EXHIBIT 10.12
AFFILIATE AGREEMENT
This agreement is entered into as of _____________________, 2002, by and between
Nara Bank, N.A. ("Bank") and Nara Bancorp, Inc., ("Affiliate"), with respect to
the following facts.
A. The Bank and Affiliate are affiliated entities.
B. From time to time, Bank may request goods and/or services from
Affiliate or may seek the services of certain of its employees. Bank
may also provide goods, services or employees to Affiliate.
C. It is the intention of the parties that this agreement be
interpreted and implemented in a manner which complies with
applicable federal law, including Sections 23A and 23B of the
Federal Reserve Act.
D. The parties may incorporate the terms of this agreement from time to
time in connection with other agreements and transactions they
conduct with each other.
Bank and Affiliate agree as follows:
1. SHARED EMPLOYEES. From time to time, one party (the "Primary Employer")
may lend one or more of its employees to the other party for specific
projects or for unspecified services. These "Shared Employees" will remain
employees on the books of the Primary Employer at all times and will work
for the other party only for the number of hours (or percentage of their
normal working time) as the parties may agree. Any significant change in
the agreed upon workload of a Shared Employee must be approved in writing
by the Primary Employer.
Neither party makes any representation or warranty to the other party
regarding Shared Employees. Each party acknowledges that it has done or
will do an independent review of the background and qualifications of each
Shared Employee for the work it wishes the Shared Employee to perform. The
Primary Employer assumes no responsibility for any loss incurred by the
other party as a result of the actions or omissions of Shared Employees
while in the service of the other party.
Either party may terminate this agreement with respect to one or more
Shared Employees, with or without cause, by giving the other party ten
days' prior written notice. Any party may terminate this agreement
immediately with respect to a particular Shared Employee who is believed
to have violated either party's Code of Conduct, any law or regulation.
2. SUPERVISION OF SHARED EMPLOYEES. Shared Employees will be under the direct
supervision of the Primary Employer for all work performed for that
employer, and shall be under the direct supervision of the other party
when performing work for the other party. The Primary Employer will not
direct the work of a Shared Employee while the Shared Employee is acting
on behalf of the other party.
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The Primary Employer will have the right to terminate, suspend or
otherwise change its employment terms with any Shared Employee. The
Primary Employer will notify the other party of any change in the
employment status or compensation of any Shared Employee which might
materially affect the other party's use of the Shared Employee, or its
rights, responsibilities or reasonable expectations under this agreement.
No party, other than the Primary Employer, is authorized to make any
representation regarding the employment status of the Shares Employee.
Neither party shall enter into any agreement with, or make promises to,
Shared Employees on behalf of the other party without its prior written
consent.
Each party will be solely responsible for monitoring the activities of
Shared Employees while they are performing its work. Neither party will
direct Shared Employees to take any action for or in the name of the other
party. Shared Employees who deal with third parties will be directed by
the parties to clearly disclose on whose behalf they are acting. Whenever
possible, the Primary Employer's stationery shall be used by Shared
Employees for its correspondence, and the other party's stationery shall
be used for its correspondence. In order to maintain the confidentiality
of proprietary and/or privileged information, the parties will instruct
Shared Employees not to commingle Bank and Affiliate files, or to place
one party's correspondence or documentation in the general records of the
other party.
Neither party will direct Shared Employees to work for third parties
without the Primary Employer's prior written consent. Unless the Primary
Employer agrees in writing, the other party shall not offer employment to
a Shared Employee until one year following the termination of the Shared
Employee's employment with the Primary Employer.
3. FEES FOR SHARED EMPLOYEES. The Primary Employer shall be entitled to a
monthly fee ("Monthly Fee") for the use of its Shared Employees by the
other party. The Primary Employer shall be solely responsible for the
payment of any compensation and benefits to Shared Employees. No fee will
be paid to Shared Employees by the other party without the Primary
Employer's written consent.
The Monthly Fee will be equal to the monthly costs (including all base
salaries, bonuses, retirement contributions, fringe benefits, social
security taxes, unemployment insurance premiums, accrued vacation rights,
and all other costs associated with such employees) multiplied by the
percentage of each Shared Employee's total working time that is devoted to
the rendering of services to the other party under this agreement (the
"Percentage").
The parties will mutually agree on the initial Percentage for each Shared
Employee. That Percentage and the Monthly Fee will be adjusted annually
(or more frequently, as necessary) to reflect the actual percentage of
time spent by Shared Employees on work for the other party.
Either party may survey Shared Employees from time to time to determine
whether the Percentage for any Shared Employee should be adjusted. The
results of any survey
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favoring an adjustment shall be presented to other party in writing. The
other party will then have 30 days to review the survey and to provide
written comments. Unless the parties disagree on the proposed new
Percentage, the new Percentage shall become effective on the date the
other party receives the survey results.
The parties acknowledge that issues regarding the calculation of the
appropriate Monthly Fee for individual Shared Employees are likely to
arise which are not addressed by this section. If that occurs, the parties
will work with each other in good faith to establish an appropriate
methodology for determining the Monthly Fee for such employees. In doing
so, the parties will be guided by the general principles reflected in
Section 19 of this agreement.
4. OUT-OF-POCKET EXPENSES. Each party agrees to reimburse the other party
promptly for all reasonable out-of-pocket expenses (e.g., phone,
secretarial service, office space, postage, etc.) the other party incurs
on its behalf while rendering services in accordance with this agreement.
Unless otherwise agreed by the parties, neither party shall be obligated
to advance funds to cover any cost incurred by Shared Employees on behalf
of the other party.
5. PAYMENT OF FEES. Bank and Affiliate agree to pay any amounts owing under
this agreement on the first day of each calendar month (or, if that day is
on a weekend or bank holiday, then the next following business day). Bank
is authorized to charge Affiliate's account with Bank for any fees owed to
Bank under this agreement.
6. PERFORMANCE STANDARDS. Whenever one party performs services for the other
party, its level of performance, including timeliness and accuracy, shall
meet or exceed the general industry standards for such service and the
level at which it provides comparable services on its own behalf. In
performing services, each party shall abide by the policies and procedures
agreed upon in advance by the parties.
7. CONFIDENTIALITY AND DATA OWNERSHIP. Unless otherwise agreed upon in
writing, neither party will convey or obtain any right in the programs,
systems, data, proprietary information or materials (including any
confidential customer information or customer lists) that are utilized or
provided by the other party in connection with any service under this
agreement. Each party will take reasonable steps to protect the security
and confidentiality of such information, and will use such information
only for the purposes contemplated by this agreement. Neither party will
disclose such information to employees who do not have a need to know such
information for the performance of this agreement.
This provision shall not apply to information that: (a) was known by the
receiving party prior to its disclosure by the other party; (b) becomes
generally available to the public other than as a result of a breach of
this agreement; or (c) becomes lawfully available on a nonconfidential
basis from a third party who is not under an obligation of confidence to
the other party.
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8. REGULATION. The parties understand that the performance of this agreement
may be subject to regulation and examination by federal and state
regulatory agencies. Each party agrees to submit to the examination of
such agencies and to furnish such reports as are required by law. Each
party will notify the other party promptly of any governmental examination
or request for information related to this agreement, unless such notice
is prohibited by law.
9. INDEMNIFICATION. Each party will indemnify, defend and hold the other
party and its directors, officers, employees and agents ("Indemnified
Parties") harmless from and against all claims, actions, damages, losses,
penalties, costs, attorney's fees and liabilities ("Losses") that are
caused by or result from: (a) the indemnifying party's gross negligence or
willful act or omission in connection with this agreement or its services;
(b) any act or omission of the Indemnified Parties taken or omitted at the
express direction of the indemnifying party, except to the extent the Loss
is due to the willful misconduct, negligence, or violation of law by the
Indemnified Parties; or (c) the indemnifying party's violation of any law
or regulation.
Each party acknowledges that the compensation for this agreement was
negotiated in contemplation of the foregoing indemnification and the other
limitations on liability set forth in this agreement.
10. NOTICES. Any written notice required or permitted to be given by this
agreement shall be mailed or delivered to the other party at the following
address, or such other address as the party may designate in writing:
If to the Bank:
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Attention:
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If to the Affiliate:
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Attention:
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11. INDEPENDENT CONTRACTOR STATUS. The relationship of the Bank and Affiliate
under this agreement is that of independent contractors. Nothing in this
agreement shall be construed as constituting a partnership, joint venture
or agency between the parties hereto.
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12. NO ASSIGNMENT OR SUBCONTRACTING. This agreement is not assignable in whole
or in part by either party without the other party's prior written
consent. Any attempted assignment without such consent will be null and
void.
13. SUCCESSORS. Subject to the restrictions on assignment set forth above,
this agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
14. AUTHORITY. Each party represents and warrants that it has the full right,
power and authority to enter into and perform this agreement in accordance
with its terms and that the execution and delivery of this agreement have
been duly authorized by proper corporate action.
15. WAIVER. Either party may delay enforcing its rights under this agreement
without losing them. Any waiver must be in writing and shall not be deemed
a waiver of other rights or of the same right at another time.
16. COMPLIANCE WITH LAWS AND REGULATIONS. Each party agrees that it will
obtain all licenses and other governmental authorizations and approvals
required for the performance of its obligations under this agreement, and
that it will perform its obligations in accordance with all applicable
federal, state and local laws, rules and regulations now or hereafter in
effect.
17. GOVERNING LAW. To the extent this agreement is subject to the laws of any
state, it will be governed by and construed in accordance with the laws of
California, without regard to its conflict of law provisions.
18. ENTIRE AGREEMENT. This agreement constitutes the only agreement between
the parties with respect to its subject matter and supersedes all prior
negotiations and understandings between the parties. Unless otherwise
agreed, the terms of this agreement will govern the service and employee
sharing arrangements between the parties.
19. ARM'S LENGTH AGREEMENT. The parties acknowledge that the terms of this
agreement are substantially the same as, or at least as favorable to the
Bank, as those prevailing at the time for comparable transactions with or
involving nonaffiliated companies or, in the absence of comparable
transactions, on terms and under circumstances at least as favorable to
Bank that in good faith would be offered or applied to nonaffiliated
companies.
20. MODIFICATION. This agreement may not be amended or modified except in a
written document signed by both parties.
21. SEVERABILITY. If any provision of this agreement is determined to be
illegal, unenforceable or void, this agreement shall be construed as if
not containing that provision, and the rest of the agreement shall remain
in full force and effect.
If any provision of this agreement or any other agreement incorporating
this agreement is determined to violate Federal Reserve Act Section 23A or
23B, the parties agree to
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amend the provision, nunc pro tunc, in a manner which brings it into
compliance with the law.
22. FORCE MAJEURE. Neither party will be liable for a delay in performance or
a failure to perform any obligation under this agreement to the extent
that the delay or failure is due to causes beyond its reasonable control,
acts of God, labor disputes, governmental regulations or orders, civil
disturbances, war conditions, fires, or a failure by the other party to
satisfy its obligations under this agreement.
23. NO THIRD PARTY BENEFICIARIES. Nothing in this agreement shall be construed
to confer any right or benefit on any person who is not a party to this
agreement.
24. TERMINATION. Either party may terminate this agreement or any service
provided in connection with this agreement:
(a) upon 60 days' prior written notice to the other party (unless the
parties agree to a longer period of notice);
(b) immediately upon written notice to the other party if it materially
breaches this agreement;
(c) upon written notice to the other party if the other party fails to
cure any nonmaterial breach of this agreement within 30 days of its
receipt of notice of the breach;
(d) immediately upon written notice to the other party in the event the
other party becomes the subject of a bankruptcy, insolvency,
reorganization, dissolution, liquidation of debt, receivership,
conservatorship or other similar proceeding under federal or state
bankruptcy, debtors relief, securities, bank regulatory or other
law; or
(e) immediately upon notice to the other party if the other party
suspends its business, becomes insolvent, or transfers a substantial
portion of its property or business.
If this agreement terminates, each party will promptly deliver to the other
party all data, files, records and documents maintained by it on behalf of the
other party under this agreement, and shall fully cooperate in the transfer of
any servicing functions pursuant to this agreement to the other party or its
designated agent. If this agreement is terminated for any reason other than (a),
above, or the mutual agreement of the parties, the terminating party shall be
reimbursed for its reasonable conversion costs (if any) by the other party.
Sections 7, 8 and 9 shall survive the termination of this agreement.
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NARA BANK, N.A. Date:
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By:
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Its:
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NARA BANCORP, INC. Date:
"Affiliate" --------------------
By:
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Its:
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