Document:

Form of Indemnification Agreement

 Exhibit 10.21 

INDEMNIFICATION AGREEMENT 

This Indemnification Agreement (“Agreement”), dated as of
[            ], is by and between LM FUNDING AMERICA, INC., a Delaware corporation (the “Company”), and [NAME] (the “Indemnitee”). 

WHEREAS, [Indemnitee is a director or officer of the Company/the Company expects Indemnitee to join the Company as a director or
officer]; 
 WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted
against directors and officers of public companies; 
 WHEREAS, the board of directors of the Company (the “Board”)
has determined that enhancing the ability of the Company to retain and attract as directors and officers the most capable persons is in the best interests of the Company and that the Company therefore should seek to assure such persons that
indemnification and insurance coverage is available; and 
 WHEREAS, in recognition of the need to provide Indemnitee with
substantial protection against personal liability, in order to procure Indemnitee’s [continued] service as a director or officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order
to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws (collectively, the “Constituent
Documents”), any change in the composition of the Board or any change in control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancement
of Expenses (as defined in Section 1(f) below) to, Indemnitee as set forth in this Agreement and to the extent insurance is maintained for the [continued] coverage of Indemnitee under the Company’s directors’ and officers’
liability insurance policies. 
 NOW, THEREFORE, in consideration of the foregoing and the Indemnitee’s agreement to [continue
to] provide services to the Company, the parties agree as follows: 
 1. Definitions. For purposes of this Agreement, the following terms shall have
the following meanings: 
 (a) “Beneficial Owner” has the meaning given to the term “beneficial owner” in Rule
13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 
 (b) “Change in
Control” means the occurrence after the date of this Agreement of any of the following events: 

  
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 (i) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the Company’s then outstanding Voting Securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the
aggregate number of outstanding shares of securities entitled to vote generally in the election of directors; 
 (ii) the consummation of a
reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the Beneficial Owners of the Voting Securities of the Company immediately prior to such transaction beneficially own, directly
or indirectly, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the entity resulting from such transaction; 

(iii) during any period of two consecutive years, not including any period prior to the execution of this Agreement, individuals who at the
beginning of such period constituted the Board (including for this purpose any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board; or 

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the assets of the Company and its Subsidiaries. 
 (c) “Claim”
means: 
 (i) any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, whether civil,
criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; or 
 (ii) any
inquiry, hearing or investigation that the Indemnitee determines might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism. 

(d) “Delaware Court” shall have the meaning ascribed to it in Section 9(e) below. 

(e) “Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee. 

  
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 (f) “Expenses” means any and all expenses, including attorneys’ and
experts’ fees, court costs, transcript costs, travel expenses, duplicating, printing and binding costs, telephone charges, and all other costs and expenses incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Claim, including without limitation
the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 5 only, Expenses incurred by Indemnitee in connection with the interpretation,
enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. 

(g) “Expense Advance” means any payment of Expenses advanced to Indemnitee by the Company pursuant to Section 4
or Section 5 hereof. 
 (h) “Indemnifiable Event” means any event or occurrence, whether occurring before, on
or after the date of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any of its Subsidiaries, or is or was serving at the request of the Company or any of its Subsidiaries as a
director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise (collectively with the Company, “Enterprise”) or by
reason of an action or inaction by Indemnitee in any such capacity (whether or not serving in such capacity at the time any Loss is incurred for which indemnification can be provided under this Agreement). 

(i) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and
neither presently performs, nor in the past five (5) years has performed, services for either: (i) the Company or Indemnitee (other than in connection with matters concerning Indemnitee under this Agreement or of other indemnitees under
similar agreements) or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. 

(j) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal
or other), ERISA excise taxes, amounts paid or payable in settlement, including any interest, assessments, any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement and all
other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim. 

  
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 (k) “Person” means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity and includes the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act. 

(l) “Standard of Conduct Determination” shall have the meaning ascribed to it in Section 9(b) below. 

(m) “Subsidiaries” means any and all Persons of which the Company owns or controls, either directly or indirectly, fifty
percent (50%) or more of the outstanding shares of stock normally entitled to vote for the election of directors or of comparable equity participation and voting power. 

(n) “Voting Securities” means any securities of the Company that vote generally in the election of directors. 

2. Services to the Company. Indemnitee agrees to [serve/continue to serve] as a director or officer of the Company for so long as Indemnitee is duly
elected or appointed or until Indemnitee tenders his or her resignation or is no longer serving in such capacity. This Agreement shall not be deemed an employment agreement between the Company (or any of its Subsidiaries or Enterprise) and
Indemnitee. Indemnitee specifically acknowledges that his or her employment with and/or service to the Company or any of its Subsidiaries or Enterprise is at will and the Indemnitee may be discharged at any time for any reason, with or without
cause, except as may be otherwise provided in any written employment agreement between Indemnitee and the Company (or any of its Subsidiaries or Enterprise), other applicable formal severance policies duly adopted by the Board or, with respect to
service as a director or officer of the Company, by the Company’s Constituent Documents or Delaware law. This Agreement shall continue in force after Indemnitee has ceased to serve as a director or officer of the Company or, at the request of
the Company, of any of its Subsidiaries or Enterprise, as provided in Section 12 hereof. 
 3. Indemnification. Subject to
Section 9 and Section 10 of this Agreement, the Company shall indemnify Indemnitee, to the fullest extent permitted by the laws of the State of Delaware in effect on the date hereof, or as such laws may from time to time
hereafter be amended to increase the scope of such permitted indemnification, against any and all Losses if Indemnitee was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim by reason
of or arising in part out of an Indemnifiable Event, including, without limitation, Claims brought by or in the right of the Company, Claims brought by third parties, and Claims in which the Indemnitee is solely a witness. 

  
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 4. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company, prior to the
final disposition of any Claim by final adjudication to which there are no further rights of appeal, of any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any Claim arising out of an Indemnifiable Event.
Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within thirty (30) days after any request by Indemnitee, the Company shall,
in accordance with such request, (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses. In connection with any
request for Expense Advances, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. Indemnitee hereby undertakes to
repay such amounts paid, advanced, or reimbursed by the Company for such Expenses only if, and to the extent that, it is ultimately determined in a decision by a court of competent jurisdiction from which no appeal can be taken that Indemnitee is
not entitled to indemnification hereunder. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon. 

5. Indemnification for Expenses in Enforcing Rights. To the fullest extent allowable under applicable law, the Company shall also indemnify against,
and, if requested by Indemnitee, shall advance to Indemnitee subject to and in accordance with Section 4, any Expenses actually and reasonably paid or incurred by Indemnitee in connection with any action or proceeding by Indemnitee for
(a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Claims
relating to Indemnifiable Events, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company. However, in the event that Indemnitee is ultimately determined not to be entitled to such
indemnification or insurance recovery, as the case may be, then all amounts advanced under this Section 5 shall be repaid. Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made
that such action brought by Indemnitee was frivolous or not made in good faith. 
 6. Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of any Losses in respect of a Claim related to an Indemnifiable Event but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. 
 7. Notification and Defense of Claims. 

(a) Notification of Claims. Indemnitee shall notify the Company in writing as soon as practicable of any Claim which could relate to an
Indemnifiable Event or for which Indemnitee could seek Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Claim. The failure by Indemnitee to timely
notify the Company hereunder shall not relieve the Company from any liability hereunder unless the Company’s ability to participate in the defense of such claim was materially and adversely affected by such failure/except that the Company shall
not be liable to indemnify Indemnitee under this Agreement with respect to any judicial award in a Claim related to an Indemnifiable Event if the Company was not given a reasonable and timely opportunity to participate at its expense in the defense
of such action. 

  
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 (b) Defense of Claims. The Company shall be entitled to participate in the defense of any
Claim relating to an Indemnifiable Event at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the
Company to Indemnitee of its election to assume the defense of any such Claim, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently directly incurred by Indemnitee in connection with
Indemnitee’s defense of such Claim other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own legal counsel in such Claim, but all Expenses related to such counsel incurred
after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided, however, that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company,
(ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Claim, (iii) after a Change in Control, Indemnitee’s employment of its own counsel has been
approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Claim, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any such Claim) and all Expenses related to such separate counsel shall be borne by the Company. 
 8. Procedure
upon Application for Indemnification. In order to obtain indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Claim. Indemnification shall be made insofar as the Company determines
Indemnitee is entitled to indemnification in accordance with Section 9 below. 
 9. Determination of Right to Indemnification. 

(a) Mandatory Indemnification; Indemnification as a Witness. 

(i) To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Claim relating to an Indemnifiable
Event or any portion thereof or in defense of any issue or matter therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified against all Losses relating to such Claim in accordance with Section 3 to the
fullest extent allowable by law. 

  
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 (ii) To the extent that Indemnitee’s involvement in a Claim relating to an Indemnifiable
Event is to prepare to serve and serve as a witness, and not as a party, the Indemnitee shall be indemnified against all Losses incurred in connection therewith to the fullest extent allowable by law. 

(b) Standard of Conduct. To the extent that the provisions of Section 9(a) are inapplicable to a Claim related to an Indemnifiable
Event that shall have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under Delaware law that is a legally required condition to indemnification of Indemnitee hereunder against
Losses relating to such Claim and any determination that Expense Advances must be repaid to the Company (a “Standard of Conduct Determination”) shall be made as follows: 

(i) if no Change in Control has occurred, (A) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board,
(B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum or (C) if there are no such Disinterested Directors, by Independent Counsel in a written opinion
addressed to the Board, a copy of which shall be delivered to Indemnitee; and 
 (ii) if a Change in Control shall have occurred,
(A) if the Indemnitee so requests in writing, by a majority vote of the Disinterested Directors, even if less than a quorum of the Board or (B) otherwise, by Independent Counsel in a written opinion addressed to the Board, a copy of which
shall be delivered to Indemnitee. 
 The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within thirty (30) days of such request, any and all Expenses incurred by Indemnitee in cooperating with the person or persons making such Standard of Conduct Determination. 

(c) Making the Standard of Conduct Determination. The Company shall use its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 9(b) to be made as promptly as practicable. If the person or persons designated to make the Standard of Conduct Determination under Section 9(b) shall not have made a determination within
thirty (30) days after the later of (A) receipt by the Company of a written request from Indemnitee for indemnification pursuant to Section 8 (the date of such receipt being the “Notification Date”) and
(B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such thirty (30)-day period may be
extended for a reasonable time, not to exceed an additional thirty (30) days, if the person or persons making such determination in good faith requires such additional time to obtain or evaluate information relating thereto. Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of any Claim. 

  
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 (d) Payment of Indemnification. If, in regard to any Losses: 

(i) Indemnitee shall be entitled to indemnification pursuant to Section 9(a); 

(ii) no Standard Conduct Determination is legally required as a condition to indemnification of Indemnitee hereunder; or 

(iii) Indemnitee has been determined or deemed pursuant to Section 9(b) or Section 9(c) to have satisfied the Standard
of Conduct Determination, 
 then the Company shall pay to Indemnitee, within five (5) business days after the later of (A) the Notification Date
or (B) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) is satisfied, an amount equal to such Losses. 

(e) Selection of Independent Counsel for Standard of Conduct Determination. If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 9(b)(i), the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel
so selected. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 9(b)(ii), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable, may, within five (5) business days after receiving written notice of selection from the other, deliver to the other a
written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in
Section 1(i), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is
properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit; and
(ii) the non-objecting party may, at its option, select an alternative Independent Counsel and give written notice to the other party advising such other party of the identity of the alternative Independent Counsel so selected, in which case
the provisions of the two immediately preceding sentences, the introductory clause of this sentence and numbered clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause
(ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 9(e) to make the Standard of Conduct
Determination shall have been selected within twenty (20) days after the Company gives its initial notice pursuant to the first sentence of this Section 9(e) or Indemnitee gives its initial notice pursuant to the second sentence of
this Section 9(e), as the case may be, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware (“Delaware Court”) to resolve any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and/or to appoint as Independent Counsel a person to be selected by the Court or such other person as the Court shall designate, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent
Counsel’s determination pursuant to Section 9(b). 

  
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 (f) Presumptions and Defenses. 

(i) Indemnitee’s Entitlement to Indemnification. In making any Standard of Conduct Determination, the person or persons making
such determination shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the Company shall have the burden of proof to overcome that presumption and establish that Indemnitee is not so
entitled. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in the Delaware Court. No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not
satisfied any applicable standard of conduct may be used as a defense to any legal proceedings brought by Indemnitee to secure indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that
Indemnitee has not met any applicable standard of conduct. 
 (ii) Reliance as a Safe Harbor. For purposes of this Agreement, and
without creating any presumption as to a lack of good faith if the following circumstances do not exist, Indemnitee shall be deemed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to
Indemnitee by the officers or employees of the Company or any of its Subsidiaries in the course of their duties, or by committees of the Board or by any other Person (including legal counsel, accountants and financial advisors) as to matters
Indemnitee reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any
director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder. 

  
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 (iii) No Other Presumptions. For purposes of this Agreement, the termination of any Claim
by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable standard of conduct or have any
particular belief, or that indemnification hereunder is otherwise not permitted. 
 (iv) Defense to Indemnification and Burden of
Proof. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Losses incurred in defending against a Claim related to an Indemnifiable Event in
advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any related Standard of Conduct Determination, the burden of
proving such a defense or that the Indemnitee did not satisfy the applicable standard of conduct shall be on the Company. 
 10. Exclusions from
Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated to: 
 (a) indemnify or
advance funds to Indemnitee for Expenses or Losses with respect to proceedings initiated by Indemnitee, including any proceedings against the Company or its directors, officers, employees or other indemnitees and not by way of defense, except: 

(i) proceedings referenced in Section 5 above (unless a court of competent jurisdiction determines that each of the material
assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous); or 
 (ii) where the Company has joined in or
the Board has consented to the initiation of such proceedings. 
 (b) indemnify Indemnitee if a final decision by a court of competent
jurisdiction determines that such indemnification is prohibited by applicable law. 
 (c) indemnify Indemnitee for the disgorgement of
profits arising from the purchase or sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar successor statute. 

(d) indemnify or advance funds to Indemnitee for Indemnitee’s reimbursement to the Company of any bonus or other incentive-based or
equity-based compensation previously received by Indemnitee or payment of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under
Section 304 of the Sarbanes-Oxley Act of 2002 in connection with an accounting restatement of the Company or the payment to the Company of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of
the Sarbanes-Oxley Act). 

  
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 11. Settlement of Claims. The Company shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any threatened or pending Claim related to an Indemnifiable Event effected without the Company’s prior written consent, which shall not be unreasonably withheld; provided, however, that if a Change in Control has
occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if an Independent Counsel has approved the settlement. The Company shall not settle any Claim related to an Indemnifiable Event in any manner that
would impose any Losses on the Indemnitee without the Indemnitee’s prior written consent. 
 12. Duration. All agreements and obligations of the
Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company (or is serving at the request of the Company as a director, officer, employee, member, trustee or agent of another Enterprise) and
shall continue thereafter (i) so long as Indemnitee may be subject to any possible Claim relating to an Indemnifiable Event (including any rights of appeal thereto) and (ii) throughout the pendency of any proceeding (including any rights
of appeal thereto) commenced by Indemnitee to enforce or interpret his or her rights under this Agreement, even if, in either case, he or she may have ceased to serve in such capacity at the time of any such Claim or proceeding. 

13. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents,
the General Corporation Law of the State of Delaware, any other contract or otherwise (collectively, “Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater
right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to
indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. 
 14.
Liability Insurance. For the duration of Indemnitee’s service as a director or officer of the Company, and thereafter for so long as Indemnitee shall be subject to any pending Claim relating to an Indemnifiable Event, the Company shall
use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to continue to maintain in effect policies of directors’ and officers’ liability insurance providing coverage
that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. In all policies of directors’ and officers’ liability
insurance maintained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, if Indemnitee is a
director, or of the Company’s officers, if Indemnitee is an officer (and not a director) by such policy. Upon request, the Company will provide to Indemnitee copies of all directors’ and officers’ liability insurance applications,
binders, policies, declarations, endorsements and other related materials. 

  
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 15. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment
to Indemnitee in respect of any Losses to the extent Indemnitee has otherwise received payment under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise of the amounts otherwise indemnifiable by the Company
hereunder. 
 16. Subrogation. In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee. Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights. 
 17. Amendments. No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver
shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy
hereunder shall constitute a waiver thereof. 
 18. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company and its
Subsidiaries), assigns, spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial
part of the business and/or assets of the Company and its Subsidiaries, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. No such assumption and agreement shall relieve the Company of any of its obligations hereunder, and this Agreement shall not otherwise be assignable by the Company. 

19. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any portion thereof)
are held by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Upon such determination that any term or other
provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

  
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 20. Notices. All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, by postage prepaid, certified or registered mail: 

(a) if to Indemnitee, to the address set forth on the signature page hereto. 

(b) if to the Company, to: 
 LM
Funding America, Inc. 
 Attn: [Chief Financial Officer] 

302 Knights Run Avenue, Suite 1000 

Tampa, FL 33602 
 Notice of change of address
shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing. 

21. Governing Law and Forum. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out
of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement and (c) waive, and agree not to plead or make, any claim that the Delaware Court lacks venue or that any such action or proceeding brought in the Delaware Court has been
brought in an improper or inconvenient forum. 
 22. Headings. The headings of the sections and paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof. 
 23.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement. Any facsimile or electronically
transmitted copies hereof or signature hereon shall, for all purposes, be deemed originals. 

  
 13 

 [SIGNATURE PAGE FOLLOWS] 

  
 14 

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

			
	
	LM FUNDING AMERICA, INC.
		
	 By:
		  

		
	 Name:
		  

		
	 Title:
		  

	
	INDEMNITEE
		
	 By:
		  

		
	 Name:
		  

		
	 Title:
		  

		
	 Address:
		  

	
	  

 [SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT] 

  
 15EXHIBIT 10.2

 

LOAN AGREEMENT

This Agreement dated as of December 31, 2008, is between Bank of America, N.A. (the "Bank") and MEXCO ENERGY CORPORATION, a Colorado corporation ("Mexco") and FORMAN ENERGY CORPORATION, a New York corporation (“Forman,” and together with Mexco, “Borrowers” or individually, a “Borrower”).

	1.	FACILITY NO. 1: LINE OF CREDIT AMOUNT AND TERMS

	1.1	Line of Credit Amount.

	(a)	During the availability period described below, the Bank will provide a line of credit to the Borrowers. The amount of the line of credit (the "Facility No. 1 Commitment") is the lesser of (i) FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), or (ii) the Borrowing Base as determined by Bank from time to time in accordance with this Agreement.

	(b)	This is a revolving line of credit. Subject to the terms hereof, during the availability period, the Borrowers may repay principal amounts and reborrow them.

	1.2	Availability Period.

The line of credit is available between the date of this Agreement and October 31, 2010, or such earlier date as the availability may terminate as provided in this Agreement (the "Facility No. 1 Expiration Date").

	1.3	Borrowing Base.

The “Borrowing Base” is the amount of the loan value which Bank assigns, in the exercise of its sole discretion, to the collateral pledged by Borrowers to the Bank as security for Facility No. 1. The Borrowing Base is initially set at the amount of $4,900,000, but may be redetermined at least annually by Bank and at any time that it appears to the Bank, in its sole discretion, that there has been a material change in the value of the collateral securing Borrowers’ obligations to the Bank under this Agreement. In the event that the unpaid principal under this facility shall, at any time, be in excess of the Borrowing Base as a result of any Borrowing Base redetermination made by the Bank hereunder, Borrower shall, within fifteen (15) days thereafter (a) by instruments satisfactory in form and substance to the Bank, provide the Bank with additional collateral with value in an amount satisfactory to the Bank in order to increase the Borrowing Base by an amount at least equal to such excess, or (b) prepay the principal outstanding under this facility in an amount at least equal to such excess.

	1.4	Repayment Terms.

	(a)	The Borrowers will pay interest on January 5, 2009, and then on the same day of each month thereafter until payment in full of any principal outstanding under this facility.

	(b)	The Borrowers will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility No. 1 Expiration Date.

	(c)	The Borrowers may prepay the loan in full or in part at any time. The prepayment will be applied to the most remote payment of principal due under this Agreement.

	
1.5

	
Interest Rate.

	(a)	The interest rate is a rate per year equal to the lesser of (i) the BBA LIBOR Daily Floating Rate, plus 2.50 percentage points, or (ii) the maximum lawful rate of interest permitted under applicable usury laws, now or hereafter enacted (the "Maximum Rate").

 

	(b)	The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest equal to the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) as determined for each banking day at approximately 11:00 a.m. London Time two (2) London Banking Days prior to the date in question, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a one-month term, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and regulatory costs. If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars.

	2.	FEES AND EXPENSES

	2.1	Unused Commitment Fee.

Borrowers shall pay to the Bank an unused commitment fee (the “Unused Commitment Fee”) in an amount equal to one half of one percent (.50%) times the daily average of the unadvanced amount of the Facility No. 1 Commitment. Such Unused Commitment Fee shall be calculated on the basis of a year consisting of 360 days. The Unused Commitment Fee shall be payable quarterly in arrears on the last day of each calendar quarter beginning March 31, 2009, with the first payment being for the period from the date of this Agreement through March 31, 2009, and with the final fee payment due on the Facility No. 1 Expiration Date for any period then ending for which the Unused Commitment Fee shall not have been theretofore paid. In the event the Facility No. 1 Expiration Date terminates on any date prior to the end of such quarterly period, Borrowers shall pay to the Bank on the date of such termination, the total Unused Commitment Fee due for the period in which such termination occurred.

	2.2	Expenses.

The Borrowers agree to immediately repay the Bank for expenses that include, but are not limited to, filing, recording and search fees, appraisal fees, title report fees, and documentation fees.

	2.3	Reimbursement Costs.

	(a)	The Borrowers agree to reimburse the Bank for any expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement. Expenses include, but are not limited to, reasonable attorneys' fees, including any allocated costs of the Bank's in-house counsel to the extent permitted by applicable law.

	(b)	The Borrowers agree to reimburse the Bank for the cost of periodic field examinations of the Borrowers’ books, records and collateral, and appraisals of the collateral, at such intervals as the Bank may reasonably require. The actions described in this paragraph may be performed by employees of the Bank or by independent appraisers.

	2.4	No Excess Fees.

Notwithstanding anything to the contrary in this Section 2, in no event shall any sum payable under this Section 2 (to the extent, if any, constituting interest under applicable laws), together with all other amounts constituting interest under applicable laws and payable in connection with the credit evidenced hereby, exceed the amount of interest computed at the Maximum Rate.

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	3.	COLLATERAL

	3.1	Real and Personal Property.

The Borrowers’ obligations to the Bank under this Agreement will be secured by liens covering Mexco’s interest in the oil and gas real and personal property collateral described in the Deed of Trust executed by Mexco and by liens covering Mexco’s interest in all of the issued and outstanding capital stock of Forman.

 

		4.	DISBURSEMENTS, PAYMENTS AND COSTS

		4.1	Disbursements and Payments.

	(a)	Each payment by the Borrowers will be made in U.S. Dollars and immediately available funds by debit to a deposit account, as described in this Agreement or otherwise authorized by the Borrowers. For payments not made by direct debit, payments will be made by mail to the address shown on the Borrowers’ statement or at one of the Bank’s banking centers in the United States, or by such other method as may be permitted by the Bank.

	(b)	The Bank may honor instructions for advances or repayments given by the Borrowers (if an individual), or by any one of the individuals authorized to sign loan agreements on behalf of the Borrowers, or any other individual designated by any one of such authorized signers (each an “Authorized Individual”).

	(c)	For any payment under this Agreement made by debit to a deposit account, the Borrowers will maintain sufficient immediately available funds in the deposit account to cover each debit. If there are insufficient immediately available funds in the deposit account on the date the Bank enters any such debit authorized by this Agreement, the Bank may reverse the debit.

		(d)	Each disbursement by the Bank and each payment by the Borrowers will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrowers to sign one or more promissory notes.

	(e)	Prior to the date each payment of principal and interest and any fees from the Borrowers becomes due (the "Due Date"), the Bank will mail to the Borrowers a statement of the amounts that will be due on that Due Date (the "Billed Amount"). The calculations in the bill will be made on the assumption that no new extensions of credit or payments will be made between the date of the billing statement and the Due Date, and that there will be no changes in the applicable interest rate. If the Billed Amount differs from the actual amount due on the Due Date (the "Accrued Amount"), the discrepancy will be treated as follows:

		(i)	If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy. The Borrowers will not be in default by reason of any such discrepancy.

		(ii)	If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the discrepancy.

Regardless of any such discrepancy, interest will continue to accrue based on the actual amount of principal outstanding without compounding. The Bank will not pay the Borrowers’ interest on any overpayment.

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		4.2	Telephone and Telefax Authorization.

	(a)	The Bank may honor telephone or telefax instructions for advances or repayments given, or purported to be given, by any one of the Authorized Individuals.

	(b)	The Borrowers will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank reasonably believes are made by any Authorized Individual. This paragraph will survive this Agreement's termination, and will benefit the Bank and its officers, employees, and agents.

		4.3	Direct Debit.

The Borrowers agree that on the Due Date the Bank will debit the Billed Amount from deposit account number 0035xxxxxxxx owned by the Borrowers, or such other of the Borrowers’ accounts with the Bank as designated in writing by the Borrowers (the "Designated Account"). The Borrowers may terminate this Direct Debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement.

		4.4	Banking Days.

Unless otherwise provided in this Agreement, a banking day is a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close, or are in fact closed, in the state where the Bank's lending office is located, and, if such day relates to amounts bearing interest at an offshore rate (if any), means any such day on which dealings in dollar deposits are conducted among banks in the offshore dollar interbank market. All payments and disbursements which would be due on a day which is not a banking day will be due on the next banking day. All payments received on a day which is not a banking day will be applied to the credit on the next banking day.

		4.5	Interest Calculation.

Except as otherwise stated in this Agreement, all interest and fees, if any, will be computed on the basis of a 360-day year and the actual number of days elapsed. This results in more interest or a higher fee than if a 365-day year is used. Installments of principal which are not paid when due under this Agreement shall continue to bear interest until paid.

		4.6	Default Rate.

Upon the occurrence of any default or after maturity or after judgment has been rendered on any obligation under this Agreement, all amounts outstanding under this Agreement, including any interest, fees, or costs which are not paid when due, will at the option of the Bank bear interest at a rate which is the lesser of (i) the Maximum Rate, or (ii) 4.0 percentage point(s) higher than the rate of interest otherwise provided under this Agreement. This may result in compounding of interest. This will not constitute a waiver of any default.

		5.	CONDITIONS

Before the Bank is required to extend any credit to the Borrowers under this Agreement, it must receive any documents and other items it may reasonably require, in form and content acceptable to the Bank, including any items specifically listed below.

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		5.1	Authorizations.

If the Borrowers or any guarantor is anything other than a natural person, evidence that the execution, delivery and performance by the Borrowers and/or such guarantor of this Agreement and any instrument or agreement required under this Agreement have been duly authorized.

		5.2	Governing Documents.

If required by the Bank, a copy of the Borrowers' organizational documents.

		5.3	Security Agreements.

Signed original security agreements covering the personal property collateral which the Bank requires.

		5.4	Perfection and Evidence of Priority.

Evidence that the security interests and liens in favor of the Bank are valid, enforceable, properly perfected in a manner acceptable to the Bank and prior to all others' rights and interests, except those the Bank consents to in writing. All title documents for motor vehicles which are part of the collateral must show the Bank's interest.

		5.5	Payment of Fees.

Payment of all fees and other amounts due and owing to the Bank, including without limitation payment of all accrued and unpaid expenses incurred by the Bank as required by the paragraph entitled "Reimbursement Costs."

		5.6	Good Standing.

Certificates of good standing for the Borrowers from their states of formation and from any other state in which the Borrowers are required to qualify to conduct their business.

		5.7	Insurance.

Evidence of insurance coverage, as required in the "Covenants" section of this Agreement.

		5.8	Deed of Trust.

Signed and acknowledged original deed of trust, as required by the Bank, encumbering the real property collateral.

		6.	REPRESENTATIONS AND WARRANTIES

When the Borrowers sign this Agreement, and until the Bank is repaid in full, the Borrowers jointly and severally make the following representations and warranties. Each request for an extension of credit constitutes a renewal of these representations and warranties as of the date of the request:

		6.1	Formation.

If a Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized.

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		6.2	Authorization.

This Agreement, and any instrument or agreement required hereunder, are within each Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers.

		6.3	Enforceable Agreement.

This Agreement is a legal, valid and binding agreement of the Borrowers, enforceable against the Borrowers in accordance with its terms, and any instrument or agreement required hereunder, when executed and delivered, will be similarly legal, valid, binding and enforceable.

		6.4	Good Standing.

In each state in which the Borrowers do business, each is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.

		6.5	No Conflicts.

This Agreement does not conflict with any law, agreement, or obligation by which either Borrower is bound.

		6.6	Financial Information.

All financial and other information that has been or will be supplied to the Bank is sufficiently complete to give the Bank accurate knowledge of the Borrowers' (and any guarantor's) financial condition, including all material contingent liabilities. Since the date of the most recent financial statement provided to the Bank, there has been no material adverse change in the business condition (financial or otherwise), operations, properties or prospects of either Borrower (or any guarantor).

		6.7	Lawsuits.

There is no lawsuit, tax claim or other dispute pending or threatened against either Borrower which, if lost, would impair either Borrower's financial condition or ability to repay the loan, except as have been disclosed in writing to the Bank.

		6.8	Collateral.

All collateral required in this Agreement is owned by the grantor of the security interest free of any title defects or any liens or interests of others, except those which have been approved by the Bank in writing.

		6.9	Permits, Franchises.

The Borrowers possess all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights, and fictitious name rights necessary to enable them to conduct the businesses in which each is now engaged.

		6.10	Other Obligations.

The Borrowers are not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment, contract, instrument or obligation, except as have been disclosed in writing to the Bank.

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		6.11	Tax Matters.

The Borrowers have no knowledge of any pending assessments or adjustments of their income tax for any year and all taxes due have been paid, except as have been disclosed in writing to the Bank.

		6.12	No Event of Default.

There is no event which is, or with notice or lapse of time or both would be, a default under this Agreement.

		6.13	Insurance.

The Borrowers have obtained, and maintained in effect, the insurance coverage required in the "Covenants" section of this Agreement.

		6.14	Location of Borrowers.

The place of business of the Borrowers (or, if the Borrowers have more than one place of business, their chief executive office) is located at the address listed on the signature page of this Agreement.

	7.	COVENANTS

The Borrowers jointly and severally agree, so long as credit is available under this Agreement and until the Bank is repaid in full:

		7.1	Use of Proceeds.

To use the proceeds of Facility No. 1 only for the working capital needs of Borrowers.

		7.2	Financial Information.

To provide the following financial information and statements in form and content acceptable to the Bank, and such additional information as requested by the Bank from time to time. The Bank reserves the right, upon written notice to the Borrowers, to require the Borrowers to deliver financial information and statements to the Bank more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.

	(a)	Within one hundred (100) days of each fiscal year end of Mexco, the annual audited financial statements of Mexco. These financial statements must be audited (with an opinion satisfactory to the Bank) by a certified public accountant acceptable to the Bank. The statements shall be prepared on a consolidated basis.

	(b)	Within forty-five (45) days of the period's end (excluding the last period in each fiscal year), quarterly financial statements of Mexco, certified and dated by an authorized financial officer. These financial statements may be company-prepared. The statements shall be prepared on a consolidated basis.

	(c)	Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent or received by Mexco to or from Mexco’s auditor. If no management letter is prepared, the Bank may, in its discretion, request a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter.

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	(d)	On or before June 1 of each calendar year an engineering report covering all of Borrowers’ material oil and gas properties dated effective as of March 31st of each such year, and at such other times as the Bank may request, an engineering report covering all of Borrowers’ material oil and gas properties dated effective not more than sixty (60) days prior to the delivery of the same to the Bank. Each such engineering report shall be prepared by an independent petroleum engineering firm acceptable to the Bank, utilizing economic pricing parameters used by the Bank as established from time to time, together with such other information, reports and data concerning the value of said oil and gas properties as the Bank shall deem necessary.

	(e)	Copies of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report for Mexco within thirty (30) days after the date of filing with the Securities and Exchange Commission.

	(f)	Within 100 days of the end of each fiscal year, a compliance certificate of the Borrowers, signed by an authorized financial officer and setting forth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action the Borrowers are taking and propose to take with respect thereto.

	(g)	Within 45 days of the end of each fiscal quarter, a compliance certificate of the Borrowers, signed by an authorized financial officer and setting forth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action the Borrowers are taking and propose to take with respect thereto.

	(h)	Promptly upon the Bank's request, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to the Borrowers and as to each guarantor of the Borrowers' obligations to the Bank as the Bank may request.

	
7.3

	
Tangible Net Worth.

To maintain on a consolidated basis, Tangible Net Worth equal to at least the sum of the following:

	(a)	Six Million Two Hundred Fifty-Seven Thousand Dollars ($6,257,000); plus

	(b)	The sum of 50% of net income after income taxes (without subtracting losses) earned in each quarterly accounting period commencing after June 30, 2008; plus

	
(c)

	
The net proceeds for from any equity securities issues after the date of this Agreement.

As used herein, “Tangible Net Worth” means the value of total assets (including leaseholds and leasehold improvements and reserves against assets but excluding goodwill, patents, trademarks, trade names, organization expense, unamortized debt discount and expense, capitalized or deferred research and development costs, deferred marketing expenses and other like intangibles, and monies due from affiliates, officers, directors, employees, shareholders, members or managers) less total liabilities, including but not limited to accrued and deferred income taxes, but excluding the non-current portion of Subordinated Liabilities. “Subordinated Liabilities” means liabilities subordinated to the Borrowers’ obligations to the Bank in a manner acceptable to the Bank in its sole discretion.

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		7.4	Dividends and Distributions.

Not to declare or pay any dividends (except dividends paid in capital stock), redemptions of stock, distributions and withdrawals (as applicable) to its owners.

		7.5	Other Debts.

Not to have outstanding or incur any direct or contingent liabilities or lease obligations (other than those to the Bank), or become liable for the liabilities of others, without the Bank's written consent. This does not prohibit:

	(a)	Acquiring goods, supplies, or merchandise on normal trade credit.

	(b)	Endorsing negotiable instruments received in the usual course of business.

	(c)	Obtaining surety bonds in the usual course of business.

	(d)	Liabilities, lines of credit and leases in existence on the date of this Agreement disclosed in writing to the Bank in the Borrowers' most recent financial statement.

		7.6	Other Liens.

Not to create, assume, or allow any security interest or lien (including judicial liens) on property the Borrowers now or later own, except:

	(a)	Liens and security interests in favor of the Bank.

	(b)	Liens for taxes not yet due.

	(c)	Liens outstanding on the date of this Agreement disclosed in writing to the Bank.

		7.7	Investments.

Not to have any existing, or make any new, investments in any individual or entity, or make any capital contributions or other transfers of assets to any individual or entity, except for:

	(a)	Existing investments disclosed to the Bank in writing.

	(b)	Investments in the Borrowers’ current subsidiaries.

		7.8	Loans.

Not to make any loans, advances or other extensions of credit to any individual or entity, except for:

	(a)	Existing extensions of credit disclosed to the Bank in writing.

	(b)	Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities.

		7.9	Loans to Officers or Affiliates.

Not to make any loans, advances or other extensions of credit (including extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services) to any of the Borrowers' executives, officers, directors or shareholders (or any relatives of any of the foregoing), or to any affiliated entities.

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		7.10	Change of Management.

Not to make any substantial change in the present executive or management personnel of the Borrowers.

		7.11	Additional Negative Covenants.

Not to, without the Bank's written consent:

	(a)	Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture, or a member of a limited liability company.

	(b)	Acquire or purchase a business or its assets.

	
(c)

	
Engage in any business activities substantially different from the Borrowers' present businesses.

	(d)	Liquidate or dissolve either of the Borrower’s businesses.

	(e)	Sell, lease, assign or otherwise dispose of or transfer any assets, except in the normal course of business.

	
7.12

	
Notices to Bank.

To promptly notify the Bank in writing of:

	(a)	Any lawsuit against a Borrower or any Obligor.

	(b)	Any substantial dispute between any governmental authority and a Borrower or any Obligor.

	(c)	Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.

	(d)	Any material adverse change in a Borrower's or any Obligor’s business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit.

	(e)	Any change in a Borrower's or any Obligor’s name, legal structure, principal residence (for an individual), state of registration (for a registered entity), place of business, or chief executive office if a Borrower or any Obligor has more than one place of business.

	(f)	Any actual contingent liabilities of a Borrower or any Obligor, and any such contingent liabilities which are reasonably foreseeable.

For purposes of this Agreement, “Obligor” shall mean any guarantor, any party pledging collateral to the Bank, or, if the Borrowers are comprised of the trustees of a trust, any trustor.

		7.13	Insurance.

	 (a)	General Business Insurance. To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of the Borrowers' properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers' compensation, and any other insurance which is usual for the Borrowers' businesses. Each policy shall provide for at least thirty (30) days prior notice to the Bank of any cancellation thereof.

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	(b)	Insurance Covering Collateral. To maintain all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage as applicable) covering the tangible property comprising the collateral. Each insurance policy must be in an amount acceptable to the Bank. The insurance must be issued by an insurance company acceptable to the Bank and must include a lender's loss payable endorsement in favor of the Bank in a form acceptable to the Bank.

	(c)	Evidence of Insurance. Upon the request of the Bank, to deliver to the Bank a copy of each insurance policy, or, if permitted by the Bank, a certificate of insurance listing all insurance in force.

		7.14	Compliance with Laws.

To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrowers' businesses. The Bank shall have no obligation to make any advance to the Borrowers except in compliance with all applicable laws and regulations and the Borrowers shall fully cooperate with the Bank in complying with all such applicable laws and regulations.

		7.15	ERISA Plans.

Promptly during each year, to pay and cause any subsidiaries to pay contributions adequate to meet at least the minimum funding standards under ERISA with respect to each and every Plan; file each annual report required to be filed pursuant to ERISA in connection with each Plan for each year; and notify the Bank within ten (10) days of the occurrence of any Reportable Event that might constitute grounds for termination of any capital Plan by the Pension Benefit Guaranty Corporation or for the appointment by the appropriate United States District Court of a trustee to administer any Plan. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. Capitalized terms in this paragraph shall have the meanings defined within ERISA.

		7.16	Books and Records.

To maintain adequate books and records.

		7.17	Audits.

To allow the Bank and its agents to inspect the Borrowers' properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrowers' properties, books or records are in the possession of a third party, the Borrowers authorize that third party to permit the Bank or its agents to have access to perform inspections or audits and to respond to the Bank's requests for information concerning such properties, books and records.

		7.18	Perfection of Liens.

To help the Bank perfect and protect its security interests and liens, and reimburse it for related costs it incurs to protect its security interests and liens.

	
7.19

	
Bank as Principal Depository.

To maintain the Bank as its principal depository bank, including for the maintenance of business, cash management, operating and administrative deposit accounts.

		7.20	Cooperation.

To take any action reasonably requested by the Bank to carry out the intent of this Agreement.

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		8.	HAZARDOUS SUBSTANCES - REAL PROPERTY SECURITY

		8.1	Indemnity Regarding Hazardous Substances.

The Borrowers agree to indemnify and hold the Bank harmless from and against all liabilities, claims, actions, foreseeable and unforeseeable consequential damages, costs and expenses (including sums paid in settlement of claims and all consultant, expert and legal fees and expenses of the Bank's counsel) or loss directly or indirectly arising out of or resulting from any of the following:

	(a)	Any hazardous substance being present at any time, whether before, during or after any construction, in or around any part of the real property collateral securing this Agreement (the "Real Property"), or in the soil, groundwater or soil vapor on or under the Real Property, including those incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work, or any resulting damages or injuries to the person or property of any third parties or to any natural resources.

	(b)	Any use, generation, manufacture, production, storage, release, threatened release, discharge, disposal or presence of a hazardous substance. This indemnity will apply whether the hazardous substance is on, under or about any of the Borrowers' property or operations or property leased to the Borrowers, whether or not the property has been taken by the Bank as collateral.

Upon demand by the Bank, the Borrowers will defend any investigation, action or proceeding alleging the presence of any hazardous substance in any such location, which affects the Real Property or which is brought or commenced against the Bank, whether alone or together with the Borrowers or any other person, all at the Borrowers' own cost and by counsel to be approved by the Bank in the exercise of its reasonable judgment. In the alternative, the Bank may elect to conduct its own defense at the expense of the Borrowers. The Borrowers' obligations to the Bank under this Article, except the obligation to give notices to the Bank, shall survive termination of this Agreement, repayment of the Borrowers' obligations to the Bank under this Agreement, and foreclosure of the deed of trust or mortgage encumbering the Real Property or similar proceedings.

		8.2	Representation and Warranty Regarding Hazardous Substances.

Before signing this Agreement, the Borrowers researched and inquired into the previous uses and ownership of the Real Property. Based on that due diligence, the Borrowers represent and warrant that to the best of their knowledge, no hazardous substance has been disposed of or released or otherwise exists in, on, under or onto the Real Property in violation of applicable Environmental Laws, except as the Borrower has disclosed to the Bank in writing.

		8.3	Compliance Regarding Hazardous Substances.

The Borrowers have complied, and will comply and cause all occupants of the Real Property to comply, with all current and future laws, regulations and ordinances or other requirements of any governmental authority relating to or imposing liability or standards of conduct concerning protection of health or the environment or hazardous substances (“Environmental Laws”). The Borrowers shall promptly, at the Borrowers’ sole cost and expense, take all reasonable actions with respect to any hazardous substances or other environmental condition at, on, or under the Real Property necessary to (i) comply with all applicable Environmental Laws; (ii) allow continued use, occupation or operation of the Real Property; or (iii) maintain the fair market value of the Real Property. The Borrowers acknowledge that hazardous substances may permanently and materially impair the value and use of the Real Property.

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		8.4	Notices Regarding Hazardous Substances.

Until full repayment of the loan, the Borrowers will promptly notify the Bank in writing if it knows, suspects or believes there may be any hazardous substance in or around the Real Property, or in the soil, groundwater or soil vapor on or under the Real Property in violation of applicable Environmental Laws, or that the Borrower or the Real Property may be subject to any threatened or pending investigation by any governmental agency under any current or future law, regulation or ordinance pertaining to any hazardous substance.

		8.5	Site Visits, Observations and Testing.

The Bank and its agents and representatives will have the right at any reasonable time, after giving reasonable notice to the Borrowers, to enter and visit the Real Property and any other locations where any personal property collateral securing this Agreement is located, for the purposes of observing the Real Property and the personal property collateral, taking and removing environmental samples, and conducting tests on any part of the Real Property. The Borrowers shall reimburse the Bank on demand for the costs of any such environmental investigation and testing. The Bank will make reasonable efforts during any site visit, observation or testing conducted pursuant this paragraph to avoid interfering with the Borrowers’ use of the Real Property and the personal property collateral. The Bank is under no duty, however, to visit or observe the Real Property or the personal property collateral or to conduct tests, and any such acts by the Bank will be solely for the purposes of protecting the Bank's security and preserving the Bank's rights under this Agreement. No site visit, observation or testing or any report or findings made as a result thereof (“Environmental Report”) (i) will result in a waiver of any default of the Borrowers; (ii) impose any liability on the Bank; or (iii) be a representation or warranty of any kind regarding the Real Property or the personal property collateral (including its condition or value or compliance with any laws) or the Environmental Report (including its accuracy or completeness). In the event the Bank has a duty or obligation under applicable laws, regulations or other requirements to disclose an Environmental Report to the Borrowers or any other party, the Borrowers authorize the Bank to make such a disclosure. The Bank may also disclose an Environmental Report to any regulatory authority, and to any other parties as necessary or appropriate in the Bank’s judgment. The Borrowers further understand and agree that any Environmental Report or other information regarding a site visit, observation or testing that is disclosed to the Borrowers by the Bank or its agents and representatives is to be evaluated (including any reporting or other disclosure obligations of the Borrowers) by the Borrowers without advice or assistance from the Bank.

		8.6	Definition of Hazardous Substance.

"Hazardous substance" means any substance, material or waste that is or becomes designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar designation or regulation under any current or future federal, state or local law (whether under common law, statute, regulation or otherwise) or judicial or administrative interpretation of such, including without limitation petroleum or natural gas.

		9.	DEFAULT AND REMEDIES

If any of the following events of default occurs, the Bank may do one or more of the following: declare the Borrowers in default, stop making any additional credit available to the Borrowers, and require the Borrowers to repay their entire debt immediately and without prior notice. If an event which, with notice or the passage of time, will constitute an event of default has occurred and is continuing, the Bank has no obligation to make advances or extend additional credit under this Agreement. In addition, if any event of default occurs, the Bank shall have all rights, powers and remedies available under any instruments and agreements required by or executed in connection with this Agreement, as well as all rights and remedies available at law or in equity. If an event of default occurs under the paragraph entitled "Bankruptcy," below, with respect to the Borrowers, then the entire debt outstanding under this Agreement will automatically be due immediately.

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		9.1	Failure to Pay.

The Borrowers fail to make a payment under this Agreement when due.

		9.2	Other Bank Agreements.

Any default occurs under any other agreement a Borrower (or any Obligor) or any of the Borrowers' related entities or affiliates has with the Bank or any affiliate of the Bank.

		9.3	Cross-default.

Any default occurs under any agreement in connection with any credit a Borrower (or any Obligor) or any of the Borrowers' related entities or affiliates has obtained from anyone else or which a Borrower (or any Obligor) or any of the Borrowers' related entities or affiliates has guaranteed.

		9.4	False Information.

A Borrower or any Obligor has given the Bank materially false or misleading information or representations.

		9.5	Bankruptcy.

A Borrower, any Obligor, or any general partner of a Borrower or of any Obligor files a bankruptcy petition, a bankruptcy petition is filed against any of the foregoing parties, or a Borrower, any Obligor, or any general partner of a Borrower or of any Obligor makes a general assignment for the benefit of creditors.

		9.6	Receivers.

A receiver or similar official is appointed for a substantial portion of a Borrower's or any Obligor's business, or the business is terminated, or, if any Obligor is anything other than a natural person, such Obligor is liquidated or dissolved.

		9.7	Lien Priority.

The Bank fails to have an enforceable first lien (except for any prior liens to which the Bank has consented in writing) on or security interest in any property given as security for this Agreement (or any guaranty).

		9.8	Judgments.

Any judgments or arbitration awards are entered against a Borrower or any Obligor, or a Borrower or any Obligor enters into any settlement agreements with respect to any litigation or arbitration.

		9.9	Death.

If a Borrower or any Obligor is a natural person, a Borrower or such Obligor dies or becomes legally incompetent; if a Borrower or any Obligor is a trust, a trustor dies or becomes legally incompetent; if a Borrower or any Obligor is a partnership, any general partner dies or becomes legally incompetent.

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		9.10	Material Adverse Change.

A material adverse change occurs, or is reasonably likely to occur, in a Borrower's (or any Obligor's) business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit; or the Bank determines that it is insecure for any other reason.

		9.11	Government Action.

Any government authority takes action that the Bank believes materially adversely affects a Borrower's or any Obligor's financial condition or ability to repay.

		9.12	Default under Related Documents.

Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement or any such document is no longer in effect, or any guarantor purports to revoke or disavow the guaranty.

		9.13	ERISA Plans.

Any one or more of the following events occurs with respect to a Plan of a Borrower subject to Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank, to subject a Borrower to any tax, penalty or liability (or any combination of the foregoing) which, in the aggregate, could have a material adverse effect on the financial condition of a Borrower:

	(a)	A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan.

	(b)	Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by a Borrower or any ERISA Affiliate.

		9.14	Other Breach Under Agreement.

A default occurs under any other term or condition of this Agreement not specifically referred to in this Article. This includes any failure or anticipated failure by a Borrower (or any other party named in the Covenants section) to comply with any financial covenants set forth in this Agreement, whether such failure is evidenced by financial statements delivered to the Bank or is otherwise known to a Borrower or the Bank.

	
10.

	
ENFORCING THIS AGREEMENT; MISCELLANEOUS

	
10.1

	
GAAP.

Except as otherwise stated in this Agreement, all financial information provided to the Bank and all financial covenants will be made under generally accepted accounting principles, consistently applied.

		10.2	Governing Law.

This Agreement shall be governed and construed in accordance with the laws of Texas. To the extent that the Bank has greater rights or remedies under federal law, whether as a national bank or otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies as may be available under federal law. It is the intention of the parties to comply with applicable usury laws. The parties agree that the total amount of interest contracted for, charged, collected or received by the Bank under this Agreement shall not exceed the Maximum Rate. To the extent, if any, that Chapter 303 of the Texas Finance Code (the "Code") is relevant to the Bank for purposes of determining the Maximum Rate, the parties elect to determine the Maximum Rate under the Code pursuant to the “weekly ceiling” from time to time in effect, as referred to and defined in § 303.001-303.016 of the Code; subject, however, to any right the Bank subsequently may have under applicable law to change the method of determining the Maximum Rate. Notwithstanding any contrary provisions contained herein, (a) the Maximum Rate shall be calculated on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be; (b) in determining whether the interest hereunder exceeds interest at the Maximum Rate, the total amount of interest shall be spread throughout the entire term of this Agreement until its payment in full; (c) if at any time the interest rate chargeable under this Agreement would exceed the Maximum Rate, thereby causing the interest payable under this Agreement to be limited to the Maximum Rate, then any subsequent reductions in the interest rate(s) shall not reduce the rate of interest charged under this Agreement below the Maximum Rate until the total amount of interest accrued from and after the date of this Agreement equals the amount of interest which would have accrued if the interest rate(s) had at all times been in effect; (d) if the Bank ever charges or receives anything of value which is deemed to be interest under applicable Texas law, and if the occurrence of any event, including acceleration of maturity of obligations owing to the Bank, should cause such interest to exceed the maximum lawful amount, any amount which exceeds interest at the Maximum Rate shall be applied to the reduction of the unpaid principal balance under this Agreement or any other indebtedness owed to the Bank by the Borrowers, and if this Agreement and such other indebtedness are paid in full, any remaining excess shall be paid to the Borrowers; and (e) Chapter 346 of the Code shall not be applicable to this Agreement or the indebtedness outstanding hereunder.

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		10.3	Successors and Assigns.

This Agreement is binding on the Borrowers' and the Bank's successors and assignees. Each Borrower agrees that it may not assign this Agreement without the Bank's prior consent. The Bank may sell participations in or assign this loan, and may exchange information about the Borrowers (including, without limitation, any information regarding any hazardous substances) with actual or potential participants or assignees. If a participation is sold or the loan is assigned, the purchaser will have the right of set-off against the Borrowers.

		10.4	Dispute Resolution Provision.

This paragraph, including the subparagraphs below, is referred to as the “Dispute Resolution Provision.” This Dispute Resolution Provision is a material inducement for the parties entering into this agreement.

	(a)	This Dispute Resolution Provision concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or (ii) any document related to this agreement (collectively a "Claim"). For the purposes of this Dispute Resolution Provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this agreement.

	(b)	At the request of any party to this agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the "Act"). The Act will apply even though this agreement provides that it is governed by the law of a specified state.

	(c)	Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association or any successor thereof ("AAA"), and the terms of this Dispute Resolution Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision shall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any provision of this arbitration clause, the Bank may designate another arbitration organization with similar procedures to serve as the provider of arbitration.

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	(d)	The arbitration shall be administered by AAA and conducted, unless otherwise required by law, in any U.S. state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one arbitrator; however, if Claims exceed Five Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and have judgment entered and enforced.

	(e)	The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitratable shall be determined by the arbitrator(s), except as set forth at subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement.

	(f)	This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies.

	(g)	The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration.

	(h)	Any arbitration or trial by a judge of any Claim will take place on an individual basis without resort to any form of class or representative action (the “Class Action Waiver”). Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to this Agreement acknowledge that the Class Action Waiver is material and essential to the arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties’ agreement to arbitrate shall be null and void with respect to such proceeding, subject to the right to appeal the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and agree that under no circumstances will a class action be arbitrated.

	(i)	By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in any way to limit this agreement to arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.

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		10.5	Severability; Waivers.

If any part of this Agreement is not enforceable, the rest of the Agreement may be enforced. The Bank retains all rights, even if it makes a loan after default. If the Bank waives a default, it may enforce a later default. Any consent or waiver under this Agreement must be in writing.

		10.6	Attorneys’ Fees.

The Borrowers shall reimburse the Bank for any reasonable costs and attorneys' fees incurred by the Bank in connection with the enforcement or preservation of any rights or remedies under this Agreement and any other documents executed in connection with this Agreement, and in connection with any amendment, waiver, "workout" or restructuring under this Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing party is entitled to recover costs and reasonable attorneys' fees incurred in connection with the lawsuit or arbitration proceeding, as determined by the court or arbitrator. In the event that any case is commenced by or against a Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute, the Bank is entitled to recover costs and reasonable attorneys' fees incurred by the Bank related to the preservation, protection, or enforcement of any rights of the Bank in such a case. As used in this paragraph, "attorneys' fees" includes the allocated costs of the Bank's in-house counsel.

		10.7	Joint and Several Liability.

	(a)	Each Borrower agrees that it is jointly and severally liable to the Bank for the payment of all obligations arising under this Agreement, and that such liability is independent of the obligations of the other Borrower(s). Each obligation, promise, covenant, representation and warranty in this Agreement shall be deemed to have been made by, and be binding upon, each Borrower, unless this Agreement expressly provides otherwise. The Bank may bring an action against any Borrower, whether an action is brought against the other Borrower(s).

	(b)	Each Borrower agrees that any release which may be given by the Bank to the other Borrower(s) or any guarantor will not release such Borrower from its obligations under this Agreement.

	(c)	Each Borrower waives any right to assert against the Bank any defense, setoff, counterclaim, or claims which such Borrower may have against the other Borrower(s) or any other party liable to the Bank for the obligations of the Borrower under this Agreement.

	(d)	Each Borrower waives any defense by reason of any other Borrower’s or any other person's defense, disability, or release from liability. The Bank can exercise its rights against each Borrower even if any other Borrower or any other person no longer is liable because of a statute of limitations or for other reasons.

	(e)	Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of the other Borrower(s) and of all circumstances which bear upon the risk of nonpayment. Each Borrower waives any right it may have to require the Bank to disclose to such Borrower any information which the Bank may now or hereafter acquire concerning the financial condition of the other Borrower(s).

	(f)	Each Borrower waives all rights to notices of default or nonperformance by any other Borrower under this Agreement. Each Borrower further waives all rights to notices of the existence or the creation of new indebtedness by any other Borrower and all rights to any other notices to any party liable on any of the credit extended under this Agreement.

	(g)	The Borrowers represent and warrant to the Bank that each will derive benefit, directly and indirectly, from the collective administration and availability of credit under this Agreement. The Borrowers agree that the Bank will not be required to inquire as to the disposition by any Borrower of funds disbursed in accordance with the terms of this Agreement.

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	(h)	Until all obligations of the Borrowers to the Bank under this Agreement have been paid in full and any commitments of the Bank or facilities provided by the Bank under this Agreement have been terminated, each Borrower (a) waives any right of subrogation, reimbursement, indemnification and contribution (contractual, statutory or otherwise), including without limitation, any claim or right of subrogation under the Bankruptcy Code (Title 11, United States Code) or any successor statute, which such Borrower may now or hereafter have against any other Borrower with respect to the indebtedness incurred under this Agreement; (b) waives any right to enforce any remedy which the Bank now has or may hereafter have against any other Borrower, and waives any benefit of, and any right to participate in, any security now or hereafter held by the Bank.

	(i)	Each Borrower waives any right to require the Bank to proceed against any other Borrower or any other person; proceed against or exhaust any security; or pursue any other remedy. Further, each Borrower consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Borrowers under this Agreement or which, but for this provision, might operate as a discharge of a Borrower.

		10.8	Individual Liability.

If a Borrower is a natural person, the Bank may proceed against such Borrower's business and non-business property in enforcing this and other agreements relating to this loan. If a Borrower is a partnership, the Bank may proceed against the business and non-business property of each general partner of such Borrower in enforcing this and other agreements relating to this loan.

		10.9	Set-Off.

	(a)	In addition to any rights and remedies of the Bank provided by law, upon the occurrence and during the continuance of any event of default under this Agreement, the Bank is authorized, at any time, to set off and apply any and all Deposits of a Borrower or any Obligor held by the Bank against any and all Obligations owing to the Bank. The set-off may be made irrespective of whether or not the Bank shall have made demand under this Agreement or any guaranty, and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable Deposits.

	(b)	The set-off may be made without prior notice to the Borrowers or any other party, any such notice being waived by the Borrowers (on their own behalf and on behalf of each Obligor) to the fullest extent permitted by law. The Bank agrees promptly to notify the Borrowers after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

	(c)	For the purposes of this paragraph, “Deposits” means any deposits (general or special, time or demand, provisional or final, individual or joint) and any instruments owned by a Borrower or any Obligor which come into the possession or custody or under the control of the Bank. “Obligations” means all obligations, now or hereafter existing, of a Borrower to the Bank under this Agreement and under any other agreement or instrument executed in connection with this Agreement, and the obligations to the Bank of any Obligor.

		10.10	One Agreement.

This Agreement and any related security or other agreements required by this Agreement, collectively:

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	(a)	represent the sum of the understandings and agreements between the Bank and the Borrowers concerning this credit;

	(b)	replace any prior oral or written agreements between the Bank and the Borrowers concerning this credit; and

	(c)	are intended by the Bank and the Borrowers as the final, complete and exclusive statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. Any reference in any related document to a “promissory note” or a “note” executed by the Borrowers and dated as of the date of this Agreement shall be deemed to refer to this Agreement, as now in effect or as hereafter amended, renewed, or restated.

		10.11	Indemnification.

The Borrowers will indemnify and hold the Bank harmless from any loss, liability, damages, judgments, and costs of any kind relating to or arising directly or indirectly out of (a) this Agreement or any document required hereunder, (b) any credit extended or committed by the Bank to the Borrowers hereunder, and (c) any litigation or proceeding related to or arising out of this Agreement, any such document, or any such credit. This indemnity includes but is not limited to attorneys' fees (including the allocated cost of in-house counsel). This indemnity extends to the Bank, its parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns. This indemnity will survive repayment of the Borrowers' obligations to the Bank. All sums due to the Bank hereunder shall be obligations of the Borrowers, due and payable immediately without demand.

		10.12	Notices.

Unless otherwise provided in this Agreement or in another agreement between the Bank and the Borrowers, all notices required under this Agreement shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Agreement, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as the Bank and the Borrowers may specify from time to time in writing. Notices and other communications shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered.

		10.13	Headings.

Article and paragraph headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Agreement.

		10.14	Counterparts.

This Agreement may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same agreement.

		10.15	Borrower Information; Reporting to Credit Bureaus.

The Borrowers authorize the Bank at any time to verify or check any information given by a Borrower to the Bank, check a Borrower’s credit references, verify employment, and obtain credit reports. Each Borrower agrees that the Bank shall have the right at all times to disclose and report to credit reporting agencies and credit rating agencies such information pertaining to the Borrowers and/or all guarantors as is consistent with the Bank's policies and practices from time to time in effect.

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		10.16	Prior Agreement Superseded.

This Agreement supersedes and restates the Loan Agreement entered into as of August 6, 2001, including all amendments thereto, between the Bank and the Borrowers, and any credit outstanding thereunder shall be deemed to be outstanding under this Agreement.

	10.17	USA PATRIOT ACT NOTICE, AFFILIATE SHARING NOTICE and AFFILIATE MARKETING NOTICE.

A.            USA PATRIOT ACT NOTICE

Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account or obtains a loan. The Bank will ask for each Borrower’s legal name, address, tax ID number or social security number and other identifying information. The Bank may also ask for additional information or documentation or take other actions reasonably necessary to verify the identity of each Borrower, guarantors or other related persons.

B.            AFFILIATE SHARING NOTICE

From time to time the Bank may share information about each Borrower’s experience with Bank of America Corporation (or any successor company) and its subsidiaries and affiliated companies (the “Affiliates”), including, but not limited to, the Bank of America Companies listed in notice C. below. The Bank may also share with the Affiliates credit-related information contained in any applications, from credit reports and information it may obtain about each Borrower from outside sources.

If a Borrower is an individual, the Borrower may instruct the Bank not to share this information with the Affiliates. A Borrower can make this election by (1) calling the Bank at 1.888.341.5000, (2) visiting the Bank online at www.bankofamerica.com, selecting “Privacy & Security,” and then selecting “Set Your Privacy Preferences,” or (3) contacting the Borrower’s client manager or local banking center. To help the Bank complete the Borrower’s request, the Borrower should include the Borrower’s name, address, phone number, account numbers(s) and social security number.

If a Borrower makes this election, certain products or services may not be made available to the Borrower. This request will apply to information from applications, consumer reports and other outside sources only. Through the normal course of doing business, including servicing the Borrower’s accounts and better serving the Borrower’s financial needs, the Bank will continue to share transaction and account experience information, as well as other general information among the Affiliates.

C.            AFFILIATE MARKETING NOTICE – YOUR CHOICE TO LIMIT MARKETING

(i)            The Bank of America companies listed below are providing this notice C.

(ii)            Federal law gives you the right to limit some but not all marketing from all the Bank of America affiliated companies. Federal law also requires us to give you this notice to tell you about your choice to limit marketing from all the Bank of America affiliated companies.

(iii)            You may limit all the Bank of America affiliated companies, such as the banking, loan, credit card, insurance and securities companies, from marketing their products or services to you based upon your personal information that they receive from other Bank of America companies. This information includes your income, your account history, and your credit score.

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(iv)            Your choice to limit marketing offers from all the Bank of America affiliated companies will apply for at least 5 years from when you tell us your choice. Before your choice to limit marketing expires, you will receive a renewal notice that will allow you to continue to limit marketing offers from all the Bank of America affiliated companies for at least another 5 years.

(v)            You may tell us your choice to limit marketing offers and you may tell us the choices for other customers who are joint account holders with you.

(vi)            This limitation will not apply in certain circumstances, such as when you have an account or service relationship with the Bank of America company that is marketing to you.

(vii)            For individuals with business purpose accounts, this limitation will only apply to marketing to individuals and not marketing to a business.

To limit marketing offers, contact us at 800.282.2884

 

Effective October 1, 2008

Bank of America Companies:

 

	
Banks and Trust Companies

Bank of America, N.A.

LaSalle Bank National Association

LaSalle Bank Midwest National Association

 

Credit Card

Bank of America Consumer Card Services, LLC

Bank of America

Fleet Credit Card Services, L.P.

	
Brokerage and Investments

BACAP Alternative Advisors, Inc.

Bank of America Capital Advisors LLC

Banc of America Investment Advisors, Inc.

Banc of America Investment Services, Inc.

Banc of America Securities LLC

LaSalle Financial Services, Inc.

U.S. Trust Hedge Fund Management, Inc.

UST Securities Corp.

	 	
	
Insurance and Annuities

BA Insurance Services, Inc.

Banc of America Agency of Texas, Inc.

Banc of America Insurance Services, Inc.,

   dba Banc of America Insurance Agency in New York State

General Fidelity Insurance Company

General Fidelity Life Insurance Company

LaSalle Financial Services, Inc.

	
Real Estate

Home Focus Services, LLC

 

Administrative Services

LaSalle Healthcare Administrative Services, LLC

 

Merchant Services

BA Merchant Services, LLC

LaSalle Merchant Services, LLC

 

	
10.18

	
Notice of Final Agreement.

THIS WRITTEN LOAN AGREEMENT AND THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

22

This Agreement is executed as of the date stated at the top of the first page.

 

	
BORROWERS:

	
BANK:

	 	 	 	 	 	 
	
MEXCO ENERGY CORPORATION

	
BANK OF AMERICA, N.A.

	 	 	 	 	 	 
	
By:

	
/s/ Nicholas C. Taylor

	 	
By:

	
/s/ Kory Clark

	 
	 	
Nicholas C. Taylor

	 	
Name:

	
Kory Clark

	 
	 	
President

	 	
Title:

	
Senior Vice President

	 

	
FORMAN ENERGY CORPORATION

	 	 	 
	
By:

	
/s/ Nicholas C. Taylor

	 
	 	
Nicholas C. Taylor

	 
	 	
President

	 

 

Address where notices to the Borrowers are to be sent:

 

214 West Texas Avenue, Suite 1101

Midland, Texas 79701

Telephone: (432) 682-1119

Facsimile: (432) 682-1123

Address where notices to the Bank are to be sent:

701 S. Taylor

Amarillo, Texas 79101

Attn: Kory Clark

Telephone: (806) 378-1743

Facsimile: (806) 374-0845

 

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]