Termination Agreement
This Termination Agreement (the "Termination Agreement") is entered
into effective as of April 13, 2007, by and among Texas Capital Bank, N.A., a
national banking association ("Seller"), and Transnational Financial Network,
Inc., a California corporation ("Buyer"), Xxxxxxx Xxxxxxx, Xxxxxx Xxxx Xxxxxx
III, Xxxxxxx X. XxXxxxx, Xxxxx Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxxxxxxx and Xxxxxxxx
X. Xxxxxxxxx, each an individual resident of Texas and, as of the date hereof,
an employee of Seller (collectively, the "Employees"), and Xxxxxxxxx & Xxxxxxxx
LLP, a Texas limited liability partnership, as the escrow agent (the "Escrow
Agent").
Recitals
WHEREAS, Buyer and Seller have entered into that certain Asset
Purchase and Sale Agreement (the "Purchase Agreement"), dated as of
September 30, 2006 and amended on October 18, 2006, pursuant to which
Buyer agreed to purchase from Seller substantially all of the assets of
Seller's residential mortgage lending business (the "Business").
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them by the Purchase Agreement.
Whereas, prior to entering into the Purchase Agreement, Buyer
and Seller entered into a Loan Purchase Agreement, dated as of
September 28, 2006 (the "Correspondent Agreement") pertaining to the
sale of mortgage loans from Seller to Buyer pending the effectiveness
of the Purchase Agreement.
Whereas, in connection with the Purchase Agreement, Buyer and
Seller have entered into a Services Agreement, dated as of September
30, 2006 (the "Services Agreement"), and a Stock Put and Call Agreement
entered into as of December 5, 2006 (the "Stock Put and Call
Agreement").
Whereas, also in connection with the Purchase Agreement, Buyer
and Seller entered into an Escrow Agreement, dated as of December 5,
2006 (the "Escrow Agreement"), with Xxxxxxxxx & Xxxxxxxx LLP as the
Escrow Agent and the Employees.
Whereas, Buyer and Seller have determined that it is not in
the best interests of either party to proceed further with the
transaction contemplated by the Purchase Agreement, and the parties now
desire to terminate their respective obligations under the Purchase
Agreement and the Escrow Agreement and to unwind as much of the
transactions that have occurred under the Purchase Agreement as is
practicable under the circumstances.
Now, therefore, in consideration of the above recitals and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Termination of Obligations under the Purchase Agreement. Buyer and Seller
hereby agree that the Purchase Agreement was terminated effective as of March
31, 2007, and that the parties' respective obligations under the Purchase
Agreement will be modified consistent with the provisions of this Section 1:
a. Buyer hereby waives all rights to receive any further Assets of the Business
from Seller under the Purchase Agreement, will transfer to Seller ownership of
the assets which Seller transferred to Buyer effective as of September 30, 2006,
and will execute and deliver a Xxxx of Sale with respect to such assets in the
form of Exhibit A hereto. Following Buyer's satisfaction of all payment
obligations under Section 7 hereof, upon the request of Buyer, Seller will sell
to Buyer the assets described in the Xxxx of Sale for a reasonable price
mutually agreeable to Buyer and Seller.
b. Seller, for itself and the Employees, hereby waives all rights to receive the
Initial Earn-Out Shares and the Remaining Earn-Out Shares under Section II of
the Purchase Agreement and agrees that Buyer will not be required to deliver to
Seller any additional shares of Buyer Common Stock.
c. Buyer hereby assigns to Seller, and Seller hereby assumes, all rights and
obligations under the contracts and equipment leases set forth in Schedule 1
hereto.
d. Buyer hereby agrees that, except as otherwise may be provided herein, Seller
will have no further obligations under the covenants of Seller set forth in
Section V of the Purchase Agreement.
e. Seller hereby agrees that, except as otherwise may be provided herein, Buyer
will have no further obligations under the covenants of Buyer set forth in
Section VI of the Purchase Agreement.
f. Buyer and Seller hereby agree that the Closing described in Section
VII of the Purchase Agreement will not occur.
g. Seller will be entitled to retain the shares of Buyer Common Stock delivered
to Seller by Buyer under Section II(A)(1)(a) of the Purchase Agreement; provided
that, upon Buyer's satisfaction of its payment obligations under Section 7
hereof, and in accordance with such Section 7, Seller will tender the shares of
Buyer Common Stock to Buyer without and for no consideration.
h. For a period of two (2) years from the date of this Termination Agreement,
Seller shall refrain from interfering with the employment arrangements between
the Buyer and any of Buyer's affiliates and subsidiaries and their respective
employees and will not in any way solicit, recruit, hire, assist others in
recruiting or hiring, or discuss employment arrangements with any employees of
the Buyer, or any of Buyer's affiliates and subsidiaries. Nothing in this
Section 1(h) shall prevent Seller from hiring or retaining as an employee any
employee of the Business who is not as of the date hereof or does not become at
any point hereafter an employee of Buyer.
i. Under the terms of the Purchase Agreement, the Employees received shares of
Buyer Common Stock as shown on Schedule 2 hereto (collectively, the "Employee
Shares"). Employees hereby agree to return the Employee Shares to Buyer, without
and for no consideration, and will tender the certificates representing the
Employee Shares to Buyer concurrent with the Employees' execution and delivery
of this Termination Agreement. Concurrent with Buyer's receipt of the Employee
Shares from the Employees, Buyer shall execute and deliver to the Employees the
receipt attached hereto as Exhibit B. With respect to the Employees' return of
the Employee Shares, because the Employees received no financial benefit from
their ownership of the Employee Shares, Buyer and Seller agree and intend that
the Employees should not have to incur or suffer from any tax impact with
respect to their temporary ownership of such shares of Buyer Common Stock.
2. Balance of Payment Obligations under the Services Agreement. Buyer and Seller
acknowledge that the Services Agreement was terminated on March 31, 2007 and
agree that, as of the date hereof, Buyer owes to Seller approximately $350,000
for services rendered by Seller to Buyer through the termination of the Services
Agreement. In consideration and settlement of Buyer's payment obligations to
Seller under the Services Agreement, concurrent with the execution and delivery
of this Termination Agreement, Buyer will execute and deliver the promissory
note described in Section 7 hereof and attached hereto as Exhibit C and will
make all required payments thereunder.
3. Property Held under the Escrow Agreement. Buyer and Seller hereby direct the
Escrow Agent to release all properties held by the Escrow Agent to the Buyer
concurrent with the execution of this Termination Agreement. Employees hereby
acknowledge and agree to the release of the properties held by the Escrow Agent
to Buyer. Buyer, Seller, Escrow Agent and Employees hereby agree that the Escrow
Agreement will be terminated effective upon the Escrow Agent's release of the
properties held by the Escrow Agent to the Buyer.
4. Stock Put and Call Agreement. Notwithstanding any general or specific
releases granted by Buyer and Seller in favor of one another in this Termination
Agreement, Buyer and Seller agree that the Stock Put and Call Agreement will
remain in full force and effect, in accordance with its terms, so long as Seller
or any of its subsidiaries or affiliates is the beneficial owner of at least a
share of Buyer Common Stock.
5. Correspondent Agreement. Buyer and Seller hereby acknowledge and
agree that the Correspondent Agreement was terminated effective as of
October 1, 2006 by virtue of the parties' entering into the Purchase Agreement.
6. Loans.
a. Loans originated by Seller and purchased by Buyer. Under Section I(A)(5) of
the Purchase Agreement, during the period from October 1, 2006 to March 30,
2007, Buyer acquired from Seller a number of Mortgage Loans originated by Seller
which Mortgage Loans are listed on Schedule 3 hereto. With respect to the
Mortgage Loans listed on Schedule 3 hereto, notwithstanding any other agreement
between Buyer and Seller to the contrary, Buyer hereby agrees that Seller will
have no obligation to repurchase from Buyer, indemnify Buyer for or reimburse
Buyer for any costs or expenses associated with any such Mortgage Loans.
Any
loans purchased from Seller by Buyer under Section 6(b) hereof after the date of
this Termination Agreement shall be deemed to be included on Schedule 3 and
subject to the terms of this Section 6(a).
b. Loans originated by Seller and agreed to be purchased by Buyer. Schedule 4
hereto contains a list of Mortgage Loans which Buyer agreed to purchase from
Seller under Section I(A)(5) of the Purchase Agreement, and for which Buyer has
taken possession of the loan files or for which the delivery of such files is
pending, but has not yet purchased from Buyer or paid Buyer the agreed upon
purchase price therefor. With respect to the loans on Schedule 4 for which Buyer
has taken delivery of the loan files, Buyer, on a best efforts basis, will sell
these loans to third-party investors within a period of two (2) weeks from the
date of this Termination Agreement. If Buyer is able to line-up purchasers for
such loans, Buyer shall acquire such loans from Seller for the purchase price
set forth in the applicable lock commitment. If Buyer is not able to find
purchasers for such loans within the agreed upon time frame, Buyer shall return
all such loan files to Seller, and Seller will retain all rights and obligations
with respect to such loans. With respect to the loans on Schedule 4 for which
Buyer has not taken delivery of the loan files, Seller will retain all rights
and obligations with respect to such loans.
c. Loans committed to be made by Seller and agreed to be purchased by Buyer.
Schedule 5 hereto contains a list of Mortgage Loans for which commitment letters
have been issued and which Buyer agreed to purchase from Seller under Section
I(A)(5) of the Purchase Agreement, but which have not yet been closed and funded
by Seller. With respect the loans on Schedule 5, Seller hereby agrees to honor
its commitment to fund these loans and relieves and releases Buyer from its
obligation to purchase these loans from Seller following the funding and closing
thereof. Seller retains all rights to sell the loans on Schedule 5 to
third-party investors following the funding and closing thereof. Buyer hereby
assigns to Seller any and all rights under any agreements entered into by Buyer
with third-party investors pertaining to the sale of the loans on Schedule 5 by
Buyer to any such third-party investors.
d. Loans originated by Seller and purchased by investors other than Buyer. With
respect to mortgage loans originated by Seller in the ordinary course of
operating the Business consistent with the Purchase Agreement and the Services
Agreement during the period from October 1, 2006 to March 30, 2007, which loans
were sold by Seller to third-party investors and for which Buyer received a
beneficial, economic interest under the Services Agreement, Seller shall be
responsible for satisfying payment and other obligations pursuant to
indemnification or repurchase requests received from the third-party investors
who acquired such loans.
e. Treatment of Specific Loans. Schedule 6 hereto describes the
agreement of Buyer and Seller with respect to loans specifically
identified therein.
f. Buyer's failure to comply with its obligations under this Section 6 shall
constitute a default under the Note and under this Termination Agreement.
7.
Payment under Note; Return of Shares of Buyer Common Stock.
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a. As payment in full of all amounts owing to Seller by Buyer under the Services
Agreement, Buyer will execute and deliver and will make payments to Seller in
accordance with the terms of the promissory note in the original principal
amount of $340,000 attached hereto as Exhibit C (the "Note").
b. On the date hereof, Seller is the beneficial owner of 1,133,645 shares of
Buyer Common Stock. In accordance with the provisions of this Section 7(b),
without and for no consideration, promptly following the receipt of each payment
made as required under the terms of the Note, Seller will execute and deliver to
Buyer stock powers pertaining to the return to Buyer of shares of Buyer Common
Stock owned by Seller as follows:
i. Concurrent with the execution and delivery of this Termination Agreement,
Seller will execute and deliver to Buyer stock powers in favor of Buyer
pertaining to the transfer by Seller of 362,776 of the shares of Buyer Common
Stock held by Seller. Seller will retain the certificate representing Seller's
shares of Buyer Common Stock until such time as Seller receives from Buyer
evidence that Buyer is prepared to issue three replacement stock certificates to
Seller in the amounts of 226,729 shares, 272,075 shares and 272,075 shares of
Buyer Common Stock.
ii. Following the receipt of the full payment of Installment #2 under the Note,
Seller will execute and deliver to Buyer stock powers in favor of Buyer and the
stock certificate pertaining to the transfer by Seller of 226,729 of the shares
of Buyer Common Stock held by Seller.
iii. Following the receipt of the full payment of Installment #3 under the Note,
Seller will execute and deliver to Buyer stock powers in favor of Buyer and the
stock certificate pertaining to the transfer by Seller of 272,075 of the shares
of Buyer Common Stock held by Seller.
iv. Following the receipt of the full payment of Installment #4 under the Note,
Seller will execute and deliver to Buyer stock powers in favor of Buyer and
deliver the share certificate representing the transfer by Seller of the
remaining 272,075 of the shares of Buyer Common Stock held by Seller. Concurrent
with the delivery of these shares, Buyer and Seller will execute and deliver an
agreement by which the Stock Put and Call Agreement will be terminated.
c. In the event that Buyer fails to make timely payment of any amount due to
Seller under the Note, Seller's obligations under this Section 7 immediately and
irrevocably will cease, and Seller's release under Section 8(b) hereof shall not
become effective.
8. Releases.
a. For and in consideration of the release from Seller set forth in Section 8(b)
hereto, the receipt and sufficiency of which are hereby acknowledged, on behalf
of Buyer and its successors, assigns, affiliates, officers, directors,
representatives, agents, attorneys and shareholders, Buyer hereby voluntarily
and knowingly grants this full, final, complete and general release with the
express intention of extinguishing all existing and inchoate claims, actions,
demands, and/or causes of action, whether now known or unknown, which Buyer has,
may have or may claim to have against Seller, or any of its successors, assigns,
affiliates, officers, directors, representatives, agents, attorneys and
shareholders, including, but not limited to, claims with respect to or arising
out of Seller's obligations under any agreement or business arrangement or any
other dealings between Seller and Buyer, including, but not limited to, the
Purchase Agreement, the Services Agreement and the Escrow Agreement.
b. For and in consideration of the release from Buyer set forth in Section 8(a)
hereto, the receipt and sufficiency of which are hereby acknowledged, on behalf
of Seller and its successors, assigns, affiliates, officers, directors,
representatives, agents, attorneys and shareholders, Seller hereby voluntarily
and knowingly grants this full, final, complete and general release with the
express intention of extinguishing all existing and inchoate claims, actions,
demands, and/or causes of action, whether now known or unknown, which Seller
has, may have or may claim to have against Buyer, or any of its successors,
assigns, affiliates, officers, directors, representatives, agents, attorneys and
shareholders, with respect to or arising out of Buyer's obligations under the
Purchase Agreement, the Services Agreement and the Escrow Agreement.
c. Buyer's release in favor of Seller set forth in Section 8(a) hereof will be
effective upon the execution and delivery by Buyer of this Termination
Agreement. Seller's release in favor of Buyer will be effective upon the payment
in full by Buyer of all amounts under the Note to be executed and delivered by
Buyer under Section 7 hereof.
9. Winding Down the Business. In order to wind-down the Business and ensure that
current and prospective customers of the Business are served pending the
winding-down of the Business, in connection with written commitments to make
loans issued to customers of the Business on or before the date hereof, Seller
hereby agrees to fund those loans in accordance with and subject to the terms
and provisions of applicable commitment letters, underwriting criteria and other
policies and procedures of Seller applicable to the Business. Buyer further
agrees to will take all other actions it deems necessary or appropriate, in its
sole and absolute discretion, to wind-down in the Business. Buyer hereby agrees
to assist Seller in the winding-down of the Business by taking such actions and
providing such information as Seller may reasonably request, from time to time,
on and after the date hereof.
10. Non-Disparagement.
a. Buyer agrees that it will engage in no act which is intended, or reasonably
may be expected, to harm the reputation, business, prospects, or operations of
Seller, Seller's affiliates and the officers, directors, shareholders and
employees of any of them. Buyer further agrees that it will not disparage
Seller, Seller's affiliates and the officers, directors, shareholders and
employees of any of them, or otherwise make comments (written or oral) which are
intended, or reasonably may be expected to harm the reputation, business,
prospects, or operations of the Seller, Seller's affiliates and the officers,
directors, shareholders and employees of any of them.
b. Seller agrees that it will engage in no act which is intended, or reasonably
may be expected, to harm the reputation, business, prospects, or operations of
Buyer, Buyer's affiliates and the officers, directors, shareholders and
employees of any of them. Seller further agrees that it will not disparage
Buyer, Buyer's affiliates and the officers, directors, shareholders and
employees of any of them, or otherwise make comments (written or oral) which are
intended, or reasonably may be expected to harm the reputation, business,
prospects, or operations of the Buyer, Buyer's affiliates and the officers,
directors, shareholders and employees of any of them.
11. Representations and Warranties.
a. Seller Representations and Warranties. Seller makes the following
representations and warranties on and as of the date of signing this
Termination Agreement:
i. Organization and Qualification. Seller is a national banking
association organized, validly existing and in good standing under the laws
of the United States of America and the regulations of the Office of the
Comptroller of the Currency. Seller has the power and authority to execute
and deliver this Termination Agreement and to perform its obligations hereunder.
ii. Authority. The execution and delivery of this Termination Agreement by
Seller and Seller's performance of its obligations hereunder have been duly
authorized by all necessary corporate action of Seller. This Termination
Agreement constitutes the valid and binding obligation of Seller enforceable
against Seller in accordance with its terms. The person who has executed this
Termination Agreement for and on behalf of Seller has been duly authorized to do
so by all necessary corporate action of Seller.
b. Buyer Representations and Warranties. Buyer makes the following
representations and warranties on and as of the date of signing this
Termination Agreement:
i. Corporate Organization and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California. Buyer has the corporate power and authority to
execute and deliver this Termination Agreement and to perform its
obligations hereunder.
ii. Authority. The execution and delivery of this Termination Agreement by Buyer
and Buyer's performance of its obligations hereunder have been duly authorized
by all necessary corporate action of Buyer. This Termination Agreement
constitutes the valid and binding obligation of Buyer enforceable against Buyer
in accordance with its terms. The person who has executed this Termination
Agreement for and on behalf of Buyer has been duly authorized to do so by all
necessary corporate action of Buyer. Neither the execution and delivery of this
Termination Agreement nor Buyer's performance of its obligations under this
Termination Agreement will (a) violate any provision of Buyer's organizational
documents, (b) violate any contract or agreement to which Buyer is a party or by
or to which Buyer may be bound or subject or affected, or any judgment, order,
injunction, decree or award against, or binding upon, Buyer or upon the
securities, property or business of Buyer, which violation would prevent
Buyer's
performance of its obligations under this Termination Agreement or (c) to
Buyer's knowledge, constitute a violation by Buyer of any law or regulation of
any jurisdiction.
12. Miscellaneous.
a. Entire Agreement. This Termination Agreement contains, and is intended as, a
complete statement of all of the terms and the arrangements between the parties
with respect to the matters provided for and supersedes any previous agreements
and understandings between the parties with respect to those matters. This
Termination Agreement may not be amended, terminated or otherwise modified
except by a writing executed and delivered by both Buyer and Seller.
b. Headings. The headings in this Termination Agreement are solely
for reference and will not in any way affect the interpretation of this
Termination Agreement. All references to Sections are to Sections in or to
this Termination Agreement, unless otherwise indicated.
c. Agreement to Take Necessary and Desirable Actions. Seller and
Buyer agree to execute and deliver such other documents, certificates and
agreements and to take such other actions as may be reasonably necessary or
reasonably appropriate to consummate the transactions contemplated hereby.
d. Binding Affect; Assignment. This Termination Agreement will be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. No assignment of this Termination Agreement or of any rights
or obligations hereunder may be made by either party (by operation of law or
otherwise) without the prior written consent of the other, and any attempted
assignment without the required consent will be void and of no force or effect.
Seller may freely assign its rights under the Note.
e. Consultation with Counsel. Each of the undersigned acknowledges
that it has had the opportunity to consult with legal counsel prior to the
execution of this Termination Agreement, and understands that this
Termination Agreement is legally binding on each of undersigned.
f. Notices. All notices and other communications under this Termination
Agreement will be in writing and will be deemed given when (1) delivered by
hand, (2) transmitted by prepaid cable, telex or telecopier (provided
that a copy is sent at about the same time by registered or certified mail,
return receipt requested), or (3) received by the addressee, if sent by
Express Mail, Federal Express, or other express delivery service to the
addressee at the following addresses, telex numbers or telecopier numbers
(or to such other address, telex number or telecopier number as a party
may specify by notice given to the other party pursuant to this provision):
If to Seller to: Texas Capital Bank, N.A.
0000 XxXxxxxx Xxx., Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Executive Vice President
Facsimile: (000) 000-0000,
with a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxxxxxx & Xxxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000.
If to Buyer to: Transnational Financial Network, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, CEO
Facsimile: (000) 000-0000,
with a copy to: Xxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000.
g. Severability. If any one or more of the provisions of this
Termination Agreement shall be found by a court of competent
jurisdiction to be unreasonably restrictive, under the circumstances,
then such provision or provisions shall be modified by such court so as to
apply the same to the maximum extent allowed by law and any such
modification shall not affect the validity of any other provision contained
in this Termination Agreement.
h. Governing Law. This Termination Agreement shall be governed by
and construed in accordance with the laws of the State of Texas.
i. Consent to Jurisdiction. The parties hereto are experienced commercial
enterprises acting with and upon the advice of legal counsel. The parties
recognize that, as the resident state of the Buyer and Seller are the State of
California and the State of Texas, respectively, each has a substantial interest
and connection to this transaction. Buyer and Seller hereby agree for themselves
and for their successors and assigns that in the event of any litigation
hereunder, the exclusive venue and place of jurisdiction for such litigation
shall be in the state courts or federal district courts situated in Dallas
County, Texas, and each party hereto specifically consents and submits to the
personal jurisdiction of such courts.
j. Counterparts. This Termination Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.
[The remainder of this page
intentionally left blank.]
IN WITNESS WHEREOF, the parties have entered into this Termination
Agreement as of the date first written above.
Seller: Buyer:
Texas Capital Bank, N.A. Transnational Financial Network,
Inc.
By: /s/ Xxxxxx Xxxxxxx
By: /s/ Xxxxx X. Xxxxxx Xxxxxx Xxxxxxx,
Xxxxx X. Xxxxxx, Chief Executive Officer
Executive Vice President
Escrow Agent: Employees:
Xxxxxxxxx & Xxxxxxxx LLP
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Partner /s/ Xxxxxx Xxxx Xxxxxx III
Xxxxxx Xxxx Xxxxxx III
/s/ Xxxxxxx X. XxXxxxx
Xxxxxxx X. XxXxxxx
/s/ Xxxxx Alexandra Xxxxx
Xxxxx Xxxxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxxxxxxx
Xxxxxx Xxxxxxxxxxx
/s/ Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxxxxx
EXHIBIT A
Xxxx of Sale
Xxxx of Sale
KNOW ALL MEN BY THESE PRESENTS, that for good and valuable
consideration as set forth in the Termination Agreement dated April 13, 2007
(the "Agreement") by and between Texas Capital Bank, N.A., a national banking
association ("TCB") and Transnational Financial Network, Inc., a California
corporation ("TFN"), the receipt and sufficiency of which consideration are
hereby acknowledged, TFN hereby grants, sells, transfers, assigns, conveys and
delivers and sets over to and unto TCB all of the Assets listed on Schedule 1 to
this Xxxx of Sale, subject to and in accordance with the terms of the Agreement.
Capitalized terms not otherwise defined herein shall have the meanings assigned
thereto in the Agreement.
For the consideration aforesaid, TFN hereby appoints TCB, its
successors and assigns, its true and lawful attorneys, with full power of
substitution in its name or otherwise, but to the use of TCB, its successors and
assigns, to demand, collect, xxx upon, receipt for and otherwise dispose of or
deal with the Assets.
TFN further covenants and agrees with TCB that it will, from time to
time, at the request of TCB, execute and deliver or cause to be executed and
delivered all such further bills of sale, assignments, instruments of transfer
and agreements as may reasonably be required by Buyer in order to more
effectually vest title in TCB to the Assets hereby conveyed or intended hereby
to be conveyed.
IN WITNESS WHEREOF, TFN has executed this Xxxx of Sale effective as of
April 13, 2007.
Transnational Financial Network, Inc.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, Chief Executive Officer
EXHIBIT B
Receipt for Employee Shares
Receipt
Reference is hereby made to the Termination Agreement entered into
effective as of April 13, 2007 (the "Termination Agreement"), by and among Texas
Capital Bank, N.A., a national banking association ("Seller"), and Transnational
Financial Network, Inc., a California corporation ("Buyer"), Xxxxxxx Xxxxxxx,
Xxxxxx Xxxx Xxxxxx III, Xxxxxxx X. XxXxxxx, Xxxxx Xxxxxxxxx Xxxxx, Xxxxxx
Xxxxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx, each an individual resident of Texas and,
as of the date hereof, an employee of Seller (collectively, the "Employees"),
and Xxxxxxxxx & Xxxxxxxx LLP, a Texas limited liability partnership, as the
escrow agent (the "Escrow Agent"). Capitalized terms used herein but not
otherwise defined hereby shall have the meanings assigned to them by the
Termination Agreement.
Buyer hereby acknowledges having received from the Employees, in
accordance with Section 1(i) of the Termination Agreement, the stock
certificates representing shares of Buyer Common Stock owned by the Employees as
shown in the following table.
Cert. # Issue Date # of Shares Issuee
C3148 10.18.2006 264,500 Xxxxxx Xxxxxx
C3149 10.18.2006 264,500 Xxxx Xxxxxxx
C3150 10.18.2006 17,250 Xxxxxx Xxxxxxxxxxx
C3151 10.18.2006 2,875 Xxxxx Xxxxx
C3152 10.18.2006 23,000 Xxx XxXxxxx
C3153 10.18.2006 2,875 Xxxxx Xxxxxxxxx
IN WITNESS WHEREOF, the undersigned has executed this Receipt effective
as of April 13, 2007.
Transnational Financial Network, Inc.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, Chief Executive Officer
EXHIBIT C
Promissory Note
$340,000.00 April 13, 0000
Xxxxxx, Xxxxx
FOR VALUE RECEIVED, Transnational Financial Network, Inc., a California
corporation ("Borrower") whose mailing address is 000 Xxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, hereby promises to pay to the order of Texas
Capital Bank, N.A., a national banking association (the "Bank"), at the Bank's
place of business located at 0000 XxXxxxxx Xxx., Xxxxx 000, Xxxxxx, Xxxxx 00000
(or at such other place as the Bank may from time to time designate by written
notice) in lawful money of the United States of America, the principal sum of
Three Hundred Forty Thousand and No/100 Dollars ($340,000.00)
Notwithstanding any provision or inference to the contrary, this Note may be
enforced without presentment, protest, or notice of dishonor, all of which are
waived by all makers and indorsers of this Note, now or hereafter existing.
Reference is hereby made to the Termination Agreement between the Bank
and the Borrower dated as of April 13, 2007 (the "Termination Agreement"). This
Note is given pursuant to, and shall be subject to and in accordance with, the
terms and conditions of the Termination Agreement. All capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the
Termination Agreement. Borrower's obligations under this Note are secured by
shares of common stock of Buyer pursuant to the terms of the Loan Agreement.
Beginning on April 13, 2007, the unpaid principal balance of this Note
shall at all times bear interest at a rate equal to eight and twenty-five one
hundredths percent (8.25%) per annum, provided, that so long as (a) any
principal of this Note remains unpaid after its due date, or (b) any interest
accrued under the terms of this Note remains unpaid after the due date of that
interest, then, and in each such case, all unpaid principal of this Note and all
overdue interest on that principal shall bear interest at eighteen and
twenty-five one hundredths percent (18.25%) per annum. All payments required to
be made under this Note shall be made in immediately available funds. Principal
and interest shall be payable in four installments, as follows:
A. Installment #1: On or before June 4, 2007, Borrower shall
remit payment to the Bank in the amount of $100,000 plus
interest accrued on the outstanding principal balance of the
Note from and including April 13, 2007 through the day
immediately preceding the date on which the Bank receives
payment of Installment #1.
B. Installment #2: On or before December 4, 2007, Borrower shall
remit payment to the Bank in an amount equal to $120,000 plus
interest accrued on the outstanding principal balance of the
Note from and including June 4, 2007 through the day
immediately preceding the date on which the Bank receives
payment of Installment #2 plus all other interest accrued on
the outstanding principal balance of the Note not previously
paid by Borrower.
C. Installment #3: On or before June 4, 2008, Borrower shall
remit payment to the Bank in an amount equal to the
outstanding principal balance of the Note plus all interest
accrued on the outstanding principal balance of the Note from
and including December 4, 2007 through the date on which the
Bank receives payment of Installment #3 plus all other
interest accrued on the outstanding principal balance of the
Note not previously paid by Borrower plus all other amounts
due and payable by Borrower hereunder.
Payments received by the Bank hereunder shall be applied first to Expenses (as
hereafter defined), then to accrued interest and then to reduce the outstanding
principal amount of the Note. Borrower may prepay this Note in whole or in part,
without penalty, at any time.
In the event that Borrower defaults in any obligation under the
Termination Agreement or under this Note, the Bank may, at its option, without
notice or demand, accelerate the maturity of the obligation evidenced by this
Note, which obligation shall become immediately due and payable, and/or may
pursue all other remedies provided in this Note, the Termination Agreement or by
law. Borrower shall pay upon demand all out-of-pocket costs and expenses
(including reasonable attorney fees and expenses) incurred by the Bank in the
servicing, administration, enforcement or collection of any indebtedness
evidenced by this Note, to the extent permitted by law (collectively, the
"Expenses"). Following any default by the Borrower of any obligation hereunder,
the Bank may exercise its right of set-off with respect to all amounts due and
unpaid under this Note against all accounts of the Borrower with and at the
Bank. In the event of a default in the payment of any amount due under this
Note, the Bank, without notice to or consent of Borrower, may set off or cancel
on the Bank's books all or part of the accounts owned by the Borrower with and
at the Bank and may apply the value of the accounts in payment of and to the
extent of Borrower's obligations hereunder.
In the event that any word, phrase, clause, sentence, or other
provision hereof shall violate any applicable statute, ordinance, or other rule
of law in any jurisdiction in which it is used, such provision shall be limited
in scope and effect to the minimum extent necessary to comply with any such
statute, ordinance, or other rule of law, and if such limitation is impossible,
such provision shall be ineffective without invalidating any other provision
hereof.
Borrower, for itself and for its successors and assigns and any and all
persons now and hereafter liable with respect to this Note, hereby waives
diligence, presentment, demand, protest, notice of dishonor, notice of protest,
notice of nonpayment, and notice of any kind whatsoever, other than notices
specifically required by this Note.
Borrower hereby waives, to the fullest extent permitted by applicable
law, any right to a jury in any trial of any case or controversy (whether based
on contract, tort or any other theory) in which Borrower is or becomes a party
(whether such case or controversy is initiated by or against Borrower or in
which Borrower is joined as a party litigant), which case or controversy arises
out of or is in respect of, any relationship among or between Borrower or any
other Person and the Bank or the actions of the Bank in the negotiation,
administration, performance or enforcement thereof.
This Note shall be governed by and construed in accordance with the
laws of the State of Texas, without giving effect to the conflicts of laws
principles thereof. Borrower hereby agrees for itself and for its successors and
assigns that in the event of any litigation under this Note, the exclusive venue
and place of jurisdiction for such litigation shall be in the state courts or
federal district courts situated in Dallas County, Texas, and Borrower
specifically consents and submits to the personal jurisdiction of such courts.
Transnational Financial Network, Inc.
By: /s/ Xxxxxx Xxxxxxx
Attest: /s/ Xxxxxx X. Xxxxxxxxx Xxxxxx Xxxxxxx, Chief Executive Officer
