LITIGATION TRUSTEE AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of August 18, 2000
is by and among Washington Mutual, Inc., a Washington corporation ("WM" as the
surviving parent corporation in the merger contemplated by the Merger Agreement
(as defined herein), the "Company")), the Bank United Litigation Contingent
Payment Right Trust (the "Litigation Trust"), the Bank United Litigation Payment
Trust (the "Payment Trust" and together with the Litigation Trust, the "Trusts")
and Xxxxxxxx X. Xxxxxxx (the "Litigation Trustee").
WHEREAS, Bank United Corp., a Delaware Corporation ("BNKU"),
Bank United, a Federal savings bank and an indirect wholly owned subsidiary of
BNKU (the "Bank"), and Hyperion Partners L.P. are currently collectively
plaintiffs in an action titled BANK UNITED V. UNITED STATES OF AMERICA, No.
95-473C (Ct. Cl. July 25, 1995) (together with any appeal thereof or other
proceeding related thereto, the "Litigation"); and
WHEREAS, in connection with the execution of the Agreement and
Plan of Merger, dated as of August 18, 2000, by and between WM and BNKU (the
"Merger Agreement"), the declarations of trust for the Trusts (the
"Declarations"), the Commitment Agreement to be entered into by and among BNKU
and the Trusts (the "Commitment Agreement") (capitalized terms used but not
otherwise defined in this Agreement shall have the meanings ascribed to them in
the Merger Agreement, the Declarations or the Commitment Agreement, as
applicable), the Litigation Trustee has agreed to manage the Litigation, in
accordance with the terms of the Declarations and this Agreement; and
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EFFECTIVE DATE. If the "Effective Time" as defined in
the Merger Agreement occurs, then the "Effective Date" shall mean the date of
the "Effective Time."
2. MANAGEMENT PERIOD. The Company and the Trusts hereby
agree to engage the Litigation Trustee, and the Litigation Trustee hereby agrees
to serve the Company and the Trusts, subject to the terms and conditions of this
Agreement and in accordance with the Declarations, for the period commencing on
the Effective Date and ending upon the final resolution of the Litigation (the
"Management Period").
3. TERMS OF ENGAGEMENT.
(a)
(i) During the Management Period, the Litigation
Trustee shall provide the services as set forth in this Agreement and the
Declarations and shall report directly to the BNKU Litigation Committee (as
defined below). During the Management Period, the Litigation Trustee and the
BNKU Litigation Committee shall have complete discretion to manage the
Litigation to the extent not inconsistent with the Declarations. During the
Management Period, the Litigation Trustee's services shall be performed in
Houston, Texas.
(ii) During the Management Period, the Litigation
Trustee agrees to devote such attention and time as is reasonably necessary to
manage the Litigation and to use his reasonable best efforts to perform
faithfully and efficiently his responsibilities as a litigation trustee. Subject
to the foregoing, nothing contained herein or in the Declaration shall prohibit
the Litigation Trustee from engaging in other employment or consulting services
or activities or from managing his personal investments.
(iii) Following the date hereof and prior to the Effective
Date, the Litigation Trustee and the Board of Directors of BNKU (the "BNKU
Board"), in their sole discretion, may establish a committee comprised of
present or former members of the BNKU Board, or such other persons as may be
appointed by the BNKU Board, to assist and advise the Litigation Trustee in
connection with the Litigation (the "BNKU Litigation Committee"). The Company
shall indemnify all members of the BNKU Litigation Committee on the same terms
as the Litigation Trustee is indemnified under Section 3(c)(v) of this
Agreement.
(b) EMPLOYMENT AGREEMENT PAYMENTS. On the Effective Date,
the Company shall make a lump sum cash payment to the Litigation Trustee equal
to the payments to which the Litigation Trustee is entitled to receive pursuant
to Section 6(a) of the Employment Agreement between BNKU and the Litigation
Trustee dated as of August 1, 1996, as amended (the "Employment Agreement") upon
a termination by the Company other than for "Cause" (as defined in the
Employment Agreement), including, without limitation, the amount provided in the
Employment Agreement for outplacement services, as well as the payments provided
by Section 9 of the Employment Agreement. In addition, the Litigation Trustee's
rights under Section 6(a)(ii) of the Employment Agreement shall vest and become
exercisable immediately upon the Effective Date. Commencing upon the expiration
of the Management Period, or if earlier the termination of the Litigation
Trustee's services hereunder for any reason, the Company shall provide or cause
to be provided to the Litigation Trustee the welfare benefits provided under
Section 6(a)(iii) of the Employment Agreement for the period of time set forth
in Section 6(a)(iii) of the Employment Agreement (the "Welfare Benefits").
(c) FEES FOR SERVICES.
(i) MANAGEMENT FEES. In respect of the
three-year period during the Management Period that commences on the Effective
Date and ends on the third anniversary thereof, the Company shall pay the
Litigation Trustee a fee in the aggregate amount of $1.5 million (the "Aggregate
Fee"), payable in cash in advance in 12 equal quarterly installments commencing
on the Effective Date, provided that, the unpaid portion of the Aggregate Fee
shall accelerate and be immediately paid in lump sum upon the final resolution
of the Litigation.
(ii) RESTRICTED CPR CERTIFICATES. On the
Effective Date, the Litigation Trust shall issue the Litigation Trustee the
number of CPR Certificates equal to 0.75% of the total outstanding CPR
Certificates issued in connection with the Merger Agreement, without giving
effect to the CPR Certificates issued to any other litigation trustee in
connection with his or her services as a litigation trustee (the "Restricted CPR
Certificates"). The Restricted CPR Certificates shall be non-transferable and
subject to restrictions during the Management Period, provided that, upon the
Litigation Trustee's termination of service as a litigation trustee (A) due to
his death or permanent and total disability, (B) by the Litigation Trustee due
to a material breach
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by the Company or the Trusts of a material provision of this Agreement or the
Declaration or (C) by the Company or the Trusts other than due to the Litigation
Trustee's substantial failure to perform his duties as a litigation trustee, the
Restricted CPR Certificates shall become immediately transferable and free of
restrictions. In the event that the services of the Litigation Trustee shall
terminate during the Management Period for reasons other than those described in
clauses (A), (B) and (C) of the immediately preceding sentence, the Restricted
CPR Certificates shall be forfeited by the Litigation Trustee effective
immediately upon such termination.
(iii) BENEFITS. During the Management Period,
except as otherwise expressly provided herein, the Company shall cause to be
provided to the Litigation Trustee the Welfare Benefits. During the Management
Period, the Litigation Trustee shall be entitled to receive fringe benefits,
including those set forth in Section 4(b)(vi) of the Employment Agreement, on
the same basis and the same terms and conditions as such benefits were provided
to the Litigation Trustee immediately prior to the Effective Date. During the
Management Period, at the request of the Litigation Trustee, the Company shall
provide the Litigation Trustee with access to an office and secretarial and
administrative assistance at the Company's offices in Houston, Texas.
(iv) EXPENSES. During the Management Period, the
Litigation Trustee shall be entitled to receive prompt reimbursement from the
Company for all reasonable expenses incurred by the Litigation Trustee in
performance of his services in connection with the Litigation on the same basis
as the Litigation Trustee was entitled to expense reimbursement from BNKU prior
to the Effective Date, including reimbursement for first class air travel.
(v) INDEMNIFICATION. The Company agrees to
indemnify and to advance expenses, without requirement of bond or other
security, to the Litigation Trustee against any and all losses, liabilities,
damages, judgments, demands, suits, claims, assessments, charges, fines,
penalties, costs and expenses, including reasonable attorney's fees and expenses
and other costs and expenses associated with defense of a claim or incurred in
obtaining indemnification hereunder, whether or not in a formal proceeding,
arising out of or relating to (A) with respect to claims brought by holders of
CPR Certificates in their capacity as holders of CPR Certificates, any matter
whatsoever and (B) with respect to claims brought by any other party, any matter
relating to either of the Trusts, the CPR Certificates, the CPR Certificate
distribution, the Litigation and any actions taken by the Litigation Trustee
(including actions taken by the Litigation Trustee in his capacity as an officer
or director of BNKU or the Company so long as such actions relate to either of
the Trusts, including, without limitation, the negotiation of the terms of the
Trusts and the CPR Certificates and the approval of the establishment of the
Trusts and the CPR Certificate distribution and related transactions, but
otherwise excluding actions taken by the Litigation Trustee in such capacities).
(d) COOPERATION. During the Management Period, the
Company and the Trusts shall fully cooperate with the Litigation Trustee to
assist him in a successful resolution of the Litigation, and the Company shall
provide the Litigation Trustee with access to the Company resources, records and
personnel as may be requested by the Litigation Trustee from time to time, and
in any event, on a basis no less favorable than that provided for in Section
6.03 of the Declaration.
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4. SUCCESSORS.
(a) This Agreement is personal to the Litigation Trustee
and without the prior written consent of the Company and the Trusts shall not be
assignable by the Litigation Trustee otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Litigation Trustee's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns, whether by merger or
otherwise.
5. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
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IN WITNESS WHEREOF, the Litigation Trustee has hereunto set
the Litigation Trustee's hand, and, pursuant to the authorization from its Board
of Directors, the Company has caused these presents to be executed in its name
on its behalf, and each of the Trusts has caused these presents to be executed
in its name on its behalf, all as of the day and year first above written.
/s/ Xxxxxxxx X. Xxxxxxx
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XXXXXXXX X. XXXXXXX
WASHINGTON MUTUAL, INC.
By:/s/ Xxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxx
Title: Senior Vice President
BANK UNITED LITIGATION CONTINGENT
PAYMENT RIGHT TRUST
By:
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Name:
Title:
BANK UNITED LITIGATION PAYMENT
TRUST
By:
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Name:
Title:
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