additional funds to fulfill
the future capital and allowance for loan and lease loss needs of the Bank.
5. The Bank shall not declare or pay any dividends without the
prior written approval of the Reserve Bank, the Department, and the Director of
the Division of Banking Supervision and Regulation of the Board of Governors.
Requests for approval shall be received by the Reserve Bank and the Department
at least 30 days prior to the proposed dividend declaration date and shall
contain, but not be limited to, current and projected information on earnings,
cash flow, capital levels, and asset quality of the Bank.
5
LOAN ACTIVITIES
6. Within 30 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written policies and procedures for
review of the Bank's loan portfolio. The loan review procedures shall be
designed to identify and categorize problem credits and to assess the overall
quality of the Bank's loan portfolio and shall, at a minimum, address, consider,
and include:
(a) monitoring and reporting of past due loans; and
(b) periodic reporting to the board of directors of the
status of the loan reviews and the action(s) taken by management to improve the
Bank's position on each loan adversely graded and/or on the watch list.
7. Within 60 days of this Order, the Bank shall take all steps
necessary to correct the documentation and credit information deficiencies in
the Bank's loan files listed in the report of examination of the bank dated June
7, 2001 (the "Report of Examination").
8. The Bank confirms that it has already eliminated from its
books, by charge-off or collection, all assets or portions of assets classified
"loss" in the Report of Examination that have not been previously collected in
full or charged off. The Bank shall, within 30 days from the receipt of any
federal or state report of examination charge off all assets classified "loss"
unless otherwise approved in writing by the Reserve Bank.
6
9. Within 45 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written policies and procedures to
monitor and control concentrations of credit. The policies and procedures shall,
at a minimum, address, consider, and include:
(a) methods used to identify assets or groups of assets
or contingent claims with common risks elements that, in the aggregate,
represent 25 percent or more of the Bank's tier 1 capital;
(b) the establishment by the board of directors of
acceptable limits on concentrations of credit;
(c) monitoring procedures to control concentrations of
credit; and
(d) written monthly reporting of concentration levels to
the board of directors, copies of which shall be retained for subsequent
supervisory review.
ASSET/LIABILITY MANAGEMENT
10. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written asset/liability management
policies designed to improve the management of the Bank's liquidity and
sensitivity to market risk.
(a) The polices regarding liquidity shall at a minimum,
address, consider, and include the following (i) appropriate standards for
volume, mix and maturity of the Bank's loans, investments, core deposits,
volatile deposits, off-balance sheet commitments and alternative funding
sources, (ii) meaningful liquidity targets and parameters, (iii) appropriate
oversight and review by management and the board of directors and by an
appropriate contingency funding plan.
7
(b) The policies regarding sensitivity to market risk
shall, at a minimum, address, consider, and include the following: (i)
identification of individuals responsible for measuring, monitoring, and
controlling interest rate sensitivity; (ii) appropriate oversight and review by
management and the board of directors; (iii) maintenance of documentation to
support the validity and accuracy of assumptions used in measuring interest rate
risk; (iv) parameters for controlling interest rate risk based on capital
levels, earnings performance, and the risk tolerance of the Bank; and (v) action
plans to reduce potential interest rate risk in the event that rate sensitivity
results fall outside fall outside approved limits.
(c) The Bank's Asset/Liability Committee (the "ALCO")
shall review, on a monthly basis all asset/liability management decisions made
by the Bank's management, paying particular attention to whether each decision
was made in accordance with approved policies. All exceptions to the policies
shall be documented by the ALCO as to the reason for the exceptions and the
continuance of the exceptions, taking into account the Bank's overall goals and
strategies. The ALCO shall maintain full and complete minutes of its actions and
shall provide monthly written reports to the board of directors to enable the
board to make informed decisions regarding the Bank's management of the market
risk and liquidity.
STRATEGIC PLAN AND BUDGET
11. (a) Within 60 days of this Order, the Bank shall submit
to the Reserve Bank and the Department a written strategic plan and a budget for
the Bank's proposed business activities for 2002. The plan shall, at a minimum,
provide "copy not readable" describe:
(i) Management, lending and operational
objectives given the condition of the Bank as reflected in the Report of
Examination.
8
(ii) an earnings improvement plan;
(iii) the operating assumptions that form the
bases for major projected income and expense components, and the sources and
uses of new funds;
(iv) financial performance objectives, including
plans for asset growth, earnings, liquidity, and capital, supported by detailed
quarterly and annual pro forma financial statements, including projected
budgets, balance sheets and income statements; and
(v) the establishment of a monthly review
process to monitor the actual income and expenses of the Bank in comparison to
budgetary projections.
(b) A strategic plan and a budget for each calendar year
subsequent to 2002 shall be submitted to the Reserve Bank and the Department at
least one month prior to the beginning of that calendar year. The board of
directors shall each month review actual performance for that month in
comparison to each month's budgetary projections and document analysis of
significant variances.
INTERNAL CONTROLS
12. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written procedures designed to
strengthen the Bank's internal controls and maintain the accuracy of the Bank's
books and records. The procedures shall at a minimum, address, consider, and
include:
(a) management information systems that ensure that
appropriate management personnel receive timely and accurate reports
necessary to effectively manage business risks and current weaknesses and
deficiencies
(b) appropriation segregation of duties
9
(c) guidelines and procedures for review and approval of
all transactions between the Bank and its affiliates;
(d) extending, approving, monitoring, and reporting,
overdrafts and overdraft lines of credit;
(e) procedures for verifying the legal authority of third
party representatives of account holder to direct account activity;
(f) reconciliations of general and subsidiary ledger
accounts, and timely resolutions of open items; and
(g) corrective steps that address internal controls
deficiencies noted in the Report of Examination.
13. The Bank shall ensure that all Consolidated Reports of
Condition and Income are submitted or published by the Bank in a timely manner,
that each Report accurately reflects that Bank's condition on the date for which
it is submitted or published and that all records indicating how Reports are
prepared are maintained for subsequent supervisor/review.
14. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written policies and procedures
designed to strengthen the electronic funds transfer function. The policies and
procedures shall at a minimum, address, consider, and include:
(a) procedures for segregation of duties for processing,
sending, reconciling and reviewing wire transfers.
10
(b) security procedures, including but not limited to,
timely call backs to authenticate telephoned, faxed or written funds transfer
requests;
(c) a secure environment for electronic funds transfer
codes and equipment, including access restrictions; and
(d) the establishment, maintenance, and monitoring of a
wire transfer log of all funds transfer through the Bank.
15. The Bank shall maintain adequate records of the business
interests of Bank affiliates (as defined in section 23A of the Federal Reserve
Act) and Bank insiders and related interests (as defined in Regulation O of the
Board of Governors).
Audit
16. (a) Within 60 days of this Order, the Bank shall review
its present internal audit program to ensure that it is consistent with
generally accepted auditing standards including, but not limited to, the scope
and frequency of audits, follow-up procedures, and periodic scheduled reports to
the board of directors.
(b) Within 90 days of this Order, the Bank shall submit
to the Reserve Bank and the Department an acceptable written internal audit
program designed to ensure that internal audits are conducted to verify
implementation and compliance with policies, procedures, and controls
established in connection with this Order.
(c) The Bank shall ensure that the Bank's external
auditors have all information and records necessary to complete the Bank's
external audit for the prior year and issue financial statements.
11
17. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department an acceptable written investment policy that
shall, at a minimum, address, consider, and include:
(a) minimum documentation requirements for investments,
including the review and analysis or prospectuses, pricing sources and credit
ratings prior to and on a regular basis after the purchase of the investment;
(b) maintenance of records on the investment portfolio to
ensure that reconciliations to source documents are completed at least monthly;
and
(c) The establishment of reporting, review, and approval
procedures to and by the board of directors.
Bank Secrecy Act, Regulation H and OFAC Compliance
18. The Bank and its institution,affiliated parties shall not
directly or indirectly, violate the BSA or any rules or regulations issued
pursuant thereto, or the Florida Control of Money Laundering in Financial
Institutions Act (Section 655.50, Fla. Star (2001)), and shall correct all BSA
violations cited at previous examinations.
19. To assist the Bank to correct any existing violations of the
BSA, the rules and regulations issued thereunder, Regulation H of the Board of
Governors and the regulations of the U.S. Department of the Treasury's office of
Foreign Asset Control "CFAC" (31 C.F.R. 500 ET.SEQ. and to develop policies and
procedures designed to ensure future compliance with all applicable laws and
regulations:
12
(a) Within 30 days of this Order the Bank shall engage
the services of a qualified independent firm (the "Consultant"), acceptable to
the Reserve Bank and the Department, to conduct a comprehensive review of the
Bank's anti-money laundering compliance and to make recommendations, as
appropriate, for new policies and procedures to be implemented by the Bank. The
comprehensive review shall include, at a minimum:
(i) a review of the Bank's policies and
procedures for compliance with the BSA, Regulation H of the Board of Governors,
OFAC rules and regulations, and subpoenas and administrative summonses;
(ii) a forensic review of account records from
October 1, 1998, to the present to determine whether any suspicious activity
involving accounts or transactions [copy not readable] by, or through the Bank
was properly identified and reported by the Bank in accordance with applicable
regulations;
(iii) a forensic review of account records from
October 1, 1998, to the present to evaluate compliance with the currency
transaction reporting requirements of the BSA;
(iv) a forensic review of the accuracy and
completeness of the Bank's responses to subpoenas and administrative summonses
received since October 1, 1998, and
(v) a forensic review of internal controls and
regulatory compliances since October 1, 1998 by all areas of the Bank's
operations "copy not readable".
(b) Within 10 days of the "copy not readable"
13
for approval an engagement letter that delineates the scope of the review and
the proposed resources to be dedicated to the review. The engagement letter
shall specify that the review will be completed within a reasonable time period,
which should not exceed 60 days. In addition, the engagement letter shall
acknowledge that the Consultant shall have access to all documents and records
necessary to conduct the review and that all information including, but not
limited to, work papers, programs and procedures related to the review shall be
provided to the Reserve Bank and the Department by the Consultant upon request.
(c) Upon completion of the review, a copy of the
Consultant's report detailing the findings, conclusions, and recommendations
from the review shall be provided to the Reserve Bank and the Department.
(d) Upon completion of the review, the Bank shall ensure
that all transactions previously required to be reported have been reported in
accordance with applicable regulations and guidelines.
20. Within 45 days of the completion of the Consultant's report
required by paragraph 19 hereof, the Bank shall submit to the reserve Bank and
the Department an acceptable written plan designed to ensure compliance with all
provisions of the BSA and applicable Florida law, including, but not limited to:
(a) recordkeeping and reporting requirements for currency
transactions of over $10,000 C31 C.F.R. 103.22 and Section 655.50(4) Fla. Stat.
(2001);
(b) identification requirements related to the
recordkeeping and recording requirements for currency transactions
(c) currency transaction report exemption procedures
14
(31 C.F.R. 103.22 and Section 655.50(4), Fla. Stat. (2001)); and
(d) requirements for maintenance of a monetary instrument
log (31 C.F.R 29 and Section 655.50(4), Fla. Stat. (2001)).
21. Within 45 days of the completion of the Consultant's report
required by paragraph 19 hereof, the Bank shall submit to the Reserve Bank and
the Department an acceptable enhanced customer due diligence program. The
program shall be designed to reasonably ensures the identification and timely,
accurate and complete reporting of known or suspected criminal activity against
or involving the Bank to law enforcement and supervisory authorities as required
by the suspicious activity reporting previous of Regulation H of the Board of
Governors (12 C.F.R. 208.62). The enhanced customer due diligence program shall
include:
(a) A risk focused assessment of the customer base of the
Bank to:
(i) identify the categories of customers whose
transactions do not require monitoring because of the routine and usual nature
of their banking activities; and
(ii) determine the appropriate level of enhanced
due diligence necessary for those categories of customers that the Bank has
reason to believe pose a heightened risk of illicit activities at or through the
Bank.
(b) For those customers whose transactions require
enhanced due diligence, procedures to:
(i) determine the appropriate documentation
necessary to confirm the identity and business activities of the customer
15
(ii) understand the normal and expected
transactions of the customer; and
(iii) report suspicious activities in compliance
with existing reporting requirements set forth in Regulation H of the Board of
Governors (12 C.F.R. 208.62).
(c) Procedures to identify accounts that are involved in
suspected significant illegal activity and, where appropriate, procedures for
closing such accounts consistent with applicable law.
22. Within 45 days of the completion of the Consultant's report
required by paragraph 19 hereof, the Bank shall submit to the Reserve Bank and
the Department an acceptable internal BSA compliance program as required by
Regulations H of the Board of Governors (12 C.F.R. 208.63). The program shall,
at a minimum:
(a) establish a system of internal controls to ensure
compliance with the BSA and the rules and regulations issued thereunder,
including policies and procedures to detect and monitor transactions to ensure
that they are nor being conducted for illegitimate purposes and that there is
full compliance with all applicable laws and regulations;
(b) provide and independent testing of compliance with
the BSA and the rules and regulations issued thereunder and ensure that
compliance audits are performed frequently, are fully documented, and are
conducted with the appropriate segregation of duties.
(c) ensure that the Bank's BSA compliance program is
managed by a qualified officer who shall have responsibility for all BSA
compliance and related matters including without limitation by the
identification and timely and complete reporting to any law enforcement and
supervisory authorities or unusual or suspicious activity or known or
16
suspected criminal activity perpetrated against or involving the Bank; and (ii)
monitoring the Bank's compliance and ensuring that full and complete corrective
action is taken with respect to all previously identified violations and
deficiencies; and
(d) provide appropriate training to all affected
personnel, conducted by competent staff, which includes all relevant BSA and
related requirements with a specific concentration on accurate recordkeeping,
form completion and the detection and reporting of known or suspected criminal
activity, and to ensure that the training is reviewed on a regular basis to
ensure that all personnel have the most current and up to date information.
23. Within 45 days of the completion of the Consultant's report
required by paragraph 19 hereof, the Bank shall submit to the Reserve Bank and
the Department an acceptable written plan designed to ensure compliance with
OFAC regulations, as well as any rules and guidelines issued or administered by
OFAC. The plan shall include, at a minimum, procedures to ensure that customer
transactions are processed in accordance with OFAC requirements and in
accordance with a regularly updated list of entities and individuals whose
transactions or assets are required to be blocked, frozen or monitored.
Consumer Protection
24. Within 60 days of this Order, the Bank shall submit to the
Reserve Bank and the Department acceptable written procedures to ensure
compliance with the record retention and adverse action requirements of
Regulation B of the Board of Governors 12 C.F.R. 202.9 and 202.12. The
procedures shall address, consider and include a system for retaining all
related application information for the required time period, provisions for the
periodic internal
17
review of such notifications and disclosures; and adequate documentation of
results of internal reviews and retention of documentation for subsequent
supervisory review.
Effect and Terms of Order
25. The written plans, programs, policies, and procedures and the
engagement letter required by paragraphs 4, 6, 9, 10, 12, 14, l6(b), 17, 19(b),
20, 21, 22, 23, and 24 hereof shall be submitted to the Reserve Bank and the
Department for. review and approval. Acceptable plans, programs, policies, and
procedures and an acceptable engagement letter shall be submitted within the
time periods set forth in this Order. The Bank shall adopt the approved plans,
programs, policies, and procedures and the approved engagement letter within 10
days of approval by the Reserve Bank and the Department and then shall fully
comply with them. During the term of this Order, the approved plans, programs,
policies, and procedures and the engagement letter shall not be amended or
rescinded without the prior written approval of the Reserve Bank and the
Department.
26. Within 30 days after the end of each calendar quarter
(December 31, March [copy not readable], June 30, and September 30) following
the date of issuance of this Order, the Bank shall furnish a writer progress
report detailing the form and manner of all actions taken to secure compliance
with this Order, and the results thereof, as well as management's responses to
the audit reports on BSA prepared by internal or external auditors during the
quarter, to the Reserve Bank and the Department.
18
27. All communications regarding this Order shall be sent
to:
Xxxxxxxx Xxxxxxx-Xxxxx
President and C.E.O.
Gulf Bank
0000 Xxxxx Xxx
Xxxxx, Xxxxxxx 00000
Xxxxxx X. Xxxxxx
Assistant Vice President
Federal Reserve Bank of Atlanta
0000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx 00000-0000
O. Xxxx Xxxxx
Director, Divisions of Banking
Department of Banking and Finance
000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx 00000-0000
28. The provisions of this Order shall be binding on the
Bank and each of its institution-affiliated parties in their capacities as such,
and their successors and assigns.
29. Each provision of this Order shall remain effective
and enforceable until stayed, modified, terminated, or suspended by the Board of
Governors and the Department.
30. Notwithstanding any provision of this Order, the
Reserve Bank and the Department may, in their discretion, grant written
extensions of time to the Bank to comply with any provision of this Order.
19
31. The provisions of this Order shall no bar, estop or
otherwise prevent the Board of Governors, the Department or any other federal or
state agency or department from taking any other action affecting the Bank or
any of its current or former institution-affiliated parties.
BY ORDER of the Board of Governors of the Federal Reserve
System and the Florida Department of Financial Institution, effective this 28th
day of November, 2001.
GULF BANK BOARD OF GOVERNORS OF THE
Miami, Florida FEDERAL RESERVE SYSTEM
By: -s- Xxxxxxxx Xxxxxxx-Xxxxx By: -s- Xxxxxxxx X. Xxxxxxx
-------------------------- -----------------------
Xxxxxxxx Xxxxxxx-Xxxxx Xxxxxxxx X. Xxxxxxx
President and C.E.O. Secretary of the Board
FLORIDA DEPARTMENT OF
BANKING AND FINANCE
By: -s- Xxxxxx X. Xxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxx
Comptroller
20
SCHEDULE 3.08(a)
CONTRACTS
See Schedule 2.0l(a)(ii).
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 3.08(b)
NOTICE OF CONTRACT DEFAULTS
None.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 3.08(c)
CONTRACT RIGHTS TRIGGERED BY TRANSACTION
Both Lily Baldor and Xxxxx Xxxxxxx have xxxxxxxxx arrangements under
certain circumstances with Gulf Bank pursuant to a Board of Directors
Resolution. Each will receive a payment of $50,000.00 upon the sale of Gulf
Bank, irrespective of whether each such person's services will be retained by
the acquiror.
SCHEDULE 3.10
OTHER BROKERS
Gulf Bank has agreed to pay a brokerage fee to Dimension Capital
Services LLC in the amount of 1.25% of the aggregate fee payable by Purchaser to
Seller for Performing Loans assigned to Purchaser and for Deposit Liabilities
assumed by Purchaser.
SCHEDULE 3.12
NONPERFORMING LOANS
Attached is a list of past due loans which includes Nonperforming Loans
(those 30 days or more in default of payment).
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 4.03
PURCHASER ADVERSE CONSEQUENCES
None.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 4.04
PURCHASER GOVERNMENTAL CONSENTS
Seller will obtain all necessary regulatory approvals including, but
not limited, to those from the Federal Reserve, Federal Deposit Insurance
Corporation and State of Florida Department of Banking.
SCHEDULE 4.05
BROKERS
None.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
SCHEDULE 9.01
ELIGIBLE EMPLOYEES
See attached list.
CONFIDENTIAL - NOT FOR DISCLOSURE TO PUBLIC
