Attached files
| file | filename |
|---|---|
| EX-10.3 - CASCADE BANCORP | v203391_ex10-3.htm |
| EX-10.4 - CASCADE BANCORP | v203391_ex10-4.htm |
| EX-10.5 - CASCADE BANCORP | v203391_ex10-5.htm |
| EX-10.1 - CASCADE BANCORP | v203391_ex10-1.htm |
| EX-10.2 - CASCADE BANCORP | v203391_ex10-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date of
Report (Date of earliest event reported): November 19, 2010 (November
16, 2010)
CASCADE
BANCORP
(Exact
name of registrant as specified in its charter)
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Oregon
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0-23322
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93-1034484
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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1100
NW Wall Street
Bend,
Oregon 97701
(Address
of principal executive offices)
(Zip
Code)
(541)
385-6205
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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x
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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Securities
Purchase Agreements
On November 16, 2010, Cascade Bancorp
(NASDAQ: CACB) (the “Company”) entered into five agreements (the “Securities
Purchase Agreements”) for the purchase and sale of approximately $177 million of
shares of common stock, no par value per share (the “Common Stock”), of the
Company at a per share price of $0.40 (which, upon consummation of the reverse
stock split announced by the Company on November 16, 2010, will be adjusted to
$4.00 per share). The principal counterparties to the Securities Purchase
Agreements are: David F. Bolger (“Mr. Bolger”), who currently beneficially owns
12.13% of the Company’s outstanding Common Stock; an affiliate of Lightyear Fund
II, L.P. (“Lightyear”); an affiliate of Leonard Green & Partners, L.P.
(“Leonard Green”); and an affiliate of WL Ross & Co. LLC (“WL Ross”). The
total gross proceeds from the sales of Common Stock to the investors pursuant to
the Securities Purchase Agreements (the “Private Offerings”) will be
approximately $177 million, consisting of $25 million from Mr. Bolger, $45.875
million from each of Lightyear, Leonard Green, and WL Ross, and an aggregate of
$14.4 million from additional private investors. Upon closing of the
transactions contemplated by the Securities Purchase Agreements, Mr. Bolger will
own 14.01%, and each of Lightyear, Leonard Green and WL Ross will own 24.35%, of
the Company’s outstanding Common Stock. The Securities Purchase Agreements
entered into between the Company and Mr. Bolger, Lightyear, Leonard Green and WL
Ross are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this report,
respectively, and are incorporated herein by reference. The fifth Securities
Purchase Agreement, filed as Exhibit 10.5 to this report and incorporated herein
by reference, provides for the purchase of approximately $14.4 million of shares
of Common Stock by five investors, including Weichert Enterprise LLC, Michael F.
Rosinus R/O IRA, Keefe Ventures Fund LP, Alden Global Value Recovery Master
Fund, L.P. and Cougar Trading, LLC.
The Securities Purchase Agreement
between the Company and Mr. Bolger amends and restates that certain Securities
Purchase Agreement dated October 29, 2009, as previously amended, between the
Company and Mr. Bolger, which was filed as Exhibit 10.1 to the Company’s Form
8-K filed with the Securities and Exchange Commission (“SEC”) on October 30,
2009. The Securities Purchase Agreement between the Company and Lightyear amends
and restates that certain Securities Purchase Agreement dated October 29, 2009,
as previously amended, between the Company and Lightyear, which was filed as
Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on October 30,
2009.
The Private Offerings are subject to
several closing conditions, including, among others: (i) the completion of the
Private Offerings for gross proceeds of an aggregate amount not less than $165
million nor more than $177 million; (ii) the exchanges of the Company’s $66.5
million aggregate principal amount of trust preferred securities (the “TRuPS”)
shall have been completed pursuant to and in accordance with the terms of the
Exchange Agreements (as defined below), and the consummation of the Private
Offerings shall constitute a Capital Raise, as defined in and pursuant to the
Exchange Agreements (an equity capital raise of at least $150 million
constitutes a Capital Raise), requiring the payment in full of such promissory
notes for an amount not to exceed, in the aggregate, $13.3 million plus accrued
interest; (iii) the Company’s satisfaction of certain financial conditions; (iv)
the receipt of required regulatory approvals, without the imposition of a
burdensome condition; and (v) the receipt of required shareholder
approvals.
The Securities Purchase Agreements
provide that, at closing of the Private Offerings, each of Lightyear, Leonard
Green and WL Ross will have the right to have one representative appointed to
the Company’s Board of Directors; thereafter, at any election of directors, each
will have the right to nominate one candidate for election to the Company’s
Board of Directors. Thomas M. Wells currently serves as the Cascade Bancorp
Board of Directors designee for Mr. Bolger pursuant to an existing shareholders
agreement between Mr. Bolger and the Company; Mr. Bolger’s right to nominate one
director to the Company’s Board of Directors will continue pursuant to the terms
of his Securities Purchase Agreement. Each of Mr. Bolger, Lightyear, Leonard
Green and WL Ross is also entitled to be represented on the board of directors
of Bank of the Cascades (the “Bank”). The rights to representation briefly
outlined above will continue with respect to each of Mr. Bolger, Lightyear,
Leonard Green and WL Ross until such investor together with his or its
affiliates ceases to own at least 5% of the outstanding shares of Common Stock
of the Company.
Subject to certain customary
conditions, the Company has granted each of Mr. Bolger, Lightyear, Leonard Green
and WL Ross preemptive rights on any subsequent offering of the Company’s
securities. Each of them will have the preemptive rights described in
the Securities Purchase Agreements until he or it, or his or its respective
affiliates, ceases to own 5% or more of the outstanding shares of Common Stock
of the Company.
The shares of Common Stock to be sold
pursuant to the Securities Purchase Agreements will not be registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. Pursuant to the Securities Purchase Agreements and as an
additional condition of closing the Private Offerings, the Company will enter
into a registration rights agreement with the investors. Within thirty days of
the closing date of the Private Offerings, the Company must file a shelf
registration statement covering the registrable securities held by the
investors, including all securities purchased by the investors pursuant to the
Securities Purchase Agreements. In addition, each of the investors will have
piggyback registration rights, pursuant to which they may include registrable
securities held by them in any subsequent registration of securities by the
Company, subject to certain conditions.
The foregoing description of the
Securities Purchase Agreements is a summary of the material terms of such
agreements and does not purport to be a complete description of all of the terms
of such agreements. As noted above, copies of the Securities Purchase Agreements
are attached to this Current Report on Form 8-K as Exhibits 10.1, 10.2, 10.3,
10.4 and 10.5, and the foregoing description of them is qualified in its
entirety by the actual agreements.
TRuPS
Exchange Agreements
As previously announced, on October 26,
2009, the Company entered into a binding letter agreement (the “Letter
Agreement”) with Cohen & Company Financial Management, LLC (“Cohen”) for the
restructuring of the TRuPS. In connection with the Letter Agreement, on November
16, 2010, the Company entered into Exchange Agreements (the “Exchange
Agreements”) among the Company, Cohen, ATP Management LLC and each of Alesco
Preferred Funding VI, Ltd., Alesco Preferred Funding X, Ltd., Alesco Preferred
Funding XI, Ltd. and Alesco Preferred Funding XIV, Ltd. (collectively, the
“Alesco CDOs”). Pursuant to the Exchange Agreements, the Alesco CDOs, as holders
of the TRuPS, will exchange the TRuPS for promissory notes issued by the
Company.
The Exchange Agreements provide for two
alternative forms of promissory notes to be issued by the Company in exchange
for the TRuPS, depending upon regulatory approval. If approved by the Federal
Reserve Bank of San Francisco (the “FRB”) and the Oregon Division of Finance and
Corporate Securities (the “DFCS”), the Company will issue promissory notes (the
“Primary Notes”) in the aggregate principal amount of $66.5 million plus accrued
interest that (i) accrue interest at the same rate applicable to the TRuPS,
payable quarterly with the permission of the FRB (if permission is required) and
otherwise added to and compounded with the principal balance of the notes; and
(ii) mature five years from the date of issuance. If the Private Offerings close
on or before February 4, 2011, the Primary Notes would become immediately due
and payable in the aggregate amount of $13.3 million, plus accrued interest on
the notional principal amount of $13.3 million at a fixed rate of 7.5% per
annum. If the Primary Notes are not approved by the FRB and the DFCS by December
31, 2010, the Company will issue promissory notes (the “Alternative Notes”) in
the aggregate principal amount of $13.3 million that (i) accrue interest at a
fixed rate of 7.5% per annum, payable quarterly; (ii) mature five years from the
date of issuance; and (iii) become immediately due and payable in the aggregate
amount of $13.3 million, plus any accrued interest, at the closing of the
Private Offerings. Subject to all of their terms and conditions, the Exchange
Agreements will close one business day after the earlier to occur of (i) receipt
of notification from the FRB and the DFCS that the issuance of the Primary Notes
has been approved or denied, and (ii) December 31, 2010. If the Primary Notes
have not been approved by the FRB and the DFCS by December 31, 2010, the Company
will issue the Alternative Notes pursuant to the terms of the Exchange
Agreements.
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a
Registrant.
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The information under the caption
“TRuPS Exchange Agreements” under Item 1.01 above is incorporated herein by
reference.
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Item
3.02
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Unregistered
Sales of Equity Securities.
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The description of the Securities
Purchase Agreements in Item 1.01 above is incorporated herein by
reference. At the closing of the Private Offerings, the sale of
securities will constitute a sale of unregistered securities by the Company. The
Company is relying on the exemptions from registration found in Section 4(2) of
the Securities Act of 1933 and Rule 506 of Regulation D.
* *
*
This communication and the Exhibits
attached hereto and incorporated herein by reference may be deemed to be
solicitation material in respect of the Private Offerings. In
connection with the proposed Private Offerings, Cascade Bancorp intends to file
relevant materials with the Securities and Exchange Commission (the “SEC”),
including a proxy statement on Schedule 14A, which will be mailed to
shareholders of Cascade Bancorp.
Cascade Bancorp shareholders are urged
to read all relevant documents filed with the SEC, including the proxy
statement, because they will contain important information about the proposed
transaction.
Investors and security holders will be
able to obtain free copies of the proxy statement (when available), as well as
other filed documents, without charge, at the SEC’s web site
(http://www.sec.gov). Investors and security holders will be able to obtain free
copies of the proxy statement (when available), as well as certain other filed
documents, without charge on the Internet at www.botc.com under the About Us
tab, under Investor Relations, under SEC Filings. Copies of Cascade
Bancorp’s filings of Form 10-K and Quarterly Reports on Form 10-Q filed with the
SEC may be obtained by mail without charge from Gregory D. Newton, EVP/Chief
Financial Officer, Cascade Bancorp, P.O. Box 369, Bend, Oregon 97709, or e-mail
cascades@botc.com.
Cascade Bancorp and its directors and
officers may be deemed, under SEC rules, to be participants in the solicitation
of proxies from the shareholders of Cascade Bancorp with respect to the proposed
Private Offerings. More detailed information regarding the identity
of the potential participants, and their direct or indirect interests, by
securities holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with the proposed Private
Offerings. Information regarding Cascade Bancorp’s directors and executive
officers is also available in Cascade Bancorp’s definitive proxy statement for
its 2010 Annual Meeting of Shareholders filed with the SEC on March 15, 2010.
These documents are available free of charge at the SEC’s web site at
http://www.sec.gov and at www.botc.com under the About Us tab, under Investor
Relations, under SEC Filings.
Forward-Looking
Statements
This Current Report on Form 8-K
contains forward-looking statements, which are not historical facts and pertain
to our future operating results. These statements include, but are not
limited to, our plans, objectives, expectations and intentions and are not
statements of historical fact. When used in this report, the word
"expects," "believes," "anticipates,” “could,” “may,” “will,” “should,” “plan,”
“predicts,” “projections,” “continue” and other similar expressions constitute
forward-looking statements, as do any other statements that expressly or
implicitly predict future events, results or performance, and such statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Certain risks and uncertainties and the
Company’s success in managing such risks and uncertainties may cause actual
results to differ materially from those projected, including among others, the
risk factors described in our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2010 as well as the following factors: the investment
transactions described in this Current Report may not be completed in a timely
manner or at all; our inability to comply in a timely manner with the Order with
the FDIC and the DFCS, under which we are currently operating, could lead to
further regulatory sanctions or orders, which could further restrict our
operations and negatively affect our results of operations and financial
condition; local and national economic conditions could be less favorable than
expected or could have a more direct and pronounced effect on us than expected
and adversely affect our results of operations and financial condition; the
local housing/real estate market could continue to decline for a longer period
than we anticipate; the risks presented by a continued economic recession, which
could continue to adversely affect credit quality, collateral values, including
real estate collateral and OREO properties, investment values, liquidity and
loan originations, reserves for loan losses and charge offs of loans and loan
portfolio delinquency rates and may be exacerbated by our concentration of
operations in the States of Oregon and Idaho generally, and the Oregon
communities of Central Oregon, Northwest Oregon, Southern Oregon and the greater
Boise area, specifically; interest rate changes could significantly reduce net
interest income and negatively affect funding sources; competition among
financial institutions could increase significantly; competition or changes in
interest rates could negatively affect net interest margin, as could other
factors listed from time to time in the Company’s reports filed with the
Securities and Exchange Commission (“SEC”); the reputation of the financial
services industry could further deteriorate, which could adversely affect our
ability to access markets for funding and to acquire and retain customers; and
existing regulatory requirements, changes in regulatory requirements and
legislation and our inability to meet those requirements, including capital
requirements and increases in our deposit insurance premium, could adversely
affect the businesses in which we are engaged, our results of operations and
financial condition.
These forward-looking statements speak
only as of the date of this Current Report on Form 8-K. The Company undertakes
no obligation to publish revised forward-looking statements to reflect the
occurrence of unanticipated events or circumstances after the date
hereof. Readers should carefully review all disclosures filed by the
Company from time to time with the SEC.
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Item
9.01
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Financial
Statements and Exhibits.
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(a)
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Financial Statements of Business
Acquired
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Not applicable.
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(b)
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Pro
Forma Financial Information
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Not applicable.
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(c)
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Shell
Company Transactions
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Not applicable.
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(d)
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Exhibits
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Exhibit
10.1 Amended and Restated Securities Purchase Agreement between
the Company and David F. Bolger, dated November 16,
2010
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Exhibit
10.2 Amended and Restated Securities Purchase Agreement between
the Company and BOTC Holdings LLC dated November 16,
2010
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Exhibit
10.3 Securities Purchase Agreement between the Company and LG
C-Co, LLC, dated November 16, 2010
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Exhibit
10.4 Securities Purchase Agreement between the Company and WLR
CB AcquisitionCo LLC, dated November 16,
2010
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Exhibit
10.5 Securities Purchase Agreement between the Company and
Weichert Enterprise LLC, Michael F. Rosinus R/O IRA, Keefe Ventures Fund
LP, Alden Global Value Recovery Master Fund, L.P. and Cougar Trading, LLC,
dated November 16, 2010
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SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereto duly
authorized.
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CASCADE
BANCORP
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By:
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/s/ Patricia L. Moss
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Patricia
L. Moss
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President
& CEO
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Date: November 19,
2010