EXHIBIT 10-j
CONFORMED COPY
WESTAMERICA BANCORPORATION
NOTE AGREEMENT
Dated as of February 1, 1996
Re: $22,500,000 7.11% Senior Notes
Due February 1, 2006
TABLE OF CONTENTS
(Not a part of the Agreement)
Section Heading Page
Parties.......................................................1
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT............1
Section 1.1. Description of Notes......................1
Section 1.2. Commitment, Closing Date..................1
Section 1.3. Several Commitments.......................2
SECTION 2. PREPAYMENT OF NOTES............................2
Section 2.1. Required Prepayments......................2
Section 2.2. Optional Prepayment with Premium..........3
Section 2.3. Prepayment upon Restricted Event..........3
Section 2.4. Prepayment Upon Downgrade.................4
Section 2.5. Notice of Optional Prepayments............5
Section 2.6. Application of Prepayments................5
Section 2.7. Direct Payment............................5
SECTION 3. REPRESENTATIONS; COVENANTS OF THE PURCHASERS...5
Section 3.1. Representations of the Company............5
Section 3.2. Representations and Covenants of the
Purchasers...............................5
SECTION 4. CLOSING CONDITIONS.............................6
Section 4.1. Conditions................................6
Section 4.2. Waiver of Conditions......................7
SECTION 5. COMPANY COVENANTS..............................7
Section 5.1. Corporate Existence, Etc..................7
Section 5.2. Insurance.................................8
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws.....................8
Section 5.4. Maintenance, Etc..........................8
Section 5.5. Nature of Business........................8
Section 5.6. Maintenance Ratios........................8
Section 5.7. Consolidated Tangible Net Worth...........9
Section 5.8. Limitation on Indebtedness...............10
Section 5.9. Fixed Charges Coverage Ratio.............10
Section 5.10. Liens and Encumbrances...................11
Section 5.11. Restricted Payments and Restricted
Investments.............................12
Section 5.12. Disposal of Shares of a Subsidiary.......14
Section 5.13. Merger and Sale of Assets................15
Section 5.14. Guaranties...............................16
Section 5.15. Repurchase of Notes......................17
Section 5.16. Transactions with Affiliates.............17
Section 5.17. Termination of Pension Plans.............17
Section 5.18. Designation of Restricted Subsidiaries...17
Section 5.19. Reports and Rights of Inspection.........18
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.......22
Section 6.1. Events of Default........................22
Section 6.2. Notice to Holders........................23
Section 6.3. Acceleration of Maturities...............24
Section 6.4. Rescission of Acceleration...............24
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS..............25
Section 7.1. Consent Required.........................25
Section 7.2. Solicitation of Holders..................25
Section 7.3. Effect of Amendment or Waiver............25
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS......25
Section 8.1. Definitions..............................25
Section 8.2. Accounting Principles....................37
Section 8.3. Directly or Indirectly...................37
SECTION 9. MISCELLANEOUS.................................37
Section 9.1. Registered Notes.........................37
Section 9.2. Exchange of Notes........................38
Section 9.3. Loss, Theft, Etc. of Notes...............38
Section 9.4. Expenses, Stamp Tax Indemnity............38
Section 9.5. Powers and Rights Not Waived; Remedies
Cumulative..............................39
Section 9.6. Notices..................................39
Section 9.7. Successors and Assigns...................39
Section 9.8. Survival of Covenants and
Representations.........................39
Section 9.9. Severability.............................40
Section 9.10. Governing Law............................40
Section 9.11. Captions.................................40
Signature Page...............................................41
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names of Note Purchasers and Amounts of Commitments
Exhibit A -- Form of 7.11% Senior Note due February 1, 2006
Exhibit B -- Representations and Warranties of the Company
Exhibit C -- Description of Special Counsel's Closing Opinion
Exhibit D -- Description of Closing Opinion of Counsel to the
Company
WESTAMERICA BANCORPORATION
1108 FIFTH AVENUE
SAN RAFAEL, CALIFORNIA 94901
NOTE AGREEMENT
Re: $22,500,000 7.11% Senior
Notes
Due February 1, 2006
Dated as of
February 1, 1996
To the Purchasers named on Schedule I
to this Agreement
The undersigned, Westamerica Bancorporation, a California
corporation (the "Company"), agrees with the Purchasers named on
Schedule I to this Agreement (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
SECTION 1.1. DESCRIPTION OF NOTES. The Company has authorized the
issue and sale of $22,500,000 aggregate principal amount of its 7.11%
Senior Notes (the "Notes") to be dated the date of issue, to bear
interest from such date at the rate of 7.11% per annum, payable
semiannually on the first day of each February and August in each year
(commencing August 1, 1996) and at maturity and to bear interest on
overdue principal (including any overdue required or optional prepayment
of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the rate of 9.11%
per annum after the date due, whether by acceleration or otherwise,
until paid, to be expressed to mature on February 1, 2006, and to be
substantially in the form attached hereto as Exhibit A. Interest on the
Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on
the terms and conditions and in the amounts and with the premium, if
any, set forth in Section 2 of this Agreement. The term "Notes" as used
herein shall include each Note delivered pursuant to this Agreement.
SECTION 1.2. COMMITMENT, CLOSING DATE. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each
Purchaser, and such Purchaser agrees to purchase from the Company, Notes
in the respective aggregate principal amount or amounts set forth
opposite such Purchaser's name on Schedule I hereto at a purchase price
of 100% of the principal amount thereof on the Closing Date hereinafter
mentioned.
The closing of the purchase of the Notes will be made at the
offices of Pillsbury Madison & Sutro LLP, One Liberty Plaza, 165
Broadway, 51st Floor, New York, New York 10006, against payment therefor
of the purchase price in Federal Reserve or other funds current and
immediately available at the principal office of Westamerica Bank, San
Rafael, California, ABA #121140218 to the account of the Company,
account #522012566 (Attn: Investment Department) at 11:00 a.m. Chicago
time, on February 16, 1996, or such later date (not later than February
28, 1996) as shall mutually be agreed upon by the Company and the
Purchasers (the "CLOSING DATE"). The Notes delivered to each Purchaser
on the Closing Date will be delivered to such Purchaser in the form of a
single registered Note in the form attached hereto as Exhibit A for the
full amount of such Purchaser's purchase (unless different denominations
are specified by such Purchaser), registered in such Purchaser's name or
in the name of such Purchaser's nominee, all as such Purchaser may
specify at any time prior to the date fixed for delivery.
SECTION 1.3. SEVERAL COMMITMENTS . The obligations of the Purchasers
shall be several and not joint and no Purchaser shall be liable or
responsible for the acts or defaults of any other Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
SECTION 2.1. REQUIRED PREPAYMENTS. The Company agrees that on
February 1 in each year, commencing February 1, 2000 and ending February
1,2005, both inclusive, it will prepay and apply and there shall become
due and payable on the principal indebtedness evidenced by the Notes an
amount equal to the lesser of (i) $3,214,286 or (ii) the principal
amount of the Notes then outstanding. The entire remaining principal
amount of the Notes shall become due and payable on February 1, 2006.
No premium shall be payable in connection with any required prepayment
made pursuant to this SECTION 2.1. Eor purposes of this SECTION 2.1, any
prepayment of less than all of the outstanding Notes pursuant to SECTION
2.2 shall be deemed to be applied first, to the amount of principal
scheduled to remain unpaid on February 1, 2006, and then to the
remaining scheduled principal payments in inverse chronological order.
In the event of any partial prepayment of Notes pursuant to SECTION
2.3 or SECTION 2.4, or in the event of any partial repurchase or
acquisition of Notes by the Company or any Subsidiary or Affiliate, each
scheduled prepayment of Notes pursuant to the provisions of this SECTION
2.1 coming due thereafter shall be reduced by an amount which bears the
same relationship to such scheduled prepayment as the aggregate amount
so applied pursuant to the prepayment under SECTION 2.3 or SECTION 2.4
or such repurchase or acquisition, as the case may be, bears to the
unpaid principal amount of Notes immediately prior to such application,
to the end that the amounts of the scheduled payments on each Note
remaining outstanding after such prepayment pursuant to SECTION 2.3 or
SECTION 2.4 or such repurchase or acquisition, shall be unchanged.
SECTION 2.2. OPTIONAL PREPAYMENT WITH PREMIUM;. In addition to the
payments required by SECTION 2.1, upon compliance with SECTION 2.5 the
Company shall have the right, at any time and from time to time, of
prepaying the outstanding Notes, either in whole or in part (but if in
part then in a minimum principal amount of $100,000) by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and
accrued interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount of each such Note, determined as
of three Business Days prior to the date of such prepayment pursuant to
this SECTION 2.2.
SECTION 2.3. PREPAYMENT UPON RESTRICTED EVENT. The Company will give
written notice (a "RESTRICTED EVENT NOTICE") to all Holders not more
than 15 days after any Restricted Event Date. The Restricted Event
Notice shall (i) describe the facts and circumstances of such Restricted
Event in reasonable detail, (ii) make reference to this SECTION 2.3 and
the rights of the Holders to require the Company to prepay their Notes
on the terms and conditions provided for herein, (iii) state that each
Holder must make an election to have the Notes held by it prepaid, (iv)
specify the date by which each Holder must respond to such Restricted
Event Notice pursuant to this SECTION 2.3 in order to make such election
(the "RESTRICTED EVENT NOTICE CUT-OFF DATE"), which Restricted Event
Notice Cut-Off Date shall be the first business day occurring 30 days
after the date of delivery of the Restricted Event Notice, (v) state the
prepayment date for the Notes, which date shall be the first business
day occurring 45 days after the date of delivery of the Restricted Event
Notice (such prepayment date being referred to as the "RESTRICTED EVENT
PREPAYMENT DATE"), and (vi) state that the Make-Whole Amount (which
shall be estimated as of the date of the Restricted Event Notice) may be
payable and state the date of determination of the Make-Whole Amount.
Upon the receipt of such Restricted Event Notice, any Holder shall
have the right, upon written notice (the "RESTRICTED EVENT PREPAYMENT
NOTICE") given by such Holder on or before the Restricted Event Notice
Cut-Off Date, of requiring prepayment in full of all Notes held on the
Restricted Event Date by such Holder serving such Restricted Event
Prepayment Notice. The Company covenants and agrees to prepay in full
on the Restricted Event Prepayment Date all Notes held by such Holder
serving such Restricted Event Prepayment Notice to the Company.
As used herein, the term "CHANGE OF CONTROL" shall mean each and
every issue, sale or other disposition of shares of stock of the Company
which results in any Person or related Persons constituting a group (as
defined in Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities and Exchange Act of 1934, as amended
("RULE 13d-3")) having acquired beneficial ownership or control (as
defined in Rule 13d-3) of more than 50% (by number of votes) of the
Voting Stock of the Company.
As used herein, the term "RESTRICTED EVENT" shall mean and include
(i) the failure of the Company to maintain a current global issuer
rating by Thomson BankWatch, Inc. ("THOMSON") of at least ("C") (or the
equivalent under any successor rating system adopted by Thomson) for the
entire 180 day period following the effective date of the last event to
occur which constitutes a Change of Control or (ii) the Company or the
Bank or any Debt obligation of the Company or the Bank having a rating
of less than "C" by Thomson, BBB- by Standard & Poor's Corporation or
less than Baa3 by Moody's Inc. at any time during the 180 day period
following the effective date of the last event to occur which
constitutes a Change of Control.
As used herein, the term "RESTRICTED EVENT DATE" shall mean, with
respect to any Restricted Event, the first business day on which such
Restricted Event shall occur.
All prepayments on the Notes pursuant to this SECTION 2.3 shall be
made by the payment of the aggregate principal amount remaining unpaid
on such Notes and accrued interest thereon to the date of such
prepayment, together with a premium equal to the Make-Whole Amount, if
any, with respect to the Notes, determined as of five (5) Business Days
prior to the date of prepayment.
SECTION 2.4. PREPAYMENT UPON DOWNGRADE. The Company will give written
notice to all Holders no more than 5 Business Days after a Downgrade
(the "DOWNGRADE NOTICE" and the date of delivery thereof being referred
to as the "DOWNGRADE NOTICE DATE"). The Downgrade Notice shall (i)
describe the facts and circumstances of such Downgrade in reasonable
detail, (ii) make reference to this SECTION 2.4 and the rights of the
Holders to require the Company to prepay their Notes on the terms and
conditions provided for herein, (iii) state that each Holder must make
an election of its intent to have the Notes held by it prepaid, (iv)
specify the date by which each Holder must respond to such Downgrade
Notice pursuant to this SECTION 2.4 in order to make such election (the
"DOWNGRADE NOTICE CUT-OFF DATE"), which Downgrade Notice Cut-Off Date
shall be the first business day 30 days after the Downgrade Notice Date,
(v) state the prepayment date for the Notes which date shall be the
first business day 45 days after the Downgrade Notice Date (the
"DOWNGRADE PREPAYMENT DATE") and (vi) state that the Make-Whole Amount
(which shall be estimated as of the Downgrade Notice Date) may be
payable and state the date of determination of the Make-Whole Amount.
Upon the receipt of such Downgrade Notice, any Holder shall have
the right, upon written notice (the "DOWNGRADE PREPAYMENT NOTICE") given
by such Holder on or before the Downgrade Notice Cut-Off Date, of
requiring prepayment in full of all Notes held on the Downgrade
Prepayment Date by such Holder serving such Downgrade Prepayment Notice.
The Company covenants and agrees to prepay in full on the Downgrade
Prepayment Date all Notes held by such Holder serving such Downgrade
Prepayment Notice to the Company.
As used herein, the term "DOWNGRADE" shall mean the failure of the
Company to maintain a current global issuer rating by Thomson of at
least "C" (or the equivalent under any successor rating system adopted
by Thomson). If the current global issuer rating by Thomson of the
Company is more than one year old, the Company will at the Company's
expense, upon the request of the Holders of 66-2/3% in aggregate
principal amount of the Notes, require Thomson to confirm such rating to
the Holders of the Notes PROVIDED, that the Holders shall be entitled to
only one such request each fiscal year.
The definition of "DOWNGRADE DATE" shall mean any date upon which a
Downgrade shall occur.
All prepayments on the Notes pursuant to this SECTION 2.4 shall be
made by the payment of the aggregate principal amount remaining unpaid
on such Notes and accrued interest thereon to the date of such
prepayment, together with a premium equal to the Make-Whole Amount,
determined as of five (5) Business Days prior to the date of prepayment.
SECTION 2.5. NOTICE OF OPTIONAL PREPAYMENTS. The Company will give
notice of any prepayment of the Notes pursuant to SECTION 2.2 to each
Holder thereof not less than 30 days nor more than 60 days before the
date fixed for such optional prepayment specifying (i) such date, (ii)
the principal amount of the Holder's Notes to be prepaid on such date,
(iii) that a premium may be payable, (iv) the date when such premium
will be calculated, (v) the estimated premium, and (vi) the accrued
interest applicable to the prepayment. Such notice of prepayment shall
also certify all facts, if any, which are conditions precedent to any
such prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the premium, if any, payable
with respect thereto shall become due and payable on the prepayment date
specified in said notice. Not later than two Business Days prior to the
prepayment date specified in such notice, the Company shall provide each
Holder written notice of the premium, if any, payable in connection with
such prepayment and, whether or not any premium is payable, a reasonably
detailed computation of the Make-Whole Amount.
SECTION 2.6. APPLICATION OF PREPAYMENTS. All partial prepayments
pursuant to SECTION 2.1 and 2.2 shall be applied on all outstanding
Notes ratably in accordance with the unpaid principal amounts thereof.
SECTION 2.7. DIRECT PAYMENT. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any
Note owned by any Holder that is a Purchaser or any other Institutional
Holder which has given written notice to the Company requesting that the
provisions of this SECTION 2.7 shall apply, the Company will punctually
pay when due the principal thereof, interest thereon and premium, if
any, due with respect to said principal, without any presentment
thereof, directly to such Holder at its address set forth herein or such
other address as such Holder may from time to time designate in writing
to the Company or, if a bank account with a United States bank is so
designated for such Holder, the Company will make such payments in
immediately available funds to such bank account, marked for attention
as indicated, or in such other manner or to such other account in any
United States bank as such Holder may from time to time direct in
writing.
SECTION 3. REPRESENTATIONS; COVENANTS OF THE PURCHASERS.
SECTION 3.1. REPRESENTATIONS OF THE COMPANY. The Company represents
and warrants that all representations and warranties set forth in
Exhibit B are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as
though herein set forth in full.
SECTION 3.2. REPRESENTATIONS AND COVENANTS OF THE PURCHASERS. (a)
Each Purchaser, severally, represents and agrees, and in entering into
this Agreement the Company understands, that (i) such Purchaser is
acquiring the Notes for such Purchaser's own account, and for the
purpose of investment and not with a view to the distribution thereof,
and that such Purchaser has no present intention of selling, negotiating
or otherwise disposing of the Notes; it being understood, however, that
the disposition of such Purchaser's property shall at all times be and
remain within its control and (ii) the Notes have not been registered
under Section 5 of the Securities Act and that each Purchaser will only
re-offer or resell the Notes purchased by such Purchaser under this
Agreement pursuant to an effective registration statement under the
Securities Act or in accordance with an available exemption from the
requirements of Section 5 of the Securities Act. The Notes shall bear
the following legend:
"This Note has not been registered under Section 5 of the
Securities Act of 1933, as amended (the "Securities Act"), or any
other applicable securities law and, accordingly, this Note may
not be resold, pledged, or otherwise transferred, except pursuant
to (i) an effective registration statement under, or in a
transaction exempt from registration under, the Securities Act
and in accordance with any other applicable securities laws and
(ii) the terms and provisions of the Note Agreement, a complete
and correct conformed copy of which Note Agreement is available
for inspection at the registered office of the Company and will
be furnished to the Holder of the Note upon written request and
without charge."
(b) Each Purchaser further represents that the source of funds to
be used by such Purchaser to pay the purchase price of the Notes is an
"insurance company general account" within the meaning of Department of
Labor Prohibited Transaction Exemption 95-60 ("PTE") (issued July 12,
1995) and the purchase of the Notes by such Purchaser is eligible for
and satisfies the requirements of PTE 95-60.
SECTION 4. CLOSING CONDITIONS.
SECTION 4.1. CONDITIONS. The obligation of each Purchaser to
purchase the Notes on the Closing Date shall be subject to the following
conditions precedent:
(a) CLOSING CERTIFICATE. Such Purchaser shall have received a
certificate dated the Closing Date, signed by the President or a Vice
President of the Company, the truth and accuracy of which shall be a
condition to such Purchaser's obligation to purchase the Notes proposed
to be sold to such Purchaser and to the effect that (i) the
representations and warranties of the Company set forth in Exhibit B
hereto are true and correct on and with respect to the Closing Date,
(ii) the Company has performed all of its obligations hereunder which
are to be performed on or prior to the Closing Date, and (iii) no
Default or Event of Default has occurred and is continuing.
(b) LEGAL OPINIONS. Each Purchaser shall have received from
Chapman and Cutler, who are acting as special counsel to the Purchasers
in this transaction, and from Pillsbury Madison & Sutro LLP, counsel for
the Company, their respective opinions dated the Closing Date, in form
and substance satisfactory to such Purchaser, and covering the matters
set forth in Exhibits C and D, respectively, hereto.
(c) CERTAIN EXPENSES. The Company shall have paid the
professional fees and separately charged items of Chapman and Cutler,
your special counsel, which have been incurred through the Closing Date.
(d) RELATED TRANSACTIONS. The Company and each other Purchaser
shall have consummated the sale of the entire principal amount of the
Notes scheduled to be sold on the Closing Date pursuant to this
Agreement.
(e) SATISFACTORY PROCEEDINGS. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to such Purchaser and such Purchaser's special counsel, and
such Purchaser shall have received a copy (executed or certified as may
be appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
SECTION 4.2. WAIVER OF CONDITIONS. If on the Closing Date the Company
fails to tender to any Purchaser the Notes to be issued to any Purchaser
on such date or if the conditions specified in SECTION 4.1 have not been
fulfilled, such Purchaser may thereupon elect to be relieved of all
further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in SECTION 4.1 have not been
fulfilled, such Purchaser may waive compliance by the Company with any
such condition to such extent as such Purchaser may in its sole
discretion determine. Nothing in this SECTION 4.2 shall operate to
relieve the Company of any of its obligations hereunder or to waive any
Purchaser's rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any
amount remains unpaid on any Note:
SECTION 5.1. CORPORATE EXISTENCE, ETC. The Company shall do or cause
to be done all things necessary to preserve and keep in full force and
effect the existence, rights and franchises of the Company and its
Subsidiaries including, in the case of the Company, its registration
under the Bank Holding Company Act and, in the case of the Bank, its
existence, franchise and right to do business as a national banking
association under the National Bank Act or a state banking corporation
organized under the laws of the State of California, except as
specifically permitted by the provisions of SECTION 5.13. The Company
will cause each Bank Subsidiary at all times to be insured under the
Federal Deposit Insurance Act. Without limiting the foregoing and
notwithstanding any provision of this Agreement, including SECTION 5.13,
the Company will at all times own and hold 100% of the shares of
outstanding capital stock of the Bank (or any successor to the Bank
permitted under this Agreement), free and clear of any Liens.
SECTION 5.2. INSURANCE. The Company will maintain, and will cause
each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts and against such risks as
are customary for corporations of established reputation engaged in the
same or a similar business and owning and operating similar properties.
SECTION 5.3. TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH
LAWS;. The Company will promptly pay and discharge, and will cause each
Subsidiary promptly to pay and discharge, all lawful taxes, assessments
and governmental charges or levies imposed upon the Company or such
Subsidiary, respectively, or upon or in respect of all or any part of
the property or business of the Company or such Subsidiary, all trade
accounts payable in accordance with usual and customary business terms,
and all claims for work, labor or materials, which if unpaid might
become a Lien upon any property of the Company or such Subsidiary;
PROVIDED, HOWEVER, that the Company or such Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account payable
or claim if (i) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will
prevent the forfeiture or sale of any property of the Company or such
Subsidiary or any material interference with the use thereof by the
Company or such Subsidiary, and (ii) the Company or such Subsidiary
shall set aside, in accordance with GAAP, on its books, reserves deemed
by it to be adequate with respect thereto. The Company will promptly
comply and will cause each Subsidiary to comply with all laws,
ordinances or governmental rules and regulations to which it is subject
including, without limitation, the Occupational Safety and Health Act of
1970, as amended, ERISA and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which could materially and adversely
affect the properties, business, prospects, profits or condition of the
Company and its Subsidiaries, taken as a whole or would result in any
Lien not permitted under SECTION 5.10.
SECTION 5.4. MAINTENANCE, ETC. The Company will maintain, preserve
and keep, and will cause each Subsidiary to maintain, preserve and keep,
its material properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good repair
and working order and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency
thereof shall be maintained in all material respects.
SECTION 5.5. NATURE OF BUSINESS. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which
would then be engaged in by the Company and its Restricted Subsidiaries
would be substantially changed from the general nature of the business
engaged in by the Company and its Restricted Subsidiaries on the date of
this Agreement.
SECTION 5.6. MAINTENANCE RATIOS. (a) The Company will not at any
time permit Capital Debt to exceed an amount equal to 40% of the sum of
(i) Capital Debt of the Company plus (ii) Common Stock of the Company
plus (iii) Perpetual Preferred Stock of the Company.
(b) The Company shall at all times maintain, and shall at all
times during which Consolidated Tangible Net Worth is less than
$250,000,000 cause the Bank to maintain, their respective risk-based
capital ratios at or above the "Well capitalized" regulatory
requirements for both Tier 1 risk-based capital and total risk-based
capital as provided for in 12 C.F.R. part 208.33(b)(I) (excluding clause
(iii) thereof).
SECTION 5.7. CONSOLIDATED TANGIBLE NET WORTH. (a) The Company will
at all times keep and maintain Consolidated Tangible Net Worth at an
amount not less than the sum of (i) $215,000,000 PLUS (ii) 50% of the
net proceeds to the Company after expenses of any sale of common stock
of the Company pursuant to a registered public offering by the Company
effected after the Closing Date, plus (iii) the following respective
percentages of positive Consolidated Net Income for each of the
respective fiscal years described in the following table:
Percentage of
Fiscal year Positive Consolidated
ending December 31, Net Income
1996 10%
1997 10%
1998 25%
1999 35%
2000 and all Fiscal Years Thereafter 50%
determined on a cumulative basis for the fiscal years ending after
December 31, 1995, PROVIDED that, for the purposes of the foregoing
calculation, in the event that Consolidated Net Income is a deficit
figure for any such fiscal year, Consolidated Net Income for such fiscal
year shall be deemed to be zero and, accordingly, shall not reduce the
amount of ConsolidatedTangible Net Worth required to be maintained
pursuant to the requirements of this Section 5.7(a).
(b) In addition to and not in limitation of the provisions of
Section 5.7(a), from and after the end of the first fiscal quarter or
fiscal year on which the Consolidated Tangible Net Worth of the Company
is at least $300,000,000 (such date being referred to as the "MILESTONE
DATE"), the Company will at all times thereafter keep and maintain
Consolidated Tangible Net Worth at an amount not less than the sum of
(i) $300,000,000 PLUS (ii) 10% of positive Consolidated Net Income
determined on a cumulative basis for each fiscal year ending on and
after the fiscal year in which the Milestone Date was initially reached,
PROVIDED, THAT, for the purposes of the foregoing calculation, in the
event that Consolidated Net Income is a deficit figure for any such
fiscal year, Consolidated Net Income for such fiscal year shall
be deemed to be zero and, accordingly, shall not reduce the amount of
Consolidated Tangible Net Worth required to be maintained pursuant to
the requirements of this SECTION 5.7(b).
SECTION 5.8. LIMITATION ON INDEBTEDNESS. (a) Neither the Company nor
any Restricted Subsidiary will create, assume or incur or in any manner be or
become liable in respect of any Funded Debt except Funded Debt
outstanding on the Closing Date and described on Annex B to Exhibit B
hereto and;
(i) Funded Debt evidenced by the Notes;
(ii) Limited Life Preferred Stock or Tier II Capital of the Company
or any Restricted Subsidiary;
(iii) Funded Debt of any Restricted Subsidiary to the Company or to
any Wholly-owned Restricted Subsidiary;
(iv) additional Capital Debt incurred after the date hereof
PROVIDED, that at the time of issuance or incurrence thereof
and after giving effect thereto and to the application of the
proceeds thereof, Pro Forma Fixed Charges for the next
succeeding period of 12 full calendar months will not exceed
150% of the Net Income Available for Fixed Charges for the
immediately preceding fiscal year; and
(v) additional Funded Debt (excluding Capital Debt of the Company)
incurred after the Closing Date PROVIDED, that at the time of
issuance or occurrence thereof and after giving effect thereto
and to the application of the proceeds thereof, (A) the
Company or such Restricted Subsidiary would be permitted to
incur at least $1.00 of additional Capital Debt pursuant to
the provisions of SECTION 5.8(a)(iv) and (B) the ratio of
Consolidated Funded Debt (excluding Capital Debt of the
Company) to the sum of (w) Consolidated Funded Debt PLUS (x)
Common Stock of the Company plus (y) Perpetual Preferred Stock
of the Company, shall not exceed 40%.
(b) Any corporation which becomes a Restricted Subsidiary after
the date hereof shall for all purposes of this SECTION 5.8 be deemed to
have created, assumed or incurred at the time it becomes a Restricted
Subsidiary all Funded Debt of such corporation existing immediately
after it becomes a Restricted Subsidiary.
SECTION 5.9. FIXED CHARGES COVERAGE RATIO. The Company will keep and
maintain the ratio (determined as of the end of each fiscal quarter) of
Net Income Available for Fixed Charges to Fixed Charges for each period
of four consecutive fiscal quarters (taken as a single accounting
period) at not less than 1.50 to 1.00.
Section 5.10. Liens and Encumbrances;.
(a) NEGATIVE PLEDGE. Neither the Company nor any Restricted
Subsidiary will cause or permit any of its Property, whether now owned
or hereafter acquired, to be subject to a Lien, except:
(1) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons, PROVIDED the payment thereof is not at the time required
by SECTION 5.3;
(2) Liens incurred or deposits made in the ordinary course
of business (i) in connection with workmen's compensation,
unemployed insurance, social security and other like laws, or
(ii) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations
(including in the case of Bank Subsidiaries, (x) the pledge of
Securities (excluding Securities issued by such Bank Subsidiary)
to secure deposits and to secure fiduciary obligations of Bank
Subsidiaries and (y) any Lien on Property of a Bank Subsidiary
required by applicable law or regulation as security for
liabilities of a Bank Subsidiary referred to in clause (iv) of
the definition of Indebtedness Incurred by a Bank Subsidiary in
the Ordinary Course of Business), surety, appeal and performance
bonds and other similar obligations not incurred in connection
with the borrowing of money, the obtaining of advances or the
payment of the deferred purchase price of Property, PROVIDED,
that in all cases, the obligation or liability secured is not
overdue or, if overdue, is being contested in good faith, by
appropriate proceedings and, if applicable, in accordance with
the provisions of SECTION 5.3;
(3) attachment, judgment and other similar Liens arising in
connection with court proceedings, PROVIDED the execution or
other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith
and by appropriate proceedings and the Company or such Restricted
Subsidiary shall have established on its books in accordance with
GAAP adequate reserves with respect thereto;
(4) Liens on Property of a Restricted Subsidiary, PROVIDED
such Liens secure only obligations owing to the Company or a
Wholly-owned Restricted Subsidiary;
(5) reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions, leases and
other similar title exceptions or encumbrances affecting real
Property, PROVIDED they do not in the aggregate materially
detract from the value of said real Properties or materially
interfere with their use in the ordinary conduct of the owning
company's business;
(6) in addition to any Liens described in SECTION
5.10(a)(2), the Lien of mortgages, pledges, conditional sale
contracts, security interests, Capitalized Leases and
arrangements for the retention of the title ("MORTGAGES")
existing as of the Closing Date and described on Annex B to
Exhibit B hereto securing Indebtedness of the Company or any
Restricted Subsidiary outstanding on such date;
(7) the Lien of Mortgages, incurred after the date hereof
given to secure the payment of the purchase price incurred in
connection with the acquisition of fixed assets useful and
intended to be used in carrying on the business of the Company or
a Restricted Subsidiary including liens existing on such fixed
assets at the time of acquisition thereof or at the time of
acquisition by the Company or a Restricted Subsidiary of any
business entity then owning such fixed assets, whether or not
such existing liens were given to secure the payment of the
purchase price of the fixed assets to which they attach,
PROVIDED, that (i) the Mortgage shall attach solely to the
Property acquired or purchased, and (ii) at the time of
acquisition of such fixed assets, the aggregate amount remaining
unpaid on all Indebtedness secured by liens on such fixed assets
whether or not assumed by the Company or a Restricted Subsidiary
shall not exceed an amount equal to 100% of the lesser of the
total purchase price or fair market value at the time of
acquisition of such fixed assets (as determined in good faith by
the Board of Directors of the Company);
(8) leases of real or personal Property entered into by the
Company or a Subsidiary; and
(9) Liens on Property acquired in satisfaction or
enforcement of Indebtedness for borrowed money or other
extensions of credit made in good faith in the ordinary course of
the banking business, PROVIDED that such Property shall be
disposed of within the period required by applicable law.
(b) LIENS ON BANK SUBSIDIARY STOCK PROHIBITED. Notwithstanding
anything contained in this SECTION 5.10 or in this Agreement to the
contrary, the Company will not at any time cause or permit the shares of
capital stock which the Company owns of any Bank Subsidiary to be
subject at any time to any Lien.
(c) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property
is subjected to a Lien or Liens in violation of this SECTION 5.10 and
the obligation or obligations secured by such Lien or Liens,
individually or in the aggregate, exceed $5,000,000, the Company will
make or cause to be made provisions whereby the Notes will be secured
equally and ratably with all other obligations secured thereby and in
any case the Notes shall have the benefit, to the full extent that the
holders may be entitled thereto under applicable law, of an equitable
Lien so equally and ratably securing the Notes. Such violation of
SECTION 5.10 shall constitute a default hereunder, whether or not any
such provision is made pursuant to this SECTION 5.10(c).
SECTION 5.11. RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. The
Company will not and will not permit any Restricted Subsidiary to, make
any Restricted Payment or any Restricted Investment if:
(a) at the time thereof or after giving effect thereto, any
Event of Default shall exist hereunder, or
(b) at the time thereof or after giving effect thereto, the
Company could not incur at least $1.00 of additional Funded Debt
under SECTION 5.8(a), or
(c) after giving effect to such Restricted Payment or such
Restricted Investment, the sum of the aggregate amount of all
Restricted Payments and all Restricted Investments made during
the period from and after January 1, 1993 to and including the
date of the making of the Restricted Payment or Restricted
Investment in questions, would exceed the sum of (i) $7,000,000
PLUS (ii) the following respective percentages of Consolidated
Net Income for each of the respective fiscal years described in
the following table:
Percentage of
Fiscal year Consolidated
ending December 31, Net Income
1993 50%
1994 50%
1995 50%
1996 90%
1997 90%
1998 75%
1999 65%
2000 and all Fiscal Years thereafter 50%
(PROVIDED that, notwithstanding the above, the foregoing percentages
shall be deemed to be "90%" for each full fiscal year subsequent to the
fiscal year in which the Milestone Date occurs), computed on a
cumulative basis for said entire period (or if such Consolidated Net
Income is a deficit figure for any such fiscal year, then minus 100% of
such deficit) PLUS (iii) the net cash proceeds to the Company from the
sale of Common Stock or Perpetual Preferred Stock (or warrants therefor)
of the Company or from the conversion at any time from and after January
1, 1993 of Debt of the Company into Common Stock of the Company or
Perpetual Preferred Stock of the Company.
In valuing any Investments for the purpose of applying the
limitations set forth hereinabove, such Investments shall be taken at
the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation thereof, but less any amount
repaid or recovered on account of capital or principal.
The Company will not cause or prevent any Restricted Subsidiary to
be subject to any restrictions or limitations with respect to the
payment of dividends to the Company except, with respect to the Bank
Subsidiaries, such restrictions or limitations which are no more
restrictive than the restrictions or limitations, if any, which are
imposed on such Bank Subsidiary by governmental or regulatory
authorities having jurisdiction over such matters.
Neither the Company nor any Subsidiary will declare any dividend
which constitutes a Restricted Payment payable more than 60 days after
the date of declaration thereof.
For the purposes of this SECTION 5.11, the amount of any Restricted
Payment declared, paid or distributed in property shall be deemed to be
the greater of the book value or fair market value (as determined in
good faith by the Board of Directors of the Company or such Restricted
Subsidiary) of such property at the time of the making of the Restricted
Payment in question.
SECTION 5.12. DISPOSAL OF SHARES OF A SUBSIDIARY. Neither the Company
nor any Restricted Subsidiary will sell, pledge or otherwise dispose of
any shares of the stock (including as "stock" for the purposes of this
Section any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of a Restricted Subsidiary,
nor will any Restricted Subsidiary issue, sell, pledge, encumber or
otherwise dispose of any shares of its own stock, if the effect of the
transaction would be to reduce the proportionate interest of the
Company and its other Restricted Subsidiaries in the outstanding stock
of the Restricted Subsidiary whose shares are the subject of the
transaction, nor will any Restricted Subsidiary issue, sell, pledge,
encumber or dispose of any shares of its own Preferred Stock; PROVIDED
that the foregoing restrictions do not apply to:
(a) the issue of directors' qualifying shares; and
(b) the sale or other disposition at one time (or a series of
related times) to a Person (other than directly or indirectly to an
Affiliate) of the entire investment (whether represented by stock,
debt, claims or otherwise) of the Company and its other Restricted
Subsidiaries in any Restricted Subsidiary (other than the Bank)
provided that:
(1) the Board of Directors of the Company shall have
determined that the retention of such investment is no longer in
the best interests of the Company and that such sale or other
disposition is not adverse to the interests of the holders of the
Notes;
(2) such investment is sold or otherwise disposed of for a
consideration and upon terms deemed by the Board of Directors of
the Company to constitute the fair market value thereof and to be
otherwise adequate and satisfactory;
(3) immediately after the consummation of the transaction
and after giving effect thereto, such Restricted Subsidiary shall
have no continuing investment in the Company or any other
Restricted Subsidiary and the investment, if any, of such
Restricted Subsidiary in the Company or any other Restricted
Subsidiary shall have been acquired by the Company or a
Wholly-owned Restricted Subsidiary;
(4) such sale or disposition does not involve a
"substantial part" of the Property of the Company and its
Restricted Subsidiaries (determined in accordance with the
provisions of Section 5.13); and
(5) immediately after the consummation of the transaction
and after giving effect thereto, no Default or Event of Default
would exist and the Company would be permitted by the provisions
of Section 5.8 to incur at least $1.00 of additional Funded Debt;
and
(c) the issue of Preferred Stock of a Restricted Subsidiary to
the Company or a Wholly-owned Restricted Subsidiary.
SECTION 5.13. MERGER AND SALE OF ASSETS. Neither the Company nor any
Restricted Subsidiary will:
(a) sell, lease, transfer or otherwise dispose of, all or any
part of its Property if such transaction involves a substantial part
of the Property of the Company and its Restricted Subsidiaries (except
Property sold in the ordinary course of business including, without
limitation, dispositions of Securities in connection with the
liquidation or disposition of loans in the ordinary course of
business), PROVIDED that any Restricted Subsidiary may sell, lease or
transfer all or any part of its assets to the Company or to another
Wholly-owned Restricted Subsidiary; or
(b) consolidate with or merge into any other Person (except that
(i) a Restricted Subsidiary may consolidate with or merge into the
Company, provided that the Company is the surviving corporation, and
except that (ii) a Restricted Subsidiary may consolidate with or merge
into a Wholly-owned Restricted Subsidiary) or permit any other Person
to consolidate with or merge into it, PROVIDED that the foregoing
restriction does not apply to the merger or consolidation of the
Company or any Restricted Subsidiary with another corporation, if:
(1) the corporation which results from such merger or
consolidation (the "SURVIVING CORPORATION") is (i) in the case of
a merger or consolidation involving the Company, a registered
bank holding company under the Bank Holding Company Act or a
wholly-owned subsidiary thereof, and (ii) in the case of a merger
or consolidation involving a Bank Subsidiary, a national banking
association organized under the laws of the United States of
America or a state or federal bank or savings bank which, in each
case, is a member of the FDIC;
(2) in the case of a merger or consolidation involving the
Company, the due and punctual payment of the principal of and
premium, if any, and interest on all of the Notes, according to
their tenor, and the due and punctual performance and observance
of all the covenants in the Notes and this Agreement to be
performed or observed by the Company (the "OBLIGATIONS"), are
expressly assumed in writing by the surviving corporation and, if
the Company merges or consolidates with a subsidiary of a bank
holding company (such bank holding company being referred to as
the "PARENT") pursuant to SECTION 5.13(b)(1)(i), the Obligations
are expressly guaranteed in writing by the Parent pursuant to a
guarantee reasonably satisfactory to the holders of 66-2/3% in
aggregate principal amount of the Notes;
(3) in the case of a merger or consolidation involving a
Restricted Subsidiary, the Company shall retain at least the same
proportionate share of the capital stock of the resulting entity
as it had of such Restricted Subsidiary immediately preceding
such merger or consolidation, it being understood that the
provisions of this SECTION 5.13(b)(3) shall not restrict mergers
in the form of the sale of all or substantially all of the assets
of a Restricted Subsidiary (other than the Bank) wherein the
Company retains no interest in the resulting entity, so long as
such sale is permitted by the provisions of this Agreement,
including without limitation, SECTION 5.13(a); and
(4) immediately after the consummation of the transaction,
and after giving effect thereto, no Default or Event of Default
would exist and the Company would be permitted by the provisions
of Section 5.8 to incur at least $1.00 of additional Funded Debt.
As used in SECTION 5.12 and 5.13 a sale, lease, transfer or other
disposition of the Property of the Company or a Restricted Subsidiary
shall be deemed to be a substantial part of the Property of the Company
and its Restricted Subsidiaries if the Property proposed to be disposed
of when added to all other Property of the Company and its Restricted
Subsidiaries sold, leased, transferred or disposed of (other than such
Property sold, leased, transferred or disposed of in the ordinary course
of business) including, without limitation, a sale of all or
substantially all of the assets of a Restricted Subsidiary during any
one fiscal year has an aggregate book value in excess of 15% of
Consolidated Assets determined as of the end of the last preceding
fiscal quarter for which financial statements are available.
Notwithstanding anything to the contrary contained in the previous
sentence, no merger permitted under SECTION 5.13(b)(ii) hereof shall be
considered a sale, lease, transfer or other disposition of the Property
of the Company or a Restricted Subsidiary for purposes of determining
compliance with the 15% test described hereinabove. Nothing contained
in this SECTION 5.13 or in this Agreement shall prohibit any merger or
consolidation of any Restricted Subsidiary with any other Restricted
Subsidiary if (i) such merger or consolidation is undertaken solely in
connection with re-incorporating such Restricted Subsidiary as a
California state bank or as a national banking association and (ii)
after giving effect to such merger or consolidation, no Default or Event
of Default would exist hereunder.
SECTION 5.14. GUARANTIES. Neither the Company nor any Restricted
Subsidiary will become or be liable in respect of any Guaranty, except
(i) Guaranties of the Company or any Restricted Subsidiary which have a
maximum dollar exposure and constitute Funded Debt of the Company or
such Restricted Subsidiary and (ii) Guaranties by Bank Subsidiaries that
constitute Indebtedness Incurred by a Bank Subsidiary in the Ordinary
Course of Business.
SECTION 5.15. REPURCHASE OF NOTES. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may
repurchase or make any offer to repurchase any Notes unless an offer has
been made to repurchase Notes, pro rata, from all Holders at the same
time and upon the same terms. In case the Company or any Subsidiary
repurchases or otherwise acquires any Notes, such Notes shall
immediately thereafter be canceled and no Notes shall be issued in
substitution therefor. Without limiting the foregoing, upon the
repurchase or other acquisition of any Notes by any Affiliate (or upon
the agreement of Company, any Restricted Subsidiary or any Affiliate to
purchase or otherwise acquire any Notes), such Notes shall no longer be
outstanding for purposes of any section of this Agreement relating to
the taking by the Holders of any actions with respect hereto, including,
without limitation, SECTION 6.3, SECTION 6.4 and SECTION 7.1.
SECTION 5.16. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party
to any material transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or exchange
of property with, or the rendering of any service by or for, any
Affiliate), except pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would obtain in a comparable arm's-length transaction
with a Person other than an Affiliate.
SECTION 5.17. TERMINATION OF PENSION PLANS. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan
or permit any employee benefit plan maintained by it to be terminated if
such withdrawal or termination could result in withdrawal liability (as
described in Part 1 of Subtitle E of Title IV of ERISA) or the
imposition of a Lien on any property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA.
SECTION 5.18. DESIGNATION OF RESTRICTED SUBSIDIARIES. The Company may,
by action of its Board of Directors, designate any Subsidiary to be a
Restricted Subsidiary if at the time of such designation and after
giving effect thereto, no Default or Event of Default would exist. Any
such designation shall be irrevocable and the Company shall furnish
prompt notice of such designation to each Holder.
SECTION 5.19. REPORTS AND RIGHTS OF INSPECTION. The Company will keep,
and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
material dealings or transactions of, or in relation to, the business
and affairs of the Company or such Restricted Subsidiary, in accordance
with GAAP consistently applied (except for changes disclosed in the
financial statements furnished to the Holders pursuant to this SECTION
5.19 and concurred in by the independent public accountants referred to
in SECTION 5.19(b) hereof), and will furnish to each Institutional
Holder (in duplicate if so specified below or otherwise requested):
(a) QUARTERLY STATEMENTS. As soon as available and in any event
within 60 days after the end of each quarterly fiscal period (except
the last) of each fiscal year, copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
(2) consolidated statements of income of the Company and
its Restricted Subsidiaries for such quarterly fiscal period and
for the portion of the fiscal year ending with such quarterly
fiscal period, in each case setting forth in comparative form the
consolidated figures for the corresponding periods of the
preceding fiscal year, and
(3) consolidated statements of cash flows of the Company
and its Restricted Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(b) ANNUAL STATEMENTS. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year,
(2) consolidated statements of income and retained earnings
and cash flows of the Company and its Restricted Subsidiaries for
such fiscal year, and
(3) a consolidated statement of condition of the Company at
the end of such year and the related statements of income and
reconciliation of capital accounts for such year in the form
submitted to the Federal Reserve Board or any other federal or
state entity requiring such statements,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and in the case
of the financial statements described in SECTION 5.19(b)(1) and (2)
accompanied by a copy of a report thereon of a firm of independent
public accountants of recognized national standing selected by the
Company to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of
the Company and its Subsidiaries as of the end of the fiscal year being
reported on and the consolidated results of their operations and cash
flows for said year in conformity with GAAP and that the examination of
such accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other examining
procedures as said accountants needed to provide a reasonable basis for
their opinion;
(c) AUDIT REPORTS. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
the Company or any Subsidiary which audit, in the good faith
determination of the Company, relates to an event or circumstances which
could materially and adversely affect the consolidated operations or
condition of the Company;
(d) SEC AND OTHER REPORTS. Promptly upon their becoming
available, one copy of each financial statement, report, notice or final
proxy statement sent by the Company to stockholders generally and of
each regular or periodic report, and any registration statement or
prospectus filed by the Company or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the Company
or any of its Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the Company or any of
its Subsidiaries;
(e) ERISA REPORTS. Promptly upon the occurrence thereof, written
notice of (i) a Reportable Event with respect to any Plan; (ii) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC
or any other person to terminate any Plan; (iii) the institution of any
steps by the Company or any ERISA Affiliate to withdraw from any Plan;
(iv) a non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA in connection with any Plan; (v) any material increase in
the contingent liability of the Company or any Restricted Subsidiary
with respect to any post-retirement welfare liability; or (vi) the
taking of any action by, or the threatening of the taking of any action
by, the Internal Revenue Service, the Department of Labor or the PBGC
with respect to any of the foregoing;
(f) OFFICER'S CERTIFICATES. Within the periods provided in paragraphs
(a) and (b) above, a certificate of an authorized financial officer of
the Company stating that such officer has reviewed the provisions of
this Agreement and setting forth: (i) the information and computations
(in sufficient detail) required in order to establish whether the
Company was in compliance with the requirements of SECTION 5.6 through
SECTION 5.14 at the end of the period covered by the financial
statements then being furnished, and (ii) whether there existed as of
the date of such financial statements and whether, to the best of such
officer's knowledge, there exists on the date of the certificate or
existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition or
event exists on the date of the certificate, specifying the nature and
period of existence thereof and the action the Company is taking and
proposes to take with respect thereto;
(g) ACCOUNTANT'S CERTIFICATES. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and stating further whether, in making
their audit, such accountants have become aware of any Default or Event
of Default under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to or involve accounting
matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof;
(h) CALL REPORTS. As soon as available and in any event within 60
days after the close of each quarterly fiscal period of each fiscal
year, one copy of each "CALL REPORT" in the form delivered by each Bank
Subsidiary which owns assets exceeding 10% of Consolidated Total Assets
to the Federal Reserve District Bank, the Comptroller of the Currency or
the FDIC, with such reports to include "Consolidated Reports of
Condition and Income" for such Bank Subsidiary and all schedules
thereto;
(i) NOTICE OF RESTRICTION OF RESTRICTED PAYMENTS. (1) Promptly
upon receipt thereof, notice by the Company that it or any of its
Subsidiaries has received a request or directive from any Federal or
state regulatory agency restricting the payment of dividends by any
Subsidiary of the Company and, (2) immediately upon entering into the
same, notice that the Company or any Subsidiary has entered into an
agreement with any Federal or state regulatory agency which restricts
the payment of dividends by any Subsidiary of the Company, together with
one copy of such agreement so restricting the payment of such dividends;
(j) LENDING GUIDELINES CIRCULAR. Within 90 days after the end of
each fiscal year, copies of the "Lending Guidelines Circular" for the
Company and each Bank Subsidiary, prepared and certified by the Chief
Credit Officer of the Company for the fiscal period ending on such
fiscal year-end date; and
(j) REQUESTED INFORMATION. With reasonable promptness, such other
data and information as such Institutional Holder may reasonably request
including, without limitation, the financial statements described in
SECTION 5.19(a) and 5.19(b)(1) and (2) prepared on a consolidating basis
for the Company and its Restricted Subsidiaries.
Without limiting the foregoing, the Company will permit each
Institutional Holder (or such Persons as such Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of
the properties of the Company or any Restricted Subsidiary, to examine
all of their books of account, records, reports and other papers, to
make copies and extracts therefrom and to discuss their respective
affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with any Institutional
Holder the finances and affairs of the Company and its Restricted
Subsidiaries) all at such reasonable times and as often as may be
reasonably requested. The Company shall not be required to pay or
reimburse any Holder for expenses which such Holder may incur in
connection with any such visitation or inspection, except that if such
visitation or inspection is made during any period when a Default or an
Event of Default shall have occurred and be continuing, the Company
agrees to reimburse such Holder for all such expenses promptly upon
demand.
Notwithstanding the foregoing, neither the Company nor any of the
Subsidiaries shall be required to disclose or permit the inspection,
discussion, examination or making of copies of that portion of materials
which may not be furnished or disclosed under applicable law or pursuant
to any regulatory restriction binding on the Company or any Subsidiary.
Notwithstanding anything else herein to the contrary, each Holder
agrees that all information received pursuant to this Agreement, that
was, at the time of its delivery, identified in writing by the Company
to such Holder as being confidential will be held by such Holder in
confidence to the extent of such Holder's customary procedures for
handling confidential information. It is understood that such Holder,
consistent with any such procedures, may only disclose such confidential
information, or portions thereof
(a) to any bona fide prospective transferee of the Notes or to
any bona fide prospective acquiror of the Holder of the Notes in
connection with the contemplated transfer of Notes or acquisition of
the Holder by another Person, provided that such transferee or
acquiror has agreed in writing (with a copy to the Company) to be
bound by the provisions of this
paragraph prior to any such disclosure;
(b) to the extent necessary to comply with the request of, or as
otherwise customarily disclosed to, any governmental or regulatory
body (including without limitation the United States National
Association of Insurance Commissioners or any successor thereto) or
representatives thereof or any rating agency in connection with the
rating of such Holder's securities or claims paying ability;
(c) to such Holder's officers, employees, trustees and
directors;
(d) to the extent necessary or appropriate to comply with any
subpoena or other court process or in connection with any litigation
or legal proceeding;
(e) such other Holder's independent auditors and accountants,
counsel and other professional advisers in the course of their
respective duties;
(f) to the extent such other Holder reasonably believes it
necessary to comply with any applicable law, statute, regulation,
ruling or order;
(g) in the enforcement of such Holder's rights hereunder and
under the Notes;
(h) which is, or after delivery to such Holder, becomes
otherwise publicly known or generally available to the public other
than as a result of a disclosure by such Holder; and
(i) to any other Holder.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
SECTION 6.1. EVENTS OF DEFAULT. Any one or more of the following
shall constitute an "EVENT OF DEFAULT" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due; or
(b) Default shall occur in the making of any required prepayment
on any of the Notes as provided in SECTION 2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment;
or
(d) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on Material Debt (other than the Notes)
of the Company or any Restricted Subsidiary and such default shall
continue beyond the period of grace, if any, allowed with respect
thereto; or
(e) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Material Debt
of the Company or any Restricted Subsidiary may be issued and such
default or event shall continue for a period of time sufficient to
permit (i) the acceleration of the maturity of any Material Debt of
the Company or any Restricted Subsidiary outstanding thereunder or
(ii) the election of any member of the Board of Directors of the
Company by the holders of any Security (other than Common Stock) of
the Company or by a Trustee; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in SECTION 5.6 through SECTION 5.15;
or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after the earlier of (i) the day on which the Company first obtains
knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by any Holder; or
(h) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by
the Company in connection with the consummation of the issuance and
delivery of the Notes or furnished by the Company pursuant hereto, is
untrue in any material respect as of the date of the issuance or
making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets
of either and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period of
30 days from the date of its entry;
or
(j) The rights, privileges or franchises of any Bank Subsidiary
to do business as a bank or trust company, as the case may be, shall
be declared forfeited by any governmental authority or any court of
competent jurisdiction and not restored and the order, decree or
judgment related thereto effectively stayed by appropriate proceedings
within 60 days thereafter; or
(k) The Company or the Bank shall at any time fail to meet the
Minimum Capital Requirements; or
(l) any conservator or receiver shall be appointed for either
Company or any Bank Subsidiary under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, as it may be amended or
supplement from time to time, or any Bank Subsidiary shall suspend
payment of its obligations; or
(m) A custodian, liquidator, trustee or receiver is appointed
for the Company or any Restricted Subsidiary or for the major part of
the property of either and is not discharged within 30 days after such
appointment; or
(n) The Company or any Restricted Subsidiary becomes insolvent
or bankrupt, is generally not paying its debts as they become due or
makes an assignment for the benefit of creditors, or the Company or
any Restricted Subsidiary applies for or consents to the appointment
of a custodian, liquidator, trustee or receiver for the Company or
such Restricted Subsidiary or for the major part of the property of
either; or
(o) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Restricted Subsidiary and, if instituted
against the Company or any Restricted Subsidiary, are consented to or
are not dismissed within 60 days after such institution.
SECTION 6.2. NOTICE TO HOLDERS. When any Event of Default described
in the foregoing SECTION 6.1 has occurred, or if any Holder or the
holder of any other evidence of Material Debt of the Company gives any
notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three Business Days of such event
to all Holders.
SECTION 6.3. ACCELERATION OF MATURITIES. When any Event of Default
described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and
is continuing, any Holder may, and when any Event of Default described
in paragraphs (d) through (l), inclusive, of said SECTION 6.1 has
happened and is continuing, any Holder or Holders holding 33-1/3% or
more of the principal amount of Notes at the time outstanding may, by
notice to the Company, declare the entire principal and all interest
accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraph (m), (n) or (o) of
SECTION 6.1 has occurred, then all outstanding Notes shall immediately
become due and payable without presentment, demand or notice of any
kind. Upon the Notes becoming due and payable as a result of any Event
of Default as aforesaid, the Company will forthwith pay to the Holders,
the entire principal and interest accrued on the Notes and, to the
extent not prohibited by applicable law, an amount as liquidated damages
for the loss of the bargain evidenced hereby (and not as a penalty)
equal to the Make-Whole Amount, determined as of the date on which the
Notes shall so become due and payable. No course of dealing on the part
of the Holder or Holders nor any delay or failure on the part of any
Holder to exercise any right shall operate as a waiver of such right or
otherwise prejudice such Holder's rights, powers and remedies. The
Company further agrees, to the extent permitted by law, to pay to the
Holder or Holders all reasonable costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon,
including reasonable compensation to such Holder's or Holders' attorneys
for all services rendered in connection therewith.
SECTION 6.4. RESCISSION OF ACCELERATION. The provisions of SECTION
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default
described in paragraphs (a) through (l), inclusive, of Section 6.1, the
Holders holding 66-2/3% in aggregate principal amount of the Notes then
outstanding may, by written instrument filed with the Company, rescind
and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under SECTION 6.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to SECTION 7.1;
and PROVIDED FURTHER, that no such rescission and annulment shall extend
to or affect any subsequent Default or Event of Default or impair any
right consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
SECTION 7.1. CONSENT REQUIRED. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the Holders
holding at least 66-2/3% in aggregate principal amount of outstanding
Notes; provided, however, that without the written consent of all of the
Holders, no such amendment or waiver shall be effective (i) which will
change the time of payment (including any prepayment required by Section
2.1) of the principal of or the interest on any Note or change the
principal amount thereof or change the rate of interest thereon or any
provisions with respect to premium, or (ii) which will change any of the
provisions with respect to prepayments, or (iii) which will change the
percentage of Holders required to consent to any such amendment or
waiver of any of the provisions of this SECTION 7 or SECTION 6.
SECTION 7.2. SOLICITATION OF HOLDERS. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the
provisions of this Agreement or the Notes unless each Holder
(irrespective of the amount of Notes then owned by it) shall be informed
thereof by the Company and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with
sufficient information to enable it to make an informed decision with
respect thereto. The Company will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Holder as consideration
for or as an inducement to entering into by any Holder of any waiver or
amendment of any of the terms and provisions of this Agreement or the
Notes unless such remuneration is concurrently offered, on the same
terms, ratably to all Holders.
SECTION 7.3. EFFECT OF AMENDMENT OR WAIVER. Any such amendment or
waiver shall apply equally to all of the Holders and shall be binding
upon them, upon each future Holder and upon the Company, whether or not
any Note shall have been marked to indicate such amendment or waiver.
No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
SECTION 8.1. DEFINITIONS. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to
both the singular and plural forms of any of the terms herein defined:
"AFFILIATE" shall mean any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, the Company, (ii) which beneficially owns or holds 5% or more of
any class of the Voting Stock of the Company or (iii) 5% or more of the
Voting Stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned or held
by the Company or a Subsidiary. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"AGREEMENT" shall mean this Note Agreement.
"BANK" shall mean Westamerica Bank, a California corporation.
"BANK HOLDING COMPANY ACT" shall mean The Bank Holding Company Act
of 1956, as amended [12 U.C.A. Section 1841 et. seq.] and any successor
legislation.
"BANK SUBSIDIARY" shall mean the Bank and any Subsidiary:
(1) organized as a national banking association under the
laws of the United States of America, or which is organized as a
Federal or state bank or savings bank and is a member of the
FDIC; and
(2) which conducts substantially all of its business and has
substantially all of its Property in the United States of
America.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
legal holiday or other day on which commercial banks located in San
Francisco, California and New York, New York are not authorized or
required by law to be closed.
"CALIFORNIA BANK HOLDING COMPANY ACT" shall mean West's Ann Fin.
Code Section 3700 et. seq. of the Financial Code of the State of
California and any successor legislation.
"CAPITAL DEBT" shall mean and include all unsecured Debt of the
Company the proceeds of which, if issued as of the Closing Date, would
satisfy the then applicable regulatory requirements in order to be
treated as Tier II Capital by the Company.
"CAPITALIZED LEASE" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated
balance sheet of the lessee and its subsidiaries in accordance with
GAAP. "Capitalized Rentals" of any Person shall mean as of the date of
any determination thereof the amount at which the aggregate Rentals due
and to become due under all Capitalized Leases under which such Person
is a lessee would be reflected as a liability under GAAP on a
consolidated balance sheet of such Person.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean and include any class of capital stock of
the Company now or hereafter authorized, the right of which to share in
distributions either of earnings or assets of such corporation is
without limit as to any amount or percentage. For the purposes of any
determination under SECTION 5.6 or 5.8, Common Stock of the Company
shall be valued at the book value thereof.
"COMPANY" shall mean Westamerica Bancorporation, a California
corporation, and any Person who succeeds to all, or substantially all,
of the assets and business of Westamerica Bancorporation.
"COMPTROLLER" shall mean the Comptroller of the Currency of the
United States.
"CONSOLIDATED ASSETS" shall mean, as of the date of any
determination thereof, an amount equal to the assets of the Company and
its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP. "Consolidated Funded Debt" shall mean all Funded
Debt of the Company and its Restricted Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
"CONSOLIDATED NET INCOME" for any period shall mean the gross
revenues of the Company and its Restricted Subsidiaries for such period
less all expenses and other proper charges (including taxes on income),
determined on a consolidated basis after eliminating earnings
attributable to outstanding Minority Interests, but excluding in any
event:
(a) any gains or losses on the sale or other disposition of
fixed or capital assets, and any taxes on such excluded gains and any
tax deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings of any Restricted Subsidiary accrued prior to
the date it became a Restricted Subsidiary;
(d) net earnings of any corporation (other than a Restricted
Subsidiary), substantially all the assets of which have been acquired
in any manner by the Company or any Restricted Subsidiary, realized by
such corporation prior to the date of such acquisition;
(e) net earnings of any corporation (other than a Restricted
Subsidiary) with which the Company or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary in the form of
cash distributions;
(g) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the
Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary; and
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
made from income arising during such period.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean as of the date of any
determination thereof shareholders' equity of the Company and its
Restricted Subsidiaries minus (to the extent otherwise included therein)
assets of the Company and its Restricted Subsidiaries which constitute
intangible assets, all determined in accordance with GAAP.
"DEBT" of any Person shall mean, as of the date of any
determination
thereof:
(i) all obligations of such person for borrowed money
evidenced by notes, bonds, debentures or similar evidences of
indebtedness of such Person,
(ii) obligations secured by any Lien upon property or assets
owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligation,
(iii) obligations created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement
in the event of default are limited to repossession or sale of
property,
(iv) Capitalized Rentals,
(v) obligations of such Person representing the deferred
and unpaid purchase price of any property or business or
services, excluding accounts payable and accrued expenses
constituting current liabilities,
(vi) letters of credit issued for the account of such Person
(other than letters of credit in respect of accounts payable);
and
(vii) Guaranties of obligations of others of the character
referred to hereinabove in this definition.
PROVIDED, HOWEVER, that "DEBT" shall not include Indebtedness Incurred
by a Bank Subsidiary in the Ordinary Course of Business.
For the purpose of computing the Debt of any Person, there shall be
excluded any particular Indebtedness to the extent that, upon or prior
to the maturity thereof, there shall have been deposited with the proper
depositary in trust for the benefit of the holder of such Indebtedness
and unavailable to satisfy the claims of creditors other than the holder
of such Indebtedness the necessary funds (or evidences of Indebtedness,
if permitted by the instrument creating such Indebtedness) for the
payment, redemption or satisfaction of such Indebtedness; and thereafter
such funds and evidences of Indebtedness so deposited shall not be
included in any computation of the assets of such Person.
"DEFAULT" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer
to any successor sections.
"ERISA AFFILIATE" shall mean any corporation, trade or business
that is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described
in section 414(b) and 414(c), respectively, of the Code or Section 4001
of ERISA.
"EVENT OF DEFAULT" shall have the meaning set forth in SECTION 6.1.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successors thereto.
"FEDERAL DEPOSIT INSURANCE ACT" shall mean the Federal Deposit
Insurance Act 12 U.S.C.A. 1811 et. seq. and any successor legislation.
"FIXED CHARGES" for any period shall mean on a consolidated basis
the sum of (i) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Restricted
Subsidiaries, and (ii) all Interest Charges on all Indebtedness
(including the interest component of Rentals on Capitalized Leases) of
the Company and its Restricted Subsidiaries. For purposes of any
determination of this definition, "FIXED CHARGES" shall be adjusted
retroactively to give effect to the Debt of any business entity
acquired or disposed of by the Company or any Restricted Subsidiary and
shall be computed as though such Debt of such business entity had been
owed by the Company or such business entity had been a Restricted
Subsidiary, as the case may be, throughout the applicable period
and as though the Debt then being satisfied, if any, had not been owed
by the Company or any Restricted Subsidiary without the applicable
period.
"FUNDED DEBT" of any Person shall mean (i) all Debt of such Person
having a final maturity of one or more than one year from the date of
origin thereof (or which is renewable or extendible at the option of the
obligor for a period or periods more than one year from the date of
origin),including all payments in respect thereof that are required to
be made within one year from the date of any determination of Funded
Debt, whether or not the obligation to make such payments shall
constitute a current liability of the obligor under GAAP, and (ii) all
Guaranties by such Person of Funded Debt of others.
"GAAP" shall mean generally accepted accounting principles at the
time in the United States.
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing, or
in effect guaranteeing, any Indebtedness, dividend or other obligation
of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such Person:
(i) to purchase such Indebtedness or obligation or any property or
assets constituting security therefor, (ii) to advance or supply funds
(x) for the purchase or payment of such Indebtedness or obligation, (y)
to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment
of such Indebtedness or obligation, (iii) to lease property or to
purchase Securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of the Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof. For
the purposes of all computations made under this Agreement, a Guaranty
in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for
borrowed money which has been guaranteed, and a Guaranty in respect of
any other obligation or liability or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"HOLDER" shall mean any Person which is, at the time of reference,
the registered Holder of any Note.
"INDEBTEDNESS" of any Person shall mean and include all obligations
of such Person which in accordance with GAAP shall be classified upon a
balance sheet of such Person as liabilities of such Person, and in any
event shall include all Debt.
"INDEBTEDNESS INCURRED BY A BANK SUBSIDIARY IN THE ORDINARY COURSE
OF BUSINESS" shall mean and include any liability or obligation of such
Bank Subsidiary with respect to (i) any deposits with or funds collected
by it, (ii) any banker's acceptance or letter of credit, (iii) any
check, note, certificate of deposit, draft or bill of exchange, issued,
accepted or endorsed by it in the ordinary course of its business, (iv)
any discount with, borrowing from, or other obligation to, any Federal
Reserve Bank or Federal Home Loan Bank, (v) any agreement, made by it in
the ordinary course of its business, to purchase or repurchase
Securities or loans or to participate in loans, (vi) any transactions in
the nature of an extension of credit, whether in the form of a
commitment, Guaranty or otherwise, undertaken by it for account of a
third party with the application by it of the same banking
considerations and legal lending limits that would be applicable if the
transaction were a loan to such party, (vii) any transaction in which it
acts solely in a fiduciary or agency capacity, (viii) sale or purchases
of federal funds or (ix) service agreements entered into in the ordinary
course of business with respect to the administration of certain assets
of such Bank Subsidiary or which have been sold in the ordinary course
of business by such Bank Subsidiary.
"INSTITUTIONAL HOLDER" shall mean any Holder which is a Purchaser
or an insurance company, bank, savings and loan association, trust
company, investment company, charitable foundation, employee benefit
plan (as defined in ERISA) or other institutional investor or financial
institution and, for purposes of the direct payment provisions of this
Agreement, shall include any nominee of any such Holder.
"INTEREST CHARGES" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Debt for
which such calculations are being made. Computations of Interest
Charges on a pro forma basis for Debt having a variable interest rate
shall be calculated at the rate in effect on the date of any
determination.
"INVESTMENTS" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or other
obligations or Securities or by loan, advance, capital contribution or
otherwise in accordance with GAAP; provided, however, that "Investments"
shall not mean or include routine investments in property to be used or
consumed in the ordinary course of business nor shall the term include
any lock-up options or similar agreements obtained by, or granted in
connection with, any acquisition or merger.
"LIEN" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest lien arising from
a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances (including, with respect to stock,
stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Restricted Subsidiary shall be deemed to be
the owner of any property which it has acquired or holds subject to a
conditional sale agreement, Capitalized Lease or other arrangement
pursuant to which title to the property has been retained by or vested
in some other Person for security purposes and such retention or vesting
shall constitute a Lien.
"MAKE-WHOLE AMOUNT" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (i) the aggregate
present value as of the date of such prepayment of each dollar of
principal being prepaid (taking into account the application of such
prepayment required by SECTION 2.1) and the amount of interest
(exclusive of interest accrued to the date of prepayment) that would
have been payable on each date on which interest would have been
required to be paid in respect of such dollar if such prepayment had not
been made (assuming required prepayments pursuant to Section 2.1, the
principal balance of such Note payable upon maturity and interest
payments, were paid when due), determined by discounting such amounts at
the Reinvestment Rate from the respective dates on which they would have
been payable, over (ii) 100% of the principal amount of the outstanding
Notes being prepaid. If the Reinvestment Rate is equal to or higher
than 7.11%, the Make-Whole Amount shall be zero. For purposes of any
determination of the Make-Whole Amount:
"REINVESTMENT RATE" shall mean .50%, plus the arithmetic mean of
the yields for the two columns under the heading "Week Ending"
published in the Statistical Release under the caption "Treasury
Constant Maturities" (available at 11:00 A.M. New York City time, on
the third Business Day prior to the date of such prepayment) for the
maturity (rounded to the nearest month) corresponding to the Weighted
Average Life to Maturity of the principal being prepaid (taking into
account the application of such prepayment required by SECTION 2.1).
If no maturity exactly corresponds to such Weighted Average Life to
Maturity, yields for the published maturity next longer than the
Weighted Average Life to Maturity and for the published maturity next
shorter than the Weighted Average Life to Maturity shall be calculated
pursuant to the immediately preceding sentence and the reinvestment
Rate shall be interpolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month.
"Statistical Release" shall mean the then most recently published
statistical release (available at 11:00 A.M. New York City time, on
the third Business Day prior to the date of such prepayment)
designated "H.15(519)" or any successor publication which is published
weekly by the Federal Reserve System and which establishes yields on
actively traded U.S. Government Securities adjusted to constant
maturities or, if such statistical release is not published at the
time of any determination hereunder, then such other reasonably
comparable index which shall be designated by the Holders holding
66-2/3% in aggregate principal amount of the outstanding Notes.
"WEIGHTED AVERAGE LIFE TO MATURITY" of the principal amount of
the Notes being prepaid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then REMAINING DOLLAR-YEARS of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (i) multiplying (x) the
remainder of (1) the amount of principal that would have become due on
each scheduled payment date if such prepayment had not been made, less
(2) the amount of principal on the Notes scheduled to become due on
such date after giving effect to such prepayment and the application
thereof in accordance with the provisions of Section 2.1, by (y) the
number of years (calculated to the nearest one-twelfth) which will
elapse between the date of determination and such scheduled payment
date, and (ii) totalling the products obtained in (i).
"MATERIAL DEBT" shall mean, as of the date of any determination
thereof, one or more obligations of the Company or any Restricted
Subsidiary constituting Debt which is outstanding in an aggregate
principal amount in excess of $5,000,000.
"MINIMUM CAPITAL REQUIREMENT" shall mean any minimum capital
guideline or requirement in effect from time to time under any published
rule or regulation issued by the Federal Reserve Board, the FDIC or any
other applicable Federal or state regulatory authority having
jurisdiction over the Company or any Bank Subsidiary including, without
limitation, pursuant to 12 C.F.R. pt. 225.
"MINORITY INTERESTS" shall mean any shares of stock of any class of
a Restricted Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or more of
its Restricted Subsidiaries. Minority Interests shall be valued by
valuing Minority Interests constituting preferred stock at the voluntary
or involuntary liquidating value of such preferred stock, whichever is
greater, and by valuing Minority Interests constituting common stock at
the book value of capital and surplus applicable thereto adjusted, if
necessary, to reflect any changes from the book value of such common
stock required by the foregoing method of valuing Minority Interests in
preferred stock.
"MULTIEMPLOYER PLAN" shall have the same meaning as in ERISA.
"NATIONAL BANK ACT" shall mean The National Bank Act [12 U.S.C.
Section 21 et. seq.] and any successor legislation.
"NET INCOME AVAILABLE FOR FIXED CHARGES" for any period shall mean
the sum of (i) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (ii) all
provisions for any Federal, state or other income taxes made by the
Company and its Restricted Subsidiaries during such period and (iii)
Fixed Charges of the Company and its Restricted Subsidiaries during such
period. For the purposes of any determination of this definition, "NET
INCOME AVAILABLE FOR FIXED CHARGES" shall be adjusted retroactively to
give effect to the operations of any business entity (based on the
actual financial performance of such business entity) where the assets
and liabilities of such business entity were acquired or disposed of by
the Company or any Restricted Subsidiary during the applicable period.
"NET INCOME AVAILABLE FOR FIXED CHARGES" shall be computed as though
such business entity (or the assets and liabilities of such business
entity) had been owned (or owed) by the Company, or such business entity
had been a Restricted Subsidiary, as the case may be, throughout the
applicable period and as though the assets and liabilities so disposed
of had not been owned or owed, as the case may be, by the Company or any
Subsidiary throughout the applicable period.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"PERPETUAL PREFERRED STOCK" shall mean Preferred Stock of the
Company or any Restricted Subsidiary which is not subject to any
requirements for the mandatory retirement, redemption or purchase
thereof regardless of whether such Preferred Stock is convertible into
Common Stock. For the purposes of any determination pursuant to Section
5.6 or 5.8, Perpetual Preferred Stock shall be valued at the involuntary
liquidating value thereof (unless said Preferred Stock is convertible
into Common Stock, in which case the value thereof shall be determined
by reference to the conversion price).
"PERSON" shall mean an individual, partnership, corporation, trust
or unincorporated organization, and a government or agency or political
subdivision thereof.
"PLAN" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"PREFERRED STOCK" shall mean stock of the Company or any Restricted
Subsidiary of any class or series ranking prior to any other class or
series of stock of the Company or such Restricted Subsidiary with
respect to whether the payment of dividends or the distribution of
assets upon the liquidation, dissolution or winding up of the Company or
such Restricted Subsidiary.
"PRO FORMA FIXED CHARGES" for any period shall mean, as of the date
of any determination thereof, the maximum aggregate amount of Fixed
Charges which would have become payable by the Company and its
Restricted Subsidiaries in such period determined on a PRO FORMA basis
giving effect as of the beginning of such period to the incurrence of
any Capital Debt and the concurrent retirement of outstanding Debt.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"PURCHASERS" shall have the meaning set forth in SECTION 1.1.
"RENTALS" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all payments
which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property) payable by the Company or a
Restricted Subsidiary, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be
paid by the Company or a Restricted Subsidiary (whether or not
designated as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. Fixed rents under any
so-called "percentage leases" shall be computed solely on the basis of
the minimum rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"REPORTABLE EVENT" shall have the same meaning as in ERISA.
"RESTRICTED INVESTMENTS" shall mean all Investments by the Company
and its Restricted Subsidiaries except for the following Investments:
(a) Investments by the Company and its Restricted Subsidiaries
in and to Restricted Subsidiaries, including any Investment in a
corporation or other Person which, after giving effect to such
Investment, will become a Restricted Subsidiary and, to the extent
necessary to permit the Company or any Restricted Subsidiary to become
a member of, and borrow funds from, a Federal Home Loan Bank, the
stock of such Federal Home Loan Bank or any successor thereof;
(b) Investments in commercial paper maturing in 270 days or less
from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is accorded a rating of P2 or
better by Standard & Poor's Ratings Group or A2 or better by Moody's
Investors Service, Inc. or other nationally recognized credit rating
agency of similar standing;
(c) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith
and credit obligation of the United States of America, in either case,
maturing in twelve months or less from the date of acquisition
thereof;
(d) Investments in certificates of deposit maturing within one
year from the date of issuance thereof, issued by a bank or trust
company organized under the laws of the United States or any state
thereof, having capital, surplus and undivided profits aggregating at
least $100,000,000 and whose long-term certificates of deposit are, at
the time of acquisition thereof by the Company or a Restricted
Subsidiary, rated AA or better by Standard & Poor's Ratings Group or
Aa or better by Moody's Investors Service, Inc.;
(e) loans or advances in the usual and ordinary course of
business to officers, directors and employees for expenses (including
moving expenses related to a transfer) incidental to carrying on the
business of the Company or any Restricted Subsidiary; and
(f) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries.
For purposes of this definition (i) at any time when a corporation
becomes a Restricted Subsidiary, all Investments of such corporation at
such time shall be deemed to have been made by such corporation, as a
Restricted Subsidiary, at such time and (ii) the purchase or other
acquisition of shares of capital stock of the Company or any Restricted
Subsidiary shall not constitute a "Restricted Investment" but, rather,
such purchase or other acquisition shall constitute a "Restricted
Payment" as defined hereinafter.
"RESTRICTED PAYMENTS" shall mean and include, as of the date of any
determination thereof,
(a) any declaration or payment of any dividends either in cash or
property by the Company or any Restricted Subsidiary on any shares of
its capital stock of any class (except dividends or other
distributions of shares of capital stock of the Company or right(s) to
acquire or receive shares of capital stock of the Company, whether or
not pursuant to the Amended and Restated Rights Agreement dated as of
March 23, 1995, or any renewal, revision or replacement thereof);
(b) any direct or indirect purchase, redemption or retirement of
any shares of capital stock of the Company or any Restricted
Subsidiary or of any class of any warrants, rights or options to
purchase or acquire any shares of its capital stock; and
(c) any other payment or distributions, whether direct or
indirect, in respect of the capital stock of the Company or any
Restricted Subsidiary (except payments or distributions of shares of
capital stock of the Company or right(s) to acquire or receive shares
of capital stock of the Company, whether or not pursuant to the
Amended and Restated Rights Agreement dated as of March 23, 1995, or
any renewal, revision or replacement thereof);
PROVIDED, HOWEVER, that "RESTRICTED PAYMENTS" shall not include any
declaration or payment of any dividends or other distributions by any
Restricted Subsidiary to the Company or to a Wholly-owned Restricted
Subsidiary.
"RESTRICTED SUBSIDIARY" shall mean and include:
(i) any Bank Subsidiary; and
(ii) any Subsidiary (a) whose assets would exceed 5% of
Consolidated Assets or (b) whose earnings would
exceed 5% of Consolidated Net Income
(determined as of the end of the most recent fiscal
period), determined without including the assets or
earnings of such Subsidiary.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
The term "SUBSIDIARY" shall mean as to any particular parent
corporation any corporation or other Person of which more than 50% (by
number of votes) of the Voting Stock or equity interests shall be
beneficially owned, directly or indirectly, by such parent corporation.
The term "SUBSIDIARY" shall mean a subsidiary of the Company.
"TIER II CAPITAL" shall mean as of the date of any determination
thereof the items that are defined in clauses (i) through (iv) of
paragraph 2 of Section A entitled "THE COMPONENTS OF QUALIFYING CAPITAL"
of Appendix A to 12 C.F.R. part 225-Capital Adequacy Guidelines for Risk
Based Bank Holding Companies: Risk-Based Measure.
"VOTING STOCK" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).
"WHOLLY-OWNED" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) shall be
owned by the Company and/or one or more of its Wholly-owned
Subsidiaries.
SECTION 8.2. ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall
be done in accordance with GAAP, to the extent applicable, except where
such principles are inconsistent with the requirements of this
Agreement.
SECTION 8.3. DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such
Person.
SECTION 9. MISCELLANEOUS.
SECTION 9.1. REGISTERED NOTES. (a) The Company shall cause to be
kept at its principal office a register for the registration and
transfer of the Notes (hereinafter called the "Note Register"), and the
Company will register or transfer or cause to be registered or
transferred as hereinafter provided any Note issued pursuant to this
Agreement.
At any time and from time to time any Holder of a Note which has
been duly registered as hereinabove provided may transfer (in compliance
with SECTION 3.2 and 9.1(b)) such Note upon surrender thereof at the
principal office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the Holder or its
attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof and a Holder
for all purposes of this Agreement. Payment of or on account of the
principal, premium, if any, and interest on any registered Note shall be
made to or upon the written order of such Holder.
(b) In the event that a Holder determines in good faith to dispose
of all or any portion of its Notes to a Person other than an affiliated
financial institution of such Holder, such Holder shall give written
notice of such proposed sale to the Company stating the proposed sale
price (such notice being referred to as the "SECTION 9.1(b) NOTICE" and
the date of such Section 9.1(b) Notice being referred to as the "SECTION
9.1(b) NOTICE DATE") and the identity of the prospective purchaser. For
a period of five (5) Business Days after the Section 9.1(b) Notice Date,
such Holder agrees not to sell such Notes to any Person other than the
Company and to be deemed to have offered such Notes to the Company at
the price described in said Section 9.1(b) Notice. The Company may
accept or reject such offer in writing to the Holder at any time during
such five (5) Business Day period and failure to accept such offer
within said five (5) Business Day period shall be deemed a rejection
thereof. In the event the Company timely accepts such offer in writing
to the Company (the "NOTICE OF ACCEPTANCE"), the Company shall purchase
such Notes and the Holder shall sell such Notes to the Company at the
price designated in the Section 9.1(b) Notice and upon such other terms
and conditions as are described in the Section 9.1(b) Notice on the
first business day which is at least five (5) Business Days after the
Notice of Acceptance by the Company. If however, the Company rejects
such offer either by written rejection thereof or by failure to accept
such offer in writing within the aforementioned three Day Business
period, the Holder shall be free for a period of 120 days thereafter to
sell said Notes at the same price (or any higher price) as was set forth
in the Section 9.1(b) Notice to the prospective purchaser previously
identified to the Company. If such sale (at such price or a higher
price to such purchaser) is not so consummated within such time period,
the procedures specified herein shall be repeated should such Holder
thereafter determined to dispose Notes to any Person other than an
affiliated financial institution of such Holder.
SECTION 9.2. EXCHANGE OF NOTES. At any time and from time to time,
upon not less than ten days' notice to that effect given by the Holder
of any Note initially delivered or of any Note substituted therefor
pursuant to SECTION 9.1, this SECTION 9.2 or SECTION 9.3, and, upon
surrender of such Note at its office, the Company will deliver in
exchange therefor, without expense to such Holder, except as set forth
below, a Note for the same aggregate principal amount as the then unpaid
principal amount of the Note so surrendered, or Notes in the
denomination of $1,000,000 or any amount in excess thereof as such
Holder shall specify, dated as of the date to which interest has been
paid on the Note so surrendered or, if such surrender is prior to the
payment of any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be designated by
such Holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon
such exchange or transfer.
SECTION 9.3. LOSS, THEFT, ETC. OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity in such form and amount
as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Note, the Company
will make and deliver without expense to the Holder thereof, a new Note,
of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Note. If an Institutional Holder is the owner of any such lost, stolen
or destroyed Note, then the affidavit of an authorized officer of such
owner, setting forth the fact of loss, theft or destruction and of its
ownership of such Note at the time of such loss, theft or destruction
shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery
of a new Note other than the written agreement of such owner to
indemnify the Company.
SECTION 9.4. EXPENSES, STAMP TAX INDEMNITY. Whether or not the
transactions herein contemplated shall be consummated, the Company
agrees to pay directly all of the Purchasers' reasonable out-of-pocket
expenses in connection with the preparation, execution and delivery of
this Agreement and the transactions contemplated hereby, including but
not limited to the reasonable charges and disbursements of Chapman and
Cutler, special counsel to the Purchasers, duplicating and printing
costs and charges for shipping the Notes, adequately insured to each
Purchaser's home office or at such other place as such Purchaser may
designate, and all reasonable expenses of the Holders (including,
without limitation, the reasonable fees and expenses of any financial
advisor to the Holders) relating to any proposed or actual amendment,
waivers or consents pursuant to the provisions hereof, including,
without limitation, any proposed or actual amendments, waivers,
or consents resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company also agrees that it will pay and
save each Purchaser harmless against any and all liability with respect
to stamp and other taxes, if any, which may be payable or which may be
determined to be payable in connection with the execution and delivery
of this Agreement or the Notes, whether or not any Notes are then
outstanding.
The Company agrees to protect and indemnify each Purchaser against any
liability for any and all brokerage fees and commissions payable or
claimed to be payable to any Person (other than any Person engaged by a
Purchaser) in connection with the transactions contemplated by this
Agreement.
SECTION 9.5. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of any Holder in the exercise of any power
or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of each Holder are cumulative to, and are not exclusive of, any
rights or remedies any such Holder would otherwise have.
SECTION 9.6. NOTICES. All communications provided for hereunder
shall be in writing and, if to a Holder, delivered or mailed prepaid by
registered or certified mail or overnight air courier, or by facsimile
communication, in each case addressed to such Holder at its address app
earing beneath its signature at the foot of this Agreement or such other
address as any Holder may designate to the Company in writing, and if to
the Company, delivered or mailed by registered or certified mail or
overnight air courier, or by facsimile communication, to the Company at
the address beneath its signature at the foot of this Agreement or to
such other address as the Company may in writing designate to the
Holders; PROVIDED, HOWEVER, that a notice to a Holder by overnight air
courier shall only be effective if delivered to such Holder at a street
address designated for such purpose in accordance with this SECTION 9.6,
and a notice to such Holder by facsimile communication shall only be
effective if made by confirmed transmission to such Holder at a
telephone number designated for such purpose in accordance with this
SECTION 9.6 and promptly followed by the delivery of such notice by
registered or certified mail or overnight air courier, as set forth
above.
SECTION 9.7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to the
benefit of each Purchaser and its successor and assigns, including each
successive Holder.
SECTION 9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All
covenants, representations and warranties made by the Company herein and
in any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and the
delivery of this Agreement and the Notes.
SECTION 9.9. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid or unenforceable portion thereof
eliminated and it is hereby declared the intention of the parties hereto
that they would have executed the remaining portion of this Agreement
without including therein any such part, parts or portion which may, for
any reason, be hereafter declared invalid or unenforceable.
SECTION 9.10. GOVERNING LAW. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with New
York law.
SECTION 9.11. CAPTIONS. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall
not affect the meaning or construction of any of the provisions hereof.
The execution hereof by the Purchasers shall constitute a contract among
the Company and the Purchasers for the uses and purposes hereinabove set
forth. This Agreement may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only
one agreement.
The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes
hereinabove set forth. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one agreement.
Westamerica Bancorporation
By /s/ David L. Payne
- ---------------------
Its Chairman, President and Chief
Executive Officer
Westamerica Bancorporation
1108 Fifth Avenue
San Rafael, California 94901
Attention: E. Joseph Bowler
Telefacsimile: (415) 257-8127
Confirmation: (415) 257-8040
Accepted as of February 1, 1996:
The Penn Mutual Life Insurance Company
By /s/ Barbara B. Henderson
- ---------------------------
Its Assistant Vice President
The Penn Mutual Life Insurance Company
530 Walnut Street
Philadelphia, Pennsylvania 19172
Attention: Barbara B. Henderson
Assistant Vice President
Mailstop C1B
Telephone: (215) 956-8514
Facsimile: (215) 672-2760
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Westamerica Bancorporation, 7.11% Senior Notes due 2006, PPN
957090 A# 0, principal or interest") to:
Bankers Trust Company
ABA #02100-1033
16 Wall Street
New York, New York 10005
Attention: Insurance Unit, Private Placements 01419540
for credit to: The Penn Mutual Life Insurance Company
Account Number 092497
Notices
All notices and communications with respect to payments and written
confirmation of each such payment to be addressed as first provided
above.
All other notices and communications to be sent by Express Mail
addressed to:
The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, Pennsylvania 19044
Attention: Barbara B. Henderson, Mailstop C1B
Name of Nominee in which Notes are to be issued: None
Tax I.D. Number: 23-0952300
Accepted as of February 1, 1996:
Phoenix Home Life Mutual Insurance Company
By /s/ Keith D. Robbins
- -----------------------
Its Vice President
Phoenix Home Life Mutual Insurance Company
c/o Phoenix Duff & Phelps, Inc.
56 Prospect Street
P. O. Box 150480
Hartford, Connecticut 06105-0480
Attention: Private Placements Division
Telecopier Number: (860) 403-5451
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Westamerica Bancorporation, 7.11% Senior Notes due 2006, PPN
957090 A# 0, principal or interest") to:
Chase Manhattan Bank (ABA #021 0000 21)
BNF-SSG Private Income Processing/AC-9009000200
for credit to: Phoenix Home Life Mutual Insurance Company
Account Number G-05143
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be addressed
as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0493340
Accepted as of February 1, 1996:
The Penn Insurance and Annuity Company
By /s/ Barbara B. Henderson
- ---------------------------
Its Investment Officer
The Penn Insurance and Annuity Company
Independence Square
530 Walnut Street
Philadelphia, Pennsylvania 19172
Attention: Barbara B. Henderson
Assistant Vice President
Securities Investment Department
Mailstop C1B
Telephone: (215) 956-8514
Facsimile: (215) 672-2760
Payments
All payments on or in respect of the Notes to be by bank wire transfer
of Federal or other immediately available funds (identifying each
payment as "Westamerica Bancorporation, 7.11% Senior Notes due 2006, PPN
957090 A# 0, principal or interest") to:
Bankers Trust Company
ABA #02100-1033
16 Wall Street
New York, New York 10005
Attention: Insurance Unit, Private Placements 01419540
for credit to: The Penn Insurance and Annuity Company
Account Number 092506
Notices
All notices and communications by regular mail to be addressed as first
provided above.
All notices and communications to be sent by Express Mail to be
addressed to:
The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, Pennsylvania 19044
Attention: Barbara B. Henderson, Mailstop C1B
Securities Investment Department
Name of Nominee in which Notes are to be issued: None
Tax I.D. Number: 23-2142731
Principal Amount
Names of Purchasers of Notes to be
Purchased
Phoenix Home Life Mutual Insurance Company $14,000,000
The Penn Mutual Life Insurance Company $3,500,000
The Penn Insurance and Annuity Company $5,000,000
Total $22,500,000
Schedule I
(to Note Agreement)
Exhibit A
(to Note Agreement)
"This Note has not been registered under Section 5 of the
Securities Act of 1933, as amended (the "Securities Act"), or any
other applicable securities law and, accordingly, this Note may
not be resold, pledged, or otherwise transferred, except pursuant
to (i) an effective registration statement under, or in a
transaction exempt from registration under, the Securities Act
and in accordance with any other applicable securities laws and (
ii) the terms and provisions of the Note Agreement, a complete
and correct conformed copy of which Note Agreement is available
for inspection at the registered office of the Company and will
be furnished to the Holder of the Note upon written request and
without charge."
Westamerica Bancorporation
7.11% Senior Note
Due February 1, 2006
PPN: 957090 A# 0
No. _________, 19__
$
Westamerica Bancorporation, a California corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the first day of February, 2006
the principal amount of
Dollars ($____________)
and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the principal amount from time to time remaining
unpaid hereon at the rate of 7.11% per annum from the date hereof until
maturity, payable semiannually on the first day of each February and
August in each year (commencing on the first of such dates after the
date hereof) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment
of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the rate of
9.11% per annum after the due date, whether by acceleration or
otherwise, until paid. Both the principal hereof and interest hereon
are payable at the principal office of the Company in San Rafael,
California in coin or currency of the United States of America which at
the time of payment shall be legal tender for the payment of public and
private debts.
This Note is one of the 7.11% Senior Notes due February 1, 2006
(the "NOTES") of the Company in the aggregate principal amount of
$22,500,000 issued or to be issued under and pursuant to the terms and
provisions of the Note Agreement dated as of February 1, 1996 (the "Note
Agreement"), entered into by the Company with the original Purchasers
therein referred to, and this Note and the holder hereof are entitled
equally and ratably with the holders of all other Notes outstanding
under the Note Agreement to all the benefits provided for thereby or
referred to therein. Reference is hereby made to the Note Agreement for
a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any,
set forth in the Note Agreement.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium,
if any, and interest on this Note shall be made only to or upon the
order in writing of the registered holder.
Westamerica Bancorporation
By
- --------------------------
Its
Exhibit B
(to Note Argreement)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Purchaser as follows:
1. SUBSIDIARIES. Annex A attached hereto states the name of each
of the Company's Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. Those Subsidiaries listed in Section 1 of said Annex A co
nstitute Restricted Subsidiaries. The Company and each Subsidiary has
good and marketable title to all of the shares it purports to own of the
stock of each Subsidiary, free and clear in each case of any Lien. All
such shares have been duly issued and are fully paid and, subject to
Section 662 of the Financial Code of the State of California with
respect to Bank Subsidiaries, non-assessable. The Company has no
corporate or joint venture Affiliates.
2. CORPORATE ORGANIZATION AND AUTHORITY. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to
carry on its business as now conducted and as presently proposed
to be conducted; and
(c) is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction wherein the nature
of the business transacted by it or the nature of the property
owned or leased by it makes such licensing or qualification
necessary.
The Company is a registered bank holding company under the Bank
Holding Company Act and is a bank holding company under the California
Bank Holding Company Act. Each Bank Subsidiary is a California
chartered banking corporation which is duly organized, validly existing
and in good standing. Each Bank Subsidiary is an insured bank under the
Federal Deposit Insurance Act.
3. FINANCIAL STATEMENTS. (a) The consolidated balance sheets of
the Company and its consolidated Subsidiaries as of December 31 in each
of the years 1990 to 1994, both inclusive, and the statements of income
and retained earnings and changes in financial position or cash flows
for the fiscal years ended on said dates, each accompanied by a report
thereon containing an opinion unqualified as to scope limitations
imposed by the Company and otherwise without qualification except as
therein noted, by KPMG Peat Marwick LLP, have been prepared in
accordance with GAAP consistently applied except as therein noted, are
correct and complete and present fairly the financial position of the
Company and its Subsidiaries as of such dates and the results of their
operations and changes in their financial position or cash flows for
such periods. The unaudited consolidated balance sheets of the Company
and its consolidated Subsidiaries as of September 30, 1995, and the
unaudited statements of income and retained earnings and cash flows for
the nine-month period ended on said date prepared by the Company have
been prepared in accordance with GAAP consistently applied, are correct
and complete and present fairly the financial position of the Company
and its consolidated Subsidiaries as of said date and the results of
their operations and changes in their financial position or cash flows
for such period.
(b) Since December 31, 1994, there has been no change in the
condition, financial or otherwise, of the Company and its consolidated
Subsidiaries, taken as a whole, as shown on the consolidated balance
sheet as of such date except changes in the ordinary course of business,
none of which individually or in the aggregate has been materially
adverse.
4. INDEBTEDNESS. Annex B attached hereto correctly describes all
Debt of the Company and its Restricted Subsidiaries outstanding on the
Closing Date.
5. FULL DISCLOSURE. Neither the financial statements referred to
in paragraph 3 hereof nor the Agreement, the Memorandum or any other
written statement furnished by the Company to such Purchaser in
connection with the negotiation of the sale of the Notes, contains any
untrue statement of a material fact or omits a material fact necessary
to make the statements contained therein or herein not misleading.
There is no fact peculiar to the Company or its Subsidiaries which the
Company has not disclosed to such Purchaser in writing which materially
affects adversely nor, so far as the Company can now foresee, will
materially affect adversely the properties, business, prospects, profits
or condition (financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole.
6. PENDING LITIGATION. There are no proceedings pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any Restricted Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which, if
adversely determined, could materially and adversely affect the
properties, business, profits or condition (financial or otherwise) of
the Company and its Restricted Subsidiaries.
7. TITLE TO PROPERTIES. The Company and each Restricted
Subsidiary has good and marketable title in fee simple (or its
equivalent under applicable law) to all material parcels of real
property and has good title to all the other material items of property
it purports to own, including that reflected in the most recent balance
sheet referred to in paragraph 4 hereof, except as sold or otherwise
disposed of in the ordinary course of business and except for Liens
permitted by the Agreement.
8. LICENSES, ETC. The Company and each Restricted Subsidiary
owns or possesses all the material trade names, service marks, licenses
and rights with respect to the foregoing necessary for the present and
planned future conduct of its business, without any known conflict with
the rights of others.
9. SALE IS LEGAL AND AUTHORIZED. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement
and the Notes --
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any
order of any court or governmental authority or agency and will
not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under the
Articles of Incorporation or By-laws of the Company or any
indenture or other material agreement or instrument to which the
Company is a party or by which it may be bound or result in the
imposition of any Liens or encumbrances on any material property
of the Company; and
(c) have been duly authorized by proper corporate
action on the part of the Company (no action by the stockholders
of the Company being required by law, by the Articles of
Incorporation or By-laws of the Company or otherwise), executed
and delivered by the Company and the Agreement and the Notes
constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable in accordance with
their respective terms.
10. NO DEFAULTS. No Default or Event of Default has occurred and
is continuing. Neither the Company nor any Restricted Subsidiary is in
default in the payment of principal or interest on any Debt or is in
default under any instrument or instruments or agreements under and
subject to which any Debt has been issued, and no event has occurred and
is continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
11. GOVERNMENTAL CONSENT. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local,
is necessary in connection with the execution and delivery by the
Company of the Agreement or the Notes or compliance by the Company with
any of the provisions of the Agreement or the Notes.
12. TAXES. All tax returns required to be filed by the Company or
any Restricted Subsidiary in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees and other governmental charges upon the
Company or any Restricted Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable
in such returns have been paid. For all taxable years ending on or
before December 31, 1994, the Federal income tax liability of the
Company and its Restricted Subsidiaries has been satisfied and either
the period of limitations on assessment of additional Federal income tax
has expired or the Company and its Restricted Subsidiaries have entered
into an agreement with the Internal Revenue Service closing conclusively
the total tax liability for the taxable year. The Company does not know
of any proposed additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material controversy
in respect of additional Federal or state income taxes due since said
date is pending or to the knowledge of the Company threatened. The
provisions for taxes on the books of the Company and each Restricted
Subsidiary are adequate in all material respects for all open years, and
for its current fiscal period.
13. USE OF PROCEEDS. The net proceeds from the sale of the Notes
will be used to repurchase outstanding shares of the Company's common
stock and for other corporate purposes. None of the transactions
contemplated in the Agreement (including, without limitation thereof,
the use of proceeds from the issuance of the Notes) will violate or
result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including,
without limitation, Regulations G, T and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company
nor any Subsidiary owns or intends to carry or purchase any "margin
stock" within the meaning of said Regulation G. None of the proceeds
from the sale of the Notes will be used to purchase, or refinance any
borrowing the proceeds of which were used to purchase, any "security"
within the meaning of the Securities Exchange Act of 1934, as amended.
14. PRIVATE OFFERING. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer
to acquire the Notes or any similar Security from or has otherwise
approached or negotiated or will approach or negotiate in respect of the
Notes or any similar Security with any Person other than the Purchasers
and not more than thirty-five (35) other institutional investors, each
of whom was offered a portion of the Notes at private sale for
investment. Neither the Company, directly or indirectly, nor any agent
on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes
or any similar Security from any Person so as to bring the issuance and
sale of the Notes within the provisions of Section 5 of the Securities
Act of 1933, as amended.
15. ERISA. The consummation of the transactions provided for in
the Agreement and compliance by the Company with the provisions thereof
and the Notes issued thereunder will not involve any non-exempt
prohibited transaction within the meaning of ERISA or Section 4975 of
the Internal Revenue Code of 1986, as amended. Each Plan complies in
all material respects with all applicable statutes and governmental
rules and regulations, and (a) no Reportable Event has occurred and is
continuing with respect to any Plan, (b) neither the Company nor any
ERISA Affiliate has incurred or will incur any withdrawal liability in
connection with any Multiemployer Plan, and (c) no steps have been
instituted to terminate any Plan. No condition exists or event or
transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any
ERISA Affiliate, nor any trust created thereunder, has incurred any
material "accumulated funding deficiency" as defined in Section 302 of
ERISA nor does the present value of all benefits vested under all Plans
exceed, as of the last annual valuation date, the value of the assets of
the Plans allocable to such vested benefits. Except as disclosed in the
consolidated financial statements of the Company previously provided to
the Purchasers, neither the Company nor any ERISA Affiliate has any
material contingent liability with respect to any post-retirement
"welfare benefit plan" (as such term is defined in ERISA).
16. COMPLIANCE WITH LAW. Neither the Company nor any Restricted
Subsidiary (a) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (b) has
failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure to obtain would
materially adversely affect the business, prospects, profits, properties
or condition (financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole, or impair the ability of the Company to
perform its obligations contained in the Agreement or the Notes.
Neither the Company nor any Restricted Subsidiary is in default with
respect to any order of any court or governmental authority or
arbitration board or tribunal.
17. COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither the Company nor
any Restricted Subsidiary is in violation of any applicable Federal,
state, or local laws, statutes, rules, regulations or ordinances
relating to public health, safety or the environment, including, without
limitation, relating to releases, discharges, emissions or disposals to
air, water, land or ground water, to the withdrawal or use of ground
water, to the use, handling or disposal of polychlorinated biphenyls
(PCBs), asbestos or ureaformaldehyde, to the treatment, storage,
disposal or management of hazardous substances (including, without
limitation, petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic,
hazardous or other controlled, prohibited or regulated substances which
violation could have a material adverse effect on the business,
prospects, profits, properties or condition (financial or otherwise) of
the Company and its Restricted Subsidiaries, taken as a whole. The
Company does not know of any liability or class of liability of the
Company or any Restricted Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.), or the Resource Conservation
and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).
18. INVESTMENT COMPANY ACT. Neither the Company nor any of its
Restricted Subsidiaries is an "investment company" or company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
19. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the Company
nor any Affiliate of the Company is, by reason of being a "national" of
"designated foreign country" or a "specially designated national" within
the meaning of the Regulations of the Office of Foreign Assets Control,
United States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or
for any other reason, subject to any restriction or prohibition under,
or is in violation of, any Federal statue or Presidential Executive
Order, or any rules or regulations of any department, agency or
administrative body promulgated under any such statute or order,
concerning trade or other relations with any foreign country or any
citizen or national thereof or the ownership or operation of any
property.
Annex A
(to Exhibit B)
SUBSIDIARIES OF THE COMPANY
1. Restricted Subsidiaries: *
Percentage of Voting Stock
Name of Jurisdiction of Owned by Company and
Subsidiary Incorporation each other Subsidiary
Westamerica Bank California 100% by Company
Bank of Lake County California 100% by Company
Napa Valley Bank California 100% by Company
2. Subsidiaries (other than Restricted Subsidiaries):
Percentage of Voting Stock
Name of Jurisdiction of Owned by Company and
Subsidiary Incorporation each other Subsidiary
Community Banker Services
Corporation California 100% by Company
Westcore California 100% by Company
Westamerica Bank
Properties California 100% by Westamerica Bank
Westar Mortgage
Corporation California 100% owned by Community
Banker Services Corporation
*Denotes Bank Subsidiaries
Annex B
(to Exhibit B)
DESCRIPTION OF DEBT AND LIENS
1. Debt (and Liens relating thereto) of
the
Company and its Restricted
Subsidiaries outstanding on the Closing Date is as follows:
A. Westamerica Bank 6.99% Subordinated Capital Note due 2003
dated December 16, 1993 (principal amount: $17,000,000).*
B. Westamerica Bank 6.99% Subordinated Capital Note due 2003
dated December 16, 1993 (principal amount: $3,000,000).*
* These Notes were issued pursuant to the terms of that certain 6.99 %
Subordinated Capital Note Purchase Agreement dated as of December 16,
1993 by and between Westamerica Bank, Morgan Guaranty Trust Company of
New York, as Trustee of a Commingled Pension Trust Fund, and Xerox
Financial Services Life Insurance Company.
Exhibit C
(to Note Agreement)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler,
special counsel to the
Purchasers, called for by SECTION 4.1 of the Note Agreement, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory in
form and substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of California and has
the corporate power and the corporate authority to execute and
deliver the Note Agreement and to issue the Notes.
2. The Note Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and
delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights
generally, and general principles of equity (regardless of
whether the application of such principles is considered in a
proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Pillsbury Madison & Sutro LLP is satisfactory in scope and form to Chapman
and
Cutler and that, in their opinion, the Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and Cutler
may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate
of good standing of the Company from, the Secretary of State of the State of
California and the By-laws of the Company. The opinion of Chapman and Cutler
is limited to the laws of the State of New York and the Federal laws of the
United States.
With respect to matters of fact upon which such opinion is based, Chapman and
Cutler may rely on appropriate certificates of public officials and officers
of the Company and upon representations of the Company and the Purchasers
delivered in connection with the issuance and sale of the Notes.
Exhibit D
(to Note Agreement)
February 16, 1996
The Penn Mutual Life Insurance Company
530 Walnut Street
Philadelphia, Pennsylvania 19172
The Penn Insurance Life and Annuity Company
530 Walnut Street
Philadelphia, Pennsylvania 19712
Phoenix Home Life Mutual Insurance Company
c/o Phoenix Duff & Phelps
56 Prospect Street
P.O. Box 150480
Hartford, Connecticut 06105-0480
Re: Westamerica Bancorporation $22,500,000 7.11%
Senior Notes due 2006
Ladies and Gentlemen:
We have acted a special counsel to Westamerica
Bancorporation (the "Company") in connection with the Note
Agreement dated as of February 1, 1996 (the "Note Agreement") by
and between the Company and the Purchasers named on Schedule I
thereto. Except as otherwise defined, terms defined in the Note
Agreement have the same meaning herein. This opinion is
rendered pursuant to Section 4.1(b) of the Note Agreement.
We have examined the laws of the State of California, the
laws of the State of New York and the federal law of the United
States of America. We have examined executed copies of the Note
Agreement and the Notes. We have also examined such other
documents and certificates of public officials and
representatives of the Company as we have deemed necessary as a
basis for the opinions expressed herein. As to questions of
fact material to such opinions, we have, when relevant facts
were not independently established by us, relied upon
certificates of officers of the Company.
This opinion is subject to the following qualifications:
A. The Note Agreement specifically provides that it shall
be governed by the laws of New York. We do not intend to and we
do not express any opinion as to any laws other than the laws of
the State of California, the laws of the State of New York and
the federal law of the United States of America.
B. We have assumed (i) the genuineness of all signatures
and documents submitted as originals, (ii) that all copies
(including facsimile copies) and final drafts submitted to us
conform to the executed originals of the documents to which they
relate, (iii) the legal capacity of all natural persons, and
(iv) as to documents executed by entities other than the
Company, that each such entity had the power to enter into and
perform its obligations under such documents, and that such
documents have been duly authorized, executed and delivered by,
and are valid and binding obligations upon and enforceable
against, such entities.
C. We have assumed that all factual matters recited or
contained in the resolutions of the Board of Directors of the
Company approving the execution, delivery and performance of the
Note Agreement and the other documents contemplated by the Note
Agreement are true and correct, and we have made no independent
investigation of the facts expressed therein.
Based upon the foregoing and subject to the qualifications
set forth below, it is our opinion that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the
State of California, has the corporate power and the corporate
authority to execute and perform the Note Agreement and to issue
the Notes and has the full corporate power and the corporate
authority to conduct the activities in which it is now engaged
and is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction in which the character
of the properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification
necessary.
2. Each Restricted Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and is duly licensed or
qualified and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary and, based solely on a review of stock
transfer books provided to counsel, to our knowledge all of the
issued and outstanding shares of capital stock of each such
Restricted Subsidiary have been duly issued, are fully paid and,
subject to Section 662 of the Financial Code of the State of
California, non-assessable and are held of record by the
Company, by one or more Restricted Subsidiaries, or by the
Company and one or more Restricted Subsidiaries.
3. The Note Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the
legal, valid and binding contract of the Company enforceable in
accordance with its terms.
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company enforceable in
accordance with their terms.
5. No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any
governmental body, Federal, California or New York, is necessary
in connection with the execution and delivery of the Note
Agreement or the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreement do
not conflict with or result in any breach of any of the
provisions of or constitute a default under or result in the
creation or imposition of any Lien upon any of the property of
the Company pursuant to the provisions of the Articles of
Incorporation or By-laws of the Company or any material
agreement or other material instrument known to us to which the
Company is a party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
8. To our knowledge after inquiry of officers of the
Company and its Subsidiaries (i) there are no proceedings
pending or threatened against or affecting the Company or its
Subsidiaries in any court or before any governmental authority or
arbitration board or tribunal which, if adversely determined,
could materially and adversely affect the business or condition
of the Company and its Subsidiaries taken as a whole or the
ability of the Company to perform the Note Agreement or the Notes,
with the exception of those set forth in Notes to the
Consolidated Financial Statements contained in the 1994 Annual
Report of the Company, and (ii) neither the Company nor any
Subsidiary is in default with respect to any material order of
any court or governmental authority or arbitration board or
tribunal.
9. The Company is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended, and Regulation
Y (12 C.F.R., Part 225), as amended.
Our opinions paragraphs 3 and 4 above are subject to and
may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, conservatorship, receivership, arrangement,
moratorium, fraudulent transfer or other similar laws affecting
the enforcement of creditors' rights generally, (ii) the rules
governing the availability of specific performance, injunctive
relief or other equitable remedies and general principles of
equity, (iii) the effect of applicable court decisions, invoking
statues or principles of equity, which have held that certain
covenants or provisions of agreements are unenforceable where
the breach of such covenants or provisions imposes restrictions
or burdens upon a party thereto and it cannot be demonstrated
that the imposition of such restrictions or burdens is
reasonably necessary for the protection of the other party, or
where the enforcement of such covenants or provisions would
violate the covenant of good faith and fair dealing implied
under California law, and (iv) California Civil Code section
1698 (which provides that a contract in writing may be modified
by an oral agreement to the extent that the oral agreement is
performed by the parties).
Our opinions in paragraphs 3 and 4 above are subject to the
qualification that the designation of the laws of New York to
govern the Note Agreement will be given effect by a California
court if the court were to hold that the state of New York has a
substantial relationship to the parties to the Note Agreement or
their transaction or there is another reasonable basis for the
choice of the laws of the State of New York to govern the Note
Agreement, except with regard to matters of the law of the State
of New York which are contrary to a fundamental policy of the
State of California.
Our opinions in paragraphs 3 and 4 are further subject to
the qualifications that, notwithstanding the designation of the
laws of New York to govern and construe the Note Agreement, the
enforceability of such designation may be limited to the extent
that (i) the validity of the Note Agreement may be governed by
the corporate laws of the State of California, (ii) the
availability or enforceability of certain remedies may be
governed by the procedural or other similar laws of a state or
jurisdiction other than New York in which an action to enforce
the Note Agreement may be brought, and (iii) certain principles
of California law may be considered mandatory or may embody an
important public policy of the State of California and may be
deemed applicable to the Note Agreement irrespective of the
designation of the laws of New York to the Note Agreement. The
courts of New York will give effect to the designation of the
laws of New York to govern the Note Agreement and, in the event
that a final, conclusive and enforceable judgement in the courts
of New York that grants or denies recovery of a sum of money
were obtained, the same would be enforced by the courts of
California without a further review on the merits.
Subject to all of the assumptions, limitations and
qualifications contained herein (other than the qualifications
set forth in clauses (i) and (iii) of the foregoing paragraph),
it is our opinion that the Note Agreement and the Notes
constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms if
Section 9.10 of the Note Agreement provided for California law as the
governing law.
Without limiting the application of the other qualifica-
tions set forth in this opinion, we express no opinion as to the
enforceability of any provision of the Note Agreement which
states that such party's notification, interpretation or
determination of any matter shall be conclusive proof of such
matter, shall be made in such party's sole judgment or shall
otherwise be determinative in any sense.
Whenever a statement herein is qualified by "known to us,"
"to our knowledge," or similar phrase, it indicates that in the
course of our representation of the Company no information that
would give us current actual knowledge of the inaccuracy of such
statement has come to the attention of the attorneys in this
firm who have rendered legal services in connection with this
transaction. We have not made any independent investigation to
determine the accuracy of such statement, except as expressly
described herein. No inference as to our knowledge of any
matters bearing on the accuracy of such statement should be
drawn from the fact of our representation of the Company in
other matters in which such attorneys are not involved.
This opinion is rendered solely for your information in
connection with the transaction described above and may not be
relied upon by any other person for any purpose without our
prior written consent, except that subsequent United States
domiciled institutional holders of the Notes may rely on this
opinion as of the date it was written as if they were original
addressees hereto (assuming said holders are not subject to any
legal or regulatory requirements which are not applicable to the
Purchasers as of the Closing Date and assuming further that said
holders do not own or control five percent or more of any class
of the Company's equity securities) provided, however, that our
opinions in paragraph 7 above shall not apply to any subsequent
United States domiciled institutional holders of the Notes.
Very truly yours,
/s/ Pillsbury Madison & Sutro LLP
---------------------------------
Pillsbury Madison & Sutro LLP