Exhibit 10.1
SETTLEMENT AGREEMENT
I. PARTIES
This Settlement Agreement is entered into as of this 10th day of November,
2004, by and among (i) the United States of America ("United States"), acting
through the Department of Justice and the United States Attorney's Office for
the Western District of Oklahoma and on behalf of the United States Department
of Agriculture (hereinafter "USDA"), including, without imitation, the Farm
Service Agency (the "FSA"), a federal agency within the USDA; and (ii) Gold Banc
Corporation, Inc., a Kansas corporation, and Gold Bank, a Kansas bank (the
successor by merger to Gold Bank, an Oklahoma bank, and Gold Bank, a Florida
bank), acting for themselves and all of their predecessors, successors, assigns,
businesses, affiliates, subsidiaries and divisions, and all directors, officers,
employees, agents, and representatives of the foregoing entities (hereinafter
collectively referred to as "Gold Banc") (the United States and Gold Banc are
hereinafter jointly referred to as "the Parties").
II. RECITALS
A. Gold Banc Corporation, Inc. is a corporation organized under the laws
of Kansas with its principal place of business in Leawood, Kansas. Gold Bank is
a banking association organized under the laws of Kansas with its principle
place of business in Leawood, Kansas.
B. Since at least October 1, 1992, Gold Bank has been a lender of
agricultural loans that were guaranteed by the FSA. In addition to issuing
federally-guaranteed agricultural loans, Gold Bank also enrolled many of its
guaranteed loans in the FSA's Interest Assist Program, which provides for an
annual federal interest subsidy of four (4) percent on eligible,
federally-guaranteed agricultural loans.
C. Xxxxx Xxxxxx, the Relator, a former xxxxxx and agricultural loan
customer of Gold Bank, filed a complaint on behalf of the United States under
the qui tam provisions of the Civil False Claims Act, 31 U.S.C. ss. 0000 xx
xxx., Xxxxxx Xxxxxx ex rel. Xxxxxx v. Gold Bank Oklahoma and Gold Banc
Corporation, Inc., CIV 02-1493-R (W.D. Okla., filed October 24, 2002), which the
Relator amended in his First Amended Complaint on February 5, 0000, Xxxxxx
Xxxxxx ex rel. Xxxxxx v. Gold Banc Corporation, Inc., Gold Bank Oklahoma and
Gold Bank Kansas, CIV 02-1493-R (W.D. Okla.) (hereinafter the "Qui Tam Action").
Relator's First Amended Complaint was filed on February 5, 2004 and alleged that
Gold Banc improperly charged excessive fees to borrowers and inflated the
interest rates it charged on federally-guaranteed agricultural loans, which in
turn resulted in Gold Banc's submission of false statements and claims for
payment to the United States for guaranteed loss claims and interest assist
payments.
D. The United States (through the Fraud Section, Commercial Litigation
Branch, Civil Division, Department of Justice and the United States Attorney's
Office, Western District of Oklahoma), and Gold Banc have engaged in settlement
discussions concerning the allegations made in Relator's First Amended
Complaint.
E. The United States intervened in this qui tam action for settlement
purposes on September 9, 2004. For the purposes of this Settlement Agreement,
"Covered Conduct" means all acts, actions and omissions of Gold Banc that were
alleged by the Relator as the basis for the claims and causes of action set
forth in the Relator's First Amended Complaint, which acts, actions or omissions
occurred or failed to occur during the time period from October 1, 1992 to the
Effective Date of this Agreement (as defined below).
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F. Gold Banc denies all allegations of wrongdoing in connection with the
Covered Conduct, including without limitation, allegations that it violated the
Federal Civil False Claims Act, 31 U.S.C. ss. 3729 et seq.
G. The Parties wish to avoid the time, expense, and risk of litigation by
reaching a settlement of the United States' allegations as described below.
H. Contemporaneous with the execution and delivery of this Settlement
Agreement, Gold Banc is entering into a separate settlement agreement with the
Relator to address Relator's attorney's fees and costs pursuant to 31 U.S.C. ss.
3730(d)(1).
I. This Settlement Agreement is made in compromise of disputed claims.
Neither the Settlement Agreement, its execution, nor the performance of any
obligations under it, including any payments, nor the fact of the settlement, is
intended to be, or shall be understood as, an acknowledgment of responsibility,
admission of liability or wrongdoing, or other expression reflecting upon the
merits of the dispute by the United States or Gold Banc.
III. AGREEMENTS
In reliance on the foregoing Recitals, and in consideration of the mutual
promises, covenants and obligations of this Settlement Agreement, and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. In consideration of this Settlement Agreement, Gold Banc shall pay
to the United States the sum of Sixteen Million Dollars ($16,000,000) (the
"Settlement Proceeds") within seven (7) business days after all Parties have
executed and delivered this Settlement Agreement and the Joint Stipulation (as
defined below). Payment shall be made by electronic
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funds transfer pursuant to written instructions to be provided to
Gold Banc's legal counsel by the Director, Commercial Litigation Branch or his
designated representative.
2. Within five (5) business days after Gold Banc makes the payment
described in Paragraph 1, the United States shall file a joint stipulation
providing for the dismissal with prejudice of the Qui Tam Action, substantially
in the form attached hereto as Exhibit A (the "Joint Stipulation").
3. Subject to the exceptions set forth below, in consideration of the
obligations of Gold Banc set forth in this Settlement Agreement, the United
States hereby releases and discharges, effective upon the payment in full by
Gold Banc of the Settlement Proceeds, Gold Banc from any civil monetary claim
the United States has under the False Claims Act, 31 U.S.C. xx.xx. 3729-3733;
the Contract Disputes Act, 41 U.S.C. ss. 601 et seq.; the Program Fraud Civil
Remedies Act, 31 U.S.C. xx.xx.? 3801-3812; or under common law for payment by
mistake, unjust enrichment, breach of contract, and fraud for the Covered
Conduct.
4. Upon signing this Settlement Agreement, Gold Banc hereby releases
and forever discharges the United States from any claims arising from or
relating to the investigation of the Covered Conduct, including attorneys' fees,
expenses, and costs.
5. The United States and Gold Banc agree that each will be
responsible for its own attorneys' fees and all costs arising out of and
relating to this action.
6. The United States specifically does not release Gold Banc, or any
other entity or individual under this Settlement Agreement, from (a) any
criminal, civil or administrative claims arising under Title 26, U.S. Code
(Internal Revenue Code) or Internal Revenue Service Regulations or under
Securities or Environmental laws; (b) any claims for bodily or personal
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injury, property damage or consequential damages; (c) any administrative
suspension or debarment action, or administrative review or actions,
concerning Gold Banc or its FSA lender status; and (d) any obligations
created by this Settlement Agreement or related to disputes and claims for the
enforcement of this Settlement Agreement.
7. Gold Banc agrees that all costs (as defined by Federal Acquisition
Regulation ("FAR") 31.205-47) incurred by or on behalf of Gold Banc in
connection with (a) the matters covered by this Settlement Agreement, (b) the
Government's audit and investigation of the matters covered by this Settlement
Agreement, (c) Gold Banc's investigation, defense of the matters, and corrective
actions relating to the United States' investigation, (d) the negotiation of
this Settlement Agreement, and (e) the payment made to the United States
pursuant to this Settlement Agreement, shall be unallowable costs for government
accounting purposes. These unallowable costs will be separately estimated and
accounted for by Gold Banc. Gold Banc will not charge such unallowable costs
directly or indirectly to any contracts with the United States. Any such cost
previously submitted or treated by Gold Banc as an allowable cost for government
accounting purposes shall be withdrawn and any charge or charges previously
submitted that were based on such cost shall be adjusted accordingly.
8. This document contains the full and complete Settlement Agreement
with respect to the matters covered herein. No modification of this Settlement
Agreement shall be effective unless in writing and signed by the Parties and
agreed to by the United States.
9. This Settlement Agreement shall be binding on the United States
and Gold Banc.
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10. The Parties consent to the public disclosure of this Settlement
Agreement and all information about this Settlement Agreement by Gold Banc
and/or the United States.
11. Each person who signs this Settlement Agreement in a
representative capacity warrants that he or she is duly authorized to do so.
Further, each Party for himself or itself, as the case may be, (i) acknowledges
that such Party has been advised by competent legal counsel in connection with
the execution of this Settlement Agreement and the accompanying releases, has
read each and every paragraph of this Settlement Agreement, and understands the
respective rights and obligations set forth herein, and (ii) represents that the
commitments, acknowledgments, representations, and promises set forth herein are
freely and willingly undertaken and given.
12. This Settlement Agreement shall be governed and interpreted in
accordance with the federal laws of the United States. The Parties agree that
the exclusive jurisdiction and venue for any dispute arising between and among
the Parties under this Settlement Agreement will be the United States District
Court, Western District of Oklahoma.
13. For purposes of construction, this Settlement Agreement shall be
deemed to have been drafted by all Parties to this Settlement Agreement and
shall not, therefore, be construed against any Party for that reason in any
subsequent dispute.
14. This Settlement Agreement is effective on the date that the
Settlement Agreement is executed and delivered by the last signatory hereto (the
"Effective Date"). This Settlement Agreement is contingent upon Gold Banc paying
the Settlement Proceeds to the United States as described in Paragraph 1, and
upon the dismissal of the Qui Tam Action with prejudice, as described in
Paragraph 2, and is null and void if no such payment is actually made
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by Gold Banc and received unencumbered, except as to any claims by
Relator for Relator's share under 31 U.S.C. ss. 3730(d)(1), by the United
States, or if no such dismissal is ordered.
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IN WITNESS WHEREOF, the Parties have executed the foregoing Agreement
or counterparts thereof, intending to be bound.
UNITED STATES OF AMERICA
By: /s/ Xxxxx X. Xxxxxxx III
--------------------------------
Xxxxx X. Xxxxxxx III, Esq.
Trial Attorney
Commercial Litigation Branch
Civil Division
United States Department of Justice
000 X Xxxxxx, X.X.
Xxxx 0000
Xxxxxxxxxx, X.X. 00000
(000) 000-0000
By: /s/ Xxx Xxxxxx
---------------------------------
Xxx Xxxxxx
Assistant U.S. Attorney
Office of the United States Attorney for
the Western District of Oklahoma
000 Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
(000) 000-0000
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GOLD BANC CORPORATION, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
GOLD BANK
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
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IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA )
ex rel. XXXXX X. XXXXXX, )
)
Plaintiff, ) Case No. CIV-02-1493-R
)
-vs- )
)
GOLD BANC CORPORATION, INC., )
and GOLD BANK OF OKLAHOMA, )
)
Defendants. )
)
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STIPULATION OF DISMISSAL WITH PREJUDICE
Pursuant to Fed. R. Civ. P. 41 and the False Claims Act, 31 U.S.C. ss.
3730(b)(1), the United States, relator Xxxxx Xxxxxx ("Relator") and the
defendants, Gold Banc Corporation, Gold Bank Oklahoma and Gold Bank Kansas
(collectively, "Gold Banc"), through their undersigned counsel, hereby
stipulate to the dismissal with prejudice of the above captioned action,
consistent with the terms of the Settlement Agreement attached as
Exhibit 1. The United States and Gold Banc have reached an agreement to settle
this litigation. Relator agrees that the settlement reached by the United
States with Gold Banc is fair, adequate and reasonable pursuant to
31 U.S.C. ss. 3730(c)(2)(B).
The United States and Gold Banc agree that each will bear its own costs,
expenses and attorneys' fees. Relator and Gold Banc have reached agreement as to
the payment of attorneys' fees and costs, pursuant to 31 U.S.C. ss. 3730(d). The
United States, Relator and Gold Banc request that the Court retain jurisdiction
to enforce the terms of the Settlement Agreement and for the limited purpose of
adjudicating the Relators' share issue pursuant to 31 U.S.C. ss. 3730(d). The
United States, Relator and Gold Banc hereby request that the Court enter the
attached Order.
Respectfully submitted,
ON BEHALF OF THE UNITED STATES
Dated: October 29, 2004.
XXXXX X. XXXXXXX
Assistant Attorney General
XXXXXX X. XxXXXXXXXX
United States Attorney
XXXXXXX X. XXXXX
XXXXXXXX X. XXXXX
XXXXX X. XXXXXXX III
Commercial Litigation Branch
Civil Division
United States Department of Justice
X.X. Xxx 000
Xxx Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXX XXXXXX
Assistant United States Attorney
400 Oklahoma Tower
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxx.Xxxxxx@xxxxx.xxx
Attorneys for the United States
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ON BEHALF OF RELATOR XXXXX XXXXXX
Dated: October 29, 2004.
By:
-------------------------------
XXXXXXX X. OXFORD
XXXXXXXX XXXXXXX
XXXXXX XXXXXXX L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Counsel for Relator, Xxxxx Xxxxxx
Dated: October 29, 2004.
By:
-------------------------------
XXXXX X. XXXXXX
XXXXXXX X.X. XXXXXXXX
XXXXXXXX & XXXXXXXX, P.L.L.C.
000 Xxxx Xxxxxxxx
Xxxx, Xxxxxxxx 00000
Counsel for Relator, Xxxxx Xxxxxx
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ON BEHALF OF GOLD BANC CORPORATION
Dated: November 8, 2004.
By:
-------------------------------
R. XXXXXX XXXXXX
XXXX X. XXXXXXXX
XXXXXXX XXXXXXXX XXXXXX L.L.P.
0000 Xxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Counsel for Gold Banc Corporation
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IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA )
ex re1., XXXXX X. XXXXXX, )
)
Plaintiff, )
)Case No. CIV-02-1493-R
-vs- )
)
GOLD BANC CORPORATION, INC., )
and GOLD BANK OF OKLAHOMA, )
Defendants. )
ORDER
The United States and the defendants, Gold Banc Corporation, Gold Bank
Oklahoma and Gold Bank Kansas (collectively, "Gold Banc") have reached an
agreement to settle this litigation. A copy of the Settlement Agreement is
attached as Exhibit 1. Relator Xxxxx Xxxxxx agrees that the settlement agreed to
by the United States and Gold Banc is fair, adequate and reasonable pursuant to
31 U.S.C. ss. 3730(c)(2)(B). Accordingly, in light of the Settlement Agreement,
it is hereby ORDERED:
1. The Court approves the settlement as being fair, adequate and
reasonable, pursuant to 31 U.S.C. ss. 3730(c)(2)(B).
2. This case is dismissed with prejudice as to all parties, pursuant to
31 U.S.C. ss. 3730(c)(2)(B).
3. The United States and Gold Banc each will bear its own costs,
expenses and attorneys' fees; and,
4. The Court retains jurisdiction over this matter to enforce the terms
of the Settlement Agreement, as well as for the limited purpose of
adjudicating the Relators' share issue pursuant to 31 U.S.C. ss.
3730(d).
IT IS SO ORDERED this 19th day of November, 2004.
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XXXXX X. XXXXXXX
UNITED STATES DISTRICT JUDGE
