Exhibit 10.1
STANDBY PURCHASE
AGREEMENT
This STANDBY PURCHASE AGREEMENT
(this “ Agreement ”), dated as of
September 17, 2009, is by and between Community Capital
Corporation, a South Carolina corporation (the “
Company ”), and William J. Downes (“
W. Downes ”), Laura B. Downes (“ L.
Downes ”) and Valleywood Capital Group, LLC (“
Valleywood ”) (each a “ Standby
Purchaser, ” and collectively, the “
Standby Purchasers ”).
W I T N E S S E T
H:
WHEREAS, the Company has pursuant to
the Rights Offering Registration Statement (as defined herein),
commenced an offering to holders of its common stock (the “
Common Stock ”) of record as of the close of
business on August 7, 2009 (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 $2.75 per share
for an aggregate offering amount of up to $20 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 of the
Unsubscribed Shares (as defined herein), subject to availability
and allocation, 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 certain standby
purchasers to agree, and the standby purchasers have agreed,
(a) when applicable, not to exercise its Over-Subscription
Privilege, and (b) that, to the extent any 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 Shares from the
Company at the Subscription Price; 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 the Standby Purchasers; provided
that the Standby Purchasers 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 South
Carolina.
“ 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.
“ 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 banking subsidiary, CapitalBank, taken as a whole;
provided that the meaning shall exclude any changes from general
economic,
- 2 -
financial services 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, limited liability
corporation, joint venture, trust, governmental entity,
unincorporated organization or other legal entity.
“ 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 September 21, 2009,
provided that the Company shall have the option to extend the
Rights Offering for any reason.
“ 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-1.
“ Rights Offering
Registration Statement ” shall mean the
Company’s Registration Statement on Form S-1 (Commission File
No. 333-160430), as amended, filed with the Commission on
July 2, 2009, 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.
“ Securities
” shall mean those of the New Shares and Unsubscribed Shares
that are purchased by the Standby Purchaser 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.
- 3 -
“ Standby Indemnified
Persons ” shall have the meaning set forth in
Section 9(a) hereof.
“ Standby
Purchaser ” 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 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 the Standby Purchaser pursuant to its Basic
Subscription Privilege, if applicable. 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, if applicable.
(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, if
applicable, and shall be obligated and hereby agrees to purchase
181,818 Unsubscribed Shares from the Company, and the Company
hereby agrees to sell to the Standby Purchasers, at the
Subscription Price. The Standby Purchasers understand and jointly
and severally agree that, if and to the extent that there are
Unsubscribed Shares available for purchase pursuant to this
Section 2, then the Standby Purchasers shall, on the Closing
Date, purchase Unsubscribed Shares equal to a total investment of
$499,999.50 (representing 181,818 Unsubscribed Shares);
provided, that the Standby Purchasers and the Company hereby
acknowledge and agree that the Company has entered into, or
contemplates entering into, one or more other Standby Purchase
Agreements with certain other parties; provided ,
further , if the number of Unsubscribed Shares is less than
the aggregate number of Unsubscribed Shares agreed to be purchased
by all standby purchasers, the Common Stock available for issuance
to standby purchasers shall be allocated as nearly as
possible
- 4 -
on a pro rata basis among all standby purchasers
based upon the maximum number of Common Stock agreed to be
purchased by each such standby purchaser, after giving effect to
the limitations set forth herein. In no event shall the Standby
Purchasers be entitled to purchase shares of Common Stock in excess
of the number of shares of Common Stock 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 shares of Common Stock after giving
effect to the Standby Purchaser’s purchase of New Shares
under the Basic Subscription Privilege, Unsubscribed Shares and
shares of Common Stock pursuant to a guaranteed minimum investment
provided for in this Agreement.
(c) Payment of the Subscription
Price for the Securities shall be made to the Company by Standby
Purchaser, on the Closing Date, against delivery of the Securities
to Standby Purchaser, in United States dollars by means of federal
funds checks or a wire transfer to an account designated by the
Company.
Section 3.
Representations and Warranties of the Company
. The Company represents and
warrants to each Standby Purchaser as follows:
(a) The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of South Carolina 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 20,000,000 shares of
Common Stock, of which, (A) 4,688,313 shares were issued and
outstanding, and (B) 145,898 shares are reserved for issuance
upon exercise of options and restricted stock awards granted under
the Company’s stock 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, including the
information incorporated by reference therein,
- 5 -
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 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 and restated, 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-1 under the Securities Act, when they became
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 June 30, 2008, 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, 2008 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
subsidiary as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then
ended.
- 6 -
(h) Since June 30, 2009, there
have not been any events, changes, occurrences or state of facts
that, individually or in the aggregate, have had or 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 represents and warrants to the Company, as
follows:
(a) Each Standby Purchaser is
acquiring its Securities for its own account and Valleywood is
acquiring the securities for its clients’ accounts, with each
Standby Purchaser and its respective clients intending to hold the
Securities for investment and with no present intention of
participating, directly or indirectly, in a distribution of the
Securities; and each Standby Purchaser and its clients, as
applicable, will not make any sale, transfer or other disposition
of the Securities for a period of ninety (90) days from the
Closing Date; provided , however that shares of Common Stock
purchased by each Standby Purchaser or its clients prior to the
Record Date shall not be subject to the limitations set forth in
this Section 4(a). Valleywood represents and warrants that it
has full investment and corporate authority and power to purchase
the Securities on its behalf and/or its clients’
behalf.
(b) Each Standby Purchaser is
familiar with the business in which the Company is engaged, and
based upon such Standby Purchaser’s knowledge and experience
in financial and business matters, it is familiar with the
investments of the type that it is undertaking to purchase; it is
fully aware of the problems and risks involved in making an
investment of this type; and it is capable of evaluating the merits
and risks of this investment. Each Standby Purchaser acknowledges
that, prior to executing this Agreement, it has had the opportunity
to ask questions of and receive answers or obtain additional
information from a representative of the Company concerning the
financial and other affairs of the Company.
(c) (i) Each of W. Downes and L.
Downes has full power and authority to perform his or her
obligations under this Agreement and each of them is of the full
age of majority and is legally competent to execute this
Agreement.
(ii) Valleywood is a limited
liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or
organization, with full power and authority to perform its
obligations under this Agreement.
(d) This Agreement has been duly and
validly authorized, executed and delivered by each Standby
Purchaser and constitutes a binding obligation of each Standby
Purchaser 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). Each Standby Purchaser represents
and warrants that it is not insolvent and has sufficient cash funds
on hand to purchase the Securities on the
- 7 -
terms and conditions contained in this Agreement
and will have such funds and make such purchase on the Closing
Date.
(e) The Standby Purchasers and
Valleywood’s clients are not “ affiliates
” (within the meaning of Rule 405 of the Securities Act)
of one another, are not acting in concert and are not members of a
“ group ” (within the meaning of
Section 13(d)(3) of the Exchange Act) and have no current
intention to act in the future in a manner that would make them
members of such a group. Each Standby Purchaser agrees and
acknowledges that it has not entered into any contracts,
arrangements, understanding or relationships (legal or otherwise)
with any Persons or Person with respect to any securities of the
Company, including but not limited to transfer or voting of any of
the securities, finder’s fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies; and no
Standby Purchaser owns any securiti
