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Exhibit
10.1
STANDBY PURCHASE
AGREEMENT
This STANDBY PURCHASE
AGREEMENT (this “ Agreement ”), dated as
of February 11, 2008, is by and among Security Bank
Corporation, a Georgia corporation (the “
Company ”), and each of the persons listed on
the signature page hereto under Standby Purchasers (each a “
Standby Purchaser ” and collectively, the
“ Standby Purchasers ”).
WITNESSETH:
WHEREAS, the Company proposes
pursuant to the Rights Offering Registration Statement (as defined
herein), to commence an offering to holders of its common stock
(the “ Common Stock ”) of record as of
the close of business on February 11, 2008 (the “
Record Date ”), of non-transferable rights (the
“ Rights ”) to subscribe for and purchase
additional shares of Common Stock (the “ New
Shares ”) at a subscription price of $6.58 per share
for an aggregate offering amount of up to $35 million (the “
Subscription Price ” and, such offering, the
“ Rights Offering ”); and
WHEREAS, pursuant to the
Rights Offering, the Company will distribute to each of its
shareholders of record, at no charge, one Right for each share of
Common Stock held by them as of the Record Date, and each Right
will entitle the holder to purchase, for each share of Common Stock
owned as of the Record Date, New Shares at the Subscription Price
(the “ Basic Subscription Privilege ”);
and
WHEREAS, each holder of
Rights who exercises in full its Basic Subscription Privilege will
be entitled to subscribe for additional shares of Common Stock up
to 100% of such holder’s Pro Rata Share of the Unsubscribed
Shares (as defined herein), at the Subscription Price, to the
extent that other holders of Rights do not exercise all of their
respective Basic Subscription Privileges (the “
Over-Subscription Privilege ”); and
WHEREAS, in order to
facilitate the Rights Offering, the Company has requested the
Standby Purchasers to agree, and each of the Standby Purchasers
have agreed, (a) not to exercise their respective
Over-Subscription Privilege and (b) that, to the extent New
Shares are not purchased by the Company’s shareholders
pursuant to the exercise of Rights, the Standby Purchasers shall be
deemed to have exercised such Rights immediately prior to the
expiration of the Rights Offering and shall purchase the
Unsubscribed New Shares from the Company at the Subscription Price
pursuant to the exercise of such Rights; and
NOW THEREFORE, in
consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the parties
hereto, intending to be legally bound hereby, agree as
follows:
Section 1. Certain
Other Definitions . The following terms used herein shall
have the meanings set forth below:
“
Affiliate ” shall mean an affiliate (as defined
in Rule 12b-2 under the Exchange Act) of such Standby
Purchaser; provided that such Standby Purchaser or
any
of its affiliates exercises investment
authority, including, without limitation, with respect to voting
and dispositive rights with respect to such affiliate.
“
Agreement ” shall have the meaning set forth in
the preamble hereof.
“ Basic
Subscription Privilege ” shall have the meaning set
forth in the recitals hereof.
“ Board
” shall mean the Board of Directors of the
Company.
“ Business
Day ” shall mean any day that is not a Saturday, a
Sunday or a day on which banks are generally closed in the State of
Georgia.
“ Closing
” shall mean the closing of the purchases described in
Section 2 hereof, which shall be held at 10:00 a.m. on the
Closing Date at the offices of Alston & Bird LLP, located
at 1201 West Peachtree Street, Atlanta, Georgia 30309, or such
other time and place as may be agreed to by the parties
hereto.
“ Closing
Date ” shall mean the date that is three
(3) Business Days after the Rights Offering Expiration Date,
or such other date as may be agreed to by the parties
hereto.
“
Commission ” shall mean the United States
Securities and Exchange Commission, or any successor agency
thereto.
“ Common
Stock ” shall have the meaning set forth in the
recitals hereof.
“ Company
” shall have the meaning set forth in the preamble
hereof.
“ Company
Indemnified Persons ” shall have the meaning set
forth in Section 9(b) hereof.
“ Company SEC
Documents ” shall have the meaning set forth in
Section 3(g) hereof.
“ Cure
Period ” shall have the meaning set forth in
Section 8(a) hereof.
“ Exchange
Act ” shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the
Commission thereunder.
“
Expenses ” shall have the meaning set forth in
Section 6(b) hereof.
“ Indemnified
Persons ” shall have the meaning set forth in
Section 9(b) hereof.
“ Market Adverse
Effect ” shall have the meaning set forth in
Section 7(a)(iii) hereof.
“ Material
Adverse Effect ” shall mean a material adverse effect
on the financial condition, or on the earnings, financial position,
operations, assets, results of operations or business of the
Company and its subsidiaries taken as a whole; provided
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that the meaning shall exclude any
changes from general economic, industry, market or competitive
conditions or changes in laws, rules or regulations generally
affecting Persons in the Company’s industry.
“ New
Shares ” shall have the meaning set forth in the
recitals hereof.
“ Non-Terminating
Standby Purchaser ” shall have the meaning set forth
in Section 8(c) hereof.
“
Over-Subscription Privilege ” shall have the
meaning set forth in the recitals hereof.
“ Person
” shall mean an individual, corporation, partnership,
association, joint stock company, limited liability company, joint
venture, trust, governmental entity, unincorporated organization or
other legal entity.
“ Pro Rata
Share ” shall mean, with respect to each shareholder
of the Company as of the Record Date, such shareholder’s
ownership percentage of all issued and outstanding Common Stock as
of the Record Date.
“
Prospectus ” shall mean a prospectus, as
defined in Section 2(10) of the Securities Act, which meets
the requirements of Section 10 of the Securities Act and is
current with respect to the Securities covered thereby.
“ Record
Date ” shall have the meaning set forth in the
recitals hereof.
“ Rights
” shall have the meaning set forth in the recitals
hereof.
“ Rights
Offering ” shall have the meaning set forth in the
recitals hereof.
“ Rights Offering
Expiration Date ” shall mean March 10, 2008,
provided that the Company shall have the option to extend the
Rights Offering for any reason, for a period not to exceed 15
Business Days.
“ Rights Offering
Prospectus ” shall mean the final Prospectus,
including any prospectus supplement relating to the Rights and the
underlying shares of Common Stock that is filed with the Commission
and deemed by virtue of Rule 430B of the Securities Act to be
part of such registration statement, each as amended, for use in
connection with the issuance of the Rights, together with the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3.
“ Rights Offering
Registration Statement ” shall mean the
Company’s shelf Registration Statement on Form S-3
(Commission File No.333-148698) filed with the Commission on
January 16, 2008, together with all exhibits thereto and any
prospectus supplement relating to the Rights and the underlying
shares of Common Stock that is filed with the Commission and deemed
by virtue of Rule 430B of the Securities Act to be part of
such registration statement, each as amended, pursuant to which the
Rights and underlying shares of Common Stock have been registered
pursuant to the Securities Act.
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“
Securities ” shall mean those of the New Shares
and Unsubscribed Shares that are purchased by the Standby
Purchasers pursuant to Section 2 hereof.
“ Securities
Act ” shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the
Commission thereunder.
“ Standby
Indemnified Persons ” shall have the meaning set
forth in Section 9(a) hereof.
“ Standby
Purchasers ” shall have the meaning set forth in the
preamble hereof.
“ Subscription
Agent ” shall have the meaning set forth in
Section 6(a)(iv) hereof.
“ Subscription
Price ” shall have the meaning set forth in the
recitals hereof.
“ Terminating
Standby Purchaser ” shall have the meaning set forth
in Section 8(c) hereof.
“ Termination
Notice ” shall mean a notice from the Company
indicating that the Board, in the exercise of its good faith
judgment, has determined to terminate or suspend indefinitely the
Rights Offering contemplated hereby.
“ Unsubscribed
Shares ” shall have the meaning set forth in
Section 2(b) hereof.
Section 2. Standby
Purchase Commitment .
(a) Each of the Standby
Purchasers hereby agrees to purchase from the Company, and the
Company hereby agrees to sell to each of the Standby Purchasers, at
the Subscription Price, all of the New Shares that will be
available for purchase by each of the Standby Purchasers pursuant
to its Basic Subscription Privilege. Each Standby Purchaser agrees
not to exercise, and to cause its Affiliates not to exercise, the
Over-Subscription Privilege to which such Standby Purchaser and its
Affiliates would otherwise be entitled in the Rights
Offering.
(b) If and to the extent New
Shares are not purchased by the Company’s other shareholders
(the “ Unsubscribed Shares ”) pursuant to
the exercise of Rights (including the Basic Subscription Privilege
and the Over-Subscription Privilege) under the Rights Offering, the
Standby Purchasers shall be deemed to have exercised such Rights
immediately prior to the expiration of the Rights Offering and
shall be entitled to and hereby agree to purchase from the Company,
and the Company hereby agrees to sell to the Standby Purchasers, at
the Subscription Price, all such remaining New Shares;
provided , however , that in no event shall the
Standby Purchasers be entitled to purchase Unsubscribed Shares in
excess of the number of Unsubscribed Shares that would result in
any of the Standby Purchasers becoming beneficial owners (within
the meaning of Section 13(d)(3) of the Exchange Act) of 9.9%
of the issued and outstanding
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shares of Common Stock after giving
effect to the Standby Purchasers’ purchase of New Shares
under the Basic Subscription Privilege and Unsubscribed Shares;
provided further . it is understood and agreed that, if and
to the extent that the Standby Purchasers are required to purchase
Unsubscribed Shares pursuant to this Section 2, then Jonathan
W. Been shall purchase 60.5% of such Unsubscribed Shares up to a
maximum investment of $10,000,000 (which amount shall include his
Basic Subscription Privilege), and Benjamin W. Griffith, III shall
purchase 39.5% of such Unsubscribed Shares, up to a maximum
investment of $8,000,000 (which amount shall include his Basic
Subscription Privilege). The obligations of the Standby Purchasers
shall be several and not joint.
(c) Payment of the
Subscription Price for the Securities shall be made to the Company
by each Standby Purchaser, on the Closing Date, against delivery of
the Securities to each Standby Purchaser, in United States dollars
by means of certified or cashier’s checks, bank drafts, money
orders or wire transfers.
Section 3.
Representations and Warranties of the Company . The
Company represents and warrants to each Standby Purchasers as
follows:
(a) The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia and has all requisite
corporate power and authority to carry on its business as now
conducted.
(b) This Agreement has been
duly and validly authorized, executed and delivered by the Company
and constitutes a binding obligation of the Company enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in
equity).
(c) As of the date hereof,
the authorized capital of the Company consists of 50,000,000 shares
of Common Stock, of which, (A)18,915,078 shares were issued and
outstanding, (B) 277,889 shares are reserved for issuance upon
exercise of options and other awards granted under the
Company’s stock option and incentive plans. All of the
outstanding shares of Common Stock have been duly authorized, are
validly issued, fully paid and nonassessable and were offered, sold
and issued in compliance with all applicable federal and state
securities laws and without violating any contractual obligation or
other preemptive or similar rights.
(d) The Rights Offering
Registration Statement has been filed with, and declared effective
by, the Commission. On the effective date, the Rights Offering
Registration Statement complied in all material respects with the
requirements of the Securities Act and did not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. On the Closing Date, the Rights Offering
Registration Statement and the Rights Offering Prospectus will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the
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statements therein, in the light of the
circumstances under which they were made, not misleading;
provided , however , that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Rights Offering Registration Statement or the
Rights Offering Prospectus made in reliance upon and in conformity
with the information furnished to the Company in writing by the
Standby Purchasers for use in the Rights Offering Registration
Statement or in the Rights Offering Prospectus.
(e) All of the Securities and
New Shares will have been duly authorized for issuance prior to the
Closing, and, when issued and distributed as set forth in the
Rights Offering Prospectus, will be validly issued, fully paid and
non-assessable; and none of the Securities or New Shares will have
been issued in violation of the preemptive rights of any security
holders of the Company arising as a matter of law or under or
pursuant to the Company’s Articles of Incorporation, as
amended, the Company’s bylaws, as amended, or any material
agreement or instrument to which the Company is a party or by which
it is bound.
(f) The documents
incorporated by reference into the Rights Offering Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act, when
they become effective or at the time they are filed with the
Commission, as the case may be, will comply in all material
respects with the applicable provisions of the Exchange
Act.
(g) Since January 1,
2007, the Company has filed with the Commission all forms, reports,
schedules, statements and other documents required to be filed by
it through the date hereof under the Exchange Act or the Securities
Act (all such documents, as supplemented and amended since the time
of filing, collectively, the “ Company SEC
Documents ”). The Company SEC Documents, including
without limitation all financial statements and schedules included
in the Company SEC Documents, at the time filed (and, in the case
of registration statements and proxy statements, on the dates of
effectiveness and the dates of mailing, respectively, and in the
case of any Company SEC Document amended or superseded by a filing
prior to the date of this Agreement, then on the date of such
amending or superseding filing), (i) did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii) complied in all
material respects with the applicable requirements of the Exchange
Act and the Securities Act, as applicable. The audited consolidated
financial statements of Company included in the Company’s
Annual Report on Form 10-K for the fiscal year ended
December 31, 2006 comply as to form in all material respects
with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, were
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved, and present fairly in all material respects, the
consolidated financial position of the Company and its consolidated
subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then
ended.
(h) Since September 30,
2007, there have not been any events, changes, occurrences or state
of facts that, individually or in the aggregate, have had
or
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would reasonably be expected to have a
Material Adverse Effect, except as disclosed in writing by the
Company to the other parties hereto.
Section 4.
Representations and Warranties of the Standby Purchasers
. Each Standby Purchaser, severally and not jointly, represents and
warrants to the Company, as to itself only, as follows:
(a) Such Standby Purchaser is
an individual resident of the State of Georgia. Each Standby
Purchaser is acquiring his Securities for his own account, with the
intention of holding the Securities for investment and with no
present intention of participating, directly or indirectly, in a
distribution of the Securities; and he will not make any sale,
transfer or other disposition of the Securities for a period of one
year
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