Exhibit 10.6
THIRD AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT/TERM LOAN AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT/TERM LOAN
AGREEMENT ("Amendment") is made and dated as of May 31, 2003, by and between
SUNTRUST BANK, A Georgia banking corporation ("Lender"), and COMMUNITY
BANKSHARES, INC., A Georgia corporation ("Borrower"). Capitalized terms not
otherwise defined herein are defined in ARTICLE 1 OF THE Prior Loan Agreement
referred to below.
R E C I T A L S
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A. Borrower and Lender are parties to that certain Amended an Restated
Revolving Credit/Term Loan Agreement dated as of July 31, 2000 (the "Prior Loan
Agreement"), pursuant to which Borrower has obtained a Loan from Lender.
B. Borrower and Lender agreed to certain modifications to the Prior
Loan Agreement upon the terms and conditions set forth in that certain Amendment
to Amended and Restated Revolving Credit/Term Loan Agreement dated as of June 8,
2001 ("First Amendment") and that certain Second Amendment to Amended and
Restated Revolving Credit/Term Loan Agreement dated as of May 1, 2002 ("Second
Amendment") (the First Amendment and Second Amendment referred to herein as the
"Amendments").
C. Borrower desires to make certain further modifications to the Prior
Loan Agreement.
D. In order to accommodate Borrower's request, Lender has agreed to
such modifications to the Prior Loan Agreement, as amended by the Amendments,
upon the terms and conditions set forth herein.
ACCORDINGLY, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. The definitions of "Revolving Maturity Date" and "Total
Non-Performing Assets" in Section 1.01 "Defined Terms" of ARTICLE I DEFINITIONS
AND ACCOUNTING TERMS of the Prior Loan Agreement are hereby deleted in their
entirety and the following definitions are inserted in their place:
"Revolving Maturity Date" means June 30, 2004.
"Total Non-Performing Assets" means the sum of (i) all loans
that are at least 90 days past due, (ii) all non-accrual loans, (iii) all
restructured loans and (iv) all other real estate owned.
2. Section 7.01 "Capital Expenditures" of ARTICLE VII FINANCIAL COVENANTS
of the Prior Loan Agreement is hereby deleted in its entirety and the following
new Section inserted in its place:
SECTION 7.01. [Intentionally Omitted].
3. Section 7.03 "Return on Assets" of ARTICLE VII FINANCIAL COVENANTS of
the Prior Loan Agreement is hereby deleted in its entirety and the following new
Section is inserted in its place:
SECTION 7.03. RETURN ON ASSETS. Income from operations after
taxes, divided by average assets, on a consolidated basis shall not be less
than: (i) from the effective date hereof through December 31, 2003, seven-tenths
of one percent (0.70%); and (ii) from January 1, 2004 until the Revolving
Maturity Date, eighty-five hundredths of one percent (0.85%).
4. Section 7.04 "Return on Equity" of ARTICLE VII FINANCIAL COVENANTS of
the Prior Loan Agreement is hereby deleted in its entirety and the following new
Section inserted in its place:
SECTION 7.04 [Intentionally Omitted].
5. Section 7.07 of ARTICLE VII FINANCIAL COVENANTS of the Prior Loan
Agreement is hereby deleted in its entirety and the following new Section
inserted in its place:
SECTION 7.07. RESERVES TO TOTAL LOANS. The Borrower and its
Subsidiaries shall maintain on a consolidated basis at all times reserves equal
to or greater than the greater of (i) one and forty-five one hundredths percent
(1.45%) of total loans (net of unearned income), or (ii) the minimum amount
required by its primary regulator.
6. Section 7.08 "Reserves" of ARTICLE VII FINANCIAL COVENANTS of the
Prior Loan Agreement is hereby deleted in its entirety and the following Section
is inserted in its place:
SECTION 7.08. RESERVES TO TOTAL NON-PERFORMING ASSETS. The
Borrower and its Subsidiaries shall maintain on a consolidated basis at all
times a ratio of (i) reserves plus Tier 1 Capital to (ii) Total Non-Performing
Assets in an amount equal to or greater than six hundred twenty-five percent
(625%).
7. Section 7.09 "Asset Quality" of ARTICLE VII FINANCIAL COVENANTS of the
Prior Loan Agreement is hereby deleted in its entirety and the following Section
is inserted in its place:
SECTION 7.09. ASSET QUALITY. The Borrower and its Subsidiaries
shall maintain on a consolidated basis at all times a ratio of Total
Non-Performing Assets divided by total loans (net of unearned income) plus other
real estate owned in an amount equal to or less than two and two tenths percent
(2.2%).
8. Section 7.10 "Consolidated Tangible Equity" of ARTICLE VII FINANCIAL
COVENANTS of Prior Loan Agreement is hereby deleted in its entirety and the
following section is inserted in its place:
SECTION 7.10 CONSOLIDATED TIER I CAPITAL. Consolidated Tier I
Capital for Borrower and its Subsidiaries shall be equal to or greater than
$60,000,000.00.
9. Section 7.11 "Consolidated Tangible Equity to Total Assets" of ARTICLE
VII FINANCIAL COVENANTS of the Prior Loan Agreement is hereby deleted in its
entirety and the following section is inserted in its place:
SECTION 7.11 CONSOLIDATED TIER I CAPITAL TO TOTAL ASSETS. The
Borrower and its Subsidiaries shall maintain on a consolidated basis at all
times a ratio of Tier I Capital to Average Total Assets for Leverage Capital
Purposes in an amount equal to or greater than 8%. For the purposes of this
definition, "Average Total Assets for Leverage Capital Purposes" shall mean the
amount identified as such on page 27, line 27 of Schedule HC-R of the Borrower
and its Subsidiaries' most recent Consolidated Financial Statements for Bank
Holding Companies (FRY-9C) (or such successor designation as may be instituted
by the appropriate regulatory authority).
10. ACKNOWLEDGMENT OF OUTSTANDING LOANS. Borrower hereby acknowledges,
certifies and agrees that pursuant to the Prior Loan Agreement, Borrower's
obligation to pay the outstanding Loan is not subject to any defense, claim,
counterclaim, setoff, right of recoupment, abatement or other determination; and
the Loan is and shall continue to be governed and secured by the terms and
provisions of the Prior Loan Agreement as amended by the First Amendment, the
Second Amendment and this Amendment.
11. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies and affirms
each of the Loan Documents in their entirety, and acknowledges and agrees that
(i) the Loan Documents are in full force and effect, (ii) all representations
and warranties contained therein are true and correct on and as of the date
hereof, (iii) Borrower is in full compliance with all covenants and agreements
established thereunder, (iv) no Event of Default exists thereunder and (v) the
Loan Documents are legal, valid and binding obligations of Borrower and are
enforceable by Lender, against Borrower in accordance with their respective
terms.
12. COUNTERPARTS. This Amendment may be signed in one or more counterpart
copies, each of which constitutes an original, but all of which, when taken
together, shall constitute one agreement binding upon all of the parties hereto.
13. GOVERNING LAW, ETC. This Amendment shall be governed by and construed
in accordance with the applicable terms and provisions of ARTICLE IX
MISCELLANEOUS of the Prior Loan Agreement, which terms and provisions are
incorporated herein by reference.
14. NO OTHER MODIFICATIONS. Except as hereby amended, no other term,
condition or provision of the Prior Loan Agreement shall be deemed modified or
amended, and this Amendment shall not be considered a novation.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment under seal as of the date first above written.
BORROWER:
COMMUNITY BANKSHARES, INC.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
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J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CEO
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And: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: EVP & CFO
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LENDER:
SUNTRUST BANK, a Georgia banking
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: GROUP VP
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And: /s/
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[name]
Title: FIRST VP
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