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EXHIBIT 10.2

 

 

REVOLVING PROMISSORY NOTE

(Floating Rate)

 

 

$30,000,000.00

December 13, 2018

 

For value received, CBTX, INC., a Texas corporation, as principal (“Borrower”),
promises to pay to the order of FROST BANK, a Texas state bank (“Lender”), at
P.O. Box 1600, San Antonio, Texas 78296, or at such other address as Lender
shall from time to time specify in writing, the principal sum of THIRTY MILLION
AND NO/100 DOLLARS  ($30,000,000.00),  or so much that may be advanced from time
to time pursuant to the terms hereof (the “Loan”),  in legal and lawful money of
the United States of America, with interest on the outstanding principal from
the date advanced until paid at the rate set out below. Interest shall be
computed on a per annum basis of a year of 360 days and for the actual number of
days elapsed, unless such calculation would result in a rate greater than the
highest rate permitted by applicable Law, in which case interest shall be
computed on a per annum basis of a year of 365 days (or 366 days in a leap
year). All capitalized terms not herein defined shall have the respective
meanings ascribed to them in the Loan Agreement (as hereinafter defined).

1. Payment Terms.  All payments received hereunder shall first be applied to the
payment of any expense or charges payable hereunder or under any of the other
Loan Documents (as hereinafter defined), then to accrued and unpaid interest,
with the balance applied to principal, or in such other order as Lender shall
determine in its sole discretion. Payments on the Loan shall be as follows:

(a) Payments of interest only shall be due and payable in four  (4)  quarterly
installments on March 13, 2019,  June 13, 2019, September 13, 2019, and December
13, 2019, interest being calculated on the unpaid principal each day principal
is outstanding; and

(b) Thereafter, payments of principal, together with accrued and unpaid interest
on the outstanding principal balance of the Loan, shall be due and payable in
twenty  (20)  quarterly installments over a term of sixty  (60)  months (the
“Repayment Term”) payable on March 13,  June 13,  September 13 and December 13
of each year during the Repayment Term, after which time the entire outstanding
principal balance of the Loan, all accrued and unpaid interest thereon and any
other unpaid amounts shall be finally due and payable in full on December 13,
2024 (the “Maturity Date”).  Quarterly installments on the Loan shall be
established by Lender and in the amount necessary to amortize the outstanding
principal balance of the Loan as of the end of the interest only period
described in Section 1(a) above over the Repayment Term described in this
Section 1(b).

2.Late Charge.  If a payment is made more than ten (10) days after it is due,
Borrower will be charged, in addition to interest, a delinquency charge of (i)
 five percent (5%) of the unpaid portion of the regularly scheduled payment; or
(ii) $250.00, whichever is less. Additionally, upon maturity of the Loan, if the
outstanding principal balance (plus all accrued but unpaid interest) is not paid
within ten (10) days after the Maturity Date, Borrower will be charged a
delinquency charge of (i) five percent (5%) of the sum of the outstanding
principal balance (plus all accrued but unpaid

 

 

 

 

CBTX, Inc.

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Revolving Promissory Note

 

 

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interest); or (ii) $250.00, whichever is less. Borrower agrees with Lender that
the charges set forth herein are reasonable compensation to Lender for the
handling of such late payments.

3.Interest Rate.  Interest on the outstanding and unpaid principal balance of
the Loan shall be computed at a per annum rate equal to the lesser of (i) a rate
equal to the Prime Rate (initially as determined on the date hereof), with said
rate to be adjusted daily to reflect any change in the Prime Rate and without
notice to Borrower or any other person; or (ii) the highest rate permitted by
applicable Law, but in no event shall interest contracted for, charged or
received hereunder plus any other charges in connection herewith which
constitute interest exceed the maximum interest permitted by applicable Law,
said rate to be effective prior to maturity (however such maturity is brought
about).  The term “Prime Rate,” as used herein, shall mean the maximum
“Latest” “U.S.” prime rate of interest per annum published from time to time in
the Money Rates section of The Wall Street Journal (U.S. Edition) or in any
successor publication to The Wall Street Journal.  Borrower understands that the
Prime Rate may not be the best, lowest, or most favored rate of Lender or The
Wall Street Journal, and any representation or warranty in that regard is
expressly disclaimed by Lender.  Borrower acknowledges that (i) if more than one
U.S. prime rate is published at any time by The Wall Street Journal, the highest
of such prime rates shall constitute the Prime Rate hereunder; and (ii) if at
any time The Wall Street Journal ceases to publish a U.S. prime rate, Lender
shall have the right to select a substitute rate that Lender determines, in the
exercise of its reasonable commercial discretion, to be comparable to such prime
rate, and the substituted rate as so selected, upon the sending of written
notice thereof to Borrower, shall constitute the Prime Rate hereunder. 

4.Default Rate.    For so long as any event of default exists under this Note or
under any of the other Loan Documents (as defined herein), regardless of whether
or not there has been an acceleration of the indebtedness evidenced by this
Note, and at all times after the maturity of the indebtedness evidenced by this
Note (whether by acceleration or otherwise), and in addition to all other rights
and remedies of Lender hereunder, interest shall accrue at the rate stated above
plus five percent (5%) per annum, but in no event in excess of the highest rate
permitted by applicable Law, and such accrued interest shall be immediately due
and payable.  Borrower acknowledges that it would be extremely difficult or
impracticable to determine Lender's actual damages resulting from any event of
default, and such accrued interest is a reasonable estimate of those damages and
does not constitute a penalty.

5.Revolving Line of Credit.  Borrower may request advances and make payments
hereunder from time to time up until December 13, 2019 (the “LOC Rest Date”),
provided that it is understood and agreed that the aggregate principal amount
outstanding at any time and from time to time shall not exceed $30,000,000.00.
Until the LOC Rest Date, the unpaid principal balance of the Loan shall increase
and decrease with each new advance or payment hereunder, as the case may be.
This Note shall not be deemed terminated or canceled by reason of the fact that
the entire principal balance hereof may from time to time be paid in full prior
to the LOC Rest Date. Prior to the LOC Rest Date, Borrower may borrow, repay and
re-borrow hereunder. All payments and prepayments of principal of or interest on
this Note shall be made in immediately available funds at the address of Lender
indicated above, or such other place as the holder of this Note shall designate
in writing to Borrower. If any payment of principal of or interest on this Note
shall become due on a day which is not a Business Day (as hereinafter defined),
such payment shall be made on the next succeeding

 

 

 

 

CBTX, Inc.

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Revolving Promissory Note

 

 

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Business Day, and any such extension of time shall be included in computing
interest in connection with such payment. As used herein, “Business Day” means
any week day on which Lender is open for transaction of its general banking
business. The books and records of Lender shall be prima facie evidence of all
outstanding principal of and accrued and unpaid interest under this Note.

6.Prepayment.  Borrower reserves the right to prepay, prior to maturity, all or
any part of the principal of the Loan without penalty.  Any prepayments shall be
applied first to accrued interest and any other amounts owing hereunder or under
the other Loan Documents, and then to reduction of principal.  Borrower will
provide written notice to the holder of this Note of any such prepayment of all
or any part of the principal at the time thereof.  All partial prepayments of
principal shall be applied to the last installments payable in their inverse
order of maturity. 

7.Default.  It is expressly provided that upon default in the punctual payment
of any indebtedness evidenced by this Note or any part hereof,  as the same
shall become due and payable, or upon the occurrence of an event of default
specified in any of the other Loan Documents,  the holder of this Note may, at
its option, without further notice or demand, (i) declare the outstanding
principal balance of and accrued but unpaid interest on this Note at once due
and payable; (ii) if such default occurs prior to the LOC Rest Date, refuse to
advance any additional amounts under this Note; (iii) foreclose all liens
securing payment hereof; (iv) pursue any and all other rights, remedies and
recourses available to the holder hereof, including, but not limited to, any
such rights, remedies or recourses under the Loan Documents, at Law or in
equity; or (v) pursue any combination of the foregoing. In the event default is
made in the prompt payment of this Note when due or declared due, and the same
is placed in the hands of an attorney for collection, or suit is brought on
same, or the same is collected through probate, bankruptcy or other judicial
proceedings, then Borrower agrees and promises to pay all costs of collection,
including reasonable attorneys’ fees.

8.Joint and Several Liability; Waiver.  Each maker, signer, surety and endorser
hereof, as well as all successors and legal representatives of said parties,
shall be directly and primarily, jointly and severally, liable for the payment
of all indebtedness hereunder.  Lender may release or modify the obligations of
any of the foregoing persons or entities, or guarantors hereof, in connection
with this Note without affecting the obligations of the others.  All such
persons or entities expressly waive presentment and demand for payment, notice
of default, notice of intent to accelerate maturity, notice of acceleration of
maturity, protest, notice of protest, notice of dishonor, and all other notices
and demands for which waiver is not prohibited by Law, and diligence in the
collection hereof; and agree to all renewals, extensions, indulgences, partial
payments, releases or exchanges of collateral, or taking of additional
collateral, with or without notice, before or after maturity.  No delay or
omission of Lender in exercising any right hereunder shall be a waiver of such
right or any other right under this Note. 

9.No Usury Intended; Usury Savings Clause.  In no event shall interest
contracted for, charged or received hereunder, plus any other charges in
connection herewith which constitute interest, exceed the maximum interest
permitted by applicable Law. The amounts of such interest or other charges
previously paid to the holder of this Note in excess of the amounts permitted by
applicable Law shall be applied by the holder of this Note to reduce the
principal of the indebtedness evidenced by this Note, or, at the option of the
holder of this Note, be refunded.  To the extent permitted by applicable Law,
determination of the legal maximum amount of interest shall at all times

 

 

 

 

CBTX, Inc.

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be made by amortizing, prorating, allocating and spreading in equal parts during
the period of the full stated term of the Loan, all interest at any time
contracted for, charged or received from the Borrower hereof in connection with
the Loan evidenced hereby, so that the actual rate of interest on account of
such indebtedness is uniform throughout the term hereof.

10.Security.  This Note has been executed and delivered pursuant to that certain
Loan Agreement dated of even date herewith by and between Borrower and Lender
(as may be amended from time to time, the “Loan Agreement”), and is secured by,
inter alia, a Pledge and Security Agreement dated of even date herewith, by and
between Borrower and Lender, covering certain collateral as more particularly
described therein. This Note, the Loan Agreement and all other documents
evidencing, securing, governing, guaranteeing and/or pertaining to this Note,
including, but not limited to, those documents described above, are collectively
referred to as the “Loan Documents.”  The holder of this Note is entitled to the
benefits and security provided in the Loan Documents.

11.Texas Finance Code.  In no event shall Chapter 346 of the Texas Finance Code
(which regulates certain revolving loan accounts and revolving tri-party
accounts) apply to this Note.  To the extent that Chapter 303 of the Texas
Finance Code is applicable to this Note, the “weekly ceiling” specified in such
article is the applicable ceiling; provided that, if any applicable Law permits
greater interest, the Law permitting the greatest interest shall apply.

12.Governing Law, Venue. This Note is being executed and delivered, and is
intended to be performed in the State of Texas.  Except to the extent that the
Laws of the United States may apply to the terms hereof, the substantive Laws of
the State of Texas shall govern the validity, construction, enforcement and
interpretation of this Note.  In the event of a dispute involving this Note or
any other instruments executed in connection herewith, the undersigned
irrevocably agrees that venue for such dispute shall lie in any court of
competent jurisdiction in Bexar County, Texas.

13.Captions.  The captions in this Note are inserted for convenience only and
are not to be used to limit the terms herein.

 

 

 

 

BORROWER:

 

CBTX, INC., a Texas corporation

 

 

 

 

By:

/s/Robert R. Franklin, Jr.

 

 

Robert R. Franklin, Jr., Chairman,
President and Chief Executive Officer

 

 

 

 

 

CBTX, Inc.

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