Exhibit 10.1

LOAN AGREEMENT

This Loan Agreement is made by and between Borrower and Lender, whose names and
addresses are described below, in connection with the Loan.

DATE:

April 8, 2015

 

LENDER:

NexBank SSB

2515 McKinney Avenue, Suite 1100

Dallas, Texas 75201

 

BORROWER(S):

CenterState Banks, Inc.

42745 U.S.  Highway 27

Davenport,Florida 33837

 

 

Loan.  Borrower has applied to Lender for revolving line of credit in the amount
of up to $25,000,000.00, and Lender is willing to make the Loan on the terms and
conditions hereinafter set forth.

Time is of the Essence.  Borrower agrees that time is of the essence under this
Agreement.

Incorporation of Recitals.  The foregoing preambles and all other recitals set
forth herein are made a part hereof by this reference.

Incorporation of Exhibits.  The exhibits and schedules to this Agreement,
attached hereto are incorporated in this Agreement and expressly made a part
hereof by this reference.

ARTICLE I – DEFINITIONS

For purposes of this Loan Agreement, the following terms shall have the
respective meanings assigned to them.

1.01Advance.  Shall mean (a) a disbursement by Lender of any of the proceeds of
the Loan to or for the benefit of the Borrower; and (b) funds that Lender
advances or indebtedness Lender incurs in exercising its rights.

1.02Advance Request Form.  A certificate, in a form approved by Lender, properly
completed and signed by Borrower requesting a Revolving Credit Advance.

1.03Affiliate.  With respect to a specified person or entity, any individual,
partnership, corporation, limited liability company, trust, unincorporated
organization, association or other entity which, directly or indirectly, through
one or more intermediaries, Controls or is Controlled by or is under common
control with such person or entity, including, without limitation, any general
or limited partnership in which such person or entity is a partner.

1.04Agreement.  As defined in the Preamble.

1.05Allowance for Loan and Lease Losses.  As defined in accordance with the
then-current regulations of the applicable Bank Regulatory Authority and as
reported by any Person on the Regulatory Capital Schedule of their respective
Call Report applicable to such period.

1.06Applicable Rate.  As such term is defined in Section 4.01a.

 

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1.07Authorized Representative.  The person appointed as the Authorized
Representative pursuant to Section 14.03.

1.08Average Total Assets.  As defined in accordance with the then-current
regulations of the applicable Bank Regulatory Authority and as reported by any
Person on the Regulatory Capital Schedule of any their respective Call Report
applicable to such period.

1.09Bank.  CenterState Bank of Florida NA, wholly owned subsidiary of Borrower,
and any other Subsidiary of Borrower, the deposits of which are insured by the
FDIC pursuant to the FDIA.

1.10Bank Regulatory Authority.  The State of Texas Department of Financial
Institutions, the OCC, the FDIC, the Board of Governors of the Federal Reserve
System, OFAC and all other relevant regulatory authorities (including, without
limitation, relevant state bank regulatory authorities).

1.11Bankers Blanket Bond.  A fidelity bond or insurance policy providing
coverage for losses resulting from criminal activities and other actions of
employees, officers or directors of a Bank.

1.12Bankruptcy Code.  Title 11 of the United States Code entitled “Bankruptcy”
as now or hereafter in effect, or any successor thereto or any other present or
future bankruptcy or insolvency statute.

1.13BHCPR.  The Bank Holding Company Performance Report, as promulgated by the
Board of Governors of the Federal Reserve System.

1.14Borrower.   Shall mean the Borrower named on page one hereof.

1.15Business Day.   A day of the year on which banks are not required or
authorized to close in Dallas, Texas.

1.16Call Report.  For each Bank, the “Consolidated Reports of Condition and
Income” (FFIEC Form 031, Form 041 or other applicable form), or any successor
form promulgated by the FFIEC.

1.17Capital Lease Obligations.  With respect to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

1.18Change of Control.  Shall mean (a) the acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) of Beneficial Ownership (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of 50% or
more of the capital stock or voting power of Borrower (or any one of its
successors, or any Subsidiary of Borrower or any of its successors), (b)
Borrower (or its successor), or any Subsidiary of Borrower or its successor,
consolidates with, or merges with or into, another Person, or conveys,
transfers, leases or otherwise disposes directly or indirectly of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, Borrower, in each case, whether pursuant to one or any
series of transactions, except where (i) Borrower is the surviving entity and
(ii) the ultimate beneficial owners of Borrower’s outstanding capital stock or
voting power immediately prior to such transaction or transactions own not less
than 50% of the outstanding capital stock or voting power of Borrower (or such
successor) immediately after such transaction or transactions, (c) the majority
of the seats (other than vacant seats) on the board of directors (or similar
governing body) of Borrower cease to be occupied by Persons who were members of
the board of directors of Borrower on the Effective Date, or (c) Borrower shall
cease to beneficially own and control 100% on a fully diluted basis of the
economic and voting interests in the Equity Interests of the Bank.

1.19Classified Assets.  An asset classified as “Substandard,” “Doubtful,” “Loss”
or a similar category in accordance with the then-current regulations of the
applicable Bank Regulatory Authority, excluding the Purchased Credit Impaired
Assets.

 

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1.20Classified Assets to Tier 1 Capital Ratio.  With respect to any Person, the
ratio (expressed as a percentage) as of the last day of any fiscal quarter of
(a) Classified Assets of such Person to (b) (i) Tier 1 Capital of such Person,
plus (ii) Allowance for Loan and Lease Losses.

1.21Collateral.  Collectively, all of the property (including Equity Interests)
in which Liens are purported to be granted pursuant to the Security Documents as
security for the Obligations.

1.22Commitment.  The obligation of Lender to make Revolving Credit Advances
pursuant to Section 3.01 in an aggregate principal amount at any time
outstanding up to but not exceeding $25,000,000.00, subject, however, to
termination pursuant to Article XII.

1.23Constituent Documents.  Shall mean (a) in the case of a corporation, its
articles or certificate of incorporation and bylaws; (b) in the case of a
general partnership, its partnership agreement; (c) in the case of a limited
partnership, its certificate of limited partnership and partnership agreement;
(d) in the case of a trust, its trust agreement; (e) in the case of a joint
venture, its joint venture agreement; (f) in the case of a limited liability
company, its articles of organization, operating agreement, regulations and/or
other organizational and governance documents and agreements; and (g) in the
case of any other entity, its organizational and governance documents and
agreements.

1.24Control. As such term is used with respect to any person or entity,
including the correlative meanings of the terms “controlled by” and “under
common control with”, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of such person
or entity, whether through the ownership of voting securities, by contract or
otherwise.

1.25Default or default.  Any event, circumstance or condition, which, if it were
to continue uncured, would, with notice or lapse of time or both, constitute an
Event of Default hereunder.

1.26Default Rate.  A rate per annum equal to 5.00% in excess of the Applicable
Rate, but which shall not at any time exceed the Maximum Lawful Rate.

1.27EBIDA. For any period, Net Income of Borrower for such period, plus, without
duplication and to the extent deducted in calculating Net Income for such
period, the sum of (a) Interest Expense for such period, (b) the amount of
depreciation and amortization expense deducted in determining Net Income, (c)
any extraordinary or non-recurring items reducing Net Income for such period,
(d) losses on the sale of securities, and (e) any non-cash items reducing Net
Income for such period, minus (i) gains on the sale of any securities, (ii) any
extraordinary or non-recurring items increasing Net Income for such period and
(iii) any non-cash items increasing Net Income for such period.

1.28Effective Date.  As listed on page one hereof.

1.29Environmental Proceedings.  Any environmental proceedings, whether civil
(including actions by private parties), criminal, or administrative proceedings,
relating to Borrower.

1.30Equity Interests. Shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any such equity
interest.

1.31ERISA.  The Employee Retirement Income Security Act of 1974, as amended, and
the regulations promulgated thereunder from time to time.

1.32Event of Default.  As such term is defined in Article XI.

1.33FDIA.  The Federal Deposit Insurance Act of 1933, as amended from time to
time, and the regulations promulgated pursuant thereto.

1.34FDIC.  The Federal Deposit Insurance Corporation, or any successor
Governmental Authority then performing the same or substantially similar duties.

 

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1.35Federal Reserve Bank.  The Federal Reserve Bank or the Federal Reserve
System, or any successor Governmental Authority then performing the same or
substantially similar duties.

1.36FFIEC.  The Federal Financial Institutions Examination Council, or any
successor Governmental Authority then performing the same or substantially
similar duties.

1.37Fixed Charges.  For any period, the sum, without duplication, of the amounts
determined for Borrower equal to (a) Interest Expense and (b) scheduled payments
of principal on Total Debt.

1.38Fixed Charge Coverage Ratio.  With respect to the Borrower, the ratio as of
the last day of any fiscal quarter of (a) EBIDA, to (b) Fixed Charges, all for
the four fiscal quarter period ending on such date.

1.39GAAP.   Generally accepted accounting principles in the United States of
America.

1.40Governmental Approvals.  All authorizations, consents, approvals, permits,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

1.41Governmental Authority.  Any nation or government, any state, province or
territory or other political subdivision thereof, any governmental agency
(including any Bank Regulatory Authority), department, authority,
instrumentality, regulatory body, court, central bank or other governmental
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization exercising such functions (including any
supra-national bodies such as the European Union or the European Central Bank)
and any group or body charged with setting financial accounting or regulatory
capital rules or standards (including, without limitation, the Bank for
International Settlements or the Basel Committee on Banking Supervision or any
successor or similar authority to any of the foregoing).

1.42Guarantee. Any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

1.43Including or including.  Including but not limited to.

1.44Indebtedness.  Without duplication, with respect to any Person (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of

 

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such Person in respect of bankers’ acceptances.   The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

1.45Intangible Assets.  As defined in accordance with the then-current
regulations of the applicable Bank Regulatory Authority.

1.46Interest Expense. For any period, total interest expense of Borrower
(including that portion attributable to Capital Lease Obligations), premium
payments, debt discount, fees and related expenses with respect to all
outstanding Indebtedness of Borrower, related to direct obligations of Borrower.

1.47Internal Revenue Code. The Internal Revenue Code of 1986, as amended from
time to time.

1.48Late Charge. As such term is defined in Section 3.05.

1.49Laws.   Collectively, all federal, state and local laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
precedential authority in the applicable jurisdiction.

1.50Lender. Shall mean the Borrower named on page one hereof, and including any
successor holder of the Loan from time to time.

1.51Leverage Ratio.  With respect to any Person, the ratio (expressed as a
percentage) as of the last day of any fiscal quarter of (a) Tier 1 Capital of
such Person to (b) Average Total Assets of such Person.

1.52LIBOR.  With respect to any LIBOR Reset Period, the rate of interest at
which deposits in U.S.  dollars are offered to major banks in the London
interbank market for a ninety (90) day period on the day that is two (2) LIBOR
Days prior to the commencement of such LIBOR Reset Period, based on information
presented by any interest rate reporting service of recognized standing selected
by Lender, or if Lender determines that no interest rate reporting service has
presented such information, the rate of interest at which deposits in
U.  S.  dollars are offered to major banks in the London interbank market for a
ninety (90) day period on the day that is two (2) LIBOR Days prior to the
commencement of such LIBOR Reset Period by any bank reasonably selected by
Lender.  Under the terms of this Agreement, the applicable “LIBOR” rate is used
by Lender as a reference rate.   The use of ninety (90) day LIBOR as a reference
rate does not mean the Borrower will actually pay interest on the Loan pursuant
to a ninety (90) day contract or any other interest rate contract.   Instead,
the effective interest rate under this Agreement will adjust at the beginning of
each LIBOR Reset Period.

1.53LIBOR Day.  A day on which commercial banks are open for dealings in
U.S.  dollar deposits in the London interbank market.

1.54LIBOR Reset Period.  Shall mean (i) as to the calendar quarter in which the
Effective Date occurs, the period commencing on the Effective Date and ending on
the last calendar day of such quarter and (ii) as to any quarter thereafter, the
period commencing on the first calendar day of the quarter immediately following
the end of the prior LIBOR Reset Period, and ending on the earlier of (a) the
last calendar day of the quarter during which the Loan was made or most recently
continued and (b) the Maturity Date.

1.55Lien.  With respect to any asset, (i) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (iii) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

1.56Loan.  Any Revolving Credit Advance.  

 

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1.57Loan Documents.  The collective reference to this Agreement, the documents
and instruments listed in Section 3.02, and all the other documents and
instruments entered into from time to time, evidencing or securing the
Obligations or any obligation of payment thereof or performance of Borrower’s
obligations in connection with the transaction contemplated hereunder, each as
amended.

1.58Loan Opening Date.  The date of the initial disbursement of proceeds of the
Loan.

1.59Marketable Securities.  Collectively, (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or any agency thereof,
(b) marketable direct obligations issued by any of the United States or any
municipality thereof and currently having a rating of (i) AA or higher issued by
S&P and (ii) Aa2 or higher issued by Moody’s, and (c) corporate bonds and
issuances and currently having a rating of (i) AA or higher issued by S&P and
(ii) Aa2 or higher issued by Moody’s.

1.60Material Adverse Change or material adverse change.   If, in Lender’s
reasonable and good faith discretion, the business prospects, operations or
financial condition of a person, entity or property has changed in a manner
which could impair the value of Lender’s security for the Obligations, prevent
timely repayment of the Obligations or otherwise prevent the applicable person
or entity from timely performing any of its material obligations under the Loan
Documents.

1.61Maturity Date.  Shall be April 1, 2018.

1.62Maximum Lawful Rate.  As such term in defined in Section 4.03.

1.63Moody’s.  Moody’s Investors Service, Inc.  and any successor thereto.

1.64Net Income.  For any period, the net income of Borrower determined in
accordance with GAAP.

1.65Note.  A promissory note, in the amount of the Commitment, executed by
Borrower and payable to the order of Lender, evidencing the Loan.

1.66Note Rate.  A rate per annum equal to the sum of (a) LIBOR for the
then-current LIBOR Reset Period plus (b) 3.50%.

1.67Obligations.  All obligations, indebtedness, and liabilities of Borrower to
Lender or any Affiliate of Lender, or both, now existing or hereafter arising,
whether direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, without
limitation, the obligations, indebtedness, and liabilities under this Agreement,
the other Loan Documents, any cash management or treasury services agreements
and all interest accruing thereon (whether a claim for post-filing or
post-petition interest is allowed in any bankruptcy, insolvency, reorganization
or similar proceeding) and all attorneys’ fees and other expenses incurred in
the enforcement or collection thereof.

1.68OCC.  The Office of the Comptroller of the Currency, or any successor
Governmental Authority then performing the same or substantially similar
duties.  

1.69OFAC.  As defined in Section 2.01t.

1.70Open the Loan, Opening of the Loan or Loan Opening.  The disbursement of
Loan proceeds.

1.71Other Real Estate Owned.  As defined in accordance with the then-current
regulations of the applicable Bank Regulatory Authority.

1.72Payment Date.  The first day of each and every January, April, July, and
October during the term of the Note.

1.73Permitted Investments.  Each of the following:

a.

Loans made in the ordinary course of business (including liquidity support to
broker-dealer Subsidiaries);

 

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b.

direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from the
date of acquisition thereof;

c.

investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

d.

investments in certificates of deposit, banker’s acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000.00;

e.

fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above; and

f.

money market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA by S&P and AAA by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.00.

1.74Permitted Liens. Each of the following:

a.

Liens imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 8.03;

b.

carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
good faith by appropriate proceedings and which could not reasonably be expected
to cause a Material Adverse Change;

c.

pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or
regulations;

d.

deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business;

e.

judgment liens in respect of judgments that do not constitute an Event of
Default under clause (f) of Article XI; and

f.

easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations and do not materially detract from the value
of the affected property or interfere with the ordinary conduct of business of
the Borrower;

provided that the term “Permitted Liens” shall not include any Lien securing
Indebtedness.

1.75Permitted Tax Distributions.  With respect to any Person, any dividend or
distribution to any holder of such Person’s stock or other equity interests to
permit such holders to pay federal income taxes and all relevant state and local
income taxes at a rate equal to the highest marginal applicable tax rate for the
applicable tax year, however denominated (together with any interest, penalties,
additions to tax, or additional amounts with respect thereto) imposed as a
result of taxable income attributed to such holder as a partner of such Person
under federal, state, and local income tax laws, determined on a basis that
combines those liabilities arising out of the net effect of the income, gains,
deductions, losses, and credits

 

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of such Person and attributable to it in proportion and to the extent in which
such holders hold stock or other equity interests of such Person.  

1.76Person.  Any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, bank, Governmental Authority
or other entity.

1.77Purchased Credit Impaired Assets.  The individual assets or group of
financial assets acquired by Borrower prior to the Effective Date and provided
on Schedule 1.77 to this Agreement.

1.78Revolving Credit Advance.  Any Advance made by Lender to Borrower pursuant
to Article III of this Agreement.

1.79Risk-Based Capital Guidelines.  Shall mean (a) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, (b) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (c) all requests, rules, guidelines or
directives promulgated by the Bank for International settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States regulatory authorities, in each case pursuant to Basel III,
regardless of the date enacted, adopted or issued.  

1.80S&P.  Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.  and any successor thereto.

1.81Sanctioned Entity.  Shall mean (a) an agency of the government of, (b) an
organization directly or indirectly controlled by, or (c) a person resident in,
a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise
published from time to time as such program may be applicable to such agency,
organization or person.

1.82Sanctioned Person.  A person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise
published from time to time.

1.83Security Agreement.  The Pledge and Security Agreement to be executed by
Borrower in form and substance satisfactory to Lender, as it may be amended,
restated, supplemented or otherwise modified from time to time.

1.84Security Documents.  The Security Agreement and all other instruments,
documents and agreements delivered by or on behalf of Borrower pursuant to this
Agreement or any of the other Loan Documents in order to grant to, or perfect in
favor of, Lender, a Lien on any real, personal or mixed property of Borrower as
security for the Obligations.

1.85Subordinated Indebtedness.  Any Indebtedness of any Borrower (other than the
Loan) that has been subordinated to the Obligations by written agreement, in
form and content satisfactory to Lender and which has been approved in writing
by Lender as constituting Subordinated Indebtedness for purposes of this
Agreement.

1.86Subsidiary.  Shall mean (a) any corporation of which at least a majority of
the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or
controlled by Borrower or one or more of other Subsidiaries or by Borrower and
one or more of such Subsidiaries, and (b) any other entity (i) of which at least
a majority of the ownership, equity or voting interest is at the time directly
or indirectly owned or controlled by one or more of Borrower and other
Subsidiaries and (ii) which is treated as a subsidiary in accordance with GAAP.

 

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1.87Swap Agreement.  Any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of Borrower shall be a Swap
Agreement.

1.88Taxes.  Any present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

1.89Texas Ratio.  With respect to any Person, the ratio (expressed as a
percentage) as of the last day of any fiscal quarter of (a) (i) Total
Non-Accrual Loans of such Person, plus (ii) Other Real Estate Owned of such
Person, plus (iii) to the extent such Loan is not already included as part of
subsection (a)(i) above, any loan for which principal or interest has been in
default for a period of ninety (90) days or more to (b) (i) Total Capital of
such Person, plus (ii) unrealized losses (gains) on securities for such Person,
plus (iii) Allowance for Loan and Lease Losses of such Person, minus (iv)
Intangible Assets of such Person.

1.90Tier 1 Capital.  As defined in accordance with the then-current regulations
of the applicable Bank Regulatory Authority.

1.91Tier 2 Capital.  As defined in accordance with the then-current regulations
of the applicable Bank Regulatory Authority.

1.92Total Capital.  As defined in accordance with the then-current regulations
of the applicable Bank Regulatory Authority.

1.93Total Debt.  As at any date of determination, the aggregate stated balance
sheet amount of all Indebtedness related to direct obligations of Borrower
determined in accordance with GAAP.  

1.94Total Non-Accrual Loans.  Total value of the loans held by any Person (other
than Purchased Credit Impaired Assets), which loans are classified as
non-accrual in accordance with the then-current regulations of the applicable
Bank Regulatory Authority and/or Call Report instructions, or which loan meets
any of the following conditions: (a) it is maintained on a cash basis because
the borrower’s financial condition has deteriorated, (b) payment in full of
principal or interest is not expected, or (c) principal or interest has been in
default for a period of ninety (90) days or more (unless the loan is both well
secured and in the process of collection).

1.95Total Risk-Based Capital Ratio.  With respect to any Person, the ratio
(expressed as a percentage) as of the last day of any fiscal quarter of (a) (i)
Tier 1 Capital of such Person, plus (ii) Tier 2 Capital of such Person, to (b)
Total Risk-Weighted Assets of such Person.

1.96Total Risk-Weighted Assets.  As defined in accordance with the then-current
regulations of the applicable Bank Regulatory Authority.

All terms defined in this Agreement shall have the same meanings when used in
the Note, any other Loan Documents, or any certificate or other document made or
delivered pursuant hereto.   The words “hereof”, “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement.

All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with GAAP, applied on a consistent
basis, as in effect from time to time and in a manner consistent with that used
in preparing the audited financial statements required by Section 8.01a, except
as otherwise specifically prescribed herein.  

 

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Notwithstanding the foregoing, all financial statements delivered hereunder
shall be prepared, and all financial covenants contained herein shall be
calculated, without giving effect to any election under the FASB ASC 825 (or any
similar accounting principle) permitting a Person to value its financial
liabilities or Indebtedness at the fair value thereof.

ARTICLE II – BORROWER’S REPRESENTATIONS AND WARRANTIES

For purposes of this Loan Agreement, the following terms shall have the
respective meanings assigned to them.

2.01Representations and Warranties.  To induce Lender to execute this Agreement
and perform its obligations hereunder, Borrower hereby represents and warrants
to Lender as follows:

a.

Except as previously disclosed to Lender in writing, no litigation or
proceedings are pending, or to the best of Borrower’s knowledge threatened,
against Borrower or its Subsidiaries, which could, if adversely determined,
cause a Material Adverse Change with respect to Borrower or its Subsidiaries.  
There are no pending Environmental Proceedings and Borrower has no knowledge of
any threatened Environmental Proceedings or any facts or circumstances which may
give rise to any future Environmental Proceedings.

b.

Borrower is a duly organized and validly existing corporation and has full power
and authority to execute, deliver and perform all Loan Documents to which
Borrower is a party, and such execution, delivery and performance have been duly
authorized by all requisite action on the part of Borrower.  Each Loan Document
to which Borrower is a party has been duly executed and delivered by Borrower
and is the legally valid and binding obligation of Borrower, enforceable against
Borrower in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

c.

No consent, approval or authorization of or declaration, registration or filing
with any Governmental Authority or nongovernmental person or entity, including
any creditor, partner, or member of Borrower or its Subsidiaries, is required in
connection with the execution, delivery and performance of this Agreement or any
of the Loan Documents other than the filing of UCC-1 financing statements,
except for such consents, approvals or authorizations of or declarations or
filings with any Governmental Authority or non-governmental person or entity
where the failure to so obtain would not have an adverse effect on Borrower or
its Subsidiaries or which have been obtained as of any date on which this
representation is made or remade.  The Borrower and each Subsidiary of Borrower
(i) has all Governmental Approvals required by any applicable Law for it to
conduct its business, each of which is in full force and effect, is final and
not subject to review on appeal and is not the subject of any pending or, to the
best of its knowledge, threatened attack by direct or collateral proceeding,
(ii) is in compliance with each Governmental Approval applicable to it and in
compliance with all other applicable Laws relating to it or any of its
respective properties and (iii) has timely filed all material reports, documents
and other materials required to be filed by it under all applicable Laws with
any Governmental Authority and has retained all material records and documents
required to be retained by it under applicable Law except in each case (i), (ii)
or (iii) where the failure to have, comply or file could not reasonably be
expected to have a Material Adverse Change.

d.

The execution, delivery and performance of this Agreement, the execution and
payment of the Note and the granting of the security interests under the
Security Documents have not constituted and will not constitute, upon the giving
of notice or lapse of time or both, a breach or default under any other
agreement to which Borrower or its Subsidiaries is a party or may be bound or
affected, or a violation of any Law or court order.

 

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e.

Borrower is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change.   Borrower has received all
permits and licenses issued by any Governmental Authority as are necessary for
the conduct of its business.

f.

There is no default under this Agreement or any of the other Loan Documents, nor
any condition which, after notice or the passage of time or both, would
constitute a default or an Event of Default under said documents.

g.

No brokerage fees or commissions are payable by or to any person in connection
with this Agreement or the Loan to be disbursed hereunder.

h.

All financial statements and other information previously furnished by Borrower
or its Subsidiaries to Lender in connection with the Loan are true, complete and
correct in all material respects and fairly present in all material respects the
financial condition of the subjects thereof as of the respective dates thereof
and do not fail to state any material fact necessary to make such statements or
information not misleading, and no Material Adverse Change with respect to
Borrower or its Subsidiaries has occurred since the respective dates of such
statements and information.  None of Borrower or its Subsidiaries has any
Indebtedness or other material liability, contingent or otherwise, not disclosed
in such financial statements.

i.

Borrower has good title to, or valid leasehold interests in, all its real and
personal property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes.   Except as
permitted by this Agreement, all such property is free and clear of Liens.

j.

Borrower owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to its business, and the use
thereof by the Borrower and its subsidiaries does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change.

k.

The Loan is not being made for the purpose of purchasing or carrying “margin
stock” within the meaning of Regulation T, U or X issued by the Board of
Governors of the Federal Reserve System.

l.

Borrower is not an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

m.

Borrower has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Change.

n.

Borrower is not a party in interest to any plan defined or regulated under
ERISA, and the assets of Borrower are not “plan assets” of any employee benefit
plan covered by ERISA or Section 4975 of the Internal Revenue Code.

o.

Borrower has disclosed to Lender all agreements, instruments and corporate or
other restrictions to which it is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Change.    No reports, financial statements, certificates
or other information furnished by or on behalf of Borrower to Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were

 

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made, not misleading; provided that, with respect to projected financial
information, Borrower represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.

p.

Borrower is not a “foreign person” within the meaning of Section 1445 or 7701 of
the Internal Revenue Code.

q.

Borrower uses no trade name other than its actual name set forth herein.  The
principal place of business of Borrower is as stated in Section 13.16.

r.

Borrower’s place of formation or organization is the State of Florida.

s.

All statements set forth in the Recitals are true and correct.

t.

None of Borrower or its Subsidiaries is (or will be) a person with whom Lender
is restricted from doing business under regulations of the Office of Foreign
Asset Control (“OFAC”) of the Department of the Treasury of the United States of
America (including, those Persons named on OFAC’s Specially Designated and
Blocked Persons list) or under any statute, executive order (including, the
September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action and is not and shall not engage in any dealings or
transactions or otherwise be associated with such persons.   In addition,
Borrower hereby agrees to provide to the Lender with any additional information
that the Lender deems necessary from time to time in order to ensure compliance
with all applicable Laws concerning money laundering and similar
activities.  None of the Borrower, any Subsidiary of the Borrower or any
Affiliate of the Borrower: (i) is a Sanctioned Person, (ii) has more than ten
percent (10%) of its assets in Sanctioned Entities, or (iii) derives more than
ten percent (10%) of its operating income from investments in, or transactions
with Sanctioned Persons or Sanctioned Entities.   The proceeds of any Loan will
not be used and have not been used to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Person or a
Sanctioned Entity.

2.02Survival of Representations and Warranties.  Borrower agrees that all of the
representations and warranties set forth in Section 2.01 and elsewhere in this
Agreement are true as of the date hereof, will be true at the Loan Opening and,
except for matters which have been disclosed by Borrower and approved by Lender
in writing, at all times thereafter.

ARTICLE III – LOAN AND LOAN DOCUMENTS

3.01Agreement to Borrow and Lend; Lender’s Obligation to Disburse.  Subject to
the terms and conditions of this Agreement, Lender agrees to make a revolving
credit loan to Borrower from time to time from the date hereof to and including
the Maturity Date in an aggregate principal amount at any time outstanding up to
but not exceeding the amount of the Commitment.  Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, repay, and reborrow hereunder.

a.

The obligation of Borrower to repay the Revolving Credit Advances and interest
thereon shall be evidenced by the Note executed by Borrower, and payable to the
order of Lender, in the principal amount of the Commitment as originally in
effect.  Borrower shall repay the unpaid principal amount of all Advances on the
Maturity Date, unless sooner due by reason of acceleration by Lender as provided
in this Agreement.

b.

Lender agrees, upon Borrower’s compliance with and satisfaction of all
conditions precedent to the Loan Opening and provided no Material Adverse Change
has occurred with respect to Borrower or its Subsidiaries and no Default or
Event of Default has occurred and is continuing hereunder, to Open the Loan.

 

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c.

To the extent that Lender may have acquiesced in noncompliance with any
conditions precedent to the Opening of the Loan, such acquiescence shall not
constitute a waiver by Lender, and Lender may at any time after such
acquiescence require Borrower to comply with all such requirements.

d.

Borrower shall give Lender notice of each Revolving Credit Advance by means of
an Advance Request Form containing the information required therein and
delivered (by hand or by mechanically confirmed facsimile) to Lender no later
than 2:00 p.m.  Dallas time on a Business Day on the day on which the Revolving
Credit Advance is desired to be funded.   Advances shall be in a minimum amount
of $100,000.00.   Lender at its option may accept telephonic requests for such
Advances, provided that such acceptance shall not constitute a waiver of
Lender’s right to require delivery of an Advance Request Form in connection with
subsequent Advances.   Any telephonic request for a Revolving Credit Advance by
Borrower shall be promptly confirmed by submission of a properly completed
Advance Request Form to Lender, but failure to deliver an Advance Request Form
shall not be a defense to payment of the Advance.   Lender shall have no
liability to Borrower for any loss or damage suffered by Borrower as a result of
Lender’s honoring of any requests, execution of any instructions, authorizations
or agreements or reliance on any reports communicated to it telephonically, by
facsimile or electronically and purporting to have been sent to Lender by
Borrower and Lender shall have no duty to verify the origin of any such
communication or the identity or authority of the Person sending it.   Subject
to the terms and conditions of this Agreement, each Revolving Credit Advance
shall be made available to Borrower by depositing the same, in immediately
available funds, in an account of Borrower designated by Borrower maintained
with Lender at its principal office.

e.

Subject to Section 3.04, Borrower agrees to pay to Lender an unused facility fee
on the daily average unused amount of the Commitment for the period from
December 1, 2015 up to and including the Maturity Date, at the rate of 0.25% per
annum based on a 360 day year and the actual number of days elapsed.   For the
purpose of calculating the unused facility fee hereunder, the Commitment shall
be deemed utilized by the amount of all outstanding Advances.   Accrued unused
facility fees shall be payable quarterly in arrears on the first (1st) day of
each April, July, October, and January during the term of this Agreement and on
the Maturity Date.

3.02Loan Documents.  Borrower agrees that it will, on or before the Loan Opening
Date, execute and deliver or cause to be executed and delivered to Lender the
following documents in form and substance acceptable to Lender:

a.

The Note.

b.

Each Security Document.

c.

Such UCC financing statements as Lender determines are advisable or necessary to
perfect or notify third parties of the security interests intended to be created
by the Loan Documents.

d.

Such other documents, instruments or certificates as Lender and its counsel may
reasonably require, including such documents as Lender in its sole discretion
deems necessary or appropriate to effectuate the terms and conditions of this
Agreement and the Loan Documents, and to comply with the Laws

3.03Term of the Loan.  All principal, interest and other sums due under the Loan
Documents shall be due and payable in full on the Maturity Date.

3.04Prepayments.   Borrower shall have the right to make prepayments of the
Loan, in whole or in part, upon not less than seven (7) days prior written
notice to Lender.   No prepayment of all or part of the Loan shall be permitted
unless same is made together with the payment of all interest accrued on the
Loan through the date of prepayment.  Upon the prepayment of all of the Loan
together with the payment of all interest accrued on the Loan through the date
of prepayment, the Borrower shall have the right to terminate this Agreement at
any time thereafter by thirty (30) days written notice to the Lender.

 

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3.05Late Charge.  Any and all amounts due hereunder or under the other Loan
Documents which remain unpaid on the tenth (10th) day after the date said amount
was due and payable shall incur a fee (the “Late Charge”) of five percent (5%)
per annum of said amount, which payment shall be in addition to all of Lender’s
other rights and remedies under the Loan Documents, provided that no Late Charge
shall apply to the final payment of principal on the Maturity Date.   Nothing in
this Section shall be deemed a cure period for the purpose of determining the
occurrence of an Event of Default.

ARTICLE IV – INTEREST

4.01Interest Rate.

a.

Subject to Section 4.03, any outstanding principal of any Advance and (to the
fullest extent permitted by law) any other amount payable by Borrower under this
Agreement or any other Loan Document will bear interest at the Note Rate (the
“Applicable Rate”), unless the Default Rate is applicable.

b.

Interest at the Applicable Rate (or Default Rate) shall be calculated for the
actual number of days elapsed on the basis of a 360-day year, including the
first date of the applicable period to, but not including, the date of
repayment.

c.

Any outstanding principal of any Advance and (to the fullest extent permitted by
law) any other amount payable by Borrower under this Agreement or any other Loan
Document that is not paid in full when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest at the Default Rate for the
period from and including the due date thereof to but excluding the date the
same is paid in full.   Additionally, at any time that an Event of Default
exists, all outstanding and unpaid principal amounts of all of the Obligations
shall, to the extent permitted by law, bear interest at the Default Rate.  
Interest payable at the Default Rate shall be payable from time to time on
demand.

4.02Required Principal and Interest Payments.  All accrued but unpaid interest
on the principal balance of the Loan outstanding from time to time shall be
payable on each Payment Date.   The then outstanding principal balance of the
Loan and all accrued but unpaid interest thereon shall be due and payable on the
Maturity Date.   Borrower may from time to time during the term of this
Agreement borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this
Agreement; provided, however, that the total outstanding borrowings under this
Agreement shall not at any time exceed the Commitment.   The unpaid principal
balance of the Loan at any time shall be the total amount advanced hereunder by
Lender less the amount of principal payments made hereon by or for Borrower,
which balance may be endorsed hereon from time to time by Lender or otherwise
noted in Lender’s records, which notations shall be, absent manifest error,
conclusive evidence of the amounts owing hereunder from time to time.   All
payments (whether of principal or of interest) shall be deemed credited to
Borrower’s account only if received by 2:00 p.m.  Dallas time on a Business Day;
otherwise, such payment shall be deemed received on the next Business Day.

4.03Maximum Lawful Rate.  It is the intent of Borrower and Lender to conform to
and contract in strict compliance with applicable usury law from time to time in
effect.  In no way, nor in any event or contingency (including but not limited
to prepayment, default, demand for payment, or acceleration of the maturity of
any obligation), shall the rate of interest taken, reserved, contacted for,
charged or received under this Agreement and the other Loan Documents exceed the
highest lawful interest rate permitted under applicable law (the “Maximum Lawful
Rate”).   If Lender shall ever receive anything of value which is characterized
as interest under applicable law and which would apart from this provision be in
excess of the Maximum Lawful Rate, an amount equal to the amount which would
have been excessive interest shall, without penalty, be applied to the reduction
of the principal amount owing on the Loan in the inverse order of its maturity
and not to the payment of interest, or refunded to the Borrower or the other
payor thereof if and to the extent such amount which would have been excessive
exceeds such unpaid principal.    All interest paid or agreed to be paid to the
holder hereof shall, to the extent permitted

 

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by applicable law, be amortized, prorated, allocated and spread throughout the
full stated term (including any renewal or extension) of the Loan so that the
amount of interest on account of such obligation does not exceed the Maximum
Lawful Rate.   As used in this Section, the term “applicable law” shall mean the
laws of the State of Texas or the federal laws of the United States, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.

ARTICLE V – COSTS OF MAINTAINING THE LOAN

5.01Increased Costs and Capital Adequacy.

a.

Borrower recognizes that the cost to Lender of maintaining the Loan or any
portion thereof may fluctuate and, Borrower agrees to pay Lender additional
amounts to compensate Lender for any increase in its actual costs incurred in
maintaining the Loan or any portion thereof outstanding or for the reduction of
any amounts received or receivable from Borrower as a result of any change after
the date hereof in any applicable Law, regulation or treaty (including any
Risk-Based Capital Guideline), or in the interpretation or administration
thereof, or by any domestic or foreign court, (i) changing the basis of taxation
of payments under this Agreement to Lender (other than Taxes imposed on all or
any portion of the overall net income or receipts of Lender), or (ii) imposing,
modifying or applying any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, credit extended by, or
any other acquisition of funds for loans by Lender (which includes the Loan or
any applicable portion thereof), or (iii) imposing on Lender any other condition
affecting the Loan, provided that the result of the foregoing is to increase the
cost to Lender of maintaining the Loan or any portion thereof or to reduce the
amount of any sum received or receivable from Borrower by Lender under the Loan
Documents.

b.

If the application of any Law, rule, regulation or guideline adopted or arising
out of the Basel Committee on Banking Regulations and Supervisory Practices
entitled “International Convergence of Capital Measurement and Capital
Standards”, or the adoption after the date hereof of any other Law, rule,
regulation or guideline regarding capital adequacy, or any change after the date
hereof in any of the foregoing, or in the interpretation or administration
thereof by any domestic or foreign Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Lender, with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has the effect of reducing the rate of return on Lender’s
capital to a level below that which Lender would have achieved but for such
application, adoption, change or compliance (taking into consideration the
policies of Lender with respect to capital adequacy), then, from time to time
Borrower shall pay to Lender such additional amounts as will compensate Lender
for such reduction with respect to any portion of the Loan outstanding.

c.

Any amount payable by Borrower under subsection (a) or subsection (b) of this
Section 5.01 shall be no more than 50 basis points (0.50%) multiplied by the
Commitment amount in the aggregate during the term of this loan and shall be
paid within five (5) days of receipt by Borrower of a certificate signed by an
authorized officer of Lender setting forth the amount due and the basis for the
determination of such amount, which statement shall be conclusive and binding
upon Borrower, absent manifest error.  Failure on the part of Lender to demand
payment from Borrower for any such amount attributable to any particular period
shall not constitute a waiver of Lender’s right to demand payment of such amount
for any subsequent or prior period.   Lender shall use reasonable efforts to
deliver to Borrower prompt notice of any event described in subsection (a) or
(b) above, of the amount of the reserve and capital adequacy payments resulting
therefrom and the reasons therefor and of the basis of calculation of such
amount; provided, however, that any failure by Lender to so notify Borrower
shall not affect Borrower’s obligation to pay the reserve and capital adequacy
payment resulting therefrom.

 

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5.02Borrower Withholding.  If by reason of a change in any applicable Laws
occurring after the date hereof, Borrower is required by Law to make any
deduction or withholding in respect of any Taxes (other than Taxes imposed on or
measured by the net income of Lender or any franchise Tax imposed on Lender),
duties or other charges from any payment due under the Note, then to the maximum
extent permitted by Law, the sum due from Borrower in respect of such payment
shall be increased to the extent necessary to ensure that, after the making of
such deduction or withholding, Lender receives and retains a net sum equal to
the sum which it would have received had no such deduction or withholding been
required to be made.

ARTICLE VI – LOAN EXPENSE AND ADVANCES

6.01Loan and Administration Expenses.  Borrower unconditionally agrees to pay
all costs and expenses incurred by Lender in connection with the Loan, including
all amounts payable pursuant to Sections 6.02 and 6.03, and any and all other
fees owing to Lender pursuant to the Loan Documents or any separate fee
agreement, all recording, filing and registration fees and charges, mortgage or
documentary taxes, all insurance premiums, printing and photocopying expenses,
survey fees and charges, and cost certified copies of instruments, and, if any
default or Event of Default occurs hereunder or under any of the Loan Documents
or if the Loan or Note or any portion thereof is not paid in full when and as
due, all costs and expenses of Lender (including, without limitation, court
costs and counsel’s fees and disbursements and fees and costs of paralegals)
incurred in attempting to enforce payment of the Loan and expenses of Lender
incurred (including court costs and counsel’s fees and disbursements and fees
and costs of paralegals) in attempting to realize, while a default or Event of
Default exists, on any security or incurred in connection with the sale or
disposition (or preparation for sale or disposition) of any security for the
Loan.  Borrower agrees to pay all brokerage, finder or similar fees or
commissions payable in connection with the transactions contemplated hereby and
shall indemnify and hold Lender harmless against all claims, liabilities, costs
and expenses (including attorneys’ fees and expenses) incurred in relation to
any claim by broker, finder or similar person.

6.02Lender’s Attorneys’ Fees and Disbursements.  Borrower agrees to pay Lender’s
attorney fees and disbursements incurred in connection with the Obligations,
including (i) the preparation and negotiation of this Agreement and the other
Loan Documents and the preparation of the closing binders (the amount of such
fees pursuant to Section 6.02(i) not to exceed $8,000 in the aggregate), and
(ii) enforcement of the terms of this Agreement and the other Loan Documents.

6.03Time of Payment of Fees and Expenses.   Borrower shall pay all expenses and
fees incurred as of the Loan Opening on the Loan Opening Date (unless sooner
required herein).   At the time of the Opening of the Loan, Lender may pay from
the proceeds of the initial disbursement of the Loan all Loan expenses and all
fees payable to Lender.  Lender may require the payment of outstanding fees and
expenses as a condition to any disbursement of the Loan.  Lender is hereby
authorized, without any specific request or direction by Borrower, to make
disbursements from time to time in payment of or to reimburse Lender for all
Loan expenses and fees.

6.04Expenses and Advances Secured by Loan Documents.  Any and all advances or
payments made by Lender under this Article VI from time to time, and any amounts
expended by Lender pursuant to Article XII, shall, as and when advanced or
incurred, constitute additional indebtedness evidenced by the Note and secured
by the Security Documents and the other Loan Documents.

6.05Right of Lender to Make Advances to Cure Borrower’s Defaults.  In the event
that Borrower fails to perform any of Borrower’s covenants, agreements or
obligations contained in this Agreement or any of the other Loan Documents
(after the expiration of applicable grace periods, except in the event of an
emergency or other exigent circumstances), Lender may (but shall not be required
to) perform any of such covenants, agreements and obligations, and any amounts
expended by Lender in so doing and shall

 

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constitute additional indebtedness evidenced by the Note and secured by the
Security Documents and the other Loan Documents and shall bear interest at the
Default Rate.

ARTICLE VII – CONDITIONS PRECEDENT TO THE OPENING OF THE LOAN

7.01Conditions Precedent to Initial Extension of Credit.   Borrower agrees that
Lender’s obligation to open the Loan and make the initial Advance under the Note
is conditioned upon Borrower’s delivery, performance and satisfaction of the
following conditions precedent in form and substance satisfactory to Lender in
its reasonable discretion.

a.

Loan Documents.  The Lender shall have received copies of each of the documents
set forth in Section 3.02, executed by the Borrower or its Subsidiaries, as the
case may be, and recorded, if applicable, each in form and substance
satisfactory to the Lender.

b.

Insurance Policies.  Borrower shall have furnished to Lender a summary of
insurance coverages that are in effect with respect to Borrower.

c.

No Litigation.  No litigation or proceedings shall be pending or threatened
which would reasonably be expected to cause a Material Adverse Change with
respect to Borrower or its Subsidiaries.

d.

Legal Opinions.  Borrower shall have furnished to Lender an opinion from counsel
for Borrower or its Subsidiaries covering due authorization, execution and
delivery and enforceability of the Loan Documents, and creation and perfection
of the security interests granted under the Loan Documents, and also containing
such other legal opinions as Lender shall require, in form and substance
satisfactory to Lender.  

e.

Searches.  Borrower shall have furnished to Lender current bankruptcy, federal
tax lien and judgment searches and searches of all Uniform Commercial Code
financing statements filed in each place UCC Financing Statements are to be
filed hereunder, demonstrating the absence of adverse claims.

f.

Financial Statements.  Borrower shall have furnished to Lender current annual
financial statements of Borrower or its Subsidiaries and such other persons or
entities connected with the Loan as Lender may request, each in form and
substance and certified by such individual as acceptable to Lender.   Borrower
and its Subsidiaries shall provide such other additional financial information
Lender reasonably requires.

g.

Equity Interests of Bank.  Borrower shall have delivered to Lender the share
certificates, if any, evidencing the Equity Interests of Bank.

h.

Organization Documents.  Borrower shall have furnished to Lender proof
satisfactory to Lender of authority, formation, organization and good standing
(or comparable active status) in the state of its incorporation or formation, of
all corporate, partnership, trust and limited liability company entities
(including Borrower and its Subsidiaries) executing any Loan Documents, whether
in their own name or on behalf of another entity.   Borrower and Bank shall also
provide certified resolutions in form and content satisfactory to Lender,
authorizing execution, delivery and performance of the Loan Documents, and such
other documentation as Lender may reasonably require to evidence the authority
of the persons executing the Loan Documents.  Borrower shall also have delivered
Constituent Documents for Borrower and Bank certified as of a date acceptable to
Lender by the appropriate government officials of the state of incorporation or
organization of Borrower and Bank.  Borrower shall also have delivered a
certificate of incumbency certified by an authorized officer or representative
certifying the names of the individuals or other Persons authorized to sign this
Agreement and each of the other Loan Documents to which Borrower and Bank is or
is to be a party (including the certificates contemplated herein) on behalf of
such Person together with specimen signatures of such individual Persons.

i.

No Default.  There shall be no uncured Default or Event of Default by Borrower
hereunder.

 

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j.

Subordinated Indebtedness.  Borrower shall deliver documentation related to all
Subordinated Indebtedness satisfactory to Lender.

k.

Additional Documentation.  Borrower shall have furnished to Lender such other
materials, documents, papers or requirements regarding Borrower and its
Subsidiaries as Lender shall reasonably request.

7.02Conditions Precedent to All Extensions of Credit.  The obligation of Lender
to make any Advance (including the initial Advance) is subject to the following
additional conditions precedent:

a.

Request for Advance.  Lender shall have received in accordance with this
Agreement (i) an Advance Request Form pursuant to Lender’s requirements and
executed by a responsible officer of Borrower and (ii) a duly executed
Certificate of Compliance in the form of Exhibit B, in addition to the
Borrower’s obligation to provide a Certificate of Compliance required under
Section 8.01(a), unless the most recent Certificate of Compliance provided to
Lender is less than 30 days old, in which case Borrower will not be obligated to
provide an updated Certificate of Compliance with the Advance Request Form.

b.

No Default.  No Default shall have occurred and be continuing, or would result
from or after giving effect to such Advance.

c.

No Material Adverse Change.  No Material Adverse Change has occurred and no
circumstance exists that would reasonably be expected to result in a Material
Adverse Change.

d.

Representations and Warranties.  All of the representations and warranties
contained in this Agreement and in the other Loan Documents shall be true and
correct on and as of the date of such Advance with the same force and effect as
if such representations and warranties had been made on and as of such date.

e.

Additional Documentation.  Lender shall have received such additional approvals,
opinions, or documents as Lender or its legal counsel may reasonably request.

Each Advance hereunder shall be deemed to be a representation and warranty by
Borrower that the conditions specified in this Section 7.02 have been satisfied
on and as of the date of the applicable Advance.

ARTICLE VIII – AFFIRMATIVE COVENANTS

Borrower covenants and agrees as follows:

8.01Furnishing Information.

a.

Financial Reports.  Borrower shall deliver or cause to be delivered to Lender
quarterly financial statements and a duly executed Certificate of Compliance in
the form of Exhibit B attached hereto within forty-five (45) days after the end
of each calendar quarter and annual audited financials within one hundred twenty
(120) days after the end of each calendar year.   All such financial statements
shall be in a format approved in writing by Lender in Lender’s reasonable sole
discretion.   Each financial statement shall be certified as true, complete and
correct by its preparer and by Borrower or, in the case of each of its
Subsidiaries’ financial statements, by the Subsidiary to whom it
relates.    Borrower shall deliver to Lender with respect to Borrower and its
Subsidiaries annual Federal Income Tax Returns within ten (10) days after timely
filing.  Borrower and its Subsidiaries shall provide such additional financial
information as Lender reasonably requires.   Borrower shall during regular
business hours permit Lender or any of its agents or representatives to have
access to and examine all of its books and records.  If any such financial
statement or other report or information described in this subsection is not
delivered to Lender as provided above, Borrower agrees to pay a late charge to
Lender in the amount of $100.00 per item per day.

 

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b.

Call Reports.  As soon as available, and in no event more than sixty (60) days
after the end of each fiscal quarter of each Bank, Borrower shall deliver or
caused to be delivered to Lender copies of each Bank’s Call Reports or other
quarterly reports of condition and income furnished to Governmental Authorities.

c.

Federal Reserve Bank or FDIC.  As soon as available, Borrower shall deliver or
cause to be delivered to Lender all other non-confidential reports filed by or
on behalf of Borrower or Bank with the Federal Reserve Bank or FDIC.

d.

Bankers Blanket Bond.  On the next Business Day after the earlier of notice of
intention to cancel or cancellation, in whole or in part, of any Bankers Blanket
Bond, Borrower shall deliver or cause to be delivered to Lender a copy of the
written notice to cancel or cancellation, including a copy of any correspondence
received from the underwriter or underwriters of such Bankers Blanket Bond
related to such intention to cancel or cancellation.

e.

USA Patriot Act.  Promptly upon the request thereof, Borrower shall deliver or
cause to be delivered to Lender such other non-confidential information and
documentation required by Bank Regulatory Authorities under applicable “know
your customer” and Anti-Money Laundering rules and regulations (including,
without limitation, the USA Patriot Act (Title III of Pub.  L.  107-56 (signed
into law October 26, 2001)), as amended), as from time to time reasonably
requested by the Lender.

f.

Notice of Litigation and Other Matters.  Prompt (but in no event later than ten
(10) days after Borrower obtains knowledge thereof) telephonic and written
notice of the commencement of all proceedings by or before any Governmental
Authority and all actions and proceedings in any court or before any arbitrator
against or involving the Borrower or any Subsidiary of Borrower or any of their
respective properties, assets or businesses that if adversely determined could
reasonably be expected to result in a Material Adverse Change.

g.

Classified Assets Report.  As soon as available, and in no event more than sixty
(60) days after the end of each fiscal quarter of each Bank, Borrower shall
deliver or cause to be delivered to Lender reports detailing the Bank’s
Classified Assets, in a form and substance satisfactory to Lender.

h.

Additional Information.  Such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary as
the Lender may reasonably request.

8.02Maintenance of Insurance.  Borrower shall maintain, with financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies and financial institutions
engaged in the same or similar businesses operating in the same or similar
locations.  Each policy shall provide that it may not be canceled, reduced or
terminated without at least thirty (30) days prior written notice to Lender.

8.03Payment of Taxes.  Borrower shall pay all Taxes before the same become
delinquent, provided, however, that Borrower shall have the right to pay such
tax under protest or to otherwise contest any such tax or assessment, but only
if (i) such contest has the effect of preventing the collection of such Taxes so
contested and also of preventing the attachment of any Lien to any of Borrower’s
property, (ii) Borrower has notified Lender of Borrower’s intent to contest such
Taxes, and (iii) Borrower has deposited security in form and amount satisfactory
to Lender, in its sole discretion, and has increased the amount of such security
so deposited promptly after Lender’s request therefor.   If Borrower fails to
commence such contest or, having commenced to contest the same, and having
deposited such security required by Lender for its full amount, shall thereafter
fail to prosecute such contest in good faith or with due diligence, or, upon
adverse conclusion of any such contest, shall fail to pay such Tax, Lender may,
at its election (but shall not be required to), pay and discharge any such Tax,
and any interest or penalty thereon, and any amounts so expended by Lender shall
be deemed to constitute disbursements of the Loan proceeds hereunder (even if
the total amount of disbursements would exceed the face amount of the Note).  

 

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Borrower shall furnish to Lender evidence that Taxes are paid at least five (5)
days prior to the last date for payment of such Taxes and before imposition of
any penalty or accrual of interest.

8.04Lender’s Attorneys’ Fees for Enforcement of Agreement.  In case of any
Default or Event of Default hereunder, Borrower (in addition to Lender’s
attorneys’ fees, if any, to be paid pursuant to Section 6.03) will pay Lender’s
attorneys’ and paralegal fees (including, without limitation, any attorney and
paralegal fees and costs incurred in connection with any litigation or
bankruptcy or administrative hearing and any appeals therefrom and any post-
judgment  enforcement  action  including,  without  limitation,  supplementary  proceedings)  in
connection with the enforcement of this Agreement; without limiting the
generality of the foregoing, if at any time or times hereafter Lender employs
counsel (whether or not any suit has been or shall be filed and whether or not
other legal proceedings have been or shall be instituted) for advice or other
representation with respect to this Agreement, or any of the other Loan
Documents, or to protect, collect, lease, sell, take possession of, or liquidate
any of the Collateral, or to attempt to enforce any security interest or lien in
any portion of the Collateral, or to enforce any rights of Lender or Borrower’s
obligations hereunder, then in any of such events all of the reasonable
attorneys’ fees arising from such services, and any reasonable expenses, costs
and charges relating thereto (including fees and costs of paralegals), shall
constitute an additional liability owing by Borrower to Lender, payable on
demand.

8.05Use of Proceeds.  The proceeds of the Loan will be used only for working
capital and general corporate purposes.  No part of the proceeds of the Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of regulations of any Bank Regulatory Authority, including
Regulations T, U and X.

8.06Lost Note. Upon Lender’s furnishing to Borrower an affidavit to such effect,
Borrower shall, if the Note is mutilated, destroyed, lost or stolen, deliver to
Lender, in substitution therefor, a new note containing the same terms and
conditions as the Note.

8.07Indemnification.  BORROWER SHALL INDEMNIFY LENDER, INCLUDING EACH PARTY
OWNING AN INTEREST IN THE LOAN AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES AND CONSULTANTS (EACH, AN “INDEMNIFIED PARTY”) AND DEFEND AND HOLD
EACH INDEMNIFIED PARTY HARMLESS FROM AND AGAINST ALL CLAIMS (INCLUDING, WITHOUT
LIMITATION, ANY CIVIL PENALTIES OR FINES ASSESSED BY OFAC), INJURY, DAMAGE, LOSS
AND LIABILITY, COST AND EXPENSE (INCLUDING ATTORNEYS’ FEES, COSTS AND EXPENSES)
OF ANY AND EVERY KIND TO ANY PERSONS OR PROPERTY BY REASON OF (I) ANY BREACH OF
REPRESENTATION OR WARRANTY, DEFAULT OR EVENT OF DEFAULT UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR RELATED DOCUMENT; OR (II) ANY OTHER MATTER ARISING IN
CONNECTION WITH THE LOAN, BORROWER OR ITS SUBSIDIARIES.  THE FOREGOING
INDEMNIFICATION SHALL SURVIVE REPAYMENT OF THE LOAN AND SHALL CONTINUE TO
BENEFIT LENDER FOLLOWING ANY ASSIGNMENT OF THE LOAN WITH RESPECT TO MATTERS
ARISING OR ACCRUING PRIOR TO SUCH ASSIGNMENT.

ARTICLE IX – NEGATIVE COVENANTS

Borrower covenants and agrees as follows:

9.01Indebtedness.  Borrower will not create, incur, assume or permit to exist
any Indebtedness, except:

a.

Indebtedness created hereunder;

b.

Indebtedness existing on the date hereof and set forth in Schedule 9.01b, but
not any extensions, renewals or replacements of any such Indebtedness;

 

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c.

Subordinated Indebtedness which comes into existence after the date hereof, but
only with Lender’s written consent which may be withheld at its sole discretion;
and

d.

Subordinated Indebtedness of all entities acquired by the Borrower after the
date hereof not to exceed $25 million in the aggregate and, if greater than $25
million, with Lender’s written consent which may not be unreasonably withheld.

9.02Liens.  Borrower will not create, incur, assume or permit to exist any Lien
on any property or asset now owned or hereafter acquired by it, or assign or
sell any income or revenues (including accounts receivable) or rights in respect
of any thereof, except:

a.

Permitted Liens;

b.

any Lien on any property or asset of Borrower existing on the date hereof and
set forth in Schedule 9.02b; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower and (ii) such Lien shall secure only
those obligations which it secures on the date hereof; and

c.

liens on fixed or capital assets acquired, constructed or improved by the
Borrower; provided that (i) such security interests secure Indebtedness
permitted by Section 9.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring, constructing or
improving such fixed or capital assets, and (iv) such security interests shall
not apply to any other property or assets of the Borrower.

9.03Fundamental Changes; Disposition of Assets.  The Borrower will not (a) merge
into or consolidate with any other Person, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) substantially all
of its assets, or liquidate or dissolve, or (b) engage to any material extent in
any business other than businesses of the type conducted by the Borrower on the
Effective Date and businesses reasonably related thereto.

9.04Investments, Loans, Advances, Guarantees and Acquisitions.  The Borrower
will not purchase, hold or acquire any capital stock, evidences of indebtedness
or other securities (including any option, warrant or other right to acquire any
of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any
other interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:

a.

Permitted Investments;

b.

investments made in the Bank;

c.

guarantees existing as of the date hereof or constituting Indebtedness permitted
by Section 9.01; or

d.

where Borrower will otherwise remain in compliance with the terms of this
Agreement upon the closing of such transaction.

9.05Swap Agreements.  The Borrower will not enter into any Swap Agreement,
except (a) Swap Agreements entered into to hedge or mitigate risks to which the
Borrower has actual exposure, (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower, and (c)
Swap Agreements entered into by the Borrower in the ordinary course of business.

9.06Transactions with Affiliates. The Borrower will not sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower than could be obtained
on an arm’s-length basis from unrelated third parties.

 

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9.07Restrictive Agreements. The Borrower will not, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of the Borrower
to create, incur or permit to exist any Lien upon any of its property or assets;
provided that (i) the foregoing shall not apply to restrictions and conditions
imposed by Law or by this Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
9.08 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (iv) the foregoing shall not apply to customary provisions in
leases restricting the assignment thereof.

9.08Borrower Leverage Ratio.  As of the last day of any fiscal quarter, the
Borrower shall have a Leverage Ratio of 7.00% or greater.

9.09Bank Leverage Ratio.  As of the last day of any fiscal quarter, the Bank
shall have a Leverage Ratio of 8.00% or greater.

9.10Total Risk-Based Capital Ratio.  As of the last day of any fiscal quarter,
the Bank shall have a Total Risk-Based Capital Ratio of 12.00% or greater.

9.11Texas Ratio.   As of the last day of any fiscal quarter, the Bank shall have
a Texas Ratio of 40% or less.

9.12Classified Assets to Tier 1 Capital Ratio.  As of the last day of any fiscal
quarter, the Bank shall have a Classified Assets to Tier 1 Capital Ratio of no
greater than 50.00%.

9.13Fixed Charge Coverage Ratio.  As of the last day of any fiscal quarter,
Borrower shall not permit the Fixed Charge Coverage Ratio to be less than 1.50
to 1.0.

9.14Limitation on Payments and Modification of Subordinated
Indebtedness.  Without the prior written consent of Lender, the Borrower shall
not amend, modify, waive or supplement (or permit the modification, amendment,
waiver or supplement of) any of the terms or provisions of any Subordinated
Indebtedness in any respect; provided, however that the foregoing shall not
preclude the prepayment of any Subordinated Indebtedness so long as (i) Borrower
is in compliance with all terms and conditions of this Agreement and (ii)
Borrower has obtained the prior written consent of Lender for any prepayments
greater than $10,000,000 within any twelve month period.

ARTICLE X – ASSIGNMENTS BY LENDER AND BORROWER

10.01Assignments and Participations.  Lender may from time to time sell the Loan
and the Loan Documents (or any interest therein) and may grant participations in
the Loan.   Borrower agrees to cooperate with Lender’s efforts to do any of the
foregoing and to execute all documents reasonably required by Lender in
connection therewith which do not materially adversely affect Borrower’s rights
under the Loan Documents.

10.02Prohibition of Assignments by Borrower.  Borrower shall not assign or
attempt to assign its rights under this Agreement and any purported assignment
shall be void.

10.03Successors and Assigns.  Subject to the foregoing restrictions on transfer
and assignment contained in this Article X, this Agreement shall inure to the
benefit of and shall be binding on the parties hereto and their respective
successors and permitted assigns.

 

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ARTICLE XI – EVENTS OF DEFAULT

11.01Events of Default.  The occurrence of any one or more of the following
shall constitute an “Event of Default” as said term is used herein:

a.

Failure of Borrower (i) (A) to make any payment within ten (10) days after it is
due, or (B) to observe or perform any of the other covenants or conditions by
Borrower to be performed under the terms of this Agreement or any other Loan
Document concerning the payment of money, for a period of thirty (30) days after
written notice from Lender that the same is due and payable; or (ii) other than
as covered by Section 12, for a period of thirty (30) days after written notice
from Lender, to observe or perform any non-monetary covenant or condition
contained in this Agreement or any other Loan Documents; provided that if any
such failure concerning a non-monetary covenant or condition covered by Sections
9.09, 9.10, 9.11, 9.12, 9.13 or 9.14, or is otherwise susceptible to cure and
cannot reasonably be cured within said thirty (30) day period, then Borrower
shall have an additional sixty (60) day period to cure such failure and no Event
of Default shall be deemed to exist hereunder so long as Borrower commences such
cure within the initial thirty (30) day period and diligently and in good faith
pursues such cure to completion within such resulting ninety (90) day period
from the date of Lender’s notice; and provided further that if a different
notice or grace period is specified under any other subsection of this Section
12.01 with respect to a particular breach, or if another subsection of this
Section 12.01 applies to a particular breach and does not expressly provide for
a notice or grace period the specific provision shall control.

b.

Any assignment in violation of Section 10.02.

c.

If any warranty, representation, statement, report or certificate made now or
hereafter by Borrower or its Subsidiaries is untrue or incorrect in any material
respect at the time made or delivered, provided that if such breach is
reasonably susceptible of cure, then no Event of Default shall exist so long as
Borrower cures said breach (i) within the notice and cure period provided in
(a)(i) above for a breach that can be cured by the payment of money or (ii)
within the notice and cure period provided in (a)(ii) above for any other
breach.

d.

Borrower or its Subsidiaries shall commence a voluntary case concerning Borrower
or such Subsidiary under the Bankruptcy Code; or an involuntary proceeding is
commenced against Borrower or its Subsidiaries under the Bankruptcy Code and
relief is ordered against Borrower, or the petition is controverted but not
dismissed or stayed within sixty (60) days after the commencement of the case,
or a custodian (as defined in the Bankruptcy Code) is appointed for or takes
charge of all or substantially all of the property of Borrower or its
Subsidiaries; or the Borrower or any of its Subsidiaries
commences  any  other  proceedings  under  any  reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar Law of any jurisdiction whether now or hereafter in effect relating
to the Borrower or its Subsidiaries; or there is commenced against Borrower or
its Subsidiaries any such proceeding which remains undismissed or unstayed for a
period of sixty (60) days; or the Borrower or its Subsidiaries fails to
controvert in a timely manner any such case under the Bankruptcy Code or any
such proceeding, or any order of relief or other order approving any such case
or proceeding is entered; or the Borrower or its Subsidiaries by any act or
failure to act indicates its consent to, approval of, or acquiescence in any
such case or proceeding or the appointment of any custodian or the like of or
for it for any substantial part of its property or suffers any such appointment
to continue undischarged or unstayed for a period of sixty (60) days.

e.

Borrower or its Subsidiaries shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall consent to the appointment of a receiver or trustee or
liquidator of all of its property or the major part thereof or if all or a
substantial part of the assets of Borrower or its Subsidiaries are attached,
seized, subjected to a writ

 

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or distress warrant, or are levied upon, or come into the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors.

f.

One or more final, non-appealable judgments are entered (i) against Borrower in
amounts aggregating in excess of $1 million or (ii) against any of Borrower’s
Subsidiaries in amounts aggregating in excess of $1 million, and said judgments
are not stayed or bonded over within thirty (30) days after entry.

g.

If Borrower shall fail to pay any debt owed by it or is in default under any
agreement with Lender or any other party (other than a failure or default for
which Borrower’s maximum liability does not exceed $1 million and such failure
or default continues after any applicable grace period specified in the
instrument or agreement relating thereto.

h.

If a Material Adverse Change occurs with respect to Borrower or any of its
Subsidiaries.

i.

The failure at any time of a security interest created under any Security
Document to be a valid first lien upon the Collateral described therein.

j.

A Change of Control shall occur.

k.

Failure of Borrower to comply with Section 8.01.

l.

The occurrence of any other event or circumstance denominated as an Event of
Default in this Agreement or under any of the other Loan Documents and the
expiration of any applicable grace or cure periods, if any, specified for such
Event of Default herein or therein, as the case may be.

m.

If (i) any Bank Regulatory Authority or other Governmental Authority having
regulatory authority over the Borrower or any Subsidiary of Borrower shall
impose any restriction not existing on the date hereof on the Borrower or such
Subsidiary with respect to the payment of dividends from any such Subsidiary to
the Borrower, (ii) any Bank shall cease for any reason to be an insured bank
under the FDIA, (iii) the FDIC or any other Governmental Authority shall issue a
cease and desist order to take other action of a disciplinary or remedial nature
against the Borrower or any Subsidiary and such order or other action could
reasonably be expected to have a Material Adverse Change or there shall occur
with respect to any Subsidiary any event that is grounds for the required
submission of a capital restoration plan under 12 U.S.C.  § 1831o(e)(2) and the
regulations thereunder, or (iv) the Borrower or any Subsidiary shall enter into
a written supervisory or similar formal or informal agreement with any Bank
Regulatory Authority or other Governmental Authority for any reason.

n.

Without limiting the generality of Section 12.01, the appointment of a
conservator or receiver for any Subsidiary of Borrower that is an “insured
depository institution” as defined in the FDIA (12 U.S.C.  § 1813(c)(2)), by any
“appropriate Federal banking agency” as defined in the FDIA (12 U.S.C.  §
1813(q)), by any state supervisory agency or by the FDIC or any successor
thereto pursuant to the FDIA; or the organization of a bridge bank to purchase
assets and assume liabilities of such Subsidiary pursuant to the FDIA; or the
provision of any form of assistance to any such Subsidiary by the FDIC pursuant
to the FDIA or other Governmental Authority.

o.

The Borrower shall cease to be a financial holding company.

p.

The subordination provisions related to any Subordinated Indebtedness or any
other agreement, document or instrument governing any Subordinated Indebtedness
shall for any reason be revoked or invalidated, or otherwise cease to be in full
force and effect, or any Person shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder, or the Loans, for any reason shall not have the priority
contemplated by this Agreement or any such subordination provisions.

 

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ARTICLE XII – LENDER’S REMEDIES IN EVENT OF DEFAULT

12.01Remedies Conferred Upon Lender.  Upon the occurrence of any Event of
Default, Lender may, with notice, pursue any one or more of the following
remedies concurrently or successively, it being the intent hereof that none of
such remedies shall be to the exclusion of any other:

a.

Enforce any Liens or security interests under the Security Documents.

b.

Declare the Note to be immediately due and payable.

c.

Use and apply any monies or letters of credit deposited by Borrower with Lender,
regardless of the purposes for which the same was deposited, to cure any such
default or to apply on account of any indebtedness under this Agreement which is
due and owing to Lender.  

d.

Terminate the Commitment or declare the Obligations or any part thereof to be
immediately due and payable, or both, and the same shall thereupon become
immediately due and payable, without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, protest, or other formalities of any kind, all of which are
hereby expressly waived by Borrower.

e.

Exercise or pursue any other remedy or cause of action permitted under this
Agreement or any other Loan Documents, or conferred upon Lender by operation of
Law.

Notwithstanding the foregoing, upon the occurrence of any Event of Default under
Section 11.01d, e, o, or p, with respect to Borrower or the Bank, the Commitment
shall automatically terminate and all amounts evidenced by the Note shall
automatically become due and payable, without any presentment, demand, protest
or notice of any kind to Borrower, all of which are hereby expressly waived by
Borrower.  In addition to the foregoing, if any Event of Default shall occur and
be continuing, Lender may exercise all rights and remedies available to it in
law or in equity, under the Loan Documents, or otherwise.

ARTICLE XIII – GENERAL PROVISIONS

13.01Captions.  The captions and headings of various Articles, Sections and
subsections of this Agreement and Schedules and Exhibits pertaining hereto are
for convenience only and are not to be considered as defining or limiting in any
way the scope or intent of the provisions hereof.

13.02Modification; Waiver.  No modification, waiver, amendment or discharge of
this Agreement or any other Loan Document shall be valid unless the same is in
writing and signed by the party against which the enforcement of such
modification, waiver, amendment or discharge is sought.

13.03Authorized Representative. Borrower hereby appoints Stephen D.  Young as
its Authorized Representative for purposes of dealing with Lender on behalf of
Borrower in respect of any and all matters in connection with this Agreement,
the other Loan Documents, and the Loan.   The Authorized Representative shall
have the power, in his discretion, to give and receive all notices, monies,
approvals, and other documents and instruments, and to take any other action on
behalf of Borrower.   All actions by the Authorized Representative shall be
final and binding on Borrower.   Lender may rely on the authority given to the
Authorized Representative until actual receipt by Lender of a duly authorized
resolution substituting a different person as the Authorized
Representative.    No more than one person shall serve as Authorized
Representative at any given time.

13.04Governing Law.  Irrespective of the place of execution and/or delivery,
this Agreement shall be governed by, and shall be construed in accordance with,
the laws of the State of Texas.

13.05Acquiescence Not to Constitute Waiver of Lender’s Requirements.  Each and
every covenant and condition for the benefit of Lender contained in this
Agreement may be waived by Lender, provided, however, that to the extent that
Lender may have acquiesced in any noncompliance with any conditions precedent to
the Opening of the Loan or to any subsequent disbursement of Loan proceeds, such

 

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acquiescence shall not be deemed to constitute a waiver by Lender of such
requirements with respect to any future disbursements of Loan proceeds.

13.06Disclaimer by Lender.  This Agreement is made for the sole benefit of
Borrower and Lender, and no other person or persons shall have any benefits,
rights or remedies under or by reason of this Agreement, or by reason of any
actions taken by Lender pursuant to this Agreement.   Lender shall not be liable
for any debts or claims accruing in favor of any such parties against Borrower
or others.  Lender, by making the Loan or taking any action pursuant to any of
the Loan Documents, shall not be deemed a partner or a joint venturer with
Borrower or fiduciary of Borrower.    No payment of funds directly to a
contractor or subcontractor or provider of services shall be deemed to create
any third-party beneficiary status or recognition of same by the Lender.

13.07Partial Invalidity; Severability.  If any of the provisions of this
Agreement, or the application thereof to any person, party or circumstances,
shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such provision or provisions to persons,
parties or circumstances other than those as to whom or which it is held invalid
or unenforceable, shall not be affected thereby, and every provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by Law.

13.08Definitions Include Amendments. Definitions contained in this Agreement
which identify documents, including, but not limited to, the Loan Documents,
shall be deemed to include all amendments and supplements to such documents from
the date hereof, and all future amendments, modifications, and supplements
thereto entered into from time to time to satisfy the requirements of this
Agreement or otherwise with the consent of Lender.   Reference to this Agreement
contained in any of the foregoing documents shall be deemed to include all
amendments and supplements to this Agreement.

13.09Execution in Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

13.10Entire Agreement.  This Agreement, taken together with all of the other
Loan Documents and all certificates and other documents delivered by Borrower to
Lender, embody the entire agreement and supersede all prior agreements, written
or oral, relating to the subject matter hereof.

13.11Waiver of Damages.   In no event shall Lender be liable to Borrower for
punitive, exemplary or consequential damages, including, without limitation,
lost profits, whatever the nature of a breach by Lender of its obligations under
this Agreement or any of the Loan Documents, and Borrower waives all claims for
punitive, exemplary or consequential damages.

13.12Claims Against Lender.  Lender shall not be in default under this
Agreement, or under any other Loan Documents, unless a written notice
specifically setting forth the claim of Borrower shall have been given to Lender
within three (3) months after Borrower first had knowledge of the occurrence of
the event which Borrower alleges gave rise to such claim and Lender does not
remedy or cure the default, if any there be, promptly thereafter.   Borrower
waives any claim, set-off or defense against Lender arising by reason of any
alleged default by Lender as to which Borrower does not give such notice timely
as aforesaid.    Borrower acknowledges that such waiver is or may be essential
to Lender’s ability to enforce its remedies without delay and that such waiver
therefore constitutes a substantial part of the bargain between Lender and
Borrower with regard to the Loan.

13.13Jurisdiction.  TO  THE  GREATEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH
RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A
“PROCEEDING”), BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF
DALLAS, COUNTY OF DALLAS AND STATE OF TEXAS, AND

 

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(B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF
ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY.  NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER
FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A
PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A
PROCEEDING IN ANY OTHER JURISDICTION.  BORROWER FURTHER AGREES AND CONSENTS
THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER
APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY TEXAS STATE OR
UNITED STATES COURT SITTING IN THE CITY OF DALLAS AND COUNTY OF DALLAS MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE
UPON RECEIPT; EXCEPT THAT IF BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE
SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

13.14Set-Offs.  After the occurrence and during the continuance of an Event of
Default, Borrower hereby irrevocably authorizes and directs Lender from time to
time to charge Borrower’s accounts and deposits with Lender (or its Affiliates),
and to pay over to Lender an amount equal to any amounts from time to time due
and payable to Lender hereunder, under the Note or under any other Loan
Document.    Borrower hereby grants to Lender a security interest in and to all
such accounts and deposits maintained by the Borrower with Lender (or its
Affiliates).

13.15Lender’s Consent.  Wherever in this Agreement there is a requirement for
Lender’s consent and/or a document to be provided or an action taken “to the
satisfaction of Lender”, it is understood by such phrase that, except as
expressly modified herein, Lender shall exercise its consent, right or judgment
in its sole discretion.

13.16Notices.  Any notice, demand, request or other communication which any
party hereto may be required or may desire to give hereunder shall be in writing
and shall be deemed to have been properly given (a) if hand delivered, when
delivered; (b) if mailed by United States Certified Mail (postage prepaid,
return receipt requested), three (3) Business Days after mailing (c) if by
Federal Express or other reliable overnight courier service, on the next
Business Day after delivered to such courier service or (d) if by telecopier on
the day of transmission so long as copy is sent on the same day by overnight
courier as set forth below:

To Borrower:

CenterState Banks, Inc.

 

42745 U.S.  Highway 27

 

Davenport,Florida 33837

 

Attention: Stephen D.  Young

 

Facsimile: (863) 294-2218

 

 

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With copies to:

Smith Mackinnon, PA

 

255 South Orange Avenue

 

Suite 1200

 

Orlando, Florida 32801

 

Attention: John P.  Greeley

 

Facsimile: (407) 843-2448

 

To Lender:

NexBank SSB

 

2515 McKinney Avenue, Suite 1100

 

Dallas, Texas 75201

 

Attention: Matt Siekielski

 

Facsimile: (972) 934-4785

 

With copies to:

Kennedy Sutherland LLP

 

112 E.  Pecan Street

 

Suite 2810

 

San Antonio, Texas 78205

 

Attention: William D.  Sutherland

 

Facsimile: (210) 228-0781

 

or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.

13.17No Oral Agreements.  THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL AGREEMENTS  OF THE  PARTIES.  THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

EXECUTED AND DELIVERED as of the date first recited.

 

[Signature page follows]

 

 

 

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LENDER:

 

 

NexBank SSB

 

 

 

 

 

/s/ Rhett Miller

 

 

Rhett Miller, Senior Vice President and Chief Credit Officer

 

 

 

 

 

BORROWER(S):

 

 

CenterState Banks, Inc.

 

 

 

 

 

/s/ Stephen D.  Young

 

 

Stephen D.  Young, Corporate Treasurer

 

 

 

 

 

Signature Page

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EXHIBIT A

Certificate of Compliance

 

 

NexBank SSB

2515 McKinney Avenue, Suite 1100

Dallas, Texas 75201

 

Attn: [●]

Re:  Loan Agreement dated as of January 6, 2015 (as amended, modified,
supplemented, restate, or renewed, from time to time, the “Agreement”), between
the below signed Borrower(s) and NexBank SSB (“Lender”).

Reference is made to the Agreement.   Capitalized terms used in this Certificate
(including schedules and other attachments hereto, this “Certificate”) without
definition have the meanings specified in the Agreement.  Pursuant to applicable
provisions of the Agreement, the undersigned, being the Authorized
Representative designated in the Agreement, hereby certifies to the Lender that
the information furnished in the attached schedules, including, without
limitation, each of the calculations listed below, with respect to the Borrower
and the Bank are true, correct and complete in all material respects as of the
last day of the fiscal periods subject to the financial statements and
associated covenants being delivered to the Lender pursuant to the Agreement
together with this Certificate (such statements the “Financial Statements” and
the periods covered thereby the “reporting period”) and for such reporting
periods.

The undersigned hereby further certifies to the Lender that:

a.

Compliance with Financial Covenants.  As shown below, the Borrower or the Bank,
as applicable, is in full compliance with the Financial Covenants contained in
the Agreement.  All covenants are expressed as a percentage.

[Note to preparer.   The following Financial Covenants are provided as
illustration.   The actual Financial Covenants must be obtained from the
Agreement]

i.

Covenant.  Fixed Charge Coverage Ratio of less than 1.5 to 1.0 tested quarterly

Calculation:

Fixed Charge Coverage Ratio = EBIDA / Fixed Charges

Fixed Charge Coverage Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in
Agreement]

Compliance? (Yes or No) _________________

b.

Bank’s Compliance with Financial Covenants.  As shown below, the Bank is in full
compliance with the Financial Covenants contained in the Agreement.  All
covenants are expressed as a percentage.

[Note to preparer.   The following Financial Covenants are provided as
illustration.   The actual Financial Covenants must be obtained from the
Agreement]

i.

Covenant: Classified Assets to Tier 1 Capital Ratio of no greater than 50%
tested quarterly

Calculation:

Classified Assets to Tier 1 Capital Ratio = Classified Assets / (Tier 1 Capital
+ Allowance for Loan and Lease Losses)

 

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Classified Assets to Tier 1 Capital Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in
Agreement]

Compliance? (Yes or No) _________________

ii.

Covenant: Texas Ratio of less than 40% tested quarterly

Calculation:

Texas Ratio = (Total Non-Accrual Loans + Other Real Estate Owned of such Person
+ loans in default for 90 days or more) / ((Total Capital + unrealized losses
(gains) on securities + Allowance for Loan and Lease Losses) - (Intangible
Assets))

Texas Ratio of for period ending ___.

[Borrower to include specific calculation based upon formula outlined in
Agreement]

Compliance? (Yes or No) _________________

iii.

Covenant: Leverage Ratio of not less than [__]% tested quarterly

Calculation:

Leverage Ratio = Tier 1 Capital / Average Total Assets

Leverage Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in
Agreement]

Compliance? (Yes or No) _________________

iv.

Covenant: Total Risk-Based Capital Ratio of [__]% or greater tested quarterly

Calculation:

Total Risk-Based Capital Ratio = (Tier 1 Capital + Tier 2 Capital) / Total
Risk-Weighted Assets

Total Risk-Based Capital Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in
Agreement]

Compliance? (Yes or No) _________________

c.

Review of Condition.  The undersigned has reviewed the terms of the Loan
Documents, including, but not limited to, the representations and warranties of
the Borrower set forth in the Loan Documents and the covenants of the Borrower
set forth in the Loan Documents, and has made, or caused to be made under his or
her supervision, a review in reasonable detail of the transactions and condition
of the Borrower through the reporting periods.

d.

Representations and Warranties.  The representations and warranties of the
Borrower contained in the Loan Documents, including those contained in the
Agreement, are true and accurate in all material respects as of the date hereof
and were true and accurate in all material respects at all times during the
reporting period except as expressly noted on Schedule A hereto.

e.

Covenants.  During the reporting period, the Borrower observed and performed all
of the respective covenants and other agreements under the Loan Documents, and
satisfied each of the conditions contained therein to be observed, performed or
satisfied by the Borrower, except as expressly noted on Schedule A hereto.

f.

No Event of Default.  No Event of Default exists as of the date hereof or
existed at any time during the reporting period, except as expressly noted on
Schedule A hereto.

 

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IN WITNESS WHEREOF, this Certificate is executed by the undersigned on January
[__], 2015.         

 

 

BORROWER:

 

CenterState Banks, Inc.

 

 

 

Stephen D.  Young, Corporate Treasurer

 

 

 

Schedule 9.08

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