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EXHIBIT 10.5
AMENDED AND RESTATED
LOAN AND STOCK PLEDGE AGREEMENT
THIS AMENDED AND RESTATED LOAN AND STOCK PLEDGE AGREEMENT (the
"Agreement"), entered into as of June 27,
2003, as amended and restated as of
October 30, 2003, between UNITED COMMUNITY
BANKS, INC., a Georgia corporation
(the "Borrower"), and THE BANKERS BANK, a
Georgia Banking corporation (the
"Lender").
On June 27, 2003, Borrower and Lender entered into a Loan and
Stock
Pledge Agreement (the "Original Loan
Agreement") pursuant to which the Borrower
borrowed the principal amount of up to
FORTY MILLION AND NO/100 ($40,000,000.00)
DOLLARS from the Lender (the "Loan"), which
Loan is evidenced by the Promissory
Note dated June 27, 2003, and amended this
date (as amended, the "Note"). The
Lender is willing to continue to make the
Loan to the Borrower on the terms and
conditions described below. The Borrower
and Lender agree that the payment and
performance of all obligations relating to
the Loan will be secured through the
pledge to the Lender of all the issued and
outstanding shares of capital stock
owned or hereafter acquired by the Borrower
(collectively the "Stock") in United
Community Bank, Murphy, North Carolina, and
United Community Bank, Lenoir City,
Tennessee, (each a "Bank" and all
collectively the "Bank"). Certain capitalized
terms used in this Agreement are defined in
Section 22 of this Agreement. From
and after the date hereof, all references
to the "Agreement" or the "Loan
Agreement" contained in any of the
Financing Documents shall be deemed to be a
reference to this Agreement. This Agreement
is not intended as a novation of the
Loan.
Borrower and Lender desire to amend the Original Loan Agreement
in
certain respects and to amend and restate
the Original Loan Agreement in its
entirety. In consideration of the premises
and the mutual agreements and
representations in this Agreement, the
Lender and the Borrower hereby amend and
restate the Original Loan Agreement in its
entirety and agree as follows:
1.
SECURITY INTEREST.
(a) The
Borrower hereby unconditionally grants and assigns to the
Lender and its successors and assigns a
continuing security interest in and
security title to the Stock. The Borrower
hereby delivers to the Lender all of
its right, title and interest in and to the
Stock, together with certificates
representing the Stock and stock powers
endorsed in blank, as security for (i)
all obligations of the Borrower to the
Lender hereunder, and (ii) payment and
performance of all obligations of the
Borrower to the Lender under the Note,
whether direct or indirect, absolute or
contingent, now or hereafter existing,
or due or to become due. If the Borrower
receives, for any reason whatsoever,
any additional shares of the capital stock
of the Bank, such shares shall
thereupon constitute Stock to be held by
the Lender under the terms of this
Agreement and the Borrower shall
immediately deliver such shares to the Lender,
together with stock powers endorsed in
blank by the Borrower. Beneficial
ownership of the Stock, including all
voting, consentual and dividend rights,
shall remain in the Borrower until the
occurrence of a Default.
(b) If, prior
to repayment in full of the Loan, the aggregate book
value of the Stock becomes $80,000,000.00
or less, the Borrower shall promptly
deliver to the Lender on demand additional
collateral of a type and value
acceptable to the Lender (and the Lender's
judgment in valuing same shall be
conclusive) so that the sum of the value of
such additional collateral plus the
aggregate book value of the Stock is at all
times equal to or in excess of
$80,000,000.00. The Borrower shall also
execute any security documents the
Lender may request to evidence and perfect
the Lender's rights in such
additional collateral. If at any time such
additional collateral is no longer
required pursuant to this Section 1(b), the
Lender shall release its security
interest in such additional collateral upon
the request of the Borrower, subject
to the Lender's right to subsequently
demand additional collateral, including,
without limitation, additional collateral
previously released.
2.
REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Lender as follows:
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(a) The
Borrower is a corporation duly organized, validly
existing, and in good standing under the
laws of the State of Georgia and is
qualified to do business in all
jurisdictions where such qualification is
necessary. The Borrower is registered as a
Bank holding company with the Board
of Governors of the Federal Reserve System
and the Georgia Department of Banking
and Finance. The chief executive office of
the Borrower and the principal place
of business of the Borrower where the
records of the Borrower are kept are
located at 59 Highway 515, Blairsville,
Georgia 30512-0398, and the Borrower's
U.S. employer identification number is
58-1807304. The Bank has all requisite
corporate power and authority and possesses
all licenses, permits and
authorizations necessary for it to own its
properties and conduct its business
as presently conducted.
(b)
Each Bank is a
Banking corporation duly organized,
validly existing, and in good standing
under the laws of the State in which it
is located. The Borrower owns all the Stock
(consisting of 100% of all stock
issued by United Community Bank, Murphy,
North Carolina; United Community Bank,
Lenoir City, Tennessee) and there are no
other outstanding shares of capital
stock and no outstanding options, warrants
or other rights which can be
converted into shares of capital stock of
the Bank. Each Bank has all requisite
corporate power and authority and possesses
all licenses, permits and
authorizations necessary for it to own its
properties and conduct its business
as presently conducted.
(c) Each
financial statement of the Borrower or any
Subsidiary which has been delivered to the
Lender presents fairly the financial
condition of the Borrower or such
Subsidiary as of the date indicated therein
and the results of its operations for the
periods shown therein. There has been
no material adverse change, either existing
or threatened, in the financial
condition or operations of the Borrower or
any Subsidiary since the date of the
most recent such financial statement.
(d) The
Borrower has full power and authority to execute
and perform the Financing Documents. The
execution, delivery, and performance by
the Borrower of the Financing Documents (i)
have been duly authorized by all
requisite action by the Borrower, (ii) do
not violate any provision of law, and
(iii) do not result in a breach of or
constitute a default under any agreement
or other instrument to which the Borrower
or any Subsidiary is a party or which
the Borrower or any Subsidiary is bound.
Each of the Financing Documents
constitutes the legal, valid, and binding
obligation of the Borrower enforceable
in accordance with its terms.
(e) Except for
the security interest created by this
Agreement, the Borrower owns the Stock free
and clear of all liens, charges, and
encumbrances. The Stock is duly issued,
fully paid and non-assessable, and the
Borrower has the unencumbered right to
pledge the Stock.
(f) There is
no action, arbitration, or other proceeding
at law or in equity, or by or before any
court, agency, or arbitrator, nor is
there any judgment, order, or other decree
pending, anticipated, or threatened
against the Borrower or any Subsidiary or
against any of their properties or
assets which might have a material adverse
effect on the Borrower, any
Subsidiary, or their respective properties
or assets, or which might call into
question the validity or enforceability of
the Financing Documents, or which
might involve the alleged violation by the
Borrower or any Subsidiary of any
law, rule or regulation or judgment order
or decree binding on Borrowers or any
subsidiary on their respective property or
assets.
(g) No consent
or notice to or other authorization or
filing with or of any governmental
authority or other public body on the part of
the Borrower or any Subsidiary is required
in connection with the Borrower's
execution, delivery, or performance of the
Financing Documents; or if required,
all such prerequisites have been fully
satisfied.
(h) None of
the transactions contemplated in this
Agreement (including, without limitation,
the use of the proceeds of the Loan)
will violate or result in a violation of
Section 7 of the Securities Exchange
Act of 1934, or any regulations issued
pursuant thereto.
(i) The following are
attached as exhibits hereto: true,
correct and complete copies of (i) the
Borrower's and each Bank's articles of
incorporation as in effect as of the date
here (as certified
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by the Georgia Secretary of State or other
State of corporate domicile on June
25, 2002; (ii) certificates of existence
for the Borrower and each Bank issued
by the Georgia Secretary of State or other
State of corporate domicile on June
25, 2002; (iii) the bylaws of the Borrower
in effect immediately prior to the
adoption of the resolutions referred to
below (and such bylaws have not been
further altered or amended and have been in
full force and effect at all times
since the adoption of such resolutions
through the date hereof); (iv) the bylaws
of each Bank as of the date hereof; and (v)
resolutions (the "Resolutions") of
the Board of Directors of the Borrower duly
adopted at a meeting duly called and
held on October 23, 2003. A quorum for the
transaction of business was present
and acting throughout the meeting at which
the Resolutions were adopted, and the
Resolutions have been since adoption and
are now in full force and effect and
have not been modified or rescinded in any
respect. There have been no further
amendments or other documents affecting or
altering the Borrower's or each
Bank's articles of incorporation since the
date of the certifications referred
to above through the date hereof, and the
Borrower and each Bank have remained
in valid existence under the laws of the
State of Georgia since such dates.
3.
AFFIRMATIVE COVENANTS. The Borrower agrees that so long as the
Note is outstanding or this Agreement is in
effect, or any portion of the loan
remains unpaid:
(a) The
Borrower shall promptly furnish to the Lender:
(i) not later than 120 days after the end
of each fiscal year, audited
consolidated financial statements of the
Borrower prepared in accordance with
generally accepted accounting principles
("GAAP") and certified by an
independent accounting firm acceptable to
the Lender; (ii) not later than 45
days after each of the first three quarters
of each fiscal year, unaudited
consolidated financial statements of the
Borrower, prepared in accordance with
GAAP (subject to changes resulting from
normal year-end adjustments) and
certified by the chief financial officer of
the Borrower; (iii) not later than
30 days after the end of each of the first
three quarters of each year, copies
of the Report of Condition and the Report
of Income and Dividends of each of the
Bank Subsidiaries; (iv) immediately after
the occurrence of a material adverse
change in the business, properties,
condition, management, or prospects
(financial or otherwise) of the Borrower,
including, without limitation,
imposition of any memorandum of
understanding, cease and desist order, or other
similar regulatory action involving the
Borrower or any Bank Subsidiary, a
statement of the Borrower's chief executive
officer or chief financial officer
setting forth in reasonable detail such
change and the action which the Borrower
or any Bank Subsidiary proposes to take
with respect thereto; and (v) from time
to time upon request of the Lender, such
other information relating to the
operations, business, condition,
management, properties, or prospects of the
Borrower or any Bank Subsidiary as the
Lender may request (including meetings
with the Borrower's or Bank Subsidiary's
officers and employees).
(b) The
Borrower and each Subsidiary shall punctually pay
and discharge all taxes, assessments and
other governmental charges or levies
imposed upon it or upon its income or upon
any of its property, unless the
Borrower is contesting such a charge or
levy and has made adequate reserves
therefor.
(c) The
Borrower and each Subsidiary shall comply in all
material respects with all requirements of
constitutions, statutes, rules,
regulations, and orders and all orders and
decrees of courts and arbitrators
applicable to it or its properties.
(d) The
Borrower shall immediately notify the Lender of
any change in the Chief Executive Officer
or any Executive Vice President of the
Borrower.
4.
NEGATIVE COVENANTS. The Borrower agrees that so long as the
Note is outstanding or this Agreement is in
effect:
(a) The
Borrower shall not permit its Capital at any time
during the term of this Agreement to be
less than $80,000,000.00.
(b) The
Borrower shall not permit the ratio of Tier 1
Capital to average total assets (the Tier 1
Leverage Ratio) of the Borrower or
any of the Bank Subsidiaries as of the end
of any fiscal year to be less than
6.00%.
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(c) The
Borrower shall not permit the Total Risk Based
Ratio of the Borrower or any of the Bank
Subsidiaries as of the end of any
fiscal year to be less than 9.00%.
(d) The
Borrower shall not, and shall not permit any of
the Bank Subsidiaries to, fail to comply
with any minimum capital requirement
imposed by any of their federal or state
regulators.
(e) The
Borrower shall not permit the Allowance for Loan
and Lease Losses to fall below 200.0% of
Non-Performing Loans for the Borrower
and each Bank Subsidiary. Loan Review
Reports will be required should the
Borrower become noncompliant.
(f) The
Borrower shall not permit the allowance for loan
and lease losses of any of the Bank
Subsidiaries to be less than 1.00% of its
gross loans for each year-end.
(g) The
Borrower shall not (i) enter into a Change of
Control transaction; (ii) purchase or
otherwise acquire all or substantially all
of the assets or stock of another Person
(which Person would, upon the
consummation of such transaction, become a
Bank Subsidiary), if, as a result of
the transaction, the total assets of the
Borrower and all of its Subsidiaries
increase by more than 33%; or (iii)
purchase or otherwise acquire all or
substantially all of the assets or stock of
any Person (which Person would not,
upon the consummation of such transaction,
become a Bank Subsidiary) if the
total revenue of such Person, as determined
in accordance with GAAP, is more
than 20% of the Borrower's total revenue in
the immediately preceding fiscal
year, which, solely for purposes of this
Section 4(g), total revenue shall equal
the net interest income of the Borrower
plus the non interest income of the
Borrower, each for the immediately
preceding fiscal year and each determined in
accordance with GAAP.
(h) The
Borrower shall not without written notification
to Lender given within 30 days of the date
of any signed agreement, and in all
events at least 60 days prior to the
closing of any such transaction, issue,
create, incur, assume or otherwise become
liable with respect to (or agree to
issue, create, incur, assume or otherwise
become liable with respect to), or
permit to remain outstanding, any
indebtedness, except: (i) indebtedness
disclosed on the Borrower's most recent
financial statements, provided that such
indebtedness shall not be renewed, extended
or increased; (ii) indebtedness to
M&I Marshall & Ilsley Bank or
Compass Bank under the Credit Agreement in an
amount not to exceed $45,000,000; (iii)
indebtedness for commercial paper of the
Borrower in an amount not to exceed
$40,000,000; (iv) Federal Home Loan bank
indebtedness or federal funds indebtedness
incurred in the ordinary course of
business by any Bank Subsidiary; and (v)
indebtedness with respect to deposit
accounts or similar accounts, including
repurchase agreements.
(i) The
Borrower shall not, directly or indirectly,
become a guarantor of any obligation of, or
an endorser of, or otherwise assume
or become liable upon any notes,
obligations, or other indebtedness of any other
Person (other than a Subsidiary) except in
connection with the depositing of
checks in the normal and ordinary course of
business.
(j) The
Borrower shall not permit any Subsidiary to
issue, sell or otherwise dispose of or part
with control of any shares of any
class of its stock (other than directors'
qualifying shares) except to the
Borrower or a wholly-owned Subsidiary of
the Borrower.
(k) The
Borrower shall not sell or otherwise dispose of
or part with control of any of the Stock or
any other securities or indebtedness
of any Subsidiary.
(l) Without
the prior written consent of the Lender, to
be given or withheld in Lender's sole
discretion, the Borrower shall not, and
shall not permit any of the Bank
Subsidiaries to grant a security interest in or
pledge any assets to any other Person or to
transfer or dispose of any material
portion of or interest in the assets of
each Bank to any other Person, except
for (x) pledges of assets of each Bank as
security for indebtedness owed to the
Lender or indebtedness permitted by Section
4(h)(i), (iii), (iv) and (v); (y)
pledges of assets of Bank Subsidiaries
other than a Bank as security for
indebtedness permitted by Section 4(h); and
(z) pledges of assets of Bank
Subsidiaries as security for
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government deposits, repurchase agreements
and other transactions in the
ordinary course of business, consistent
with historical practices of the
Borrower and the Bank Subsidiaries.
(m) The
Borrower shall not pay any cash dividends if the
Loan is in Default or if the payment of
such dividend would create a Default, or
during any notice or cure period.
(n) The
Borrower shall not permit its Return on Average
Assets at the end of any fiscal year to be
less than .60%. This Return will be
calculated by dividing the Net Income of
the Borrower for the previous year,
excluding the effect of interest on this
loan, by the Consolidated Average
Assets of the Borrower for the previous
year.
(o) Maximum
Loan to Value shall not exceed 50% at all
times.
(p) The
Borrower shall maintain the separate existence of
each Bank and only acquire any new Bank
Subsidiary as a separate Bank Subsidiary
or by a merger or consolidation into any
Bank Subsidiary.
5.
ADVANCES UNDER THE LOAN. The Lender shall not be obligated to
make any advance of the Loan to the
Borrower, unless in
