State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 4845-4862

FINANCIAL CODE
SECTION 4845-4862



4845.  In this article, unless the context otherwise requires, "sale"
means any of the sales described in Section 4846.



4846.  With the approval of the commissioner:
   (a) A bank may sell its whole business unit to a California state
bank or a California state-licensed foreign (other nation) bank
pursuant to (1) this article, (2) in case the seller is a national
banking association or a California federally licensed foreign (other
nation) bank, federal law, and (3) in case the seller or purchaser
is a foreign bank, the law of the foreign bank's domicile.
   (b) An industrial loan company may sell its whole business unit to
a California industrial loan company pursuant to (1) this article
and (2) in case the seller is a foreign (other state) industrial loan
company, the law of the foreign industrial loan company's domicile.
   (c) A depository corporation of any class may sell its whole
business unit to a California state depository corporation of another
class or a California state-licensed foreign (other nation) bank
pursuant to (1) this article, (2) in case the seller is a federal
depository corporation or a California federally licensed foreign
(other nation) bank, federal law, (3) in case the seller is a foreign
depository corporation, the law of the foreign depository
corporation's domicile, and (4) in case the purchaser is a California
state-licensed foreign (other nation) bank, the law of the foreign
bank's domicile.


4847.  A seller and purchaser shall make an agreement of sale,
providing:
   (a) That the seller shall sell to the purchaser, and the purchaser
shall purchase from the seller, the seller's whole business unit.
   (b) That the purchaser will assume and be subject to all the debts
and liabilities of the seller in the same manner as if the purchaser
had itself incurred them.
   (c) Other provisions as may be appropriate.



4848.  The agreement of sale shall be approved by the seller and
purchaser, as follows:
   (a) In the case of a California state depository corporation:
   (1) If the sale constitutes a reorganization, as defined in
Section 181 of the Corporations Code, the agreement of sale shall be
approved as required by Chapter 12 (commencing with Section 1200) of
Division 1 of Title 1 of the Corporations Code.
   (2) If the sale does not constitute a reorganization, as defined
in Section 181 of the Corporations Code, and if the California state
depository corporation is the seller, the agreement of sale shall be
approved by the board of the seller, and the principal terms of the
agreement of sale shall be approved by the outstanding shares of the
seller.
   (3) If the sale does not constitute a reorganization, as defined
in Section 181 of the Corporations Code, and if the California state
depository corporation is the purchaser:
   (A) If, as of the time when the agreement of sale is made, the
deposits, if any, of the business unit are less than 10 percent of
the total deposits of the purchaser and the fiduciary assets, if any,
of the business unit are less than 10 percent of the total fiduciary
assets of the purchaser, the agreement of sale shall be approved by
the board of the purchaser.
   (B) Otherwise, the agreement of sale shall be approved by the
board of the purchaser, and the principal terms of the agreement of
sale shall be approved by the outstanding shares of the purchaser.
   (4) For purposes of paragraph (3):
   (A) The amount of deposits shall be determined as of the end of
the calendar quarter immediately preceding the making of the
agreement of sale.
   (B) The value of fiduciary assets shall be the net carrying value,
as determined in conformity with generally accepted accounting
principles, as of the end of the calendar quarter immediately
preceding the making of the agreement of sale.
   (b) In the case of a depository corporation other than a
California state depository corporation, the agreement of sale shall
be approved as required by the law of the depository corporation's
domicile.


4849.  (a) Any amendment to an agreement of sale shall be approved
by the seller and purchaser, as follows:
   (1) In the case of a California state depository corporation, by
the board of the corporation, and, if the principal terms of the
agreement of sale were required to be approved by the outstanding
shares of the corporation under Section 4848 and if the amendment
changes any of the principal terms of the agreement of sale, by the
outstanding shares of the corporation.
   (2) In the case of a depository corporation other than a
California state depository corporation, as required by the law of
the depository corporation's domicile.
   (b) If an agreement of sale is amended and if the amendment is
approved as required by subdivision (a), the agreement of sale, as
thus amended, constitutes the agreement of sale.



4850.  In the case of a seller or purchaser which is a California
state depository corporation, any approval of the outstanding shares
of the corporation required by Section 4848 or 4849 may be given
before or after the approval of the board of the corporation.




4851.  In obtaining any approval of outstanding shares required for
an agreement of sale, in case the purchaser is a California state
depository corporation, the purchaser, and, in case the seller is a
California state depository corporation or in case the purchaser is a
California state depository corporation that is to issue securities
in consideration of the sale, the seller, shall each provide to its
shareholders information as the commissioner may require. In
determining the information to be required, the commissioner shall
give due consideration to regulations relating to proxy statements
issued under Section 14 of the Securities Exchange Act of 1934 (15
U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b)
in the case of a depository corporation that is a bank, the federal
bank regulatory agencies, and (c) in the case of a depository
corporation that is a savings association, the Office of Thrift
Supervision.


4852.  A purchaser or seller that is a California state depository
corporation, with the approval of its board and without further
approval of the outstanding shares, may, and any other purchaser or
seller, with approval as may be required under the law of its
domicile, may, abandon the sale at any time before the sale becomes
effective, subject to the contractual rights, if any, of other
parties, including the seller or purchaser, as the case may be.



4853.  In case a purchaser is a California state depository
corporation, the provisions of Chapter 13 (commencing with Section
1300) of Division 1 of Title 1 of the Corporations Code do not apply
to the shareholders of the purchaser in a sale.




4854.  A purchaser shall file the following with the commissioner:
   (a) A copy of the agreement of sale.
   (b) An officers' certificate of the purchaser, certifying that the
agreement of sale has been approved by the purchaser as required by
Sections 4848 and 4849.
   (c) An officers' certificate of the seller, certifying that the
agreement of sale has been approved by the seller as required by
Sections 4848 and 4849.
   (d) An application for approval of the sale.



4855.  If the commissioner finds all of the following with respect
to an application for approval of a sale, the commissioner shall
approve the application:
   (a) That the sale will not result in a monopoly and will not be in
furtherance of any combination or conspiracy to monopolize or to
attempt to monopolize the banking, savings association, or industrial
loan business in any part of this state.
   (b) That the sale will not have the effect in any section of this
state of substantially lessening competition, tending to create a
monopoly, or otherwise being in restraint of trade, or that the
anticompetitive effect is clearly outweighed in the public interest
by the probable effect of the sale in meeting the convenience and
needs of the community to be served.
   (c) That the shareholders' equity of the purchaser will be
adequate and that the financial condition of the purchaser will be
satisfactory.
   (d) That the directors and executive officers of the purchaser
will be satisfactory.
   (e) That the purchaser will afford reasonable promise of
successful operation and that it is reasonable to believe that the
purchaser will be operated in a safe and sound manner and in
compliance with all applicable laws.
   (f) That the sale will be fair, just, and equitable. For purposes
of this subdivision, in the case of any term of the sale that has
been determined by agreement between the seller and the purchaser in
an arm's length transaction, the commissioner shall find that the
term is fair, just, and equitable to the seller and the purchaser.
   (g) In the case of a sale where the seller is a California savings
association, that the sale will not have a seriously adverse effect
on the total availability of financing for housing in the market area
of the seller in this state or that any effect of that type is
clearly outweighed in the public interest by the probable effect of
the sale in meeting the convenience and needs of the community to be
served. Nothing in this subdivision authorizes the commissioner to
require the purchaser to make financing for housing available.
   If the commissioner finds otherwise, the commissioner shall deny
the application for approval of the sale.



4857.  After an application for approval of a sale has been approved
and all conditions precedent to the sale have been fulfilled, the
commissioner shall approve the agreement of sale and endorse the
approval on the original or a copy of the agreement of sale, and at
that time the sale shall become effective for all purposes.




4858.  When a sale becomes effective:
   (a) Unless the purchaser provided otherwise in the application for
approval of the sale or unless the commissioner provided otherwise
in the approval of the application:
   (1) The purchaser may establish and maintain a branch office at
the head office of the seller and establish and maintain equivalent
offices at the branch offices, places of business, extensions of
offices, and other facilities, if any, of the seller.
   (2) If the seller was authorized to transact and was transacting
trust business, the purchaser, if it is a California state bank or
savings association, may transact trust business.
   (b) The commissioner shall issue to the purchaser certificates of
authority, licenses, and other authorizations as may be necessary to
carry out the provisions of subdivision (a).



4859.  When a sale becomes effective:
   (a) The purchaser shall succeed, without other transfer, to all
the rights and property of the seller except any rights and property
of the seller which are specifically not sold to the purchasing
corporation under the agreement of sale.
   (b) The purchaser shall assume and be subject to all the debts and
liabilities of the seller in the same manner as if the purchaser had
itself incurred them.
   (c) All rights of creditors of the seller and all liens upon the
property of the seller shall be preserved unimpaired, provided that
such liens upon the property of the seller shall be limited to the
property affected thereby immediately prior to the time when the sale
becomes effective.
   (d) Any action or proceeding pending by or against the seller may
be prosecuted to judgment, which shall bind the purchaser, or the
purchaser may be proceeded against or substituted in place of the
seller.
   (e) Any reference to the seller in any writing, whether executed
or taking effect before or after the sale, shall be deemed a
reference to the purchaser, if not inconsistent with the other
provisions of the writing.
   (f) In case the seller was transacting trust business, the
purchaser shall succeed, without further transfer, to the rights,
obligations, properties, assets, investments, deposits, demands,
agreements, and trusts of the seller under all trusts, executorships,
administrations, guardianships, agencies, and all other fiduciary or
representative capacities to the same extent as if the purchaser had
originally assumed the fiduciary or representative capacities, and
the purchaser shall be entitled to take and execute the appointment
to all executorships, trusteeships, guardianships, and other
fiduciary or representative capacities to which the seller is or may
be named in wills, whenever probated, or to which the seller is or
may be named or appointed by any other instrument.



4860.  No action on account of any debt or liability assumed by a
purchaser in a sale may be commenced against the seller more than one
year after the time when the sale becomes effective.



4861.  Promptly after a sale becomes effective:
   (a) The seller shall:
   (1) Surrender to the commissioner for cancellation the
certificates of authority or licenses issued to it by the
commissioner.
   (2) File with the commissioner any report regarding the sale that
the commissioner may require.
   (b) In case the seller is a California state depository
corporation, the seller shall wind up and dissolve. However, if the
seller is a California state bank, the seller may, in the alternative
and with the approval of the commissioner, change into a nonbank
corporation by amending its articles and changing its name.



4862.  (a) After a sale becomes effective, the commissioner shall
issue, upon application, a certificate under his or her official
seal, stating that the seller sold its whole business unit to the
purchaser and specifying the time at which the sale became effective.
   (b) Any certificate pursuant to subdivision (a) shall be prima
facie evidence of the fact of the sale and of the regularity of the
proceedings taken for the sale and shall be conclusive evidence of
the matters in favor of any innocent purchaser or encumbrancer for
value.