Exhibit 10.3
STOCK PLEDGE AGREEMENT (BORROWER)
1. As collateral security for the payment of any and all indebtedness
(principal, interest, fees, collection costs and expenses and other amounts),
liabilities and obligations of the undersigned, SUPERIOR BANCORP, a Delaware
corporation (“Debtor”), to COLONIAL BANK (“Secured Party”), of every kind or
character, now or hereafter existing, absolute or contingent, joint or several
or joint and several, otherwise secured or unsecured, due or not due, direct or
indirect, expressed or implied in law, contractual or tortious, liquidated or
unliquidated, at law, or in equity or otherwise, and whether heretofore, now or
hereafter incurred or given by Debtor as principal, surety, endorser, guarantor
or otherwise, and whether created directly or acquired by Secured Party by
assignment or otherwise, including, without limitation, any and all present and
future indebtedness (principal, interest, fees, collection costs and expenses
and other amounts) of Debtor to Secured Party evidenced by or arising under the
Loan Agreement dated as of September 4, 2008, executed by Secured Party, as
Lender, and Debtor, as Borrower (as amended, the “Loan Agreement”), and the
Revolving Credit Note dated as of September 4, 2008, executed by Debtor and
payable to the order of Secured Party in the original principal amount of up to
$10,000,000 (each, a “Liability”; and collectively, “Liabilities”), Debtor
hereby pledges and delivers to Secured Party and grants Secured Party a security
interest in, a lien upon and right of set-off as to the following: (a) 127,501
shares of capital stock of Superior Bank, a Federal savings bank (the
“Subsidiary”), set forth and described on Collateral Schedule #1 attached hereto
and incorporated herein by reference (collectively, the “Pledged Shares”) and
the certificates representing the Pledged Shares, and all dividends, cash,
instruments, stock, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares, (b) all additional shares of any class of capital stock
of the Subsidiary from time to time acquired by Debtor in any manner (including,
without limitation, any shares of preferred stock of the Subsidiary)
(collectively, the “Additional Shares”), and the certificates representing such
Additional Shares, and all dividends, cash, instruments, stock, securities and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Additional Shares, (c) all
other rights appurtenant to the property described in clauses (a) and (b) above
(including, without limitation, voting rights) and (d) all cash and noncash
proceeds of any and all of the foregoing (collectively, the “Collateral”).
Certificates representing the Pledged Shares set forth on Collateral Schedule #1
attached hereto, accompanied by proper instruments of assignment duly executed
in blank by Debtor, are herewith being delivered to Secured Party. Promptly upon
Debtor’s acquisition of any Additional Shares, Debtor will (i) deliver to
Secured Party the certificates representing such Additional Shares together with
proper instruments of assignment duly executed in blank by Debtor and (ii) amend
Collateral Schedule #1 to include such Additional Shares.
2. Debtor hereby covenants and agrees that (a) with respect to all shares of any
class of capital stock of Subsidiary pledged to Secured Party contemporaneously
with the execution of or pursuant to this Stock Pledge Agreement (Borrower)
(this “Agreement”), or at any time hereafter, if any stock dividends, stock
splits, reclassifications, adjustments or other changes are made in the capital
structure of Subsidiary (whether as a result of a reorganization,
recapitalization, share split up, merger, transfer, consolidation or otherwise),
all new, additional or substituted securities issued with respect to any of such
shares by reason of any such change

 

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shall be subject to Secured Party’s security interest and immediately delivered
to Secured Party, which shall hold such shares or securities so issued as
additional Collateral, (b) if any warrants, options or other rights now or
hereafter exist with respect to any of the Pledged Shares, any of the Additional
Shares or any of the other Collateral, Debtor has and hereafter shall
immediately so advise Secured Party of the existence of such warrants, options
and rights, all such warrants, options and rights shall be subject to Secured
Party’s security interest and all stock or securities issued pursuant to the
exercise of any such warrant, option or right shall be subject to Secured
Party’s security interest and immediately delivered to Secured Party, which
shall hold such shares or securities as additional Collateral, (c) Debtor shall
immediately pledge and deliver to Secured Party any and all shares of any class
of capital stock of Subsidiary now owned or hereafter acquired by Debtor and
(d) Debtor shall not, without the prior written consent of Secured Party,
(i) sell, assign or otherwise transfer or pledge any of the Pledged Shares, any
of the Additional Shares or any of the other Collateral, (ii) create or permit
any other lien or encumbrance upon, or any other security interest in, any of
the Pledged Shares, any of the Additional Shares or any of the other Collateral
or (iii) grant any option or right with respect to any of the Pledged Shares,
any of the Additional Shares or any of the other Collateral.
3. Debtor hereby represents and warrants to Secured Party that:
(a) Debtor is the sole legal, beneficial and record owner of all of the
Collateral pledged hereunder and none of the Collateral pledged hereunder is or
will be subject to any security interests, liens, encumbrances, charges, claims,
warrants, options, proxies, restrictions on transfer, resale or other
disposition, restrictions on voting rights, preferences and/or other
preferential arrangements of any kind or nature whatsoever (except those in
favor of Secured Party under this Agreement);
(b) the Pledged Shares have been duly authorized and validly issued by
Subsidiary and are fully paid and non-assessable;
(c) Debtor has all requisite corporate power and authority to (i) pledge,
assign, grant a security interest in, transfer and deliver the Collateral to
Secured Party in the manner hereby done or contemplated and (ii) execute,
deliver and perform all of its obligations under this Agreement;
(d) this Agreement has been duly authorized, executed and delivered by Debtor
and constitutes the legal, valid and binding obligation of Debtor, enforceable
in accordance with its terms;
(e) no consent, approval, authorization or other order of any governmental or
regulatory agency, authority, body or official or any other third party is or
will be required for (i) the execution, delivery and/or performance of this
Agreement by Debtor or the delivery by Debtor of the Collateral to Secured Party
as provided herein or (ii) the exercise by Secured Party of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement;
(f) the execution, delivery and performance by Debtor of this Agreement do not
and

 

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will not (i) violate any provision of the Articles of Incorporation or Bylaws of
Debtor or any law, rule, regulation (including, without limitation, Regulations
U or X of the Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to Debtor, (ii) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, document
or instrument to which Debtor is a party or by which it or its properties may be
bound or affected or (iii) result in or require the creation or imposition of
any mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the property or assets
of Debtor (other than in favor of Secured Party as provided for in this
Agreement);
(g) upon the execution of this Agreement, Secured Party will have a valid and
enforceable security interest in the Collateral. So long as Secured Party has
possession of the certificates representing the Pledged Shares, Secured Party’s
security interest in the Pledged Shares and the proceeds thereof will be
perfected and have a first priority;
(h) the authorized capital of Subsidiary consists solely of 200,000 shares of
common stock, $1.00 par value and no shares of preferred stock. As of the date
hereof, (i) there are 127,501 shares of common stock of Subsidiary issued and
outstanding, (ii) Debtor is the sole legal, beneficial and record owner of
127,501 shares of common stock of Subsidiary, representing all of the issued and
outstanding shares of common stock of Subsidiary, and (iii) the Pledged Shares
consist of One Hundred Percent (100%) of the outstanding shares of common stock
of Subsidiary, subject to no security interests, liens, encumbrances, warrants,
options, proxies, restrictions on transfer, resale or other disposition or
restrictions on voting rights (except those in favor of Secured Party). As of
the date hereof, there are no warrants or options, or any agreements to issue
any warrants or options, outstanding with respect to any class of capital stock
of Subsidiary.
4. Debtor hereby covenants and agrees that: (a) it will not cause or permit
Subsidiary to (i) authorize or issue any new types, varieties or classes of
capital stock or any bonds or debentures, subordinated or otherwise, or any
stock warrants or options, (ii) authorize or issue any additional shares of any
existing class of capital stock or (iii) declare any stock dividends or stock
splits or take any other action which could, directly or indirectly, decrease
Debtor’s ownership interest in Subsidiary; and (b) without the prior written
consent of Secured Party, (i) it will not cause or permit Subsidiary to amend or
otherwise change its Articles or Certificate of Incorporation or its Bylaws in
any manner which could affect any of the voting or other rights of any of the
shares of capital stock of Subsidiary now owned or hereafter acquired by Debtor
and (ii) it will not take or cause or permit Subsidiary to take any other action
which could, directly or indirectly, affect the voting rights of Debtor with
respect to any shares of capital stock of Subsidiary now owned or hereafter
acquired by Debtor.
5. So long as no Event of Default (as hereinafter defined) under this Agreement
has occurred and is continuing:
(a) Debtor shall be entitled to exercise any and all voting and other consensual
rights

 

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pertaining to the Pledged Shares or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the terms of the Loan
Agreement; provided, however, that (i) Debtor shall not exercise or refrain from
exercising any such right if such action could reasonably be expected to have an
adverse effect on the value of the Pledged Shares or any part thereof and (ii)
Debtor shall not exercise or refrain from exercising any such right in a manner
which would authorize or effect (A) the dissolution or liquidation, in whole or
in part, of Subsidiary, (B) the consolidation or merger of Subsidiary with or
into any corporation or other entity unless such Subsidiary is the surviving
entity, (C) the sale, disposition or encumbrance of all or substantially all of
the property or assets of Subsidiary, (D) any change in the authorized capital
of Subsidiary, (E) the issuance of any additional shares of any class of capital
stock of Subsidiary or (F) the alteration of the voting rights with respect to
any class of capital stock of Subsidiary; and
(b) Debtor shall be entitled to collect and use for its proper corporate
purposes all cash dividends (except cash dividends paid or payable in respect of
the total or partial liquidation of Subsidiary) paid on the Pledged Shares so
long as the declaration and payment of such dividends does not violate the
provisions of Section 6.09 of the Loan Agreement; provided, however, that until
actually paid, all rights to such dividends shall remain subject to the security
interest created by this Agreement. All dividends (other than cash dividends
governed by the immediately preceding sentence) and all other distributions in
respect of any of the Pledged Shares or any of the other Collateral, whenever
paid or made, shall be delivered to Secured Party and held by it subject to the
security interest created by this Agreement.
6. If any one or more of the following events (each, an “Event of Default”)
shall occur and be continuing: (a) Debtor shall fail to make any payment of any
principal of or interest on any of the Liabilities as and when the same shall
become due and payable, whether by reason of demand, maturity, acceleration or
otherwise; (b) Debtor shall fail to perform or observe any term, provision,
covenant or agreement contained in this Agreement and any such failure shall
remain unremedied for ten (10) days after the earlier of (i) written notice of
default is given to Debtor by Secured Party or (ii) an officer of Debtor
obtaining knowledge of such default; (c) any representation or warranty made by
Debtor in this Agreement shall prove to be untrue or incorrect in any material
respect; (d) if the shares of common stock of Subsidiary then pledged by Debtor
to Secured Party pursuant to this Agreement shall at any time constitute less
than One Hundred Percent (100%) of the then issued and outstanding shares of
common stock of Subsidiary; or (e) any “Event of Default” (as defined therein)
shall occur under or within the meaning of the Loan Agreement; then Secured
Party may, at its option, (A) declare the principal of and interest on any or
all of the Liabilities to be immediately due and payable, (B) exercise all
voting rights with respect to the Collateral, (C) appropriate and apply toward
the payment and discharge of any such Liability, moneys on deposit or otherwise
held by Secured Party for the account of, to the credit of or belonging to
Debtor, (D) sell or cause to be sold any Collateral, (E) have transferred to or
registered in the name of Secured Party, or its nominee or nominees, any
Collateral and thereafter to exercise all rights with respect thereto as the
absolute owner thereof, without notice or liability to Debtor, except to account
for money or property actually received by Secured Party; provided, however,
that Secured Party may treat all cash proceeds as additional Collateral and such
proceeds need not be applied to the reduction of the Liabilities of Debtor
unless Secured Party so elects, (F) in Secured Party’s name, or in the name

 

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of Debtor, demand, sue for, collect and receive money, securities or other
property which may at any time be payable or receivable on account of or in
exchange for any of the Collateral, or make any compromise or settlement that
Secured Party considers desirable with respect thereto or renew or extend the
time of payment or otherwise modify the terms of any obligation included in the
Collateral; provided, however, that it is expressly agreed that Secured Party
shall not be obligated to take any step to preserve rights against prior parties
on any of the Collateral, and that reasonable care of the Collateral shall not
include the taking of any such step and (G) exercise any or all of the rights
and remedies of a Secured Party under the Uniform Commercial Code of the State
of Alabama, as from time to time amended (the “Code”), or other applicable law.
Any sale of Collateral may be made without demand of performance and any
requirement of the Code for reasonable notice to Debtor shall be met if such
notice is mailed, postage prepaid, to Debtor at its address as it appears herein
or as last shown on the records of Secured Party at least five (5) business days
before the time of sale, disposition or other event giving rise to the notice.
Debtor acknowledges and agrees that it shall be reasonable for Secured Party to
sell the Collateral on credit for present or future delivery without any
assumption of any credit risk. In case of a public sale, notice published by
Secured Party for ten (10) days in a newspaper of general circulation in the
City or County where the sale is to be held shall be sufficient. The proceeds of
any sale, or sales, of Collateral shall be applied by Secured Party in the
following order: (1) to expenses, including attorneys’ fees and expenses,
arising from the enforcement of any of the provisions hereof, or of the
Liabilities or of any actual or attempted sale; (2) to the payment or the
reduction of any of the Liabilities of Debtor to Secured Party with the right of
Secured Party to distribute or allocate such proceeds in such order and manner
as Secured Party shall elect, and its determination with respect to such
allocation shall be conclusive; and (3) to the payment of any surplus remaining
after payment of the amounts mentioned, to Debtor or to whomsoever may be
lawfully entitled thereto. If any deficiency arises upon any such sale or sales
Debtor agrees to pay the amount of such deficiency promptly upon demand with
interest. Notwithstanding that Secured Party may continue to hold the Collateral
and regardless of the value thereof, Debtor shall be and remain liable for the
payment in full of the principal of and interest on any balance of the
Liabilities and expenses at any time unpaid.
7. Secured Party shall have no duties or obligations with respect to the
Collateral except that while the Collateral is in Secured Party’s possession,
Secured Party’s obligation with respect to the same shall be limited to
preserving the physical condition of the same.
8. At any time, whether prior to or after the occurrence of an Event of Default
under this Agreement, Secured Party may, at its option, but shall not be
obligated to, surrender or deliver, without further liability on the part of
Secured Party to account therefor, all or any part of the Collateral to or upon
the written order of Debtor, permit substitutions therefor or additions thereto,
and accept the receipt of Debtor for any Collateral, or proceeds thereof, which
receipt shall be a full and complete discharge of Secured Party with respect to
the Collateral so delivered and proceeds so paid.
9. The rights and powers of Secured Party under this Agreement (a) are
cumulative and do not exclude any other right which Secured Party may have
independent of this Agreement and (b) may be exercised or not exercised at the
discretion of Secured Party (i) without regard to

 

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any rights of Debtor, (ii) without forfeiture or waiver because of any delay in
the exercising thereof, (iii) without imposing any liability on Secured Party
for so exercising or failing to exercise and (iv) in the event of a single or
partial exercise thereof, without precluding further exercise thereof. No delay
or omission on the part of Secured Party in exercising any right hereunder shall
operate as a waiver of such right or of any other right hereunder and no waiver
shall be construed as a bar to or waiver of any right or remedy in the future.
The rights and powers of Secured Party under this Agreement shall inure to the
benefit of its successors and assigns and any assignee of any Liability secured
hereby. Any and all liabilities and obligations of Debtor under this Agreement
shall be binding upon the successors and assigns of Debtor.
10. Debtor agrees to do such further acts and things and to execute and deliver
such additional conveyances, assignments, agreements and instruments as Secured
Party may at any time reasonably request in connection with the administration
or enforcement of this Agreement or related to the Collateral or any part
thereof or in order to better assure and confirm to Secured Party its rights,
powers and remedies hereunder. Debtor hereby makes, constitutes and appoints
Secured Party the true and lawful agent and attorney-in-fact of Debtor with full
power of substitution to execute, endorse and deliver such agreements, documents
and instruments and to take such other action in the name and on behalf of
Debtor as may be necessary or appropriate to carry out the intent of this
Agreement, including, without limitation, the grant of the security interest
granted under this Agreement, and to perfect and protect the security interest
granted to Secured Party in respect of the Collateral and Secured Party’s rights
created under this Agreement, which power of attorney is irrevocable during the
term of this Agreement. Debtor hereby consents and agrees that the issuers of or
obligors in respect of the Collateral or any registrar or transfer agent for any
of the Collateral shall be entitled to accept the provisions hereof as
conclusive evidence of the right of Secured Party to effect any transfer
pursuant to this Agreement, notwithstanding any other notice or direction or the
contrary heretofore or hereafter given by Debtor or any other person (unless
consented to in writing by Secured Party) to any such issuers or obligors or to
any such registrar or transfer agent.
11. Except as otherwise specified in this Agreement, any notice, request,
demand, consent or other communication under this Agreement shall be in writing
and delivered in person, or sent by registered or certified mail, return receipt
requested and postage prepaid, or transmitted by facsimile, if to Debtor at 17
North 20th Street, Birmingham, Alabama 35203, (205) 327-3611 (FAX), or if to
Secured Party at 100 Colonial Bank Blvd, Montgomery, AL
36117-4244,                     (FAX), or at such other address as either party
may designate as its address for communications hereunder by notice so given.
Such notices shall be deemed effective on the day on which delivered, if
delivered in person, on the third (3rd) business day after the day on which
mailed, if sent by registered or certified mail, or when with answerback
confirmation received if sent by facsimile.
12. The terms of this Agreement, the pledge of Collateral hereunder and the
security interest created by this Agreement are continuing and shall apply to
all existing transactions and to all future transactions, although such
transactions may not be continuous. Debtor may not revoke or terminate this
Agreement unless and until (a) all of the Liabilities shall have been
indefeasibly paid in full in cash, (b) the Loan Agreement shall have been
terminated and (c)

 

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Secured Party shall have no further commitment or obligation to make advances or
extend credit to Debtor, whether under the Loan Agreement, or otherwise.
13. If claim is ever made on Secured Party for repayment or recovery of any
amount or amounts received by Secured Party in payment or on account of any of
the Liabilities (including payment under a guaranty or from application of
collateral) and Secured Party repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or administrative body having
jurisdiction over Secured Party or any property of Secured Party or (b) any
settlement or compromise of any such claim effected by Secured Party with any
such claimant (including, without limitation, Debtor), then and in such event
Debtor agrees that any such judgment, decree, order, settlement or compromise
shall be binding on Debtor, notwithstanding any cancellation of any note or
other instrument or agreement evidencing such Liabilities or of this Agreement,
and this Agreement shall continue to be effective or be reinstated, as the case
may be, and shall secure the payment of the amount so repaid or recovered to the
same extent as if such amount had never originally been received by Secured
Party except to the extent such judgment, decree, order, settlement or
compromise were caused by the gross negligence or intentional misconduct of
Secured Party. This Agreement shall continue to be effective or be reinstated,
as the case may be, if (i) at any time any payment of any of the Liabilities is
rescinded or must otherwise be returned by Secured Party upon the insolvency,
bankruptcy or reorganization of Debtor or otherwise, all as though such payment
had not been made or (ii) this Agreement is released in consideration of a
payment of money or transfer of property or grant of a security interest by
Debtor or any other person or entity and such payment, transfer or grant is
rescinded or must otherwise be returned by Secured Party upon the insolvency,
bankruptcy or reorganization of such person or entity or otherwise, all as
though such payment, transfer or grant had not been made.
14. This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Alabama (without reference to conflict of law
principles); provided, however, that the perfection and effect of the perfection
or nonperfection of the security interests and liens created by this Agreement
shall in all respects be governed, construed, applied and enforced in accordance
with the substantive laws of the applicable jurisdictions.
15. DEBTOR IRREVOCABLY AGREES THAT, SUBJECT TO SECURED PARTY’S SOLE AND ABSOLUTE
ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL
SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN THE COUNTY OF JEFFERSON,
STATE OF ALABAMA. DEBTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND STATE. DEBTOR
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT IN ACCORDANCE WITH THIS SECTION. DEBTOR AND SECURED PARTY
IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH
DEBTOR AND SECURED PARTY ARE PARTIES.
This Agreement executed by Debtor as of September 4 , 2008.

 

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(SIGNATURES ON FOLLOWING PAGE)

 

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SIGNATURE PAGE-
STOCK PLEDGE AGREEMENT
Debtor:
SUPERIOR BANCORP

         
By:
  /s/ Mark A. Tarnakow
 
   
Print Name:
  Mark A. Tarnakow    
 
       
Title:
  CFO    

Acknowledged by and agreed to by Secured Party as of September 4 , 2008:
Secured Party:
COLONIAL BANK

         
By:
  /s/ John J. Burke Jr.
 
   
Print Name:
  John J. Burke Jr.    
 
       
Title:
  Sr. Vice President    

 

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COLLATERAL SCHEDULE #1
Description of Stock Pledged
127,501 Shares of Common Stock of Superior Bank Common
Stock Certificate No(s). 1 & 2 issued in the name of Superior Bancorp