LOAN AGREEMENT

EX-10.1 2 csfl-ex101_201504089.htm EX-10.1

Exhibit 10.1

LOAN AGREEMENT

This Loan Agreement is made by and between Borrower and Lender, whose names and addresses are described below, in connection with the Loan.

 

Loan.  Borrower has applied to Lender for revolving line of credit in the amount of up to $25,000,000.00, and Lender is willing to make the Loan on the terms and conditions hereinafter set forth.

Time is of the Essence.  Borrower agrees that time is of the essence under this Agreement.

Incorporation of Recitals.  The foregoing preambles and all other recitals set forth herein are made a part hereof by this reference.

Incorporation of Exhibits.  The exhibits and schedules to this Agreement, attached hereto are incorporated in this Agreement and expressly made a part hereof by this reference.

ARTICLE I – DEFINITIONS

For purposes of this Loan Agreement, the following terms shall have the respective meanings assigned to them.

1.01Advance.  Shall mean (a) a disbursement by Lender of any of the proceeds of the Loan to or for the benefit of the Borrower; and (b) funds that Lender advances or indebtedness Lender incurs in exercising its rights.

1.02Advance Request Form.  A certificate, in a form approved by Lender, properly completed and signed by Borrower requesting a Revolving Credit Advance.

1.03Affiliate.  With respect to a specified person or entity, any individual, partnership, corporation, limited liability company, trust, unincorporated organization, association or other entity which, directly or indirectly, through one or more intermediaries, Controls or is Controlled by or is under common control with such person or entity, including, without limitation, any general or limited partnership in which such person or entity is a partner.

1.04Agreement.  As defined in the Preamble.

1.05Allowance for Loan and Lease Losses.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority and as reported by any Person on the Regulatory Capital Schedule of their respective Call Report applicable to such period.

1.06Applicable Rate.  As such term is defined in Section 4.01a.

 

---

1.07Authorized Representative.  The person appointed as the Authorized Representative pursuant to Section 14.03.

1.08Average Total Assets.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority and as reported by any Person on the Regulatory Capital Schedule of any their respective Call Report applicable to such period.

1.09Bank.  CenterState Bank of Florida NA, wholly owned subsidiary of Borrower, and any other Subsidiary of Borrower, the deposits of which are insured by the FDIC pursuant to the FDIA.

1.10Bank Regulatory Authority.  The State of Texas Department of Financial Institutions, the OCC, the FDIC, the Board of Governors of the Federal Reserve System, OFAC and all other relevant regulatory authorities (including, without limitation, relevant state bank regulatory authorities).

1.11Bankers Blanket Bond.  A fidelity bond or insurance policy providing coverage for losses resulting from criminal activities and other actions of employees, officers or directors of a Bank.

1.12Bankruptcy Code.  Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor thereto or any other present or future bankruptcy or insolvency statute.

1.13BHCPR.  The Bank Holding Company Performance Report, as promulgated by the Board of Governors of the Federal Reserve System.

1.14Borrower.   Shall mean the Borrower named on page one hereof.

1.15Business Day.   A day of the year on which banks are not required or authorized to close in Dallas, Texas.

1.16Call Report.  For each Bank, the “Consolidated Reports of Condition and Income” (FFIEC Form 031, Form 041 or other applicable form), or any successor form promulgated by the FFIEC.

1.17Capital Lease Obligations.  With respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

1.18Change of Control.  Shall mean (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of Beneficial Ownership (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of 50% or more of the capital stock or voting power of Borrower (or any one of its successors, or any Subsidiary of Borrower or any of its successors), (b) Borrower (or its successor), or any Subsidiary of Borrower or its successor, consolidates with, or merges with or into, another Person, or conveys, transfers, leases or otherwise disposes directly or indirectly of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, Borrower, in each case, whether pursuant to one or any series of transactions, except where (i) Borrower is the surviving entity and (ii) the ultimate beneficial owners of Borrower’s outstanding capital stock or voting power immediately prior to such transaction or transactions own not less than 50% of the outstanding capital stock or voting power of Borrower (or such successor) immediately after such transaction or transactions, (c) the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Borrower cease to be occupied by Persons who were members of the board of directors of Borrower on the Effective Date, or (c) Borrower shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interests in the Equity Interests of the Bank.

1.19Classified Assets.  An asset classified as “Substandard,” “Doubtful,” “Loss” or a similar category in accordance with the then-current regulations of the applicable Bank Regulatory Authority, excluding the Purchased Credit Impaired Assets.

 

---

1.20Classified Assets to Tier 1 Capital Ratio.  With respect to any Person, the ratio (expressed as a percentage) as of the last day of any fiscal quarter of (a) Classified Assets of such Person to (b) (i) Tier 1 Capital of such Person, plus (ii) Allowance for Loan and Lease Losses.

1.21Collateral.  Collectively, all of the property (including Equity Interests) in which Liens are purported to be granted pursuant to the Security Documents as security for the Obligations.

1.22Commitment.  The obligation of Lender to make Revolving Credit Advances pursuant to Section 3.01 in an aggregate principal amount at any time outstanding up to but not exceeding $25,000,000.00, subject, however, to termination pursuant to Article XII.

1.23Constituent Documents.  Shall mean (a) in the case of a corporation, its articles or certificate of incorporation and bylaws; (b) in the case of a general partnership, its partnership agreement; (c) in the case of a limited partnership, its certificate of limited partnership and partnership agreement; (d) in the case of a trust, its trust agreement; (e) in the case of a joint venture, its joint venture agreement; (f) in the case of a limited liability company, its articles of organization, operating agreement, regulations and/or other organizational and governance documents and agreements; and (g) in the case of any other entity, its organizational and governance documents and agreements.

1.24Control. As such term is used with respect to any person or entity, including the correlative meanings of the terms “controlled by” and “under common control with”, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise.

1.25Default or default.  Any event, circumstance or condition, which, if it were to continue uncured, would, with notice or lapse of time or both, constitute an Event of Default hereunder.

1.26Default Rate.  A rate per annum equal to 5.00% in excess of the Applicable Rate, but which shall not at any time exceed the Maximum Lawful Rate.

1.27EBIDA. For any period, Net Income of Borrower for such period, plus, without duplication and to the extent deducted in calculating Net Income for such period, the sum of (a) Interest Expense for such period, (b) the amount of depreciation and amortization expense deducted in determining Net Income, (c) any extraordinary or non-recurring items reducing Net Income for such period, (d) losses on the sale of securities, and (e) any non-cash items reducing Net Income for such period, minus (i) gains on the sale of any securities, (ii) any extraordinary or non-recurring items increasing Net Income for such period and (iii) any non-cash items increasing Net Income for such period.

1.28Effective Date.  As listed on page one hereof.

1.29Environmental Proceedings.  Any environmental proceedings, whether civil (including actions by private parties), criminal, or administrative proceedings, relating to Borrower.

1.30Equity Interests. Shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

1.31ERISA.  The Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder from time to time.

1.32Event of Default.  As such term is defined in Article XI.

1.33FDIA.  The Federal Deposit Insurance Act of 1933, as amended from time to time, and the regulations promulgated pursuant thereto.

1.34FDIC.  The Federal Deposit Insurance Corporation, or any successor Governmental Authority then performing the same or substantially similar duties.

 

---

1.35Federal Reserve Bank.  The Federal Reserve Bank or the Federal Reserve System, or any successor Governmental Authority then performing the same or substantially similar duties.

1.36FFIEC.  The Federal Financial Institutions Examination Council, or any successor Governmental Authority then performing the same or substantially similar duties.

1.37Fixed Charges.  For any period, the sum, without duplication, of the amounts determined for Borrower equal to (a) Interest Expense and (b) scheduled payments of principal on Total Debt.

1.38Fixed Charge Coverage Ratio.  With respect to the Borrower, the ratio as of the last day of any fiscal quarter of (a) EBIDA, to (b) Fixed Charges, all for the four fiscal quarter period ending on such date.

1.39GAAP.   Generally accepted accounting principles in the United States of America.

1.40Governmental Approvals.  All authorizations, consents, approvals, permits, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

1.41Governmental Authority.  Any nation or government, any state, province or territory or other political subdivision thereof, any governmental agency (including any Bank Regulatory Authority), department, authority, instrumentality, regulatory body, court, central bank or other governmental entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization exercising such functions (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

1.42Guarantee. Any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

1.43Including or including.  Including but not limited to.

1.44Indebtedness.  Without duplication, with respect to any Person (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of

 

---

such Person in respect of bankers’ acceptances.   The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

1.45Intangible Assets.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

1.46Interest Expense. For any period, total interest expense of Borrower (including that portion attributable to Capital Lease Obligations), premium payments, debt discount, fees and related expenses with respect to all outstanding Indebtedness of Borrower, related to direct obligations of Borrower.

1.47Internal Revenue Code. The Internal Revenue Code of 1986, as amended from time to time.

1.48Late Charge. As such term is defined in Section 3.05.

1.49Laws.   Collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential authority in the applicable jurisdiction.

1.50Lender. Shall mean the Borrower named on page one hereof, and including any successor holder of the Loan from time to time.

1.51Leverage Ratio.  With respect to any Person, the ratio (expressed as a percentage) as of the last day of any fiscal quarter of (a) Tier 1 Capital of such Person to (b) Average Total Assets of such Person.

1.52LIBOR.  With respect to any LIBOR Reset Period, the rate of interest at which deposits in U.S.  dollars are offered to major banks in the London interbank market for a ninety (90) day period on the day that is two (2) LIBOR Days prior to the commencement of such LIBOR Reset Period, based on information presented by any interest rate reporting service of recognized standing selected by Lender, or if Lender determines that no interest rate reporting service has presented such information, the rate of interest at which deposits in U.  S.  dollars are offered to major banks in the London interbank market for a ninety (90) day period on the day that is two (2) LIBOR Days prior to the commencement of such LIBOR Reset Period by any bank reasonably selected by Lender.  Under the terms of this Agreement, the applicable “LIBOR” rate is used by Lender as a reference rate.   The use of ninety (90) day LIBOR as a reference rate does not mean the Borrower will actually pay interest on the Loan pursuant to a ninety (90) day contract or any other interest rate contract.   Instead, the effective interest rate under this Agreement will adjust at the beginning of each LIBOR Reset Period.

1.53LIBOR Day.  A day on which commercial banks are open for dealings in U.S.  dollar deposits in the London interbank market.

1.54LIBOR Reset Period.  Shall mean (i) as to the calendar quarter in which the Effective Date occurs, the period commencing on the Effective Date and ending on the last calendar day of such quarter and (ii) as to any quarter thereafter, the period commencing on the first calendar day of the quarter immediately following the end of the prior LIBOR Reset Period, and ending on the earlier of (a) the last calendar day of the quarter during which the Loan was made or most recently continued and (b) the Maturity Date.

1.55Lien.  With respect to any asset, (i) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (ii) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (iii) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

1.56Loan.  Any Revolving Credit Advance.  

 

---

1.57Loan Documents.  The collective reference to this Agreement, the documents and instruments listed in Section 3.02, and all the other documents and instruments entered into from time to time, evidencing or securing the Obligations or any obligation of payment thereof or performance of Borrower’s obligations in connection with the transaction contemplated hereunder, each as amended.

1.58Loan Opening Date.  The date of the initial disbursement of proceeds of the Loan.

1.59Marketable Securities.  Collectively, (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof, (b) marketable direct obligations issued by any of the United States or any municipality thereof and currently having a rating of (i) AA or higher issued by S&P and (ii) Aa2 or higher issued by Moody’s, and (c) corporate bonds and issuances and currently having a rating of (i) AA or higher issued by S&P and (ii) Aa2 or higher issued by Moody’s.

1.60Material Adverse Change or material adverse change.   If, in Lender’s reasonable and good faith discretion, the business prospects, operations or financial condition of a person, entity or property has changed in a manner which could impair the value of Lender’s security for the Obligations, prevent timely repayment of the Obligations or otherwise prevent the applicable person or entity from timely performing any of its material obligations under the Loan Documents.

1.61Maturity Date.  Shall be April 1, 2018.

1.62Maximum Lawful Rate.  As such term in defined in Section 4.03.

1.63Moody’s.  Moody’s Investors Service, Inc.  and any successor thereto.

1.64Net Income.  For any period, the net income of Borrower determined in accordance with GAAP.

1.65Note.  A promissory note, in the amount of the Commitment, executed by Borrower and payable to the order of Lender, evidencing the Loan.

1.66Note Rate.  A rate per annum equal to the sum of (a) LIBOR for the then-current LIBOR Reset Period plus (b) 3.50%.

1.67Obligations.  All obligations, indebtedness, and liabilities of Borrower to Lender or any Affiliate of Lender, or both, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, including, without limitation, the obligations, indebtedness, and liabilities under this Agreement, the other Loan Documents, any cash management or treasury services agreements and all interest accruing thereon (whether a claim for post-filing or post-petition interest is allowed in any bankruptcy, insolvency, reorganization or similar proceeding) and all attorneys’ fees and other expenses incurred in the enforcement or collection thereof.

1.68OCC.  The Office of the Comptroller of the Currency, or any successor Governmental Authority then performing the same or substantially similar duties.  

1.69OFAC.  As defined in Section 2.01t.

1.70Open the Loan, Opening of the Loan or Loan Opening.  The disbursement of Loan proceeds.

1.71Other Real Estate Owned.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

1.72Payment Date.  The first day of each and every January, April, July, and October during the term of the Note.

1.73Permitted Investments.  Each of the following:

 

---

1.74Permitted Liens. Each of the following:

provided that the term “Permitted Liens” shall not include any Lien securing Indebtedness.

1.75Permitted Tax Distributions.  With respect to any Person, any dividend or distribution to any holder of such Person’s stock or other equity interests to permit such holders to pay federal income taxes and all relevant state and local income taxes at a rate equal to the highest marginal applicable tax rate for the applicable tax year, however denominated (together with any interest, penalties, additions to tax, or additional amounts with respect thereto) imposed as a result of taxable income attributed to such holder as a partner of such Person under federal, state, and local income tax laws, determined on a basis that combines those liabilities arising out of the net effect of the income, gains, deductions, losses, and credits

 

---

of such Person and attributable to it in proportion and to the extent in which such holders hold stock or other equity interests of such Person.  

1.76Person.  Any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, bank, Governmental Authority or other entity.

1.77Purchased Credit Impaired Assets.  The individual assets or group of financial assets acquired by Borrower prior to the Effective Date and provided on Schedule 1.77 to this Agreement.

1.78Revolving Credit Advance.  Any Advance made by Lender to Borrower pursuant to Article III of this Agreement.

1.79Risk-Based Capital Guidelines.  Shall mean (a) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, (b) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (c) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, regardless of the date enacted, adopted or issued.  

1.80S&P.  Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.  and any successor thereto.

1.81Sanctioned Entity.  Shall mean (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in, a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time as such program may be applicable to such agency, organization or person.

1.82Sanctioned Person.  A person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

1.83Security Agreement.  The Pledge and Security Agreement to be executed by Borrower in form and substance satisfactory to Lender, as it may be amended, restated, supplemented or otherwise modified from time to time.

1.84Security Documents.  The Security Agreement and all other instruments, documents and agreements delivered by or on behalf of Borrower pursuant to this Agreement or any of the other Loan Documents in order to grant to, or perfect in favor of, Lender, a Lien on any real, personal or mixed property of Borrower as security for the Obligations.

1.85Subordinated Indebtedness.  Any Indebtedness of any Borrower (other than the Loan) that has been subordinated to the Obligations by written agreement, in form and content satisfactory to Lender and which has been approved in writing by Lender as constituting Subordinated Indebtedness for purposes of this Agreement.

1.86Subsidiary.  Shall mean (a) any corporation of which at least a majority of the outstanding shares of stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by Borrower or one or more of other Subsidiaries or by Borrower and one or more of such Subsidiaries, and (b) any other entity (i) of which at least a majority of the ownership, equity or voting interest is at the time directly or indirectly owned or controlled by one or more of Borrower and other Subsidiaries and (ii) which is treated as a subsidiary in accordance with GAAP.

 

---

1.87Swap Agreement.  Any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of Borrower shall be a Swap Agreement.

1.88Taxes.  Any present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

1.89Texas Ratio.  With respect to any Person, the ratio (expressed as a percentage) as of the last day of any fiscal quarter of (a) (i) Total Non-Accrual Loans of such Person, plus (ii) Other Real Estate Owned of such Person, plus (iii) to the extent such Loan is not already included as part of subsection (a)(i) above, any loan for which principal or interest has been in default for a period of ninety (90) days or more to (b) (i) Total Capital of such Person, plus (ii) unrealized losses (gains) on securities for such Person, plus (iii) Allowance for Loan and Lease Losses of such Person, minus (iv) Intangible Assets of such Person.

1.90Tier 1 Capital.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

1.91Tier 2 Capital.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

1.92Total Capital.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

1.93Total Debt.  As at any date of determination, the aggregate stated balance sheet amount of all Indebtedness related to direct obligations of Borrower determined in accordance with GAAP.  

1.94Total Non-Accrual Loans.  Total value of the loans held by any Person (other than Purchased Credit Impaired Assets), which loans are classified as non-accrual in accordance with the then-current regulations of the applicable Bank Regulatory Authority and/or Call Report instructions, or which loan meets any of the following conditions: (a) it is maintained on a cash basis because the borrower’s financial condition has deteriorated, (b) payment in full of principal or interest is not expected, or (c) principal or interest has been in default for a period of ninety (90) days or more (unless the loan is both well secured and in the process of collection).

1.95Total Risk-Based Capital Ratio.  With respect to any Person, the ratio (expressed as a percentage) as of the last day of any fiscal quarter of (a) (i) Tier 1 Capital of such Person, plus (ii) Tier 2 Capital of such Person, to (b) Total Risk-Weighted Assets of such Person.

1.96Total Risk-Weighted Assets.  As defined in accordance with the then-current regulations of the applicable Bank Regulatory Authority.

All terms defined in this Agreement shall have the same meanings when used in the Note, any other Loan Documents, or any certificate or other document made or delivered pursuant hereto.   The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement.

All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 8.01a, except as otherwise specifically prescribed herein.  

 

---

Notwithstanding the foregoing, all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the FASB ASC 825 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof.

ARTICLE II – BORROWER’S REPRESENTATIONS AND WARRANTIES

For purposes of this Loan Agreement, the following terms shall have the respective meanings assigned to them.

2.01Representations and Warranties.  To induce Lender to execute this Agreement and perform its obligations hereunder, Borrower hereby represents and warrants to Lender as follows:

 

---

 

---

2.02Survival of Representations and Warranties.  Borrower agrees that all of the representations and warranties set forth in Section 2.01 and elsewhere in this Agreement are true as of the date hereof, will be true at the Loan Opening and, except for matters which have been disclosed by Borrower and approved by Lender in writing, at all times thereafter.

ARTICLE III – LOAN AND LOAN DOCUMENTS

3.01Agreement to Borrow and Lend; Lender’s Obligation to Disburse.  Subject to the terms and conditions of this Agreement, Lender agrees to make a revolving credit loan to Borrower from time to time from the date hereof to and including the Maturity Date in an aggregate principal amount at any time outstanding up to but not exceeding the amount of the Commitment.  Subject to the foregoing limitations, and the other terms and provisions of this Agreement, Borrower may borrow, repay, and reborrow hereunder.

 

---

3.02Loan Documents.  Borrower agrees that it will, on or before the Loan Opening Date, execute and deliver or cause to be executed and delivered to Lender the following documents in form and substance acceptable to Lender:

3.03Term of the Loan.  All principal, interest and other sums due under the Loan Documents shall be due and payable in full on the Maturity Date.

3.04Prepayments.   Borrower shall have the right to make prepayments of the Loan, in whole or in part, upon not less than seven (7) days prior written notice to Lender.   No prepayment of all or part of the Loan shall be permitted unless same is made together with the payment of all interest accrued on the Loan through the date of prepayment.  Upon the prepayment of all of the Loan together with the payment of all interest accrued on the Loan through the date of prepayment, the Borrower shall have the right to terminate this Agreement at any time thereafter by thirty (30) days written notice to the Lender.

 

---

3.05Late Charge.  Any and all amounts due hereunder or under the other Loan Documents which remain unpaid on the tenth (10^th) day after the date said amount was due and payable shall incur a fee (the “Late Charge”) of five percent (5%) per annum of said amount, which payment shall be in addition to all of Lender’s other rights and remedies under the Loan Documents, provided that no Late Charge shall apply to the final payment of principal on the Maturity Date.   Nothing in this Section shall be deemed a cure period for the purpose of determining the occurrence of an Event of Default.

ARTICLE IV – INTEREST

4.01Interest Rate.

4.02Required Principal and Interest Payments.  All accrued but unpaid interest on the principal balance of the Loan outstanding from time to time shall be payable on each Payment Date.   The then outstanding principal balance of the Loan and all accrued but unpaid interest thereon shall be due and payable on the Maturity Date.   Borrower may from time to time during the term of this Agreement borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Agreement; provided, however, that the total outstanding borrowings under this Agreement shall not at any time exceed the Commitment.   The unpaid principal balance of the Loan at any time shall be the total amount advanced hereunder by Lender less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by Lender or otherwise noted in Lender’s records, which notations shall be, absent manifest error, conclusive evidence of the amounts owing hereunder from time to time.   All payments (whether of principal or of interest) shall be deemed credited to Borrower’s account only if received by 2:00 p.m.  Dallas time on a Business Day; otherwise, such payment shall be deemed received on the next Business Day.

4.03Maximum Lawful Rate.  It is the intent of Borrower and Lender to conform to and contract in strict compliance with applicable usury law from time to time in effect.  In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the rate of interest taken, reserved, contacted for, charged or received under this Agreement and the other Loan Documents exceed the highest lawful interest rate permitted under applicable law (the “Maximum Lawful Rate”).   If Lender shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the Maximum Lawful Rate, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loan in the inverse order of its maturity and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal.    All interest paid or agreed to be paid to the holder hereof shall, to the extent permitted

 

---

by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Loan so that the amount of interest on account of such obligation does not exceed the Maximum Lawful Rate.   As used in this Section, the term “applicable law” shall mean the laws of the State of Texas or the federal laws of the United States, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future.

ARTICLE V – COSTS OF MAINTAINING THE LOAN

5.01Increased Costs and Capital Adequacy.

 

---

5.02Borrower Withholding.  If by reason of a change in any applicable Laws occurring after the date hereof, Borrower is required by Law to make any deduction or withholding in respect of any Taxes (other than Taxes imposed on or measured by the net income of Lender or any franchise Tax imposed on Lender), duties or other charges from any payment due under the Note, then to the maximum extent permitted by Law, the sum due from Borrower in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, Lender receives and retains a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made.

ARTICLE VI – LOAN EXPENSE AND ADVANCES

6.01Loan and Administration Expenses.  Borrower unconditionally agrees to pay all costs and expenses incurred by Lender in connection with the Loan, including all amounts payable pursuant to Sections 6.02 and 6.03, and any and all other fees owing to Lender pursuant to the Loan Documents or any separate fee agreement, all recording, filing and registration fees and charges, mortgage or documentary taxes, all insurance premiums, printing and photocopying expenses, survey fees and charges, and cost certified copies of instruments, and, if any default or Event of Default occurs hereunder or under any of the Loan Documents or if the Loan or Note or any portion thereof is not paid in full when and as due, all costs and expenses of Lender (including, without limitation, court costs and counsel’s fees and disbursements and fees and costs of paralegals) incurred in attempting to enforce payment of the Loan and expenses of Lender incurred (including court costs and counsel’s fees and disbursements and fees and costs of paralegals) in attempting to realize, while a default or Event of Default exists, on any security or incurred in connection with the sale or disposition (or preparation for sale or disposition) of any security for the Loan.  Borrower agrees to pay all brokerage, finder or similar fees or commissions payable in connection with the transactions contemplated hereby and shall indemnify and hold Lender harmless against all claims, liabilities, costs and expenses (including attorneys’ fees and expenses) incurred in relation to any claim by broker, finder or similar person.

6.02Lender’s Attorneys’ Fees and Disbursements.  Borrower agrees to pay Lender’s attorney fees and disbursements incurred in connection with the Obligations, including (i) the preparation and negotiation of this Agreement and the other Loan Documents and the preparation of the closing binders (the amount of such fees pursuant to Section 6.02(i) not to exceed $8,000 in the aggregate), and (ii) enforcement of the terms of this Agreement and the other Loan Documents.

6.03Time of Payment of Fees and Expenses.   Borrower shall pay all expenses and fees incurred as of the Loan Opening on the Loan Opening Date (unless sooner required herein).   At the time of the Opening of the Loan, Lender may pay from the proceeds of the initial disbursement of the Loan all Loan expenses and all fees payable to Lender.  Lender may require the payment of outstanding fees and expenses as a condition to any disbursement of the Loan.  Lender is hereby authorized, without any specific request or direction by Borrower, to make disbursements from time to time in payment of or to reimburse Lender for all Loan expenses and fees.

6.04Expenses and Advances Secured by Loan Documents.  Any and all advances or payments made by Lender under this Article VI from time to time, and any amounts expended by Lender pursuant to Article XII, shall, as and when advanced or incurred, constitute additional indebtedness evidenced by the Note and secured by the Security Documents and the other Loan Documents.

6.05Right of Lender to Make Advances to Cure Borrower’s Defaults.  In the event that Borrower fails to perform any of Borrower’s covenants, agreements or obligations contained in this Agreement or any of the other Loan Documents (after the expiration of applicable grace periods, except in the event of an emergency or other exigent circumstances), Lender may (but shall not be required to) perform any of such covenants, agreements and obligations, and any amounts expended by Lender in so doing and shall

 

---

constitute additional indebtedness evidenced by the Note and secured by the Security Documents and the other Loan Documents and shall bear interest at the Default Rate.

ARTICLE VII – CONDITIONS PRECEDENT TO THE OPENING OF THE LOAN

7.01Conditions Precedent to Initial Extension of Credit.   Borrower agrees that Lender’s obligation to open the Loan and make the initial Advance under the Note is conditioned upon Borrower’s delivery, performance and satisfaction of the following conditions precedent in form and substance satisfactory to Lender in its reasonable discretion.

 

---

7.02Conditions Precedent to All Extensions of Credit.  The obligation of Lender to make any Advance (including the initial Advance) is subject to the following additional conditions precedent:

Each Advance hereunder shall be deemed to be a representation and warranty by Borrower that the conditions specified in this Section 7.02 have been satisfied on and as of the date of the applicable Advance.

ARTICLE VIII – AFFIRMATIVE COVENANTS

Borrower covenants and agrees as follows:

8.01Furnishing Information.

 

---

8.02Maintenance of Insurance.  Borrower shall maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies and financial institutions engaged in the same or similar businesses operating in the same or similar locations.  Each policy shall provide that it may not be canceled, reduced or terminated without at least thirty (30) days prior written notice to Lender.

8.03Payment of Taxes.  Borrower shall pay all Taxes before the same become delinquent, provided, however, that Borrower shall have the right to pay such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing the collection of such Taxes so contested and also of preventing the attachment of any Lien to any of Borrower’s property, (ii) Borrower has notified Lender of Borrower’s intent to contest such Taxes, and (iii) Borrower has deposited security in form and amount satisfactory to Lender, in its sole discretion, and has increased the amount of such security so deposited promptly after Lender’s request therefor.   If Borrower fails to commence such contest or, having commenced to contest the same, and having deposited such security required by Lender for its full amount, shall thereafter fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of any such contest, shall fail to pay such Tax, Lender may, at its election (but shall not be required to), pay and discharge any such Tax, and any interest or penalty thereon, and any amounts so expended by Lender shall be deemed to constitute disbursements of the Loan proceeds hereunder (even if the total amount of disbursements would exceed the face amount of the Note).  

 

---

Borrower shall furnish to Lender evidence that Taxes are paid at least five (5) days prior to the last date for payment of such Taxes and before imposition of any penalty or accrual of interest.

8.04Lender’s Attorneys’ Fees for Enforcement of Agreement.  In case of any Default or Event of Default hereunder, Borrower (in addition to Lender’s attorneys’ fees, if any, to be paid pursuant to Section 6.03) will pay Lender’s attorneys’ and paralegal fees (including, without limitation, any attorney and paralegal fees and costs incurred in connection with any litigation or bankruptcy or administrative hearing and any appeals therefrom and any post- judgment  enforcement  action  including,  without  limitation,  supplementary  proceedings)  in connection with the enforcement of this Agreement; without limiting the generality of the foregoing, if at any time or times hereafter Lender employs counsel (whether or not any suit has been or shall be filed and whether or not other legal proceedings have been or shall be instituted) for advice or other representation with respect to this Agreement, or any of the other Loan Documents, or to protect, collect, lease, sell, take possession of, or liquidate any of the Collateral, or to attempt to enforce any security interest or lien in any portion of the Collateral, or to enforce any rights of Lender or Borrower’s obligations hereunder, then in any of such events all of the reasonable attorneys’ fees arising from such services, and any reasonable expenses, costs and charges relating thereto (including fees and costs of paralegals), shall constitute an additional liability owing by Borrower to Lender, payable on demand.

8.05Use of Proceeds.  The proceeds of the Loan will be used only for working capital and general corporate purposes.  No part of the proceeds of the Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of regulations of any Bank Regulatory Authority, including Regulations T, U and X.

8.06Lost Note. Upon Lender’s furnishing to Borrower an affidavit to such effect, Borrower shall, if the Note is mutilated, destroyed, lost or stolen, deliver to Lender, in substitution therefor, a new note containing the same terms and conditions as the Note.

8.07Indemnification.  BORROWER SHALL INDEMNIFY LENDER, INCLUDING EACH PARTY OWNING AN INTEREST IN THE LOAN AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND CONSULTANTS (EACH, AN “INDEMNIFIED PARTY”) AND DEFEND AND HOLD EACH INDEMNIFIED PARTY HARMLESS FROM AND AGAINST ALL CLAIMS (INCLUDING, WITHOUT LIMITATION, ANY CIVIL PENALTIES OR FINES ASSESSED BY OFAC), INJURY, DAMAGE, LOSS AND LIABILITY, COST AND EXPENSE (INCLUDING ATTORNEYS’ FEES, COSTS AND EXPENSES) OF ANY AND EVERY KIND TO ANY PERSONS OR PROPERTY BY REASON OF (I) ANY BREACH OF REPRESENTATION OR WARRANTY, DEFAULT OR EVENT OF DEFAULT UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RELATED DOCUMENT; OR (II) ANY OTHER MATTER ARISING IN CONNECTION WITH THE LOAN, BORROWER OR ITS SUBSIDIARIES.  THE FOREGOING INDEMNIFICATION SHALL SURVIVE REPAYMENT OF THE LOAN AND SHALL CONTINUE TO BENEFIT LENDER FOLLOWING ANY ASSIGNMENT OF THE LOAN WITH RESPECT TO MATTERS ARISING OR ACCRUING PRIOR TO SUCH ASSIGNMENT.

ARTICLE IX – NEGATIVE COVENANTS

Borrower covenants and agrees as follows:

9.01Indebtedness.  Borrower will not create, incur, assume or permit to exist any Indebtedness, except:

 

---

9.02Liens.  Borrower will not create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

9.03Fundamental Changes; Disposition of Assets.  The Borrower will not (a) merge into or consolidate with any other Person, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) substantially all of its assets, or liquidate or dissolve, or (b) engage to any material extent in any business other than businesses of the type conducted by the Borrower on the Effective Date and businesses reasonably related thereto.

9.04Investments, Loans, Advances, Guarantees and Acquisitions.  The Borrower will not purchase, hold or acquire any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:

9.05Swap Agreements.  The Borrower will not enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower has actual exposure, (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower, and (c) Swap Agreements entered into by the Borrower in the ordinary course of business.

9.06Transactions with Affiliates. The Borrower will not sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower than could be obtained on an arm’s-length basis from unrelated third parties.

 

---

9.07Restrictive Agreements. The Borrower will not, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of the Borrower to create, incur or permit to exist any Lien upon any of its property or assets; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 9.08 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (iv) the foregoing shall not apply to customary provisions in leases restricting the assignment thereof.

9.08Borrower Leverage Ratio.  As of the last day of any fiscal quarter, the Borrower shall have a Leverage Ratio of 7.00% or greater.

9.09Bank Leverage Ratio.  As of the last day of any fiscal quarter, the Bank shall have a Leverage Ratio of 8.00% or greater.

9.10Total Risk-Based Capital Ratio.  As of the last day of any fiscal quarter, the Bank shall have a Total Risk-Based Capital Ratio of 12.00% or greater.

9.11Texas Ratio.   As of the last day of any fiscal quarter, the Bank shall have a Texas Ratio of 40% or less.

9.12Classified Assets to Tier 1 Capital Ratio.  As of the last day of any fiscal quarter, the Bank shall have a Classified Assets to Tier 1 Capital Ratio of no greater than 50.00%.

9.13Fixed Charge Coverage Ratio.  As of the last day of any fiscal quarter, Borrower shall not permit the Fixed Charge Coverage Ratio to be less than 1.50 to 1.0.

9.14Limitation on Payments and Modification of Subordinated Indebtedness.  Without the prior written consent of Lender, the Borrower shall not amend, modify, waive or supplement (or permit the modification, amendment, waiver or supplement of) any of the terms or provisions of any Subordinated Indebtedness in any respect; provided, however that the foregoing shall not preclude the prepayment of any Subordinated Indebtedness so long as (i) Borrower is in compliance with all terms and conditions of this Agreement and (ii) Borrower has obtained the prior written consent of Lender for any prepayments greater than $10,000,000 within any twelve month period.

ARTICLE X – ASSIGNMENTS BY LENDER AND BORROWER

10.01Assignments and Participations.  Lender may from time to time sell the Loan and the Loan Documents (or any interest therein) and may grant participations in the Loan.   Borrower agrees to cooperate with Lender’s efforts to do any of the foregoing and to execute all documents reasonably required by Lender in connection therewith which do not materially adversely affect Borrower’s rights under the Loan Documents.

10.02Prohibition of Assignments by Borrower.  Borrower shall not assign or attempt to assign its rights under this Agreement and any purported assignment shall be void.

10.03Successors and Assigns.  Subject to the foregoing restrictions on transfer and assignment contained in this Article X, this Agreement shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and permitted assigns.

 

---

ARTICLE XI – EVENTS OF DEFAULT

11.01Events of Default.  The occurrence of any one or more of the following shall constitute an “Event of Default” as said term is used herein:

 

---

 

---

ARTICLE XII – LENDER’S REMEDIES IN EVENT OF DEFAULT

12.01Remedies Conferred Upon Lender.  Upon the occurrence of any Event of Default, Lender may, with notice, pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other:

Notwithstanding the foregoing, upon the occurrence of any Event of Default under Section 11.01d, e, o, or p, with respect to Borrower or the Bank, the Commitment shall automatically terminate and all amounts evidenced by the Note shall automatically become due and payable, without any presentment, demand, protest or notice of any kind to Borrower, all of which are hereby expressly waived by Borrower.  In addition to the foregoing, if any Event of Default shall occur and be continuing, Lender may exercise all rights and remedies available to it in law or in equity, under the Loan Documents, or otherwise.

ARTICLE XIII – GENERAL PROVISIONS

13.01Captions.  The captions and headings of various Articles, Sections and subsections of this Agreement and Schedules and Exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

13.02Modification; Waiver.  No modification, waiver, amendment or discharge of this Agreement or any other Loan Document shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment or discharge is sought.

13.03Authorized Representative. Borrower hereby appoints Stephen D.  Young as its Authorized Representative for purposes of dealing with Lender on behalf of Borrower in respect of any and all matters in connection with this Agreement, the other Loan Documents, and the Loan.   The Authorized Representative shall have the power, in his discretion, to give and receive all notices, monies, approvals, and other documents and instruments, and to take any other action on behalf of Borrower.   All actions by the Authorized Representative shall be final and binding on Borrower.   Lender may rely on the authority given to the Authorized Representative until actual receipt by Lender of a duly authorized resolution substituting a different person as the Authorized Representative.    No more than one person shall serve as Authorized Representative at any given time.

13.04Governing Law.  Irrespective of the place of execution and/or delivery, this Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of Texas.

13.05Acquiescence Not to Constitute Waiver of Lender’s Requirements.  Each and every covenant and condition for the benefit of Lender contained in this Agreement may be waived by Lender, provided, however, that to the extent that Lender may have acquiesced in any noncompliance with any conditions precedent to the Opening of the Loan or to any subsequent disbursement of Loan proceeds, such

 

---

acquiescence shall not be deemed to constitute a waiver by Lender of such requirements with respect to any future disbursements of Loan proceeds.

13.06Disclaimer by Lender.  This Agreement is made for the sole benefit of Borrower and Lender, and no other person or persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Lender pursuant to this Agreement.   Lender shall not be liable for any debts or claims accruing in favor of any such parties against Borrower or others.  Lender, by making the Loan or taking any action pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with Borrower or fiduciary of Borrower.    No payment of funds directly to a contractor or subcontractor or provider of services shall be deemed to create any third-party beneficiary status or recognition of same by the Lender.

13.07Partial Invalidity; Severability.  If any of the provisions of this Agreement, or the application thereof to any person, party or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by Law.

13.08Definitions Include Amendments. Definitions contained in this Agreement which identify documents, including, but not limited to, the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments, modifications, and supplements thereto entered into from time to time to satisfy the requirements of this Agreement or otherwise with the consent of Lender.   Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement.

13.09Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

13.10Entire Agreement.  This Agreement, taken together with all of the other Loan Documents and all certificates and other documents delivered by Borrower to Lender, embody the entire agreement and supersede all prior agreements, written or oral, relating to the subject matter hereof.

13.11Waiver of Damages.   In no event shall Lender be liable to Borrower for punitive, exemplary or consequential damages, including, without limitation, lost profits, whatever the nature of a breach by Lender of its obligations under this Agreement or any of the Loan Documents, and Borrower waives all claims for punitive, exemplary or consequential damages.

13.12Claims Against Lender.  Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim of Borrower shall have been given to Lender within three (3) months after Borrower first had knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and Lender does not remedy or cure the default, if any there be, promptly thereafter.   Borrower waives any claim, set-off or defense against Lender arising by reason of any alleged default by Lender as to which Borrower does not give such notice timely as aforesaid.    Borrower acknowledges that such waiver is or may be essential to Lender’s ability to enforce its remedies without delay and that such waiver therefore constitutes a substantial part of the bargain between Lender and Borrower with regard to the Loan.

13.13Jurisdiction.  TO  THE  GREATEST EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A “PROCEEDING”), BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF DALLAS, COUNTY OF DALLAS AND STATE OF TEXAS, AND

 

---

(B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.  NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.  BORROWER FURTHER AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY TEXAS STATE OR UNITED STATES COURT SITTING IN THE CITY OF DALLAS AND COUNTY OF DALLAS MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

13.14Set-Offs.  After the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably authorizes and directs Lender from time to time to charge Borrower’s accounts and deposits with Lender (or its Affiliates), and to pay over to Lender an amount equal to any amounts from time to time due and payable to Lender hereunder, under the Note or under any other Loan Document.    Borrower hereby grants to Lender a security interest in and to all such accounts and deposits maintained by the Borrower with Lender (or its Affiliates).

13.15Lender’s Consent.  Wherever in this Agreement there is a requirement for Lender’s consent and/or a document to be provided or an action taken “to the satisfaction of Lender”, it is understood by such phrase that, except as expressly modified herein, Lender shall exercise its consent, right or judgment in its sole discretion.

13.16Notices.  Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

 

 

---

 

 

 

 

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

13.17No Oral Agreements.  THIS WRITTEN LOAN AGREEMENT REPRESENTS 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.

 

EXECUTED AND DELIVERED as of the date first recited.

 

[Signature page follows]

 

 

 

---

 

 

 

 

 

 

 

---

 

EXHIBIT A

Certificate of Compliance

 

 

NexBank SSB

2515 McKinney Avenue, Suite 1100

Dallas, Texas 75201

 

Attn: [●]

Re:  Loan Agreement dated as of January 6, 2015 (as amended, modified, supplemented, restate, or renewed, from time to time, the “Agreement”), between the below signed Borrower(s) and NexBank SSB (“Lender”).

Reference is made to the Agreement.   Capitalized terms used in this Certificate (including schedules and other attachments hereto, this “Certificate”) without definition have the meanings specified in the Agreement.  Pursuant to applicable provisions of the Agreement, the undersigned, being the Authorized Representative designated in the Agreement, hereby certifies to the Lender that the information furnished in the attached schedules, including, without limitation, each of the calculations listed below, with respect to the Borrower and the Bank are true, correct and complete in all material respects as of the last day of the fiscal periods subject to the financial statements and associated covenants being delivered to the Lender pursuant to the Agreement together with this Certificate (such statements the “Financial Statements” and the periods covered thereby the “reporting period”) and for such reporting periods.

The undersigned hereby further certifies to the Lender that:

[Note to preparer.   The following Financial Covenants are provided as illustration.   The actual Financial Covenants must be obtained from the Agreement]

Calculation:

Fixed Charge Coverage Ratio = EBIDA / Fixed Charges

Fixed Charge Coverage Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in Agreement]

Compliance? (Yes or No) _________________

[Note to preparer.   The following Financial Covenants are provided as illustration.   The actual Financial Covenants must be obtained from the Agreement]

Calculation:

Classified Assets to Tier 1 Capital Ratio = Classified Assets / (Tier 1 Capital + Allowance for Loan and Lease Losses)

 

---

 

Classified Assets to Tier 1 Capital Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in Agreement]

Compliance? (Yes or No) _________________

Calculation:

Texas Ratio = (Total Non-Accrual Loans + Other Real Estate Owned of such Person + loans in default for 90 days or more) / ((Total Capital + unrealized losses (gains) on securities + Allowance for Loan and Lease Losses) - (Intangible Assets))

Texas Ratio of for period ending ___.

[Borrower to include specific calculation based upon formula outlined in Agreement]

Compliance? (Yes or No) _________________

Calculation:

Leverage Ratio = Tier 1 Capital / Average Total Assets

Leverage Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in Agreement]

Compliance? (Yes or No) _________________

Calculation:

Total Risk-Based Capital Ratio = (Tier 1 Capital + Tier 2 Capital) / Total Risk-Weighted Assets

Total Risk-Based Capital Ratio of for period ending .

[Borrower to include specific calculation based upon formula outlined in Agreement]

Compliance? (Yes or No) _________________

 

---

 

 

IN WITNESS WHEREOF, this Certificate is executed by the undersigned on January [__], 2015.