Document:

ex101to10q08263_02262011.htm

Exhibit 10.1

 

WAREHOUSING AGREEMENT

 

WAREHOUSING AGREEMENT, dated as of April 11, 2011, between JENNIFER CONVERTIBLES, INC., a Delaware corporation (“JCI”), MARKS & COHEN LLC., a North Carolina corporation (“M&C”).

 

W I T N E S S E T H:

 

WHEREAS, M&C desires to obtain certain warehousing and distribution and other services in California for their operations and JCI desires to provide such services to M&C.

 

NOW, THEREFORE, in consideration herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.           Definitions.  As used in this Agreement:

 

 “Effective Date” shall have the mean May 1, 2011.

 

 “Merchandise” shall mean home-furnishing items generally sold to other retailers.

 

“Warehouse” shall mean the premises located at 1050 Orange Show Road, San Bernardino, California.

 

“M&C Delivered Sales” shall mean the landed wholesale cost of the Merchandise.

 

“COD” shall mean payment due from customers of M&C upon receipt of Merchandise to these customers from JCI.  Payments may be in the form of Cash or Check.

 

2.           Warehousing.  During the term of this Agreement, JCI shall:

 

	
  

	
(a)

	
Receive, hold and store at the Warehouse Merchandise for M&C or its agents.

 

	
  

	
(b)

	
Release of Merchandise to customers of M&C or its agent as requested by its M&C and its agents including collecting any COD payments.

 

	
  

	
(c)

	
Provide to M&C or its agent (i) Receiving Reports, (ii) Delivery Reports and (iii) Stock Status Reports.

 

	
  

	
(d)

	
Title and risk of loss of Merchandise remains with M&C.

 

3.           Warehousing Fees.  As consideration for providing the services set forth in Sections 2 above,  M&C shall pay to JCI:

 

	
  

	
(a)

	
Fee equal to the greater of $10,000 or 5% of the aggregate M&C Delivered Sales.  $10,000 is due the first of each month with the balance due on the $15th of the following month.

 

	
  

	
(b)

	
One time fee of $7,000 due May 1, 2011.

 

  

  

  

 

4.           Warranty Claims; Service and Repairs.  JCI will be not be responsible for any claims for breach of warranty or otherwise relating to M&C Delivered Sales or any defects or irregularities relating to Merchandise.

 

5.           Term and Termination.  The term of this Agreement shall be for one year commencing on the Effective Date and maybe terminated earlier by either party upon thirty day written notice.  If the Agreement is terminated M&C must still make any payments under section 3 of this Agreement.

 

6.           Representations and Warranties.  (a)  M&C hereby represents and warrants to JCI as follows:

 

(i)           M&C is duly incorporated, validly existing and in good standing under the laws of the State of North Carolina and has all requisite corporate power to operate and to carry on its business as presently being conducted;

 

(ii)          M&C has all requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby and, assuming the due and valid execution and performance hereof by JCI, this Agreement, when so executed and delivered by M&C, will constitute the legal, valid and binding obligation of M&C, enforceable against M&C in accordance with its terms except as such enforcement may be limited by applicable principles of bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies;

 

(iii)         except for the Court Approval, no consent, authorization, approval, order, license, certificate or permit of or from, or filing with, any federal, state, local or other governmental authority is required by M&C in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby.

 

(iv)         the execution, delivery and performance of this Agreement by M&C will not violate its certificate of incorporation or by-laws or any law, regulation, order, judgment or decree binding on it or to which it or any of its properties or assets are subject.

 

(b)           JCI hereby jointly and severally represent and warrant to M&C as follows:

 

(i)           JCI is duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power to own, lease and operate its properties and to carry on its business as presently being conducted;

 

(ii)          JCI has all requisite corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby and, assuming the due and valid execution and performance hereof by M&C, this Agreement, when so executed and delivered by JCI will constitute the legal, valid and binding obligations of JCI, enforceable against each of JCI in accordance with its terms except as such enforcement may be limited by applicable principles of bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies;

 

(iii)         except for the Court Approval, no consent, authorization, approval, order, license, certificate or permit of or from, or filing with, any federal, state, local or other governmental authority is required by JCI in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby; and

 

  

  

  

 

(iv)         the execution, delivery and performance of this Agreement by JCI will not violate their respective certificates of incorporation or bylaws or any law, regulation, order, judgment or decree binding on either of them or to which any of their respective properties or assets are subject.

 

7.           Indemnity.  (a)  M&C shall indemnify and hold harmless JCI and their respective successors, permitted assigns, officers, directors, employees, agents, advisors, representatives and affiliates (collectively, the “JCI Indemnified Parties”) from and against any and all loss, cost, liability, damage, injury, claim and expense (including, but not limited to, reasonable attorneys’ fees and disbursements), accruing, and arising out of or in connection with the inaccuracy of any of the representations and warranties made by M&C herein or the breach by M&C of any covenant or agreement contained herein.

 

(b)      JCI shall indemnify and hold harmless each of M&C, its successors, permitted assigns, officers, directors, employees, agents, advisors, representatives and affiliates (collectively, the “M&C Indemnified Parties”) from and against any and all loss, cost, liability, damage, injury, claim and expense (including but not limited to reasonable attorneys’ fees and disbursements), accruing, and arising out of or in connection with the inaccuracy of any of the representations and warranties made by either of them or the breach by either of them of any covenant or agreement contained herein.

 

8.           Miscellaneous.  (a) No party may assign its rights or obligations hereunder without the prior written consent of the other parties.  Notwithstanding the foregoing, JCI may subcontract to any wholly-owned subsidiary, the performance of its obligations hereunder and the sale of JCI’s stock or a merger of JCI or a sale of substantially all of the assets of JCI shall not be deemed an assignment, provided, however, that in the case of an asset sale, the acquiring party shall agree to assume and be bound by this Agreement.  This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.

 

(b)      Except as expressly provided to the contrary herein, each paragraph, part, term and/or provision of this Agreement shall be considered severable and if, for any reason, any section, part, term and/or provision herein is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation of any court or agency having valid jurisdiction, such shall not impair the operation or affect the remaining portions, sections, parts, terms or provisions of this Agreement; and the latter will continue to be given full force and effect and bind the parties hereto and such invalid sections, parts, terms and/or provisions shall be deemed not to be part of this Agreement.

 

(c)      This Agreement constitute the entire, full and complete agreement among JCI and M&C concerning the subject matter hereof and supersede all prior agreements concerning such subject matter.  No amendment, change or variance from this Agreement shall be binding on any party unless in writing and signed by all parties hereto.

 

(d)      The captions to each paragraph herein are used for convenience only and shall not be considered part of this Agreement, nor used in interpreting the provisions hereof.

 

(e)      This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflict of laws principles thereof.

 

(f)      This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and together which shall be deemed one instrument.

 

  

  

  

 

(g)      Nothing in this Agreement, express or implied, is intended to confer on any person not a party here to any rights or remedies by reason of this Agreement.

 

(h)      Any amounts due hereunder, but not paid when due (whether by offset or otherwise) shall bear interest at the rate of 9% per annum until paid.

 

(i)      Any controversy or claim arising out of or relating to this Agreement or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any federal or state court of competent jurisdiction sitting within the area comprising the Eastern District of New York, such arbitration shall take place in New York, and the parties do hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision.  In addition to all other remedies available in the arbitration, the parties shall have the right to seek termination of this Agreement and damages.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	
JENNIFER CONVERTIBLES, INC.

	  	  
	
By:

	
/s/ Rami Abada

	  	
Name: Rami Abada

	  	
Title: President

	  	  
	  	  
	
MARKS and COHEN LLC.

	  	  
	
By:

	
 /s/ Herb Hester Jr.

	  	
Name: Herb Hester Jr.

	  	
Title: Presidentex_10-1.htm

 

April 11, 2011

 

Sun Bancorp, Inc.

226 Landis Avenue

Vineland, New Jersey  08360

Ladies and Gentlemen:

 

Reference is hereby made to (i) the Securities Purchase Agreement, dated as of July 7, 2010 (the “Securities Purchase Agreement”), between Sun Bancorp, Inc., a New Jersey corporation (the “Company”), and WLR SBI AcquisitionCo, LLC, a Delaware limited liability company (“WLR”); (ii) the notice given by the Company to WLR, dated as of March 3, 2011, notifying WLR of its gross-up right under Section 4.7 of the Securities Purchase Agreement (the “Gross-Up Right”) in connection with a proposed public offering (the “Offering”) by the Company of 25,000,000 shares (the “Initial Shares”) of its common stock, par value $1.00 per share (“Common Stock”), for $3.00 per share of Common Stock (the “Offering Price”), plus an additional 3,750,000 shares of Common Stock to cover over-allotments (the “Option Securities”); (iii) the notice given by WLR, dated as of March 11, 2011, notifying the Company of WLR’s intention to exercise the Gross-Up Right with respect to the Common Stock issued in the Offering; and (iv) the completion on March 22, 2011 of the Company’s public offering of 28,750,000 shares of Common Stock, including the Option Securities, at which time WLR acquired 6,186,114 shares of Common Stock in respect of the Gross-Up Right with respect to the Initial Shares only, at a price of $2.85 per share, representing the Offering Price less the underwriting discount of $0.15. Certain capitalized terms used herein have the meanings set forth in the Securities Purchase Agreement.  This letter agreement (this “Letter Agreement”) confirms the mutual understanding and agreement of the parties hereto regarding the exercise by WLR of the Gross-up Right with respect to the Option Securities.

 

1.   Transaction and Purchase Price. WLR hereby agrees to purchase from the Company, and the Company agrees to issue and sell to WLR, an aggregate of 2,002,054 shares of Common Stock (the “Purchased Shares”) at a price per share equal to $2.85 (the Offering Price, less the underwriting discount of $0.15), for an aggregate purchase price of  $5,705,853.90 (the “Purchase Price”). The transactions contemplated by the preceding sentence will be consummated on April 11, 2011 (the “Closing Date”). WLR will pay the Purchase Price on the Closing Date by wire transfer of immediately available funds to the account previously designated by the Company. The Company will deliver one or more certificates evidencing the Purchased Shares to WLR within one business day following the Closing Date. The Purchased Shares will bear the legend set forth in Section 4.3(a) of the Securities Purchase Agreement.

 

2.   Representations and Warranties of the Company. The Company represents and warrants as of the date of this Letter Agreement (except to the extent made only as of a specified date, in which case as of such date) to WLR that:

 

 

  

  

  

 

	 	
(a)

	
Organization and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and failure to be so qualified would have a Material Adverse Effect on the Company and the Company has corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted.

 

	 	
(b)  

	
Authorization.

 

(1) The Company has the corporate power and authority to enter into this Letter Agreement and to carry out its obligations hereunder. This Letter Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery of this Letter Agreement by WLR, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganizations, fraudulent transfer or similar laws relating to or affecting creditors generally or by general equitable principles (whether applied in equity or at law). No other corporate proceedings are necessary for the execution and delivery by the Company of this Letter Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.

 

(2) Neither the execution, delivery and performance by the Company of this Letter Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any Lien, upon any of the properties or assets of the Company or any Company Subsidiary under any of the material terms, conditions or provisions of (A) its certificate of incorporation or bylaws (or similar governing documents) or (B) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which it may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject, or (ii) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any ordinance, permit, concession, grant, franchise, law, statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective  properties or assets, except in the case of clauses (i)(B) and (ii) for such violations, conflicts and breaches that are not material to the Company, individually or in the aggregate.

 

 

  

  

  

 

(3) Other than the securities or blue sky laws of the various states, no notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or expiration or termination of any statutory waiting period, in each case with respect to the Company or any Company Subsidiary, is necessary for the consummation by the Company of the transactions set forth in this Letter Agreement.

 

	
  

	(c) 	
Status of Securities. The Purchased Shares have been duly authorized by all necessary corporate action of the Company. When issued and sold against receipt of the consideration therefor as provided in this Letter Agreement, the Purchased Shares will be validly issued, fully paid and nonassessable and will not subject the holders thereof to personal liability and, except as to certain other investors referred to in Section 3(e) and Section 13 hereof, will not be subject to preemptive rights of any other stockholder of the Company, nor will such issuance result in the violation or triggering of any price-based antidilution adjustments under any agreement to which the Company or any Company Subsidiary is a party.

 

	
  

	(d) 	
Capitalization.  As of April 7, 2011, and immediately prior to the completion of the transactions hereby, there were 79,158,384 shares of Common Stock outstanding and no shares of Company Preferred Stock outstanding.  Simultaneously with the purchase of Common Stock to be made hereunder, the Company will also issue 1,800,077 shares of Common Stock in the aggregate to other investors not including WLR, allocated as set forth on Appendix A attached hereto, in respect of their contractual gross-up rights with respect to the Option Securities (the “Additional Share Issuances”).  Immediately following the completion of the transactions contemplated hereby and the Additional Share Issuances, (i) there will be 82,960,515 shares of Common Stock and no shares of Company Preferred Stock outstanding and (ii) no person will have contractual gross-up or other preemptive rights with respect to the Initial Shares, the Option Securities or any other securities issued by the Company on or prior to the date hereof, other than certain other investors referred to in Section 3(e) and the Anchorage Gross-Up Rights described in Section 13 hereof.

 

3.   Representations and Warranties of WLR. WLR hereby represents and warrants as of the date of this Letter Agreement (except to the extent made only as of a specified date, in which case as of such date) to the Company that:

 

	 	
(a)  

	
Organization and Authority. WLR is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and failure to be so qualified would have a Material Adverse Effect on WLR and WLR has power and authority to own its properties and assets and to carry on its business as it is now being conducted.

 

 

  

  

  

 

 

	 	
(b)  

	
Authorization.

 

(1) WLR has the power and authority to enter into this Letter Agreement and to carry out its obligations hereunder. The execution, delivery and performance of this Letter Agreement by WLR and the consummation of the transactions contemplated hereby have been duly authorized by WLR and no further approval or authorization is required. Assuming due authorization, execution and delivery of this Letter Agreement by the Company, this Letter Agreement is a valid and binding obligation of WLR enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganizations, fraudulent transfer or similar laws affecting creditors generally or by general equitable principles (whether applied in equity or at law). No other proceedings are necessary for the execution and delivery by WLR of this Letter Agreement, the performance by it of its obligations hereunder or the consummation by it of the transactions contemplated hereby.

 

(2) Neither the execution, delivery and performance by WLR of this Letter Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by it with any of the provisions hereof, will (i) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any Lien upon any of the properties or assets of WLR under any of the material terms, conditions or provisions of (A) its certificate of formation or limited liability company agreement or (B) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which it is a party or by which it may be bound, or to which it or any of its properties or assets may be subject, or (ii) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any statute, rule or regulation or, to the knowledge of WLR, any judgment, ruling, order, writ, injunction or decree applicable to WLR or any of its properties or assets except in the case of clauses (i)(B) and (ii) for such violations, conflicts and breaches as would not reasonably be expected to materially and adversely affect WLR’s ability to perform its obligations under this Letter Agreement.

 

(3) No notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or expiration or termination of any statutory waiting period, in each case with respect to WLR, is necessary for the consummation by WLR of the transactions set forth in this Letter Agreement.

 

	 	
(c)  

	
Accredited Investor.  WLR is an accredited investor within the meaning of Rule 501(a) of Regulation D (“Regulation D”) under the Securities Act of 1933, as 

 

 

 

  

  

  

 

 

	 	 	
amended (the “Securities Act”).  WLR has not solicited offers for, or offered or sold, and will not solicit offers for, or offer to sell, the Purchased Shares by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act.

 

	 	
(d)  

	
Status of Purchased Shares.  WLR acknowledges that the Purchased Shares (i) have not been registered under the Securities Act; (ii) are “restricted securities” within the meaning of Rule 144 under the Securities Act; (iii) may not be offered and sold unless they are subsequently registered or qualified under the Securities Act and any other applicable securities law or exemptions from such registration and qualification are available; and (iv) will bear the legend set forth in Section 4.3(a) of the Securities Purchase Agreement restricting their resale.

 

	 	
(e)  

	
Other Gross-Up Investors.  WLR acknowledges that certain other investors have similar gross-up rights and, concurrent with its purchase of the Purchased Shares, such other investors will be purchasing additional shares of Common Stock as set forth in Appendix A attached hereto.

 

4.   Survival. Each of the representations and warranties set forth in this Letter Agreement shall survive the closing indefinitely. Except as otherwise provided herein, all covenants and agreements contained herein shall survive for the duration of any statutes of limitations applicable thereto or until, by their respective terms, they are no longer operative.

 

5.   Registrable Securities. The parties hereto agree that, for the avoidance of doubt, the definition of the term “Registrable Securities” under the Securities Purchase Agreement shall be deemed to include the Purchased Shares.

 

6.   Amendment. No amendment or waiver of this Letter Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party.

 

7.   Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No waiver of any party to this Letter Agreement will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.

 

8.   Counterparts and Facsimile. For the convenience of the parties hereto, this Letter Agreement may be executed in any number of separate counterparts, each such counterpart being 

 

 

  

  

  

 

deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Letter Agreement may be delivered by facsimile or other comparable electronic means and as so delivered will be deemed as sufficient as if actual signature pages had been delivered.

 

9.   GOVERNING LAW. THIS LETTER AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.  THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY WILL BE TRIED EXCLUSIVELY IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY AND COUNTY OF NEW YORK AND THE PARTIES AGREE TO SUBMIT TO THE JURISDICTION OF, AND TO VENUE IN, SUCH COURTS.

 

10.   WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS LETTER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

11.   Notices. The provisions of Section 6.7 of the Securities Purchase Agreement are incorporated herein by reference as if set out in full herein.

 

12.   Expenses.  The Company shall reimburse WLR up to $50,000 for all out-of-pocket fees and expenses (including fees and expenses of legal counsel) incurred in connection with the Offering and the transactions contemplated hereby.

 

13.   Additional Gross-Up Rights.  The parties hereto acknowledge that on March 17, 2011 the Company entered into an agreement with an as-yet unnamed fund managed by Anchorage Capital Group LLC (“Anchorage Capital”) which provides Anchorage Capital with certain “gross-up rights” (the “Anchorage Gross-Up Rights”) with respect to certain securities offerings that the Company may conduct, including the sale of the Option Securities.  The parties hereto further acknowledge that the transactions contemplated herein do not account for any rights that WLR may have if Anchorage Capital exercises the Anchorage Gross-Up Right with respect to the Option Securities or any other securities and that if Anchorage Capital does exercise the Anchorage Gross-Up Right with respect to the Option Securities, WLR will have the right to exercise the Gross-Up Right with respect to any shares acquired by Anchorage Capital on account of the sale of the Option Securities and the transactions contemplated hereby.

 

 

  

  

  

 

14.   Entire Agreement, Etc. (a) This Letter Agreement, together with Sections 4.6 and 4.7 of the Securities Purchase Agreement, constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof; (b) the terms and conditions of this Letter Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors, and with respect to WLR, its permitted assigns; and (c) this Letter Agreement will not be assignable by operation of law or otherwise (any attempted assignment in contravention hereof being null and void), except that WLR shall be permitted to assign its rights or obligations hereunder to (i) any Affiliate entity (any such transferee shall be included in the term “WLR”); provided, further, that no such assignment shall relieve WLR of any of its obligations under this Letter Agreement.

 

15.   Severability. If any provision of this Letter Agreement or the application thereof to any person (including, the officers and directors of WLR and the Company) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

 

16.   No Third Party Beneficiaries. Nothing contained in this Letter Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto, any benefit, right or remedies.

 

 

[Signature page follows]

 

  

  

  

If the foregoing accurately reflects your understanding and agreement, please acknowledge the same by signing this Letter Agreement where indicated below and returning to us a copy of this letter.

 

	  	
Sincerely,

	 	 
	  	  
	  	
WLR SBI ACQUISITIONCO, LLC

	  	  
	  	
By:

	
WLR Recovery Fund IV, L.P.,

	  	  	
Its Sole Manager

	  	  	  
	  	
By:

	
WLR Recovery Associates IV LLC,

	  	  	
Its General Partner

	  	  	  
	  	
By:

	
WL Ross Group, L.P.,

	  	  	
Its Managing Member

	  	  	  
	  	
By:

	
El Vedado, LLC,

	  	  	
Its General Partner

	  	  	  
	  	  	  
	  	
By:

	
/s/ Michael J. Gibbons

	  	  	
Name:  Michael J. Gibbons

	  	  	
Title:

	  	  	  
	  	  	  
	  	  	  

	
Acknowledged and agreed as of the date first above written.

 

SUN BANCORP, INC.

	  	  
	
By:

	/s/ Thomas X. Geisel
	  	
Name: Thomas X. Geisel

Title: President and Chief Executive Officer

 

  

  

  

 

 

 

Appendix A

 

	
Investor

	
Number of Shares

Being Purchased

	
WLR SBI AcquisitionCo, LLC

	
2,002,054

	
Maycomb Holdings II, LLC

	
  266,107

	
Maycomb Holdings III, LLC

	
   266,108

	
Maycomb Holdings IV, LLC

	
   266,108

	
NFI Interactive Logistics, LLC

	
   350,877

	
Bernard A. Brown

	
   491,228

	
Sidney R. Brown

	
     78,948

	
Jeffrey S.  Brown

	
     70,175

	
Anne E. Koons

	
     10,526

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