RESTITUTION AGREEMENT
This Restitution Agreement (the "Agreement"), dated as of May 20, 2003
(the "Execution Date"), is made by and among XXXXXXX X. XXXXXXX ("Xxxxxxx") and
GOLD BANK, a Kansas banking corporation (the "Bank").
RECITALS
X. Xxxxxxx formerly served as the Chairman of the Board,
President and Chief Executive Officer of the Bank and Chairman of
the Board and Chief Executive Officer of Gold Banc Corporation,
Inc., a Kansas corporation (the "Corporation").
B. During the course of his employment by the Bank, Xxxxxxx used funds
belonging to the Bank acknowledged by Xxxxxxx to be $1,973,113.03 as specified
by date and description on Exhibit A (the "Agreed Restitution Obligations"), but
which the Bank believes are in excess of that amount.
X. Xxxxxxx has agreed to reimburse the Bank for that amount plus interest
at the Contract Rate (as defined below) from the date such funds were so used by
Xxxxxxx as shown on Exhibit A attached hereto until the date such funds are
reimbursed to the Bank (the "Restitution Interest").
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. When used in this Agreement, the following terms shall have
the meanings assigned thereto:
(a) "Agreed Restitution Obligations" shall have the meaning specified
in Recital B of this Agreement.
(b) "Business Day" means any day that is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close.
(c) "Collateral" means the LaSalle Collateral and Xxxxxxx'x membership
interest in I-435/Xxxx, L.L.C. which represents fifty percent (50%) of all
of the membership interest in such L.L.C. (the "L.L.C. Interest").
(d) "Contract Rate" means the Prime Rate as published from time to
time in the Money Rates section of The Wall Street Journal, adjusted
quarterly on the last day of each calendar quarter.
(e) "LaSalle" means LaSalle Bank, National Association.
(f) "LaSalle Collateral" means the 640,792 shares of common stock of
the Corporation owned by Xxxxxxx and pledged to LaSalle to secure repayment
of the LaSalle Obligations.
(g) "LaSalle Obligations" means the indebtedness owed by Xxxxxxx to
LaSalle under the Promissory Note dated November 27, 2002 in the original
principal amount of $4,000,000.00 from Xxxxxxx, as maker, payable to the
order of LaSalle.
(h) "Pledge Agreement" means the Pledge and Security Agreement of even
date herewith among the Pledgor and the Bank pursuant to which the Pledgor
agrees to pledge, and grants a security interest in, the Collateral
described therein to the Bank in order to secure payment of the Agreed
Restitution Obligations, said Pledge Agreement to be substantially in the
form attached hereto as Exhibit B.
(i) "Pledgor" means Xxxxxxx.
(j) "Restitution Interest" shall have the meaning specified in Recital
C of this Agreement.
(k) "Security Documents" means any security agreement, pledge
agreement, mortgage, deed of trust, collateral assignment, control
agreement or other agreement pursuant to which Xxxxxxx now or hereafter
grants to the Bank a lien on, or security in, property or assets to secure
payment of the Agreed Restitution Obligations and the Restitution Interest,
including, without limitation, the Pledge Agreement.
2. Agreement to Pay Restitution. Xxxxxxx hereby agrees to pay to the Bank
(or the assignee(s) of the Bank): (a) the Agreed Restitution Obligations, plus
(b) Restitution Interest (the sum of the Agreed Restitution Obligations plus
Restitution Interest is hereinafter collectively referred to as the "Total
Agreed Restitution Amount"), in each case in the manner and at the time
specified in Section 5 below.
3. Security. In order to secure payment of the Total Agreed Restitution
Amount together with any interest thereon at the Default Rate if such amount is
not paid when due, the Pledgor covenants and agrees to execute and deliver to
the Bank (or the assignee(s) of the Bank) on the date hereof the Pledge
Agreement in order to (i) grant to the Bank (or the assignee(s) of the Bank) a
first priority, perfected security interest in or lien on the Collateral
(excluding the LaSalle Collateral), and (ii) grant to the Bank a second
priority, perfected security interest in or lien on the LaSalle Collateral.
Xxxxxxx agrees to execute such additional Security Documents and deliver such
Security Documents to the Bank (or the assignee(s) of the Bank) within five (5)
calendar days after demand by the Bank (or the assignee(s) of the Bank).
4. Representations and Warranties. Xxxxxxx represents and warrants to the
Bank (or the assignee(s) of the Bank) that: (a) there is presently due and owing
on the LaSalle Obligations $4,000,000.00 in principal, interest has been paid
through May 1, 2003, and interest is accruing on the unpaid principal balance
after May 1, 2003 at the rate of $472.22222 per day, (b) as of the Execution
Date, Xxxxxxx is solvent, both before and after giving effect to the
transactions described in this Agreement, excluding any assets that are exempt
from levy and execution under applicable federal or state law, (c) neither
Xxxxxxx'x wife nor any other party has any right, title or
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interest (including, without limitation, any marital interest) in any of the
Collateral, except as set forth in the first sentence of Section 5 of this
Agreement.
5. Disposition of Collateral. (a) The Bank acknowledges that: (a) the
LaSalle Collateral is subject to a right of first refusal in favor of Xxxxx X.
Xxxxxxxx ("Xxxxxxxx") and Xxxxxxx X. Xxxxxx ("Xxxxxx") created under a Proxy
Agreement/Shareholder Agreement dated September 15, 1996 among Xxxxxxx, Xxxxxx
and Xxxxxxxx (the "Shareholder Agreement"), and (b) the LaSalle Collateral is
subject to a prior security interest in favor of LaSalle to secure payment of
the LaSalle Obligations. If Xxxxxxxx and/or Xxxxxx exercise their right of first
refusal and purchase the LaSalle Collateral or any portion thereof pursuant to
the Shareholder Agreement, the proceeds of such sale will be applied first to
the LaSalle Obligations until such obligations are paid in full, then to the
Total Agreed Restitution Amount and then to Xxxxxxx. The Bank and Xxxxxxx agree
that if Xxxxxxxx and Xxxxxx: (i) waive in writing their respective rights of
first refusal contained in the Shareholder Agreement, (ii) exercise their right
of first refusal for less than all of the LaSalle Collateral, or (iii) allow the
right of first refusal to expire without further action by Xxxxxxxx or Xxxxxx,
the Bank (or the Bank's assignee(s)) will have the option to purchase from
Xxxxxxx, and Xxxxxxx shall, upon exercise of such option, sell to the Bank (or
the Bank's assignee(s)), such portion of the LaSalle Collateral that is not
purchased by Xxxxxxxx and Xxxxxx (the "Remaining LaSalle Collateral") with an
aggregate Purchase Price (as defined below) equal to (a) the sum of the LaSalle
Obligations and the Total Agreed Restitution Amount less (b) the aggregate
purchase price of the shares purchased by Xxxxxxxx and Xxxxxx (the "Maximum Bank
Purchase Price") (or, if the Maximum Bank Purchase Price is greater than the
aggregate Purchase Price (as defined below) of the Remaining LaSalle Collateral,
then all of the Remaining LaSalle Collateral may be purchased by the Bank (or
the Bank's assignee(s)) in exchange for the consideration described below. The
closing of such purchase shall take place on a date specified by the Bank (or
the Bank's assignee(s)) which is not more than three (3) business days after the
first to occur of (i) through (iii) above (the "Stock Closing Date"). The
LaSalle Collateral shall be valued on a per share basis at a price equal to the
average closing price of shares of the Corporation's common stock on NASDAQ for
the ten (10) trading days immediately preceding the Stock Closing Date
multiplied by the number of shares to be purchased (the "Purchase Price"). The
Purchase Price will be payable on the Stock Closing Date as follows (after
giving effect to the application of the purchase price for any of the LaSalle
Collateral purchased by Xxxxxx and Xxxxxxxx): (A) any remaining LaSalle
Obligations will be paid in full by wire transfer to LaSalle, and (B) the
balance of the Purchase Price will be paid by offsetting against the unpaid
balance of the Total Agreed Restitution Amount. On the Stock Closing Date,
Xxxxxxx will endorse and instruct LaSalle to deliver to the Bank (or the Bank's
assignee(s)) the certificates representing the LaSalle Collateral purchased by
the Bank (or the Bank's assignee(s)) in form satisfactory to the Bank (or the
Bank's assignee(s)), free and clear of all liens, claims and encumbrances with
any remaining amount going to Xxxxxxx. Xxxxxxx agrees to give Xxxxxxxx and
Xxxxxx the notice called for by Section 4 of the Shareholders Agreement on the
Execution Date with respect to the proposed sale of the LaSalle Collateral
pursuant to this Agreement, shall accompany that notice with a copy of this
Agreement, and shall provide the Bank with a copy of such notice on the
Execution Date.
(b) If the Total Agreed Restitution Amount has not been repaid in full from
the sale of the LaSalle Collateral on the Stock Closing Date, Xxxxxxx shall
remain liable to the Bank (or the Bank's assignee(s)) for any such amount
remaining unpaid ("True-Up Amount") plus interest
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thereon at the Contract Rate ("True-Up Interest") (the sum of True-Up Amount
plus True-Up Interest is hereinafter collectively referred to as the "Total
True-Up Amount") and Xxxxxxx shall be obligated to pay the Bank (or the Bank's
assignee(s)) the Total True-Up Amount by wire transfer on a date which is sixty
(60) days after the Stock Closing Date (or if such date is not a Business Day,
then on the next Business Day after such 60th Day) (the "Second Closing Date").
Xxxxxxx agrees to use his reasonable best efforts to obtain the cash necessary
to pay the Total True-Up Amount on the Second Closing Date which shall include,
without limitation, finding a buyer to purchase L.L.C. Interest during such 60
day period. If Xxxxxxx fails to pay the Total True-Up Amount on the Second
Closing Date ("Second Closing Payment Default"), then the Bank (or the Bank's
assignee(s)) shall be entitled to immediately foreclose upon the L.L.C. Interest
and exercise all of its rights as a secured creditor under the Uniform
Commercial Code of Kansas and under the Security Documents and apply the
proceeds from any sale of the L.L.C. Interest to reimburse the Bank (or the
Bank's assignee(s)) for the Total True-Up Amount, plus interest thereon at the
Contract Rate until the Total True-Up Amount is fully reimbursed to the Bank (or
the Bank's assignee(s)) with any remaining proceeds paid to Xxxxxxx. If a Second
Closing Payment Default occurs, Xxxxxxx agrees to execute and deliver all
instruments and documents necessary or appropriate to transfer and convey good
and marketable title to the L.L.C. Interest, free and clear of all liens, claims
and encumbrances.
(c) Termination of Pledge Agreement. If the proceeds from the
above-described disposition of Collateral pay in full the Total Agreed
Restitution Amount as provided under this Agreement, the Pledge Agreement and
the Bank's security interest in the Collateral will terminate and Xxxxxxx will
have no further obligations under this Agreement.
6. Reservation of Rights. Xxxxxxx hereby acknowledges and agrees that (a)
the Bank, the Corporation and its subsidiaries, and all their respective
directors, officers, employees, agent, representatives, consultants, attorneys,
accountants, and all their predecessors, successors and assigns (all of the
foregoing hereinafter called the "Reserved Parties") retain all of their legal
and equitable rights against Xxxxxxx, and (b) the Reserved Parties are not
granting any release of any liability or obligation which Xxxxxxx owes to any of
the Reserved Parties, except that the Reserved Parties agree to forbear from
filing any legal action with respect to the Agreed Restitution Obligations prior
to the Second Closing Date; provided, however, that no such forbearance shall be
required after the earlier of the Second Closing Date or such time as Xxxxxxx is
in breach of this Agreement or the Security Documents. Except as otherwise
contemplated by this Agreement, the Bank hereby acknowledges and agrees that
this Agreement or the Pledge Agreement shall not be deemed an admission of any
liability by Xxxxxxx. Without limiting the foregoing, the parties acknowledge
and agree that Exhibit A lists only the total amount that Xx. Xxxxxxx has
acknowledged constitutes Agreed Restitution Obligations and that the dates
listed thereon have been agreed to by the parties solely for the purpose of
identifying the amount which Xxxxxxx believes he owes to the Bank and computing
interest at the Contract Rate on such amount. Xxxxxxx acknowledges and agrees
that (i) the failure to list any item on Exhibit A shall not be deemed an
admission by the Reserved Parties that Xxxxxxx does not owe an amount greater
than that listed on Exhibit A, and (ii) the listing of any credits on Exhibit A
shall not be deemed an admission by the Reserved Parties that Xx. Xxxxxxx is
entitled to such a credit against the Agreed Restitution Obligations.
7. Waivers. If the Bank, the Corporation or its subsidiaries pursue any
legal or equitable action, suit or proceeding (collectively, "Action") against
Xxxxxxx after the date of this
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Agreement, Xxxxxxx agrees not to interpose as a defense to such Action, and
hereby waives, any defense, objection or matter in avoidance based on accord and
satisfaction, release, waiver, estoppel, merger, account stated, election of
remedies, single action rule, splitting a cause of action or similar theory or
defense, except that Xxxxxxx may raise such defenses with respect to the Total
Agreed Restitution Amount that has been paid in full in accordance with this
Agreement. If the Bank elects to foreclose on the Collateral or any portion
thereof pursuant to Section 5 of this Agreement, Pledgor hereby waives pursuant
to Section 9-624 of the Kansas Uniform Commercial Code (the "Kansas UCC"),
notification of disposition of the Collateral under 9-611 of the Kansas UCC, the
right to require mandatory disposition of the Collateral pursuant to Section
9-620(e) of the Kansas UCC and the right to redeem the Collateral under Section
9-623 of the Kansas UCC.
8. Further Actions, Assurances and Cooperation. Xxxxxxx agrees to execute
such other and further documents and instruments and take such further action as
the Bank may request to implement the provisions of this Agreement and to
perfect and protect the security interests and liens created by the Security
Documents.
9. No Novation. The parties hereto agree that by entering into this
Agreement, the parties are not intending to: (a) effect a novation of Xxxxxxx'x
obligations to the Bank or to change the nature of the Bank's claims against
Xxxxxxx, or (b) determine the dischargeability of Xxxxxxx'x obligations to the
Bank under Title 11 of the United States Code, including, without limitation, 11
X.X.X.xx. 523.
10. Specific Performance. Xxxxxxx agrees that the Bank and the Released
Parties shall be entitled to enforce their respective rights hereunder by
maintaining an action for specific performance, which remedy shall not require
the posting of any bond and which shall not be exclusive of any rights to obtain
money damages in addition thereto.
11. Benefit of Agreement. This Agreement shall be binding upon the parties
hereto, and their respective heirs, legal representatives, successors and
assigns, and shall inure to the benefit of the Released Parties and their
respective heirs, legal representatives, successors and assigns.
12. Entire Agreement. This Agreement and the Security Documents constitute
the entire agreement and understanding among the parties hereto related to the
subject matter hereof, and supersedes all prior negotiations, agreements and
understandings relating to such subject matter. In entering into this Agreement,
Xxxxxxx acknowledges that he is relying on no statement, representation,
warranty, of any kind made by the Bank, the Corporation, any subsidiary of the
Corporation, or any director, officer, employee, agent, representative,
consultant, attorney or accountant of any of the foregoing.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas.
14. Counterparts; Telecopied Signatures. This Agreement may be executed in
any number of counterparts and by different parties to this Agreement on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall
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constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto.
15. Venue; Jurisdiction; Jury Trial Waiver. XXXXXXX AND THE BANK EACH
HEREBY IRREVOCABLY: (A) CONSENT TO THE JURISDICTION OF THE DISTRICT COURT OF
XXXXXXX COUNTY, KANSAS OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
KANSAS; (B) AGREE THAT VENUE SHALL BE PROPER IN ANY SUCH COURT; AND (C) WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE PLEDGE AGREEMENT.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
day and year first above written.
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
GOLD BANK, a Kansas banking
corporation
By: /s/ Xxxx Xxxxx
----------------------------------------
Name: Xxxx Xxxxx
Title: President
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EXHIBIT A
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(Agreed Restitution Obligations)
Description Termination Date Amount
----------- ---------------- ------
Gold Bank credit card transaction 1-14-98 $534.38
3-16-98 $542.43
Gold Bank credit card transaction 10-15-98 $296.19
Gold Bank credit card transaction 11-16-98 $2,007.64
Gold Bank credit card transaction 2-21-00 $3,606.90
Gold Bank credit card transaction 3-20-00 $1,020.02
Transfer into Xxxxxxx'x Gold Bank account 7-17-00 $25,000.00
Transfer into Xxxxxxx'x Gold Bank account 8-18-00 $10,000.00
Transfer into Xxxxxxx'x Gold Bank account 9-13-00 $69,806.47
Transfer into XX Xxxxxxx account 10-8-00 $1,000,000.00
12-22-00 $5,000.00
1-12-01 ($200,000.00)
3-23-01 $70,000.00
Deposit into Xxxxxxx'x Gold Bank account 5-4-01 $900,000.00
Gold Bank credit card purchase 8-6-01 2455.00
Gold Bank credit card purchase 8-21-01 $225.00
Gold Bank credit card purchase 9-06-01 $828.00
Gold Bank credit card purchase 9-21-01 $26.95
12-31-01 $15,000.00
1-04-02 $1,172.00
Gold Bank credit card transaction 1-21-02 $563.50
1-29-02 $5,000.00
2-15-02 $5,000.00
Gold Bank credit card transaction 2-20-02 $82.49
3-5-02 $1,233.00
3-5-02 ($1,755.00)
3-26-02 $7,500.00
3-26-02 $7,500.00
4-10-02 $37,697.06
Gold Bank credit card transaction 5-3-02 $497.00
5-20-02 $1,000.00
Gold Bank credit card transaction 6-5-02 $559.00
Gold Bank credit card transaction 11-5-02 $715.00
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Total $1,973,113.03
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