Back to top

AMENDED AND RESTATED LOAN AND STOCK PLEDGE AGREEMENT

Stock Pledge Agreement

AMENDED AND
RESTATED LOAN AND STOCK PLEDGE AGREEMENT | Document Parties: UNITED COMMUNITY BANKS IN | THE BANKERS BANK You are currently viewing:
This Stock Pledge Agreement involves

UNITED COMMUNITY BANKS IN | THE BANKERS BANK

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: AMENDED AND RESTATED LOAN AND STOCK PLEDGE AGREEMENT
Governing Law: Georgia     Date: 3/8/2004
Industry: Regional Banks     Sector: Financial

50 of the Top 250 law firms use our Products every day

 

<PAGE>

 

                                                                    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:

 

<PAGE>

 

                  (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

 

                                                                              -2-

<PAGE>

 

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%.

 

                                                                              -3-

<PAGE>

 

                  (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

 

                                                                              -4-

<PAGE>

 

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


SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Close this window