SENIOR NOTE THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER FEDERAL OR STATE GOVERNMENT AGENCY. THIS SENIOR NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE...
Exhibit 10.3
SENIOR
NOTE
THIS
OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT
INSURANCE CORPORATION OR ANY OTHER FEDERAL OR STATE
GOVERNMENT
AGENCY.
THIS
SENIOR NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933,
AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAW OR ANY
OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SENIOR NOTE NOR ANY
INTEREST
OR PARTICIPATION THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE
OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM,
OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
|
$6,500,000
|
San
Francisco, California
March
31, 2009
|
Belvedere
SoCal, a California corporation (the "Company") promises to pay to the order of
Belvedere Capital Fund II L.P. (the "Purchaser"), at the Company's office at Xxx
Xxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, XX 00000 in lawful money of the United
States of America, the principal amount of $6,500,000, together with interest on
the part of the principal amount from time to time remaining unpaid from this
date until such principal is paid at the rate provided below.
The
principal of this Senior Note (the "Note") shall be due and payable in full on
July 1, 2009 (the "Final Maturity Date").
The
interest on this Note shall be due and payable quarterly as it accrues on the
first day of July until this Note is paid in full, commencing on the first such
day next succeeding this date. In the sole discretion of Purchaser and upon
three business days prior notice to the Company, any quarterly interest payment
may be deferred and paid on the Final Maturity Date
Interest
on this Note shall be based on a fixed rate of 15 % per annum. The amount of
interest payable for any interest period shall be computed on the basis of the
actual number of days in such interest period divided by 360.
The
Company will pay Purchaser a $130,000 transaction fee in connection with its
purchase of the Note, which shall be added to the principal balance of the
Note.
The
Company shall have the right and privilege of prepaying all or any part of this
Note at any time, after the full repayment of that certain promissory note dated
as of March 18, 2008 to Pacific Coast Bankers' Bank (the "PCBB Note"), without
notice or penalty and all pre-payments on this Note shall be applied first to
accrued interest and the balance, if any, to principal.
1
The
indebtedness of the Company evidenced by this Note, including the principal and
interest, shall be (i) subordinate and junior in right of payment to the PCBB
Note and (ii) deemed to be "Senior Indebtedness" for purposes of Fixed Rate
Junior Subordinated Deferrable Interest Rate Debentures issued pursuant to that
certain Indenture dated as of January 31, 2008 (the "Trust Preferred"). In the
event of any insolvency, receivership, conservatorship, reorganization,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings or any liquidation or winding up of the Company, whether voluntary
or involuntary, then (A) the PCBB Note shall be preferred in payment over the
Note and (B) the Note shall be preferred in payment over the Trust
Preferred.
Upon the
occurrence of one or more Events of Default (as defined below), the holder of
this Note may, by written notice to the Company in the manner set forth below,
declare all sums of principal and interest then remaining unpaid on this Note
immediately due and payable in full. Presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
An "Event
of Default" shall exist if any of the following occurs and is
continuing:
(a) a
court of competent jurisdiction shall enter a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(b) the
Co mpany shall commence a voluntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case under
any such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors;
(c) any
bank regulatory agency or agencies having authority over the Company's banking
subsidiary (the "Bank") cancels its charter, revokes or suspends its license to
engage in the banking business, seizes control of the Bank, or declares the Bank
insolvent and such action is not withdrawn or reversed within 10 days;
or
(d) upon
the occurrence of any event of default in connection with the PCBB Note or the
Trust Preferred.
At any
time after such declaration of default has been made but before any judgment or
decree for payment of money due on this Note has been obtained by the Note
holder, the holder may, by written notice to the Company, rescind and annul such
declaration and its consequences if all Events of Default have been cured or
waived. No such rescission or annulment shall affect any subsequent default or
impair any right with respect thereto.
Notice of
default shall be in writing, signed by the holder of this Note, and shall set
forth with reasonable specificity the event or events of default on which the
Note holder bases its declaration of default.
2
At the
option of Purchaser and at any time prior to the Final Maturity Date, the Note
shall be convertible, in whole or in part, into, at the discretion of the
Purchaser, either shares of the Company's (A) common stock or (B) Series A
Non-Cumulative Perpetual Preferred Stock ("Series A Stock"). Purchaser shall
effect a conversion by delivering to Company a notice of conversion specifying
therein the principal amount of the Note to be converted and the date on which
such conversion shall be effected. In connection with a conversion into common
stock, the conversion price shall be a 20% premium to the fair value of the
common stock as determined by independent appraisal as of the proposed date of
conversion. In connection with a conversion into Series A Stock, the conversion
price shall be $25.00 per share.
This Note
shall be governed by, and construed and interpreted in accordance with the laws
of the State of California.
By: /s/ Xxxx Xxxx X.
Xxxx
Name: Xxxx
Xxxx X. Xxxx
Title:
President/CEO
3
