EXHIBIT 4.6
GUARANTEE AGREEMENT
Between
UNITED COMMUNITY BANKS, INC.
(as Guarantor)
and
THE CHASE MANHATTAN BANK
(as Guarantee Trustee)
dated as of
July 20, 1998
UNITED COMMUNITY CAPITAL TRUST
Certain Sections of this Guarantee Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Guarantee Agreement
Act Section Section
----------- -------
Section 310 (a) (1)...................... 4.1 (a)
(a) (2)...................... 4.1 (a)
(a) (3)...................... Not Applicable
(a) (4)...................... Not Applicable
(b).......................... 2.8, 4.1 (c)
Section 311 (a).......................... Not Applicable
(b).......................... Not Applicable
Section 312 (a).......................... 2.2 (a)
(b).......................... 2.2 (b)
(c).......................... Not Applicable
Section 313 (a).......................... 2.3
(a) (4)...................... 2.3
(b).......................... 2.3
(c).......................... 2.3
(d).......................... 2.3
Section 314 (a).......................... 2.4
(b).......................... 2.4
(c) (1)...................... 2.5
(c) (2)...................... 2.5
(c) (3)...................... 2.5
(e).......................... 1.1, 2.5, 3.2
Section 315 (a).......................... 3.1 (d)
(b).......................... 2.7
(c).......................... 3.1 (c)
(d).......................... 3.1 (d)
(e).......................... Not Applicable
Section 316 (a).......................... 1.1, 2.6, 5.4
(a) (1) (A).................. 5.4
(a) (1) (B).................. 5.4
(a) (2)...................... Not Applicable
(b).......................... 5.3
(c).......................... Not Applicable
Section 317 (a) (1)...................... Not Applicable
(a) (2)...................... Not Applicable
(b).......................... Not Applicable
Section 318 (a).......................... 2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Guarantee Agreement.
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS......................................................2
SECTION 1.1. DEFINITIONS...............................................2
ARTICLE II. TRUST INDENTURE ACT.............................................5
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION..........................5
SECTION 2.2. LIST OF HOLDERS...........................................6
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE..........................6
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.................6
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..........7
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.................................7
SECTION 2.7. EVENT OF DEFAULT; NOTICE..................................7
SECTION 2.8. CONFLICTING INTERESTS.....................................8
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.............8
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE................8
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE......................10
SECTION 3.3 COMPENSATION.............................................11
SECTION 3.4. INDEMNITY................................................12
ARTICLE IV. GUARANTEE TRUSTEE..............................................12
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY...........................12
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE......................................12
ARTICLE V. GUARANTEE........................................................13
SECTION 5.1. GUARANTEE................................................13
SECTION 5.2. WAIVER OF NOTICE AND DEMAND..............................14
SECTION 5.3. OBLIGATIONS NOT AFFECTED.................................14
SECTION 5.4. RIGHTS OF HOLDERS........................................15
SECTION 5.5. GUARANTEE OF PAYMENT.....................................15
SECTION 5.6. SUBROGATION..............................................16
SECTION 5.7. INDEPENDENT OBLIGATIONS..................................16
ARTICLE VI. COVENANTS AND SUBORDINATION....................................16
SECTION 6.1. SUBORDINATION............................................16
SECTION 6.2. PARI PASSU GUARANTEES....................................16
ARTICLE VII. TERMINATION...................................................17
SECTION 7.1. TERMINATION..............................................17
ARTICLE VIII. MISCELLANEOUS................................................17
SECTION 8.1. SUCCESSORS AND ASSIGNS...................................17
SECTION 8.2. AMENDMENTS...............................................17
SECTION 8.3. NOTICES..................................................18
SECTION 8.4. BENEFIT..................................................19
SECTION 8.5. INTERPRETATION...........................................19
SECTION 8.6. GOVERNING LAW............................................20
SECTION 8.7. COUNTERPARTS.............................................20
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of July 20, 1998, is executed and
delivered by UNITED COMMUNITY BANKS, INC., a Georgia bank holding company (the
"Guarantor") having its principal office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Capital Securities (as defined herein) of United
Community Capital Trust, a Delaware statutory business trust (the "Issuer
Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of July 20, 1998, among United Community Banks,
Inc., as Depositor, The Chase Manhattan Bank, as Property Trustee (the "Property
Trustee"), Chase Manhattan Bank Delaware, as Delaware Trustee (the "Delaware
Trustee") (collectively, the "Issuer Trustees") and the Holders from time to
time of undivided beneficial ownership interests in the assets of the Issuer
Trust, the Issuer Trust is issuing $21,000,000 aggregate Liquidation Amount (as
defined herein) of its 8.125% Capital Securities, Liquidation Amount $1,000 per
capital security (the "Capital Securities"), representing preferred undivided
beneficial ownership interests in the assets of the Issuer Trust and having the
terms set forth in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer Trust
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the 8.125% Junior Subordinated Deferrable Interest Debentures due July 15, 2028
(the "Junior Subordinated Debentures") of the Guarantor which will be deposited
with The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase of the Capital
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, and intending to be legally bound hereby, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of the
Holders from time to time of the Capital Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date hereof.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" AND "CONTROLLED" have meanings correlative to the
foregoing.
"CAPITAL SECURITIES" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"COMMON SECURITIES" means the securities representing common
undivided beneficial interests in the assets of the Issuer Trust.
"DISTRIBUTIONS" means preferential cumulative cash distributions
accumulating from July 20, 1998 and payable semiannually in arrears on January
15 and July 15 of each year, commencing January 15, 1999, at an annual rate of
8.125% of the Liquidation Amount.
"EVENT OF DEFAULT" means (i) a default by the Guarantor in any of
its payment obligations under this Guarantee Agreement, or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"GUARANTEE AGREEMENT" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the
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Redemption Price, with respect to the Capital Securities called for redemption
by the Issuer Trust to the extent that the Issuer Trust shall have funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Issuer Trust, unless the Junior
Subordinated Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the Liquidation Amount and all accumulated and unpaid Distributions
to the date of payment to the extent the Issuer Trust shall have funds on hand
available to make such payment at such time and (b) the amount of assets of the
Issuer Trust remaining available for distribution to Holders on liquidation of
the Issuer Trust (in either case, the "LIQUIDATION DISTRIBUTION").
"GUARANTEE TRUSTEE" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"GUARANTOR" shall have the meaning specified in the first paragraph
of this Guarantee Agreement.
"HOLDER" means any holder, as registered on the books and records of
the Issuer Trust, of any Capital Securities; PROVIDED, HOWEVER, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"INDENTURE" means the Junior Subordinated Indenture dated
as of July 20, 1998, between United Community Banks, Inc. and The Chase
Manhattan Bank, as trustee, as may be modified, amended or supplemented
from time to time.
"ISSUER TRUST" shall have the meaning specified in the first
paragraph of this Guarantee Agreement.
"LIKE AMOUNT" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
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"LIQUIDATION AMOUNT" means the stated amount of $1,000 per
Capital Security.
"MAJORITY IN LIQUIDATION AMOUNT OF THE CAPITAL SECURITIES" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer Trust.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chief
Executive Officer, President, Executive Vice President or a Senior Vice
President or Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
(other than pursuant to Section 2.4) shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"REDEMPTION DATE" means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Junior Subordinated Debenture Redemption Date and
the stated maturity of the Junior Subordinated Debentures shall be a Redemption
Date for a Like Amount of Capital Securities.
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"REDEMPTION PRICE" shall have the meaning specified in the
Trust Agreement.
"RESPONSIBLE OFFICER" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary, Senior Trust Officer, Trust Officer or any other
officer of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and having direct
responsibility for the administration of this Guarantee Agreement, and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"SENIOR INDEBTEDNESS" shall have the meaning specified in
the Indenture.
"SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"TRUST AGREEMENT" means the Amended and Restated Trust Agreement,
dated as of July 20, 1998, executed by United Community Banks, Inc., as
Depositor, Chase Manhattan Bank Delaware, as Delaware Trustee, and The Chase
Manhattan Bank, as Property Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939
(15 U.S.C. ▇▇.▇▇. 77aaa-77bbbb), as amended.
"TRUST SECURITIES" means the Common Securities and the
Capital Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
This Guarantee Agreement is intended to be in conformity with the
provisions of the Trust Indenture Act that would be required to be part of this
Guarantee Agreement were this Guarantee Agreement to be qualified under the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions. If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the
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duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Guarantee Agreement, the provision of
the Trust Indenture Act shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Guarantee Agreement as so modified or to be excluded, as the case may be.
SECTION 2.2. LIST OF HOLDERS.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) semiannually, not more than 15 days after December 31 and
June 30 in each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of such
December 31 and June 30; and
(ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished; provided that the Guarantor shall not
be obligated to provide such a list at any time such list does not differ from
the most recent list of holders given to the Guarantee Trustee by the Guarantor.
(b) The Guarantee Trustee shall comply with the requirements of
Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Not later than 60 days after May 15 of each year, commencing May 15,
1999 the Guarantee Trustee shall provide to the Holders such reports dated as of
such May 15, 1999, if any, as are required by Section 313 of the Trust Indenture
Act in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.
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The Guarantor shall provide to the Guarantee Trustee, and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314(a)(4) of the Trust Indenture Act, in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence
of compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in Liquidation Amount of the Capital
Securities may, on behalf of the Holders, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent therefrom.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the Guarantee
Trustee has actual knowledge of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, notice of all Events of Default actually
known to the Guarantee Trustee, unless such Events of Default have been cured
before the giving of such notice; PROVIDED THAT, except in the case of a default
in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected
in withholding such notice if and so long as the Board of Directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer charged with the
administration of this Guarantee Agreement shall have received written notice
from the Guarantor or a Holder of such Event of Default.
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SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee hereunder. The right, title and interest of the
Guarantee Trustee, as such, hereunder shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to the Guarantee Trustee
has occurred and is continuing, the Guarantee Trustee shall enforce this
Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall be obligated to perform only such duties as are specifically set forth in
this Guarantee Agreement (including pursuant to Section 2.1), and no implied
covenants shall be read into this Guarantee Agreement against the Guarantee
Trustee. If an Event of Default has occurred that is actually known to the
Guarantee Trustee (that has not been cured or waived pursuant to Section 2.6),
the Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
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(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by the express provisions of this
Guarantee Agreement (including pursuant to Section 2.1), and the Guarantee
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee Agreement (including
pursuant to Section 2.1); and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof or of the Trust
Indenture Act are specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Guarantee
Agreement;
(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in Liquidation
Amount of the Capital Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not assured to it under the terms of this Guarantee
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Agreement or adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the advice or written opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by it hereunder in good faith
and in accordance with such advice or opinion. Such legal counsel may be legal
counsel to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee.
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(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any negligence or willful misconduct on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the Holders
of a Majority in Liquidation Amount of the Capital Securities, (B) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received and (C) shall be fully protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3 COMPENSATION.
The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Guarantee Trustee in accordance with any provision of
this Guarantee Agreement.
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SECTION 3.4. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Guarantee Trustee will
not claim or exact any lien or charge on any Guarantee Payments as a result of
any amount due to it under this Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(a) of the Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act, subject to the penultimate
paragraph thereof.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE
GUARANTEE TRUSTEE.
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(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a Guarantee
Trustee may resign at any time by giving written notice thereof to the Guarantor
and the Holders. If the instrument of acceptance by the Successor Guarantee
Trustee shall not have been delivered to the Guarantee Trustee within 60 days
after the giving of such notice of resignation, the Guarantee Trustee may
petition, at the expense of the Guarantor, any court of competent jurisdiction
for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any time by
Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders of
at least a Majority in Liquidation Amount of the Capital Securities, delivered
to the Guarantee Trustee, or with or without cause, by the Guarantor at any time
except during an Event of Default.
(d) If a Guarantee Trustee shall resign, be removed or become
incapable of acting as Guarantee Trustee, or if any vacancy shall occur in the
office of any Guarantee Trustee for any cause, the Guarantor shall appoint a
successor Guarantee Trustee. If no Successor Guarantee Trustee shall have been
so appointed by the Guarantor and such appointment accepted by the Successor
Guarantee Trustee, any Holder, on behalf of himself and all others similarly
situated, may petition any court of competent jurisdiction for the appointment
of a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust
to pay such amounts to the Holders. The Guarantor shall give prompt written
notice to the Guarantee Trustee in the event it makes any direct payment
hereunder.
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SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of all
or any portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment period
on the Junior Subordinated Debentures as so provided in the Indenture),
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Capital
Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Capital Securities, or any
action on the part of the Issuer Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer Trust or any of the
assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
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(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it being the intent of this Section 5.3
that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement,
PROVIDED, HOWEVER, that, subject to Section 3.1, the Guarantee Trustee shall
have the right to decline to follow any such direction if the Guarantee Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Guarantee Trustee in good faith shall, by a Responsible
Officer or Officers of the Guarantee Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of the Holders not party to such direction, and
PROVIDED FURTHER that nothing in this Guarantee Agreement shall impair the right
of the Guarantee Trustee to take any action deemed proper by the Guarantee
Trustee and which is not inconsistent with such direction; and (iv) any Holder
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Issuer Trust or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Junior Subordinated Debentures
to Holders as provided in the Trust Agreement.
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SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all rights (if any) of the
Holders against the Issuer Trust in respect of any amounts paid to the Holders
by the Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness of the Guarantor to the extent and in the manner set forth
in the Indenture with respect to the Junior Subordinated Debentures, and the
provisions of Article XIII of the Indenture will apply, MUTATIS MUTANDIS, to the
obligations of the Guarantor hereunder. The obligations of the Guarantor
hereunder do not constitute Senior Indebtedness of the Guarantor.
SECTION 6.2. PARI PASSU GUARANTEES.
The obligations of the Guarantor under this Guarantee Agreement
shall rank PARI PASSU with any similar guarantee agreements issued by the
Guarantor on behalf
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of the holders of preferred or capital securities issued by any other trust
similar to the Issuer Trust and with any other security, guarantee or other
obligation that is expressly stated to rank PARI PASSU with the obligations of
the Guarantor under this Guarantee Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Capital
Securities, (ii) the distribution of Junior Subordinated Debentures to the
Holders in exchange for all of the Capital Securities, (iii) full payment of the
amounts payable in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer Trust, or (iv) the exchange of this Guarantee
Agreement for the Exchange Guarantee Agreement, provided, that, all Private
Capital Securities shall have been exchanged for Exchange Capital Securities
pursuant to the Exchange Offer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder is required to restore payment of any sums paid
under the Capital Securities or this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder, and any purported assignment that is not in accordance
with these provisions shall be void.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this
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Guarantee Agreement may only be amended with the prior approval of the Holders
of not less than a Majority in Liquidation Amount of the Capital Securities. The
provisions of Article VI of the Trust Agreement concerning meetings or consents
of the Holders shall apply to the giving of such approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to
be given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied with receipt confirmed, or mailed by first
class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set
forth below or such other address or telecopy number or to the attention of such
other Person as the Guarantor may give notice to the Guarantee Trustee and the
Holders:
United Community Banks, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(b) if given to the Issuer Trust at the Issuer Trust's (and the
Guarantee Trustee's) address or telecopy number set forth below or such other
address or telecopy number or to the attention of such other Person as the
Issuer Trust or the Guarantee Trustee may give notice to the Guarantee Trustee
(if given by the Issuer Trust) and the Holders:
United Community Capital Trust
c/o United Community Banks, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Attention: Corporate Trustee Administration
(c) if given to the Guarantee Trustee, to the address or telecopy
number set forth below or such other address or telecopy number or to the
attention of such other Person as the Guarantee Trustee may give notice to the
Guarantor and the Holders:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trustee Administration
(d) if given to any Holder, at the address set forth on the books
and records of the Issuer Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders
and is not separately transferable from the Capital Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
UNITED COMMUNITY BANKS, INC.
as Guarantor
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
THE CHASE MANHATTAN BANK,
as Guarantee Trustee, and not
in its individual capacity
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trust Officer
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