Document:

Exhibit 4(b)(3)

 

FORM OF SUPPLEMENTAL
INDENTURE

(Senior Debt Securities)

PUBLIC SERVICE COMPANY

OF COLORADO

TO

THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A.,

as Trustee

SUPPLEMENTAL INDENTURE

Dated as of                     ,
20   

 

Supplementing the
Indenture

dated as of July 1, 1999

Establishing the
Securities of Series

designated          % Senior Notes
due               20

 

 

THIS           SUPPLEMENTAL
INDENTURE, dated as of                   ,
20    , is between PUBLIC SERVICE COMPANY OF COLORADO, a
Colorado corporation (hereinafter called the “Issuer” or the “Company”), having
its principal office at 1225 17th Street, Denver, Colorado 80202, and THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee (hereinafter called the “Trustee”),
having its principal corporate trust office at 700 South Flower Street, Suite 500,
Los Angeles, California 90017.

 

Recitals of the Issuer

 

The
Issuer has heretofore executed and delivered an Indenture, dated as of July 1,
1999 (the “Original Indenture”, the Original Indenture, previously supplemented
and as further supplemented by this supplemental indenture being hereinafter
referred to as the “Indenture”), relating to the issuance at any time or from
time to time of its Securities on terms to be specified at the time of
issuance. Terms used and not otherwise defined herein shall (unless the context
otherwise clearly requires) have the respective meanings given to them in the
Original Indenture.

 

The
Original Indenture provides in Article Three thereof that, prior to the
issuance of Securities of any series, the form of such Securities and the terms
applicable to such series shall be established in, or pursuant to, the
authority granted in a resolution of the Board of Directors or established in
one or more indentures supplemental thereto.

 

The
Issuer desires by this supplemental indenture, among other things, to establish
the form of the Securities of a series, to be titled        %
Series        Senior Notes due             20    of
the Issuer, and to establish the terms applicable to such series, pursuant to
Sections 201, 301 and 901 of the Original Indenture.  The Issuer has duly authorized the execution
and delivery of this supplemental indenture.

 

Article Nine
of the Original Indenture provides that the Issuer, when authorized by a
resolution of its Board of Directors, and the Trustee may from time to time and
at any time amend the Indenture without the consent of Securityholders for
certain purposes enumerated in Section 901 thereof, including the purposes
set forth in subsection (7) of said Section 901.

 

The
execution and delivery of this supplemental indenture by the parties hereto are
in all respects authorized by the provisions of the Indenture.

 

All
things necessary have been done to make this supplemental indenture a valid
agreement of the Issuer, in accordance with its terms.

 

NOW, THEREFORE, THIS              SUPPLEMENTAL
INDENTURE WITNESSETH:

 

For and in consideration of the premises, it is
mutually covenanted and agreed, as follows:

 

ARTICLE
I

 

Establishment
of           % Series        Senior
Notes due               20

 

Section 1.01.                             The title of the series of
the Securities established by this supplemental indenture shall be        %
Series         Senior Notes due              20    
of the Issuer (hereinafter called the “Series         Notes”).

 

Section 1.02.                             The Series          Notes
shall be limited to $                        in
aggregate principal amount except as provided for in Section 1.19 of this
Supplemental Indenture.

 

Section 1.03.                             The Series        Notes
may be issued in whole or in part as one or more Global Securities and The
Depository Trust Company, or a nominee thereof, shall be the Depository for
such Global Security or Global Securities. 
The Depository for such Global Security or Global Securities
representing Series         Notes
may surrender one or more Global Securities representing Series       Notes
in exchange in whole or in part for individual Series          Notes
on such terms as are acceptable to the Issuer and such Depository and otherwise
subject to the terms of the Indenture.

 

 

Section 1.04.                             The principal of the Series         Notes
shall be payable on                     ,
20     .

 

Section 1.05.                             The Series        Notes
shall bear interest at the rate of        %
per annum and shall accrue from                 ,
20    . The Interest Payment Dates shall be                    and                in
each year, commencing                  ,
20     . The Regular Record Dates in respect of such
Interest Payment Dates shall be                          and                              in
each year, respectively.

 

Section 1.06.                             The Corporate Trust Office
of The Bank of New York Mellon Trust Company, N.A. shall be the place at which
the principal of the Series         Notes
shall be payable.  Any interest thereon
shall be paid as specified in Section 307 of the Original Indenture.

 

Section 1.07.                             [Interest Payment Deferral
Provisions, if any.]

 

Section 1.08.                             [Optional Redemption
Provisions, if any.]

 

Section 1.09.                             [Mandatory Redemption
Provisions, if any.]

 

Section 1.10.                             The Series        Notes shall be issued in denominations
of $             and
multiples of $            in
excess thereof.

 

Section 1.11.                             [Original Issue Discount
Provisions, if any.]

 

Section 1.12.                             [Additional Defaults, if
any.]

 

Section 1.13.                             Sections 1301 and 1302 of
the Indenture shall be applicable to the Series          Notes.

 

Section 1.14.                             [Currency, if other than
U.S. Dollars.]

 

Section 1.15.                             [Additional Covenants, if
any.]

 

Section 1.16.                             The Issuer hereby
appoints, or confirms the appointment of, The Bank of New York Mellon Trust
Company, N.A. as the initial Trustee, Securities Registrar and Paying Agent,
subject to the provisions of the Indenture with respect to resignation, removal
and succession, and subject, further, to the right of the Issuer to appoint
additional agents (including Paying Agents).

 

Section 1.17.                             [Exceptions to Business
Day Definition, if any.]

 

Section 1.18.                             [Any Additional Terms.]

 

Section 1.19.                             The Series          Notes
may be reopened and additional Securities of Series          Notes
may be issued in excess of the amount initially authenticated and delivered,
provided that such additional Securities of Series        Notes
will contain the same terms (including the stated maturity and interest rate)
as the other Series          Notes.  Any such additional Securities of Series          Notes,
together with the other Series         Notes,
shall constitute a single series for purposes of the Indenture.

 

Section 1.20.                             The Series         Notes
shall be substantially in the form set forth in Exhibit A hereto, and
shall have such further terms as are reflected in such form, subject to changes
in the form thereof made by the Issuer and acceptable to the Trustee.

 

ARTICLE
II

 

Miscellaneous

 

Section 2.01.                             The recitals contained
herein shall be taken as the statements of the Issuer, and the Trustee assumes
no responsibility for the correctness of the same. The Trustee makes no
representation as to the 

 

3

 

validity of this supplemental indenture. The
Indenture, as supplemented by this supplemental indenture, is in all respects
hereby adopted, ratified and confirmed.

 

Section 2.02.                             This supplemental
indenture may be executed in any number of counterparts, and on separate
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.

 

Section 2.03.                             If any provision of this
supplemental indenture limits, qualifies or conflicts with the duties imposed
by any of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, through operation of Section 318(c),
such imposed duties shall control.

 

Section 2.04.                             The Article headings
herein are for convenience only and shall not affect the interpretation hereof.

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the           day
of                     ,
20     .

 

 

	
   

  	
  PUBLIC SERVICE COMPANY OF COLORADO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK MELLON TRUST

  
	
   

  	
  COMPANY, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
						

 

5

 

EXHIBIT
A

 

Form of          %
Series          Senior Note
due                   20

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

THIS SECURITY IS A GLOBAL SECURITY REGISTERED IN THE
NAME OF DTC, AS DEPOSITARY, OR A NOMINEE THEREOF AND UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES REPRESENTED
HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED OR EXCHANGED, NOR MAY ANY
PURPORTED TRANSFER BE REGISTERED, EXCEPT THIS SECURITY MAY BE TRANSFERRED
IN WHOLE, AND APPROPRIATE REGISTRATION OF TRANSFER EFFECTED, IF SUCH TRANSFER
IS BY CEDE & CO., AS NOMINEE FOR DTC (THE “DEPOSITARY”), TO THE
DEPOSITARY, OR BY THE DEPOSITARY TO ANOTHER NOMINEE THEREOF, OR BY ANY NOMINEE
OF THE DEPOSITARY TO ANY OTHER NOMINEE THEREOF.

 

PUBLIC SERVICE COMPANY OF COLORADO          %
Series         Senior Note due              20

 

	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Interest Payment Dates:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Regular Record Dates:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Original Interest
  Accrual Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Stated Maturity:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Registered No.

  	
   

  	
  Principal Amount

  
	
   

  	
   

  	
   

  
	
  CUSIP

  	
   

  	
  $

  

 

PUBLIC
SERVICE COMPANY OF COLORADO, a corporation duly organized and existing under
the laws of the State of Colorado (herein called the “Company”, which term
includes any successor corporation under the Indenture referred to below)
promises to pay to                           or
registered assigns the principal sum of                                                            Dollars
on                         ,
20      the Stated Maturity specified above.

 

1.                                       Interest.

 

The Company promises to pay interest on the principal amount hereof at
the Interest Rate per annum shown above from the Original Interest Accrual Date
specified above, or from the most recent Interest Payment Date to which
interest has been paid, semiannually in arrears, on the Interest Payment Dates
specified above, in each year, commencing with the Interest Payment Date next
succeeding the Original Interest Accrual Date specified above, until the
principal hereof is paid or duly provided for. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

 

 

2.                                       Method
of Payment.

 

The Company will pay interest so payable to the person who is the
registered holder hereof at the close of business on the Regular Record Date
for the next Interest Payment Date, except as otherwise provided in the
Indenture and except that interest payable at Maturity will be paid to the
person to whom principal is paid at Maturity. Payment of principal shall be
made upon presentation hereof at the office of this Paying Agent. The Company
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. The Company
may pay principal and interest by check payable in such money. It may mail an
interest check to the holder’s registered address.

 

3.                                       Agents.

 

Initially, The Bank of New York Mellon Trust Company, N.A., 700 South
Flower Street, Suite 500, Los Angeles, California 90017, Attention:
Corporate Trust Administration, will act as Paying Agent, and Securities
Registrar. The Company may change the Paying Agent to provide for more than one
such agent. The Company may appoint one or more Security Registers. The Company
or any Affiliate may act in any such capacity. The Trustee may appoint one or
more Authenticating Agents to authenticate the Securities.

 

4.                                       Indenture.

 

The securities of this series (the “Securities”) have been issued under
an Indenture dated as July 1, 1999 (the “Indenture”) between the Company
and The Bank of New York Mellon Trust Company, N.A. (the “Trustee,” which term
includes any successor trustee under the Indenture). The terms of the
Securities include those stated in the Indenture and in the Supplemental
Indenture creating the Securities and those made part of the Indenture by the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb).
Securityholders are referred to the Indenture, the Supplemental Indenture and
the Act for a statement of such terms.

 

5.                                       Redemption.

 

[This Security is not redeemable prior to maturity.]

 

[This Security is subject to redemption upon not less than 30 days’
notice by first class mail, in whole or in part from time to time prior to the
Stated Maturity on and after                      ,
20 at the option of the Company at a redemption price equal to                           .  In the event of redemption of this Security
in part only, a new Security or Securities of this series for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]

 

6.                                       [Notice
of Redemption.

 

Notice of redemption will be mailed at least 30 days before the
redemption date to the holder hereof at his address appearing on the Security
Register.

 

A notice of redemption shall provide that it is subject to the
occurrence of any event before the date fixed for such redemption as described
in such notice (“Conditional Redemption”) and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the redemption
have occurred before such date or have been waived by the Company.]

 

2

 

7.                                       Denominations,
Transfer, Exchange.

 

The Securities of this series are in registered form without coupons in
denominations of $              and
multiples of $                 in
excess thereof. The transfer of this Security may be registered and this
Security may be exchanged as provided in the Indenture. The Securities Registrar
may require a holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or the
Indenture. The Securities Registrar need not exchange or register the transfer
of any Security of this series or portion thereof selected for redemption.
Also, it need not exchange or register the transfer of any Security for a
period of 15 days before a selection of Securities of this series to be
redeemed.

 

8.                                       Persons
Deemed Owners.

 

The registered holder of a Security may be treated as its owner for all
purposes.

 

9.                                       Amendments
and Waivers.

 

Subject to certain exceptions, the Indenture may be amended with the
consent of the holders of a majority in outstanding principal amount of the
Securities. Subject to certain exceptions, a default under the Indenture may be
waived with the consent of the holders of a majority in outstanding principal
amount of the Securities.

 

Without the consent of any Securityholder, the Indenture may be
amended, among other things, to cure any ambiguity, omission, defect or
inconsistency; to provide for assumption of Company obligations to
Securityholders; or to make any change that does not materially adversely
affect the rights of any Securityholder.

 

10.                                 Restrictive
Covenants.

 

The Securities of this series are unsecured general obligations of the
Company and shall initially be authenticated and delivered in the aggregate
principal amount of $                     .  The Securities of this series may be reopened
and additional Securities of this series may be issued in accordance with the
terms of the Indenture.  The Indenture
does not limit other unsecured debt.

 

11.                                 Successors.

 

When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.

 

12.                                 Defeasance
Prior to Redemption or Maturity.

 

Subject to certain conditions, the Company at any time may terminate
some or all of its obligations hereunder and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest hereon to redemption or maturity. U.S. Government Obligations
are securities backed by the full faith and credit of the United States of
America or certificates representing an ownership interest in such Obligations.

 

13.                                 Defaults
and Remedies.

 

If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the outstanding Securities may
declare the principal of all such Securities to be due and payable
immediately.  Securityholders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, holders of a
majority in 

 

3

 

principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing default (except a default in payment of principal or
interest or any sinking fund installment) if it determines that withholding
notice is in their interests. The Company must furnish annual compliance
certificates to the Trustee.

 

14.                                 Trustee
Dealings with Company.

 

The Bank of New York Mellon Trust Company, N.A., the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.

 

15.                                 No
Recourse Against Others.

 

A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

 

16.                                 Authentication.

 

This Security shall not be valid for any purpose and shall not be
entitled to any benefit under the Indenture until authenticated by a manual
signature of the Trustee or any Authenticating Agent.

 

17.                                 Abbreviaions.

 

Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (tenants in common), TEN ENT (tenants by the
entireties) , JT TEN (joint tenants with right of survivorship and not as
tenants in common), CUST (custodian), and U/G/M/A (Uniform Gifts to Minors
Act).

 

The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture, including the Supplemental Indenture
which contains the text of this Security in larger type. Requests may be made
to: Public Service Company of Colorado, 1225 17th Street, Denver, Colorado,
80202 Attention: Corporate Secretary.

 

4

 

	
   

  	
  PUBLIC SERVICE COMPANY OF COLORADO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [corporate
  seal] 

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
									

 

This
is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

 

	
   

  	
  THE BANK OF NEW YORK MELLON TRUST 

  
	
   

  	
  COMPANY, N.A., as Trustee 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				

 

5

 

	
  ASSIGNMENT
  FORM

  
	
   

  
	
  To
  assign this Security, fill in the form below:

  
	
   

  
	
  I or
  we assign and transfer this Security to:

  
	
  ______________________________________

  
	
  ______________________________________

  
	
   

  
	
  (Insert
  assignee’s social security or tax I.D. no.)

  
	
  ______________________________________

  
	
  ______________________________________

  
	
  ______________________________________

  
	
   

  
	
  (Print
  or type assignee’s name, address and zip code)

  

 

and irrevocably appoint ____________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.

 

	
  Date:

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(Sign
exactly as your name appears on the other side of this Security)

 

6UNITED STATES OF AMERICA

Exhibit 10.1

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

STATE OF FLORIDA

OFFICE OF FINANCIAL REGULATION

TALLAHASSEE, FLORIDA

		
	Written Agreement by and among

	 

	SUN AMERICAN BANCORP

	Docket Nos.

08-056-WA/RB-HC

	Boca Raton, Florida

	08-056-WA/RB-SM

	SUN AMERICAN BANK

	OFR ADMINISTRATIVE

	Boca Raton, Florida

	FILE NO:  0583-FI-11/08

	FEDERAL RESERVE BANK OF ATLANTA

	 

	Atlanta, Georgia

	 

	and

	 

	STATE OF FLORIDA

	 

	OFFICE OF FINANCIAL REGULATION

	 

	Tallahassee, Florida

	 

WHEREAS, in recognition of their common goal to maintain the financial soundness of Sun American Bancorp, Boca Raton, Florida (“Sun American”), a registered bank holding company, and its subsidiary bank, Sun American Bank, Boca Raton, Florida (the “Bank”), a state chartered bank that is a member of the Federal Reserve System, Sun American, the Bank, the Federal Reserve Bank of Atlanta (the “Reserve Bank”), and the State of Florida Office of Financial Regulation (the “OFR”) have mutually agreed to enter into this Written Agreement (the “Agreement”); and 

WHEREAS, on January 21, 2009, the boards of directors of Sun American and the Bank, at duly constituted meetings, adopted resolutions authorizing and directing Michael E. Golden, President and Chief Executive Officer, to enter into this Agreement on behalf of Sun American and the Bank, and consenting to compliance with each and every applicable provision of this Agreement by Sun American, the Bank, and their institution-affiliated parties, as defined in Sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. §§ 1813(u) and (b)(3)), and Section 655.005(1)(i), Florida Statutes. 

NOW, THEREFORE, Sun American, the Bank, the Reserve Bank, and the OFR agree as follows: 

Board Oversight 

1.

Within 60 days of this Agreement, the board of directors of the Bank shall submit to the Reserve Bank and the OFR a written plan to strengthen board oversight of the management and operations of the Bank. The plan shall, at a minimum, address, consider, and include: 

(a)

The actions that the board of directors will take to improve the Bank’s condition and maintain effective control over, and supervision of, the Bank’s major operations and activities, including but not limited to, credit risk management, credit administration, processes to mitigate risks associated with credit concentrations, and earnings; 

(b)

the responsibility of the board of directors to monitor management’s adherence to approved Bank policies and procedures, and to require management to document exceptions thereto; and 

(c)

the establishment of measures to ensure Bank staff’s adherence to approved policies and procedures.

2

Credit Risk Management 

2.

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR an acceptable written plan to strengthen credit risk management practices. The plan shall, at a minimum, address, consider, and include: 

(a)

Procedures to periodically review and revise risk exposure limits to address changes in market conditions and strategies to minimize credit losses; 

(b)

procedures to identify, limit, and manage concentrations of credit that are consistent with the Interagency Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, dated December 12, 2006 (SR 07-1); 

(c)

procedures for timely and accurate identification of credit risk in the loan portfolio; and 

(d)

procedures to enhance management’s monitoring and controlling the level of problem assets. 

Loan Policies and Procedures 

3.

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR acceptable revised written loan policies and procedures that shall, at a minimum, address, consider, and include: 

(a)

A description of the specific types and volume of loans that may be made by the Bank and an appropriate portfolio mix of loan types; 

(b)

standards for renewing, extending, or modifying existing loans; 

(c)

the appropriate use of interest reserves; 

(d)

a prohibition on the capitalization of interest; and 

(e)

formal appraisal review training for appropriate staff. 

3

Loan Review Program 

4.

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR an acceptable written program to enhance the loan review function. The program shall, at a minimum, address, consider, and include: 

(a)

The scope and frequency of loan review; 

(b)

standards and criteria for assessing the credit quality of loans; 

(c)

application of loan grading standards and criteria to the loan portfolio; 

(d)

controls to ensure adherence to the revised loan review and grading standards; and 

(e)

written reports to the board of directors, at least quarterly, that identify and report the status of those loans that are nonperforming or adversely graded and the prospects for full collection or strengthening of the quality of any such loans. 

Asset Improvement 

5.

(a)

The Bank shall not, directly or indirectly, extend or renew any credit to or for the benefit of any borrower, including any related interest of the borrower, who is obligated to the Bank in any manner on any extension of credit or portion thereof that has been charged off by the Bank or classified, in whole or in part, “loss” in the report of examination of the Bank conducted by the OFR that commenced on August 25, 2008 (“Report of Examination”) or in any subsequent report of examination, as long as such credit remains uncollected. 

(b)

The Bank shall not, directly or indirectly, extend or renew any credit to or for the benefit of any borrower, including any related interest of the borrower, whose extension of credit has been classified “doubtful” or “substandard” in the Report of Examination or in any subsequent report of examination, without the prior approval of the Bank’s board of directors. 

4

The board of directors shall document in writing the reasons for the extension of credit or renewal, specifically certifying that: (i) the extension of credit is necessary to protect the Bank’s interest in the ultimate collection of the credit already granted or (ii) the extension of credit is in full compliance with the Bank’s written loan policy, is adequately secured, and a thorough credit analysis has been performed indicating that the extension or renewal is reasonable and justified, all necessary loan documentation has been properly and accurately prepared and filed, the extension of credit will not impair the Bank’s interest in obtaining repayment of the already outstanding credit, and the board of directors reasonably believes that the extension of credit or renewal will be repaid according to its terms. The written certification shall be made a part of the minutes of the board of directors meetings, and a copy of the signed certification, together with the credit analysis and related information that was used in the determination, shall be retained by the Bank in the borrower’s credit file for subsequent supervisory review. For purposes of this Agreement, the term “related interest” is defined as set forth in Section 215.2(n) of Regulation O of the Board of Governors of the Federal Reserve System (the “Board of Governors”) (12 C.F.R. § 215.2(n)) and Section 658.48, Florida Statutes. 

6.

(a)

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR an acceptable written plan designed to improve the Bank’s position through repayment, amortization, liquidation, additional collateral, or other means on each loan or other asset in excess of $500,000, including other real estate owned (“OREO”), that (i) is past due as to principal or interest more than 90 days as of the date of this Agreement; (ii) is on the Bank’s problem loan list; or (iii) was adversely classified in the Report of Examination. In developing the plan for each loan, the Bank shall, at a minimum, review, analyze, and document the financial position of the borrower, including source of repayment, repayment ability, and 

5

alternative repayment sources, as well as the value and accessibility of any pledged or assigned collateral, and any possible actions to improve the Bank’s collateral position. 

(b)

Within 30 days of the date that any additional loan or other asset in excess of $500,000, including OREO, becomes past due as to principal or interest for more than 

90 days, is on the Bank’s problem loan list, or is adversely classified in any subsequent report of examination of the Bank, the Bank shall submit to the Reserve Bank and the OFR an acceptable written plan to improve the Bank’s position on such loan or asset. 

(c)

Within 30 days after the end of each calendar quarter thereafter, the Bank shall submit a written progress report to the Reserve Bank and the OFR to update each asset improvement plan, which shall include, at a minimum, the carrying value of the loan or other asset and changes in the nature and value of supporting collateral, along with a copy of the Bank’s current problem loan list, extension report, and past due/non-accrual report. The board of directors shall review the progress reports before submission to the Reserve Bank and the OFR and shall document the review in the minutes of the board of directors’ meetings. 

Allowance for Loan and Lease Losses 

7.

(a)

Within 10 days of this Agreement, the Bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets classified “loss” in the Report of Examination that have not been previously collected in full or charged off. Thereafter the Bank shall, within 30 days from the receipt of any federal or state report of examination, charge off all assets classified “loss” unless otherwise approved in writing by the Reserve Bank and the OFR. 

(b)

Within 60 days of this Agreement, the Bank shall review and revise its allowance for loan and lease losses (“ALLL”) methodology consistent with relevant supervisory 

6

guidance, including the Interagency Policy Statements on the Allowance for Loan and Lease Losses, dated July 2, 2001 (SR 01-17 (Sup)) and December 13, 2006 (SR 06-17), and the findings and recommendations regarding the ALLL set forth in the Report of Examination, and submit a description of the revised methodology to the Reserve Bank and the OFR. The revised ALLL methodology shall be designed to maintain an adequate ALLL and shall address, consider, and include, at a minimum, the reliability of the Bank’s loan grading system, the volume of criticized loans, concentrations of credit, the current level of past due and nonperforming loans, past loan loss experience, evaluation of probable losses in the Bank’s loan portfolio, including adversely classified loans, and the impact of market conditions on loan and collateral valuations and collectibility. 

(c)

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR an acceptable written program for the maintenance of an adequate ALLL. The program shall include policies and procedures to ensure adherence to the revised ALLL methodology and provide for periodic reviews and updates to the ALLL methodology, as appropriate. The program shall also provide for a review of the ALLL by the board of directors on at least a quarterly calendar basis. Any deficiency found in the ALLL shall be remedied in the quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income, by additional provisions. The board of directors shall maintain written documentation of its review, including the factors considered and conclusions reached by the Bank in determining the adequacy of the ALLL. During the term of this Agreement, the Bank shall submit to the Reserve Bank and the OFR, within 30 days after the end of each calendar quarter, a written report regarding the board of directors’ quarterly review of the ALLL and a description of any changes to the methodology used in determining the amount of ALLL for that quarter. 

7

Capital Plan 

8.

Within 60 days of this Agreement, Sun American shall submit to the Reserve Bank an acceptable written plan to maintain sufficient capital at Sun American on a consolidated basis, and the Bank shall submit to the Reserve Bank and the OFR an acceptable written plan to maintain sufficient capital at the Bank as a separate legal entity on a stand-alone basis. The plans shall, at a minimum, address, consider, and include the Bank’s current and future capital requirements, including: 

(a)

Sun American’s current and future capital requirements, including compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A and D); 

(b)

the Bank’s current and future capital requirements, including compliance with the Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R. Part 208, App. A and B); 

(c)

the adequacy of the Bank’s capital, taking into account the volume of classified credits, concentrations of credit, ALLL, current and projected asset growth, and projected retained earnings; 

(d)

the source and timing of additional funds to fulfill Sun American’s and the Bank’s future capital requirements; 

(e)

the requirements of Section 225.4(a) of Regulation Y of the Board of Governors (12 C.F.R. § 225.4(a)) that Sun American serve as a source of strength to the Bank; and 

8

(f)

procedures for Sun American and the Bank to notify the Reserve Bank and the OFR, in writing, no more than 30 days after the end of any quarter in which any of Sun American’s consolidated capital ratios or the Bank’s capital ratios (total risk-based, Tier 1, or leverage) fall below the appropriate plan’s minimum ratios and to submit to the Reserve Bank and the OFR an acceptable written plan that details the steps Sun American or the Bank, as appropriate, will take to increase Sun American’s or the Bank’s capital ratios to or above the respective plan’s minimum within 30 days of such calendar quarter-end date. 

Earnings Plan and Budget 

9.

(a)

Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the OFR a written business plan for 2009 through 2011 to improve the Bank’s earnings and overall condition that shall, at a minimum, provide for or describe: 

(i)

a realistic and comprehensive budget for calendar year 2009, including income statement and balance sheet projections; and

(ii)

a description of the operating assumptions that form the basis for, and adequately support, major projected income, expense, and balance sheet components. 

(b)

The business plan shall be synchronized with the details of the budget and earnings forecasts. 

(c)

Upon adoption, the Bank shall implement the business plan. Bank management shall report monthly to the Bank’s board of directors on progress made in implementing the business plan. The written monthly reports shall compare actual financial results to those projected in the business plan. In the event that revisions to the plan are 

9

necessary, such revisions shall be forwarded to the Reserve Bank and the OFR within 15 days of adoption. 

(d)

A business plan and budget for each calendar year subsequent to 2009 shall be submitted to the Reserve Bank and the OFR with the progress reports required to be submitted following each December 31st. 

Contingency Funding Plan 

10.

Within 60 days of this Agreement, the Bank shall revise and submit to the Reserve Bank and the OFR an acceptable written contingency funding plan that, at a minimum, identifies available sources of liquidity and includes adverse scenario planning. 

Dividends 

11.

(a)

Sun American and the Bank shall not declare or pay any dividends without the prior written approval of the Reserve Bank, the Director of the Division of Banking Supervision and Regulation of the Board of Governors, and, as to the Bank, the OFR. 

(b)

Sun American shall not take any other form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank. 

(c)

All requests for prior approval shall be received at least 30 days prior to the proposed dividend declaration date. All requests shall contain, at a minimum, current and projected information, as appropriate, on Sun American’s capital, earnings, and cash flow; the Bank’s capital, asset quality, earnings and ALLL needs; and identification of the sources of funds for the proposed payment. Sun American and the Bank, as appropriate, must also demonstrate that the requested declaration or payment of dividends is consistent with the Board of Governors’ Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 

10

4-877 at page 4-323), and the Bank must demonstrate compliance with Section 658.37, Florida Statutes. 

Debt and Stock Redemption 

12.

(a)

Sun American shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the Reserve Bank. All requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment, and an analysis of the cash flow resources available to meet such debt repayment. 

(b)

Sun American shall not, directly or indirectly, purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank. 

Compliance with Laws and Regulations 

13.

(a)

Within 30 days of this Agreement, the Bank shall eliminate or correct the violations of law and regulation cited in the Report of Examination. 

(b)

In appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, Sun American and the Bank shall comply with the notice provisions of Section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.) and, as to the Bank, the notice provisions of Section 655.0385, Florida Statutes, for directors and executive officers as defined in Section 655.005, Florida Statutes. 

(c)

Sun American and the Bank shall comply with the restrictions on indemnification and severance payments of Section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance Corporation’s regulations (12 C.F.R. Part 359). 

11

Compliance with the Agreement 

14.

(a)

Within 10 days of this Agreement, the boards of directors of Sun American and the Bank shall appoint a joint committee (the “Compliance Committee”) to monitor and coordinate Sun American’s and the Bank’s compliance with the provisions of this Agreement. The Compliance Committee shall include a majority of outside directors who are not executive officers or principal shareholders of Sun American and the Bank, as defined in Sections 215.2(e)(1) and 215.2(m)(1) of Regulation O of the Board of Governors (12 C.F.R. §§ 215.2(e)(1) and 215.2(m)(1)). At a minimum, the Compliance Committee shall meet at least monthly, keep detailed minutes of each meeting, and report its findings to the boards of directors of Sun American and the Bank. 

(b)

Within 30 days after the end of each calendar quarter following the date of this Agreement, the Bank shall submit to the Reserve Bank and the OFR written progress reports detailing the form and manner of all actions taken to secure compliance with this Agreement and the results thereof. 

Approval and Implementation of Plans, Programs, Policies, and Procedures 

15.

(a)

The Bank and, as applicable, Sun American shall submit written plans, programs, policies, and procedures that are acceptable to the Reserve Bank and the OFR within the applicable time periods set forth in paragraphs 2, 3, 4, 6, 7(c), 8, and 10 of this Agreement. 

(b)

Within 10 days of approval by the Reserve Bank and the OFR, the Bank and, as applicable, Sun American shall adopt the approved plans, programs, policies, and procedures. Upon adoption, the Bank and, as applicable, Sun American shall promptly implement the approved plans, programs, policies, and procedures, and thereafter fully comply with them. 

12

(c)

During the term of this Agreement, the approved plans, programs, policies, and procedures shall not be amended or rescinded without the prior written approval of the Reserve Bank and the OFR. 

Communications 

16.

All communications regarding this Agreement shall be sent to: 

(a)

Mr. Steve Wise

Assistant Vice President

Federal Reserve Bank of Atlanta

1000 Peachtree Street, N.E.

Atlanta, Georgia 30309-4470

(b)

Ms. Linda B. Charity

Director

State of Florida

Office of Financial Regulation

Division of Financial Institutions

200 E. Gaines Street

Tallahassee, Florida 32399-0370

(c)

Mr. Michael E. Golden 

President and Chief Executive Officer 

Sun American Bancorp 

Sun American Bank 

9293 Glades Road 

Boca Raton, Florida 33434 

Miscellaneous 

17.

Notwithstanding any provision of this Agreement, the Reserve Bank and the OFR may, in their sole discretion, grant written extensions of time to Sun American and the Bank to comply with any provision of this Agreement. 

18.

The provisions of this Agreement shall be binding upon Sun American, the Bank, and their institution-affiliated parties, in their capacities as such, and their successors and assigns. 

19.

Each provision of this Agreement shall remain effective and enforceable until stayed, modified, terminated, or suspended in writing by the Reserve Bank and the OFR. 

13

20.

The provisions of this Agreement shall not bar, estop, or otherwise prevent the Board of Governors, the Reserve Bank, the OFR, or any other federal or state agency from taking any other action affecting Sun American, the Bank, or any of their current or former institution-affiliated parties and their successors and assigns. 

21.

Pursuant to Section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement is enforceable by the Board of Governors under Section 8 of the FDI Act (12 U.S.C. § 1818). 

22.

This Agreement is enforceable by the OFR as a “written agreement,” as the term is contained in Sections 655.033 and 655.041, Florida Statutes, pursuant to Chapters 120, 655, and 658, Florida Statutes. 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the 28th day of January, 2009. 

					
	SUN AMERICAN BANCORP

	 
	FEDERAL RESERVE BANK 

OF ATLANTA

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	By:

	/s/ MICHAEL E. GOLDEN 

	 
	By:

	/s/ STEVE WISE

	 
	Michael E. Golden 

	 
	 
	Steve Wise

	 
	President and 

Chief Executive Officer, 

	 
	 
	Assistant Vice President

					
	SUN AMERICAN BANK

	 
	STATE OF FLORIDA

OFFICE OF FINANCIAL REGULATION

	 
	 
	 
	 
	 

	    

	                                                               

	 
	    

	                                                               

	By:

	/s/ MICHAEL E. GOLDEN 

	 
	By:

	/s/ LINDA B. CHARITY

	 
	Michael E. Golden 

	 
	 
	Linda B. Charity

	 
	Chairman, President, and

Chief Executive Officer

	 
	 
	Director

Division of Financial Institutions

14

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