Document:

Exhibit 10.9

         

         

        OPERATING AGREEMENT

        by and among

        FLORIDIAN FINANCIAL MORTGAGE, LLC,

         

        a Florida limited liability company,

         

         

        and its Members,

        FLORIDIAN FINANCIAL GROUP, INC.,

        a Florida corporation,

        and

        FBC MORTGAGE, LLC,

        a Florida limited liability company

         

         

        

        

        

        
            

            TABLE OF CONTENTS

             

            (The Table of Contents for the Operating Agreement of FLORIDIAN FINANCIAL MORTGAGE, LLC is for convenience of reference only and is not intended to define, limit or describe the scope or intent of any provisions of said document)

        

         

        
            	 	 	Page
	
                        ARTICLE I

                    	
                        FORMATION AND TERM OF THE COMPANY

                    	
                        1

                    

        

        
            	
                         

                    	
                        Section 1.1

                    	
                        Formation

                    	
                        1

                    
	 	
                        Section 1.2

                    	
                        Legal and Business Names

                    	
                        1

                    
	 	
                        Section 1.3

                    	
                        Principal Places of Business

                    	
                        1

                    
	 	
                        Section 1.4

                    	
                        Purposes

                    	
                        1

                    
	 	
                        Section 1.5

                    	
                        Title to Property

                    	
                        2

                    
	 	
                        Section 1.6

                    	
                        Term

                    	
                        2

                    
	 	
                        Section 1.7

                    	
                        Independent Activities; Transactions with Affiliates

                    	
                        2

                    
	 	
                        Section 1.8

                    	
                        Definitions

                    	
                        2

                    

        

        
            	
                        ARTICLE II

                    	
                        CONTRIBUTIONS AND PERCENTAGE INTERESTS

                    	
                        4

                    

        

        
            	
                         

                    	
                        Section 2.1

                    	
                        Initial Capital Contributions

                    	
                        4

                    
	 	
                        Section 2.2

                    	
                        Interests of Members

                    	
                        4

                    
	 	
                        Section 2.3

                    	
                        Additional Capital Contributions and Member Loans

                    	
                        4

                    
	 	
                        Section 2.4

                    	
                        Return of Contributions

                    	
                        4

                    
	 	
                        Section 2.5

                    	
                        Capital Accounts

                    	
                        4

                    
	 	
                        Section 2.6

                    	
                        Changes in Company Interests

                    	
                        5

                    

        

        
            	
                        ARTICLE III 

                    	
                        PROFIT OR LOSS AND ALLOCATIONS

                    	
                        5

                    

        

        
            	
                         

                    	
                        Section 3.1

                    	
                        Determination of Profit or Loss

                    	
                        5

                    
	 	
                        Section 3.2

                    	
                        Costs and Expenses

                    	
                        6

                    
	 	
                        Section 3.3

                    	
                        Allocations

                    	
                        6

                    
	 	
                        Section 3.4

                    	
                        Special Allocations

                    	
                        6

                    
	 	
                        Section 3.5

                    	
                        Crediting Accounts

                    	
                        8

                    

        

        
            	
                        ARTICLE IV 

                    	
                        DISTRIBUTIONS

                    	
                        8

                    

        

        
            	
                         

                    	
                        Section 4.1

                    	
                        Distributable Amounts

                    	
                        8

                    
	 	
                        Section 4.2

                    	
                        Distributions

                    	
                        8

                    

        

        
            	
                        ARTICLE V

                    	
                        MANAGEMENT

                    	
                        9

                    

        

        
            	
                         

                    	
                        Section 5.1

                    	
                        Management by Members

                    	
                        9

                    
	 	
                        Section 5.2

                    	
                        Operational Authority of Members

                    	
                        9

                    

        

         

        
            

            
                	
                             

                        	
                            -i-

                        	
                             

                        

            

             

             

            

        

         

        

        

        

        
            

            TABLE OF CONTENTS

            (continued)

        

         

        
            	 	 	 	Page
	
                         

                    	
                        Section 5.3

                    	
                        Duties of the Manager

                    	
                        10

                    
	 	Section 5.4	Nonliability of Members for Acts or Omissions in Their Managerial Capacity	10
	 	
                        Section 5.5

                    	
                        No Authority of Individual Members

                    	
                        10

                    
	 	
                        Section 5.6

                    	
                        Limitations on Manager’s Management Authority

                    	
                        10

                    
	 	
                        Section 5.7

                    	
                        Consultants

                    	
                        10

                    
	 	
                        Section 5.8

                    	
                        Action Without a Meeting

                    	
                        10

                    
	 	
                        Section 5.9

                    	
                        Compensation

                    	
                        11

                    

        

        
            	
                        ARTICLE VI 

                    	
                        TRANSFER OF INTERESTS IN COMPANY

                    	
                        11

                    

        

        
            	
                         

                    	
                        Section 6.1

                    	
                        Prohibited Transfers

                    	
                        11

                    
	 	
                        Section 6.2

                    	
                        Withdrawal

                    	
                        11

                    

        

        
            	
                        ARTICLE VII 

                    	
                        TERMINATION AND LIQUIDATION DISTRIBUTION

                    	
                        11

                    

        

        
            	
                         

                    	
                        Section 7.1

                    	
                        Liquidating Events

                    	
                        11

                    
	 	
                        Section 7.2

                    	
                        Winding Up

                    	
                        11

                    
	 	Section 7.3	Compliance With Certain Requirements of Regulations; Deficit Capital Accounts 	12
	 	
                        Section 7.4

                    	
                        Rights of Members

                    	
                        12

                    
	 	
                        Section 7.5

                    	
                        No Petition for Dissolution

                    	
                        12

                    
	 	
                        Section 7.6

                    	
                        Deemed Distribution and Recontribution

                    	
                        12

                    

        

        
            	
                        ARTICLE VIII 

                    	
                        FINANCIAL AND TAX MATTERS

                    	
                        13

                    

        

        
            	
                         

                    	
                        Section 8.1

                    	
                        Books of Account

                    	
                        13

                    
	 	
                        Section 8.2

                    	
                        Accounting and Reports

                    	
                        13

                    
	 	
                        Section 8.3

                    	
                        Fiscal Year and Accounting Method

                    	
                        13

                    
	 	
                        Section 8.4

                    	
                        Banking

                    	
                        13

                    
	 	
                        Section 8.5

                    	
                        Accounting Decisions

                    	
                        14

                    
	 	
                        Section 8.6

                    	
                        Reserves

                    	
                        14

                    
	 	
                        Section 8.7

                    	
                        Tax Matters Partner

                    	
                        14

                    
	 	
                        Section 8.8

                    	
                        Tax Election

                    	
                        14

                    
	 	
                        Section 8.9

                    	
                        Adjustments to Tax Basis

                    	
                        14

                    

        

        
            	
                        ARTICLE IX 

                    	
                        MISCELLANEOUS

                    	
                        14

                    

        

        
            	
                         

                    	
                        Section 9.1

                    	
                        Amendments

                    	
                        14

                    

        

         

        
            	
                        

                         

                    	
                        -ii-

                    	
                         

                    

        

         

        

        

        

        

        
            

            TABLE OF CONTENTS

            (continued)

            Page

             

            

        

         

        
            	
                         

                    	
                        Section 9.2

                    	
                        Florida Law

                    	
                        14

                    
	 	
                        Section 9.3

                    	
                        Notices

                    	
                        15

                    
	 	
                        Section 9.4

                    	
                        Captions

                    	
                        15

                    
	 	
                        Section 9.5

                    	
                        Variations of Pronouns

                    	
                        15

                    
	 	
                        Section 9.6

                    	
                        Severability

                    	
                        15

                    
	 	
                        Section 9.7

                    	
                        Counterpart Execution

                    	
                        15

                    
	 	
                        Section 9.8

                    	
                        Waiver

                    	
                        15

                    
	 	
                        Section 9.9

                    	
                        Binding Effect

                    	
                        15

                    
	 	
                        Section 9.10

                    	
                        Benefits

                    	
                        15

                    
	 	
                        Section 9.11

                    	
                        Attorney’s Fees

                    	
                        15

                    
	 	
                        Section 9.12

                    	
                        No Third Party Beneficiaries

                    	
                        16

                    
	 	
                        Section 9.13

                    	
                        Complete Agreement

                    	
                        16

                    
	 	
                        Section 9.14

                    	
                        Time

                    	
                        16

                    

        

        
            	
                        EXHIBIT "A"

                    	
                        INITIAL CAPITAL CONTRIBUTIONS

                    	
                        18

                    

        

         

        
            	
                        

                        -iii-

                         

                    

        

         

        

        

        

        

        OPERATING AGREEMENT

        BY AND AMONG

        FLORIDIAN FINANCIAL MORTGAGE, LLC

        AND ITS MEMBERS

         

        THIS OPERATING AGREEMENT (the “Agreement”), is entered into as of the ____ day of _______________, 2008, by and among FLORIDIAN FINANCIAL MORTGAGE, LLC, a Florida limited liability company (the “Company”), and its members, FLORIDIAN FINANCIAL GROUP, INC., a
        Florida corporation and registered bank holding company (“Floridian”), and FBC MORTGAGE, LLC, a Florida limited liability company and licensed correspondent mortgage lender (“FBC”) (each of Floridian and FBC is sometimes referred to herein as a “Member,” and both are referred to collectively as the “Members” of the Company).

        WITNESSETH:

        In consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

        ARTICLE I

        FORMATION AND TERM OF THE COMPANY

        Section 1.1     Formation. The Members have heretofore formed the Company for the limited purposes and scope set forth in this Agreement. Except as otherwise specifically provided in this Agreement, the rights and obligations of the Members and the administration and
        termination of the Company shall be governed by the Florida Limited Liability Company Act, Chapter 608, Florida Statutes (the “Act”).

        Section 1.2     Legal and Business Names. The legal name of the Company is FLORIDIAN FINANCIAL MORTGAGE, LLC.

        Section 1.3     Principal Place of Business. The principal place of business of the Company shall be located at 189 S. Orange Ave., Ste 950 Orlando FL. 32801, or at such other place as the Members may from time to time designate in writing. The Company may also maintain other offices at places as the Members may deem
        advisable.

        Section 1.4     Purposes. Subject to the provisions of this Agreement, the purposes of the Company are to originate, process and close mortgage loans and to engage in any and all activities related or incidental thereto. The Company shall engage in no other business unless
        approved by the Members; provided, however, that notwithstanding any other provision of this Agreement, if any Member of the Company is an Insured Bank or a registered bank holding company that is the parent company of an Insured Bank, the Company shall engage only in activities that are part of, or incidental to, the business of banking.

         

        

        

        

        Section 1.5     Title to Property. All real and personal property owned by the Company shall be owned by the Company as a distinct legal entity, and no Member shall have any ownership interest in such property in its individual name or right, and each Member’s interest
        in the Company shall be personal property for all purposes. Except as otherwise provided in this Agreement, the Company shall hold all of its real and personal property in the name of the Company and not in the name of any Member.

        Section 1.6     Term. The term of the Company commenced on the date the Articles of Organization were filed in the office of the Secretary of State of Florida in accordance with the Act, and shall continue until the winding up and liquidation of the Company and its business
        is completed following a Liquidating Event, as provided in Section 7.1 hereof.

        Section 1.7   Independent Activities; Transactions with Affiliates.

        (a)       Each Member and any of its Affiliates shall be required to devote only such time to the affairs of the Company as such Member determines in its sole discretion may be necessary to manage and operate the Company, and each such Person, to the extent not otherwise directed by such Member, shall be free to serve any other Person or enterprise in
        any capacity that it may deem appropriate in its discretion.

        (b)       Insofar as permitted by applicable law, each Member may, notwithstanding this Agreement, engage in whatever activities they choose, whether the same are competitive with the Company or otherwise, without having or incurring any obligation to offer any interest in such activities to the Company or any Member and neither this Agreement nor any
        activity undertaken pursuant hereto shall prevent any Member from engaging in such activities, or require any Member to permit the Company or any Member to participate in any such activities, and as a material part of the consideration for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and renounces any such right or claim of participation.

        Section 1.8     Definitions. The following definitions and abbreviations shall be used for purposes of this Agreement:

        (a)       “Act” shall mean the Florida Limited Liability Company Act, as set forth in Chapter 608, Florida Statues, as amended from time to time (or any corresponding provision of succeeding law).

        (b)       “Affiliate” or “Associate” means any employee or any individuals or entities affiliated or in any way related to the Members, or employees, whether directly or indirectly by blood
        relationship to marriage or through common ownership or common employees, officers, members or directors.

        (c)       “Agreement” shall mean this Operating Agreement, as amended, modified or supplemented from time to time.

        (d)       “Capital Account” shall mean the capital account of each Member created and maintained pursuant to this Agreement.

        
             

            
                	
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        (e)       “Capital Contribution(s)” shall mean the aggregate amount of cash and the agreed fair market value of any other property contributed by a Member to the capital of the Company.

        (f)        “Capital Contribution(s)” shall mean the aggregate amount of cash and the agreed fair market value of any other property contributed by a Member to the capital of the Company.

        (g)   “Code” shall mean the Internal Revenue Code of 1986, as amended.

        (h)       “Fiscal Year” means the fiscal year of the Company, which is the calendar year.

        (i)        “Insured Bank” means a state bank or national banking association the deposit accounts of which are insured by the Federal Deposit Insurance Corporation pursuant to the provisions of the Federal Deposit Insurance Act, 12 U.S.C. 1810, et
        seq.

        (j)        “Liquidating Event” shall have the meaning given such term in Section 7.1.

        (k)       “Members” shall mean FLORIDIAN and FBC (hereinafter sometimes referred to as the “Members”).

        (l)        “Member Loan” means amounts transferred to the Company by a Member as a Loan. With respect to Section 3.4, the term “Member Loan” shall also mean liabilities of the Company for which a Member (or a Person related to such Member under Regulation §
        1.752-4(b) bears the economic risk of loss (within the meaning of Regulation §1.752-2(b)-(j)).

        (m)      “Minimum Gain” shall mean the amount determined by computing with respect to each non-recourse liability of the Company, including for this purpose a loan for which a Member bears the economic risk of loss, the amount of Gain (of whatever character), if any, that would be
        realized by the Company if it disposed (in a taxable transaction) of the property subject to such liability in full satisfaction thereof, and by then aggregating the amounts so computed.

        (n)       “Percentage Interest” means the underlying share of each Member, expressed as a percentage, in the Company, including such Member’s share of Profits and Losses and cash distributions where such items are stated in this Agreement to be allocated or made to the Members
        in accordance with their respective Percentage Interests.

        (o)       “Permitted Transferee” shall have the meaning given such term in Section 6.3.

        (p)       “Person” shall mean any individual, membership, corporation, trust, or other entity.

         

        
            

            
                	
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        (q)       “Profit and Losses” shall mean for each Fiscal Year, an amount equal to the Company’s taxable income or loss for such Fiscal Year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be
        stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss).

        (r)        “Property” shall mean any real or personal property owned by the Company

        (s)        “Regulations” means the Income Tax Regulations promulgated under the Code, as such Regulations may from time to time be amended.

        To the extent that capitalized terms appear in this Agreement but are not defined above in this Article, such term shall have the meaning otherwise set forth in this Agreement.

        ARTICLE II

        CONTRIBUTIONS AND PERCENTAGE INTERESTS

        Section 2.1     Initial Capital Contributions. Simultaneously with the execution of this Agreement, each Member shall contribute to the capital of the Company in the amount and in the manner set forth in Exhibit “A” attached hereto.

        Section 2.2     Interests of Members. The Members shall have Percentage Interests equal to the percentage set forth in Exhibit “A”. Except as otherwise provided in this Agreement, each Member shall share in accordance with its Percentage Interest all profits and
        losses of the Company and all distributions of assets of the Company, whether distributions of available cash, capital, or otherwise.

        Section 2.3   Additional Capital Contributions and Member Loans.

        (a)       The Members shall make an additional Capital Contributions upon the request of a majority of the Members and in amounts proportionate to the Members’ respective Percentage Interests to the Company.

        (b)       No additional contribution of capital pursuant to this Article II shall increase the Percentage Interest allocable to such Member pursuant to Section 2.2 hereof.

        (c)       The Members may make loans to the Company upon the approval of a majority of the Members.

        Section 2.4     Return of Contributions. Except as otherwise specifically provided in this Agreement, no Member shall have the right to withdraw any part of its capital contribution.

        Section 2.5     Capital Accounts. An individual capital account shall be maintained for each Member in accordance with Section 704(b) of the Code, paragraph 1.704-1(b)(2)(iv) of the accompanying Treasury Regulations, and the following rules:

         

        
            

            
                	
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        (a)       Computation of Capital Account Balance. The capital account of a Member shall consist of the initial Capital Contributions as set forth in Section 2.1 hereof, increased by: (i) the amount of money contributed by such Member to the Company, (ii) the fair market value of property
        contributed by such Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code), (iii) such Member’s allocable share of Company income and gain, (iv) the amount of any Company liabilities assumed by the Member or that are secured by any Company property distributed to that Member, (iv) the amount of any Company liabilities assumed by the Member or that are secured by any
        Company property distributed to that Member; and decreased by (v) the amount of money distributed to such Member, (vi) the fair market value of property distributed to such Member (net of liabilities secured by such property that such Member is considered to assume or take subject to under Section 752 of the Code), (vii) such Member’s allocable share of all items of Company loss or deduction, and (viii) the amount of any liabilities of such Member that are assumed by the Company
        or that are secured by any property contributed by that Member to the Company.

        (b)       Built-In Gain or Loss. The capital account of a Member shall not be increased or decreased with regard to any built-in gain or loss allocated to the Member pursuant to Section 3.4(a) hereof.

        (c)       Transferee’s Capital Account. Except as otherwise provided herein, in the event of a transfer of any Company interest, the transferee shall assume the capital account balance of the transferor.

        (d)       Interest. No interest shall be paid on any present or future capital account balance.

        (e)       Conformance with Regulations. The provisions of this Section 2.5 are intended to comply with Treasury Regulation Section 1.704-1(b) regarding the maintenance of the capital accounts of the Members and this Section 2.5 shall be interpreted and applied in a manner consistent with such
        Regulations.

        Section 2.6     Changes in Company Interests. Upon the contribution to, or distribution from, the Company of Property in connection with admission to, or retirement from the Company of a Member or a change in the interest of a Member in the Company, the assets of the Company
        shall be revalued on the books of the Company to reflect the fair market value of such assets at the time of the occurrence of such event, and the Capital Accounts of the Members shall be adjusted in the manner provided under Treasury Regulation Section 1.704-1(b)(2)(iv)(f) and (g).

        ARTICLE III

        PROFIT OR LOSS AND ALLOCATIONS

        Section 3.1     Determination of Profit or Loss. The items of income, gains, expenses, deductions, losses and credits to the Company shall be determined in accordance with generally accepted accounting principles, consistently applied, within sixty (60) days after the close
        of the fiscal year of the Company.

         

        
            

            
                	
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        Section 3.2     Costs and Expenses. The Company shall pay all expenses (which expenses shall be billed directly to the Company) of the Company which may include but are not limited to: (i) all actual compensation and employer taxes of personnel employed full or part time by
        the Company and involved in the business of the Company; (ii) all costs of borrowed money, taxes and assessments on Company assets and other taxes applicable to the Company; (iii) legal, audit, accounting, brokerage and other fees; (iv) printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and recording of documents evidencing ownership of an interest in the Company or in connection with the business of the
        Company; (v) fees and expenses paid to independent contractors, consultants, and other agents; (vi) the cost of insurance as required in connection with the business of the Company; (vii) expenses of organizing, revising, amending, converting, modifying or terminating the Company; (viii) costs of any accounting, statistical or bookkeeping equipment necessary for the maintenance of the books and records of the Company; and (ix) the cost of preparation and dissemination of the
        informational material and documentation relating to potential sale, lease or other disposition of the Property.

        Section 3.3  Allocations.

        (a)       Except as provided in Section 3.4, Profits for any Fiscal Year shall be allocated among the Members in accordance with their respective Percentage Interests.

        (b)       Except as provided in Section 3.4, the Losses for any Fiscal Year shall be allocated among the Members in accordance with their respective Percentage Interests.

        Section 3.4  Special Allocations.

        (a)       Contributed Property. Notwithstanding any other provision to the contrary in this Agreement, in accordance with Section 704(c) of the Code and the accompanying Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property other than cash contributed to
        the capital of the Company shall, solely for tax purposes, be allocated among Members so as to take account of any variation between (i) the adjusted basis of such property to the Company for federal income tax purposes on the date of contribution and (ii) the fair market value of such property on the date contributed to the Company, as determined by the contributing Member and the remaining Member. In any case, however, the total income, gain, loss or deductions (including, but not
        limited to, depreciation) allocated in accordance with Section 704(c) of the Code is limited to a “ceiling” which cannot exceed the amount of a gain or loss actually realized by the Company or the depreciation or depletion allowable to it.

        (b)   Minimum Gain Chargeback and Qualified Income Offset.

        (1)       Notwithstanding anything to the contrary set forth in this Agreement, if at the close of any taxable year (A) the foregoing allocation provisions of this Article III and the distribution provisions of this Agreement would (but for this Section 3.4(b) cause the negative Capital Account balance of any Member to exceed such Member’s
        Share (as defined below) of the Company’s Minimum Gain, taking into account the rules of Treasury Regulations Sections 1.704-1(b)(2)(ii)(a)(4), (5) and (6), plus any amounts which such Member 

         

        
            

            
                	
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        is required to restore to the Company upon liquidation (or that are treated as such amounts pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c)), or (B) the allocation of further taxable loss or deductions of the Company pursuant to the other provisions of this Article III would result in any such excess, then to the extent (but only to the extent) required to eliminate or
        prevent the creation of any such excess: (I) all items of taxable loss and deduction of the Company for such year and subsequent years shall be allocated to Members having positive Capital Account balances in proportion to such balances until such balances are reduced to zero and (II) all gross income of the Company for such year and subsequent years shall be allocated to those Members having excess negative Capital Account balances in proportion to such excess balances until such
        excess negative balances are reduced to zero. Thereafter all taxable income, taxable loss and deductions of the Company shall be allocated in accordance with the foregoing provisions of this Article III. This Section 3.4(b) is intended to comply with the minimum gain chargeback requirements of Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(f) and with the qualified income offset requirement of Treasury Regulations Section 1.704-1(b)(2)(ii)(d). For purposes of this Section
        3.4(b), a Member’s Share of the Company’s Minimum Gain shall mean the excess of (A) the sum of (X) the aggregate nonrecourse deductions of the Company (as defined in Treasury Regulations Section 1.704-2(c)) and Member nonrecourse deductions of the Company (as defined in Treasury Regulations Section 1.704-2(i)(2) allocated to such Member, plus (Y) its distribution of any financing or refinancing proceeds allocable (under Treasury Regulations Sections 1.704-1(h)(i)(2) to an
        increase in Company Minimum Gain with respect to a liability other than a Member Loan plus (Z) its distribution of any financing or refinancing proceeds allocable (under Treasury Regulations Sections 1.704-2(i)(6) to an increase in Company Minimum Gain with respect to a Member Loan but only if such Member (or a person related to such Member) bears the economic risk of loss for the Member Loan at the time of the distribution with respect to such distribution, over (B) its share of any
        net decrease in the Company’s Minimum Gain as determined under Treasury Regulations Sections 1.70402(f)(1) and 1.704-2(g)(2).

        (2)       If there is a net decrease in Company Minimum Gain for a taxable year of the Company (or a net decrease in the Minimum Gain attributable to a Member Loan) allocable to the disposition of a Property, then each Member must be allocated items of income or gain of the Company for such year in proportion to, and to the extent of, the portion of
        such Member’s share of the net decrease in Company Minimum Gain determined under Treasury Regulations Sections 1.704-2(g)(2) (or such Member’s share of the net decrease in the Minimum Gain attributable to a Member Loan as determined under Treasury Regulations Section 1.704-2(i)(4)). This Section 3.4(b)(ii) shall be applied before applying Section 3.4(b)(i).

        (3)       If upon the liquidation of the Company any allocation pursuant to clause (i) or (ii) above has the net effect (after taking into account all adjustments to Capital Accounts during the term of, and upon liquidation of the Company and after making distributions except as set forth in Subsection 7.2(c)) of adjusting the Capital Accounts of the
        Members so that the ratio thereof does not reflect the ratio of their respective Percentage Interests, then the gains and losses realized upon liquidation shall (to the extent not strictly prohibited by Treasury Regulations) be allocated in a manner so as to make the ratio of each Member’s Capital Account reflect the ratio of each Member’s Percentage Interest.

         

        
             

            
                	
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        (c)       Mandatory Allocations. Notwithstanding the foregoing, if Subsection (a) above requires allocations of income or loss of the Company in a manner different than that set forth in Subsection (b) above, the provisions of Section 704(c) and the regulations thereunder shall control such
        allocations among the Members, and all deductions and losses of the Company that, pursuant to Treasury Regulations Section 1.704-2(i), are attributable to a liability of the Company for which a Member (or a person related to such Member under Treasury Regulations Section 1.752-4(b) bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.752-2(b)-(i) shall be allocated to such Member.

        Section 3.5     Crediting Accounts. Items of income, gains, expenses, deductions, losses and credits shall be credited or debited as the case may be, to each Member’s capital account as provided in Section 2.5 hereof and pursuant to the adjustments described in Section
        3.4 hereof, if applicable.

        ARTICLE IV

        DISTRIBUTIONS

        Section 4.1     Distributable Amounts. The Company shall make distribution of any amounts of cash received by the Company in excess of its reasonable operating requirements, as determined pursuant to the unanimous vote of the Members. The amounts available for distribution
        may be generated by operations of the Company, through the sale, condemnation or refinancing of the Company, by collection of amounts owed to the Company or by any other transaction. Provided, however, no distribution pursuant to this Section 4.1 shall be made unless after the distribution the Company retains assets sufficient to pay all expenses and to establish and maintain such working capital reserves as are required, determined by the unanimous vote of the Members, for the proper
        operation of the Company’s business.

        Section 4.2  Distributions.

        (a)       Subject to the guidelines and restrictions of Section 4.1, above, on a quarterly basis the Company shall distribute to the Members (in accordance with their respective Percentage Interests) not less than an amount equal to (x) the estimated amount of the Company’s items of taxable income and gain (determined under Section 703(a) of the
        Code (for this purpose, all items of income, gain, loss or deduction required to be separately stated shall be included in taxable income or loss) for such quarter and the amount by which the Company’s aggregate items of income and loss (for this purpose, all items of income, gain, loss or deduction required to be separately stated shall be included in taxable income or loss) for each quarter ending prior to such quarter exceed the Company’s aggregate items of income and
        gain (for this purpose, all items of income, gain, loss or deduction required to be separately stated shall be included in taxable income or loss)) for such period, multiplied by (z) the sum of: (A) the highest marginal federal income tax rates in effect for such quarter which are applicable to any Member (“Federal Rate”) plus (B) the highest combined marginal state and local income tax rates in effect for such quarter (“State Rate”) which are applicable to any
        Member with respect to the Company’s income shall be made within forty-five (45) days after the end of such quarter. Any determinations of the amount of each such quarterly tax distribution shall be made by the Members upon the advice of the Company’s certified public accountants or tax counsel.

         

        
            

            
                	
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        (b)       Except as provided in Section 7.2, and after giving effect to the distributions described in Section 4.2(a), distributions of available cash (whether from operations or sale or refinancing of the Property or otherwise) shall be made to the Members in accordance with their respective Percentage Interests (to be made no later than the
        forty-fifth (45th) day after the end of each fiscal quarter).

        ARTICLE V

        MANAGEMENT

        Section 5.1     Management by Members. The Company shall be managed by FBC (the “Manager”), which shall have sole authority to manage the Company; provided, however, that Floridian, and any other Member of the Company that is an Insured Bank or the parent holding
        company of an Insured Bank, shall have veto power over any activities or proposed activities of the Company and over any major decisions of the Manager that are inconsistent with the provisions of Section 1.4.

        Section 5.2  Operational Authority of Members.

        (a)       The Members, with the approval of Members owning combined Percentage Interests greater than fifty percent (50%) of all Percentage Interests in the Company, are authorized to make any contracts, enter into any transactions, and make and obtain any commitments on behalf of the Company to conduct or further the Company’s business
        including, without limitation, the right to:

        (1)       Acquire, operate and maintain the Property and to discharge the obligations of the company with respect thereto.

        (2)       Prosecute, defend, waive, settle or compromise claims and causes of actions (in contract, tort or otherwise) by or against the Company.

        (3)       Take and hold all real, personal and mixed property of the Company in the name of the Company.

        (4)       Open and maintain checking, savings, brokerage and other bank and investment accounts as the Members may deem necessary or appropriate.

        (5)       Purchase at the expense of the Company, liability and other insurance to protect the Company’s business and the members from liabilities arising out of the Company’s business.

        (6)       Incur obligations and make expenditures on behalf of the Company to the extent consistent with any approved budget.

        (7)       Prepare and file (subject to the approval of all of the Members) all real and personal property tax returns required to be filed by the Company with respect to the Property.

         

        
            

            
                	
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        (8)       Prepare and file (subject to the approval of all of the Members) all federal and state income tax returns required to be filed by the Company.

        (b)       The Manager may delegate to a subcommittee of Members, an individual Member, or an employee of the Company any management responsibility or authority except those matters described in Section 5.6.

        Section 5.3   Duties of the Manager.

        (a)       The Manager shall discharge its managerial duties in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the Manager reasonably believes to be in the best interests of the Company.

        (b)       A Manager may rely on information received from other persons if that reliance is consistent with the Manager’s duties under Section 5.3(a).

        Section 5.4     Nonliability of Members for Acts or Omissions in Their Managerial Capacity. To the full extent permitted by law, all Members are released from liability for damages and other monetary relief on account of any act, omission, or conduct in the Member’s
        managerial capacity.

        Section 5.5     No Authority of Individual Members. No individual Member is an agent of the Company or has the authority to make any contracts, enter into any transactions or make any commitments on behalf of the Company.

        Section 5.6     Limitations on Manager’s Management Authority. Notwithstanding anything to the contrary herein, the following decisions (major decisions) shall require the unanimous consent of all of the Members:

        
            	 	(a)	Borrowing of money.
	
                         

                    	
                        (b)

                    	
                        The sale or exchange of any of the assets of the Company.

                    
	 	
                        (c)

                    	
                        Any amendment to the Agreement.

                    
	 	
                        (d)

                    	
                        The admission of new Members to the Company.

                    
	 	
                        (e)

                    	
                        Dissolution of the Company.

                    

        

        Section 5.7     Consultants. Except as limited in this Agreement, the cm. is Manager may from time to time employ on behalf of the Company such persons, firms or corporations as it in its sole judgment shall deem advisable in the operation of the business of the Company,
        including appraisers, accountants and attorneys, on such terms and for such compensation as it, in its sole judgment shall determine.

        Section 5.8     Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Members may be taken without a meeting by written action signed by the Members who own Percentage Interests equal to the percentage of Company Interests that would
        

         

        
            

            
                	
                            10

                        

            

             

            

        

         

        

        

        

        be required to take the same action at a meeting of the Members at which all Members were present. The written action is effective when signed by Members owning the required Percentage Interests for the decision made in the written action, unless a different effective time is provided in the written action. When written action is taken by less than all Members, the Company will
        immediately notify all Members of the action’s text and effective date. Failure to provide the notice does not invalidate the written action.

        Section 5.9     Compensation. The Manager shall receive such compensation for services to be rendered to the Company as determined by the Members. The Manager shall be reimbursed by the Company for the reasonable out-of-pocket expenses incurred by it on behalf of the Company
        and in connection with the business and affairs of the Company, to the extent provided for in the Budget.

        ARTICLE VI

        TRANSFER OF INTERESTS IN COMPANY

        Section 6.1     Prohibited Transfers. Subject to the provisions of Section 6.3, no Member shall sell, transfer, assign, or convey, subject to a security interest or other encumbrance, all or any part of its interest in the Company without the prior written approval of the
        other Member. Any attempt to so transfer or encumber any such interest shall be null and void.

        Section 6.2     Withdrawal. Except as otherwise provided herein, no Member may withdraw from the Company; provided, however, that if the Company engages in any activity that is inconsistent with the provisions of Section 1.4, any Member that is an Insured Bank shall have the
        right to withdraw from the Company upon delivery of written notice of such withdrawal to the Manager.

        ARTICLE VII

        TERMINATION AND LIQUIDATION DISTRIBUTION

        Section 7.1     Liquidating Events. The Company shall dissolve and commence winding up and liquidating upon (i) the withdrawal of any Member that is an Insured Bank or a bank holding company that is the parent company of an Insured Bank, or (ii) the unanimous vote of the
        Members to dissolve, wind up or liquidate the Company.

        Section 7.2     Winding Up. Upon the occurrence of a Liquidating Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors, and no Member shall take any action
        that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company’s business and affairs. To the extent not inconsistent with the foregoing, all covenants and obligations in this Agreement shall continue in full force and effect until such time as the Company’s property has been distributed pursuant to this Section 7.2. The Members shall be responsible for overseeing the winding up and dissolution of the Company, shall take full account of the
        Company’s liabilities and Property, shall cause the Property to be liquidated as promptly as is consistent with obtaining the fair value thereof, and shall cause the proceeds therefrom, to the extent sufficient therefore, to be applied and distributed in the following order:

         

        
            

            
                	
                            11

                        

            

             

            

        

         

        

        

        

        (a)       First, to the payment and discharge of all of the Company’s debts and liabilities to creditors other than the Members;

        (b)       Second, to the payment and discharge of all the Company’s debts and liabilities to Members; and

        (c)       The balance, if any, to the Members in accordance with their Capital Accounts, after giving effect to all contributions, distributions, and allocations for all periods.

        Section 7.3     Compliance With Certain Requirements of Regulations; Deficit Capital Accounts. In the event the Company is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article VII to the
        Members who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) (after giving effect to all contributions, distributions, and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs). If any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs), such
        member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or any other Person for any purpose whatsoever. In the discretion of the Members, a pro rata portion of the distributions that would otherwise be made to the Members and pursuant to this Article VII may be withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise) and to
        reflect the unrealized portion of any installment obligations owed to the Company, provided that such withheld amounts shall be distributed to the Members as soon a practicable.

        Section 7.4     Rights of Members. Except as otherwise provided in this Agreement, (a) each Member shall look solely to the assets of the Company for the return of its Capital Contribution and shall have no right or power to demand or receive property other than cash from
        the Company, and (b) no Member shall have priority over any other Member as to the return of its Capital Contributions, distributions, or allocations.

        Section 7.5     No Petition for Dissolution. The parties agree that irreparable damages would be done to the good will and reputation of the Company if any Member should bring an action in any court to dissolve the Company and to have a liquidator or receiver for the Company
        appointed. Care has been taken in this Agreement to provide what the parties feel is fair and just payment in liquidation of the interest of all Members. Accordingly, each Member hereby waives and renounces any right to file or pursue any such petition for dissolution of the Company or to seek the appointment by any court of a liquidator or receiver for the Company.

        Section 7.6     Deemed Distribution and Recontribution. Notwithstanding any other provisions of this Article VII, in the event the Company is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Property shall
        not be liquidated, the Company’s liabilities shall not be paid or discharged, and the Company’s affairs shall not be wound up. Instead, solely for federal income tax purposes, the Company shall be deemed to have distributed the Property in kind to the Members, who shall be deemed to have assumed and taken subject to all Company liabilities, all in accordance with their 

         

        
            

            
                	
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        respective Capital Accounts. Immediately thereafter, the Members shall be deemed to have recontributed the Property in kind to the Company, which shall be deemed to have assumed and taken subject to all such liabilities.

        ARTICLE VIII

        FINANCIAL AND TAX MATTERS

        Section 8.1     Books of Account. The Manager shall keep adequate books of account of the Company wherein shall be recorded and reflected all of the contributions to the capital of the Company, and all of the income, expenses and transactions of the Company. Such books of
        account shall be kept at the principal place of business of the Company, or such other place that the Manager deems appropriate, and each Member and his authorized representatives shall have free access to and the right to inspect and copy such books of account at reasonable times, during business hours. The Company’s records shall be subject to the audit of any Member or any Member’s authorized representative at mutually convenient times at the expense of the
        Company.

        Section 8.2  Accounting and Reports.

        (a)       As soon as practicable after the close of each Fiscal Year, but in no event later than sixty (60) days after the close of any year, the Manager shall deliver to each Member an annual report containing:

        (1)       a balance sheet as of the end of the last Fiscal Year and statements of income, Member’s equity, and. cash flow for the year then ended, all of which shall be prepared in accordance with generally accepted accounting principles and procedures applied in a consistent method;

        (2)       a report of the activities of the Company during the period covered by the report; and

        (3)       a record of distributions to members for the period covered thereby.

        Such annual statement shall also be provided to any person who is a Member at any time during the last year covered by the annual statements.

        (b)       As soon as practicable after the close of each Fiscal Year, but in no event later than 90 days after the close of any year, the Manager shall deliver to each Member all information necessary for the preparation of the Member’s federal income tax returns.

        (c)       The Manager shall cause the Company’s accountants to prepare or review the federal, state and local tax returns of the Company for each Fiscal Year and shall timely file such returns.

        Section 8.3     Fiscal Year and Accounting Method. The Fiscal Year of the Company for both reporting and federal income tax purposes shall begin with the first day of January and 

         

        
            

            
                	
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        end on the last day of December in each calendar year. The Company shall use the accrual method of accounting.

        Section 8.4     Banking. All funds of the Company shall be deposited in the name of the Company in one (1) or more bank or investment accounts at such financial institutions as the Manager shall deem appropriate. Funds shall be withdrawn only by the Manager or their
        authorized representatives.

        Section 8.5     Accounting Decisions. All decisions as to accounting matters, except as specifically provided to the contrary herein shall be made by the Manager in accordance with generally accepted accounting methods and procedures applied in a consistent manner. Such
        decisions must be acceptable to the Company’s accountants, and the Manager may rely upon the advice of the accountants as to whether a decision is in accordance with generally accepted accounting principles.

        Section 8.6     Reserves. The Company shall maintain reasonable reserves for normal working capital and contingencies to the extent that funds are available for that purpose.

        Section 8.7     Tax Matters Partner. The Manager is hereby designated as the “Tax Matters partner” for the purposes of Subchapter C of Chapter 63 of Subtitle F of the Code (Sections 6221-6233 of the Code) and (subject to the approval of all of the Members) shall
        have the authority to exercise all functions provided for in said sections, or in the Treasury Regulations promulgated thereunder, including, to the extent permitted by such Treasury Regulations, the authority to delegate the function of “Tax Matters Partner” to any other person.

        Section 8.8     Tax Election. Upon the transfer of an interest in the Company or in the event of a distribution of the Company’s property, the Tax Matters Partner may elect, pursuant to Section 754 of the Code, to adjust the basis of the Company’s Property as
        allowed by Section 734(b) thereof. The Tax Matters Partner shall be authorized to make any and all other elections beneficial to the Company allowed by the Code.

        Section 8.9     Adjustments to Tax Basis. In the event of adjustment to the adjusted tax basis of Company Property under Sections 732, 734 or 743 of the Code, the Capital Accounts of the Members shall be adjusted to the extent provided in Treasury Regulations Section
        1.704-1(b)(2)(iv)(m).

        ARTICLE IX

        MISCELLANEOUS

        Section 9.1     Amendments. Amendments to the Agreement may be made only by an instrument in writing signed by all the Members.

        Section 9.2     Florida Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Florida.

        Section 9.3     Supervision and Regulation. If any Member of the Company is an Insured Bank or the parent holding company of an Insured Bank, the books and records of the Company shall be subject to inspection and examination by examiners of any bank regulatory 

         

        
            

            
                	
                            14

                        

            

             

            

        

         

        

        

        

        agency having supervisory jurisdiction over such Insured Bank and over any bank holding company of which such Insured Bank is a subsidiary, and the Manager shall make the books and records of the Company available to such agencies and their examiners upon request.

        Section 9.4     Notices. Any notice, payment, demand, offer, or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been delivered and given for all purposes (a) if delivered personally to the Member or to an officer of
        the Member to whom the same is directed at the address set forth in this Agreement, (b) whether or not the same is actually received, if sent by registered or certified mail, postage and charges prepaid, addressed to a Member, at the address set forth in Exhibit “B” to this Agreement, or (c) in all other cases, when actually received by the party to whom it is addressed. Any party may changes the address to which said notices are to be given by giving written notice of such
        change to the other Members in the manner set forth herein.

        Section 9.5     Captions. Section titles or captions contained in this Agreement are for reference purposes only and shall not be construed to expand or limit any of the terms of this Agreement.

        Section 9.6     Variations of Pronouns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular, or plural as the identity of the person or persons may require.

        Section 9.7     Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this
        Agreement.

        Section 9.8     Counterpart Execution. This Agreement may be executed in several counterparts with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one agreement.

        Section 9.9     Waiver. No consent or waiver, express or implied by any Member to or if any breach or default by the other in the performance by the other of its obligations hereunder shall be deemed or construed to be a consent or a waiver to or if any other breach or
        default in the performance by such other member of the same or any other obligations of such Member hereunder. Failure on the part of any Member to complain of any act or failure to act of the other Member or to declare the other Member in default, irrespective of how long such failure continues, shall not constitute a waiver by such member of its rights hereunder.

        Section 9.10   Binding Effect. Subject to the restrictions on transfers and encumbrances set forth herein, this Agreement shall inure to the benefit of and be binding upon the undersigned Members and their respective heirs, executors,. legal representatives, successors and assigns.
        Whenever, in this instrument, a reference to any Member is made, such reference shall be deemed to include a reference to the heirs, executors, legal representatives, and permitted assigns of such Member.

        Section 9.11   Benefits. Except as herein otherwise provided to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties signatory hereto, their personal representatives, heirs, successors and assigns.

         

        
            

            
                	
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        Section 9.12   Attorney’s Fees. In the event the Members are required to engage the services of legal counsel to enforce their rights under this Agreement, regardless of whether such action results in an actual lawsuit being filed, the prevailing Member shall be entitled to
        reasonable attorneys’ fees from the other Member. In the event of litigation, said attorneys’ fees shall include fees and costs, including costs of paralegals, both at trial and appeal, including bankruptcy actions.

        Section 9.13   No Third Party Beneficiaries. This Agreement is solely for the benefit of the Members. No person not a Member shall have any rights or privileges under this Agreement, either as a third-party beneficiary or otherwise.

        Section 9.14   Complete Agreement. This Agreement constitutes the entire understanding and agreement among the parties hereto and supersedes any prior understandings, whether written or oral, with respect to the subject matter hereof, and there are no agreements, understandings,
        restrictions, representations, or warranties among the parties other than those set forth herein provided for.

        Section 9.15   Time. Time is of the essence with respect to this Agreement.

         

         

        [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

         

        
            

            
                	
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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date above written.

        
            	
                        Witnesses:

                         

                        
                                                                                                                            

                         

                         

                        Print Name:
                                                                                                       

                         

                        
                                                                                                      
                                              

                         

                        Print
                        Name:                                                                                

                    	
                        FLORIDIAN FINANCIAL MORTGAGE, LLC, a Florida limited liability company

                         

                        By: FBC Mortgage, LLC                                                

                         

                        Its: Managing
                        Member                                                    

                         

                        By: /s/ S. Joe
                        Nunziata                                                    

                         

                        Print Name: S. Joe Nunziata                                           

                         

                        Its: Chief Executive Officer                                             

                         

                    
	
                        Witnesses:

                         

                        
                                                                                                                            

                         

                         

                        Print Name:
                                                                                                       

                        

                         

                        
                                                                                                                            

                         

                        Print
                        Name:                                                                                

                        

                    	
                        FBC MORTGAGE, LLC, a Florida limited liability company

                         

                        By: /s/ S. Joe
                        Nunziata                                                  

                        Print Name: S. Joe Nunziata                                          

                         

                        Its: Chief Executive Officer                                           

                         

                         

                         

                         

                         

                    
	
                        Witnesses:

                         

                        
                                                                                                                            

                         

                         

                        Print Name:
                                                                                                       

                         

                        
                                                                                                                            

                         

                        Print
                        Name:                                                                                

                    	
                        FLORIDIAN FINANCIAL GROUP, INC., a Florida corporation

                         

                        By: /s/ Thomas H. Dargan                                               

                         

                        Print Name: Thomas H. Dargan                                      

                         

                        Its:
                        President                                                                   

                         

                         

                    

        

         

         

        
            

            
                	
                            17

                        

            

             

            

        

         

        

        

        

        EXHIBIT "A"

        Initial Capital Contributions

        
            	
                        Member and

                        Address

                    	
                        Description 

                        of Property 

                        Contributed

                    	
                        Amount of 

                        Capital 

                        Contribution

                    	
                        Percentage 

                        Interest 

                        Contributed

                    
	
                         

                    	
                         

                    	
                         

                    	
                         

                    
	
                        FBC Mortgage, LLC

                        201 South Orange Avenue, Suite 1000

                        Orlando, Florida 32801

                    	
                        CASH

                    	
                        $37,230.00

                    	
                        51%

                    
	 	 	 	 
	
                        Floridian Financial Group, Inc.,

                        171 Timuacuan Boulevard

                        Lake Mary, Florida 32746

                    	
                        CASH

                    	
                        $35,770.00

                    	
                        49%

                    

        

         

         

        
            

            
                	
                            18EMPLOYMENT AGREEMENT

         

         

                  This Employment Agreement (the “Agreement”) is made as of this 20th day of March, 2006, by and between Floridian Bank (the “Bank”), and Keith A. Bulko (the “Executive”).

         

        WITNESSETH:

         

                  WHEREAS, the Bank desires to retain the services of and employ the Executive, and the Executive desires to provide services to the Bank, pursuant to the terms and conditions of this Agreement.

         

                  NOW, THEREFORE, in consideration of the promises and of the covenants and agreements herein contained, the Bank and the Executive covenant and agree as follows:

         

                  1.         Employment. Pursuant to the terms and conditions of this Agreement, the Bank agrees to employ the Executive and the Executive agrees to render services to the Bank as set forth herein.

         

                  2.         Position and Duties. During the term of this Agreement, the Executive shall serve as President and Senior Lender of the Bank, and shall undertake such duties, consistent with such titles, as may be assigned to him from
        time to time by the Board of Directors of the Bank (referred to as the “Board”), including the Chairman and Chief Executive Officer and/or serving on Board committees as required in the Bank’s bylaws and as appointed from time to time by the Board, keeping the Board informed of industry and regulatory developments regarding the Bank, coordinating with Bank personnel and third parties to the extent necessary to further the profitability and business of the Bank, and
        assisting in keeping the Bank in compliance with applicable laws and regulations. In performing his duties pursuant to this Agreement, the Executive shall devote his full business time, energy, skill and best efforts to promote the Bank and its business and affairs; provided that, subject to Sections 10, 12 and 13 of this Agreement, the Executive shall have the right to manage and pursue personal and family interests, and make passive investments in securities, real estate, and other
        assets, and also to participate in charitable and community activities and organizations, so long as such activities do not adversely affect the performance by Executive of his duties and obligations to the Bank.

         

                  3.         Term. The initial term of employment pursuant to this Agreement shall be for a period of three years, commencing on the date set forth above and expiring (unless sooner terminated as otherwise provided in this Agreement
        or unless otherwise renewed or extended as set forth herein) on the third anniversary of this Agreement, which date, including any earlier date of termination or any extended expiration date, shall be referred to as the “Expiration Date”. Subject to the provisions of Section 8 of this Agreement, the term of this Agreement and the employment of the Executive by the Bank hereunder shall be deemed automatically renewed for successive periods of one year commencing on the third
        anniversary date of this Agreement, unless either party gives the other written notice, at least 180 days prior to the end of the then

         

         

        

        

        

        term of the Agreement. After termination of the employment of the Executive for any reason whatsoever, the Executive shall continue to be subject to the provisions of Sections 10 through 17, inclusive, of this Agreement; provided, however, that the Executive shall not be subject to the provisions of Sections 12 or 13 where the employment of the Executive is terminated by the Executive for Good Reason (as
        defined in Section 8) or pursuant to Sections 8(e) or 8(f), or where the term of employment is not renewed pursuant to this Section 3.

         

                  4.         Compensation. During the term of this Agreement, the Bank shall pay or provide to the Executive as compensation for the services of the Executive set forth in Section 2 hereof:

         

                              (a)       A base annual salary of at least $150,000 payable in such periodic installments consistent with other employees of the Bank (such base salary to be subject to increase each year commencing with the first
        anniversary of the date of this Agreement by amount equal to at least 8% of the base salary for the prior twelve-month period); and

         

                              (b)       Such individual bonuses and other compensation to the Executive as may be authorized by the Board from time to time.

         

                  5.         Benefits and Insurance. The Bank shall provide to the Executive such medical, health, and life insurance as well as any other benefits as the Board shall determine from time to time. At a minimum, the Executive shall be
        entitled to (i) participate in all employee benefit plans offered to the Bank’s employees generally, and (ii) life insurance coverage (payable to such beneficiary as the Executive may designate from time to time). The Executive shall receive upon the opening of the Bank stock options exercisable for an amount equal to 2.8% of the outstanding shares of Bank common stock at the time the Bank opens for business, which shall be allocated to the Executive under the Bank’s
        Officers and Employees Stock Option Plan. The exercise price of the options shall be $10.00 per share, such stock options to be subject to the terms and conditions of the Bank’s stock option plan to be adopted by the Bank for its officers and employees. The Bank also shall pay (or reimburse the Executive) for the payment of a life insurance policy maintained by the Executive on his life (currently the annual premium on such policy is approximately $4,975). In addition, the Bank
        also shall implement a bank-owned life insurance policy for the Executive as soon as may be allowable, providing for the Executive to receive 35% of the highest salary and bonus paid to the Executive during his employment with the Bank for a period of 15 years following age 65 (such payment to provide for survivorship benefits to his estate in the event of his death) and subject to immediate vesting upon any change in control of the Bank and forfeiture of benefits upon the resignation
        by the Executive of his employment with the Bank or the termination of the Executive’s employment by the Bank for cause.

         

                  6.         Vacation. The Executive may take up to four weeks of vacation time as authorized by the Bank’s personnel policies and at such periods during each year as the Chairman and Chief Executive Officer and the Executive
        shall determine from time to time. The Executive shall be entitled to full compensation during such vacation periods.

         

         

        

        

        

                  7.         Reimbursement of Expenses; Automobile Allowance. The Bank shall reimburse the Executive for monthly club dues, assessments and expenses; and reasonable expenses incurred in connection with his employment hereunder subject
        to guidelines issued from time to time by the Board and upon submission of documentation in conformity with applicable requirements of federal income tax laws and regulations supporting reimbursement of such expenses. The Executive also shall be entitled to receive from the Bank a monthly automobile allowance of $750.

         

                  8.         Termination. The employment of the Executive may be terminated as follows:

         

                              (a)       By the Bank, by action taken by its Board, at any time and immediately upon written notice to the Executive if said discharge is for cause. In the notice of termination furnished to the Executive under this
        Section 8(a), the reason or reasons for said termination shall be given and, if no reason or reasons are given for said termination, said termination shall be deemed to be without cause and therefore termination pursuant to Section 8(f). Any one or more of the following conditions shall be deemed to be grounds for termination of the employment of the Executive for cause under this Section 8(a):

         

                                           (i)       If the Executive shall fail or refuse to comply with the obligations required of him as set forth in this Agreement or comply with
        the policies of the Bank established by the Board from time to time; provided, however, that for the first such failure or refusal, the Executive shall be given written warning (each providing at least a 10 day period for an opportunity to cure), and the second failure or refusal shall be grounds for termination for cause;

         

                                          (ii)       If the Executive shall have engaged in conduct involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, or any other
        conduct, which in any such case has adversely affected, or may adversely affect, the business or reputation of the Bank;

         

                                          (iii)      If the Executive shall have violated any banking law or regulation, memorandum of understanding, cease and desist order, or other agreement
        with any banking agency having jurisdiction over the Bank;

         

                                          (iv)      If the Executive shall have become subject to continuing intemperance in the use of alcohol or drugs which has adversely affected, or may
        adversely affect, the business or reputation of the Bank, or has been convicted of a crime involving moral turpitude; or

         

                                          (v)       If the Executive shall have filed, or had filed against him, any petition under the federal bankruptcy laws or any state insolvency
        laws.

         

                                          In the event of termination for cause, the Bank shall pay the Executive only salary, vacation, and bonus amounts accrued and unpaid as of the effective date of termination.

         

         

        

        

        

                              (b)       By the Executive upon the lapse of 30 days following written notice by the Executive to the Bank of termination of his employment hereunder for Good Reason (as defined below), which notice shall reasonably
        describe the Good Reason for which the Executive’s employment is being terminated; provided, however, that the Bank shall have the opportunity to cure such Good Reason, during such 30 day period, and the Executive’s employment shall continue in effect during such time. If such Good Reason shall be cured by the Bank during such time, the Executive’s employment and the obligations of the Bank hereunder shall not terminate as a result of the notice which has been given
        with respect to such Good Reason. Cure of any Good Reason with or without notice from the Executive shall not relieve the Bank from any obligations to the Executive under this Agreement or otherwise and shall not affect the Executive’s rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any material breach by the Bank of any provision of this Agreement, any significant
        reduction, without the Executive’s prior written consent, in the duties, responsibilities, authority or title of the Executive as an officer of the Bank, or if the Executive’s employment is terminated by the Bank for any reason other than cause.

         

                              If the Executive’s employment is terminated by the Executive for Good Reason, the Bank shall, for a period of 12 months after said termination continue to pay to the Executive the base annual salary in effect under Section 4(a) on the date of said
        termination (or, if greater, the highest annual salary in effect for the Executive within the 36 month period prior to said termination) plus an annual amount equal to any bonus paid by the Bank to the Executive during the 12 month period prior to said termination.

         

                              (c)       By the Executive upon the lapse of 30 days following written notice by the Executive to the Bank of his resignation from the Bank for other than Good Reason; provided, however, that the Bank, in its discretion,
        may cause such termination to be effective at any time during such 30-day period. If the Executive’s employment is terminated because of the Executive’s resignation, the Bank shall be obligated to pay to the Executive any salary, vacation, and bonus amounts accrued and unpaid as of the effective date of such resignation.

         

                              (d)       If the Executive’s employment is terminated by the death or disability (as defined in the disability plan maintained by the Bank) of the Executive, this Agreement shall automatically terminate, and the
        Bank shall be obligated to pay to the Executive or the Executive’s estate any salary, vacation, and bonus amounts accrued and unpaid at the date of disability or death.

         

                              (e)       By the Executive or the Bank upon the closing of a Change of Control in which case the Executive shall be entitled to receive promptly thereafter an amount equal to one and one-half (11⁄2) times the average
        base annual salary plus the average annual bonus received by the Executive during the three year period prior to such termination. For purposes of this Agreement, a Change of Control shall mean a merger or acquisition in which the Bank is not the surviving entity, or the acquisition by any individual or group of beneficial ownership of more than 50% of the outstanding shares of Bank common stock (excluding any transaction which results in the formation for the Bank of a bank holding
        company owned by substantially all of

         

         

        

        

        

        the former shareholders of the Bank). The term “group” and the concept of beneficial ownership shall have such meanings ascribed thereto as set forth in the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the regulations and rules thereunder.

         

                              (f)        By the Bank, by action taken by its Board, at any time if said discharge is without cause. If the Executive’s employment is terminated by the Bank without cause, the Bank shall, for a period of 18
        months after said termination continue to pay to the Executive the base annual salary in effect under Section 4(a) on the date of said termination (or, if greater, the highest annual salary in effect for the Executive within the 36 month period prior to said termination) plus an annual amount equal to any bonus paid by the Bank to the Executive during the 12 month period prior to said termination.

         

                  9.         Notice. All notices permitted or required to be given to either party under this Agreement shall be in writing and shall be deemed to have been given (a) in the case of delivery, when addressed to the other party as set
        forth at the end of this Agreement and delivered to said address, (b) in the case of mailing, three days after the same has been mailed by certified mail, return receipt requested, and deposited postage prepaid in the U.S. Mails, addressed to the other party at the address as set forth at the end of this Agreement, and (c) in any other case, when actually received by the other party. Either party may change the address at which said notice is to be given by delivering notice of such to
        the other party to this Agreement in the manner set forth herein.

         

                  10.       Confidential Matters. The Executive is aware and acknowledges that the Executive shall have access to confidential information by virtue of his employment. The Executive agrees that, during the period of time the Executive is
        retained to provide services to the Bank, and thereafter subsequent to the termination of Executive’s services to the Bank for any reason whatsoever, the Executive will not release or divulge any confidential information whatsoever relating to the Bank or its business, to any other person or entity without the prior written consent of the Bank. Confidential information does not include information that is available to the public or which becomes available to the public other than
        through a breach of this Agreement on the part of the Executive. Also, the Executive shall not be precluded from disclosing confidential information in furtherance of the performance of his services to the Bank or to the extent required by any legal proceeding.

         

                  11.       Injunction Without Bond. In the event there is a breach or threatened breach by the Executive of the provisions of Sections 10, 12, or 13, the Bank shall be entitled to an injunction without bond to restrain such breach or
        threatened breach, and the prevailing party in any such proceeding will be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees in connection therewith. Nothing herein shall be construed as prohibiting the Bank from pursuing such other remedies available to it for any such breach or threatened breach including recovery of damages from the Executive.

         

                  12.       Noncompetition. The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one year subsequent to the termination of Executive’s services to
        the Bank for any reason whatsoever

         

         

        

        

        

        (except where the employment of the Executive is terminated by the Executive for Good Reason or pursuant to Sections 8(e) or 8(f), or where the term of employment is not renewed pursuant to Section 3), Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or
        financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank; provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of Bank common stock
        owned by the Executive at the time of termination of employment.

         

                  13.       Nonsolicitation; Noninterference. The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one year subsequent to the termination of
        Executive’s services to the Bank for any reason whatsoever (except where such termination is by the Executive for Good Reason or pursuant to Sections 8(e) or 8(f), or where the term of employment is not renewed pursuant to Section 3), the Executive will not (a) solicit for employment by Executive, or anyone else, or employ any employee of the Bank or any person who was an employee of the Bank within 12 months prior to such solicitation of employment; (b) induce, or attempt to
        induce, any employee of the Bank to terminate such employee’s employment; (c) induce, or attempt to induce, anyone having a business relationship with the Bank to terminate or curtail such relationship or, on behalf of himself or anyone else, compete with the Bank; (d) knowingly make any untrue statement concerning the Bank or its directors or officers to anyone; or (e) permit anyone controlled by the Executive, or any person acting on behalf of the Executive or anyone controlled
        by an employee of the Executive to do any of the foregoing.

         

                  14.       Remedies. The Executive agrees that the restrictions set forth in this Agreement are fair and reasonable. The covenants set forth in this Agreement are not dependent covenants and any claim against the Bank, whether arising out of
        this Agreement or any other agreement or contract between the Bank and Executive, shall not be a defense to a claim against Executive for a breach or alleged breach of any of the covenants of Executive contained in this Agreement. It is expressly understood by and between the parties hereto that the covenants contained in this Agreement shall be deemed to be a series of separate covenants. The Executive understands and agrees that if any of the separate covenants are judicially held
        invalid or unenforceable, such holding shall not release him from his obligations under the remaining covenants of this Agreement. If in any judicial proceedings, a court shall refuse to enforce any or all of the separate covenants because taken together they are more extensive (whether as to geographic area, duration, scope of business or otherwise) than necessary to protect the business and goodwill of the Bank, it is expressly understood and agreed between the parties hereto that
        those separate covenants which, if eliminated or restricted, would permit the remaining separate covenants or the restricted separate covenant to be enforced in such proceeding shall, for the purposes of such proceeding, be eliminated from the provisions of this Agreement or restriction, as the case may be.

         

         

        

        

        

                  15.       Invalid Provision. In the event any provision should be or become invalid or unenforceable, such facts shall not affect the validity and enforceability of any other provision of this Agreement. Similarly, if the scope of any
        restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then any such restriction or covenant shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any judicial proceeding brought to enforce such restriction or covenant.

         

                  16.       Governing Law; Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida. The sole and exclusive venue for any action arising out of this Agreement shall be a federal or
        state court situated in Orange County, Florida, and the parties to this Agreement agree to be subject to the personal jurisdiction of such Court and that service on each party shall be valid if served by certified mail, return receipt requested or hand delivery.

         

                  17.       Attorneys’ Fees and Costs. In the event a dispute arises between the parties under this Agreement and suit is instituted, the prevailing party shall be entitled to recover his or its costs and attorneys’ fees from the
        nonprevailing party. As used herein, costs and attorneys’ fees include any costs and attorneys’ fees in any appellate proceeding.

         

                  18.       Binding Effect. The rights and obligations of the parties under this Agreement shall inure to the benefit of and shall be binding upon their respective successors and legal representatives.

         

                  19.       Effect on Other Agreements. This Agreement and the termination thereof shall not affect any other agreement between the Executive and the Bank, and the receipt by the Executive of benefits thereunder.

         

                  20.       Miscellaneous. The rights and duties of the parties hereunder are personal and may not be assigned or delegated without the prior written consent of the other party to this Agreement. The captions used herein are solely for the
        convenience of the parties and are not used in construing this Agreement. Time is of the essence of this Agreement and the performance by each party of its or his duties and obligations hereunder.

         

                  21.       Complete Agreement. This Agreement constitutes the complete agreement between the parties hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein. This Agreement
        may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change or modification.

         

        

        

        

                  IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

         

        
            	
                         
                    	
                        FLORIDIAN BANK
                    
	 	 
	 	By:  	/s/ Thomas H. Dargan, Jr.
	 	 	Thomas H. Dargan, Jr.
	 	 	Chairman/CEO
	 	 	 
	 	“EXECUTIVE”
	 	 	 
	 	/s/ Keith A. Bulko
	 	Keith A. Bulko
	 	Address: 	63 Coquina Way
	 	 	Ormond Beach, FL 32174

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