Document:

Exhibit

Exhibit 10.13

FOURTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Fourteenth Amendment to Loan and Security Agreement (this “Amendment”), dated as of March 18, 2016, is between BANK OF AMERICA, N.A., a national banking association (“Lender”) and LAPOLLA INDUSTRIES, INC., a Delaware corporation (“Borrower”).

RECITALS

A.    Lender and Borrower are parties to that certain Loan and Security Agreement, dated as of August 31, 2010 (as amended by: (i) that certain First Amendment to Loan and Security Agreement, dated as of August 31, 2010; (ii) that certain Second Amendment to Loan and Security Agreement, dated as of March 14, 2011; (iii) that certain Third Amendment to Loan and Security Agreement, dated as of May 11, 2011; (iv) that certain Fourth Amendment to Loan and Security Agreement, dated as of August 17, 2011; (v) that certain Fifth Amendment to Loan and Security Agreement, dated as of November 18, 2011; (vi) that certain Sixth Amendment to Loan and Security Agreement, dated as of April 12, 2012; (vii) that certain Seventh Amendment to Loan and Security Agreement, dated as of June 29, 2012; (viii) Eighth Amendment to Loan and Security Agreement, dated as of November 15, 2012; (ix) that certain Ninth Amendment to Loan and Security Agreement, dated as of March 31, 2013; (x) that certain Tenth Amendment to Loan and Security Agreement, dated as of December 10, 2013; (xi) that certain Eleventh Amendment to Loan and Security Agreement, effective as of August 31, 2014; (xii) that certain Twelfth Amendment to Loan and Security Agreement, effective as of January 23, 2015; and (xiii) that certain Thirteenth Amendment to Loan and Security Agreement, effective as of May 29, 2015, the “Loan Agreement”).

B.    Lender and Borrower desire to amend the Loan Agreement as herein set forth.

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I
Definitions

Section 1.1    Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same definitions assigned to such terms in the Loan Agreement, as amended hereby.

ARTICLE II
Amendments to the Loan Agreement

Section 2.1    Amendments to Loan Agreement.  

(a)    Section 1.1 of the Loan Agreement is hereby amended by deleting the definitions set forth below in their entirety and replacing them, respectively, as follows:  
    
“Applicable Margin: with respect to any Type of Loan, means, as of any date of determination, the applicable margin set forth in the following table that corresponds to the Fixed Charge Coverage Ratio of Borrower for the most recently completed month; provided, that the Applicable Margin, effective as of the Fourteenth Amendment Effective Date, through and including March 31, 2016, shall be set at Level I:

	
				
	Level
	Fixed Charge Coverage Ratio
	Base Rate Revolver Loans and UK Base Rate Revolver Loans
	LIBOR Revolver Loans

	I
	>1.5x
	1.25%
	2.25%

	II
	1.2x-1.5x
	1.50%
	2.50%

	III
	<1.2x
	1.75%
	2.75%

The Applicable Margin shall be re-determined as of the first day of each month occurring after the month in which delivery by Borrower of a Compliance Certificate to Lender pursuant to and in accordance with Section 10.1.2(c), is made; provided, that if Borrower fails to deliver such Compliance Certificate to Lender in accordance with Section 10.1.2(c) in any given month, the Applicable Margin shall be set at Level III.”

“Availability Reserve: the sum (without duplication) of (a) the Basic Reserve plus (b) the Inventory Reserve plus (c) the Rent and Charges Reserve plus (d) the LC Reserve plus (e) the Bank Product Reserve plus (f) UK Priority Payable Reserve plus (g) all accrued Royalties, whether or not then due and payable by a Borrower plus (h) the aggregate amount of liabilities secured by Liens upon Collateral that are senior to Lender’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom) plus (i) such additional reserves, in such amounts and with respect to such matters, as Lender in its discretion may elect to impose from time to time.”

“Basic Reserve: an amount, determined as of any day, equal to $0.”

“Guarantors:  each Person who guarantees payment or performance of any Obligations, and Guarantor means any of the foregoing.”

“Inventory Formula Amount: (a) prior to the date of Lender’s receipt of an Inventory appraisal performed by a firm acceptable to Lender, in its sole discretion, the least of: (i) 55% of the Value of Eligible Inventory, or (ii) $6,000,000, and (b) from and after the date of Lender’s receipt of an Inventory appraisal performed by a firm acceptable to Lender, in its sole discretion, the least of: (i) 65% of the Value of Eligible Inventory, (ii) 85% of the NOLV Percentage of the Value of Eligible Inventory, or (iii) $6,000,000.”
    
“Revolver Commitment:  Lender’s obligation to make Revolving Loans and to issue Letters of Credit in an amount up to $12,000,000 in the aggregate.”

“Revolver Termination Date: the earlier to occur of (a) March 31, 2019 or (b) 90 days prior to the maturity date of the New Subordinated Term Debt.”
(b)    The following definitions are hereby inserted into Section 1.1 of the Loan Agreement in a manner that maintains alphabetical order:

“Applicable Unused Line Fee Percentage: means, as of any date of determination, the applicable percentage set forth in the following table that corresponds to the amount by which the Revolver Commitment exceeds the average daily balance of Revolver Loans and stated amount of Letters of Credit for the most recently completed month, as determined by Lender in its reasonable discretion; provided, that for the period from and after the Fourteenth Amendment Effective Date, through and including March 31, 2016, the Applicable Unused Line Fee Percentage shall be set at $0.25%:

	
		
	Amount by which the Revolver Commitment exceeds the average daily balance of Revolver Loans and stated amount of Letters of Credit 
	Applicable Unused Line Fee Percentage

	<50%
	0.25%

	>50%
	0.50%

The Applicable Unused Line Fee Percentage shall be re-determined on the first date of each month by Agent.”

“Fourteenth Amendment Effective Date: means March 18, 2016.”
 
(c)    Section 3.2.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:

“3.2.1    Unused Line Fee.  Borrower shall pay to Lender a fee equal to the Applicable Unused Line Fee Percentage times the amount by which the Revolver Commitment exceeds the average daily balance of Revolver Loans and stated amount of Letters of Credit during any month.  Such fee shall be payable in arrears, on the first day of each month and on the Commitment Termination Date.”

(d)    Section 5.6 of the Loan Agreement is hereby deleted in its entirety and replaced as follows:

“5.6    Application of Payments.  The ledger balance in (a) the US Dominion Accounts as of the end of each Business Day, and (b) the Canadian Dominion Account as of the end of each Business Day after Lender sends to Borrower an Activation Notice, in each case shall be applied to the Obligations at the beginning of the next Business Day, as applicable.  If, as a result of such application, a credit balance exists, the balance shall not accrue interest in favor of Borrower and shall be made available to Borrower as long as no Default or Event of Default exists.  Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds, and agrees that Lender shall have the continuing, exclusive right to apply and reapply same against the Obligations, in such manner as Lender deems advisable.”
(e)    Section 8.1 of the Loan Agreement is hereby deleted in its entirety and replaced as follows:

“8.1    Borrowing Base Certificates.    As soon as available but in any event (a) within 3 Business Days after the end of each calendar week for so long as Availability is greater than or equal to the greater of (i) fifteen percent (15%) of the Borrowing Base, or (ii) $1,000,000 or (b) daily following any day on which Availability is less than the greater of (i) fifteen percent (15%) of the Borrowing Base, or (ii) $1,000,000, and continuing until Availability has equaled or exceeded the greater of (x) fifteen percent (15%) of the Borrowing Base, or (y) $1,000,000 for at least 30 consecutive days, Borrower shall deliver to Lender a Borrowing Base Certificate prepared as of the close of business, and at such other times as Lender may request.  All calculations of Availability in any Borrowing Base Certificate shall originally be made by Borrower and certified by a Senior Officer, provided that Lender may from time to time review and adjust any such calculation (x) to reflect its reasonable estimate of declines in value of any Collateral, due to collections received in the Dominion Accounts or otherwise; (y) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (z) to the extent the calculation is not made in accordance with this Agreement or does not accurately reflect the Availability Reserve.”

(f)    Section 10.2.2(k) is hereby deleted in its entirety and replaced with the following:

“(k)    Liens securing the New Subordinated Term Debt, provided, that such Liens are subordinated to Lender’s Liens under the Loan Documents pursuant to the New Subordinated Term Debt Intercreditor Agreement.”

(g)    Section 10.2.8 of the Loan Agreement is hereby deleted in its entirety and replaced as follows:

“10.2.8       Restrictions on Payment of Certain Debt.  Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any (a) Subordinated Debt (exclusive of New Subordinated Term Debt), except regularly scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating to such Debt (and a Senior Officer of Borrower shall certify to Lender, not less than five Business Days prior to the date of payment, that all conditions under such agreement have been satisfied); (b) New Subordinated Term Debt, except as set forth in the New Subordinated Term Debt Intercreditor Agreement, or (c) Borrowed Money (exclusive of the Obligations to the extent permitted pursuant to this Agreement and the New Subordinated Term Debt to the extent permitted pursuant to clause (b) immediately preceding) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of Lender).”

(h)    Section 11.2.2 of the Loan Agreement is hereby deleted in its entirety and replaced as follows:

“11.2.2        [intentionally deleted];”

ARTICLE III
Consent of Amendment of New Subordinated Term Debt

Section 3.1    Consent.

(a)    Borrower has notified Lender that it has amended the documentation evidencing the New Subordinated Term Debt to increase in the interest rate thereunder, which, without the consent of Lender, would be a violation of  Section 10.2.19 of the Loan Agreement.

(b)    Borrower has requested that Lender consent to the amendment of the documentation evidencing the New Subordinated Term Debt to increase the interest rate thereunder, subject to the terms and conditions set forth herein.

(c)    Lender hereby consents to the amendment of the documentation evidencing the New Subordinated Term Debt pursuant to that certain Amendment No. 3, dated as of December 15, 2015, by and between Borrower and Enhanced Credit Supported Loan Fund, LP, a Delaware limited partnership.  The consent agreed to herein (i) is strictly limited to the transactions described above, and except as expressly set forth herein, all the other terms, provisions and conditions of each of the Loan Agreement and the New Subordinated Term Debt Intercreditor Agreement shall remain in full force and effect, and (ii) shall not constitute any course of dealing or other basis for altering any obligation of Borrower or any right, privilege or remedy of Lender under the Loan Agreement, the New Subordinated Term Debt Intercreditor Agreement, or any of the other Loan Documents.

ARTICLE IV
Conditions Precedent

Section 4.1    Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent, unless specifically waived in writing by Lender:

(a)    The representations and warranties contained herein and in all other Loan Documents shall be true and correct as of the date hereof as if made on the date hereof;

(b)    No Default or Event of Default shall have occurred and be continuing;

(c)    Lender and Borrower shall have executed this Amendment;

(d)    Each of Lender, Borrower, and Enhanced Credit Supported Loan Fund, LP shall have executed an amendment to the New Subordinated Term Debt Intercreditor Agreement, in form and substance satisfactory to Lender in its sole discretion;

(e)    All corporate proceedings taken in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory to Lender and its legal counsel;

(f)    Lender shall have received evidence satisfactory to Lender, in its sole discretion, that all Debt issued by Borrower to Richard J. Kurtz on or before the date hereof has been paid in full; and

(g)    Lender shall have received reimbursement for its legal fees and expenses as described in Section 6.3 hereof.

ARTICLE V
Ratifications, Representations, and Warranties

Section 5.1    Ratifications by Borrower.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Loan Agreement and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Loan Agreement are ratified and confirmed and shall continue in full force and effect.  The Loan Agreement as amended by this Amendment shall continue to be legal, valid, binding and enforceable in accordance with its terms.

Section 5.2    Renewal and Extension of Security Interests and Liens.  Borrower hereby (i) renews and affirms the liens and security interests created and granted in the Loan Documents, and (ii) agrees that this Amendment shall in no manner affect or impair the liens and security interests securing the Obligations, and that such liens and security interests shall not in any manner be waived, the purposes of this Amendment being to modify the Loan Agreement as herein provided, and to carry forward all liens and security interest securing same, which are acknowledged by Borrower to be valid and subsisting.

Section 5.3    Representations and Warranties.  Borrower represents and warrants to Lender that (i) the execution, delivery and performance of this Amendment and any and all Loan Documents executed and/or delivered in connection herewith have been authorized by all requisite corporate action on the part of Borrower and will not violate the articles or bylaws of Borrower or any agreement to which Borrower is a party, including, without limitation, any documents or agreements evidencing or related to the New Subordinated Term Debt; (ii) the representations and warranties contained in the Loan Agreement as amended hereby and in each of the other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof; (iii) no Default or Event of Default under the Loan Agreement has occurred and is continuing; (iv) no default or event of default has occurred and is continuing in respect of the New Subordinated Term Debt; and (v) Borrower is in full compliance with all covenants and agreements contained in the Loan Agreement, as amended hereby.

ARTICLE VI
Miscellaneous

Section 6.1    Survival of Representations and Warranties.  All representations and warranties made in the Loan Agreement or any other Loan Document, including without limitation, any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect such representations and warranties or the right of Lender to rely thereon.

Section 6.2    Reference to Loan Agreement.  Each of the Loan Documents and the Loan Agreement and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Loan Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.

Section 6.3    Expenses of Lender.  Borrower agrees to pay on demand all reasonable costs and expenses incurred by Lender directly in connection with the preparation, negotiation and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Lender’s legal counsel, and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the Loan Agreement, as amended hereby, or any other Loan Document, including, without limitation, the reasonable costs and fees of Lender's legal counsel.

Section 6.4    Severability.  Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

Section 6.5    APPLICABLE LAW.  THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

Section 6.6    Release of Claims.  To induce Lender to enter into this Amendment, Borrower voluntarily, knowingly, and unconditionally releases, acquits, and forever discharges Lender and its prior, current, or future officers, directors, agents, employees, successors, and assigns (collectively, the “Released Parties”), from any and all liabilities, claims, demands, damages, expenses, actions, or causes of action of any kind or nature (if there be any), owned by, through, or under Borrower, whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown, that such Person now has or ever had against any of the Released Parties arising under or in connection with any of the Loan Documents or otherwise, including, without limitation, any such liabilities, claims, demands, damages, expenses, actions, or causes of action arising out of or relating to a claim of breach of contract, fraud, lender liability or misconduct, breach of fiduciary duty, usury, unfair bargaining position, unconscionably, violation of law, negligence, error or omission in accounting or calculations, misappropriation of funds, tortious conduct or reckless or willful misconduct.  Borrower represents and warrants to Lender that it has not transferred or assigned to any Person any claim that it ever had or claimed to have against Lender.

Section 6.7    Waiver of Jury Trial.  To the fullest extent permitted by applicable law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim, or proceeding arising out of or related to this Amendment.

Section 6.8    Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs, executors, and legal representatives, except that none of the parties hereto other than Lender may assign or transfer any of its rights or obligations hereunder without the prior written consent of Lender.

Section 6.9    Counterparts.  This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.  A facsimile or digital copy of this Amendment shall be deemed to be an original thereof.

Section 6.10    Effect of Waiver.  No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition or duty by Borrower, shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or duty.

Section 6.11    Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

Section 6.12    Conflicting Provisions.  If any provision of the Loan Agreement as amended hereby conflicts with any provision of any other Loan Document, the provision in the Loan Agreement shall control.

Section 6.13    ENTIRE AGREEMENT.  THIS AMENDMENT, THE LOAN AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT TO THIS AMENDMENT AND THE LOAN AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Remainder of page blank; signature page follows.]

EXECUTED as of the date first written above.

BANK OF AMERICA, N.A.

By:    /s/  H Michael Wills, SVP            
H. Michael Wills, Senior Vice President

LAPOLLA INDUSTRIES, INC.

By:    /s/  Michael T. Adams, EVP            
Michael T. Adams, Executive Vice PresidentEXHIBIT 10.1

 

 

EXECUTION COPY

 

OBSERVER RIGHTS AGREEMENT

 

Observer Rights Agreement
(this “Agreement”) dated as of March 23, 2016 by and between Seacoast Banking Corporation of Florida, a Florida
corporation (the “Company”), Basswood Capital Management, L.L.C. (“Basswood”) and Matthew
Lindenbaum (“Lindenbaum”).

 

WHEREAS, Basswood is
the investment manager or adviser to certain private investment funds and managed accounts (Basswood “clients”)
that collectively Beneficially Own approximately 7% of the outstanding shares of the Company’s common stock; and

 

WHEREAS, Lindenbaum
is a principal of Basswood and has broad experience in investing in, and serving on the boards of directors of, financial institutions
similar to the Company; and

 

WHEREAS, Basswood has
requested that Lindenbaum be granted certain information and observation rights with respect to the board of directors of the Company
(the “Board”); and

 

WHEREAS, the Board
has determined that granting Lindenbaum such information and observation rights on the terms and conditions hereof is in the best
interests of the Company.

 

NOW THEREFORE, the
Company, Basswood and Lindenbaum agree as follows:

 

1.Board Observer
Right. During the term of this Agreement, Lindenbaum shall have the right to attend all meetings of the Board (in each case
whether in person, by telephone or otherwise) in a non-voting observer capacity, subject to the provisions hereof. Regardless of
the foregoing, the Company shall have the right to exclude Lindenbaum from meetings of the Board or omit to provide Lindenbaum
with certain information and materials if (but only to the extent) the Company’s legal counsel or a majority of the Board
determines in good faith that such exclusion or omission is necessary in order to (i) preserve attorney-client or other legal privilege,
(ii) comply with its fiduciary obligations under applicable law, (iii) comply with applicable law or regulation, including to protect
confidential supervisory information under any order, notice or regulation of a bank regulatory authority, (iv) comply with any
obligation of confidentiality existing as of the date hereof or (v) address any conflict of interest. In the event that Lindenbaum
is excluded from a meeting of the Board, the Company shall inform Lindenbaum of the general nature of the subject matter discussed
and explain the Board’s rationale for the decision to exclude Lindenbaum.

 

2.Information
Right. The Company shall provide to Lindenbaum notice of any and all Board meetings and, subject to the provisions and exclusions
hereof (including, without limitation, the exclusions described in Section 1 hereof), a copy of the materials provided to all members
of the Board and the committees thereof at the time such materials are provided to members of the Board and such committees, including
without limitation, the minutes of all Board meetings and committee meetings (all of which information shall be subject to the
confidentiality provisions set forth in Section 3 hereof).

 

     

     

    

 

3.Confidentiality;
Trading in Company Securities.

 

		a.	Lindenbaum agrees that he will hold all Evaluation Material in strict confidence and will not disclose
or divulge any Evaluation Material to any person. Further, neither Basswood nor Lindenbaum shall use such information for any purpose
other than to monitor and seek to enhance the value of the investments of Basswood’s clients in the Company and, in the case
of Lindenbaum, other than in connection with his status as a Board observer. For purposes of this Agreement, the term “Evaluation
Material” means any and all information concerning or relating to the Company or any of its subsidiaries or affiliates
that is furnished to Lindenbaum in his capacity as a Board observer (regardless of the manner in which it is furnished, including
in written or electronic format or orally, gathered by visual inspection or otherwise), together with all notes, analyses, reports,
models, compilations, studies, interpretations, documents, records or extracts thereof containing, referring, relating to, based
upon or derived from such information, in whole or in part. The term “Evaluation Material” shall not include such information
that (a) can be shown to have been or becomes available to Lindenbaum on a non-confidential basis from a source other than the
Company or any of its affiliates not known by Lindenbaum, Basswood or any of their respective affiliates or Representatives to
be bound by an agreement or obligation of confidentiality with respect to such information, (b) is or becomes generally available
to the public other than as a result of a disclosure by Lindenbaum, Basswood or any of their respective affiliates or Representatives
in violation of this Agreement, or (c) has been or is independently developed by Lindenbaum, Basswood or any of their respective
affiliates or Representatives without the use of any Evaluation Material. Notwithstanding the foregoing, Lindenbaum may provide
Evaluation Material to any Basswood officer or employee (each, a “Representative” (for the avoidance of doubt,
Bennett Lindenbaum shall be a “Representative” for all purposes hereunder, including Section 4 hereof)) who has a need
to know such information for the purpose of monitoring and seeking to enhance the value of the investments of Basswood’s
clients in the Company provided that any such Representative provided with any such information shall keep it confidential to the
same extent as Lindenbaum is required under this Agreement and use it only for such purposes; and, in any event, Basswood and Lindenbaum
shall be responsible for any non-compliance with such confidentiality and use requirements by any Representative who is provided
with such information. Basswood and Lindenbaum agree to take all reasonable measures to restrain their Representatives from prohibited
or unauthorized disclosure of the Evaluation Material. In furtherance, and not in limitation, of the foregoing, Basswood and Lindenbaum
shall, and shall instruct their Representatives to, use all reasonable and prudent efforts to protect and safeguard the Evaluation
Material from disclosure to at least the same extent that they do so with respect to Basswood’s own confidential information.

 

     

     

    

 

		b.	In the event that Basswood, Lindenbaum or any Representative becomes legally compelled to disclose
any Evaluation Material, Basswood and Lindenbaum agree, unless prohibited by law, to provide the Company with reasonable advance
notice under the circumstances prior to any such disclosure to enable the Company to seek a protective order or other appropriate
remedy (and if the Company seeks such an order or other remedy, Basswood and Lindenbaum will provide such cooperation as the Company
shall reasonably request, at the Company’s sole cost and expense). If in the absence of a protective order or the receipt
of a waiver hereunder Basswood, Lindenbaum or such Representative is nonetheless, based on the advice of Lindenbaum’s or
Basswood’s legal counsel, required to disclose any such information, Basswood, Lindenbaum or such Representative, as the
case may be, may make the required disclosure (solely to the extent required) without liability under this Agreement. In no event
will Basswood, Lindenbaum or any of their Representatives oppose action by the Company to obtain a protective order or other remedy
to prevent the disclosure of Evaluation Material or to obtain reliable assurance that confidential treatment will be accorded the
Evaluation Material. For the avoidance of doubt, it is understood that there shall be no “legal requirement” requiring
Basswood, Lindenbaum or any of their Representatives to disclose any Evaluation Material solely by virtue of the fact that, absent
such disclosure, any of them or any of their respective affiliates, or any of Basswood’s clients, would be prohibited from
purchasing, selling or engaging in derivative or other voluntary transactions with respect to, the Company’s common stock
or the securities of any other company or otherwise proposing or making an offer to do any of the foregoing, or any of them would
be unable to file any proxy materials in compliance with Section 14(a) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or the rules and regulations promulgated thereunder. In addition, nothing contained in
this Agreement shall require any notice to be given or limit or prohibit Lindenbaum, Basswood or any such Representative from providing
any information demanded or requested in the course of a routine examination or inquiry by a regulatory authority having jurisdiction
over Lindenbaum, Basswood, Basswood’s clients or such Representative so long as such examination or inquiry is not known
by Lindenbaum, Basswood or any such Representative to be targeted at the Company or any of its affiliates or Basswood’s clients’
investment in the Company.

 

		c.	Basswood and Lindenbaum acknowledge that (a) none of the Company or any of its representatives
makes any representation or warranty, express or implied, as to the accuracy or completeness of any Evaluation Material, and (b) none
of the Company or any of its representatives shall have any liability to Basswood, Lindenbaum, any Basswood client, any Representative
of Basswood or Lindenbaum or any of their respective affiliates relating to or resulting from the use of the Evaluation Material
or any errors therein or omissions therefrom.

 

		d.	All Evaluation Material shall remain the property of the Company. No other person shall by virtue
of any disclosure of and/or use of any Evaluation Material acquire any rights with respect thereto, all of which rights shall remain
exclusively with the Company. At any time after the date on which this Agreement has been terminated pursuant to Section 9 hereof,
Basswood and Lindenbaum will promptly return to the Company or destroy all hard copies of the Evaluation Material and use reasonable
best efforts to permanently erase or delete all electronic copies of the Evaluation Material in their or any of their Representatives’
possession or control (and, upon the request of the Company, shall certify to the Company in writing that such Evaluation Material
has been erased or deleted, as the case may be); provided, however, that Basswood shall be entitled to retain copies of the Evaluation
Material to the extent required by applicable law or regulation or by its internal document retention and compliance policies.
Notwithstanding the return or erasure or deletion of Evaluation Material, Lindenbaum, Basswood and their Representatives will continue
to be bound by the obligations contained herein.

 

     

     

    

 

		e.	Lindenbaum and Basswood hereby acknowledge that they are aware that the United States securities
laws prohibit any person who has received from an issuer any material, non-public information from purchasing or selling securities
of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable
that such person is likely to purchase or sell such securities.

  

		f.	Lindenbaum and Basswood agree that, while this Agreement is in effect, neither Lindenbaum nor Basswood
will purchase or sell securities of the Company (including for the account of Basswood’s clients) other than (i) at times
when members of the Board are permitted to purchase or sell Company securities (i.e., during “trading windows”)
or (ii) in a transaction that a member of the Board would otherwise be permitted to effect pursuant to the Company’s policy
on securities transactions by members of the Board (the “Trading Policy”). The Company represents and warrants
to Lindenbaum and Basswood that it has provided to them a true and complete copy of the Trading Policy and agrees to provide to
Lindenbaum and Basswood promptly from time to time (but in no event later than when provided to members of the Board), including
for a period ending on the six (6) months following the time when Lindenbaum ceases to have observer rights pursuant to Section
1 of this Agreement, copies of all updates to the Trading Policy and all notices provided to members of the Board concerning the
closing of a trading window or the failure of a trading window to open and the opening or re-opening of any trading window under
the Trading Policy. Notwithstanding the foregoing agreements in this Section 3(f), neither Lindenbaum, Basswood nor Basswood’s
clients shall be subject to the Trading Policy.

  

4.Certain Agreements.
During the term of this Agreement, Basswood and Lindenbaum shall not, and shall cause their respective Representatives and affiliates
not to, directly or indirectly:

 

		a.	acquire, offer, seek or propose to acquire, or agree to acquire, by purchase or otherwise, Beneficial
Ownership of Company common stock if after giving effect to such acquisition Basswood and its clients and their respective affiliates
would collectively Beneficially Own more than 9.99% of the outstanding shares of Company common stock;

 

		b.	make, or in any way participate, in any “solicitation” of “proxies” to
vote (as such terms are used in the rules of the Securities and Exchange Commission (the “SEC”)), or seek to
advise or influence any person with respect to the voting of (including engaging in any withhold the vote campaign) any Company
common stock;

 

		c.	separately or in conjunction with any other person, submit a proposal for or offer of (with or
without conditions) (including to the Board if any such proposal would reasonably be expected to be required to be disclosed by
Basswood, Lindenbaum or the Company), any Extraordinary Transaction. “Extraordinary Transaction” means any of
the following involving the Company or any of its subsidiaries or its or their securities or a material amount of the assets or
businesses of the Company or any of its subsidiaries: any tender offer or exchange offer, merger, acquisition, business combination,
reorganization, restructuring, recapitalization, spin-off, split-off, licensing, sale or acquisition of, or joint venture or other
partnership with respect to, material assets, sale or purchase of securities, liquidation or dissolution, or any similar transaction;

 

     

     

    

 

		d.	form, join or in any way participate in a 13D Group with any person other than Lindenbaum, Basswood,
Basswood’s clients or any of their respective affiliates;

 

		e.	present at any annual meeting or any special meeting of the Company’s shareholders or through
action by written consent any proposal for consideration for action by shareholders, conduct any shareholder referendum, seek to
call a special meeting of the Company’s shareholders, propose any nominee for election to the Board or seek the removal of
any member of the Board;

 

		f.	grant any proxy, consent or other authority to vote with respect to any matters (other than to
the named proxies included in the Company’s proxy card for an annual meeting or a special meeting) or deposit any of the
Company common stock (or any securities convertible into, exchangeable for or otherwise exercisable to acquire such common stock)
held by any of them in a voting trust or other arrangement of similar effect, or subject them to a voting agreement or other arrangement
of similar effect;

 

		g.	make or issue, or cause to be made or issued, any public disclosure, statement or announcement
(including the filing or furnishing of any document or report with the SEC or any other governmental agency or any disclosure to
any journalist, member of the media or securities analyst) (x) in support of any solicitation described in clause (b) above or
otherwise inconsistent with the restrictions set forth in this Section 4, or (y) negatively commenting upon the Company, including
the Company’s corporate strategy, business, corporate activities, Board or management (and including making any statements
critical of the Company’s business, strategic direction, capital structure or compensation practices);

 

		h.	institute, solicit, assist or join, as a party, any litigation, arbitration or other proceeding
against or involving the Company or any of its current or former directors or officers (including derivative actions) other than
to enforce the provisions of this Agreement;

 

		i.	make any request under Section 607.1602 of the Florida Business Corporation Act;

 

		j.	sell shares of Company common stock representing 5% or more of the outstanding shares of Company
common stock to a single purchaser (or group of affiliated purchasers) or any 13D Group or sell shares of Company common stock
to any single purchaser (or group of affiliated purchasers) or any 13D Group if as a result thereof such purchaser (or group of
affiliated purchasers) or 13D Group would Beneficially Own 5% or more of the outstanding shares of Company common stock;

 

		k.	request the Company or any of its representatives, directly or indirectly, to amend or waive any
provision of this Section 4, in each case which would reasonably be expected to result in a public announcement of such request;

 

     

     

    

 

		l.	enter into any discussions, negotiations, agreements or undertakings with any person with respect
to the foregoing or advise, assist, encourage or seek to persuade others to take any action with respect to any of the foregoing.

 

Basswood and Lindenbaum agree to promptly
advise the Company if they receive an approach or inquiry regarding a potential proposed acquisition or proxy contest with respect
to the Company.

 

5.Basswood Beneficial
Ownership. Basswood and Lindenbaum represent and warrant that they, together with their affiliates and Basswood’s clients,
Beneficially Own 2,385,972 shares of the Company’s common stock as of the date of this Agreement, all of which are “physical”
shares (i.e., none are Beneficially Owned through options or other rights to acquire or as a Receiving Party of a Derivatives
Contract).

 

6.No Waiver.
No failure or delay by the Company in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof,
and no modification hereof shall be effective, unless in writing and signed by all parties hereto.

  

7.Governing
Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of
the State of Florida, without giving effect to choice of law doctrines. Each of the parties hereto consents to personal jurisdiction
in such State and voluntarily submits to the jurisdiction of the courts of such State in any action or proceeding with respect
to this Agreement, including the federal district courts located in such State. Each party agrees that it/him may be served with
process at the address set forth on the signature page hereof, and further agrees not to commence any action, suit or proceeding
related hereto except in such courts. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT. EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY CLAIM, ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.

  

8.Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute
the same Agreement. One or more counterparts of this Agreement may be delivered by telecopier or pdf electronic transmission, with
the intention that they shall have the same effect as an original counterpart hereof.

  

9.Termination.
This Agreement and (subject to the next following sentence) the rights granted herein, shall terminate upon the earlier of (i)
following the six (6) month anniversary of the date of this Agreement, Lindenbaum’s delivery of written notice to the Company
that he has terminated this Agreement; and (ii) following the six (6) month anniversary of the date of this Agreement, the Company’s
delivery of written notice to Lindenbaum that it has terminated this Agreement. The obligations of Basswood, Lindenbaum and any
Representatives pursuant to Sections 3(a)-(e) hereof shall survive any termination of this Agreement for a period of twenty four
(24) months following such termination, and the obligation of the Company pursuant to Section 3(f) hereof to provide certain information
with respect to the Trading Policy, shall survive any termination of this Agreement for a period of six (6) months following such
termination.

 

     

     

    

 

10.No Fiduciary.
Nothing in this Agreement shall render Lindenbaum a fiduciary of the Company or of any affiliate, shareholder or creditor of the
Company.

 

11.Specific
Performance. The parties hereto agree that irreparable damage would occur in the event that the provisions contained in this
Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled (without bond) to seek an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions thereof, this being in addition to any other remedy to which they may be entitled
by law or equity, and any party sued for breach of this Agreement expressly waives any defense that a remedy in damages would be
adequate.

 

12.Certain Definitions.
For purposes of this Agreement, the term:

 

		a.	“13D Group” means any group of persons formed for the purpose of acquiring,
holding, voting or disposing of shares of Company common stock (or any securities convertible, exchangeable for or otherwise exercisable
to acquire such Company common stock) which would be required under Section 13(d) of the Exchange Act, and the rules and regulations
promulgated thereunder, to file a statement on Schedule 13D pursuant to Rule 13d-l(a) or Schedule 13G pursuant to Rule 13d-1(c)
with the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act if such group beneficially
owned (within the meaning set forth in Rule 13d-3 or Rule 13d-5(b)(1) of the rules and regulations promulgated under the Exchange
Act) shares of Company common stock representing more than 5% of the shares thereof then outstanding.

 

		b.	“Beneficially Own,” “Beneficial Owner” or “Beneficial
Ownership” shall have the meaning (or the correlative meaning, as applicable) set forth in Rule 13d-3 and Rule 13d-5(b)(1)
of the rules and regulations promulgated under the Exchange Act; provided that, “Beneficially Own” and “Beneficial
Ownership” shall include securities which are beneficially owned, directly or indirectly, by a person as a Receiving Party;
provided further, that the number of shares of Company common stock that a person is deemed to beneficially own pursuant
to this proviso in connection with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with
respect to such Derivatives Contract.

 

     

     

    

 

		c.	“Derivatives Contract” shall mean a contract between two parties (the “Receiving
Party” and its counterparty) that is designed to produce economic benefits and risks to the Receiving Party that correspond
substantially to the ownership by the Receiving Party of a number of shares of Company common stock specified or referenced in
such contract (the number corresponding to such economic benefits and risks, the “Notional Common Shares”),
regardless of whether (i) obligations under such contract are required or permitted to be settled through the delivery of cash,
shares of Company common stock or other property or (b) such contract conveys any voting rights in shares of Company common stock,
without regard to any short or similar position under the same or any other Derivatives Contract. For the avoidance of doubt, interests
in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading
by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts.

 

		d.	“person” shall be broadly interpreted to include the media, the internet and
any individual, corporation, partnership, limited liability company, group, trust, estate, joint venture, organization and any
governmental, administrative, arbitral or regulatory representative or authority (including any court) or other entity of any kind
or nature.

 

     

     

    

 

IN WITNESS WHEREOF,
the Company, Basswood and Lindenbaum have caused this Agreement to be executed as of the date first set forth above. 

 

	 	 	Seacoast Banking Corporation of Florida
	 	 	815 Colorado Avenue
	 	 	Stuart, Florida 34994
	 	 	 	 
	Dated:  March 23, 2016	By:	/s/ Dennis S. Hudson, III
	 	 	Name: 	 
	 	 	Title: 	 
	      	 	 	 
	 	 	 	 
	 	 	Basswood Capital Management, L.L.C.
	 	 	645 Madison Avenue, 10th Floor
	 	 	New York, NY 10022

   

	Dated:  March 23, 2016	By	/s/ Matthew Lindenbaum
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 
	 	 	Matthew
    Lindenbaum
	 	 	c/o Basswood Capital Management, L.L.C.
	 	 	645 Madison Avenue, 10th Floor
	 	 	New York, NY 10022

   

	Dated:  March 23, 2016	By:	/s/ Matthew Lindenbaum
	 	 	 

  

 

[Signature page to Observer
Rights Agreement]

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