Exhibit 10.3
 

SENIOR NOTE
 
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER FEDERAL OR STATE
GOVERNMENT AGENCY.
 
THIS SENIOR NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAW OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SENIOR NOTE NOR ANY
INTEREST OR PARTICIPATION THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
$6,500,000
San Francisco, California
March 31, 2009

 
Belvedere SoCal, a California corporation (the "Company") promises to pay to the
order of Belvedere Capital Fund II L.P. (the "Purchaser"), at the Company's
office at One Maritime Plaza, Suite 825, San Francisco, CA 94111 in lawful money
of the United States of America, the principal amount of $6,500,000, together
with interest on the part of the principal amount from time to time remaining
unpaid from this date until such principal is paid at the rate provided below.
 
The principal of this Senior Note (the "Note") shall be due and payable in full
on July 1, 2009 (the "Final Maturity Date").
 
The interest on this Note shall be due and payable quarterly as it accrues on
the first day of July until this Note is paid in full, commencing on the first
such day next succeeding this date. In the sole discretion of Purchaser and upon
three business days prior notice to the Company, any quarterly interest payment
may be deferred and paid on the Final Maturity Date
 
Interest on this Note shall be based on a fixed rate of 15 % per annum. The
amount of interest payable for any interest period shall be computed on the
basis of the actual number of days in such interest period divided by 360.
 
The Company will pay Purchaser a $130,000 transaction fee in connection with its
purchase of the Note, which shall be added to the principal balance of the Note.
 
The Company shall have the right and privilege of prepaying all or any part of
this Note at any time, after the full repayment of that certain promissory note
dated as of March 18, 2008 to Pacific Coast Bankers' Bank (the "PCBB Note"),
without notice or penalty and all pre-payments on this Note shall be applied
first to accrued interest and the balance, if any, to principal.
 
 
 
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The indebtedness of the Company evidenced by this Note, including the principal
and interest, shall be (i) subordinate and junior in right of payment to the
PCBB Note and (ii) deemed to be "Senior Indebtedness" for purposes of Fixed Rate
Junior Subordinated Deferrable Interest Rate Debentures issued pursuant to that
certain Indenture dated as of January 31, 2008 (the "Trust Preferred"). In the
event of any insolvency, receivership, conservatorship, reorganization,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings or any liquidation or winding up of the Company, whether voluntary
or involuntary, then (A) the PCBB Note shall be preferred in payment over the
Note and (B) the Note shall be preferred in payment over the Trust Preferred.
 
Upon the occurrence of one or more Events of Default (as defined below), the
holder of this Note may, by written notice to the Company in the manner set
forth below, declare all sums of principal and interest then remaining unpaid on
this Note immediately due and payable in full. Presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
 
An "Event of Default" shall exist if any of the following occurs and is
continuing:
 
(a)            a court of competent jurisdiction shall enter a decree or order
for relief in respect of the Company in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
 
(b)            the Co mpany shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors;
 
(c)            any bank regulatory agency or agencies having authority over the
Company's banking subsidiary (the "Bank") cancels its charter, revokes or
suspends its license to engage in the banking business, seizes control of the
Bank, or declares the Bank insolvent and such action is not withdrawn or
reversed within 10 days; or
 
(d)            upon the occurrence of any event of default in connection with
the PCBB Note or the Trust Preferred.
 
At any time after such declaration of default has been made but before any
judgment or decree for payment of money due on this Note has been obtained by
the Note holder, the holder may, by written notice to the Company, rescind and
annul such declaration and its consequences if all Events of Default have been
cured or waived. No such rescission or annulment shall affect any subsequent
default or impair any right with respect thereto.
 
Notice of default shall be in writing, signed by the holder of this Note, and
shall set forth with reasonable specificity the event or events of default on
which the Note holder bases its declaration of default.
 

 
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At the option of Purchaser and at any time prior to the Final Maturity Date, the
Note shall be convertible, in whole or in part, into, at the discretion of the
Purchaser, either shares of the Company's (A) common stock or (B) Series A
Non-Cumulative Perpetual Preferred Stock ("Series A Stock"). Purchaser shall
effect a conversion by delivering to Company a notice of conversion specifying
therein the principal amount of the Note to be converted and the date on which
such conversion shall be effected. In connection with a conversion into common
stock, the conversion price shall be a 20% premium to the fair value of the
common stock as determined by independent appraisal as of the proposed date of
conversion. In connection with a conversion into Series A Stock, the conversion
price shall be $25.00 per share.
 
This Note shall be governed by, and construed and interpreted in accordance with
the laws of the State of California.
 
 
BELVEDERE SOCAL
 
By:  /s/ Mary Lynn D. Lenz                        
 
Name:  Mary Lynn D. Lenz
 
Title: President/CEO
 
 
 
 
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