Exhibit 10.2
STANDBY PURCHASE
AGREEMENT
This STANDBY PURCHASE AGREEMENT
(this “Agreement”), dated as of
September 18, 2009, is by and between Community Capital
Corporation, a South Carolina corporation (the
“Company”), and Clients of Allen C.
Ewing & Co., a Registered Broker-Dealer (the
“Standby Purchaser”).
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 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 the Standby Purchaser to
agree, and the Standby Purchaser has 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 Purchaser 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 Purchaser;
provided that the 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 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”
shall have the meaning set forth in
the recitals 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(h) 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, 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.
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“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
CommonStock 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,
“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) The Standby Purchaser hereby
agrees to purchase from the Company, and the Company hereby agrees
to sell to the Standby Purchaser, 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. The Standby Purchaser agrees not to exercise, and to
cause its Affiliates not to exercise, the Over-Subscription
Privilege to which the 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
Purchaser shall be deemed to have exercised such Rights
immediately
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prior to the expiration of the Rights Offering
and shall be entitled to and hereby agrees to purchase from the
Company, and the Company hereby agrees to sell to the Standby
Purchaser, at the Subscription Price, such Standby Purchasers pro
rata share of all such remaining New Shares. It is understood and
agreed that, if and to the extent that the Standby Purchaser is
required to purchase Unsubscribed Shares pursuant to this
Section 2, then the Standby Purchaser shall purchase such
Unsubscribed Shares up to a maximum investment of $469,999.75;
provided, that the Standby Purchaser 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 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 Purchasers’
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 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.
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(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, 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 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 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), (1) 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.
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(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. The Standby Purchaser
represents and warrants to the Company, as follows:
(a) The Standby Purchaser is
acquiring its Securities for its 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 the Standby Purchaser will not make any sale,
transfer or other disposition of the Securities for a period of
ninety (90) days from the Closing Date.
(b) The Standby Purchaser is
familiar with the business in which it is engaged, and based upon
its 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. The 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) If the Standby Purchaser is
an individual, he or she has full power and authority to perform
his or her obligations under this Agreement. The Standby Purchaser
is of the full age of majority and is legally competent to execute
this Agreement.
(ii) If the Standby Purchaser is a
corporation, the Standby Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws
of its jurisdiction of incorporation, with corporate power and
authority to perform its obligations under this
Agreement.
(iii) If the Standby Purchaser is a
trust, the trustee has been duly appointed as trustee of the
Standby Purchaser with full power and authority to act on behalf of
the Standby Purchaser and to perform the obligations of the Standby
Purchaser under this Agreement.
(iv) If the Standby Purchaser is a
partnership or limited liability company, the Standby Purchaser is
a partnership or 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 the Standby Purchaser
and constitutes a binding obligation of the 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). The Standby Purchaser represents
and warrants that it is not insolvent and has sufficient cash funds
on hand to purchase the Securities on the terms and conditions
contained in this Agreement and will have such funds on the Closing
Date.
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(e) The Standby Purchasers 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. The 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, includi
