Exhibit 10.1
March 25, 2009
PacWest Bancorp
401 West “A” Street
San Diego, CA 92101
Attention: Victor R. Santoro
Dear Vic:
This letter agreement (the
“Agreement”) will confirm that, subject to the terms
and conditions contained herein, PacWest Bancorp (the
“Company”) has engaged Castle Creek Financial LLC
(“Castle Creek”) as the exclusive financial advisor to
the Company in connection with the Company’s efforts to
(a) acquire or invest in other financial institutions,
excepting therefrom the opening of individual bank branches in the
ordinary course of business or acquisition of deposit bases, loan
pools or failed institutions from the FDIC; (b) effect a sale
of the Company or a material amount of its assets; or
(c) pursue a financing or recapitalization transaction
(collectively, the “Transaction”). As the
exclusive financial advisor to the Company, Castle Creek will, in
addition to providing services in connection with a proposed
Transaction provide other services pursuant to paragraph 9.
This Agreement amends and restates the letter agreement between the
Company and Castle Creek dated as of January 7,
2008.
1.
In connection with a proposed
Transaction, at the request of the Company, Castle Creek will
provide such services as the Company shall reasonably request
including: (i) assisting the Company in the structuring of the
financial aspects of a Transaction; (ii) identifying
alternative potential parties and contacting such parties as the
Company may designate; (iii) assist the Company in negotiating the
terms of a Transaction with such parties; (iv) assisting the
Company in communicating the strategic implications of the
Transaction to the investment community; and (v) advising the
Company in connection with its efforts to raise any additional
capital that may be required to facilitate the Transaction.
Further, Castle Creek and the Company expressly acknowledge that
the fees provided for under paragraph 3 for a completed Transaction
were determined in light of the fact that significant financial
advisory services are rendered to the Company in connection with
potential Transactions that are not successfully completed.
Thus, such fees earned pursuant to paragraph 3 will serve as
compensation for services rendered in connection with a completed
Transaction and in connection with potential Transactions that are
not successfully completed. Further, such fees are in
recognition of the exclusive arrangement between Castle Creek and
the Company, and Castle Creek’s commitment to source and
present opportunities in the Company’s geographic market and
niche for the Company’s sole consideration and decision
before presenting such opportunities to any third party.
2.
In connection with a proposed
Transaction, you will furnish Castle Creek with such material
regarding the business and financial condition of the Company as we
reasonably request, all of which will be accurate and complete in
all material respects at the time furnished in writing. The
Company will also use its reasonable best efforts to assure that
its personnel, consultants, experts, attorneys and accountants are
made available to Castle Creek upon Castle Creek’s reasonable
request in connection with services provided or to be provided by
Castle Creek. While any proposed Transaction may be pending
that was
initiated during the term of this
Agreement, the Company shall promptly notify Castle Creek of
(i) any material changes in the business or financial
condition of the Company from the written information provided to
Castle Creek, and (ii) any material events or developments
relating to the financial condition or business operations or
prospects of the Company and promptly make available for Castle
Creek’s review copies of all filings related to the
Transaction made by the Company with any regulatory agency and
copies of all press releases related to the Transaction issued by
the Company. We are relying, without independent
verification, on the accuracy and completeness of all information
furnished to us in writing by the Company or any other party or
potential party to any Transaction. Castle Creek agrees that
all requests for information from the Company will be directed only
to the Chief Executive Officer, Chief Financial Officer or General
Counsel of the Company or such other persons as the Chief Executive
Officer shall specifically designate and that it will not treat
information obtained from any other person or source as having been
provided by the Company.
3.
In consideration of the services to
be provided hereunder, the Company agrees to pay to Castle Creek
the following cash fees:
(A)
In the event that a sale of the
Company is completed, an amount equal to one percent (1.0%) of the
Transaction Value (as defined below) for the
Transaction.
(B)
In the event that an acquisition of
or investment in another financial institution is completed by the
Company, an amount based upon the following schedule will be owed
to Castle Creek upon the consummation of the acquisition or
investment based upon the Transaction Value for the Transaction,
net of the cost of a “fairness opinion” if such opinion
is deemed necessary:
|
|
|
|
|
Deal Value
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
If
|
|
$0 < $20
|
|
then
|
|
1.0% of the Transaction Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
If
|
|
Over $20
|
|
then
|
|
$200,000, plus 0.65% of the amount of the
Transaction Value in excess of $20 million.
|
|
(C)
In the event of a financing or
recapitalization, the fees will be determined in accordance with
paragraph 8 below.
(D)
Fees payable pursuant to paragraphs
3 (A), (B) and (C) shall be paid upon and only upon the
closing of the Transaction.
For purposes of this Agreement,
“Transaction Value” means the sum of (as applicable for
the particular Transaction): (i) with respect to each class of
capital stock of the Company in the event of a sale of the Company
or of the financial institution which is acquired by the Company or
in which the Company invests, the aggregate consideration paid or
payable for all
2
shares of such capital stock and for
all shares of such classes issuable upon exercise of options,
warrants or other rights, or conversion or exchange of securities
to the extent that such options are then exercisable; (ii) in
the case of an acquisition or sale, the aggregate liquidation value
of any preferred stock or other preferential interests redeemed or
remaining outstanding; (iii) the fair market value of any
assets distributed to the shareholders of the Company or such
financial institution that is purchased, in connection with the
Transaction; and (iv) in the case of an asset purchase or
sale, the aggregate consideration paid or payable for the assets of
the Company or the assets of the financial institution.
The determination of the
“aggregate consideration paid or payable” for shares of
any classes of capital stock in connection with the Transaction
shall include cash, securities (valued in accordance with the
following paragraph), or other assets or consideration paid or
payable by the purchaser or any of its affiliates, as the case may
be, determined without regard to any allocations between the
Company or its affiliates in the event of a sale of the Company or
between the financial institution or its affiliates in the event
such financial institution is acquired by the Company or the
Company invests in such financial institution, including but not
limited to (i) assets (net of debt or payables) of the Company
or such financial institution retained by the Company or such
financial institution or their respective stockholders and
affiliates, as the case may be (ii) any deferred installments of
the purchase price, (iii) any portion of the purchase price
held in escrow subsequent to closing which is payable pursuant to
the terms of the escrow arrangement, irrespective of whether such
amounts are in fact paid, (iv) any payments pursuant to
earn-outs, royalties or other similar arrangements, (v) any
payments payable after closing upon the occurrence of certain
events or conditions or the satisfaction of certain earnings, sales
levels or other performance objectives which are agreed to on or
before the closi
