Document:

United States Security & Exchange Commission EDGAR Filing

EXHIBIT 10.1

FIRST AMENDMENT TO ASSET ACQUISITION

ASSUMPTION AGREEMENT

THIS FIRST AMENDMENT TO ASSET ACQUISITION AND ASSUMPTION AGREEMENT dated May 17, 2006 (this “Amendment”) is made and entered into as of November 17, 2006 by and among Sun American Bancorp, a Delaware business corporation (“SAB”), Sun American Bank, a Florida commercial banking association and a wholly-owned subsidiary of SAB (“SB”) (collectively, SAB and SB are referred to as the “SAB”) and Beach Bank, a Florida commercial banking association (“BB”). 

BACKGROUND

SAB and BB entered into that certain Asset Purchase Agreement, dated as of May 17, 2006 (the “Original Agreement”), SAB and BB have agreed to amend certain of the terms and provisions of the Original Agreement as more particularly set forth herein. Any capitalized term set forth herein and not defined herein shall have the meaning ascribed to such term in the Original Agreement. 

AGREEMENT

For good and valuable consideration in addition to that which is being paid as part of the Original Agreement, SAB and SB and BB agree as follows: 

1.

Background. The provisions contained in the “Background” section of this Amendment are true and correct and are incorporated herein by reference. 

2.

Amendments. 

(a)

Deletion of $100,000 Cash Consideration. 

(i)

The following sentence shall be deleted from the definition of Acquisition Transaction Consideration defined in Article I, Section 1.1 of the Original Agreement: 

“Notwithstanding anything in this Agreement to the contrary, SAB may elect to pay up to $100,000 of the Acquisition Transaction Consideration in cash (the “Cash Consideration”), which shall be delivered to the Escrow Agent as provided in Section 2.4 hereof and used to pay certain fees and expenses as provided in the Escrow Agreement.”

(ii)

Article II, Section 2.4(b)(i) of the Original Agreement is hereby deleted and replaced in its entirety by the following provision: 

“(i) at Closing, SAB shall deposit 75% of the SAB Shares (the “Escrow Amount”) with the Escrow Agent to be distributed in accordance with the terms of this Agreement and the Escrow Agreement. The Escrow Amount, as adjusted from time to time, shall be referred to as the ‘Escrow Fund;’ and” 

(b)

$1,000,000 Cash Holdback. 

(i)

Article II, Section 2.2 (a) of the Original Agreement entitled “Excluded Assets” is hereby deleted in its entirety and replaced by the following provision: 

“Excluded Assets. Neither SB nor SAB shall acquire the following assets: 

(i) the Bank Charter of BB, (ii) any rights, claims, action, pending or otherwise against any person or under any policy of insurance relating, directly or indirectly, to any Regulatory Claim, potential Regulatory Claim or any other matter which could be the subject of any Regulatory Claim or similar action, (iii) a sum not to exceed One Million Dollars ($1,000,000) in cash, which sum shall be used by BB to fund the Liquidating Trust for purposes of paying any payments permitted to be made by the trustee of the Liquidating Trust and to fund the payment of sums required by the exercise of any dissenters rights pursuant to applicable Florida statutes (the “Cash Holdback”) and (iv) the FDIC Records and Former Customer Records.” 

(ii)

The following provision is hereby added as Article II, Section 2.2 (c) of the Original Agreement: 

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“Cash Holdback. Notwithstanding anything else contained in this Agreement, the parties agree that for purposes of this Agreement, including the calculation of the Acquisition Transaction Consideration, the Book Value of BB shall not be reduced by the value of the Cash Holdback; provided, however, that for purposes of calculating the number of shares of SAB Common Stock to be delivered by SAB at Closing, SAB shall subtract the number of shares of SAB Common Stock equal to the value of the Cash Holdback, calculated as follows: the cash value of the Cash Holdback divided by the SAB Per Share Value.” 

(iii)

The following provision is hereby added as Article II, Section 2.2 (d) of the Original Agreement: 

“Records Retention. 

(a)

FDIC Related Records. The parties agree that BB shall retain ownership of the 32 boxes of customer files currently being reviewed by the FDIC at the BB operations center, which are listed on Schedule 2.2(d) to this Agreement (the “FDIC Records”) and shall cause the FDIC Records to be removed as of the date of Closing to premises that will not be under the control or supervision of SAB. 

(b)

Former Customer Records. BB shall maintain ownership, sole custody and possession, at its expense, of the customer files related to non-current customers of BB as of the Closing Date (the “Former Customer Records”) to a location that will not be under the control or supervision of SAB. BB further agrees to be solely responsible for dealing with any third party and regulatory requests with respect to the such Former Customer Records and for that purpose will designate a person (the “Records Designee”) that will be responsible for dealing with such third parties.” 

(c)

Closing Date. 

Article IX, Section 9.1(c) of the Original Agreement shall be amended to replace the November 30, 2006 date with December 31, 2006. 

(d)

Assumption of SOI Agreement. 

As of the Closing Date, SAB shall assume all of BB's rights and obligations under that certain Agreement (the “SOI Agreement”) between BB and Strategic Outsourcing, Inc. (“SOI”) as of the Closing Date. At the Closing, SAB shall execute any and all documents reasonably required by BB or SOI in order to evidence SAB's assumption of the SOI Agreement. BB shall maintain the SOI Agreement, at its sole expense, in good standing through the Closing Date, including but not limited to paying all invoices due to SOI in full through the Closing Date. 

(e)

Adjustments to the Estimated Closing Balance Sheet. 

All the terms, agreements and resolutions determined by the parties in connection with the due diligence process in July 2006 are incorporated herein and shall be binding and enforceable against each of the parties hereto (the “Due Diligence Closing Balance Sheet Determinations”). Notwithstanding the foregoing, pursuant to and consistent with the agreed upon Due Diligence Closing Balance Sheet Determinations, BB shall cause all increases to the loan loss reserves to be made to the books and records of BB prior to the date the Estimated Closing Balance Sheet is prepared pursuant to Section 2.13 of the Original Agreement, such that all reserves shall be reflected on the Estimated Closing Balance Sheet. 

(f)

Lease Agreement. Through the Closing Date, BB shall maintain all obligations and covenants under its lease agreements including but not limited to maintaining and renewing a letter of credit with respect to the Sublease, dated January 10, 2000, between Southtrust Bank, N.A. and Michael Kosnitzky, as Trustee for Beach Bank, for the premises located at 551, 553, 555 Arthur Godfrey Road and 4111 Prairie Avenue, Miami Beach, Florida 33140. As of the Closing Date, SB shall assume all obligations under the Sublease, including any obligation with respect to collateralization of the lease, if any. 

3.

Facsimile Execution. The parties agree that a facsimile copy of this Amendment and any signatures thereon shall be considered for all purposes as originals. 

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4.

Counterparts. The parties agree that this Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same Amendment. 

5.

Amendment Controls; No Other Amendments. In the event of any conflict between the terms of the Original Agreement and the terms of this Amendment, the terms of this Amendment shall control. Except as amended herein, the remaining terms and provisions of the Original Agreement shall remain in full force and effect as originally set forth therein. 

[SIGNATURE PAGE TO FOLLOW]

3

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above. 

		
	SUN AMERICAN BANCORP

	 
	                                                   

	By:

	/s/  MICHAEL GOLDEN

	Name:

	Michael Golden

	Title:

	President, CEO Chairman

		
	SUN AMERICAN BANK

	 
	                                                   

	By:

	/s/  MICHAEL GOLDEN

	Name:

	Michael Golden

	Title:

	President, CEO Chairman

		
	BEACH BANK

	 
	                                                   

	By:

	/s/  MICHAEL KOSNITZKY     11/20/2006

	Name:

	Michael Kosnitzky

	Title:

	Chairman

		
	SHAREHOLDER REPRESENTATIVE

	 
	                                                   

	By:

	/s/  MICHAEL KOSNITZKY     11/20/2006

	Name:

	Michael Kosnitzky

[signature page to Amendment to Asset Acquisition Agreement]

4

November 20, 2006

SunAmerican Bancorp 

SunAmerican Bank 

1200N. Federal highway, Suite 101 Boca Raton, Florida 33432 

Attention: Michael Golden 

Re:

First Amendment to Asset Acquisition and Assumption Agreement 

Mr. Golden: 

This is to confirm that the reference to “terms, agreements and resolutions determined by the parties in connection with the due diligence process in July 2006” (the “Due Diligence Closing Balance Sheet Determinations”) in Section 2(e) of that certain First Amendment to Asset Acquisition and Assumption Agreement, dated as of the date hereof, by and among Sun American Bancorp (“SAB”), Sun American Bank (“SB”) and Beach Bank (“BB”) refers solely and exclusively to the Scholl/Nichols memorandum, dated July 5,2006, a copy of which is attached hereto as Exhibit A.

			
	 
	Sincerely,

	 
	 

	 
	Beach Bank

	                                                                                      

	 
	                                                   

	 
	By:

	/s/  MICHAEL KOSNITZKY

	 
	Name:

	Michael Kosnitzky

	 
	Title:

	Chairman

			
	Agreed to by:

	 

	 
	 

	Sun American Bancorp

	 

	Sun American Bank

	 

	 
	                                                   

	                                                                                                     

	By:

	/s/  MICHAEL GOLDEN

	 

	Name:

	Michael Golden

	 

	Title:

	President CEOExhibit 10.1

Exhibit 10.1

    Interim
      Credit Agreement

    

    Dated
      as
      of: November 20, 2006

    

    Borrower:
      Standard Drilling, Inc., a Nevada corporation

    

    Lender:
      Prentis B. Tomlinson, Jr.

    

    Loan
      amount: In an initial aggregate principal amount of one million dollars
      ($1,000,000.00), which may be increased to a maximum aggregate principal amount
      of five million dollars ($5,000,000).

    

    

    1. Lender
      agrees to loan to Borrower in an initial aggregate principal amount of
      $1,000,000.00, which may be increased to a maximum aggregate principal amount
      of
      $5,000,000 in Lender’s sole discretion, in lump sum or in installments in
      accordance with this agreement.

    

    2. Borrower
      shall execute a promissory note or notes evidencing the indebtedness (“Demand
      Note”) in an initial aggregate principal amount of $1,000,000.00, which may be
      increased to a maximum aggregate principal amount of $5,000,000 together with
      interest on the unpaid principal amount at the rate of 10% per annum, compounded
      monthly. Additional Demand Notes may be issued if the loan amount is increased
      by Lender in accordance with the terms hereof. Interest shall be calculated
      on
      an the basis of a year of 365 or 366 days, as applicable, and charged for the
      actual number of days elapsed and accrued, but unpaid interest, shall be payable
      in full upon demand.

    

    3. Borrower
      may request loans from time to time from Lender in accordance with this
      Agreement and the Demand Note; provided,
      that
      the aggregate amount of all loans outstanding hereunder and under the Demand
      Note shall not exceed an aggregate principal amount of $5,000,000.00. Lender
      may, in its sole discretion, loan the requested amounts to Borrower according
      to
      the terms of this agreement and the Demand Note. Nothing herein or in the Demand
      Note shall be construed as requiring Lender to comply with any request by
      Borrower for any additional loan amount if in the Lender’s judgment the
      requested amount should not be honored. 

    

    4. This
      agreement may be terminated by either Lender or Borrower at any time.
      Termination by either party shall not release, discharge or modify the
      indebtedness owed to Lender from Borrower.

    

    5. The
      Borrower shall execute and deliver to Lender a Security Agreement of even date
      herewith substantially in the form attached hereto as Exhibit A (the “Security
      Agreement”), pursuant to which the Borrower shall grant to the Lender a lien and
      security interest in and to the Collateral (as defined in the Security
      Agreement) to secure payment of the Demand Note.

    

    6. Amounts
      loaned by Lender hereunder shall be used for general corporate and working
      capital purposes.

    

    7. Borrower
      represents as follows:

    

    (a)
      Borrower is Nevada corporation in good standing.

    

    (b)
      Borrower is authorized by its constituent documents and applicable law to enter
      into this agreement.

    

    (c)
      All
      information provided by Borrower to Lender, including financial reports, is
      true
      and correct.

    

    (d)
      Borrower’s execution of this agreement and amounts loaned by Lender, if any, do
      not violate or conflict with any covenant or condition of Borrower under any
      other credit agreement, note, regulation, or law.

    

    8. All
      amounts outstanding under this agreement shall be repaid in full upon demand
      by
      the Lender at any time after the date which is ninety (90) days from the date
      hereof. The Borrower shall have the right to prepay the loan in whole or in
      part
      at any time without penalty. Amounts repaid may not be reborrowed.

    

    9. Borrower
      covenants and agrees that it will:

    

    (a)
      Keep
      accurate financial records of all business operations, and provide Lender with
      any financial reports or statements requested by Lender.

    

    (b)
      Permit inspections of Borrower’s books, records, premises, and assets by
      Lender.

    

    (c)
      Promptly notify Lender of any threatened litigation or change in business
      conditions that may adversely affect Borrower.

    

    10. Borrower
      covenants and agrees that it will not:

    

    (a)
      Encumber or permit any mortgages, security interests, or other encumbrances
      to
      be assessed against its assets without prior written Lender’s
      consent.

    

    (b)
      Increase salaries of any officers during the term of this loan, except with
      prior written consent of Lender.

    

    (c)
      Declare any dividends or distributions without prior written consent of
      Lender.

    

    11. It
      shall
      be a default by Borrower: (1) to breach any of the foregoing covenants; or
      (2)
      to fail to pay all liabilities (as defined in the Demand Note) due to Maker
      upon
      demand.

    

    12. On
      the
      occurrence of any event of default, all obligations under this loan will
      immediately become due and payable on demand of Lender without presentation,
      demand for payment, notice of dishonor, protest, or notice of protest of any
      kind, all
      of which are expressly waived by the Borrower.
      Lender
      will have all remedies provided by the Texas Business and Commerce Code, as
      well
      as all other remedies available at law or equity, and provided under this loan
      agreement and related agreements and instruments.

    

    13. Lender's
      failure or delay to exercise any right or privilege under this agreement will
      not operate as a waiver of any such right or privilege or any further exercise
      of the right or privilege.

    

    14. All
      notices, consents, requests, demands and other communications hereunder shall
      be
      given to or made upon the respective parties hereto at their respective
      addresses set forth beneath their respective signatures below or, as to any
      party, at such other address as may be designated by it in a written notice
      to
      the other party. All notices, requests, consents and demands hereunder shall
      be
      effective (a) upon personal delivery, or (b) one (1) Business Day after deposit
      with a nationally-recognized overnight courier service, or (c) three (3)
      Business Days after deposit with registered or certified, first class mail,
      postage prepaid.

    

    15. This
      agreement shall be governed by the laws of the State of Texas. The obligations
      of the Debtor under this agreement and any Demand Note are performable in Harris
      County, Texas. Any suit, action or proceeding against the Borrower with respect
      to this agreement or any Demand Note or any judgment entered by any court in
      respect thereof, may be brought in the courts of the State of Texas, County
      of
      Harris, or in the United States courts located in Harris County, Texas and
      the
      Borrower hereby submits to the non-exclusive jurisdiction of such courts for
      the
      purpose of any such suit, action or proceeding. The Borrower hereby irrevocably
      consents to service of process in any suit, action or proceeding in said court
      by the mailing thereof by the Lender by registered or certified mail, postage
      prepaid, to the Borrower, at the address for notices as set forth beneath the
      Borrower’s signature hereto. The Borrower hereby irrevocably waives any
      objection which it may now or hereafter have to the laying of venue of any
      suit,
      action or proceeding arising out of or relating to this agreement or any Demand
      Note brought in the courts located in the State of Texas, County of Harris,
      and
      hereby further irrevocably waives any claim that any such suit, action or
      proceeding brought in any such court has been brought in an inconvenient forum.
      

    

    16. This
      agreement may be executed in any number of counterparts, all of which taken
      together shall constitute one agreement, and any of the parties hereto may
      execute this agreement by signing any such counterpart.

    

    17. This
      agreement and the Demand Note set out the entire agreement of the
      parties.

    

    18. 
      If any
      part of this agreement is held to be invalid, all other parts will continue
      in
      effect as if the invalid provision had never been included.

    

    

    
      
        Interim
          Credit Agreement

        Page
          

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
      witness hereof, the parties have executed this agreement as of November 20,
      2006.

     

     

    LENDER

    

    Prentis
      B. Tomlinson, Jr.  [name]

    

    By:/S/Prentis
      B. Tomlinson, Jr. [signature]

    

    Prentis
      B. Tomlinson, Jr. [typed
      name and title]

    

    Address
      for Notices:

    

    

    

     

    Date: 11/27/06

     

    BORROWER

    

    Standard
      Drilling, Inc. [name]

    

    By:
      /S/Edward L. Moses, Jr. [signature]

    

    Edward
      L.
      Moses, Jr., President and COO [typed
      name and title]

    

    

    Address
      for Notices:

    

    

    

    
      
        
          Interim
            Credit Agreement

          Page

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