Exhibit 10.8
Valley Commerce Bancorp
JUNIOR SUBORDINATED DEBT SECURITY DUE 2033
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
(EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIOE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE
AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER
OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES
OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE
CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.
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Junior Subordinated Debt Security due 2033
of
Valley Commerce Bancorp
Valley Commerce Bancorp, a bank holding company incorporated in California (the
"Company"), for value received promises to pay to Wells Fargo Bank, National
Association, not in its individual capacity but solely as Institutional Trustee
for Valley Commerce Trust I, a Delaware statutory trust (the "Holder"), or
registered assigns, the principal sum of Three Million Ninety Three Thousand
Dollars on April 7, 2033 and to pay interest on said principal sum from March
27, 2003, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on January 7,
April 7, July 7 and October 7 of each year commencing July 7, 2003, at a
variable per annum rate equal to LIBOR (as defined in the Indenture) plus 3.30%
(the "Interest Rate") (subject to the Maximum Rate Increase, as defined in the
Indenture, and provided, that the applicable Interest Rate may not exceed 12.5%
through the Interest Payment Date on April 7, 2008) until the principal hereof
shall have become due and payable, and on any overdue principal and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at an annual rate equal
to the Interest Rate in effect for each such Extension Period compounded
quarterly. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year and the actual number of days elapsed in
the relevant interest period. In the event that any date on which the principal
or interest is payable on this Debt Security is not a Business Day, then payment
payable on such date will be made on the next succeeding day that is a Business
Day, except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debt Security (or one or more Predecessor Securities, as
defined in said Indenture) is registered at the close of business on the regular
record date for such interest installment, except that interest and any Deferred
Interest payable on the Maturity Date shall be paid to the Person to whom
principal is paid. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders on
such regular record date and may be paid to the Person in whose name this Debt
Security (or one or more Predecessor Debt Securities) is registered at the close
of business on a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the registered
holders of the Debt Securities not less than 10 days prior to such special
record date, all as more fully provided in the Indenture. The principal of and
interest on this Debt Security shall be payable at the office or agency of the
Trustee (or other Paying Agent appointed by the Company) maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Debt Security Register or by wire transfer to an account appropriately
designated by the holder hereof. Notwithstanding the foregoing, so long as the
holder of this Debt Security is the Institutional Trustee, the payment of the
principal of and interest on this Debt Security will be made in immediately
available funds at such place and to such account as may be designated by the
Trustee.
Upon submission of Notice (as defined in the Indenture) and so long as no
Event of Default has occurred and is continuing, the Company shall have the
right, from time to time and without causing an Event of Default, to defer
payments of interest on the Debt Securities by extending the interest payment
period on the Debt Securities at any time and from time to time during the term
of the Debt Securities, for up to 20 consecutive quarterly periods (each such
extended interest payment period, an "Extension Period"), during which Extension
Period no interest shall be due and payable (except any Additional Interest that
may be due and payable). During any Extension Period, interest will continue to
accrue on the Debt Securities, and interest on such accrued interest (such
accrued interest and interest thereon referred to herein as "Deferred Interest")
will accrue at an annual rate equal to the Interest Rate in effect for each such
Extension Period, compounded quarterly from the date such Deferred Interest
would have been payable were it not for the Extension Period, to the extent
permitted by law. No Extension Period may end on a date other than an Interest
Payment Date. At the end of any such Extension Period the Company shall pay all
Deferred Interest then accrued and unpaid on the Debt Securities; provided,
however, that no Extension Period may extend beyond the Maturity Date and
provided, further, however, during any such Extension Period, the Company may
not (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment on or repay, repurchase or redeem any
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debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (A)
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, (B) in connection with a dividend reinvestment or
stockholder stock purchase plan or (C) in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable for
such capital stock), as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary of the Company) for any class or series of the Company's
capital stock or of any class or series of the Company's indebtedness for any
class or series of the Company's capital stock, (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any Extension Period, the Company may further extend such
period, provided, that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all Deferred Interest, the Company may
commence a new Extension Period, subject to the foregoing requirements. No
interest or Deferred Interest shall be due and payable during an Extension
Period, except at the end thereof, but Deferred Interest shall accrue upon each
installment of interest that would otherwise have been due and payable during
such Extension Period until such installment is paid. The Company must give the
Trustee notice of its election to begin such Extension Period at least one
Business Day prior to the earlier of (i) the next succeeding date on which
interest on the Debt Securities would have been payable except for the election
to begin such Extension Period or (ii) the date such interest is payable, but in
any event not later than the related regular record date.
The indebtedness evidenced by this Debt Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debt Security is
issued subject to the provisions of the Indenture with respect thereto. Each
holder of this Debt Security, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on such
holder's behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee such holder's attorney-in-fact for any and all such purposes. Each
holder hereof, by such holder's acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
The Company waives demand, presentment for payment, notice of nonpayment,
notice of protest, and all other notices.
This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to and shall not be valid or become obligatory
for any purpose until the certificate of authentication hereon shall have been
signed by or on behalf of the Trustee.
The provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has duly executed this certificate.
Valley Commerce Bancorp
By: /s/ Donald A. Gilles
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Name: Donald A. Gilles
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Title: President and CEO
---------------------------------
Dated: March 17, 2003
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities referred to in the within-mentioned
Indenture.
Wells Fargo Bank, National Association,
not in its individual capacity but
solely as the Trustee
By: /s/ Edward L. Truitt, Jr.
-----------------------------------
Authorized Officer
Dated: March 17, 2003
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[REVERSE OF SECURITY]
This Debt Security is one of a duly authorized series of Debt Securities
of the Company, all issued or to be issued pursuant to an Indenture (the
"Indenture"), dated as of March 27, 2003, duly executed and delivered between
the Company and Wells Fargo Bank, National Association, as Trustee (the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debt Securities (referred to herein as the "Debt Securities")
of which this Debt Security is a part. The summary of the terms of this Debt
Security contained herein does not purport to be complete and is qualified by
reference to the Indenture.
Upon the occurrence and continuation of a Tax Event, an Investment Company
Event or a Capital Treatment Event (each a "Special Event"), this Debt Security
may become due and payable, in whole but not in part, at any time, within 90
days following the occurrence of such Tax Event, Investment Company Event or
Capital Treatment Event (the "Special Redemption Date"), as the case may be, at
the Special Redemption Price. The Company shall also have the right to redeem
this Debt Security at the option of the Company, in whole or in part, on any
January 7, April 7, July 7 or October 7 on or after April 7, 2008 (a "Redemption
Date"), at the Redemption Price.
Any redemption pursuant to the preceding paragraph will be made, subject
to the receipt by the Company of prior approval from the Board of Governors of
the Federal Reserve System (the "Federal Reserve") if then required under
applicable capital guidelines or policies of the Federal Reserve, upon not less
than 30 days' nor more than 60 days' notice. If the Debt Securities are only
partially redeemed by the Company, the Debt Securities will be redeemed pro rata
or by lot or by any other method utilized by the Trustee.
"Redemption Price" means 100% of the principal amount of the Debt
Securities being redeemed plus accrued and unpaid interest on such Debt
Securities to the Redemption Date or, in the case of a redemption due to the
occurrence of a Special Event, to the Special Redemption Date if such Special
Redemption Date is on or after April 7, 2008.
"Special Redemption Price" means (1) if the Special Redemption Date is
before April 7, 2008, One Hundred Seven and One Half Percent (107.5%) of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption and (2) if the Special Redemption Date is on or
after April 7, 2008, the Redemption Price for such Special Redemption Date.
In the event of redemption of this Debt Security in part only, a new Debt
Security or Debt Securities for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared due and payable, and upon such declaration of acceleration shall become
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debt Securities at the time outstanding affected
thereby, as specified in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debt Securities;
provided, however, that no such supplemental indenture shall, among other
things, without the consent of the holders of each Debt Security then
outstanding and affected thereby (i) extend the fixed maturity of the Debt
Securities, or reduce the principal amount thereof or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make payments due on the Debt Securities payable in any coin or currency
other than that provided in the Debt Securities, or impair or affect the right
of any holder of Debt Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Debt Securities, the holders of which
are required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Debt Securities at the time outstanding, on behalf of all of the
holders of the Debt Securities, to waive any past default in the performance of
any of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in payments due on any of the
Debt Securities. Any such consent or waiver by the registered holder of this
Debt Security (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this Debt
Security and of any Debt Security issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debt Security.
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No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay all payments due on this
Debt Security at the time and place and at the rate and in the money herein
prescribed.
As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Debt Security is transferable by the registered holder
hereof on the Debt Security Register of the Company, upon surrender of this Debt
Security for registration of transfer at the office or agency of the Trustee in
Wilmington, Delaware accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or such holder's attorney duly authorized in writing,
and thereupon one or more new Debt Securities of authorized denominations and
for the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be made for any such
registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the
registered holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon) for the purpose of receiving payment of or on account of the principal
hereof and interest due hereon and for all other purposes, and neither the
Company nor the Trustee nor any Authenticating Agent nor any Paying Agent nor
any transfer agent nor any Debt Security registrar shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debt Security, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Debt Securities are issuable only in registered certificated form
without coupons. As provided in the Indenture and subject to certain limitations
herein and therein set forth, Debt Securities are exchangeable for a like
aggregate principal amount of Debt Securities of a different authorized
denomination, as requested by the holder surrendering the same.
All terms used in this Debt Security that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE DEBT
SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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