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EXHIBIT 10.12
AGREEMENT AS TO EXPENSES AND LIABILITIES
This Agreement
as to Expenses and Liabilities (the "Agreement"), dated as
of November 10, 2003, is between Southern
Community Financial Corporation, a
North Carolina corporation (the "Company"),
and Southern Community Capital Trust
II, a Delaware statutory trust (the
"Trust").
WHEREAS, the
Trust intends to issue common securities (the "Common
Securities") to, and receive 7.95%
Deferrable Interest Junior Subordinated
Debentures due December 31, 2033 (the
"Debentures") from, the Company and to
issue and sell the 7.95% Cumulative Trust
Preferred Securities (the "Preferred
Securities") with such powers, preferences
and special rights and restrictions
as are set forth in the Amended and
Restated Trust Agreement of the Trust dated
as of November 10, 2003, as the same may be
amended from time to time (the
"Trust Agreement"); and
WHEREAS, the
Company will directly or indirectly own all of the Common
Securities of the Trust and will issue the
Debentures.
NOW, THEREFORE,
in consideration of the purchase by each holder of the
Preferred Securities, which purchase the
Company hereby agrees shall benefit the
Company and which purchase the Company
acknowledges will be made in reliance
upon the execution and delivery of this
Agreement, the Company, including in its
capacity as holder of the Common
Securities, and the Trust hereby agree as
follows:
ARTICLE I
SECTION 1.01.
GUARANTEE BY THE COMPANY. Subject to the terms and conditions
hereof, the Company, including in its
capacity as holder of the Common
Securities, hereby irrevocably and
unconditionally guarantees to each person or
entity to whom the Trust is now or
hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and
as due, of any and all Obligations
(as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations"
means any costs, expenses or liabilities of
the Trust other than obligations of
the Trust to pay to holders of any
Preferred Securities or other similar
interests in the Trust the amounts due such
holders pursuant to the terms of the
Preferred Securities or such other similar
interests, as the case may be. This
Agreement is intended to be for the benefit
of, and to be enforceable by, all
such Beneficiaries, whether or not such
Beneficiaries have received notice
hereof.
SECTION 1.02.
TERM OF AGREEMENT. This Agreement shall terminate and be of
no further force and effect upon the later
of: (a) the date on which full
payment has been made of all amounts
payable to all holders of all the Preferred
Securities (whether upon redemption,
liquidation, exchange or otherwise); or (b)
the date on which there are no
Beneficiaries remaining; provided, however, that
this Agreement shall continue to be
effective or shal
