BANK DEVELOPMENT AGREEMENT
This Bank Agreement (the "Agreement") is made as of this 15th day of
May, 1996, by and among Community Capital Corporation, a South Carolina
corporation (the "Holding Company"), and the undersigned organizers of The Bank
of Belton (the "Bank")(in organization).
The Holding Company and the Organizers have jointly pursued the
formation of a bank in Belton, South Carolina (the "Bank"). This Agreement
formalizes the terms of such joint pursuit.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants hereafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Statement of Agreement
1. Structure. The bank will be organized as a wholly-owned subsidiary
of the Holding Company and is anticipated to be a state chartered bank having
membership in the Federal Deposit Insurance Corporation and the Federal Reserve
System.
2. Capitalization. The initial Capitalization of the Bank is expected
to be $3,500,000 (or such other amount as may be necessary to satisfy South
Carolina banking laws and applicable regulatory requirements). This initial
capitalization is anticipated to be funded as set forth in Section 5 below and
will be accomplished pursuant to the terms of a Conditional Subscription
Agreement between the Holding Company and the Bank, substantially in the form
attached hereto as Exhibit A.
3. Development. Each of the parties has agreed to cooperate in all
aspects of the development of the Bank and to exercise their good faith and best
efforts to accomplish the goals contemplated by this Agreement. Notwithstanding
the foregoing, the division of responsibilities related to the organization and
formation of the Bank shall be as follows:
A. The Holding Company shall be responsible for the legal and
accounting aspects of organization of the Bank and all state and federal
regulatory approvals, but the Organizers shall be consulted and have opportunity
for input and comment on all material documents and issues related thereto.
B. Subject to the Holding Company's opportunity for input,
comment, and approval, the Organizers shall procure and provide professional
bank consultant services to the Holding Company to assist with the formation of
the Bank and all state and federal regulatory approvals.
C. The Organizers shall be responsible for the acquisition
and/or leasing of certain real or personal property related to the proposed
operation of the Bank, but the Holding Company shall be consulted and have
opportunity for input and comment on the selection of such property and all
material documents and issues related hereto.
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4. Allocation of Expenses.
A. Expenses Paid By Holding Company.
1. Legal and Accounting Fees. The Holding Company
shall be responsible for, and shall advance, all legal and accounting fees
incurred by the Holding Company or Bank which are associated with the Public
Offering (as defined hereinbelow) and the formation of the Bank.
2. Employee Expenses. As set forth in that certain
Employment and Option Agreement by and between Xxxxx Xxxxxx ("Xxxxxx") and the
Holding Company dated (The "Employee Agreement"), Xxxxxx is
employed as Vice-President of the Holding Company for an initial term of two (2)
years, and his duties include assisting the Holding Company with the formation
of the Bank. Subject to reimbursement as set forth in Section 4(B)(2) hereof,
until the Bank assumes the payment of Xxxxxx'x salary and benefits as set forth
in Section 9 hereof, the Holding Company shall be responsible for, and shall
advance, salary, FICA, perquisites and fringe benefits to Xxxxxx as set forth
[sic] the Employment Agreement.
B. Expenses Paid By Organizers. Subject to reimbursement as
set forth in Section 6 hereof, the Organizers shall advance the costs and
expenses related to the following:
1. General Expenses. All costs and expenses, other
than the costs and expenses to be paid by the Holding Company as set forth in
Section 4(A) hereof, incurred by and party in connection with the formation of
the Bank, including but not limited to acquisition or leasing of real or
personal property, professional bank consulting fees, legal and other
professional fees related to the internal affairs among the organizers and the
acquisition of real or personal property as contemplated herein, FDIC and other
federal regulatory fees, and state filing fees, shall be the responsibility of,
and advanced by, the Organizers.
2. Reimbursement of Portion of Xxxxxx Expenses. Until
the Bank assumes the payment of Xxxxxx'x salary and benefits as set forth in
Section 9 hereof, the Holding Company shall advance and pay all salary, FICA,
perquisites and fringe benefits to Xxxxxx as set forth in the Employment
Agreement and Section 4(A)(2) above. Notwithstanding the forgoing, sixty (60%)
percent of Xxxxxx'x salary, FICA, perquisites and fringe benefits incurred by
the Holding Company for the period commencing with Xxxxxx'x employment by the
Holding Company and ending upon the termination of the Holding Company's
obligation to pay salary to Xxxxxx pursuant to his Employment Agreement shall be
billed to the Organizers by the Holding Company and immediately reimbursed by
the Organizers to the Holding Company.
C. Funding of Organizers's Expense Obligations. To facilitate
the payment of such expenses by the Organizers, the Organizers will obtain a
$300,000 line of credit (the "Line of Credit") from Greenwood Bank & Trust, a
wholly-owned subsidiary of the Holding Company and will enter into a
contribution agreement among the Organizers to allocate liability for the Line
of Credit.
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5. Public Offering. The initial capitalization and reimbursement of
organizational costs for the Bank are anticipated to be funded from the proceeds
of a proposed estimated $5,000,000 to $10,000,000 public offering of securities
to be conducted by the Holding Company (the "Public Offering"). Such
capitalization may, in the Holding Company's sole discretion, be funded from
sources other than the Public Offering. The Organizers agree to cooperate in
good faith with the preparation of all documents related to the Public Offering
as reasonably requested from time to time by the Holding Company. The Organizers
further agree to abide by all applicable restrictions under federal and state
securities laws which apply to the Public Offering and the Holding Company's
participation in the development of the Bank.
6. Reimbursement.
A. Reimbursement to Organizers. Upon the first to occur of the
following, the Holding Company shall assume the Line of Credit or otherwise
satisfy or cause the Bank to satisfy the Line of Credit (from the Bank's initial
$3,500,000 capitalization or other source) thereby causing each Organizer to be
relieved of liability pursuant to the Line of Credit, up to an aggregate of
$300,000:
1. The Organizers in the aggregate have irrevocably
subscribed and paid for at least $800,000 of securities of the Holding Company,
and the Bank is capitalized in an amount necessary to satisfy all applicable
state and federal bank regulatory requirements; or
2. The Organizers in the aggregate have irrevocably
subscribed and paid for at least $800,000 of securities in the Holding Company,
and the Bank fails (i) to be capitalized in an amount necessary to satisfy all
applicable state and federal bank regulatory requirements as a result of facts
or circumstances which are not the result or product of, in whole or in
substantial part, any negligent, wilful or intentional act or omission of one or
more Organizers; or (ii) to become licensed as a lawfully chartered bank as a
result of facts or circumstances which are not the result or product of, in
whole or in substantial part, any negligent, willful or intentional act or
omission of one or more Organizers; or
3. The Organizers in the aggregate have failed to
irrevocably subscribe and pay for at least $800,000 of securities in the Holding
Company, but the Bank is nevertheless capitalized in an amount necessary to
satisfy all applicable state and federal bank regulatory requirements and
lawfully opens for business and commences banking operations, and the Organizers
are not in material breach of this Agreement.
B. No Reimbursement to Organizers. Without limiting or
modifying Section 6(A) above, the parties hereto acknowledge and agree that in
the event (i) the Bank fails to be capitalized in an amount necessary to satisfy
all applicable state and federal bank regulatory requirements as a result of
facts or circumstances which are the result or product of, in whole or in
substantial part, any negligent, willful or intentional act or omission of one
or more Organizers; or (ii) the Bank fails to become licensed as a lawfully
chartered bank as a result of facts or circumstances which are the result or
product of, in whole or in substantial part, any negligent, willful, or
intentional act or omission of one or more Organizers, or (iii) the Organizers
in the aggregate do not irrevocably subscribe or pay for at least $800,000 of
securities of the Holding Company or the Bank fails to lawfully open for
business and commence banking
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operations, then the Holding Company shall not assume the Line of Credit or
otherwise satisfy the Line of Credit, and the Organizers shall remain liable for
the Line of Credit.
7. Bank Directors. The Holding Company agrees to structure the initial
Board of Directors of the Bank to include and to be limited to each of the
Organizers and Xxxxxxx X. Xxxxxxx, or another director or officer of the Holding
Company designated by Xx. Xxxxxxx (or in his absence the CEO of the Holding
Company). Upon the organization of the Bank, the Holding Company further agrees
to elect each of the Organizers to the Board of Directors of the bank.
Notwithstanding the foregoing, the Board of Directors of the Bank shall not
include any Organizer: (i) who does not agree to serve on the Board of
Directors, (ii) who is prohibited by federal or state law, rule, or regulation,
or the Bank's Bylaws, from serving on the board of directors of a bank or
subsidiary of a publicly held company, (iii) who has violated this Agreement, or
(iv) who is not approved by the Board of the Holding Company, which approval
will not be unreasonably withheld.
8. Holding Company Directors.
A. In the event (i) the Organizers in the aggregate have
irrevocably subscribed and paid for at least $800,000 of securities of the
Holding Company, and (ii) the incorporation and organization of the Bank is
completed and the Bank lawfully opens for business, the following shall occur:
1. The Holding Company will adopt appropriate
corporate resolutions to expand the size of the Holding Company's Board of
Directors by a sufficient number of members to permit the appointment of the
nominees described in Section 8(A)(2) hereof; and
2. The Holding Company's Board of Directors shall
appoint the Bank's Chief Executive Officer and one other organizer who is
designated by majority of the Organizers to fill two (2) vacancies on the
Holding Company's Board of Directors which exist or are created pursuant to
Section 8(A)(1).
B. Upon the satisfaction of such conditions precedent set
forth in Section 8(A) above, the Holding Company's Board of Directors shall
nominate for election to the Board of Directors of the Holding Company at the
next annual shareholder meeting of the Holding Company after the satisfaction of
such conditions precedent, two Directors of the Bank submitted to the Board of
Directors of the Holding Company by the Board of Directors of the Bank.
C. In the event that the conditions precedent set forth in
Section 8(A) above have been satisfied, upon the expiration of the term of each
proposed director set forth in Section 8(B) above, the Board of Directors of the
Holding Company hereby agrees annually to nominate for election or re-election
as a director of the Holding Company by its shareholders, one (1) or two (2) (as
appropriate to allow for the Bank's continued representation by two (2) members
on the Holding Company's Board of Directors) individual(s) submitted to the
Board of Directors of the Holding Company by the Board of Directors of the Bank.
D. Notwithstanding anything contained herein to the contrary,
the Holding Company shall not elect or nominate for election as a director of
the Holding Company any
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individual: (i) who does not agree to elect or serve on the board of directors
of the Holding Company, (ii) who is prohibited be federal or state law, rule, or
regulation, or the Holding Company's Bylaws from serving on the board of
directors of a bank or publicly held company, or (iii) who has violated this
Agreement. The obligation of the Holding Company to elect and/or nominate
directors under this Section 8 shall terminate in the event the Bank ever ceases
to be a wholly-owned subsidiary of the Holding Company or the Organizers
materially breach this Agreement.
9. Xxxxxx Salary Assumption. Upon the Bank's lawful commencement of
business in Belton, South Carolina, the Organizers shall cause the Bank to pay
to Xxxxxx, for the remainder of the initial term of the Employment Agreement,
his salary, FICA, perquisites, and fringe benefits in pay periods as determined
by the Bank, but no event less frequently than monthly, unless Xxxxxx'
employment has been sooner terminated pursuant to his Employment Agreement.
10. Assignment of Property Interests. Upon the incorporation and
initial capitalization of the Bank in an amount necessary to satisfy all
applicable state and federal bank regulatory requirements (or at any sooner time
designated by the Holding Company in its discretion, and then only upon the
Holding Company relieving the Organizers of liability under the Line of Credit),
the Organizers shall convey or assign to the Bank any and all right, title and
interest in and to any and all real or personal property which is associated
with or related to the proposed operation of the Bank, and which is acquired by,
or held in the name of, one or more Organizers or any entity controlled by one
or more Organizers, including but not limited to any fee interest, leasehold
interest, or option to acquire a fee or leasehold interest. In the event of such
conveyance or assignment as described in this Section 10, the real and personal
property conveyed, or interest therein which is assigned, shall be free and
clear of all liens or encumbrances except liens or encumbrances in favor of the
Holding Company or Greenwood Bank & Trust.
11. Office Support. Until the initial capitalization of the bank in an
amount necessary to satisfy all applicable sate [sic] and federal bank
regulatory requirements, the Organizers will make available facilities,
furniture, fixtures, equipment, and clerical support for the initial operations
of the Bank.
12. Lock-Up. In consideration for the incurring of costs and expenses
by the Holding Company and the Organizers for the transactions contemplated
herein, for a period commencing the date hereof and ending on April 30, 1997:
(a) each of the Organizers agrees not to participate directly or indirectly on
any activity related to the formation of a new financial institution, or the
affiliation with or expansion of an existing financial institution, in Xxxxxxxx
County, South Carolina other than the Bank contemplated herein or a modification
thereof which is to be a wholly-owned subsidiary of the Holding Company, and (b)
the Holding Company agrees not to participate directly or indirectly in any
activity related to the formation of a new financial institution in Xxxxxxxx
County, South Carolina other than the Bank contemplated herein or a modification
hereof which is to affiliated with all the Organizers who have violated neither
this Agreement nor any other agreement related to the formation of the Bank
contemplated hereby and who have not withdrawn from participation in this
venture. After April 30, 1997 the parties' restrictions, if any, on the
ownership of, and participation in, other competing financial institutions shall
be governed and dictated by the parties' fiduciary and other duties, if any,
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arising from the relationship of the parties on such date and any applicable
state and federal rule or regulation applicable hereto. Each party hereto has
carefully read and considered the provisions of this Section 12, and, having
done so, agrees that the restrictions set forth in this Section 12 are fair and
reasonable and are reasonably required for the protection of the interests of
each party hereto. The parties hereto acknowledge that each party's services
hereunder are a special and unusual character with a unique value to the other
parties hereto, the loss of which cannot adequately be compensated by damages in
an action at law. In the event of a breach or threatened breach by a party
hereto of any of the provisions of Section 12, the other parties hereto, or any
one of them, in addition to and not in limitation of, any other rights,
remedies, or damages available under this Agreement, shall be entitled to a
permanent injunction in order to prevent or restrain any such breach by the
breaching party or such party's partners, agents, representatives, servants,
employers, employees, consulting clients, and/or any and all persons directly or
indirectly acting for or with such breaching party.
13. Publicity and Confidentiality. All press releases and public
announcements about the Bank and any other activities contemplated by this
Agreement require the prior written approval of the Holding Company after
consultation with securities counsel for the Holding Company. Each of the
Organizers (i) will abide by any disclosure and confidentiality guidelines to be
provided from time to time by the Holding Company and its counsel, (ii) will not
make any disclosures that are harmful to the development of the bank unless
legally required to do so, and (iii) will not make any disclosure respecting
any-matters contemplated in this Agreement that will adversely affect the
Holding Company's compliance with federal or state securities laws. No Organizer
will trade in any of the Holding Company's stock when in possession of material
non-public information respecting the Holding Company.
14. Termination. This Agreement shall terminate upon the written
consent of the Holding Company and a majority of the Organizers.
15. Legal Compliance. This Agreement constitutes neither an offer or a
sell, nor a solicitation of an offer to buy, securities of any kind whatsoever.
The parties acknowledge that securities will only be offered or sold after
compliance with all applicable federal and state securities laws. Each of the
Organizers and the Holding Company represent and warrant to the other parties
hereto that execution and performance of this Agreement and the transactions
contemplated herein will not violate any contract, commitment, or other legal
requirement binding upon such party.
16. Modifications. This Agreement can only be modified by a written
agreement duly signed by the Holding Company and a majority of the Organizers.
Moreover, in order to avoid uncertainty, ambiguity and misunderstandings in
their relationships, the parties hereto covenant and agree not to enter into any
written or oral agreement or understanding inconsistent or in conflict with this
Agreement; and the parties hereto further covenant and agree that any oral
communication allegedly or purportedly constituting such an agreement or
understanding shall be absolutely null, void and without effect.
17. Waiver. Any waiver by a party of any breach or any term or
condition hereof shall be affective only if in writing and such writing shall
not be deemed to be a waiver of any subsequent or other breach, term or
condition of this Agreement.
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18. Relationship of the Parties. Nothing herein shall be deemed to
create any partnership or joint venture relationship between the parties. No
party shall make any representation or statement (whether written or oral) to
any person or entity inconsistent with this Section.
19. Third Parties. The provisions of this Agreement are not intended to
be for, and shall not inure to, the benefit of any third parties, and no third
party shall be deemed to have any privity of contract with any of the parties
hereto by virtue of this Agreement.
20. Assignments. Neither this Agreement nor any rights hereunder may be
assigned or otherwise transferred by a party, except the Holding Company may
assign this Agreement to any corporation controlled by or under common control
with the Holding Company.
21. Cumulative Remedies. All rights and remedies of a party hereunder
shall be cumulative and in addition to such rights and remedied as may be
available to a party at law or equity.
22. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous written or oral agreements and representations between
the parties with respect thereto.
23. Notices. Any notice, request, approval, consent, demand or other
communication shall be effective upon the first to occur of the following: (i)
upon receipt by the party to whom such notice, request, approval, consent,
demand or other communication is being given; or (ii) three (3) business days
after being duly deposited in the United States mail, registered or certified,
return receipt requested, and addressed as follows:
Holding Company: Community Capital Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Organizers: The Bank of Belton
(in organization)
x/x Xxxxx Xxxxxx
X. X. Xxx 00
Xxxxxx, XX 00000
The parties hereto may change their respective addresses by notice in writing
given to the other party to this Agreement.
24. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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25. Governing Law. The construction and interpretation of the Agreement
shall at all times and in all respects be governed by the laws of the State of
South Carolina.
26. Venue and Jurisdiction. The parties hereto hereby (i) agree that
any litigation, action or proceeding arising out of or relating to this
Agreement may be instituted in a state or federal court in the State of South
Carolina, (ii) waive any objection which it might have now or hereafter to any
such litigation, action or proceeding based upon improper venue or inconvenient
forum, and (iii) irrevocably submit to the jurisdiction of such courts in any
such litigation, action or proceeding. For all purposes of this Agreement, each
party hereby further agrees that service of process upon such party may be
effected pursuant to United States mail.
27. No Inference Against Author. No provision of the Agreement shall be
interpreted against any party because such party or its legal representative
drafted such provision.
28. Captions and Headings/Usage. The captions and headings are inserted
in the Agreement for convenience only, and in no event be deemed to define,
limit or describe the scope or intent of this Agreement, or of any provision
hereof, nor in any way affect the interpretation of this Agreement.
All pronouns and defined terms appearing herein shall be deemed to include both
the singular and plural, and to refer to all genders, unless the context clearly
requires otherwise.
29. Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original but which
together shall constitute one and the same original.
IN WITNESS HEREOF, the parties hereto have duly executed the Bank
Development Agreement to be legally binding and effective as of the date first
above written.
COMMUNITY CAPITAL CORPORATION
By: /s/ XXXXX X. XXXXX
Its: Chief Financial Officer
ORGANIZERS:
/s/ XXXXX X. XXXXXX /s/ XXXXX X. XXXXXX
/s/ XXXXXX X. XXXXXXXXX /s/ XXXXXX XXXXXXXXXXX, XX.
/s/ XXXXXXX X. XXXXXX /s/ XXXX X. XXXXXXXX
/s/ D. XXXXXXX XXXXX /s/ XXXXXX X. XXXXX
/s/ XXXXX X. XXXXXXX /s/ D. XXXXX XXXXXXXX
/s/ XXXXXXX X. O'DELL /s/ X. XXXXXXXX KEYS
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EXHIBIT A
Conditional Subscription Agreement
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CONDITIONAL SUBSCRIPTION AGREEMENT
(CCC with the Bank of Belton)
TO: The Bank of Belton
P. O. Xxx 00
Xxxxxx, Xxxxx Xxxxxxxx 00000
ATTN: Xxxxx Xxxxxx, President
In consideration for your agreement to sell and issue shares of the
$5.00 par value common stock ("Shares") of The Bank of Belton, a South Carolina
banking corporation ("Corporation"), to the undersigned subscriber ("Holding
Company"), and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Holding Company hereby
conditionally agrees to acquire from the Corporation and does hereby
conditionally subscribe for 350,000 Shares at a cash purchase price of $10.00
per share, for a total subscription price of $3,500,000.
It is expressly understood and agreed by the Corporation and Holding
Company that the Holding Company's obligations to acquire and pay for the shares
is subject to and conditioned upon satisfaction of each of the following: (a)
the receipt by the Holding Company of at least $800,000 in gross proceeds from
the purchase of Holding Company securities by the Organizers of the Corporation;
(b) the filing of all applications and other documentation with the State Board
of Financial Institutions, Federal Reserve System, and FDIC and either receipt
or continued active pursuit of all regulatory approvals for this investment and
the Corporation's proposed banking business; (c) the Holding Company, upon
completion of this subscription, will be the sole shareholder of the
Corporation; and (d) the absence of any materially adverse changes in condition
or circumstances which would make the acquisition, development, or operation of
the Corporation's proposed Belton bank unlawful, impracticable, or commercially
unreasonable. The Holding Company agrees that in order for any of the foregoing
conditions to be effective for the benefit of the Holding Company, the Holding
Company shall have exercised its good faith and best efforts towards the
satisfaction of such conditions to the fullest extent that the same is within
the control of the Holding Company and is commercially feasible.
The Holding Company understands that the Shares in the Corporation are
being sold without registration under the Federal Securities Act of 1933 ("1933
Act") or the South Carolina Uniform Securities Act ("SC Act") pursuant to
certain exemptions, and the Holding Company makes the following representations,
declarations, and warranties with the intent that the same may be relied upon in
determining its suitability as a shareholder in the Corporation:
1. The Holding Company is organized under the laws of the state of
South Carolina, maintains its principal office in the state of South Carolina,
and was not formed for the specific purpose of acquiring shares in this
offering.
2. The Holding Company is investing in the Corporation solely for its
own account and not with any present intention for resale, fractionalization, or
further distribution.
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3. The Holding Company has total assets valued in excess of $5 million
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of investment in the Corporation.
4. The Holding Company has been advised that it must bear the economic
risk of investment in the Shares for an indefinite period of time, in part,
because the shares have not been registered under the 1933 Act or the SC Act,
and may not be transferred by the Holding Company except pursuant to an
effective registration or exemption under the 1933 Act and SC Act.
5. The Holding Company understands that the Corporation will, and
authorizes the Corporation to, place an appropriate legend in the certificate(s)
evidencing that the Shares have not been registered under the 1933 Act and the
SC Act, and setting forth certain limitations on resale referenced herein.
Furthermore, the Corporation is authorized to make a notation in the appropriate
stock transfer records of the Corporation preventing the transfer of any Shares
on the books of the Corporation without sufficient evidence that such transfer
is in compliance with applicable state and the federal securities laws.
This Agreement shall be governed by the laws of the state of South
Carolina, and the parties hereto agree to jurisdiction and venue, subject to
proper service of process, in the state of South Carolina. All terms and
provisions hereof are severable in the event of unenforceability of any one or
more of them. The terms hereof may only be amended, modified, or waived in
writing signed by the party to be bound thereby.
IN WITNESS HEREOF, the Holding Company has executed this Conditional
Subscription Agreement to be effective as of the day of , 19 .
HOLDING COMPANY
COMMUNITY CAPITAL CORPORATION
By:
Its:
ACCEPTED as of the day
of 199 .
The Bank of Xxxxxx (in organization)
By:
Its: President
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