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Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 20, 1996
FWB Bancorporation
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(Exact name of registrant as specified in its charter)
Maryland 0-16187 52-1332050
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(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
7535 Old Georgetown Road Bethesda, Maryland 20814
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (301) 770-1300
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Item 5. Other Events.
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On December 20, 1996, FWB Bancorporation ("Bancorp"), and its wholly
owned commercial bank subsidiary, FWB Bank (the "Bank") entered into an
agreement (the "Agreement") with United Payors & Providers, a Maryland
Corporation ("UP&UP"), Rockville, Maryland. The Agreement has an initial term
extending through October 31, 2001, and is subject to extension. Under the
Agreement, among other things, (a) the Bank with the assistance of UP&UP agrees
to establish a credit card program with the assistance of UP&UP for persons
covered by certain health insurance companies; (b) the Bank agrees to extend
credit under the credit card program to such persons subject to the Bank's
credit determinations; (c) UP&UP grants a limited, exclusive license to use
trademarks acquired by UP&UP for use in the credit card program; (d) the Bank
agrees to provide compensation to UP&UP based upon credit card receivables on
the books of the Bank under the credit card program; and (e) UP&UP agrees to
purchase, and Bancorp agrees to sell, newly issued shares of Bancorp common
stock, par value $0.10 per share, for a total investment of up to $1.5 million.
The Agreement calls for UP&UP to purchase 106,666 shares of such common stock
for a cash payment of $500,000, or $4.6875 per share, following receipt by the
Bank of a VISA/Mastercard license and certain approvals of the credit card
program. Following their issuance, such 106,666 shares would represent
approximately 2.65 percent of the Company's outstanding common stock, based upon
the 3,925,499 shares outstanding at December 20, 1996. Additional investments in
common stock, up to the $1.5 million maximum total investment, would be made at
the average market price of the stock for the thirty days prior to such
purchases, with the amount of such additional investments, if any, based upon
the levels of credit card receivables on the books of the Bank under the credit
card program. For additional information, see the Agreement filed as Exhibit
10.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Financial Statements. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibit 10.1-Agreement, dated December 20, 1996, by and among FWB
Bancorporation, FWB Bank, and United Payers & United Providers, a
Maryland corporation.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FWB Bancorporation
By: /s/ Steven K. Colliatie
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Steven K. Colliatie, President
Dated : January 15, 1997
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EXHIBIT 10.1
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Agreement Among
FWB Bank
FWB Bancorporation
and
United Payors & United Providers
This agreement is entered into as of this 20th day of December, 1996 (the
"Effective Date") by and among FWB Bank, a state banking association having its
principal place of business in Bethesda, Maryland ("FWB"), FWB Bancorporation, a
Maryland corporation and registered bank holding company for FWB, and United
Payors & United Providers, a Maryland corporation, having its principal place of
business in Rockville, Maryland (UP&UP) for themselves, and their respective
successors and assigns.
WHEREAS, FWB desires to be in the business of issuing and administering credit
cards to customers and is establishing a credit card division for that purpose;
WHEREAS, UP&UP assists medical insurance companies by developing financial
service products to offer its customers; and
WHEREAS, FWB wishes to enter into an agreement with UP&UP to support UP&UP's
health card program.
1. DEFINITIONS
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When used in this Agreement,
(a) "Credit Card Account" means a credit card account opened by a
Member in response to marketing efforts made pursuant to the
program.
(b) "Customer" means any Member who is a participant in the Program.
(c) "Insurance Company" refers to any health insurance company that
UP&UP has contracted with for inclusion in this program.
(d) "Mailing Lists" means updated and current lists and/or magnetic
tapes (in a format designated by FWB) containing names, postal
addresses and, when available, telephone numbers of members
segmented by zip-codes or reasonably selected membership
characteristics.
(e) "Member" means a member of beneficiary of a health insurance plan
operated by an Insurance Company.
(f) "Program" means the credit card services offered by FWB as part of
the Health Card program described generally in Schedule A and
which is offered to the Members from time to time pursuant to this
Agreement.
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(g) "Trademarks" means any design, image, visual representation, logo,
service mark, trade dress, trade name, or trademark used or
acquired by UP&UP or an Insurance Company for inclusion in the
Program.
2. RIGHTS AND RESPONSIBILITIES OF UP&UP
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(a) UP&UP agrees to provide FWB with such information and assistance
as may be reasonably requested by FWB in connection with the
Program. UP&UP agrees to provide the consulting services of
Michael Smith on an as-needed basis (determined by FWB) to assist
FWB.
(b) UP&UP authorizes FWB to solicit Members by mail, direct promotion,
advertisements and/or telephone for participation in the Program.
(c) UP&UP shall have the right of prior approval of all Program
advertising and solicitation materials to be used by FWB which
contain the Trademarks; such approval shall not be unreasonably
withheld or delayed.
(d) UP&UP hereby grants FWB and its affiliates a limited, exclusive
license to use the Trademarks solely in conjunction with the
Program, including the promotion thereof.
3. RIGHTS AND RESPONSIBILITIES OF FWB
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(a) FWB shall use its best efforts to establish a credit card
operation and agrees to initially issue credit cards under the
Health Card program for Pioneer Financial Services' members. FWB
shall use its reasonable efforts to establish a credit card
division or subsidiary called "UP&UP Financial" and to obtain a
VISA/Master Card license and approval for the Program.
(b) FWB shall design, develop and administer the Program for the
Members. FWB shall fund the receivables and bear the costs of the
program, including, but not limited to costs relating to marketing
and promotion, product development, account origination, credit,
and account maintenance.
(c) FWB shall make all credit decisions and shall bear the credit
risks with respect to each Customer's account(s).
(d) FWB shall use the mailing lists provided pursuant to this
Agreement, consistent with this Agreement and will use reasonable
efforts to limit those entities handling these Mailing Lists from
using them for any other purpose. These Mailing Lists are and
shall remain the sole property of UP&UP.
(e) The Program shall be developed, marketed and administered in a
manner that complies in all material respects with all of the
applicable laws and regulations.
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4. REPRESENTATIONS AND WARRANTIES
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UP&UP and FWB each represents and warrants to the other that as of
the Effective Date and throughout the term of this Agreement:
(a) It is duly organized, validly existing and in good standing under
applicable laws of the State of Maryland and qualified in all
jurisdictions it is to do business.
(b) It has all necessary power and authority to execute and deliver
this Agreement and to perform its obligations under this
Agreement.
(c) This Agreement constitutes a legal, valid and binding obligation
of such party, enforceable against such party in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, receivership, reorganization and other
similar laws affecting the enforcement of creditors' rights
generally and by the general principles of equity.
(d) No consent, approval or authorization from any third party is
required is required in connection with the execution, delivery
and performance of this Agreement, except such as have been
obtained and are in full force and effect.
(e) The execution, delivery and performance of this Agreement by such
party will not constitute a violation under each party's Articles
of Incorporation and Bylaws or of any document, agreement, or
contract of which each is a party or of any law, rule, regulation,
court order or ruling applicable to such party.
5. COMPENSATION
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(a) During the of the Agreement, FWB shall pay compensation to UP&UP
in accordance with Schedule B.
(b) On or before the fifteenth (15th) day after the end of each
calendar quarter during the term of this Agreement, FWB will
provide UP&UP with reports showing the number of new Credit Card
Accounts originated, the preceding calendar period and related
receivables balances and interest income.
(c) FWB will continue to pay compensation to UP&UP after the
termination of this Agreement for any reason for any credit card
account whose valid credit card device continues to bear a
Trademark.
6. PROGRAM ADJUSTMENTS
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A summary of the current features of the Program are set forth in
Schedule A. FWB and UP&UP may agree to make periodic adjustments,
substitutions or eliminations to the Program and its terms and
features.
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7. CAPITAL INVESTMENT
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(a) UP&UP will invest $1,500,000 in the common stock of FWB
Bancorporation. Upon receipt by FWB of a VISA/MasterCard license
to issue credit cards and approval by VISA/MasterCard of the
Health Card program, UP&UP will acquire 106,666 shares of common
stock from FWB Bancorporation for a cash payment of $500,000.
(b) Additional capital investments beyond the initial $500,000 shall
be made according to Schedule C at a price of prices equal to the
average of the bid and ask price for the prior 30 days, or if
listed with NASDAQ, the average of the closing price for the prior
30 days.
8. CONFIDENTIALITY AGREEMENT
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The terms of this Agreement, any proposal, financial information
and proprietary information provided for or on behalf of one party
to the other party prior to, contemporaneously with, or subsequent
to, the execution of this Agreement ("Information") are
confidential as of the date of disclosure. Such information will
not be disclosed by such other party to any other person or
entity, except as permitted under this Agreement or as mutually
agreed in writing. FWB and UP&UP shall be permitted to disclose
such Information (i) to their accountants, legal, financial and
marketing advisors, and employees as necessary for the performance
of their respective duties, provided that persons are informed of
the confidential nature of such information; (ii) as required by
law or by any governmental regulatory authority; (iii) to the
Insurance company; and (iv) if such information becomes part of
the public domain through no fault of either party. It is
understood and agreed that this Agreement may be described in and
filed as Exhibit to FWB Bancorporation's Form 10-KSB and other
regulatory filings as required.
9. TERM OF AGREEMENT
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The initial term of this Agreement (the "Term") will begin on the
Effective Date and end on October 31, 2001. This Agreement will
automatically extend at the end of the initial term or any renewal
term for successive two-year periods, unless either party gives
written notice of its intention not to renew at least one hundred
and eighty days (180) prior to the last date of such term or
renewal term, as applicable.
10. TERMINATION
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(a) In the event of any material breach of this Agreement by FWB or
UP&UP, the other party may terminate this Agreement by giving
notice, as provided herein, to the breaching party. This notice
shall (i) describe the material breach; and (ii) state the party's
intention to terminate this Agreement. If
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the breaching party does not cure or substantially cure such
breach within sixty (60) days after receipt of this notice, as
provided herein (the "Cure Period"), then this Agreement shall
terminate sixty (60) days after the Cure Period.
(b) This agreement may be terminated at any time by mutual agreement
of the parties.
(c) Upon termination of this Agreement, FWB shall cease to use the
Trademarks within (90) days of termination.
12. INDEMNIFICATION
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(a) UP&UP and FWB each will indemnify and hold harmless the other
party, its directors, officers, agents, employees, parents,
subsidiaries, affiliates, successors and assigns from and against
any causes of action and the reasonable and actual costs incurred
in connection therewith, including reasonable attorney's fees,
which arises out of a final determination of an act or omission by
FWB, its employees, agents or contractors, in which UP&UP and/or
Insurance Company is included as a defendant (referred to as a
"Claim"). UP&UP and/or Insurance Company shall, within ten (10)
business days of receiving notice of the Claim, notify FWB in
writing (in the manner provided for in this Agreement) of the
Claim.
13. MISCELLANEOUS
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(a) This Agreement cannot be amended except by written agreement
signed by the authorized agents of both parties hereto.
(b) All representations and warranties stated herein shall survive the
execution of this Agreement and the obligations in Sections 2(a),
2(d)(as it relates to the provisions of 11(c), 3(a), 5, 7, 8,
11(c), and 12 shall survive any termination of this Agreement.
(c) The failure of any party to exercise any rights under this
Agreement shall not be deemed a waiver of such right or any other
rights.
(d) The section captions are inserted only for convenience and are in
no way to be construed as part of this Agreement.
(e) If any part of this Agreement shall for any reason be found or
held invalid or unenforceable by any court or governmental agency
of competent jurisdiction, such invalidity or unenforceability
shall not affect the remainder of this Agreement which shall
survive and be construed as if such invalid or unenforceable part
had not been contained herein.
(f) All notices relating to this Agreement shall be in writing and
shall be deemed given (i) upon receipt by hand delivery, facsimile
or overnight courier which shall be followed by mailing, or
(ii) three (3) business days after mailing by registered
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or certified mail, postage pre-paid, return receipt requested. All
notices shall be addressed as follows:
(1) If to UP&UP United Payors & United Providers
2275 Research Boulevard
Sixth Floor
Rockville, Maryland 20850
ATTENTION: S. Joseph Bruno
Corporate Secretary
Fax#:(301)548-8828
(2) If to FWB or FWB Bank
FWB Bancorporation 7535 Old Georgetown Road
Bethesda, Maryland 20814
ATTENTION: Steven K. Colliatie
President
Fax#:(301)984-7127
Any party may change the address to which communications are sent
by giving notice, as provided herein, of such change of address.
(g) This Agreement contains the entire Agreement if the parties with
respect to the matters covered herein and supersedes all prior
promises and agreements, written or oral, with respect to the
matters covered herein.
(h) FWB and UP&UP are not agents, representatives or employees of each
other and neither party shall have the power to obligate or bind
the other in any manner except as otherwise expressly provided by
this Agreement.
(i) Neither party shall be in breach hereunder by reason of its delay
in the performance of or failure to perform any of its obligations
herein if such delay or failure is caused by strikes, acts of god,
or the public enemy, riots, incendiaries, interference by civil or
military authorities beyond our control, compliance with
governmental laws, rules, regulations, delays in transit or
delivery, or any event beyond its reasonable control or without
its fault or negligence.
IN WITNESS WHEREOF, each of the parties, by its representative, has executed
this Agreement as of the Effective Date.
UNITED PAYORS & UNITED PROVIDERS FWB BANK
By: /s/ Michael A. Smith By: /s/ Steven K. Colliatie
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Name: Michael A. Smith Name: Steven K. Colliatie 3
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Title: Vice President Title: President/CEO
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FWB BANCORPORATION
By: /s/ Steven K. Colliatie
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Name: Steven K. Colliatie
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Title: President/CEO
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