Document:

ex10_3.htm

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (“Agreement”), dated December 22, 2015, by and between FIRST GUARANTY BANCSHARES, INC. a Louisiana corporation (“Pledgor”) and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, having an office and place of business in Memphis, Tennessee (“Lender”);

W I T N E S S E T H:

WHEREAS, Lender has extended certain loan and credit facilities to Pledgor pursuant to that certain Loan Agreement between Lender and Pledgor of even date herewith (the “Loan Agreement”), and all capitalized terms used but not otherwise defined in this Agreement shall have the same meaning as set out in the Loan Agreement; and

 

 

WHEREAS, pursuant to the Loan Agreement, Lender is willing to extend such loan and credit facilities to Pledgor only upon Pledgor executing this Agreement for the purpose of securing all Obligations (as hereinafter defined) of Pledgor to Lender.

NOW THEREFORE, in consideration of the foregoing, and to enable Pledgor to obtain loans and other extensions of credit from Lender and to induce Lender to have transactions with Pledgor, Pledgor agrees as follows:

1. Pledge.  As collateral security for the payment and performance in full of the Obligations, Pledgor hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto Lender, and hereby grants to Lender a first lien security interest in, the collateral described in Schedule A, together with the proceeds thereof and all cash, additional securities or other property at any time and from time to time receivable or otherwise distributable in respect of, in exchange for, or in substitution for any and all such pledged securities (all such pledged securities, the proceeds thereof, cash, dividends, additional securities and other property now or hereafter pledged hereunder are hereinafter collectively called the “Pledged Securities”);

TO HAVE AND TO HOLD the Pledged Securities, together with all rights, titles, interests, powers, privileges and preferences pertaining or incidental thereto, unto Lender, its successors and assigns; subject, however, to the terms, covenants and conditions hereinafter set forth.  Pledgee agrees to hold the Pledged Securities to secure the payment of the Obligations and shall not encumber or otherwise dispose of such Pledged Securities except in accordance with the terms and provisions of this Agreement.

Upon delivery to Lender, the Pledged Securities shall be accompanied by executed stock powers in blank and by such other instruments or documents as Lender or its counsel may reasonably request.  Each delivery of certificates for such Pledged Securities shall be accompanied by a schedule showing the number of shares and the numbers of the certificates theretofore and then pledged hereunder, which schedule shall be attached hereto as Schedule A and made a part hereof.  Each schedule so delivered shall supersede any prior schedule so delivered.

  

  

  

2. Obligations Secured.  This Agreement is made, and the security interest created hereby is granted to Lender, to secure full payment and performance of any and all indebtedness and other obligations of Pledgor to Lender, direct or contingent, however evidenced or denominated, arising under or related to that certain Twenty-Five Million Dollar ($25,000,000.00) Loan governed by the Loan Agreement, and all other indebtedness or obligations of Pledgor or Bank under or evidenced by the Note, the Loan Agreement and other Loan Documents, as each of them may be amended from time to time, in each case now existing or hereafter arising under the Loan Documents (all of the foregoing, collectively, the “Obligations”).

3. Representations and Warranties.  Pledgor hereby represents and warrants to Lender (a) that Pledgor is the legal and equitable owner of the Pledged Securities, that Pledgor has the complete and unconditional authority to pledge the Pledged Securities being pledged by it, and holds the same free and clear of all liens, charges, encumbrances and security interests of every kind and nature; (b) that no consent or approval of any governmental body or regulatory authority, or of any other party, which was or is necessary to the validity of this pledge, has not been obtained; and (c) that the Pledged Securities represent eighty-five percent (85.00%) of the issued and outstanding Capital Stock of the Bank.  Pledgor further represents and warrants that no part of the Obligations will be used to purchase or carry any “margin stock”, as defined in Regulation U of the Board of Governors of the Federal Reserve System, 12 CFR § 221.1 et seq.

4. Covenants.  Pledgor hereby further covenants and agrees with Lender as follows, until all Obligations have been fully paid and performed (or unless specifically waived by Lender in writing):

(a) No Disposition, Etc.  The Pledgor shall not sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, any of the Pledged Securities, nor will it create, incur or permit to exist any pledge, lien, mortgage, hypothecation, security interest, charge, option or any other encumbrance with respect to any of the Pledged Securities, or any interest therein, or any proceeds thereof, except for the lien and security interest provided for by this Agreement.

(b) Share Adjustments.  All new, substitute, and additional shares, or other securities, issued by reason of any share dividend, reclassification, recapitalization, adjustment or other change declared or made in the capital structure of the Bank (subject to obtaining Lender’s prior written consent thereto as required by the Loan Documents), which are issued in respect of the Pledged Securities, shall be delivered to and held by Lender under the terms of this Agreement in the same manner as the Pledged Securities originally pledged hereunder.

(c) Warrants and Rights.  In the event that subscription warrants or any other rights or options shall be issued in connection with any of the Pledged Securities (subject to obtaining Lender’s prior written consent thereto as required by the Loan Documents), such warrants, rights, and options shall be immediately assigned to Lender to be held under the terms of this Agreement in the same manner as the Pledged Securities originally pledged hereunder.

  

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(d) No Dilution.  Pledgor shall not consent to, approve, or permit to occur any change in the capital structure of the Bank which would result in any dilution of the percentage of stock ownership represented by the Pledged Securities as determined immediately prior to the acquisition of the Pledged Securities by Pledgor.

5. Registration in Nominee Name; Denominations.  Lender shall have the right (in its sole and absolute discretion) to hold the certificates representing the Pledged Securities in its own name or in the name of the Pledgor, endorsed or assigned in blank or in favor of Lender.  Upon request and delivery of certificates representing the Pledged Securities to the issuer of the Pledged Securities, Lender may have such Pledged Securities registered in the name of Lender or any nominee or nominees of Lender.  Lender shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

6. Dividends.  Notwithstanding anything in this Agreement to the contrary, so long as no Event of Default has occurred and is continuing, all cash dividends paid in respect of the Pledged Securities, if any (subject to obtaining Lender’s prior written consent thereto, if required by the Loan Documents), shall be the property of Pledgor.  If any Event of Default occurs and is continuing, all such cash dividends shall thereafter be paid to Lender and applied in reduction of the Obligations, in such order of priority as Lender shall determine in its sole discretion.

7. Voting Rights.

(a) Provided that no default or Event of Default shall have occurred and be continuing hereunder or under any other Loan Documents:

(i) Pledgor shall be entitled to exercise or refrain from exercising the voting rights attributable to the Pledged Securities or any part thereof for any purpose not inconsistent with the terms and conditions of this Agreement and the other Loan Documents, and

(ii) Lender will execute and deliver any proxies or other instruments reasonably requested by Pledgor for the purpose of enabling Pledgor to exercise the voting rights that it is entitled to exercise pursuant to subparagraph 7(a)(i).

(b) Upon the occurrence and during the continuance of an Event of Default hereunder or under any other Loan Documents, all rights of Pledgor to exercise or refrain from exercising the voting rights attributable to the Pledged Securities or any part thereof pursuant to subparagraph 7(a)(i) or otherwise shall cease, and Lender and its successors and assigns shall have the sole right to exercise or refrain from exercising such rights after obtaining all necessary regulatory approvals.  In furtherance of the foregoing, Pledgor hereby makes, constitutes and appoints Lender and its officers as the proxies and attorneys-in-fact of and for Pledgor, with full power to exercise or to refrain from exercising any and all voting rights attributable to the Pledged Securities upon the occurrence and during the continuance of any such default or event of default.  The foregoing appointment and power, being coupled with an interest, are irrevocable until the Obligations have been fully and irreversibly satisfied.

  

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8. Remedies Upon Default.

(a) Upon the occurrence of any Event of Default, Lender shall have all of the rights, powers, privileges, options and remedies of a secured party under the Uniform Commercial Code as in effect in the State of Tennessee, and without limiting the foregoing, Lender may (1) collect any and all amounts payable in respect of the Pledged Securities and exercise any and all rights, powers, privileges, options and remedies of the holder and owner thereof, and (2) sell, transfer or negotiate the Pledged Securities, or any part thereof, at public or private sale, for cash, upon credit or for future delivery as Lender shall deem appropriate, including without limitation, at Lender’s option, the purchase of all or any part of the Pledged Securities at any public sale by Lender.  Upon consummation of any sale, Lender shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Pledged Securities so sold.  Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights of redemption, stay or appraisal that Pledgor now has or may at any time in the future have under any rule of law or statute now existing or hereinafter enacted.  Pledgor hereby expressly waives notice to redeem and notice of the time, place and manner of such sale.

(b) Pledgor recognizes that, by reason of certain prohibitions contained in the Securities Act of 1933, as amended (the “Securities Act”), applicable state securities laws, and other applicable laws, rules and regulations (including without limitation the rules and regulations of any Bank Regulatory Authority), Lender may be compelled, with respect to any sale of all or any part of the Pledged Securities, to limit purchasers to those who agree, among other things, to acquire such Pledged Securities for their own account, for investment and not with a view to the distribution or resale thereof.  Pledgor acknowledges that any such private sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including, without limitation, a public offering made pursuant to a registration statement under the Securities Act), and, notwithstanding such circumstances, Pledgor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Lender shall have no obligation to engage in public sales and no obligation to delay the sale of any of the Pledged Securities for the period of time necessary to permit the issuer thereof to register such sale under the Securities Act or under applicable state securities laws, even if Pledgor would agree to do so.

(c) If Lender determines to exercise its right to sell any or all of the Pledged Securities, upon written request, Pledgor from time to time shall, and shall cause each issuer of the Pledged Securities to be sold hereunder to, furnish to Lender all such information as Lender may request in order to determine the number of shares and other instruments included in the Pledged Securities that may be sold by Lender as exempt transactions under the Securities Act and the rules of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.

9. Application of Proceeds.  The proceeds of the sale of Pledged Securities sold pursuant to Section 8, and the proceeds of the exercise of any of Lender’s other remedies hereunder, shall be applied by Lender as follows:

  

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First:  To the payment of all costs and expenses incurred by Lender in connection with any such sale, including, but not limited to, all court costs and the reasonable fees and expenses of counsel for Lender in connection therewith, and

Second:  To the payment in full of the Obligations, in such order of priority as Lender shall determine, in its sole discretion, and

Third:  The excess, if any, shall be paid to Pledgor or any other person lawfully thereunto entitled.

10. Reimbursement of Lender.  Pledgor agrees to reimburse Lender, upon demand, for all expenses, including without limitation reasonable attorney’s fees, incurred by it in connection with the administration (other than Lender's general overhead expenses and subject to the terms of the Loan Agreement) and enforcement of this Agreement, and agrees to indemnify Lender and hold it harmless from and against any and all liability incurred by it hereunder or in connection herewith, unless such liability shall be due to willful misconduct or gross negligence on the part of Lender.

11. No Waiver.  No failure on the part of Lender to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by Lender preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  All remedies are cumulative and are not exclusive of any other remedies provided by law.

12. Limitation of Liability.  The powers conferred on Lender hereunder are solely to protect its interests in the Pledged Securities, and shall not impose any duty upon Lender to exercise any such powers.  Except for the exercise of reasonable care in the custody and preservation and return of the certificates or other instruments representing Pledged Securities in its possession and the accounting for monies actually received by it hereunder, Lender shall have no duty as to any Pledged Securities.  Without limiting the generality of the foregoing, Lender shall have no responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Securities, regardless of whether Lender has or is deemed to have knowledge of such matters, (b) taking any necessary steps (other than steps in accordance with the standard of care set forth above to maintain possession of the certificates or other instruments representing Pledged Securities in its possession) to preserve rights against any parties with respect to the Pledged Securities, (c) taking any necessary steps to collect or realize upon any of the Obligations or any of the Pledged Securities, or (d) initiating any action to protect the Pledged Securities against the possibility of a decline in market value.  Lender shall be deemed to have exercised reasonable care in the custody and preservation of the certificates or other instruments representing Pledged Securities in its possession if such items are accorded treatment substantially equal to that which Lender accords its own property consisting of negotiable securities.

13. Counterparts.  This Agreement may be executed in multiple counterparts or copies, each of which shall be deemed an original hereof for all purposes.  One or more counterparts or copies of this Agreement may be executed by one or more of the parties hereto, and some different counterparts or copies executed by one or more of the other parties.  Each counterpart or copy hereof executed by any party hereto shall be binding upon the party executing same even though other parties may execute one or more different counterparts or copies, and all counterparts or copies hereof so executed shall constitute but one and the same agreement.  Each party hereto, by execution of one or more counterparts or copies hereof, expressly authorizes and directs any other party hereto to detach the signature pages and any corresponding acknowledgment, attestation, witness or similar pages relating thereto from any such counterpart or copy hereof executed by the authorizing party and affix same to one or more other identical counterparts or copies hereof so that upon execution of multiple counterparts or copies hereof by all parties hereto, there shall be one or more counterparts or copies hereof to which is(are) attached signature pages containing signatures of all parties hereto and any corresponding acknowledgment, attestation, witness or similar pages relating thereto.

  

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14. Binding Agreement.  This Agreement and the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of the parties hereto and to all holders of indebtedness secured hereby and their respective successors and assigns.

15. Further Assurances.  Pledgor agrees to do such further acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments (including but not limited to the execution and delivery and filing of UCC financing statements with respect to the security interests of this Agreement), as Lender at any time may request in connection with the administration and enforcement of this Agreement or relative to the Pledged Securities or any part thereof or in order to assure and confirm unto Lender its rights and remedies hereunder.

16. Severability.  If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement or the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforceable to the greatest extent permitted by law.

17. Return of Pledged Securities.  Upon the irrevocable payment in full of the Obligations and termination of any commitment of Lender to lend thereunder, at the request of Pledgor, Lender shall promptly return and deliver the Pledged Securities to Pledgor (unless otherwise required by law, in which case Lender shall return and deliver the Pledged Securities to the party legally entitled thereto).

18. Miscellaneous.

(a) This Agreement shall be governed by and construed according to the laws of the State of Tennessee, without reference to the conflicts or choice of law principles thereof.

(b) Neither this Agreement nor any provision hereof may be altered, amended, modified or changed, nor may any of the Pledged Securities be released, except by an instrument in writing signed by the party against whom enforcement of such alteration, amendment, modification, change or release is sought.

  

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(c) The headings in this Agreement and the usage herein of defined terms are for convenience of reference only, and shall not be construed as amplifying, limiting or otherwise affecting the substantive provisions hereof.

(d) Any reference herein to any instrument, document or agreement, by whatever terminology used, shall be deemed to include any and all past, present or future amendments, restatements, modifications, supplements, extensions, renewals or replacements thereof, as the context may require.

(e) All references herein to the preamble, the recitals or sections, paragraphs, subparagraphs, schedules or exhibits are to the preamble, recitals, sections, paragraphs, subparagraphs, schedules and exhibits of or to this Agreement unless otherwise specified.  The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

(f) When used herein, (1) the singular shall include the plural, and vice versa, and the use of the masculine, feminine or neuter gender shall include all other genders, as appropriate, (2) ”include”, “includes” and “including” shall be deemed to be followed by “without limitation” regardless of whether such words or words of like import in fact follow same, and (3) unless the context clearly indicates otherwise, the disjunctive “or” shall include the conjunctive “and”.

(g) Any reference herein to any law shall be a reference to such law as in effect from time to time and shall include any rules and regulations promulgated or published thereunder and published interpretations thereof.

  

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IN WITNESS WHEREOF, Pledgor and Lender have executed this Agreement, or have caused this Agreement to be duly executed by a duly authorized officer, all as of the day first above written.

PLEDGOR:

FIRST GUARANTY BANCSHARES, INC.

By: /s/ Alton B. Lewis, Jr.

Name: Alton B. Lewis, Jr.                                                                

Title: President and Chief Executive Officer

LENDER:

FIRST TENNESSEE BANK NATIONAL ASSOCIATION

By: /s/ R. Chuck Hunt                                                               

Name: R. Chuck Hunt

Title: Vice President                                                              

  

8ex10_4.htm

TERM NOTE

 

$25,000,000,00 Memphis, Tennessee

 

 December 22, 2015

 

FOR VALUE RECEIVED, the undersigned FIRST GUARANTY BANCSHARES, INC., a Louisiana corporation ("Maker"), promises to pay to the order of FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association having its principal place of business in Memphis, Tennessee ("Bank"), the principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00), together with interest from date until maturity, upon disbursed and unpaid principal balances, at the rate hereinafter specified, said principal and interest being payable as follows:

 

the unpaid principal balance hereof shall be payable in 20 consecutive quarterly principal installments, installment nos. 1 to 19, both inclusive, being in the amount of Six Hundred Twenty-Five Thousand Dollars ($625,000.00) each, and installment no. 20 being for the entire unpaid principal balance, the first of said installments of principal being due and payable on the first (1st) day of January 2016, and one on the first (1st) day of each calendar quarter thereafter until all are fully paid (with the final installment, being a balloon payment for the entire then-unpaid principal balance, if not sooner paid, being due and payable on the 22nd day of December, 2020); and interest on the indebtedness hereby evidenced shall be paid concurrently with the payment of such principal installments; provided, however, that in any case where the date for a payment hereunder shall be, in Memphis, Tennessee, a Saturday, a Sunday, a legal holiday, or a day on which banking institutions are authorized by law to close, then such performance may be made on the next succeeding business day not a Saturday, a Sunday, a legal holiday, or a day on which banking institutions are authorized by law to close.

 

This Note is being issued pursuant to that certain Loan Agreement, dated of even date, among the Maker, the Bank and a certain guarantors therein mentioned and described, as said agreement may be amended or modified (the "Loan Agreement").  Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Loan Agreement.

 

The interest rate on this Note is subject to change from time to time based on changes in an independent index (the "Index") which is the LIBOR Rate (as hereinafter defined) adjusted and determined, without notice to Maker, as of the date of this Note and on the 1st day of every third calendar month hereafter (beginning with January and then each April, July, and October hereafter) (the "Interest Rate Change Date"). The "LIBOR Rate" shall mean the London Interbank Offered Rate of interest for an interest period of one (1) month, which appears on Bloomberg page BBAM under the column heading "USD" (rounded upward to the next whole multiple of one-sixteenth of one percent (1/16 of 1%)) (the "Index") on the day that is two (2) London Business Days preceding each Interest Rate Change Date (the "Reset Date").  If the LIBOR Rate as defined above is not available or is not published for any Reset Date, then Bank shall, at its sole discretion, choose a substitute source for the LIBOR Rate, which LIBOR Rate plus the Margin (hereinafter defined) shall become effective on the next Interest Rate Change Date, subject to the floor on the Contract Rate as herein provided.  "London Business Day" shall mean any day on which commercial banks in London, England are open for general business.  The Index is not necessarily the lowest rate charged by Bank on its loans.  If the Index becomes unavailable during the term of this loan, Bank may designate a substitute index after notice to Maker.  Bank will tell Maker the current Index rate upon Maker's request.  The interest rate change will not occur more often than each month.  Maker understands that Bank may make loans based on other rates as well.  The Index is currently 0.5695 percent (0.5695%) per annum.  The interest rate to be applied to the unpaid principal balance of this Note  (the “Contract Rate”) will be the Index plus a margin of two and one-half percent (2.5%) (the "Margin"), which results in an initial interest rate of 3.0695 percent (3.0695%).   NOTICE:  Under no circumstances will the interest rate on the Note be more than the maximum rate allowed by applicable law.

 

  

  

  

Notwithstanding any other provisions herein, if any Change in Law (as hereafter defined) shall make it unlawful for the Bank to make or maintain a LIBOR Rate loan as contemplated by this Note, the principal outstanding hereunder shall, if required by law and if the Bank so requests, be converted on the date required to make the loan evidenced by this Note legal to a loan according interest at the lesser of the Maximum Rate or the base commercial rate of interest ("Base Rate") established from time to time by the Bank.  Each change in the Base Rate shall become effective, without notice to the Maker, on the same date that the Base Rate changes.  The Maker hereby agrees promptly to pay the Bank, upon demand, any costs incurred by the Bank in making any conversion in accordance with this paragraph, including any interest or fees payable by the Bank to lenders of funds obtained by Bank in order to maintain its LIBOR Rate loans.

 

 Subject to the limitations set forth in Section 1.5(e) of the Loan Agreement, the Maker hereby indemnifies the Bank and holds the Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of (i) a default by the Maker in payment of the principal amount of or interest on the loan evidenced hereby, including any such loss or expense arising from interest or fees payable by the Bank to lenders of funds obtained by it in order to make or maintain its LIBOR Rate loans; or (ii) a Change in Law that results in the imposition on the Bank of reserve requirements in connection with LIBOR Rate loans made by the Bank.  The Maker will make any payments under this indemnity to Bank, upon demand.  The Maker further agrees to enter into a modification of this Note, at the request of the Bank, to bring this Note into compliance with any Change in Law, provided such change does not increase the rate of interest otherwise payable nor increase the principal balance of the Note (but subject to the costs and indemnifications described in this paragraph and the preceding paragraph).

 

 "Change in Law" shall mean the adoption of any law, rule, regulation, policy, guideline or directive (whether or not having the force of law) or any change therein or in the interpretation or application thereof, in all cases by Governmental Authority having jurisdiction over the Bank, in each case after the date hereof.

 

 "Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof and any entity exercising regulatory function of or pertaining to government.

 

The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.

 

  

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In the event that the foregoing provisions should be construed by a court of competent jurisdiction not to constitute a valid, enforceable designation of a rate of interest or method of determining same, the indebtedness hereby evidenced shall bear interest at the lesser of (a) ten percent (10.00%) per annum or (b) the maximum effective variable contract rate which may be charged by the Bank under applicable law from time to time in effect (the "Maximum Rate).

 

Notwithstanding the foregoing, upon the occurrence of an Event of Default (as defined in the Loan Agreement), the Bank, at its option, may charge, and the Maker agrees to pay, interest on disbursed and unpaid principal balances at the default rate (the "Default Rate") per annum equal to the lesser of (a) the Maximum Rate or (b) (i) the Contract Rate plus (ii) four percent (4.00%).

 

Any amounts not paid when due hereunder (whether by acceleration or otherwise), subject to any applicable grace or notice and cure period set forth in the Loan Agreement, shall bear interest after maturity at the Default Rate.

 

For any payment which is not made within ten (10) days of the due date for such payment, the Maker shall pay a late fee.  The late fee shall equal five percent (5%) of the unpaid portion of the past-due payment.

 

This Note is secured by the Pledge Agreement.

 

All installments of interest, and the principal hereof, are payable at the office of First Tennessee Bank National Association, 165 Madison Avenue, Memphis, Tennessee 38103, or at such other place as the holder may designate in writing, in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment.

 

Upon the occurrence of any Event of Default under the Loan Agreement, then and in any such event, the entire unpaid principal balance of the indebtedness evidenced hereby, together with all interest then accrued, shall, at the absolute option of the holder hereof, at once become due and payable, without demand or notice, the same being expressly waived and Bank may exercise any right, power or remedy permitted by law or equity, or as set forth herein or in the Loan Agreement or any other Loan Document.

 

If this Note is placed in the hands of an attorney for collection, by suit or otherwise, or to protect the security for its payment, or to enforce its collection, or to represent the rights of the Bank in connection with any loan documentation executed in connection herewith, or to defend successfully against any claim, cause of action or suit brought by the Maker against the Bank, the Maker shall pay on demand all costs of collection and litigation (including court costs), together with a reasonable attorney's fee.  These include, but are not limited to, the Bank's reasonable attorney's fees and legal expenses, whether or not there is a lawsuit, including attorney's fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction) and appeals.

 

The Bank and the Maker hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Bank or Maker against the other.

 

  

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To the extent permitted by applicable law, the Bank reserves a right of setoff in all the Maker's accounts with the Bank (whether checking, savings, or some other account).  This includes all accounts the Maker may open in the future.  However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law.  The Maker authorizes the Bank, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at the Bank's option, to administratively freeze all such accounts to allow the Bank to protect the Bank's charge and setoff rights provided in this paragraph.

 

The undersigned agrees to furnish a current financial statement as provided in the Loan Agreement, and further agrees to execute and deliver all other instruments and take such other actions as the Bank may from time to time reasonably request in order to carry out the provisions and intent hereof.

 

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each business entity that opens an account.  What this means to Maker:  When Maker opens an account, the Bank will ask for Federal Tax Identification Number, physical street address, full legal name of the Maker and other information that will allow the Bank to identify Maker.  The Bank may also ask Maker to provide copies of certain documents that will aid in confirming this information.

 

The Maker and any endorsers or guarantors hereof waive protest, demand, presentment, and notice of dishonor, and agree that this Note may be extended, in whole or in part, without limit as to the number of such extensions or the period or periods thereof, without notice to them and without affecting their liability thereon.  Maker agrees that borrowers, endorsers, guarantors and sureties may be added or released without notice and without affecting Maker’s liability hereunder.  The liability of Maker shall not be affected by the failure of Bank to perfect or otherwise obtain or maintain the priority or validity of any security interest in any collateral.  The liability of Maker shall be absolute and unconditional and without regard to the liability of any other party hereto.

 

It is the intention of the Bank and the Maker to comply strictly with applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder hereof ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which the Bank may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness hereby evidenced; and if the principal amount of the indebtedness evidenced hereby, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to the Maker, or other party lawfully entitled thereto.  All interest paid or agreed to be paid by the Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law.  Any provision hereof, or of any other agreement between the holder hereof and the Maker, that operates to bind, obligate, or compel the Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only.  The provisions of this paragraph shall be given precedence over any other provision contained herein or in any other agreement between the holder hereof and the Maker that is in conflict with the provisions of this paragraph.

 

This Note shall be governed and construed according to the statutes and laws of the State of Tennessee from time to time in effect, except to the extent that Section 85 of Title 12 of the United States Code (or other applicable federal statute) may permit the charging of a higher rate of interest than applicable state law, in which event such applicable federal statute, as amended and supplemented from time to time shall govern and control the maximum rate of interest permitted to be charged hereunder; it being intended that, as to the maximum rate of interest which may be charged, received, and collected hereunder, those applicable statutes and laws, whether state or federal, from time to time in effect, which permit the charging of a higher rate of interest, shall govern and control; provided, always, however, that in no event and under no circumstances shall the Maker be liable for the payment of interest in excess of the maximum rate permitted by such applicable law, from time to time in effect.

 

The principal amount of this Note may be prepaid in whole or in part at any time, and from time to time without penalty or premium, provided, however, that if an Interest Rate Swap has been entered into in connection with this Note, any full or partial prepayments of principal amounts due under this Note may require termination or adjustment of the Interest Rate Swap and may result in a payment due from Maker per the terms and conditions of the Interest Rate Swap.

 

Bank is hereby authorized to disclose any financial or other information about Maker to any regulatory body or agency having jurisdiction over Bank and to any present, future or prospective participant or successor in interest in any loan or other financial accommodation made by Bank to Maker.  The information provided may include, without limitation, amounts, terms, balances, payment history, return item history and any financial or other information about Maker.  However, subject to applicable law, Bank shall use reasonable efforts to protect the confidentiality of the terms and conditions of the Loan in all other respects.

 

The invalidity or unenforceability of any one or more provisions of this Note shall not render any other provision invalid or unenforceable.  In lieu of any invalid or unenforceable provision, there shall be added automatically a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.

 

The covenants, conditions, waivers, releases and agreements contained in this Note shall bind, and the benefits thereof shall inure to, the parties hereto and their respective heirs, executors, administrators, successors and assigns; provided, however, that this Note cannot be assigned by Maker without the prior written consent of Bank, and any such assignment or attempted assignment by Maker without consent shall be void and of no effect with respect to Bank.

 

  

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Subject to the terms of the Loan Agreement, Bank may from time to time sell or assign, in whole or in part, or grant participations in, the Loan, this Note and/or the obligations evidenced thereby.  The holder of any such sale, assignment or participation, if the applicable agreement between Bank and such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Bank; and (b) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to Maker, in each case as fully as though Maker were directly indebted to such holder.  Bank shall give notice to Maker of such sale, assignment or participation in accordance with the terms of the Loan Agreement.

 

Maker hereby consents that any action or proceeding against it be commenced and maintained in any state or federal court sitting in Memphis, Shelby County, Tennessee, by service of process on any such owner, partner and/or officer; and Maker agrees that such courts of the State shall have jurisdiction with respect to the subject matter hereof and the person of Maker and all collateral securing the obligations of Maker.  Maker agrees not to assert any defense to any action or proceeding initiated by Bank based upon improper venue or inconvenient forum.

 

FIRST GUARANTY BANCSHARES, INC.

 

 

By:  /s/ Alton B. Lewis, Jr.                                                             

 

Name:  Alton B. Lewis, Jr.                                                              

 

Title:  Preisdent and Chief Executive Officer                                                             

 

 

 MAKER

 

  

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