AMENDED AND RESTATED
FOURTH AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED FOURTH AMENDMENT TO STOCK PURCHASE AGREEMENT (the
"Amendment") is entered into as of March 21, 2001, by UNITED FINANCIAL HOLDINGS,
INC. ("Holding Company") with FIRST SECURITY BANK ("First Security") and all of
the Shareholders of First Security ("Stockholders").
BACKGROUND
The parties entered into a Stock Purchase Agreement (the "Agreement") dated
September 22, 2000. Before the date hereof, the Holding Company and First
Security (for itself and the Stockholders) entered into amendments extending the
time for certain performances under the Agreement. The Holding Company has
completed its pre-purchase due diligence as contemplated by Section II of the
Agreement and as a result of the due diligence has proposed changes to the
Agreement, which have been discussed and agreed upon.
THEREFORE, in consideration of the covenants contained herein and for
$10.00 and other good and valuable consideration, receipt of which is
acknowledged, the parties agree as follows:
1.The Background statements are incorporated into this Amendment.
2. The Agreement, as modified by the prior amendments, is ratified and
confirmed.
3. Section IV is amended as follows:
a. The Effective Date specified in Section IV A is April 1, 2001.
b. The following paragraph 5 is added to Section IVD:
"5. The term "loan" shall have the meaning as that term is used
in Chapter 658, FLORIDA Statutes, and shall include, but not be
limited to, an extension of credit, including an overdraft.
4. "Section A. 2 of Section VI, Purchase, is amended and restated in its
entirety as follows:
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"2. CONSIDERATION. Subject to further setoff or reduction as
provided in this Agreement, as amended, the consideration (the
"Consideration") to be paid for the First Security Shares shall
be the combination of shares of the Series One Preferred Stock of
the Holding Company, and cash, based upon an agreed value (the
"Agreed Value") of FIVE MILLION THREE HUNDRED SIXTY SIX THOUSAND
THREE HUNDRED ELEVEN DOLLARS ($5,366,311) for the First Security
Shares. Forty percent (40%) of the Consideration will be paid in
cash or acceptable funds and the balance of the Agreed Value will
be by delivery of shares of the Series One Preferred Stock of the
Holding Company."
5. The following sentences are added to the end of Section A. 5. of Section VI,
Purchase:
"At the Closing, the Representatives, on behalf of the
Stockholders, shall advise the Holding Company of any of the
Stockholders who desire to receive cash or shares of the Series
One Preferred Stock in a ratio other than the ratio of the
Consideration stated in Section A 2 of Section VI. The Holding
Company will use its best efforts to accommodate the
disproportionate elections of the Stockholders; provided however,
in no event shall the total amount of the Consideration payable
in cash or acceptable funds exceed Forty Percent (40%) of the
total consideration. Furthermore, any Stockholder who is paid
Consideration in cash or acceptable funds will not, to the extent
of the cash or acceptable funds, be deemed a "Qualified Holder"
for purposes of Section B of Section VI."
6. Section X, Additional Covenants, Warranties, and Representations of the
Stockholders, is amended and restated in its entirety as follows:
"SECTION X
"ADDITIONAL COVENANTS, WARRANTIES, AND REPRESENTATIONS OF STOCKHOLDERS
"In addition to other covenants, warranties and representations contained
in this Agreement, the Stockholders each covenant, warrant and represent to
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Holding Company as follows, all of which warranties and representations are true
now and shall be true at the Closing as if made at that time, and shall survive
Closing:
"A. ACCREDITED INVESTOR QUALIFICATION.
"1. Each Stockholder is a resident of the State of Florida
"2. Each of the Stockholders is sufficiently experienced in financial
and business matters to be capable of utilizing the information furnished
to evaluate the merits and risks of the sale of the Stockholder's shares of
stock in First Security and the purchase by the Stockholder of the Series
One Preferred Shares or the Common Shares in to which such shares are
convertible of the Holding Company (the Holding Company shares are referred
to collectively as the "Shares.") and the consideration to be received in
the "Purchase" described in Section VI of the Agreement and to make an
informed decision related thereto. Each of the Stockholder's personal
financial condition is such that the Stockholder has adequate resources for
the Stockholder's current needs and possible personal contingencies and has
no need for liquidity with respect to the Series One Preferred Shares or
the Common Shares into which they are convertible. Each Stockholder further
acknowledges that the Shares are a speculative investment that involves a
substantial degree of risk of loss by the Stockholder of its or his or her
entire investment and the Stockholder understands and takes full cognizance
of the risk factors related to the acquisition of the Shares. Each
Stockholder represents it, he or she is financially able to bear the
economic risk of an investment in the Shares, including a loss of the
investment.
"3. Each of the Stockholders understands:
"a. That the Shares have not been registered under any applicable
state or federal securities laws, including the Securities Act of 1933
and the Florida Securities and Investor Protection Act (collectively,
the "Securities Laws") and that the Shares will be issued to the
Stockholders in reliance on exemptions from registration contained in
the Securities Laws, and in reliance, in part, on each Stockholder's
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representations, warranties, and agreements set forth in this
Agreement.
"b. That, unless registered under the applicable Securities Laws,
the Shares can only be transferred under an exemption from
registration under the Securities Laws.
"c. That Holding Company has no obligation to register the Shares
under the Securities Laws and that such registration is unlikely.
Provided, however, if the Holding Company seeks to register any of its
authorized but unissued Common Stock with the Securities & Exchange
Commission for sale by a public offering, the Holding Company shall
provide written notice of the planned or pending registration to the
Stockholders who are then holders of record of Holding Company Common
Shares received on conversion of their Series One Preferred Shares. If
a Stockholder receiving the notice holds Holding Company Common Shares
that exceed the number of Common Shares that can then be transferred
or sold under Rule 144 of the Securities & Exchange Commission in a
single transaction, the Stockholder may elect to offer the
Stockholder's Common Shares for sale as a secondary offering with the
planned offering of the Holding Company, subject to the terms of this
section. The Stockholder making the election shall notify the Holding
Company within fifteen days following delivery of notice of the
intended offering by the Holding Company. Provided however, the
Holding Company shall not be obligated to include the Common Shares of
Stockholder in a secondary offering if the underwriter for the Holding
Company refuses to include the secondary offering with the planned
offering. Provided further that the Holding Company shall not be
obligated to offer any Stockholder the right to include Common Stock
in more than one offering approved by the underwriter of an offering.
Any Stockholder who elects to offer his or her or its Holding Company
Common Shares in a secondary offering shall be subject to the terms
and conditions of the offering, including the price of the Shares,
payment of commissions on the sale of such Shares, and indemnification
provisions. The expenses of the offering shall be paid from the
proceeds of the offering and allocated pro rata among all the
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securities sold in the offering; however, if the offering does not
close, the Holding Company shall be solely responsible for payment of
the expenses of the offering, except however, each Stockholder shall
be solely responsible for its, his or her personal expenses, including
without limitation the expense of its, his or her personal counsel.
"d. That except for the Regulatory Approval no state or federal
agency has reviewed the Purchase or passed on the Purchase, and no
state or federal agency has reviewed or passed on the merits of the
Purchase or the Shares.
"e. That the Shares will contain a standard legend referencing
that they are not registered under Securities Laws and that the
transferability of the Shares is restricted by Securities Laws.
"f. That each Share is a "restricted security" under the
Securities Act in that each Share will be acquired from the Holding
Company in a transaction not involving a public offering, that the
Shares may be resold without registration under the Securities Act
only in certain limited circumstances, and that otherwise the Shares
must be held indefinitely.
"g. That the Holding Company and its shareholders are under no
obligation to register or qualify any Shares under the Securities Act
or under any state securities law, or to assist the Stockholder in
complying with any exemption from registration.
"h. That there are substantial restrictions on the
transferability of the Shares pursuant to this Agreement and
applicable law, that there is no public market for the Shares or other
securities of the Holding Company and none is expected to develop, and
that, accordingly, it may not be possible for any Stockholder to
liquidate its or his investment in the Holding Company.
"i. THAT THE SHARES, ANY SECURITY ISSUED UPON CONVERSION OF THE
SHARES, ANY DIVIDENDS PAYABLE WITH RESPECT TO THE SHARES, AND THE
PROCEEDS OF ANY REDEMPTION OF THE SHARES ARE SUBJECT TO THE
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INDEMNIFICATION AND SET OFF PROVISIONS CONTAINED IN SECTION XXV OF
THIS AGREEMENT.
"4. Each of the Stockholders, directly and through authorized
representatives, has been afforded ample opportunity to ask questions and
receive answers from the appropriate executive officers of Holding Company
concerning the Purchase and the Shares and to obtain any additional
information the Holding Company possesses or can acquire without
unreasonable effort or expense.
"a. Any questions raised by a Stockholder or a representative of
a Stockholder about the Holding Company has been satisfactorily
answered. Each Stockholder has been advised to consult with its or his
or her own legal counsel and financial advisors regarding all legal
and financial matters concerning an investment in the Holding Company
and the tax and other consequences of participating in the Holding
Company and acquiring and owning the Shares, and has done so, to the
extent that the Stockholder considers necessary. The decision of each
Stockholder to enter into this transaction has been independently made
and based upon a personal evaluation of the risks and merits of the
Purchase. No Stockholder has requested or desires any further
information from the Holding Company about the Shares or the Purchase.
Each Stockholder has received and reviewed all information that it or
he considers necessary or appropriate for deciding whether to acquire
and commit to acquire the Shares.
"b. Neither the Holding Company nor any representative of the
Holding Company nor any other Person, has at any time expressly or
implicitly represented, guaranteed, or warranted to the Stockholder
that it or he or she may freely Transfer any Shares, that a percentage
of profit and/or amount or type of consideration will be realized as a
result of an investment in the Shares, that past performance or
experience on the part of any Person in any way indicates the
predictable results of the ownership of those Shares or of the Holding
Company's business, that any cash distributions from the Holding
Company's operations or otherwise will be made to the owners of Shares
by any specific date or will be made at all, or that any specific tax
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benefits will accrue as a result of an investment in the Holding
Company.
"5. Each of the Stockholders meets one or more of the following tests,
and will certify the same at Closing:
"a. If an individual, he or she is a natural person whose
individual net worth or joint net worth with his or her spouse exceeds
$1 million.
"b. If an individual, he or she is a natural person who had an
individual income in excess of $200,000 in each of the two most recent
years or a joint income with his or her spouse in excess of $300,000
in each of those years, and has a reasonable expectation of reaching
the same income level in the current year.
"c. If not an individual, the Stockholder is:
"i. an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, as amended,
which satisfies one or more of the following criteria: (i) the
investment decision for such plan is made by a plan fiduciary, as
defined in section 3 of such Act, which is either a bank, a
savings and loan association, an insurance company, or a
registered investment adviser, or (ii) the plan has total assets
in excess of $5 million, or (iii) the plan is self-directed and
the investment decisions are made by persons who are accredited
investors within the meaning of Rule 501(a) of the Securities
Act, or
"ii. a private business development company, as defined in
section 202(a)(22) of the Investment Advisers Act of 1940, or
"iii. an organization described in section 501(c)(3) of the
Internal Revenue Code, a corporation, or a Massachusetts or
similar business trust, or a partnership, which was not formed
for the specific purpose of investing in the Holding Company or
Security Trust, and which has assets in excess of $5 million, or
"iv. a trust with total assets in excess of $5 million,
which was not formed for the specific purpose of investing in the
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Holding Company or Security Trust and whose investment in the
Holding Company or Security Trust is directed by a person with
such knowledge and experience in financial and business matters
that the undersigned is capable of evaluating the merits and
risks of an investment in the Holding Company or Security Trust,
or
"v. an entity in which each equity owner meets either of the
criteria specified in paragraphs 5a or 5b of this Section.
"6. The Shares shall be held by Stockholders for investment and not
with a view to, or for sale in connection with, any distribution of such
Shares. Each of the Stockholders represents that the Stockholder has no
present plans or intentions to sell any Shares. No person other than the
Stockholder will have any direct or indirect beneficial interest in or
right to the Shares.
"7. Each Stockholder has not seen, received, been presented with, or
been solicited by any leaflet, public promotional meeting, newspaper or
magazine article or advertisement, radio or television advertisement, or
any other form of advertising or general solicitation, with respect to the
issuance of the Shares.
"8. Each Stockholder agrees that it, he or she will not make any
disposition of all or any part of the Shares which will result in the
violation by it or him or her or by the Holding Company of the Securities
Act, or any other applicable securities law.
"B. NON-DISPOSAL OF FIRST SECURITY SHARES. No Stockholder shall sell,
transfer or otherwise dispose of the Stockholder's shares of First Security
stock or any interest therein, before the effectiveness of the Purchase.
C. OWNERSHIP OF FIRST SECURITY. The Stockholders are the sole owners of all
of the issued and outstanding shares of stock of First Security, and no other
person has any interest or right, legal or equitable in First Security or its
assets or stock. There are no liens, pledge, options, contracts, calls,
commitments or preemptive rights or demands of any nature related to the stock
or securities issued or authorized by First Security.
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"D. TAX MATTERS. Each Stockholder acknowledges that the tax consequences to
the Stockholder of acquiring and owning the Shares will depend on its or his or
her particular circumstances, and neither the Holding Company nor any
representative of the Holding Company nor any other Person will be responsible
or liable for the tax consequences that Stockholder of an investment in the
Holding Company. Each Stockholder will look solely to, and rely upon, its or his
or her own advisors with respect to the tax consequences of this investment. The
Stockholder acknowledges that there can be no assurance that the Code or Unites
States Treasury Regulations or any other laws, rules or regulations will not be
amended or interpreted in the future in such a manner so as to deprive the
Holding Company and its stockholders of some or all of the tax benefits they
might receive, nor that some of the deductions claimed by the Holding Company or
the allocations of items of income, gain, loss, deduction, or credit among the
Holding Company's stockholders may not be challenged by the Internal Revenue
Service or any other taxing authority."
7. The following Sections T and U are added to Section XII, Conduct of First
Security Business Pending Closing:
"T. LOAN PROCESSING. Before the Purchase, First Security shall not make or
renew any secured loan in excess of One Hundred Thousand Dollars ($100,000) or
any unsecured loan in excess of Twenty-five Thousand Dollars ($25,000) without
the prior review and approval of the Holding Company, which will not be
unreasonably withheld. First Security shall furnish Holding Company timely
copies of its minutes of Board of Directors, Loan Committee and other committee
meetings through the date of the Purchase.
"U. LOAN LOSS RESERVE. By application of sound banking practices
consistently applied, First Security shall maintain its loan loss reserve in an
amount that is not less than One and One-half Percent (1.5%) of the principal
balance due on outstanding loans including overdrafts (the "Loan Loss Reserve;"
provided however, any additions to the Loan Loss Reserve or loan write offs
after September 23, 2000 but prior to Closing that are not reflected in the
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reduced Consideration stated in this Fourth Amendment shall further reduce the
Consideration payable at Closing.
"V. PRE-CLOSING LOAN WRITE OFF. Prior to the Purchase, First Security shall
write off all loans classified as "loss," write down by fifty percent (50%) all
loans classified as "doubtful" and write down by twenty percent (20%) all loans
classified as "substandard" in accordance with First Security's loan policy and
the applicable federal and state banking laws, rules and regulations." The
following Section 6. is added to Section L, Stockholder Deliveries, of Section
XIII, titled "Conditions Precedent to Closing by Holding Company":
"6. ESCROW AGREEMENT. An Escrow Agreement substantially in the form of
Exhibit [C] shall be executed and delivered by each of the Stockholders, the
Holding Company and the Escrow Agent. Upon the Closing, SEVEN HUNDRED FORTY TWO
THOUSAND DOLLARS ($742,000) of the Consideration received by each Stockholder
shall be delivered to the Escrow Agent by that Stockholder (or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
as the Stockholder's agent, as herein provided) to be held and distributed in
accordance with the Escrow Agreement and this Agreement. Each Stockholder shall
have the right to specify at Closing whether that portion of the Consideration
received by that Stockholder that is required to be delivered to the Escrow
Agent is to be comprised of Series One Preferred Stock and/or cash. If no
designation is made, the Consideration shall be delivered proportionately. EACH
OF THE STOCKHOLDERS HEREBY IRREVOCABLY APPOINTS ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ESQUIRE, OR HIS
DESIGNEE, AS THE STOCKHOLDER'S ATTORNEY-IN-FACT, COUPLED WITH AN INTEREST, TO
EXECUTE AND DELIVER THE ESCROW AGREEMENT AT CLOSING FOR AND ON BEHALF OF THE
STOCKHOLDER AND TO FURTHER DELIVER AT CLOSING $742,000 IN TOTAL, PRO RATA, FROM
THE STOCKHOLDERS' CONSIDERATION TO THE ESCROW AGENT TO BE HELD, MANAGED AND
DISPOSED OF UNDER THE SEPARATE ESCROW AGREEMENTS BY THE ESCROW AGENT IN
ACCORDANCE WITH THE TERMS OF THE ESCROW AGREEMENTS AND THIS AGREEMENT.
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9. The following Section N. is added to Section XIII, titled "Conditions
Precedent to Closing by Holding Company":
N. LEASE MODIFICATION. The First Security real property lease shall be
renegotiated on terms, conditions, and at rents, satisfactory to the Holding
Company."
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10. The following Section XXV is added to the Agreement following Section XXIV:
"SECTION XXV.
"INDEMNITY
"A. Subject to the limitations contained in this Section, but in addition
to, and not in lieu of, any rights or remedies provided by law, equity or
agreement, Stockholders shall indemnify, protect, save and hold harmless Holding
Company and First Security, separately and together, of, from, and against all
liability, obligation, loss, injury, damage, expense, and claim or demand of
whatsoever nature (including without limitation any claims, assessments,
judgments, costs and legal and other expenses) arising out of, connected with,
or in any manner related to any of the following:
"1. LOANS. In regard to First Security loans existing or committed at
the time of the Purchase, including bona fide renewals of such loans,
indemnity for (i) any addition to the First Security Loan Loss Reserve made
by First Security after the Purchase but before NOVEMBER 1, 2001, and (ii)
the amount of all First Security loans (including overdrafts) written off
or written down after the Purchase but before NOVEMBER 1, 2001 that reduce
the First Security loan loss reserve applicable collectively to such loans
(and no other loans) below ONE AND ONE HALF PERCENT (1.5%) of the amount of
the First Security loans existing at the Closing of the Purchase, and (iii)
First Security loans and overdrafts directly written down or off after the
Purchase but before NOVEMBER 1, 2001, but without a charge to its Loan Loss
Reserve, subject however to the following:
"a. Additions to the Loan Loss Reserve for, or write down or
write off of, loans (including new overdrafts) made and booked by
First Security after the Purchase shall not be indemnified under this
provision, unless made pursuant to commitments made by First Security
prior to the Purchase, nor shall such addition, write downs or write
off be included when determining whether the Loan Loss Reserve is ONE
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AND ONE HALF PERCENT (1.5%) of the amount of the First Security loans
existing at the Closing of the Purchase.
"b. Additions to the Loan Loss Reserve for, or write down or
write off of, loans (including new overdrafts) shall not be
indemnified under this provision unless the loan becomes substandard,
doubtful, or loss before NOVEMBER 1, 2001, in which event the proper
Loan Loss Reserve addition, write down or write off shall be subject
to indemnification.
"c. The amount by which the aggregate losses on overdrafts
existing on date of the Purchase exceeds THREE THOUSAND DOLLARS
($3,000) shall be indemnified under this provision.
"d. Any Loan Loss Reserve addition, write down or write off shall
be made in accordance with sound banking practice, generally accepted
accounting principles, the written loan policies of First Security
existing September 22, 2000, the requirements of this Agreement as
amended, and the requirements of federal and state banking laws, rules
and regulations.
"2. EMPLOYMENT MATTER. Indemnity for any loss, injury, damage,
expense, claim or demand of whatsoever nature, including, but not being
limited to fines and penalties, arising out of, relating to, or in any
manner connected with any failure prior to the Purchase by First Security,
its employees, agents, servants, and contractors, to comply with all
requirements of law relating to employment, employment practices, or
employee benefits, including, without limitation, any failure of First
Security to comply with the requirements of the American with Disabilities
Act of 1990; the Civil Rights Acts of 1866, and 1871; Title VII of the
Civil Rights Act of 1964; the Civil Rights Act of and 1968 and 1991; the
Age Discrimination in Employment Act of 1967; the Equal Pay Act of 1963;,
the Rehabilitation Act of 1973; the Consolidated Omnibus Budget
Reconciliation Act of 1985; the Health Insurance Portability and
Accountability Act of 1996; the National Labor Relations Act; the Fair
Labor Standards Act; the Occupational Safety and Health Act; the Veterans
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Reemployment Act; the Immigration Reform and Control Act of 1986; the
Employee Retirement Income Security Act of 1974, and the Internal Revenue
Code provisions applicable to employee benefit or welfare plans that are
subject to the Employee Retirement Income Act of 1974; Federal and state
laws governing wage, hour, and overtime compensation; workmen's
compensation laws; and Federal and state unemployment compensation laws; as
the same shall, from time to time be amended and in legal force and effect
from time to time; the valid rules and regulations promulgated thereunder;
and analogous state and local laws, statutes, rules, regulations, and
ordinances. Any loss, injury, damage, expense, claim or demand subject to
indemnification pursuant to this subparagraph is referred to in this
Agreement as an "Employment Matter."
3. EMPLOYMENT AGREEMENT WITH ▇▇▇▇▇▇ R PAGE. Indemnify the Holding
Company and First Security for (a) the amounts paid by First Security
arising out of or related to the termination of the Employment Agreement
between First Security and ▇▇▇▇▇▇ ▇. Page, which Agreement the Stockholders
represent has been terminated, but the amounts payable to or for ▇▇▇▇▇▇ ▇.
Page upon that termination are in dispute, and for (b) legal fees and costs
incurred by First Security in the employment of the ▇▇▇▇, Band et al law
firm in its representation of First Security in regard to that matter, "B.
Except as limited in this Article XXV, the Holding Company shall have the
following rights and remedies, none of which shall be exclusive, and all of
which shall be cumulative with all other rights and remedies available at
law, in equity or by agreement, all of which may be exercised or pursued
concurrently or successively and in any order or combination as determined
by the Holding Company, and the exercise of any right or remedy shall not
preclude the exercise of any other right or remedy in connection with that
or any other matter.
"1. LOAN LOSS RESERVE. The following shall apply to the
Stockholders' obligation to indemnity the Holding Company in regard to
the First Security Loan Loss Reserve additions and loan write-offs
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occurring after the Purchase when the additions or write-offs relate
to the First Security loans subject to indemnification as described in
Section XXV (A)1.:
"a. The amount of the First Security Loan Loss Reserve and
the amount and identification of its outstanding loans, including
overdrafts and unfunded commitments as of the Closing shall be
confirmed by a writing signed at Closing by the Holding Company
and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ as agent for the Stockholders. The loans
confirmed on the writing are referred to as `Indemnified Loans.'
"b. First Security shall track the Indemnified Loans from
and after the Closing through NOVEMBER 1, 2001, and shall
classify any such of the Indemnified Loans that is in arrears for
forty-five (45) or more days as loss, doubtful or substandard, as
the case may be, and shall charge its Loan Loss Reserve in
accordance with the classification.
"c. The Holding Company shall cause First Security to report
to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, as agent for the Stockholders, any of the
Indemnified Loans that after the Closing and before NOVEMBER 1,
2001 the Board of Directors of First Security classifies as loss
(100% write off), doubtful (50% write off) or substandard (25%
write off), whether or not the loan is then in arrears for
forty-five days. Any of the Indemnified Loans that or before
NOVEMBER 1, 2001 is classified as loss, doubtful, substandard or
past due shall be subject to indemnification under Section XXV
(A)1.
"d. Upon receipt of the report of any of the Indemnified
Loans as being loss, doubtful or substandard, ▇▇▇▇▇▇ shall
promptly poll the Stockholders about working out or purchasing
the loan. If any of the Stockholders desire to purchase the loan
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or otherwise assist the borrower (if the borrower will
voluntarily accept such assistance) to workout the loan to the
complete satisfaction of First Security, ▇▇▇▇▇▇ shall notify
First Security and the Holding Company. Any workout shall be in
full accordance with the requirements of applicable law including
those laws dealing with confidentiality. The Stockholders shall
communicate with the Holding Company through ▇▇▇▇▇▇. The
Stockholder(s) desiring to purchase the loan, shall have SIXTY
(60) DAYS to purchase the loan from First Security at its face
value, including accrued and unpaid interest and costs, but
without recourse or representation of collectibility or value by
First Security or the Holding Company.
"e. If the past due Indemnified Loan(s) is (are) not
purchased by one or more of the Stockholders within the sixty
(60) day period, as provided above, or are not otherwise worked
out within the sixty (60) day period to the complete satisfaction
of First Security and the Holding Company so that the loan is
removed from First Security's classification as loss, doubtful or
substandard, the Holding Company shall be entitled to full
indemnification and shall notify the Escrow Agent of its claim
for indemnification; provided, however, the total amount of the
indemnification for all loss, doubtful or substandard loans shall
not exceed FOUR HUNDRED SEVENTEEN THOUSAND DOLLARS ($417,000)
under this provision. A Indemnified Loan shall not be deemed
worked out to the satisfaction of First Security or the Holding
Company merely because a delinquent payment is brought current by
a Stockholder. No loan workout shall be satisfactory to the
Holding Company or First Security unless the entire structure and
proposed payment plan from the date of delinquency to maturity is
satisfactory to each of them. The Holding Company shall look only
to the Escrow Fund for indemnification in regard to the
Indemnified Loans and no Stockholder shall have any further
obligation of indemnification. (This limitation, however, shall
not release any Stockholder from personal liability in regard to
any loan made to or guaranteed by the Stockholder.)
"2. EMPLOYMENT MATTER. The following cumulative rights shall
apply to the Stockholders' obligation to indemnity the Holding Company
in regard to First Security Employment Matter, as described in Section
XXV (A)2, in addition to all other indemnification rights provided
under this Agreement or by law:
a. Proceed Against the Escrow Fund.
The Holding Company may, in its discretion but is not
required to, seek indemnification for an Employment Matter from
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the Escrow Fund established under the Escrow Agreement to the
extent thereof, but only to the extent the Escrow Fund is not
first used to satisfy indemnification of loss, doubful or
substandard loans or the claims arising out of or related to the
▇▇▇▇▇▇ ▇. Page Employment Agreement, hereinafter described.
b. Set Off Rights.
The Holding Company may in its discretion but is not
required to set off the amount of an Employment Matter against
any and/or all of the following:
i. Incentive Shares.
Any liability or obligation of the Holding Company to issue
any Incentive Shares pursuant to paragraph B of Section VI of the
Agreement and the Holding Company's Articles of Incorporation, as
amended by Exhibit B to the Agreement, as amended.
ii. Redemption Proceeds.
Any liability of the Holding Company to pay redemption
proceeds when the proceeds of any redemption of the Series One
Preferred Stock if the redemption occurs on or before March 31,
2003, pursuant to the Holding Company's Articles of
Incorporation, as amended by Exhibit B to the Agreement, as
amended.
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iv. Dividends.
Any liability or obligation of the Holding Company for the
payment on or before March 31, 2003 of any dividend payable on
the Series One Preferred Stock.
"3. PAGE EMPLOYMENT AGREEMENT. The following cumulative rights
shall apply to the Stockholders' obligation to indemnity the Holding
Company in regard to ▇▇▇▇▇▇ ▇. Page Employment Agreement, as described
in Section XXV (A)3, in addition to all other indemnification rights
provided under this Agreement or by law: $325,000 of the Escrow Fund
is reserved to indemnify the Holding Company and First Security for
the liability and costs incurred that arise out of or relate to the
termination of the First Security's Employment Agreement with ▇▇▇▇▇▇ R
Page, including but not limited to all sums payable to or for ▇▇▇▇▇▇
▇. Page in settlement or as damages or termination compensation and
all legal fees and costs incurred by First Security in regard to the
settlement. In regard to any claim for indemnity arising out of or
related to the ▇▇▇▇▇▇. R. Page Employment Agreement, the Holding
Company, for itself and for First Security, shall seek indemnification
from the Escrow Fund established under the Escrow Agreement but only
to the extent of this earmarked amount of $325,000.
4. Notices. Any notice shall be sent in accordance with Section XVI of
the Agreement.
11. Exhibit [A], Stockholders, is completed in accordance with the Exhibit A
annexed hereto.
12. Each of the parties to this Amendment may execute this Amendment in one or
more counterparts, which, taken together shall constitute the entire Amendment
and shall be fully binding upon all of the parties. The Holding Company and
First Security have executed this Amendment on the date first above written. If
this Amendment is not also executed by all of the Stockholders by the Closing,
- 18 -
then, upon written notice from Holding Company, the Agreement, as heretofore
amended, shall be null and void and no party shall have any further obligations
to the other.
13. The Disclosure Statements, heretofore provided by First Security and the
Stockholders in accordance with the Agreement, are supplemented by the "Due
Diligence Response" provided by First Security on November 17, 2000.
14. Exhibit B to the Agreement, the "Preferred Shares Resolution" is restated in
accordance with Exhibit B hereto.
15. Each Stockholder acknowledges receipt and review of the 2000 Annual Report
and 10ksb and Proxy Statement from the Holding Company.
16. This Amendment amends and restates in its entirety the Fourth Amendment to
Stock Purchase Agreement, dated December 27, 2000. The Agreement, dated
September 22, 2000, as modified by the First Amendment to Stock Purchase
Agreement, dated October 16, 2000, the Second Amendment to Stock Purchase
Agreement, dated November 20, 2000, the Third Amendment to Stock Purchase
Agreement, dated December 7, 2000, and this Amended and Restated Fourth
Amendment to Stock Purchaser Agreement, is hereby ratified, confirm, and
affirmed in its entirety and, as so modified, shall continue in full legal force
and effect in accordance with its provisions.
- 19 -
IN WITNESS WHEREOF, the parties have executed this Amendment in duplicate at St.
Petersburg, Florida, the day and year first above written.
FIRST SECURITY BANK
By: _________________________
UNITED FINANCIAL HOLDINGS, INC.
By: _________________________
[Signatures Continued Next Page]
- 20 -
[SIGNATURE PAGES, WHICH MAY BE EXECUTED IN COUNTERPARTS]
[SIGNATURES CONTINUED]
EACH OF THE STOCKHOLDERS, BY ITS, HIS OR HER SIGNATURE ACKNOWLEDGES RECEIPT
OF, REVIEW OF, AND AGREEMENT TO, THE STOCK PURCHASE AGREEMENT, AS AMENDED; THAT
IT, HE OR SHE AGREES TO BE BOUND BY THE COVENANTS, TERMS, REPRESENTATIONS,
WARRANTIES AND CONDITIONS THEREOF; THAT IT, HE OR SHE IS AN "ACCREDITED
INVESTOR" AS DEFINED IN SECTION X OF THAT AGREEMENT AS AMENDED BY THIS THIRD
AMENDMENT; THAT IT, HE OR SHE HAS RECEIVED AND REVIEWED THE "COMPANY
INFORMATION" FURNISHED UNDER THAT AGREEMENT AND THAT IT, HE OR SHE HAS RECEIVED
ALL OF THE INFORMATION DESIRED. EACH OF THE STOCKHOLDERS CONSENTS TO AND IS
BOUND BY THIS AMENDMENT.
--------------------------------------------------------------------------------
NUMBER OF CASH TO BE
SHARES OWNED RECEIVED
BY FIRST SECURITY BY
SIGNATURES OF STOCKHOLDERS: STOCKHOLDER: STOCKHOLDER:
--------------------------------------------------------------------------------
_______________________________________ 10,200 $ 37,400
ASK & MSK Family Limited Partnership II
_______________________________________ 10,200 $ 37,400
Northern Trust Bank of Florida, N.A.,
as trustee for the ▇▇▇ Rollover of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
- 21 -
_______________________________________ 6,200 $ 22,733
Northern Trust Bank of Florida, N.A.,
as trustee for the ▇▇▇▇▇ ▇. Band ▇▇▇ Rollover Trust
_______________________________________ 2,400 $ 8,800
▇▇▇▇▇▇▇ ▇. Band
_______________________________________ 2,400 $ 8,800
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________________ 7,800 $ 28,600
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
_______________________________________ 7,800 $ 28,600
SouthTrust Bank of Florida, N.A.,
as trustee for the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ Rollover
_______________________________________ 6,000 $ 22,000
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- 22 -
_______________________________________ 28,000 $ 102,667
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________________ 20,000 $ 73,333
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ DLJSC as Custodian
_______________________________________ 500 $ 1,833
▇▇▇▇▇▇ ▇. or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________________ 4,800 $ 17,600
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
Family Portfolio, Ltd.
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D., Chtd.,
Profit Sharing Trust
- 23 -
_______________________________________ 5,400 $ 19,800
Northern Trust Bank of Florida, N.A.,
as Trustee for the ▇▇▇▇▇▇▇ ▇. Garden ▇▇▇ Rollover Trust
_______________________________________ 5,400 $ 19,800
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee of the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Living Trust d/t/d 5/21/96
_______________________________________ 18,600 $ 68,200
▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
The Hanan Family Partnership, Ltd.
_______________________________________ 6,000 $ 22,000
▇▇▇▇▇ ▇. ▇▇▇▇
_______________________________________ 500 $ 1,833
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
- 24 -
_______________________________________ 3,500 $ 12,833
The ▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇ ▇. ▇▇▇▇▇ Revocable Trust u/a/d
1/27/95
_______________________________________ 21,000 $ 77,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee of the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Revocable Trust
u/a/d 11/27/95
_______________________________________ 48,000 $ 176,000
▇▇▇▇▇▇ ▇▇▇▇, Trustee of the ▇▇▇▇▇▇
▇▇▇▇ Revocable Trust u/a/d 4/06/89
_______________________________________ 48,000 $ 176,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee of the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ revocable Trustee
u/a/d 3/14/89
_______________________________________ 7,800 $ 28,600
Northern Trust Bank of Florida, N.A.,
as Trustee for the ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇
Rollover Trust
- 25 -
_______________________________________ 7,800 $ 28,600
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. Money Purchase
Pension Plan
_______________________________________ 4,800 $ 17,600
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and March ▇. ▇▇▇▇▇
_______________________________________ 5,400 $ 19,800
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Defined Benefit Plan
_______________________________________ 7,800 $ 28,600
▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- 26 -
_______________________________________ 2,400 $ 8,800
Northern Trust Bank of Florida, N.A.,
as Trustee for the ▇▇▇ Rollover of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ Trust
_______________________________________ 3,000 $ 11,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Custodian for
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ Rollover
_______________________________________ 3,000 $ 11,000
▇▇▇▇▇▇▇ ▇. or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust u/a/d
9/21/87 FBO ▇▇▇▇▇▇ ▇.▇▇▇▇▇, et al.
_______________________________________ 10,000 $ 36,667
▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇, Joint
Tenants in Their Entirety
- 27 -
_______________________________________ 10,200 $ 37,400
▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________________ 12,000 $ 44,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________________ 500 $ 1,833
▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇
_______________________________________ 15,600 $ 57,200
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Declaration of Trust
dated 11/23/88
_______________________________________ 3,000 $ 11,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
- 28 -
_______________________________________ 30,700 $ 112,567
▇▇▇▇▇ ▇▇▇▇▇▇ Revocable Trust dated
May 13, 1993 and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Revocable Trust dated 5/13/93
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Family Limited
Partnership
_______________________________________ 7,800 $ 28,600
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________________ 33,000 $ 121,000
Talia Limited Partnership
_______________________________________ 5,400 $ 19,800
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Joint Tenants by Entirety
- 29 -
_______________________________________ 3,600 $ 13,200
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable Trust
_______________________________________ 4,300 $ 15,767
Venture Net, Inc.
_______________________________________ 10,200 $ 37,400
▇▇▇▇▇▇▇▇▇ ▇. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
_______________________________________ 5,400 $ 19,800
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________________ 6,000 $ 22,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_______________________________________ 5,000 $ 18,334
▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________________ 4,800 $ 17,600
▇▇▇ 75, Inc.
- 30 -
_______________________________________ 5,400 $ 19,800
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Joint Tenants by Entirety
_______________________________________ 10,200 $ 37,400
Northern Trust Bank of Florida, N.A.,
as Trustee for the ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ Rollover
_________ ____________
TOTAL 600,000 $ 2,200,000
========= ============
- 31 -
EXHIBIT A - STOCKHOLDERS
All names of the Stockholders appear on the above signature page, and the page
accurately indicates their share holdings. There are no other stockholders.
- 32 -
EXHIBIT B
AMENDMENT TO ARTICLES OF INCORPORATION
OF
UNITED FINANCIAL HOLDINGS, INC.
Pursuant to the provisions of Sections 607.0602, of the Florida Business
Corporation Act, this corporation, UNITED FINANCIAL HOLDINGS, INC. (the
"Corporation") adopts the following Articles of Amendment to its Articles of
Incorporation, filed with the Secretary of State for the State of Florida on
January 28, 1982, as document number F65055. The Board of Directors of this
Corporation has approved this resolution. SHAREHOLDER APPROVAL IS NOT REQUIRED
FOR THIS AMENDMENT.
1. NAME OF CORPORATION: UNITED FINANCIAL HOLDINGS, INC.
2. TEXT OF AMENDMENT ADOPTED PURSUANT TO FLORIDA STATUTES 607.0602
Pursuant to the authority granted to the Board of Directors in Article
Four, Paragraph (d), the Certificate and Articles of Incorporation and Florida
Statutes Section 607.0602, the Board of Directors adopts the following Amendment
to the Articles of Incorporation of this Corporation, defining a new series of
preferred stock, to be known as "Series One Preferred Stock:"
- 33 -
1. SEVEN HUNDRED FIFTY THOUSAND (750,000) shares of the $0.01 par value
Preferred Stock of this Corporation are classified as "Series One Preferred
Stock," to be issued hereafter.
2. Each share of the Series One Preferred Stock shall have the following
preferences, limitations and relative rights:
A. LIQUIDATION PREFERENCE. In the event of the liquidation of the
Corporation, the holders of shares of the Series One Preferred Stock shall
be entitled, after the debts of the Corporation have been paid, to receive,
out of the assets remaining, $8.00 per share whether or not earned or
declared, before any payment is made or assets set apart for payment to the
holders of the Common Stock or any class or series of stock having
preferential rights that are inferior to those of the Series One Preferred
Stock, and shall be entitled to no further payments or distributions except
any declared and unpaid dividends which shall be paid on par with dividends
on the Corporation's Common Stock. The Corporation reserves the right to
issue one or more additional classes or series of Preferred Stock with a
lesser preference to the net assets of the Corporation upon liquidation,
but in no event shall a class or series of Preferred Stock subsequently
approved by the Corporation have a liquidation preference greater than the
Series One Preferred Stock shares. If upon liquidation the net assets
remaining after payment of the corporate debts be insufficient to pay the
full amount of the liquidation preference on all classes or series of stock
(including Series One Preferred Stock) having the same priority and
preference as the Series One Preferred Stock, such net assets as remain
shall be divided among the holders of the Series One Preferred Stock and
each other series or class of Preferred Stock with the same liquidation
- 34 -
preference on a pro rata basis in proportion to the relative aggregate
dollar amount of the liquidation preference of each such class or series
then issued and outstanding.
B. CONTINGENT AUTOMATIC CONVERSION. Exhibit 1 to this Amendment sets
forth the conversion terms for the Series One Preferred Stock. Upon one or
more of the events described in Exhibit 1 all or the specified portion of
the Series One Preferred Stock shall convert to Common Stock of the
Corporation, on a share-for-share basis. (One share of Series One Preferred
Stock shall convert into one share of Common Stock of the Corporation.)
Provided, however if a Common Stock stock dividend, stock split, share
combination, exchange of shares, recapitalization, consolidation,
reorganization, or liquidation of or by this Corporation shall occur prior
to the conversation of all of the Series One Preferred Stock into Common
Stock of the Corporation, the Corporation shall adjust the Common Stock
conversion ratio of the remaining, unconverted shares of the Series One
Preferred Stock to the extent the Board of Directors of the Corporation in
good faith determines appropriate to reflect the equity of the applicable
transaction. The Corporation shall notify each holder of the Series One
Preferred Stock of the conversion. Upon notification, each holder shall
promptly surrender his or her shares to the Corporation or to the
Corporation's designated transfer agent, duly endorsed with signatures
guaranteed. However, surrender of Series One Preferred Stock shall not be
necessary to effectuate a conversion pursuant to Exhibit 1. In the event
less than all of the outstanding shares of the Series One Preferred Stock
automatically convert under paragraph 2 of Exhibit 1 at the end of a
calendar year the conversion shall be pro rata among all of the outstanding
shares.
- 35 -
C. REDEMPTION RIGHT. The Corporation may, at any time and from time to
time after MARCH 31, 2008, at the option of the Board of Directors, redeem
the whole or any part of the outstanding and unconverted Series One
Preferred Stock on any MARCH 31ST after the issuance thereof (the
designated date is the "Redemption Date"), by paying a price for each of
the Series One Preferred Stock shares that is equal to 150% of the value
ascribed to each share when the Corporation purchased First Security Bank,
together with the sum equivalent to all unpaid dividends accrued thereon,
upon sixty (60) days notice by mail to the holders of record thereof. If
less than all the shares of the Series One Preferred Stock are to be
redeemed, the shares to be redeemed shall be selected pro rata among the
holders, as Board of Directors shall determine. At any time prior to the
Redemption Date, the holder of the shares of the Series One Preferred Stock
to be redeemed may exercise his or her right to convert such Preferred
Stock into Common Stock, as heretofore provided.
D. VOTING RIGHTS. Each share of the Series One Preferred Stock issued
and outstanding shall entitle the holder to one vote on all matters coming
before the shareholders of the Corporation on parity with each of the
shares of Common Stock issued and outstanding. In addition, the holders of
the Series One Preferred Stock shall have any special voting rights
reserved to them under applicable Florida Law.
E. DIVIDEND RIGHTS. Except as provided in this paragraph, the Series
One Preferred Stock shall not have a preference as to dividends but shall
participate on parity with any dividend payable on the Common Stock, as and
- 36 -
when declared. Anything contained herein to the contrary notwithstanding,
if, and only if:
1. The "Target Level" of $2,460,000 specified in Exhibit 1 hereto
as the first target causing a conversion of the Series One Preferred
Shares is not achieved by MARCH 31, 2003, the Series One Preferred
Shares outstanding APRIL 1, 2003 shall thereafter (until the earlier
of their redemption, conversion or APRIL 1, 2004) have an annual
cumulative dividend preference on each outstanding Share over the
Common Stock (the "Preference Dividend") in the amount of $0.32 per
Share, and shall also participate with any dividend payable on the
Common Stock, with the participation fixed at two-thirds (2/3) of the
dividend amounts paid on the shares of Common Stock.
2. The "Target Level" of $6,030,000 specified in Exhibit 1 hereto
as the second target causing a conversion of the Series One Preferred
Shares is not achieved by MARCH 31, 2004, the Series One Preferred
Shares outstanding on APRIL 1, 2004 shall thereafter (until the
earlier of their redemption, conversion or APRIL 1, 2005) have an
annual cumulative dividend preference on each outstanding Share over
the Common Stock (the "Preference Dividend") in the amount of $0.64
per Share, and shall also participate with any dividend payable on the
Common Stock, with the participation fixed at one-third (1/3) of the
dividend amounts paid on the shares of Common Stock.
3. The "Target Level" of $10,980,000 specified in Exhibit 1
hereto as the third target causing a conversion of the Series One
Preferred Shares is not achieved by MARCH 31, 2005, the Series One
Preferred Shares outstanding on APRIL 1, 2005 shall thereafter (until
- 37 -
the earlier of their redemption or conversion) have an annual
cumulative dividend preference on each outstanding Share over the
Common Stock (the "Preference Dividend") in the amount of $0.96 per
Share, and shall also participate with any dividend payable on the
Common Stock, but without participation in the dividend amounts paid
on the shares of Common Stock.
The Preference Dividend shall be paid in the discretion of the
Board of Directors of the Corporation, but shall cumulate until paid
in full. Any shares of the Series One Preferred Stock converted or
redeemed during a fiscal year shall participate in the Preference
Dividend for that year and any unpaid cumulated dividends shall be
paid at the time of redemption or conversion.
During the time the Series One Preferred Shares participate in
dividends on parity with the Common Stock, no dividend in cash or
property may be paid upon the Common Stock unless a like dividend "per
share" is paid on each share of the Series One Preferred Stock then
issued and outstanding. During the time the Series One Preferred
Shares are entitled to a dividend preference, no dividend shall be
paid on the Common Stock unless and until the preference dividends
have been first fully paid.
3. DATE ADOPTED: These Articles of Amendment were adopted March __,
2001.
4. APPROVAL BY BOARD OF DIRECTORS: These Articles of Amendment have
been approved by the Board of Directors of this Corporation and are filed
pursuant to Florida Statutes 607.0602. The vote of the Board of Directors
- 38 -
was unanimous and sufficient to carry this Amendment. A vote of the
shareholders is not required under the above Statutes.
IN WITNESS WHEREOF, the undersigned, as President, has executed this
Amendment on behalf of this corporation this ____ day of March 2001.
President
- 39 -
EXHIBIT 1
AMENDMENT TO ARTICLES OF INCORPORATION
UNITED FINANCIAL HOLDINGS, INC.
SERIES ONE PREFERRED STOCK
This Exhibit sets for the conversion terms applicable to each share of the
Series One Preferred Stock issued by United Financial Holdings, Inc. (the
"Corporation").
1. AUTOMATIC CONVERSION ON CHANGE OF CONTROL. Upon any Change of Control of
the Corporation, each share of the Series One Preferred Stock then issued and
outstanding shall automatically be converted into and become one (1) share of
the $0.01 par value Common Stock of the Corporation. For purposes of this
Agreement, a "Change of Control" shall be deemed to occur if prior to APRIL 1,
2006 a holding company change in control application filed with the Federal
Reserve is finally approved by all federal and state agencies having
jurisdiction thereof, permitting the direct or indirect transfer of fifty-one
percent (51%), or more, of the voting common stock of United Financial Holdings,
Inc., from its shareholder group, as that group exists on December 31, 2001 and
the shares of United Financial Holdings, Inc., representing such Change of
Control have in fact been lawfully transferred to the control group designated
in the application.
2. AUTOMATIC CONVERSION BASED ON TARGET. If at any time after the later of
MARCH 31, 2001 or the date the Corporation's purchase of First Security Bank is
closed, but prior to redemption of the Series One Preferred Shares by the
Corporation (herein referred to as the "Reference Period"), the Cumulative Net
Interest Income of First Security Bank, calculated through the Reference Period
(after all proper adjustments) equals one or more "Target Level," the
"Applicable Percentage" of the initially issued and outstanding shares of the
Series One Preferred Stock shall automatically be converted as of the end of the
calendar month following the month in which a Target Level was met. Upon meeting
- 40 -
the Target Level, the Applicable Percentage of the Series One Preferred Stock
shall automatically convert and become one (1) share of the Corporation's $0.01
par value Common Stock, rounded in each case to the nearest whole share. The
Target Levels and Applicable Percentages for this purpose are as set forth in
the following table:
TARGET
LEVEL APPLICABLE PERCENTAGE
----------- ---------------------------------------------------
$2,460,000 Thirty-three percent (33%)
$6,030,000 Additional thirty three percent (33%)
$10,980,000 Cumulative One hundred percent (100%)
The term "Cumulative Net Interest Income" is the cumulative amount of
interest income earned by First Security during the Reference Period through the
date the year-end Target Level is being calculated from its loans and
investments reduced by the cumulative amount paid or accrued by First Security
Bank during the Reference Period of (i) any interest paid or accrued on any
indebtedness of First Security Bank, including without limitation, deposit
liabilities and obligations to the Corporation, (ii) any interest paid or
accrued by the Corporation on any indebtedness for borrowed money that is
allocable to funds invested as capital in First Security, and (iii) any
additions (as determined and prescribed by the Corporation) that are made to
First Security's loan loss reserve during the Reference Period.
The Cumulative Net Interest Income earned by First Security calculated
during the Reference Period shall be determined by the Corporation on a
- 41 -
consistent basis, without audit, in accordance with generally accepted
accounting principles, on a consolidating basis (as opposed to a consolidated
basis).
Within thirty (30) days after the Cumulative Net Interest Income as of the
close of a calendar month within the Reference Period equals a Target Level, the
Corporation shall send written notice to each holder of the Series One Preferred
Stock. In the event of any dispute as to the amount of the Cumulative Net
Interest Income, such dispute shall be resolved by the Holding Company's
independent firm of Certified Public Accountants, and the determination of the
accountants, unless patently erroneous, shall be final, and binding on all
parties.
- 42 -
EXHIBIT C
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made and entered into as of this 1st
day of April, 2001, by and among United Financial Holdings, Inc., a Florida
corporation ("Holding Company"), _________________________ (the "Escrow Agent"),
and _______________________________ ("Stockholder").
BACKGROUND
Pursuant to the Stock Purchase Agreement dated as of September 22, 2000, as
amended, (the "Agreement"), between United Financial Holdings, Inc. ("Holding
Company"), First Security Bank ("First Security") and its Stockholders
("Stockholders") First Security was acquired by Holding Company. Under the
Agreement, Cash Consideration and Preferred Shares have been exchanged or paid
by the Holding Company for all of the issued and outstanding shares of First
Security. The Agreement contains certain indemnification provisions for the
benefit of the Holding Company. As security for the performance of such
indemnification provisions, the Agreement provides for the execution and
delivery of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, and of other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. TERMS. All terms defined in the Agreement shall have the same meanings
when used herein.
2. DELIVERY OF PREFERRED SHARES AND CASH CONSIDERATION TO ESCROW AGENT.
(a) Stockholder hereby transfers to the Escrow Agent [________ shares
of Holding Company Preferred Stock, accompanied by an irrevocable stock
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power endorsed in blank] and [$_______ Cash Consideration], which shall be
used by the Escrow Agent to create a fund (the "Escrow Fund"), subject to
the terms and conditions of this Agreement.
(b) In the event of any stock dividend, stock split into a larger
number of shares, stock combination into a smaller number of shares with
respect to the Preferred Shares or any Common Shares held in the Escrow
Fund (collectively the "Shares"), in each case whether by reclassification
of Shares, recapitalization or otherwise, which becomes effective while
Shares are held in the Escrow Fund, the additional Shares issued shall be
added to the Escrow Fund and shall be subject to the terms and conditions
of this Agreement as if such shares were initially delivered at the
Closing. The Escrow Fund shall also include any Common Shares issued upon
any conversion of any Preferred Shares held in the Escrow Fund, any
dividend paid with respect to any of the Shares, and any security or other
property issued, paid or distributed as an addition to, in substitution of,
or in exchange for any of the Shares, and all proceeds.
3. ESCROW FUND INCOME. The Escrow Agent shall invest all Profits (as
hereinafter defined) in federally insured interest-bearing deposit accounts
or in marketable obligations issued or guaranteed by the United States of
America, as the Escrow Agent may select. All net profits resulting from, or
interest or income produced by investments of, the Escrow Fund, including
cash dividends on the Shares (the "Profits"), shall become part of the
Escrow Fund and shall be distributed pursuant to the terms of this
Agreement.
4. INDEMNIFICATION CLAIMS. Upon determination by Holding Company that it
has a claim for indemnification from the Escrow Fund under the Agreement,
Holding Company shall notify the Stockholder in writing (the
"Indemnification Notice") as to the amount of the claim and shall deliver a
copy of the Indemnification Notice to the Escrow Agent, and the following
shall apply:
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(i) Fifteen (15) days after the date of receipt of the Indemnification
Notice by the Escrow Agent, the Escrow Agent shall pay to Holding
Company from the Escrow Fund the amount of the claim stated in the
Indemnification Notice, unless prior to the expiration of that fifteen
(15) day period the Escrow Agent receives written notice (the "Dispute
Notice") from the Stockholder stating that the amount of the claim is
being contested.
(ii) If a Dispute Notice is delivered to the Escrow Agent prior to the
expiration of that fifteen (15) day period, the Escrow Agent shall pay
to Holding Company from the Escrow Fund the amount of the claim stated
in the Indemnification Notice fifteen (15) days after the date of
receipt of the Dispute Notice by the Escrow Agent, unless (a) payment
by the Escrow Agent is restrained or enjoined by a court of competent
jurisdiction, or (a) prior to the expiration of that fifteen (15) day
period the Escrow Agent is directed to pay a different amount to the
Holding Company pursuant to a written notice received by the Escrow
Agent from Holding Company and the Stockholder.
(iii) The Escrow Agent shall pay to Holding Company from the Escrow
Fund such amount of amounts as shall be directed to be paid in any
final order, decree or judgment (a "Final Decree") received by the
Escrow Agent from a court of competent jurisdiction.
5. PAYMENT FOR CLAIMS. All claims of Holding Company against the Escrow
Fund shall be paid pro rata out of shares of [Shares] and [Cash] held in
the Escrow Fund. Shares shall be valued based upon the most recent trading
price of any of Holding Company's registered and outstanding common shares,
and in the case of Preferred Shares, using the conversion ratio then
applicable.
6. DISTRIBUTION AND TERMINATION.
(a) FUND DISTRIBUTION.
i) Within fifteen (15) days following NOVEMBER 1, 2001, Holding
Company shall deliver to the Stockholder and the Escrow Agent a
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written report of all claims for indemnification under the
Agreement which it has as of such date (whether or not Holding
Company has previously provided an Indemnification Notice with
respect to any such claim) (the "Distribution Report"). The
Distribution Report shall constitute an Indemnification Notice
for the purposes of Section 4 of this Agreement.
(ii) As soon as practicable after December 31, 2001, (the
"Distribution Date") and subject to the other provisions of this
Section 6, the Escrow Agent shall distribute the Escrow Fund not
used or held to satisfy claims, as provided below, to the
Stockholder. The distribution shall not terminate the
indemnification provisions of the Agreement, which shall continue
in full force and effect in accordance with their terms.
(iii) Notwithstanding the above, however, if any claims for
indemnification under the Agreement (of which the Stockholder and
the Escrow Agent have received an Indemnification Notice on or
before the Distribution Date or which were identified in the
Distribution Report) remain pending on the Distribution Date, and
the amount reflected in either such notice has not been paid to
Holding Company, then the Escrow Agent shall withhold in the
Escrow Fund an amount equal to such pending claims.
(iv) Subject to Section 7 hereof, all amounts in the Escrow Fund
on the Distribution Date in excess of such pending claims shall
be immediately distributed to the Stockholder. The distribution
shall not terminate the indemnification provisions of the
Agreement, which shall continue in full force and effect in
accordance with their terms.
(v) For purposes of determining the number of Shares to be
delivered to the Stockholder or retained in the Escrow Fund
following the Distribution Date, all Shares held in the Escrow
Fund shall be valued as provided in Section 5.
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(b) WITHHELD ASSETS. Any assets withheld pursuant to Section 7(a)
shall be retained by the Escrow Agent in the Escrow Fund until (i)
fifteen (15) days shall have expired since Holding Company delivered
to the Escrow Agent and the Stockholder a copy of an Indemnification
Notice or the Distribution Report and the Escrow Agent shall not have
received a Dispute Notice within such time from the Stockholder, at
which time the Escrow Agent shall pay Holding Company the amount of
such claim, (ii) the Escrow Agent receives written direction from
Holding Company and the Stockholder directing the Escrow Agent to
disburse assets, in which case disbursement shall be made in
accordance with such direction, (iii) the Escrow Agent receives a
written notice from Holding Company and Stockholder directing that any
pending claim, or any portion thereof, be paid, in which case payment
of such pending claim or portion thereof shall be made in accordance
with such notice, or (iv) the Escrow Agent receives a Final Decree
directing that a pending claim, or any portion thereof, be paid, in
which case payment of such pending claim or portion thereof shall be
made in accordance with such Final Decree. At such time as any claim
pending on the Distribution Date is no longer pending, the Escrow
Agent shall distribute to the Stockholder, any balance of the assets
withheld in respect of that claim remaining after disposition of that
claim.
(c) TERMINATION. When the entire Escrow Fund has been distributed in
accordance with Section 4 and/or this Section 6, this Agreement shall
terminate.
(d) DISTRIBUTION OF SHARES. In connection with any distribution of
Shares under this Section 6, the Escrow Agent shall forward the
existing stock certificate to the transfer agent with instructions
that such certificate be canceled in exchange for new stock
certificates issued in the names of the Stockholder, Holding Company
and the Escrow Agent, as the case may be, and in connection with any
distribution of Shares to Stockholder, Holding Company hereby agrees
that it will direct the transfer agent to so issue the new
certificates and deliver such certificates to the Escrow Agent for
redelivery to the Stockholder.
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7. ESCROW AGENT.
(a) ESCROW AGENT OBLIGATIONS. The obligations and duties of the Escrow
Agent are confined to those specifically enumerated in this Agreement.
The Escrow Agent shall not be subject to, nor be under any obligation
to ascertain or construe the terms and conditions of any other
instrument, whether or not now or hereafter deposited with or
delivered to the Escrow Agent or referred to in this Agreement, nor
shall the Escrow Agent be obliged to inquire as to the identity,
authority, or rights of the person or persons executing or delivering
the same.
(b) ESCROW AGENT LIABILITY. The Escrow Agent shall not be personally
liable for any act that it may do or omit to do hereunder in good
faith and in the exercise of its own best judgment. Any act done or
omitted by the Escrow Agent in the absence of gross negligence or
willful misconduct shall be deemed conclusively to have been performed
or omitted in good faith by the Escrow Agent. The Escrow Agent shall
not be held liable for any losses that may occur as the result of the
investment or reinvestment of the Escrow Fund.
(c) CONFLICTS. If any dispute should arise with respect to the payment
and/or ownership or right of possession of the Escrow Fund, the Escrow
Agent is authorized and directed to retain in its possession, without
liability to anyone, all or any part of the Escrow Fund until such
dispute shall have been settled either by mutual written agreement by
the parties concerned or by the final order, decree or judgment of a
court of competent jurisdiction in the United States of America (the
time for appeal having expired with no appeal having been taken) in a
proceeding to which the Stockholder and Holding Company are parties,
but the Escrow Agent shall be under no duty whatsoever to institute or
defend any such proceedings; or the Escrow Agent, at its option, may
deposit the Escrow Fund in the registry of a court of competent
jurisdiction in a proceeding to which the Stockholder and Holding
Company are parties (or their respective successors or assigns). Upon
so depositing such funds and filing its complaint and interpleader,
the Escrow Agent shall be completely discharged and released from
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further liability hereunder with respect to that portion of the Escrow
Fund so deposited. Holding Company shall not seek to disqualify Escrow
Agent from representation of Stockholder in connection with any
disputes involving Holding Company and the Stockholder on the basis
that Escrow Agent has a conflict of interest due to its representation
of the Stockholder and its role hereunder as the Escrow Agent.
(d) INDEMNIFICATION OF ESCROW AGENT. Subject to the provisions of
Section 7(b) hereof, Holding Company and Stockholder jointly agree to
indemnify and hold harmless the Escrow Agent from and against all
costs, damages, judgments, attorney's fees (whether such attorneys
shall be regularly retained or specially employed), expenses,
obligations, and liabilities of every kind and nature which the Escrow
Agent may incur, sustain, or be required to pay in connection with or
arising out of this Agreement, except for any of the foregoing arising
out of the gross negligence or willful misconduct of the Escrow Agent.
(e) ESCROW AGENT'S CONDUCT; FEES. In performing its duties hereunder,
the Escrow Agent may rely on statements furnished to it by an officer
of Holding Company or by the Stockholder, or on any other evidence
deemed by the Escrow Agent to be reliable. The Escrow Agent shall be
entitled to be reimbursed 50% by Holding Company and 50% by
Stockholder for any reasonable expenses incurred by the Escrow Agent
when performing its obligations hereunder in connection with any
litigation or other court proceedings or any disputes between the
parties relating thereto.
(f) RESIGNATION AND REMOVAL. The Escrow Agent may resign and be
discharged from its duties hereunder at any time by giving at least
twenty (20) days written notice of such resignation to the Stockholder
and Holding Company, specifying a date upon which such resignation
shall take effect; provided however, that the Escrow Agent shall
continue to serve until a successor approved by Holding Company and
Stockholder accepts the Escrow Fund. Upon receipt of such written
notice, a successor Escrow Agent shall be appointed by the Stockholder
and Holding Company. If an instrument of acceptance by a successor
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escrow agent shall not have been delivered to the Escrow Agent within
thirty (30) days after the giving of such notice of resignation, the
resigning Escrow Agent may at the expense of the Stockholder and
Holding Company petition any court of competent jurisdiction of the
appointment of a successor escrow agent. The Stockholder and Holding
Company, acting jointly, may at any time substitute a new Escrow Agent
by giving ten (10) days notice thereof to the current Escrow Agent
then acting.
8. MISCELLANEOUS.
(a) VOTING. Stockholder shall have the exclusive right to exercise his
or her voting rights in its sole discretion with respect to the Shares
held in the Escrow Fund, and the Escrow Agent shall cause the Shares
held in the Escrow Fund to be voted in the manner as directed by
Stockholder. The Escrow Agent shall not vote any Shares as to which
the Escrow Agent receives no direction as to voting.
(b) SUCCESSORS. This Agreement shall be binding on and inure to the
benefit of the Stockholder, Holding Company and Escrow Agent and their
respective successors and permitted assigns.
(c) NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given upon the earlier of delivery
thereof if by hand or upon receipt if sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or on the
second next business day after deposit if sent by a recognized
overnight delivery service or upon transmission if sent by telecopy or
delivery service or upon transmission if sent by telecopy or facsimile
transmission (with request of assurance of receipt in a manner
customary for communication of such type) to the addresses specified
for each party in the Agreement and to the Escrow Agent as follows:
TO THE ESCROW AGENT: _____________________
--------------------------------------------
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TO THE STOCKHOLDER: _______________________
--------------------------------------------
TO THE HOLDING COMPANY: _________________
--------------------------------------------
The Escrow Agent agrees to promptly deliver a copy of each Dispute Notice
that it receives to Holding Company.
(d) NEW ESCROW AGENT. If the Escrow Agent shall decline or cease to act as
Escrow Agent, Holding Company and the Stockholder shall appoint a successor.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to the
conflicts-of-law rules thereof.
(f) AMENDMENT OR MODIFICATION. The terms of this Agreement may be altered,
amended, modified or revoked by writing only, signed by Holding Company, the
Escrow Agent and the Stockholder.
(g) REPORTS FROM ESCROW AGENT. The Escrow Agent shall furnish to Holding
Company and the Stockholder quarterly reports listing each transaction made by
the Escrow Agent during such quarter with respect to this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
(i) HEADINGS. The article and section headings contained in this Agreement
are solely for the purpose of reference, are not part of the agreement of the
parties and shall not affect in any way the meaning or interpretation of this
Agreement.
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(j) WAIVER OF COMPLIANCE; CONSENTS. Any failure of the parties hereto to
comply with any obligation, covenant, agreement or condition contained herein
may be waived in writing by the other parties hereto, respectively, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.
(k) VALIDITY. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
(l) ASSIGNMENT. This Agreement shall not be assigned other than by
operation of law.
(m) BACKGROUND. The Background statement is true and correct and is
incorporated herein and made a part hereof.
[Signatures next page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
UNITED FINANCIAL HOLDINGS, INC.
By: _____________________________
Name: __________________________
Title:____________________________
ESCROW AGENT: _______________________________
By: ___________________________________________
Name: ________________________________________
Title: _________________________________________
STOCKHOLDER:
-----------------------------------------------
By:____________________________________________
[NAME]
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