Form of Subordinated Note Purchase Agreement
SUBORDINATED NOTE PURCHASE AGREEMENT
This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of September 29, 2020, and is made by and between C&F Financial Corporation, a Virginia corporation (“Company”), and the purchaser of the Subordinated Note (as defined herein) identified on the signature page hereto (“Purchaser”).
WHEREAS, Company has requested that Purchaser purchase from Company a Subordinated Note in the principal amount set forth on Purchaser’s signature page (the “Subordinated Note Amount”), which amount is intended to meet the qualifications for inclusion as Tier 2 Capital (as defined herein);
WHEREAS, Purchaser is an “accredited investor” as such term is defined by Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), and/or a “qualified institutional buyer” as such term is defined in Rule 144A promulgated under the Securities Act (“QIB”);
WHEREAS, the offer and sale of the Subordinated Note by Company is being made pursuant to one or more available exemptions from the registration requirements of the Securities Act, including Section 4(a)(2) of the Securities Act and the provisions of Rule 506(b) of Regulation D promulgated thereunder; and
WHEREAS, Purchaser is willing to purchase from Company a Subordinated Note in the Subordinated Note Amount in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth herein and in the Subordinated Note.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
“Affiliate(s)” means, with respect to any Person (as defined herein), such Person’s immediate family members, partners, members or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective Affiliates.
“Agreement” has the meaning set forth in the preamble hereto.
“Articles” has the meaning set forth in Section 18.104.22.168.
“Bank” refers to Citizens and Farmers Bank, a Virginia-chartered non-member bank with its principal place of business located in West Point, Virginia.
“Bank Holding Company Act” has the meaning set forth in Section 22.214.171.124.
“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the Commonwealth of Virginia are permitted or required by any applicable law or executive order to close.
“Bylaws” has the meaning set forth in Section 126.96.36.199.
“Closing” has the meaning set forth in Section 2.5.
“Closing Date” means September 29, 2020.
“Common Stock” means Company’s common stock, $1.00 par value per share.
“Company” has the meaning set forth in the preamble hereto and shall include any successors to Company.
“Company’s Reports” means the (i) Company’s annual report on Form 10-K for the year ended December 31, 2019 filed with the SEC (as defined herein); (ii) Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2020 filed with the SEC, (iii) Company’s Parent Company Only Financial Statements for Small Holding Companies (FR Y-9SP) as of and for the year ended December 31, 2019 filed with the FRB (as defined herein), (iv) Bank’s consolidated reports of condition and income (or call report) as of and for the year ended December 31, 2019 and the quarters ended March 31, 2020 and June 30, 2020 filed with the Federal Financial Institutions Examination Council’s Central Data Repository, and (v) Bank’s Part 363 Annual Report for the year ended December 31, 2019 filed with the FDIC (as defined herein).
“Condition or Release” means any presence, use, storage, transportation, discharge, disposal, release or threatened release of any Hazardous Materials (as defined herein).
“Control” (including the terms “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
“Disbursement” has the meaning set forth in Section 3.1.
“Equity Interest” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation, and any and all warrants, options or other rights to purchase any of the foregoing.
“Event of Default” has the meaning set forth in the Subordinated Note.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FDIC” means the Federal Deposit Insurance Corporation.
“Financial Advisor” means Piper Sandler & Co., independent financial advisor to Company in connection with the transactions contemplated by this Agreement.
“FRB” means the Board of Governors of the Federal Reserve System.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.
“Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department, commission, board, regulatory authority or agency (including each applicable Regulatory Agency (as defined herein)) with jurisdiction over Company, Bank or any of their Subsidiaries.
“Governmental Licenses” has the meaning set forth in Section 4.3.
“Hazardous Materials” means oil, flammable explosives, asbestos, urea formaldehyde insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances” under the Hazardous Materials Laws (as defined herein) and/or other applicable environmental laws, ordinances or regulations.
“Hazardous Materials Laws” mean any laws, regulations, permits, licenses or requirements pertaining to the protection, preservation, conservation or regulation of the environment which relates to real property, including: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.
“Indebtedness” means: (i) all items arising from the borrowing of money that, according to GAAP as in effect from time to time, would be included in determining total liabilities as shown on the consolidated balance sheet of Company or any Subsidiary (as defined herein) of Company; and (ii) all obligations secured by any lien on property owned by Company or any Subsidiary whether or not such obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred or maintained in the ordinary course of Company’s or Bank’s business (including without limitation federal funds purchased, advances
from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by Company or Bank, repurchase arrangements, interest rate swaps and financing through the Paycheck Protection Program Liquidity Facility) and consistent with customary banking practices and applicable laws and regulations.
“Leases” means all leases, licenses or other documents providing for the use or occupancy of any portion of any Property (as defined herein), including all amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate agreements relating thereto.
“Material Adverse Effect” means any change or effect that (i) is or would be reasonably likely to be material and adverse to the financial condition, results of operations, business or assets of Company, Bank and/or their respective Subsidiaries, or (ii) would materially impair the ability of Company, Bank and/or their respective Subsidiaries to perform its respective obligations under any of the Transaction Documents (as defined herein), or otherwise materially impede the consummation of the transactions contemplated hereby or thereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or regulations of general applicability or interpretations thereof by Governmental Agencies, (2) changes in GAAP or regulatory accounting requirements applicable to financial institutions and their holding companies generally, (3) changes after the date of this Agreement in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically related to Company, Bank, or Purchaser, (4) pandemics, epidemics, disease outbreaks, and other public health emergencies, including the Coronavirus disease (COVID-19), (5) direct effects of compliance with this Agreement on the operating performance of Company, Bank, or Purchaser, including expenses incurred by Company, Bank, or Purchaser in consummating the transactions contemplated by this Agreement, and (6) the effects of any action or omission taken by Company or Bank with the prior written consent of Purchaser, and vice versa, or as otherwise contemplated by this Agreement and the Subordinated Note.
“Maturity Date” means September 30, 2030.
“Person” means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental Agency) or any other entity or organization.
“Property” means any real property owned or leased by Company or any Affiliate or Subsidiary of Company.
“Purchaser” has the meaning set forth in the preamble hereto.
“QIB” has the meaning set forth in the Recitals.
“Regulation D” means Regulation D promulgated under the Securities Act.
“Regulatory Agencies” means any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged
in the insurance of depository institution deposits, or any court, administrative agency or commission or other authority, body or agency having supervisory or regulatory authority with respect to Company, Bank or any of their Subsidiaries.
“SEC” means the Securities and Exchange Commission.
“Securities Act” has the meaning set forth in the Recitals.
“Subordinated Note” means the Subordinated Note in the form attached as Exhibit A hereto, as amended, restated, supplemented or modified from time to time, and each Subordinated Note delivered in substitution or exchange for such Subordinated Note (any one or more Subordinated Notes into which this Subordinated Note may be subdivided, exchanged, or substituted in the future referred to, collectively, with this Subordinated Note, as the “Subordinated Notes”).
“Subordinated Note Amount” has the meaning set forth in the Recitals.
“Subsidiary” means with respect to any Person, any corporation or entity in which a majority of the outstanding Equity Interest is directly or indirectly owned by such Person.
“Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 217, 12 C.F.R. Part 225, and 12 C.F.R. Part 250, as amended, modified and supplemented and in effect from time to time or any replacement thereof.
“Transaction Documents” has the meaning set forth in Section 188.8.131.52.
|(a)||A copy, certified by the Secretary or Assistant Secretary of Company, of the articles of incorporation of Company and all amendments thereto as in effect as of the Closing Date (the “Articles”);|
|(b)||A certificate of good standing of Company issued by the State Corporation Commission of the Commonwealth of Virginia;|
|(c)||A copy, certified by the Secretary or Assistant Secretary, of the bylaws of Company and all amendments thereto as in effect as of the Closing Date (the “Bylaws”);|
|(d)||A copy, certified by the Secretary or Assistant Secretary of Company, of the resolutions of the board of directors of Company, and any committee thereof, authorizing the execution, delivery and performance of the Transaction Documents;|
|(e)||An incumbency certificate of the Secretary or Assistant Secretary of Company certifying the names of the officer or officers of Company authorized to sign the Transaction Documents and the other documents provided for in this Agreement; and|
|(f)||The opinion of Troutman Pepper Hamilton Sanders LLP, counsel to Company, dated as of the Closing Date, substantially in the form set forth at Exhibit B attached hereto addressed to Purchaser.|
Company hereby represents and warrants to Purchaser as follows:
Company hereby further covenants and agrees with Purchaser as follows:
Purchaser hereby represents and warrants to Company, and covenants with Company, as follows:
if to Company:
C&F Financial Corporation
with a copy to:
Troutman Pepper Hamilton Sanders LLP
Richmond, Virginia 23219
if to Purchaser:
To the address indicated on Purchaser’s signature page.
or to such other address or addresses as the party to be given notice may have furnished in writing to the party seeking or desiring to give notice, as a place for the giving of notice; provided that no change in address shall be effective until five (5) Business Days after being given to the other party in the manner provided for above. Any notice given in accordance with the foregoing shall be deemed given when delivered personally or, if mailed, three (3) Business Days after it shall have been deposited in the United States mails as aforesaid or, if sent by overnight courier, the Business Day following the date of delivery to such courier (provided next Business Day delivery was requested).
[Signature Pages Follow]
IN WITNESS WHEREOF, Company has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.
C&F FINANCIAL CORPORATION
Name: Thomas F. Cherry
Title: President & Chief Executive Officer
[Company Signature Page to Subordinated Note Purchase Agreement]
IN WITNESS WHEREOF, Purchaser has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.
Address of Purchaser:
Address for Delivery of Note:
Principal Amount of Subordinated Note Purchased:
[Purchaser Signature Page to Subordinated Note Purchase Agreement]
FORM OF SUBORDINATED NOTE
FORM OF OPINION OF COUNSEL
Schedule 184.108.40.206 – Direct and Indirect Subsidiaries