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EXHIBIT 10.5
July 21, 1999
Xx. X. Xxxxx Oakley
Executive Vice President
Colonial BancGroup, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Dear Flake:
On behalf of SunTrust Bank, Atlanta, I am pleased to commit to a
$25,000,000 Revolving Credit facility for Colonial BancGroup, Inc. The terms and
conditions are outlined below:
BORROWER: COLONIAL BANCGROUP, INC. ("Borrower")
BANK: SUNTRUST BANK, ATLANTA ("Bank")
PROPOSED
COMMITMENT: $25,000,000
FACILITY: Revolving Credit
COLLATERAL: Borrower will provide Bank with 100% of the Subsidiary Bank
Stock of Colonial Bank, Montgomery, AL
REPAYMENT: Interest on the facility is to be paid quarterly throughout
the life of the loan with all principal due at maturity.
MATURITY: July 31, 2000
INTEREST RATE: 30, 60, 90, or 120 day LIBOR + 0.85%
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SUNTRUST BANK, ATLANTA
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FINANCIAL COVENANTS:
1. The Borrower will maintain, and cause each of its banking subsidiaries
to maintain, the minimum levels of regulatory capital necessary to
maintain the regulatory capital classification of "Well Capitalized".
2. The Borrower's consolidated net income from operations after taxes,
less shareholder dividends, divided by interest on all holding company
debt (including Trust Preferred Issues and Holding Company subordinated
debt) and principal repayments on subject credit facility assuming a
straight three year full amortization, shall not be less than 1.40x.
3. The Borrower shall maintain a minimum consolidated Tangible Equity of
at least $550,000,000. This figure shall include mortgage servicing
rights.
4. The Borrower shall maintain a minimum Consolidated Tier I Leverage
Ratio of 6.00%.
5. The Borrower shall maintain at all times on a consolidated basis a
ratio of (1) the sum of (a) non-accrual loans and (b) restructured
loans and (c) accruing loans more than 90 days past due and (d) other
real estate owned to (2) the sum of (x) all loans and (y) other real
estate owned, of no more than 1.25%.
6. The Borrower shall maintain at all times on a consolidated basis a
ratio of (1) allowance for possible loan losses to (2) the sum of (a)
non-accrual loans and (b) restructured loans and (c) accruing loans
more than 90 days past due, of no less than 150%.
7. All covenants will be tested quarterly. Within 45 days after each
calendar quarter, the Borrower will send to the Bank a letter prepared
by its Chief Financial Officer stating that (1) the Borrower and its
banking subsidiaries are in compliance with all terms, conditions, and
covenants of the Agreement and the Note or specify the extent to which
they are not in compliance and (2) listing the appropriate financial
numbers or ratios of the Borrower or its banking subsidiaries as called
for in the Agreement.
REPORTING REQUIREMENTS:
1. The borrower will furnish to the Bank an annual consolidated financial
statement, including both balance sheet and income statement of the
Borrower; these statements will be prepared by and independent
certified public accountant and will be accompanied by an opinion
letter.
2. The Borrower will furnish to the Bank a quarterly 10-Q report as well
as a quarterly call report on all subsidiary banks.
3. The Borrower will furnish to the Bank such information, financial or
otherwise, regarding the condition of or operations of the Borrower or
its banking subsidiaries, as the Bank may
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SUNTRUST BANK, ATLANTA
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reasonably request. This will include quarterly reports detailing the
Borrower's 25 largest loan commitments, 25 largest non-accrual loans
and classified assets.
REPRESENTATIONS AND WARRANTIES:
Representations and warranties of Borrower and Subsidiaries which are
customary for the Bank and which are typical of this type of transaction.
OTHER CONDITIONS:
1. Neither the Borrower nor any of its subsidiaries will incur, assume or
suffer to exist, any lien upon any of its properties, now owned or here
after acquired, expect as those incurred in the normal course of
business. Nor will the Borrower give to any other lender a negative
pledge on borrower's or subsidiaries' properties.
2. The Borrower will not wind up, liquidate, or dissolve itself,
reorganize, merge, or consolidate with or into, or convey, sell,
assign, transfer, lease, or otherwise dispose of (whether in one
transaction or a series of transactions) all or substantially all of
its assets (whether now owned or here after acquired) to any entity,
except that the Bank, in its sole discretion, may consent in writing to
additional exceptions. This condition shall not pertain to the sale of
a portion of Colonial Mortgage Company's assets.
3. The Borrower will not create or assume any liability in excess of
$20,000,000 for borrowed money with the following exceptions:
a) The subject credit facility;
b) Borrowings from the Federal Home Loan Bank in the
usual course of business;
c) Any debt subordinated to this credit facility;
d) Any debt related to the sale of commercial paper or
similar short term borrowings that arise in the
normal course of business; and
e) Any Bank Note or Deposit Note program of any
subsidiary of the Borrower.
4. Neither the Borrower nor any of its subsidiaries shall pay or declare
any dividend on any of its stock, after the date hereof, make any other
distribution in respect of its capital stock, or purchase or deem or
otherwise acquire any shares of its outstanding capital stock unless
such action has been approved as required by the necessary regulatory
authorities, if such approval is required, and will not impair the
Borrower's ability to perform its obligation hereunder, or otherwise
result in any breach of this Agreement.
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SUNTRUST BANK, ATLANTA
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THIS DOCUMENT IS FOR THE BENEFIT OF THE BORROWER ONLY AND SHOULD NOT BE RELIED
UPON OR SHARED WITH THIRD PARTIES.
We certainly appreciate the opportunity to provide financing and look
forward to continuing our long relationship with Colonial BancGroup. If the
terms and conditions outlined in this document are acceptable, please signify
your agreement by signing below and returning the original to us.
Sincerely,
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Corporate Banking Officer
Financial Institutions
THE ABOVE TERMS AND CONDITIONS
Are hereby acknowledged, accepted and agreed
to this 22nd Day of July, 1999.
COLONIAL BANCGROUP, INC.
BY: /s/ X. Xxxxx Oakley
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X. XXXXX OAKLEY
EXECUTIVE VICE PRESIDENT/CFO
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SUNTRUST BANK, ATLANTA
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