Document:

EXHIBIT 10.2

 

SUBSCRIPTION AGREEMENT

FOR AFFILIATE INVESTORS

 

Tennessee Commerce Bancorp, Inc.

381 Mallory Station Road, Suite 207

Franklin, Tennessee 37067

 

Gentlemen:

 

The
undersigned (the “Investor”)
hereby confirms its agreement with Tennessee
Commerce Bancorp, Inc., a Tennessee corporation (the “Company”),
as follows:

 

1.             This Subscription Agreement,
including the Terms and Conditions for Purchase of Shares attached hereto as Annex
I (collectively, this “Agreement”)
is made as of the date set forth below between the Company and the Investor.

 

2.             The Company has authorized
the sale and issuance to certain investors of up to an aggregate of 948,115
shares (the “Shares”) of its common stock, par
value $0.50 per share (the “Common Stock”),
for a purchase price of $3.65 per share (the “Purchase
Price”) for investors that are affiliates of the Company.

 

3.             The offering and sale of the
Shares (the “Offering”) is being made pursuant
to (a) an effective Registration Statement on Form S-3 (Registration No. 333-160712)
(the “Registration Statement”) filed by the
Company with the Securities and Exchange Commission (the “Commission”),
which contains the base prospectus dated July 20, 2009 (the “Base Prospectus”) and was declared effective by the
Commission on July 27, 2009, (b) if applicable, certain “free writing
prospectuses” (as that term is defined in Rule 405 under the Securities
Act of 1933, as amended (the “Act”)), that
have been or will be filed with the Commission and delivered to the Investor on
or prior to the date hereof and (c) a final prospectus supplement (the “Prospectus Supplement” and together with the Base
Prospectus, the “Prospectus”) containing certain
supplemental information regarding the Shares and terms of the Offering that
has been filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version
thereof with the Commission).

 

4.             The Company and the Investor
agree that the Investor will purchase from the Company and the Company will
issue and sell to the Investor the number of Shares set forth below for the
aggregate purchase price set forth below. The Shares shall be purchased
pursuant to the Terms and Conditions for Purchase of Shares attached hereto as Annex
I and incorporated herein by this reference as if fully set forth herein.
The Investor acknowledges that the minimum number of shares that the Investor
may purchase in connection with the Offering is 2,500 and the maximum number of
shares that the Investor may purchase in connection with the Offering is
250,000; provided, however, that the Company may waive the minimum and maximum
subscription amounts for any officer, director, employee or consultant of the
Company who subscribes for shares of common stock in the Offering.

 

5.             (a)           The
manner of settlement of the Shares purchased by the Investor shall be determined
by the Investor as follows (check one):

 

o            (1)           Delivery
by crediting the account of the Investor’s broker-dealer (as specified by such
Investor on Exhibit A attached hereto) with The Depository Trust
Company (“DTC”) through its Deposit/Withdrawal At
Custodian (“DWAC”) system, whereby Investor’s
broker-dealer shall 

 

 

initiate a DWAC transaction on the Closing Date
using its DTC participant identification number, and released by Registrar and
Transfer Company, the Company’s transfer agent (the “Transfer
Agent”), at the Company’s direction. NO LATER
THAN ONE BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND
THE COMPANY, THE INVESTOR SHALL DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT
OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES.

 

o            (2)           Delivery of the Shares in physical,
certificated form to the address set forth on the signature page hereto, registered in the name of the Investor or, if so indicated on the Investor
Questionnaire attached hereto as Exhibit A, in the name of a
nominee designated by the Investor. The Investor hereby acknowledges and
agrees that the Transfer Agent will mail the Shares in physical, certificated
form within a commercially reasonable time after Closing.

 

(b)           NO LATER THAN ONE BUSINESS DAY
AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL REMIT THE AMOUNT OF FUNDS EQUAL TO THE
AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR BY (A) CHECK
MADE PAYABLE TO THE ORDER OF “TENNESSEE COMMERCE BANCORP, INC.” OR (B) WIRE
TRANSFER TO THE FOLLOWING ACCOUNT:

 

Bank Name: Tennessee
Commerce Bank

ABA #

Account Name: Tennessee
Commerce Bancorp, Inc.

Account Number:

Swift:

Reference: Tennessee
Commerce Bancorp, Inc. Stock Offering

Contact: Chris Bick

 

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) DELIVER
THE NECESSARY CHECK, MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) IF THE INVESTOR ELECTS TO SETTLE THE
SHARES IT PURCHASED THROUGH DTC’S DWAC DELIVERY SYSTEM, ARRANGE FOR SETTLEMENT
BY WAY OF DWAC IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE
AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS
FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.

 

6.             The Investor represents
that, except as set forth below, (a) he, she or it is not a member of the
Financial Industry Regulatory Authority, Inc. (“FINRA”)
or an Associated Person (as such term is defined under the FINRA Membership and
Registration Rules Section 1011) as of the Closing, and (b) neither
the Investor nor any group of Investors (as identified in a public filing made
with the Commission) of which the Investor is a part in connection with the
Offering of the Shares, acquired, or obtained the right to acquire, 20% or more
of the Common Stock (or securities convertible into or exercisable for Common
Stock) or the voting power of the Company on a post-transaction basis.  Exceptions:

 

 

(If no exceptions, write “none.” If left blank, response will be deemed
to be “none.”)

 

7.             The Investor
represents that he, she or it is an officer, director, employee or consultant
of the Company or otherwise a person or entity known to be an affiliate of the
Company.

 

8.             The Investor
represents that it has received (or otherwise had made available to it by the
filing by the Company of an electronic version thereof with the Commission) the
Base Prospectus, which 

 

2

 

is
part of the Company’s Registration Statement, the documents incorporated by
reference therein, and any issuer free writing prospectus (as set forth in
Commission Rule 433, relating to the Shares in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g)) (collectively,
the “Disclosure Package”), prior to or in
connection with the receipt of this Agreement. The Investor acknowledges that,
prior to the execution and delivery of this Agreement to the Company, the
Investor will receive certain additional information regarding the Offering,
including pricing information (the “Offering Information”).
Such information may be provided to the Investor by any means permitted under
the Act, including the Prospectus Supplement, an issuer free writing prospectus
and oral communications.

 

9.             No offer by the Investor to
buy Shares will be accepted and no part of the Purchase Price will be delivered
to the Company until the Investor has received the Offering Information and the
Company has accepted such offer by countersigning a copy of this Agreement, and
any such offer may be withdrawn or revoked, in whole or in part, without
obligation or commitment of any kind, at any time prior to the Company sending
(orally, in writing or by electronic mail) notice of its acceptance of such
offer. This Agreement will involve no obligation or commitment of any kind
until the Investor has been delivered the Offering Information and this
Agreement is accepted and countersigned by or on behalf of the Company.

 

[Remainder of Page Intentionally
Left Blank]

 

3

 

Number of Shares:

 

Purchase Price Per Share:  $3.65

 

Aggregate Purchase Price:  $

 

Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.

 

 

	
   

  	
   

  	
  Dated
  as of: December       , 2009

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed
  and Accepted

  	
   

  	
   

  
	
  this
         day of December, 2009:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENNESSEE COMMERCE BANCORP, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

4

 

ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF SHARES

 

1.             Authorization and Sale of the Shares. 
Subject to the terms and conditions of this Agreement, the
Company has authorized the sale of the Shares.

 

2.             Agreement to Sell and Purchase the Shares.

 

2.1           At the Closing (as defined in Section 3.1), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon the
terms and conditions set forth herein, the number of Shares set forth on the
last page of the Agreement to which these Terms and Conditions for
Purchase of Shares are attached as Annex I (the “Signature Page”)
for the aggregate purchase price therefor set forth on the Signature Page.

 

2.2           The Company proposes to enter into subscription
agreements with certain other affiliate and non-affiliate investors (the “Other Investors”) and expects to
complete sales of Shares to them.  The
Investor and the Other Investors are hereinafter sometimes collectively
referred to as the “Investors,”
and this Agreement and the subscription agreements executed by the Other
Investors are hereinafter sometimes collectively referred to as the “Agreements.”

 

2.3           The Company represents that
the only material, non-public information relating to the Company or its
subsidiaries that the Company, its employees or agents has provided to the
Investor in connection with the Offering prior to the date hereof is the
existence of the Offering. The Company confirms that neither it nor any other
person acting on its behalf has provided the Investor or his, her or its agents
or counsel with any information, other than information relating to the
Offering, that constitutes or could reasonably be expected to constitute
material, non-public information, except as will be disclosed in the Disclosure
Package and the Company’s Current Report on Form 8-K to be filed with the
Commission in connection with the Offering. The Company understands and
confirms that the Investor will rely on the foregoing representations in
purchasing the Shares.

 

3.             Closing and Delivery of the Shares and Funds.

 

3.1           Closing.  The
completion of the purchase and sale of the Shares (the “Closing”) shall
occur on December 18, 2009 (the “Closing Date”) at a place to be
specified by the Company.  At the
Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares set forth on the Signature Page registered
in the name of the Investor or, if so indicated on the Investor Questionnaire
attached hereto as Exhibit A, in the name of a nominee designated
by the Investor and (b) the aggregate purchase price for the Shares being
purchased by the Investor will be delivered by or on behalf of the Investor to
the Company.

 

3.2           Conditions to the
Obligations of the Parties.

 

(a)           Conditions
to the Company’s Obligations.  The Company’s
obligation to issue and sell the Shares to the Investor shall be subject to (i) the
receipt by the Company of the purchase price for the Shares being purchased
hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.

 

(b)           Conditions
to the Investor’s Obligations.  The Investor’s obligation to
purchase the Shares shall be subject to (i) the delivery by the Company of
the Shares in accordance with 

 

5

 

the
provisions of this Agreement and (ii) the accuracy of the representations
and warranties made by the Company and the fulfillment of those undertakings of
the Company to be fulfilled prior to the Closing Date. The Investor’s
obligations are expressly not conditioned on the purchase by any or all of the
Other Investors of the Shares that they have agreed to purchase from the
Company.

 

3.3           Delivery
of Funds. No later than one business day after the execution of this Agreement by
the Investor and the Company, the Investor shall remit
the amount of funds equal to the aggregate purchase price for the Shares being
purchased by the Investor by (a) a check made payable to the order of “Tennessee
Commerce Bancorp, Inc.” or (b) wire transfer to the following account
designated by the Company:

 

Bank
Name: Tennessee Commerce Bank

ABA
#

Account
Name: Tennessee Commerce Bancorp, Inc.

Account
Number:

Swift:

Reference:
Tennessee Commerce Bancorp, Inc. Stock Offering

Contact:
Chris Bick

 

Such
funds shall be held in escrow by the Company until the Closing upon the
satisfaction of the conditions set forth in Section 3.2 hereof.

 

3.4           Delivery
of Shares.  

 

(a)           DWAC
Delivery. If the Investor elects
to settle the Shares it purchased through DTC’S DWAC delivery system, no later than one business day after the execution of
this Agreement by the Investor and the Company, the Investor
shall direct the broker-dealer at which the account or accounts to be credited
with the Shares being purchased by such Investor are maintained, which
broker-dealer shall be a DTC participant, to set up a DWAC instructing the
Transfer Agent to credit such account or accounts with the Shares. Such DWAC
instruction shall indicate the settlement date for the deposit of the Shares.
At the Closing, the Company shall direct the Transfer Agent to credit the
Investor’s account or accounts with the Shares pursuant to the information
contained in the DWAC.

 

(b)           Physical
Certificate. If the
Investor elects to settle the Shares it purchased through receipt of a physical
certificate, at the Closing, the Company shall direct the Transfer Agent
to mail the Shares in physical, certificated form to the address set forth on
the signature page hereto within a commercially reasonable time after
Closing.

 

4.             Representations, Warranties and Covenants of the
Investor.

 

The
Investor acknowledges, represents and warrants to, and agrees with, the Company
that:

 

4.1           The Investor (a) is
knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Shares, including
investments in securities issued by the Company and investments in comparable
companies, (b) has answered all questions on the Signature Page and
the Investor Questionnaire attached hereto as Exhibit A and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date, (c) in connection with its decision to
purchase the number of Shares set forth on the Signature Page, has received and
is relying only upon the Disclosure Package and the documents incorporated by
reference therein and the Offering Information and (d) is either an “accredited
investor” as defined in Rule 501(a) under the Act or a “qualified
institutional buyer” as defined in Rule 144A(a) under the Act.

 

4.2           (a) No action has been or will be taken in any jurisdiction outside
the United States by the Company that would permit an offering of the Shares,
or possession or distribution of offering materials in connection with the
issue of the Shares, in any jurisdiction outside the United States where action
for that purpose is required and (b) if the Investor is outside the United
States, it will comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Shares or has in
its possession or distributes any offering material, in all cases at its own
expense.

 

6

 

4.3           (a) The
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
to the enforceability of any rights to indemnification or contribution that may
be violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation).

 

4.4           The Investor understands that nothing in this Agreement, the Prospectus,
the Disclosure Package, the Offering Information or any other materials
presented to the Investor in connection with the purchase and sale of the
Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors and made such investigation as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.

 

4.5           Since the date on which the Company first contacted the Investor about
the Offering (the “Initial Date”),
the Investor has not disclosed any information regarding the Offering to any
third parties (other than its legal, tax and other advisors) and has not
engaged in any purchases or sales involving the securities of the Company
(including, without limitation, any Short Sales involving the Company’s
securities).  The Investor covenants that
it has not engaged in any purchases or sales involving the securities of the
Company (including Short Sales) during the period commencing on the Initial
Date and ending at the time that the transactions contemplated by this
Agreement are publicly disclosed.  The
Investor agrees that it will not use any of the Shares acquired pursuant to
this Agreement to cover any short position in the Common Stock if doing so
would be in violation of applicable securities laws.  For purposes hereof, “Short Sales” include, without limitation,
all “short sales” as defined in Rule 200 promulgated under Regulation SHO
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
whether or not against the box, and all types of direct and indirect stock
pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange
Act) and similar arrangements (including on a total return basis), and sales
and other transactions through non-US broker-dealers or foreign regulated
brokers.

 

5.             Survival of Representations, Warranties and Agreements;
Third Party Beneficiary.  Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein will survive the execution of this Agreement, the delivery to the
Investor of the Shares being purchased and the payment therefor.

 

6.             Notices.  All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States, by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile or (b) if delivered from
outside the United States, by International Federal Express or facsimile, and (c) will
be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed
and (iv) if delivered by facsimile, upon electronic confirmation of
receipt, and will be delivered and addressed as follows:

 

7

 

(a)       if
to the Company, to:

 

Tennessee
Commerce Bancorp, Inc.

381 Mallory Station Road, Suite 207

Franklin,
Tennessee 37067

Facsimile:  (615) 599-2275

 

(b)       with
copies to:

 

Waller Lansden Dortch &
Davis, LLP

511 Union Street, Suite 2700

Nashville, Tennessee 37219

Attention:  David G. Wilson, Esq.

Facsimile:  (615) 244-6804

 

(c)       if
to the Investor, at its address on the Signature Page hereto, or at such
other address or addresses as may have been furnished to the Company in
writing.

 

7.             Changes.  This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.

 

8.             Headings.  The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.

 

9.             Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.

 

10.           Governing Law.  This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Tennessee,
without giving effect to the principles of conflicts of law that would require
the application of the laws of any other jurisdiction.

 

11.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

 

12.           Confirmation of Sale.  The Investor acknowledges and agrees that the
Investor’s receipt of the Company’s signed counterpart to this Agreement,
together with the Prospectus Supplement (or the filing by the Company of an
electronic version thereof with the Commission), shall constitute written
confirmation of the Company’s sale of Shares to the Investor.

 

13.           Press Release.  The Company and the Investor agree that the
Company may, in its sole discretion, (a) issue a press release announcing
the Offering and disclosing all material information regarding the Offering and
(b) file a Current Report on Form 8-K with the Commission including a
form of this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

8

 

EXHIBIT A

 

TENNESSEE COMMERCE BANCORP, INC.

 

INVESTOR QUESTIONNAIRE

 

Pursuant
to Section 3 of Annex I to the Agreement, please provide us
with the following information:

 

	
  1.

  	
  The
  exact name in which your Shares are to be registered. You may use a nominee
  name if appropriate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  The
  relationship between the Investor and the registered holder listed in
  response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  The
  mailing address of the registered holder listed in response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  The
  Social Security Number or Tax Identification Number of the registered holder
  listed in the response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Name
  of DTC Participant (broker-dealer at which the account or accounts to be
  credited with the Shares are maintained); please include the name and
  telephone number of the contact person at the broker-dealer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  DTC
  Participant Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Name
  of Account at DTC Participant being credited with the Shares:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Account
  Number at DTC Participant being credited with the Shares:Exhibit 10.1

 

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

 

STATE OF OREGON

DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,

DIVISION OF FINANCE AND CORPORATE SECURITIES

SALEM, OREGON

 

	
  Written
  Agreement by and among

  	
   

  	
   

  
	
   

  	
   

  	
  Docket
  No. 09-181-WA/RB-HC

  
	
  WEST
  COAST BANCORP

  	
   

  	
   

  
	
  Lake
  Oswego, Oregon

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FEDERAL RESERVE BANK OF SAN FRANCISCO

  	
   

  	
   

  
	
  San
  Francisco, California

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OREGON DEPARTMENT OF CONSUMER AND BUSINESS
  SERVICES, DIVISION OF FINANCE AND CORPORATE SECURITIES

  	
   

  	
   

  
	
  Salem,
  Oregon

  	
   

  	
   

  

 

WHEREAS, West Coast Bancorp, Lake Oswego,
Oregon (“Bancorp”), a registered bank holding company, owns and controls West
Coast Bank, Lake Oswego, Oregon (the “Bank”), a state chartered nonmember bank,
and various nonbank subsidiaries;

 

WHEREAS, it is the common goal of Bancorp, the Federal Reserve Bank of
San Francisco (the “Reserve Bank”), and the Director of the State of Oregon’s
Department of Consumer and Business Services acting through the Administrator
of the Division of Finance and Corporate Securities (the “DFCS”) to maintain
the financial soundness of Bancorp so that Bancorp may serve as a source of
strength to the Bank;

 

 

WHEREAS, Bancorp, the Reserve Bank, and the DFCS have mutually agreed
to enter into this Written Agreement (the “Agreement”); and

 

WHEREAS, on November 24, 2009 the board of directors of Bancorp, at a
duly constituted meeting, adopted a resolution authorizing and directing Robert
D. Sznewajs to enter into this Agreement on behalf of Bancorp, and consenting
to compliance with each and every provision of this Agreement by Bancorp and
its institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of
the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C.
§§ 1813(u) and 1818(b)(3)).

 

NOW, THEREFORE, Bancorp, the Reserve Bank,
and the DFCS agree as follows:

 

Dividends and Distributions

 

1.                                      (a)           Bancorp
shall not declare or pay any dividends without the prior written approval of
the Reserve Bank, the Director of the Division of Banking Supervision and
Regulation (the “Director”) of the Board of Governors of the Federal Reserve
System (the “Board of Governors”), and the DFCS.

 

(b)           Bancorp shall not directly or indirectly take dividends or
any other form of payment representing a reduction in capital from the Bank
without the prior written approval of the Reserve Bank and the DFCS.

 

(c)           Bancorp and its nonbank subsidiaries shall not make any
distributions of interest, principal, or other sums on subordinated debentures
or trust preferred securities without the prior written approval of the Reserve
Bank, the Director, and the DFCS.

 

(d)           All requests for prior approval shall be received by the
Reserve Bank and the DFCS at least 30 days prior to the proposed dividend
declaration date, proposed distribution on subordinated debentures, and
required notice of deferral on trust preferred securities.  All requests shall contain, at a minimum,
current and projected information on Bancorp’s capital, 

 

2

 

earnings, and cash flow; the Bank’s
capital, asset quality, earnings, and allowance for loan and lease losses; and
identification of the sources of funds for the proposed payment or distribution.  For requests to declare or pay dividends,
Bancorp must also demonstrate that the requested declaration or payment of
dividends is consistent with the Board of Governors’ Policy Statement on the
Payment of Cash Dividends by State Member Banks and Bank Holding Companies,
dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).

 

Debt and Stock Redemption

 

2.                                     (a)           Bancorp
and any nonbank subsidiary shall not, directly or indirectly, incur, increase,
or guarantee any debt without the prior written approval of the Reserve Bank
and the DFCS.  All requests for prior
written approval shall contain, but not be limited to, a statement regarding
the purpose of the debt, the terms of the debt, and the planned source(s) for
debt repayment, and an analysis of the cash flow resources available to meet
such debt repayment.

 

(b)           Bancorp shall not, directly or indirectly, purchase or
redeem any shares of its stock without the prior written approval of the
Reserve Bank and the DFCS.

 

Capital Plan

 

3.                                     Within 60 days of this Agreement, Bancorp shall submit to
the Reserve Bank an acceptable updated written plan to maintain sufficient
capital at Bancorp, on a consolidated basis, and at the Bank, as a separate
legal entity on a stand-alone basis.  The
plan shall, at a minimum, address, consider, and include:

 

(a)           The consolidated organization’s and the Bank’s current and
future capital requirements, including compliance with the Capital Adequacy
Guidelines for Bank Holding Companies: 
Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of Governors (12 C.F.R Part 225,
App. A and D), and the applicable capital adequacy guidelines for the Bank
issued by the Bank’s federal regulator;

 

3

 

(b)           the adequacy of the Bank’s capital, taking into account the
volume of classified credits, concentrations of credit, allowance for loan and
lease losses (“ALLL”), current and projected asset growth, and projected
retained earnings;

 

(c)           the source and timing of additional necessary funds to
fulfill the consolidated organization’s and the Bank’s future capital
requirements, taking into account the $134.2 million in capital that was
injected into the Bank by Bancorp on October 26, 2009;

 

(d)           supervisory requests for additional capital at the Bank or
the requirements of any supervisory action imposed on the Bank by its federal
or state regulator; and

 

(e)           the requirements of section 225.4(a) of Regulation Y of
the Board of Governors (12 C.F.R § 225.4(a)) that Bancorp serve as a source
of strength to the Bank.

 

4.                                     Bancorp shall notify the Reserve Bank, in writing, no more
than 30 days after the end of any quarter in which any of the consolidated
organization’s or the Bank’s capital ratios (total risk-based, Tier I, or
leverage) fall below the approved plan’s minimum ratios.  Together with the notification, Bancorp shall
submit an acceptable capital plan that details the steps Bancorp will take to
increase the consolidated organization’s or the Bank’s capital ratios to or
above the approved plan’s minimums.

 

Cash Flow Projections

 

5.                                     Within 90 days of this Agreement, Bancorp shall submit to
the Reserve Bank a written statement of Bancorp’s planned sources and uses of
cash for debt service, operating expenses, and other purposes (“Cash Flow
Projection”) for 2010.  Bancorp shall
submit to the Reserve Bank
a Cash Flow Projection for each calendar year subsequent to 2010 at least one
month prior to the beginning of that calendar year.

 

4

 

Compliance with Laws and Regulations

 

6.                                     (a)           In
appointing any new director or senior executive officer, or changing the
responsibilities of any senior executive officer so that the officer would
assume a different senior executive officer position, Bancorp shall comply with
the notice provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and
Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.).

 

(b)           Bancorp shall comply with the restrictions on
indemnification and severance payments of section 18(k) of the FDI Act (12
U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance
Corporation’s regulations (12 C.F.R. Part 359).

 

Progress Reports

 

7.                                     Within 30 days after the end of each calendar quarter
following the date of this Agreement, the board of directors shall submit to
the Reserve Bank and the DFCS written progress reports detailing the form and
manner of all actions taken to secure compliance with the provisions of this
Agreement and the results thereof, and a parent company only balance sheet,
income statement, and, as applicable, a report of changes in stockholders’
equity.

 

Approval and Implementation of Plan

 

8.                                     (a)           Bancorp
shall submit a written capital plan that is acceptable to the Reserve Bank
within the applicable time period set forth in paragraph 3 of this Agreement.

 

(b)           Within 10 days of approval by the Reserve Bank, Bancorp
shall adopt the approved capital plan. 
Upon adoption, Bancorp shall promptly implement the approved plan and
thereafter fully comply with it.

 

(c)           During the term of this Agreement, the approved capital plan
shall not be amended or rescinded without the prior written approval of the
Reserve Bank.

 

5

 

Communications

 

9.                                     All communications regarding this Agreement shall be sent
to:

 

(a)           Mr. John
Kandaris

Examining Manager

Banking Supervision and Regulation

Federal Reserve Bank of San Francisco

101 Market Street, Mail Stop 945

San Francisco, California  94105

 

(b)           Mr. Richard
Renken

Banks and Trusts Program Manager

State of Oregon, Department of Consumer and Business Services

Division of Finance and Corporate Securities

350 Winter Street NW, Room 410

Salem, Oregon  97309-0405

 

(c)           Mr. Robert
Sznewajs

President and Chief Executive Officer

West Coast Bancorp

5335 SW Meadows Road, Suite 201

Lake Oswego, Oregon  97035

 

Miscellaneous

 

10.          Notwithstanding any provision of this Agreement, the Reserve
Bank and the DFCS may, in their sole discretion, grant written extensions of
time to Bancorp to comply with any provision of this Agreement.

 

11.          The provisions of this Agreement shall be binding upon
Bancorp and its institution-affiliated parties, in their capacities as such,
and their successors and assigns.

 

12.          Each provision of this Agreement shall remain effective and
enforceable until stayed, modified, terminated, or suspended in writing by the
Reserve Bank or the DFCS.

 

13.          The provisions of this Agreement shall not bar, estop, or
otherwise prevent the Board of Governors, the Reserve Bank, the DFCS, or any
other federal or state agency from taking any other action affecting Bancorp,
the Bank, any nonbank subsidiary of Bancorp, or any of their current or former
institution-affiliated parties and their successors and assigns.

 

6

 

14.          Pursuant to section 50 of the FDI Act (12 U.S.C.
§ 1831aa), this Agreement is enforceable by the Board of Governors under
section 8 of the FDI Act (12 U.S.C. § 1818).

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the 18th day of December, 2009.

 

	
  WEST
  COAST BANCORP

  	
   

  	
  FEDERAL
  RESERVE BANK OF SAN FRANCISCO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Robert D. Sznewajs

  	
   

  	
  By:

  	
  /s/
  Kevin Zerbe

  
	
  Robert
  D. Sznewajs

  	
   

  	
  Kevin
  Zerbe

  
	
  President
  and CEO

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OREGON
  DEPARTMENT OF CONSUMER AND BUSINESS SERVICES, DIVISION OF FINANCE AND
  CORPORATE SECURITIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David Tatman

  
	
   

  	
   

  	
  David C. Tatman,
  Administrator

  
					

 

7

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