Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNITED COMMUNITY BANKS INC | t67624_8k.htm |
| EX-1.3 - EXHIBIT 1.3 - UNITED COMMUNITY BANKS INC | ex1-3.htm |
| EX-1.2 - EXHIBIT 1.2 - UNITED COMMUNITY BANKS INC | ex1-2.htm |
| EX-1.1 - EXHIBIT 1.1 - UNITED COMMUNITY BANKS INC | ex1-1.htm |
| EX-4.1 - EXHIBIT 4.1 - UNITED COMMUNITY BANKS INC | ex4-1.htm |
| EX-99.1 - EXHIBIT 99.1 - UNITED COMMUNITY BANKS INC | ex99-1.htm |
Exhibit
4.2
FORM
OF
CERTIFICATE
OF RIGHTS AND PREFERENCES
OF
SERIES
C CONVERTIBLE PREFERRED STOCK
OF
UNITED
COMMUNITY BANKS, INC.
March
[●], 2010
Pursuant
to Section 14-2-602 of the Georgia Business Corporation Code and Article V of
the Restated Articles of Incorporation, as amended, of United Community Banks,
Inc., a corporation organized and existing under the laws of the State of
Georgia (the “Company”),
hereby certifies that the following resolution was duly adopted by the Board of
Directors of the Company effective as of March [●], 2010 pursuant to authority
conferred upon the Board of Directors by the Restated Articles of Incorporation
of the Company, as amended, which authorize the issuance of up to Ten Million
(10,000,000) shares of preferred stock, par value $1.00 per share.
RESOLVED,
that pursuant to authority expressly granted to and vested in the Board of
Directors of the Company and pursuant to the provisions of the Articles of
Incorporation, the Board of Directors hereby creates a series of preferred
stock, herein designated and authorized as the Series C Convertible Preferred
Stock, par value $1.00 per share, which shall consist of Sixty-Five Thousand
(65,000) of the shares of preferred stock which the Company now has authority to
issue, and the Board of Directors hereby fixes the powers, designations and
preferences and the relative, participating, optional and other special rights
of the shares of such series, and the qualifications, limitations and
restrictions thereof as follows:
1. Number. The
number of shares constituting the Series C Convertible Preferred Stock shall be
Sixty-Five Thousand (65,000), all of which are issuable solely under the
Agreement.
2. Definitions. Unless
the context otherwise requires, when used herein the following terms shall have
the meaning indicated.
“Acquiring
Person” has the meaning set forth in the Agreement.
“Acquisition
Consideration” is defined in Section
6(f)(iii)(C).
“Agreement”
means the Securities Purchase Agreement dated as of April 1, 2010, by and
between the Company and Fletcher pursuant to which Sixty-Five Thousand (65,000)
shares of Series C Preferred Stock and a warrant are to be issued by the
Company, including all schedules, annexes and exhibits thereto, and as such
agreement may be amended from time to time.
“Articles
of Incorporation” means the Restated Articles of Incorporation of the
Company, as amended.
“Board”
means the Board of Directors of the Company.
1
“Business
Day” means any day on which the Common Stock may be traded on the Nasdaq,
or if not admitted for trading on the Nasdaq, on any day other than a Saturday,
Sunday or holiday on which banks in New York City are required or permitted to
be closed.
“Capital
Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated) of capital or capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership, limited
partnership, limited liability company or other equity interests of such
Person.
“Certificate
of Rights and Preferences” means this Certificate of Rights and
Preferences of the Series C Preferred Stock.
“Change
of Control” has the meaning set forth in the Agreement.
“Change
of Control Notice” is defined in Section
6(f)(i).
“Common
Stock Equivalent Junior Preferred Stock” means the Company’s Common Stock
Equivalent Junior Preferred Stock, par value $1.00 per share, issuable pursuant
to Section 6 of the Agreement, and any Capital Stock for or into which such
Common Stock Equivalent Junior Preferred Stock hereafter is exchanged,
converted, reclassified or recapitalized by the Company or pursuant to a Change
of Control (or, at the election of the Holder, the Capital Stock of any
Acquiring Person from and after the consummation of a Change of
Control).
“Common
Stock” means the Company’s common stock, par value $1.00 per share, and
any Capital Stock for or into which such common stock hereafter is exchanged,
converted, reclassified or recapitalized by the Company or pursuant to a Change
of Control (or, at the election of the Holder, the Capital Stock of any
Acquiring Person from and after the consummation of a Change of
Control).
“Company”
means United Community Banks, Inc., a Georgia corporation (or any Acquiring
Person from and after the consummation of a Change of Control).
“Contingent
Notice” is defined in Section
6(f)(iii).
“Conversion
Closing Date” is defined in Section
6(a)(i).
“Conversion
Notice” is defined in Section
6(a)(i).
“Conversion
Notice Date” is defined in Section
6(a)(i).
“Conversion
Price” means Six Dollars and Two Cents ($6.02), subject to adjustment as
set forth herein.
“Conversion
Stock Amount” is defined in Section
6(a)(ii).
“Daily
Market Price” has the meaning set forth in the Agreement.
2
“Dividend
Payment Date” is defined in Section
3(a).
“Dividend
Period” is defined in Section
3(a).
“Dividend
Rate” means (i) prior to receipt of the Stockholder Consent, a rate equal
to One Thousand Dollars ($1,000) per share multiplied by the lesser of (a)
twelve percent (12%) per annum and (b) the sum of the three (3)-month London
Interbank Offer Rate (LIBOR) determined as of the first day of the Dividend
Period (or if the first day of the Dividend Period is not a Business Day, then
the first Business Day after the first day of the Dividend Period) plus eight
percent (8%) per annum, subject to Section
3(c); and (ii) after receipt of the Stockholder Consent, a rate equal to
One Thousand Dollars ($1,000) per share multiplied by the lesser of (a) eight
percent (8%) per annum and (b) the sum of the three (3)-month London Interbank
Offer Rate (LIBOR) determined as of the first day of the Dividend Period (or if
the first day of the Dividend Period is not a Business Day, then the first
Business Day after the first day of the Dividend Period) plus four percent (4%)
per annum, subject to Section
3(c).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Fletcher”
means Fletcher International, Ltd. a company domiciled in Bermuda, together with
its successors.
“Holder”
shall mean Fletcher and any one or more Persons to whom Fletcher sells,
exchanges, transfers, assigns, gives, pledges, encumbers, hypothecates,
alienates or distributes, whether directly or indirectly, any or all the Series
C Preferred Stock or all or any portion of the right to purchase the Series C
Preferred Stock under the Agreement.
“Investment
Period” has the meaning set forth in the Agreement.
“Issue
Date” means with respect to any shares of Series C Preferred Stock the
original date of issuance of such shares of Series C Preferred
Stock.
“Junior
Securities” means Capital Stock that, with respect to dividends and
distributions upon Liquidation, ranks junior to the Series C Preferred Stock,
including but not limited to Common Stock, Common Stock Equivalent Junior
Preferred Stock and any other class or series of Capital Stock issued by the
Company or any Subsidiary of the Company on or after the date of the Agreement,
but excluding any Parity Securities and Senior Securities issued (i) to Fletcher
or its authorized assignees under the Agreement, (ii) with the approval of the
Holders of a Majority of the Series C Preferred Stock or (iii) upon the
conversion, redemption or exercise of securities described in clause (i) or (ii)
in accordance with the terms thereof.
“Liquidation”
means the voluntary or involuntary liquidation, dissolution or winding up of the
Company; provided,
however,
that a consolidation, merger or share exchange shall not be deemed a
Liquidation, nor shall a sale, assignment, conveyance, transfer, lease or other
disposition by the Company of all or substantially all of its assets, which does
not involve a distribution by the Company of cash or other property to the
holders of Common Stock and Common Stock Equivalent Junior Preferred Stock, be
deemed to be a Liquidation.
3
“Liquidation
Preference” is defined in Section
4.
“Majority
of the Series C Preferred Stock” means more than fifty percent (50%) of
the then outstanding shares of Series C Preferred Stock.
“Maximum
Number” has the meaning set forth in the Agreement.
“Nasdaq”
has the meaning set forth in the Agreement.
“Ordinary
Cash Dividend” means all quarterly cash dividends out of capital surplus
or retained earnings legally available therefore (determined in accordance with
generally accepted accounting principles, consistently applied), in an amount
and frequency consistent with past practice.
“Parent”
means, as to any Acquiring Person, any Person that (i) controls the Acquiring
Person directly or indirectly through one or more intermediaries, (ii) is
required to include the Acquiring Person in the consolidated financial
statements contained in such Parent’s Annual Report on Form 10-K (if the Parent
is required to file such a report) or would be required to so include the
Acquiring Person in such Parent’s consolidated financial statements if they were
prepared in accordance with U.S. generally accepted accounting principles and
(iii) is not itself included in the consolidated financial statements of any
other Person (other than its consolidated subsidiaries).
“Parity
Securities” means any class or series of Capital Stock that, with respect
to dividends or distributions upon Liquidation, is pari
passu with the Series C Preferred Stock.
“Person”
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, limited liability company, joint venture, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Preferred
Stock” means the Company’s preferred stock authorized pursuant to the
provisions of the Articles of Incorporation.
“Prevailing
Market Price” means, with respect to any reference date, the average of
the Daily Market Prices of the Common Stock (or, for purposes of determining the
Prevailing Market Price of the common stock of an Acquiring Person or its Parent
under Section
6(f), the common stock of such Acquiring Person or such Parent) for the
twenty-five (25) Business Days ending on and including the third (3rd)
Business Day before such reference date.
“Redemption
Closing Date” is defined in Section
6(b)(i).
“Redemption
Notice” is defined in Section
6(b)(i).
“Redemption
Price” means Five Dollars and Twenty-Five Cents ($5.25), subject to
adjustment as set forth herein.
“Redemption
Stock Amount” is defined in Section
6(b)(ii).
4
“Restatement”
has the meaning set forth in the Agreement.
“SEC”
means the Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
“Senior
Securities” means any class or series of Capital Stock that, with respect
to dividends or distributions upon Liquidation, ranks senior to the Series C
Preferred Stock.
“Series
C Preferred Stock” means the Series C Convertible Preferred Stock of the
Company or successor as contemplated by Section
6(f).
“Stated
Value” is an amount equal to One Thousand Dollars ($1,000) per share of
Series C Preferred Stock plus (x) any unpaid dividends on the Series C Preferred
Stock (as of the date of determination, which for purposes of Sections
6(a) and 6(b)
shall be the Conversion Closing Date and Redemption Closing Date, respectively),
whether or not declared and whether or not earnings are available in respect of
such dividends (i.e., the Stated Value shall increase in each Dividend Period by
the Dividend Rate if and to the extent that dividends for such Dividend Period
are not declared and paid by the respective Dividend Payment Date) and
(y) any unpaid dividends declared on the Common Stock and Common Stock
Equivalent Junior Preferred Stock in an amount equal to the product of (A) the
per-share dividend other than the Ordinary Cash Dividend paid on Common Stock
and Common Stock Equivalent Junior Preferred Stock multiplied by (B) the
number of shares of Common Stock and/or the number of one-hundredths of a share
of Common Stock Equivalent Junior Preferred Stock issuable upon redemption or
conversion (whichever number of shares is greater) of a share of Series C
Preferred Stock on the date such dividend is declared on the Common Stock and
Common Stock Equivalent Junior Preferred Stock. In the event the
Company shall declare a distribution on the Common Stock and Common Stock
Equivalent Junior Preferred Stock payable in securities or property other than
cash, the value of such securities or property will be the fair market
value. Any securities shall be valued as follows: (i) if traded on a
national securities exchange (as defined in the Exchange Act), the value shall
be deemed to be the average of the closing prices of the securities on such
exchange or system over the twenty-five (25) Business Day period ending three
(3) calendar days prior to such declaration; (ii) if actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid
or sale prices (whichever is applicable) over the twenty-five (25) Business Day
period ending three (3) calendar days prior to such declaration; and (iii) if
there is no active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board.
“Stockholder
Consent” has the meaning set forth in the Agreement.
“Stockholder
Consent Date” has the meaning set forth in the Agreement.
“Subsidiary”
of a Person means (i) a corporation, a majority of whose stock with voting
power, under ordinary circumstances, to elect directors is at the time of
determination, directly or indirectly, owned by such Person or by one or more
Subsidiaries of such Person, or (ii) any other entity (other than a corporation)
in which such Person or one or more Subsidiaries of such Person, directly or
indirectly, at the date of determination thereof has a least a majority
ownership interest.
5
The
foregoing definitions will be equally applicable to both the singular and plural
forms of the defined terms.
3. Dividends
and Distributions.
(a) Holders
shall be entitled to receive out of the assets of the Company legally available
for that purpose, cash dividends at the Dividend Rate to be paid in accordance
with the terms of this Section
3. In addition, Holders for each share of Series C Preferred
Stock then owned by such Holder shall be entitled to receive out of the assets
of the Company legally available for that purpose, dividends or other
distributions declared on the Common Stock and Common Stock Equivalent Junior
Preferred Stock in the same form as such dividends or distributions in an amount
equal to the product of (x) the amount of any per-share dividend or distribution
other than the Ordinary Cash Dividends paid on the Common Stock and Common Stock
Equivalent Junior Preferred Stock multiplied by (y) the number of shares of
Common Stock and/or the number of one-hundredths of a share of Common Stock
Equivalent Junior Preferred Stock issuable upon redemption or conversion
(whichever number of shares is greater) of a share of the Series C Preferred
Shares on the date such dividend is declared, to be paid in accordance with the
terms of this Section
3. Such dividends shall be payable quarterly in arrears, when
and as declared by the Board (or a duly appointed committee of directors), on
April 15, July 15, October 15 and January 15 of each year commencing on
April 15, 2010 and, in the case of dividends resulting from dividends or
distributions declared on Common Stock and Common Stock Equivalent Junior
Preferred Stock, no later than the date on which such dividends or distributions
are paid to holders of the Common Stock and Common Stock Equivalent Junior
Preferred Stock (each such date being herein referred to as a “Dividend
Payment Date”). The period from the Issue Date to
March 31, 2010, and each quarterly period between consecutive Dividend
Payment Dates shall hereinafter be referred to as a “Dividend
Period.” The dividend for any Dividend Period for any share of
Series C Preferred Stock that is not outstanding on every calendar day of the
Dividend Period shall be prorated based on the number of calendar days such
share was outstanding during the period. Each such dividend shall be
paid to the Holders of record of the Series C Preferred Stock as their names
appear on the share register of the Company on the Dividend Payment
Date. Dividends on account of arrears for any past Dividend Periods
may be declared and paid at any time, without reference to any Dividend Payment
Date (including, without limitation, for purposes of computing the Stated Value
of any shares of Series C Preferred Stock in connection with the conversion or
redemption thereof or any Liquidation of the Company), to Holders of record on a
date designated by the Board, not exceeding thirty (30) calendar days preceding
the payment date thereof, as may be fixed by the Board. For purposes
of determining the amount of dividends accrued as of the first Dividend Payment
Date and as of any date that is not a Dividend Payment Date, such amount shall
be calculated on the basis of the Dividend Rate for the actual number of
calendar days elapsed from and including the Issue Date (in case of the first
Dividend Payment Date and any date prior to the first Dividend Payment Date) or
the last preceding Dividend Payment Date (in case of any other date) to the date
as of which such determination is to be made, based on a three hundred sixty
five (365) day year.
6
(b) So
long as any shares of the Series C Preferred Stock shall be outstanding,
(i) the Company shall not and shall not allow its Subsidiaries (other than
direct or indirect wholly-owned Subsidiaries) to declare or pay any dividend
whatsoever, whether in cash, property or otherwise, set aside any cash or
property for the payment of any dividends, or make any other distribution on any
Junior Securities or Parity Securities and (ii) the Company shall not and
shall not allow its Subsidiaries to repurchase, redeem or otherwise acquire for
value or set aside any cash or property for the repurchase or redemption of any
Junior Securities or Parity Securities, unless in each such case all dividends
to which the Holders of the Series C Preferred Stock shall have been entitled to
receive for all previous Dividend Periods shall have been paid and dividends on
the Series C Preferred Stock for the subsequent four Dividend Periods shall have
been designated and set aside in cash.
(c) Notwithstanding
anything herein to the contrary, whenever, at any time or times after the
Company has obtained the approval of the stockholders of the Company to increase
the authorized number of shares of Common Stock, the Company shall fail to
redeem any Series C Preferred Stock by the date it is obligated to do so under
Section
6(b) hereof and such failure is ongoing, then (x) the Dividend Rate with
respect to such Series C Preferred Stock that is subject to such redemption
shall mean a rate equal to twenty two percent (22%) per annum times the Stated
Value until such date that the failure to redeem no longer exists.
(d) The
Company shall be entitled to deduct and withhold from any dividend on the Series
C Preferred Stock such amounts as the Company is required to deduct and withhold
with respect to such dividend under the Internal Revenue Code of 1986, as
amended, or any other provision of state, local or foreign tax law.
7
4. Liquidation
Preference. In the event of any Liquidation, after payment or
provision for payment by the Company of the debts and other liabilities of the
Company and the liquidation preference of any Senior Securities that rank senior
to the Series C Preferred Stock with respect to distributions upon Liquidation,
each Holder shall be entitled to receive an amount in cash for each share of the
then outstanding Series C Preferred Stock held by such Holder equal to the
greater of (a) the Stated Value per share to and including the date full payment
is tendered to the Holders with respect to such Liquidation and (b) the amount
the Holders would have received if the Holders had converted all outstanding
shares of Series C Preferred Stock into Common Stock and/or Common Stock
Equivalent Junior Preferred Stock in accordance with the provisions of Section
6(a) hereof or redeemed all outstanding shares of Series C Preferred
Stock into Common Stock and/or Common Stock Equivalent Junior Preferred Stock
under Section 6(b)
hereof (whichever is greater), in each case as of the Business Day immediately
preceding the date of such Liquidation (such greater amount being referred to
herein as the “Liquidation
Preference”), before any distribution shall be made to the holders of any
Junior Securities (and any Senior Securities or Parity Securities that, with
respect to distributions upon Liquidation, rank junior to the Series C Preferred
Stock) upon the Liquidation of the Company. In case the assets of the
Company available for payment to the Holders are insufficient to pay the full
Liquidation Preference on all outstanding shares of the Series C Preferred Stock
and all outstanding shares of Parity Securities and Senior Securities that, with
respect to distributions upon Liquidation, are pari
passu with the Series C Preferred Stock in the amounts to which the
holders of such shares are entitled, then the entire assets of the Company
available for payment to the Holders and to the holders of such Parity
Securities and Senior Securities shall be distributed ratably among the Holders
of the Series C Preferred Stock and the holders of such Parity Securities and
Senior Securities, based upon the aggregate amount due on such shares upon
Liquidation. Written notice of any Liquidation of the Company,
stating a payment date and the place where the distributable amounts shall be
payable, shall be given by facsimile and overnight delivery not less than ten
(10) calendar days prior to the payment date stated therein, to the Holders of
record of the Series C Preferred Stock, if any, at their respective addresses as
the same shall appear on the books of the Company.
5. Voting
Rights. The Holders shall have the following voting rights
with respect to the Series C Preferred Stock:
(a) Each
share of Series C Preferred Stock shall entitle the holder thereof to the voting
rights specified in Section
5(b) and no other voting rights except as required by law.
(b) The
consent of the Holders of at least a Majority of the Series C Preferred Stock,
voting separately as a single class with one vote per share, in person or by
proxy, either in writing without a meeting or at an annual or a special meeting
of such Holders called for the purpose, shall be necessary to amend, alter or
repeal, by way of merger or otherwise, any of the provisions of the Articles of
Incorporation, including the Certificate of Rights and Preferences, or Bylaws of
the Company so as to significantly and adversely affect any of the rights or
preferences of the Holders of the Series C Preferred Stock. Without limiting the
generality of the preceding sentence, such change includes any action that
would:
(i) Reduce
the Dividend Rate on the Series C Preferred Stock or defer the date from which
dividends will accrue, or cancel accrued and unpaid dividends, or change the
relative seniority rights of the holders of Series C Preferred Stock as to the
payment of dividends in relation to the holders of any other Capital Stock of
the Company;
(ii) Reduce
the amount payable to the holders of the Series C Preferred Stock upon the
voluntary or involuntary liquidation, dissolution, or winding up of the Company,
or change the relative seniority of the liquidation preferences of the holders
of the Series C Preferred Stock to the rights upon liquidation of the holders of
any other Capital Stock of the Company;
8
(iii) Make
the Series C Preferred Stock redeemable at the option of the
Company;
(iv) Authorize,
create or issue any shares of Senior Securities (or amend the provisions of any
existing class of Capital Stock to make such class of Capital Stock a class of
Senior Securities); or
(v)
Decrease (other than by redemption or conversion) the total number of authorized
shares of Series C Preferred Stock.
6. Conversion
and Redemption.
(a) Procedure
for Conversion at the Option of the Company.
(i) General. Subject
to Section
6(c) hereof, on or after the five year anniversary of the
Stockholder Consent Date, on any date on which the Prevailing Market Price
exceeds the Conversion Price by one hundred percent (100%) or more, the
Company shall have the option to convert all, but not less than all, of the then
outstanding shares of Series C Preferred Stock by delivering a duly executed
written Preferred Stock conversion notice, substantially in the form attached as
Annex F to the Agreement (the “Conversion
Notice” and the date such notice is deemed delivered hereunder, the
“Conversion
Notice Date”), by facsimile, mail or overnight courier delivery, to the
Holder. The closing of such conversion shall take place, subject to the
satisfaction or waiver of the conditions set forth in Section 6(a)(iii),
(a) on the twentieth (20th)
Business Day following and excluding the Conversion Notice Date or (b) any other
date upon which the exercising Holder and the Company mutually agree (the “Conversion
Closing Date”). The Conversion Notice shall apply only to shares of
Series C Preferred Stock for which no Redemption Notice has been tendered to the
Company before the twentieth (20th)
Business Day after the Conversion Notice Date, regardless of when the applicable
redemption is consummated.
(ii) Conversion
for stock. Subject to Section
6(c) hereof, such shares of stock shall be converted into that number of
shares of Common Stock and/or number of one-hundredths (1/100th) of
a share of Common Stock Equivalent Junior Preferred Stock equal to (a) the
aggregate Stated Value of such shares divided by (b) the Conversion Price (the
“Conversion
Stock Amount”). On the Conversion Closing Date, the Holder
shall surrender the certificate representing the shares of Series C Preferred
Stock to be converted to the Company at the address set forth for notices to the
Company specified in Section 18 of the Agreement, and the Company shall deliver
to such Holder as specified in the Conversion Notice the Conversion Stock Amount
of duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock and/or Common Stock Equivalent Junior Preferred Stock.
9
(iii) Closing
conditions. It shall be a condition of the converting Holder’s
obligation to close that each of the following is satisfied, unless expressly
waived by such Holder in writing (which Holder may do or refrain from doing in
its sole discretion):
(A) (w)
the representations and warranties made by the Company in the Agreement shall be
true and correct as of the Conversion Closing Date, except those representations
and warranties that address matters only as of a particular date, which shall be
true and correct as of such date; (x) the Company shall have complied fully
with all of the covenants and agreements in the Agreement; (y) all shares of
Common Stock to be issued upon such conversion shall be duly listed and admitted
to trading on the Nasdaq Global Select Market, the Nasdaq Global Market or the
New York Stock Exchange; and (z) such Holder shall have received a certificate
of the Chief Executive Officer and the Chief Financial Officer of the Company
dated such date and to the effect of clauses (x), (y) and (z).
(B) On
the Conversion Closing Date, the Company shall have delivered to the Holder
(x) a Conversion Notice, substantially in the form attached as Annex G to
the Agreement and (y) the legal opinion described in Section 12(b) of the
Agreement.
(C) If
the issuance of Common Stock or Common Stock Equivalent Junior Preferred Stock
would cause the number of shares of Common Stock and Common Stock Equivalent
Junior Preferred Stock held by any Holder to exceed the Maximum Number then
delivery of such shares of Common Stock or Common Stock Equivalent Junior
Preferred Stock shall be deferred pursuant to Section 6(d) of the
Agreement. Notwithstanding anything herein to the contrary, in such
event, the Company shall no longer be obligated to pay any dividend on the
Series C Preferred Stock or provide or recognize any other preferences,
limitations, powers or other rights provided by this Certificate of Rights and
Preferences to the extent that, if the Series C Preferred Stock would have been
converted, the Holder would beneficially own Common Stock and Common Stock
Equivalent Junior Preferred Securities that would exceed the Maximum
Number.
The
Company shall use its best efforts to cause each of the foregoing conditions to
be satisfied at the earliest practicable date after a Conversion
Notice. If such conditions are not satisfied or waived prior to the
twentieth (20th)
Business Day following and excluding the date the Conversion Notice is
delivered, then the Company may, at its sole option, and at any time, withdraw
the Conversion Notice by written notice to the Holder regardless of whether such
conditions have been satisfied or waived as of the withdrawal date and, after
such withdrawal, shall have no further obligations with respect to such
Conversion Notice and may submit a Conversion Notice with respect to the shares
referenced in the withdrawn Conversion Notice pursuant to Section
6(a)(i) hereof, subject to the closing conditions in this Section
6(a)(iii).
10
(iv) Holder
of record. Each conversion of Series C Preferred Stock shall
be deemed to have been effected immediately before the close of business on the
Business Day on which the Conversion Notice is delivered (except, that, for
purposes of calculation of the Stated Value, dividends shall accrue until and
including the Conversion Closing Date), and at such time the Person or Persons
in whose name or names any certificate or certificates for shares of Common
Stock or Common Stock Equivalent Junior Preferred Securities shall be issuable
upon such conversion as provided in Section
6(a)(ii) shall be deemed to have become the holder or holders of record
thereof.
(b) Procedure
for Redemption at the Option of the Holder.
(i)
General. Subject
to Section
6(c) hereof, at any time after the Company has obtained the approval of
the stockholders of the Company to increase the authorized number of shares of
Common Stock, a Holder of Series C Preferred Stock may at the option of the
Holder require the Company to redeem any or all shares of Series C Preferred
Stock held by such Holder for Common Stock and/or Common Stock Equivalent Junior
Preferred Stock on one or more occasions by delivering an optional redemption
notice (a “Redemption
Notice”) to the Company substantially in the form attached as Annex H to
the Agreement; provided, however, that until the Company has obtained the
approval of the stockholders of the Company to increase the authorized number of
shares of Common Stock, a Holder of Series C Preferred Stock may require the
Company to redeem any or all of such shares of Series C Preferred Stock for
Common Stock Equivalent Junior Preferred Stock. The closing of such
redemption shall take place, subject to the satisfaction or waiver of the
conditions set forth in Section 6(b)(iii)
(a) on the second (2nd)
Business Day, or if the Holder so elects, the third (3rd)
Business Day, following and excluding the date the Redemption Notice is
delivered or (b) any other date upon which the exercising Holder and the Company
mutually agree (the “Redemption
Closing Date”).
(ii)
Redemption
for stock. Subject to Section
6(c) hereof, such shares of Series C Preferred Stock shall be redeemed
into that number of shares of Common Stock and/or number of one-hundredths
(1/100th) of
a share of Common Stock Equivalent Junior Preferred Stock equal to (a) the
aggregate Stated Value of such shares divided by (b) the Redemption Price (the
“Redemption
Stock Amount”). On the Redemption Closing Date, the Holder
shall surrender the certificate representing the shares of Series C Preferred
Stock to be redeemed to the Company at the address set forth for notices to the
Company specified in Section 18 of the Agreement and the Company shall deliver
to such Holder as specified in the Redemption Notice the Redemption Stock Amount
of duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock and/or Common Stock Equivalent Junior Preferred Stock.
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(iii) Closing
conditions. It shall be a condition of the redeeming Holder’s
obligation to close that each of the following is satisfied, unless expressly
waived by such Holder in writing:
(A) (w)
the representations and warranties made by the Company in the Agreement shall be
true and correct as of the Redemption Closing Date, except those representations
and warranties that address matters only as of a particular date, which shall be
true and correct as of such date; (x) the Company shall have complied fully
with all of the covenants and agreements in the Agreement; (y) all shares of
Common Stock to be issued upon such redemption shall be duly listed and admitted
to trading on the Nasdaq Global Select Market, the Nasdaq Global Market or the
New York Stock Exchange; and such Holder shall have received a certificate of
the Chief Executive Officer and (z) the Chief Financial Officer of the Company
dated such date and to the effect of clauses (w), (x) and (y).
(B) On
the Redemption Closing Date, the Company shall have delivered to the Holder
(x) a Preferred Stock redemption delivery notice, substantially in the form
attached as Annex I to the Agreement and (y) the legal opinion described in
Section 12(b) of the Agreement.
(C) As
of the Redemption Closing Date, the Company shall have notified the Holder of
all Restatements.
(D) If
the issuance of Common Stock or Common Stock Equivalent Junior Preferred Stock
would cause the number of shares of Common Stock and Common Stock Equivalent
Junior Preferred Stock held by any Holder to exceed the Maximum Number then
delivery of such shares of Common Stock or Common Stock Equivalent Junior
Preferred Stock shall be deferred pursuant to Section 6(d) of the
Agreement. Notwithstanding anything herein to the contrary, in such
event, the Company shall no longer be obligated to pay any dividend on the
Preferred Stock or provide or recognize any other preferences, limitations,
powers or other rights provided by this Certificate of Rights and Preferences to
the extent that, if the Series C Preferred Stock would have been redeemed, the
Holder would beneficially own Common Stock and Common Stock Equivalent Junior
Preferred Securities that would exceed the Maximum Number.
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(iv) Holder
of record. Each redemption of Series C Preferred Stock shall
be deemed to have been effected immediately before the close of business on the
Business Day on which the Redemption Notice is delivered (except, that, for the
purposes of calculation of the Stated Value, dividends shall accrue until and
including the Redemption Closing Date), and at such time the Person or Persons
in whose name or names any certificate or certificates for shares of Common
Stock (or Other Securities) shall be issuable upon such redemption as provided
in Section
6(b)(ii) shall be deemed to have become the holder or holders of record
thereof. The foregoing notwithstanding, such redemption shall not be
deemed effective if and as of the date that the Holder delivers written notice
of withdrawal to the Company as set forth in Section
6(b)(v) below.
(v) Withdrawal
of Redemption Notice. If the conditions set forth in Section
6(b)(iii) are not satisfied or waived on or prior to the Redemption
Closing Date or if the Company fails to perform its obligations on any
Redemption Closing Date (including delivery of all shares of Series C Preferred
Stock issuable on such date), then in addition to all remedies available to
Holder at law or in equity, Holder may, at its sole option, and at any time,
withdraw the Redemption Notice by written notice to the Company regardless of
whether such conditions have been satisfied or waived as of the withdrawal date
and, after such withdrawal, shall have no further obligations with respect to
such Redemption Notice and may submit a Redemption Notice on any future date
with respect to such Series C Preferred Stock and the Redemption Price for such
subsequent Redemption Notice shall be the lesser of (x) the Redemption Price in
the withdrawn Redemption Notice and (y) the Redemption Price in effect as of the
date of the subsequent Redemption Notice. If the Company fails to
deliver (A) shares of Common Stock as provided in Section
6(b) on or before the later of the twentieth (20th)
Business Day following and excluding (1) the Redemption Closing Date or
(2) three (3) Business Days after the Stockholder Consent Date (if and to
the extent such approval is required to issue such shares of Common Stock) or
(B) shares of Common Stock Equivalent Junior Preferred Stock on or before the
twentieth (20th)
Business Day following and excluding the Redemption Closing Date, then the
Redemption Price shall equal the lesser of Four Dollars and Forty-One Cents
($4.41) and the Redemption Price in effect immediately before such
date.
(vi) Partial
redemption. If any redemption is for only part of the shares
represented by the certificate surrendered, the Company shall deliver on the
Redemption Closing Date a new Series C Preferred Stock certificate of like
tenor, calling in the aggregate on the face or faces thereof for the number of
shares of Series C Preferred Stock in the name and to an address specified by
the Holder.
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(c)
Maximum
Voting Stock Amount. The Company shall not effect any
conversion or redemption of the Series C Preferred Stock, and the Holders shall
not have the right to convert or redeem any portion of the Series C Preferred
Stock, into Common Stock to the extent such conversion, redemption or exercise
would result in aggregate issuances upon conversion or redemption of the Series
C Preferred Stock in excess of nine and seventy-five one hundredths percent
(9.75%)(the “Maximum
Voting Stock Amount”) of the number of shares of Common Stock that would
be outstanding after giving effect to such conversion or
redemption. Holders of a Majority of the Series C Preferred Stock
shall have the right to permanently reduce the percentage used in the
determination of the Maximum Voting Stock Amount to four and seventy-five one
hundredths percent (4.75%) at any time, effective upon delivery of written
notice of such election to the Company. In the event that the Company
cannot effect a conversion or redemption of the Series C Preferred Stock into
Common Stock pursuant to the terms of this Section 6(c), the conversion or
redemption shall be effected into an equal number of shares of Common Stock
Equivalent Junior Preferred Stock of the Company.
(d) The
Company shall at all times reserve for issuance such number of its shares of
Common Stock and Common Stock Equivalent Junior Preferred Stock as shall be
required under the Agreement. The Company will procure, at its sole
expense, the listing of the Common Stock issuable upon conversion or redemption
of the Series C Preferred Stock (including upon the conversion of Common Stock
Equivalent Junior Preferred Stock issuable upon the conversion or redemption of
the Series C Preferred Stock) and shares issuable as dividends hereunder,
subject to issuance or notice of issuance, on all stock exchanges and quotation
systems on which the Common Stock is then listed or quoted, no later than the
date on which such Series C Preferred Stock is issued to the Holder and
thereafter shall use its best efforts to prevent delisting or removal from
quotation of such shares. The Company will pay any and all
documentary stamp or similar issue or transfer taxes that may be payable in
respect of the issuance or delivery of shares of Common Stock and/or Common
Stock Equivalent Junior Preferred Stock on conversion or redemption of shares of
the Series C Preferred Stock. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involving the issue and delivery of shares of Common Stock and/or Common Stock
Equivalent Junior Preferred Stock in a name other than that in which the shares
of Series C Preferred Stock so converted or redeemed were registered, and no
such issue and delivery shall be made unless and until the person requesting
such issue has paid to the Company the amount of any such tax, or has
established, to the reasonable satisfaction of the Company, that such tax has
been paid.
(e) No
fractional shares or scrip representing fractional shares of Common Stock or,
other than fractional shares in increments of one-hundredth (1/100th) of
a share, of Common Stock Equivalent Junior Preferred Stock shall be issued upon
the conversion or redemption of the Series C Preferred Stock. If any
such conversion or redemption would otherwise require the issuance of a
fractional share of Common Stock or, other than fractional shares in increments
of one-hundredth (1/100th) of
a share, of Common Stock Equivalent Junior Preferred Stock, an amount equal to
such fraction multiplied by the current Daily Market Price per share of Common
Stock on the date of conversion or redemption shall be paid to the Holder in
cash by the Company. If more than one share of Series C Preferred
Stock shall be surrendered for conversion or redemption at one time by or for
the same Holder, the number of shares of Common Stock and/or Common Stock
Equivalent Junior Preferred Stock issuable upon conversion or redemption thereof
shall be computed on the basis of the aggregate number of shares of Series C
Preferred Stock so surrendered.
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(f) Change
of Control.
(i) If
the Company on or after the date of the Agreement is party to any Change of
Control, proper provision shall be made so that, upon the basis and the terms
and in the manner provided herein, the Holder of each unconverted and unredeemed
share of Series C Preferred Stock, upon conversion or redemption thereof at any
time after the consummation of such Change of Control, shall be entitled to, and
appropriate adjustments will be made to ensure that the Holder will receive,
equivalent rights as those provided in this Certificate of Rights and
Preferences, including, without limitation, the voting, dividend, conversion,
redemption and liquidation rights contained herein with respect to the Acquiring
Person. The Company shall, prior to the consummation of any Change of
Control, provide that each Person (other than the Company) that may be required
to deliver any stock, securities, cash or property upon conversion of Series C
Preferred Stock as provided herein shall assume, by written instrument delivered
to, and reasonably satisfactory to, the Holders of a Majority of the Series C
Preferred Stock, (a) the obligations of the Company under this Certificate of
Rights and Preferences (and if the Company shall survive the consummation of
such transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this
Certificate of Rights and Preferences) and (b) the obligation to deliver to the
Holders of Series C Preferred Stock such shares of stock, securities, cash or
property as, in accordance with the provisions of this Certificate of Rights and
Preferences, such Holders may be entitled to receive, and such Person shall have
similarly delivered to such Holders an opinion of counsel for such Person, which
counsel shall be reasonably satisfactory to Holders of a Majority of the Series
C Preferred Stock, stating that the rights of such Holders under this
Certificate of Rights and Preferences shall thereafter continue in full force
and effect with respect to such Acquiring Person in accordance with the terms
hereof.
(ii) In
the event of a Change of Control, all references to the Conversion Price or the
Redemption Price herein shall be references to the Stock Adjustment Measuring
Price. “Stock
Adjustment Measuring Price” means an amount equal to the Conversion Price
or the Redemption Price, as applicable, multiplied by a fraction,
(A) the
numerator of which is the Daily Market Price of the securities for Common Stock
is exchanged in the Change of Control (or if none, the most widely-held class of
voting securities of the Acquiring Person) determined as of the Business Day
immediately preceding and excluding the date on which the Change of Control is
consummated; and
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(B) the
denominator of which is the Daily Market Price of the Common Stock of the
Company determined as of the Business Day immediately preceding and excluding
the date on which the Change of Control is consummated.
(iii) Prior
to the effective date of a Change of Control, the Company shall continue to have
the right to submit to each Holder Conversion Notices and each Holder shall
continue to have the right to submit to the Company Redemption Notices and
consummate closings of any such conversions or redemptions, in each party’s sole
discretion, in accordance with the terms and conditions of this Certificate of
Rights and Preferences. In addition, the Holder at its sole option
may elect to submit to the Company a special notice (a “Contingent
Notice”) to redeem the Series C Preferred Stock (including any Series C
Preferred Stock issued pursuant to a Contingent Investment Notice (as defined in
the Agreement) under the Agreement) in whole or in part in connection with such
Change of Control; in which case, notwithstanding anything to the contrary
herein:
(A) the
effectiveness of such contingent redemption shall be conditional upon the
effectiveness of the Change of Control;
(B) until
the effective date of such Change of Control, the Holder shall have the right to
deliver a notice to withdraw such Contingent Notice; and
(C) if
such Contingent Notice shall not have been withdrawn, then on the effective date
of such Change of Control, such Holder shall receive the same consideration, in
the form of cash, securities or other assets (the “Acquisition
Consideration”) per share of Common Stock and Common Stock Equivalent
Junior Preferred Stock issuable to any other holder of shares of Common Stock
and Common Stock Equivalent Junior Preferred Stock in connection with such
Change of Control based upon the number of shares of Common Stock and Common
Stock Equivalent Junior Preferred Stock which the Holder would have held if the
Holder had consummated such redemption on the Business Day immediately preceding
the date on which such Change of Control occurs.
7. Status
of Converted and Redeemed Shares; Limitations on Series C Preferred
Stock. The Company shall return to the status of unauthorized
and undesignated shares of Preferred Stock each share of Series C Preferred
Stock which shall be converted, redeemed or for any other reason acquired by the
Company, and such shares thereafter may have such characteristics and
designations as the Board may determine (subject to Section
5 hereof),
provided, however,
that no share of Series C Preferred Stock which shall be converted, redeemed or
otherwise acquired by the Company shall thereafter be reissued, sold or
transferred by the Company as Series C Preferred Stock. The Company
will not issue any further shares of Series C Preferred
Stock.
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8. Subdivision
of Common Stock. Notwithstanding anything herein to the
contrary, if the Company at any time subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) the
shares of Common Stock and/or Common Stock Equivalent Junior Preferred Stock
into a greater number of shares, then, after the date of record for effecting
each such subdivision, all measurements and references herein related to share
prices for such securities will be proportionately decreased and all references
to share numbers for such securities herein will be proportionately
increased.
9. Nonperformance. If
the Company, shall (i) at any time fail to deliver the shares of Common Stock
Equivalent Junior Preferred Stock required to be delivered to the Holder
pursuant hereto or (ii) at any time after the Company has obtained the approval
of the stockholders of the Company to increase the authorized number of shares
of Common Stock, fail to deliver the shares of Common Stock or required to be
delivered to the Holder pursuant hereto, for any reason other than the failure
of any condition precedent to the Company’s obligations hereunder or the failure
by the Holder to comply with its obligations hereunder, then the Company shall
(without limitation to the Holder’s other remedies at law or in equity): (i)
indemnify and hold the Holder harmless against any loss, claim or damage arising
from or as a result of such failure by the Company (regardless of whether any of
the foregoing results from a third-party claim or otherwise) and (ii) reimburse
the Holder for all of its reasonable out-of-pocket expenses (which includes fees
and expenses of its counsel) incurred by the Holder in connection herewith and
the transactions contemplated herein (regardless of whether any of the foregoing
results from a third-party claim or otherwise).
10. Assignment. The
Holder may, in its sole discretion, freely assign, pledge, hypothecate or
transfer all shares of Series C Preferred Stock.
[The rest
of this page is intentionally left blank.]
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IN
WITNESS WHEREOF, this Certificate of Rights and Preferences has been signed on
behalf of the Company by its Chief Financial Officer and attested to by its
Corporate Secretary, all as of the date first set forth above.
| UNITED COMMUNITY BANKS, INC. | |||
| Name: | Rex S. Schuette | ||
| Title: | Chief Financial Officer | ||
| Name: | Lori McKay | ||
| Title: | Corporate Secretary | ||
[Signature
Page to Certificate of Rights and Preferences]
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