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Exhibit 10.2

 

REVOLVING PROMISSORY NOTE

(Floating Rate)

 

 

 

30,000,000.00

    

December 13, 2019

 

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, calculated on the unpaid principal each
day principal is outstanding, shall be due and payable in eight  (8)  quarterly
installments over a term of twenty-four  (24)  months (the “Interest Only Term”)
payable each March 13,  June 13, September 13 and December 13 during the
Interest Only Term, beginning March 13, 2020; 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)  equal quarterly installments over a term of sixty  (60)
 months (the “Repayment Term”) payable each March 13,  June 13,  September 13
and December 13 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, 2026 (the “Maturity Date”). The amounts of the 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 Term 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

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(i) five percent (5%) of the sum of the outstanding principal balance (plus all
accrued but unpaid 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, 2021 (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

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not a Business Day (as hereinafter defined), such payment shall be made on the
next succeeding 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 weekday 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) 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

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permitted by applicable Law, determination of the legal maximum amount of
interest shall at all times 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 replaces and supersedes any and all prior
promissory notes from Borrower to Lender, including, without limitation, that
certain Promissory Note dated December 13, 2018. This Note has been executed and
delivered pursuant to that certain Second Amended and Restated 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,
that certain Pledge and Security Agreement dated December 13, 2018, 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

 

 

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