Exhibit 10.1
LOAN AND SECURITY
AGREEMENT
THIS LOAN AND SECURITY
AGREEMENT made this 30th day of June, 2017,
by and between SOUTHERN FIRST BANCSHARES,
INC., a South Carolina corporation, having
its principal place of business in 000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000 (hereinafter referred to as the “Borrower”), and
CENTERSTATE BANK, NATIONAL
ASSOCIATION, a national banking association,
having its principal place of business in 0000 0xx Xxxxxx Xxxxx,
Xxxxxx Xxxxx, Xxxxxxx 00000 (hereinafter referred to as the “Lender”).
The parties, in consideration of the
making of the loans hereinafter specified and of the promises and undertakings
to be set forth, do hereby agree, it being expressly understood that all
covenants and undertakings herein will survive and remain in full force and
effect, so far as material or appropriate, until such time as all indebtedness
(principal and all accrued interest) direct or indirect, of the Borrower to the
Lender shall have been paid in full as follows:
| I. |
Representations
and Warranties. The Borrower hereby represents and warrants
that: |
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A. |
Financial
Statements. The audited consolidated
financial statements of the Borrower as of and for the fiscal year ended
December 31, 2016, and the unaudited consolidated financial statements of
the Borrower as of and for the nine months ending March 31, 2017 which it
has submitted to the Lender, are complete and correct, and fairly present
the financial condition of Borrower as of the respective dates stated
herein. |
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B. |
Changes in Financial
Condition. There have been no
substantial changes in its financial condition or in that of any of its
consolidated subsidiaries since that reflected in the most recent balance
sheet submitted to the Lender nor are, to the knowledge of the Borrower,
any such changes threatened. |
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C. |
Liens or
Encumbrances. The Borrower and its
consolidated subsidiaries have good marketable title to, or valid
leasehold interest in, all of their respective properties and assets
subject to no liens or encumbrances, including but not limited to the
mortgaging of real or personal properties, assignment of accounts
receivable, pledging of personal properties, etc., except as provided
herein or except as otherwise disclosed by the financial statements
submitted to the Lender and by the information submitted to the Lender in
the form of Exhibit “A”
attached hereto. |
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D. |
Guaranty
Agreements. Neither the Borrower nor
any of its consolidated subsidiaries is a party to any suretyship,
guaranty, or other similar type agreement nor have any of them offered its
endorsement to any individual or concern which would in any way create a
contingent liability that does not appear in the financial statements
referred to in Paragraph A above or in the information submitted to the
Lender in the form of Exhibit “A”
attached hereto. |
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E. |
Organization. The Borrower and each of its consolidated subsidiaries
is a duly organized corporation and the execution and delivery of this
Agreement is for a valid corporate purpose and will not violate any laws,
Borrower’s charter, bylaws, or any other agreement to which it or any of
its consolidated subsidiaries is a party. |
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F. |
Litigation. There is no litigation or proceeding pending against
the Borrower or any of its consolidated subsidiaries nor, to the knowledge
of the Borrower, are any threatened, financial or otherwise, which might
have a material adverse effect on the Borrower’s or any of its
consolidated subsidiaries’ financial condition or business affairs except
as shown on Exhibit “A”
attached hereto. |
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G. |
Taxes. The Borrower and each of its
consolidated subsidiaries has filed all required (Federal, State and Local) tax returns and has paid all taxes
as shown on such returns as they have become due. No claims have been assessed and remain unpaid with respect to such
taxes except as disclosed by the financial statements submitted to the Lender or by Exhibit
“A” attached hereto. |
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H. |
Corporate
Action. The Borrower has full power,
authority and legal right to execute, deliver, and perform this Agreement,
the Note (as defined below) and all other Loan Documents (this Agreement,
the Note and any and all other documents executed in connection with this
loan accommodation shall hereinafter be referred to as, the “Loan
Documents”) and to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings hereunder on the terms and conditions
of this Agreement and to authorize the execution, delivery and performance
of this Agreement and the Note. This Agreement and the Note have been duly
authorized, executed and delivered by the Borrower and constitute legal,
valid and binding obligations of the Borrower enforceable in accordance
with their respective terms. |
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I. |
Subsidiaries. The subsidiaries
of the Borrower and the Borrower’s percentage of ownership thereof are as
listed in Exhibit “B”
attached hereto. |
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J. |
Governmental
Laws. The Borrower and its consolidated
subsidiaries are in compliance in all material respects with all
applicable governmental laws and regulations. |
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K. |
Stock of
Southern First Bank (hereinafter
referred to as "SFB"). |
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1. |
The common stock of SFB pledged
to Lender (herein "Collateral") represents 100% of the outstanding common
stock of SFB, represented by Share Certificate No. 001 of SFB. SFB has no
other capital stock or securities issued or outstanding. |
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2. |
The Collateral has been duly
authorized and validly issued and is fully paid and
non-assessable. |
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3. |
Other than those imposed by the
Change in Bank Control Act of 1978, there are no restrictions upon the
transfer of the Collateral. |
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L. |
The pledge of the
Collateral pursuant to this Agreement creates a valid and perfected first
priority security interest in the Collateral. |
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| II. |
The
Loan. Subject to the terms and conditions of the Agreement,
the Lender agrees to make a revolving line of credit loan to the Borrower
as of the date hereof in the maximum principal amount of
$15,000,000.00 (the "Loan"). |
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A. |
The Note. The Loan shall be evidenced by that certain promissory
note substantially in the form attached hereto as Exhibit “C” (hereinafter called the "Note"). The Note shall (a) be dated as of
the date hereof; (b) be stated to be due on June 30, 2020 (the “Maturity
Date”); (c) bear interest (at the applicable interest rate provided herein
below) from the date hereof on the unpaid principal amount thereof, with
quarterly payments of interest only, based on the outstanding principal
balance of the Note, payable beginning on September 30, 2017 and on the
thirtieth (30th ) day of each of December, March and June
during the term hereof; and (d) be due and payable in full as to the
unpaid principal amount on the Maturity Date. |
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Floating Rate of 30-day LIBOR
Base Rate. Interest shall accrue on the
unpaid principal balance of the Note at a variable per annum rate equal to
the One Month LIBOR Base Rate (as hereinafter defined), plus a margin of
250 basis points (or 2.50%) (the “Interest Rate”). The Interest Rate may
change as often as monthly. The interest rate hereunder shall be adjusted
monthly in accordance with fluctuations in the One Month LIBOR Base Rate.
The effective date of any rate change will be the last Business Day (as
defined below) of each month. |
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For purposes hereof, “One Month LIBOR Base
Rate” means the percentage rate of interest at which one (1) month
deposits in United States dollars in an amount equal to the principal
balance of the Loan on the effective date of this Agreement (or the next
higher amount for which quotes are available in the London Interbank
Market) are offered to major banks in the London Interbank Market as
published in the Wall Street Journal
on the first Business Day of
each month. Such One Month LIBOR Base Rate is established by
CENTERSTATE BANK as an index or base rate and may or may not at any time
be the best or lowest rate of interest offered by the
Lender.
The LIBOR Base Rate shall be the “offered to”
rate reported by a reliable source for LIBOR quotes selected by the Lender
in its sole discretion. If two or more applicable “offered to” rates are
reported by that source, the LIBOR Base Rate shall be the arithmetic mean
of such rates. “Business Day” means any day on which dealings in deposits
in United States Dollars are conducted in the London Interbank Market
other than Saturday, Sunday, or a day on which national banks are
authorized or required by law to be closed in the city where the Lender’s
office, as identified above, is located, and any performance which would
otherwise be required on a day other than a Business Day shall be timely
performed in such instance, if performed on the next succeeding Business
Day. Notwithstanding such timely performance, interest shall continue to
accrue hereunder until such payment or performance has been
made.
All interest accruing under this Note shall be
computed on a 360 day basis (i.e., interest for each day during which the
principal amount of the Note is outstanding shall be computed at the
Interest Rate divided by 360, for the actual number of days elapsed) and
the applicable Interest Rate shall not exceed the maximum rate of interest
permitted by law. |
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B. |
Commitment Fee. 0.10% ($15,000.00) paid upon execution hereof, prior
to any funding of the Loan. |
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C. |
Prepayments; Revolving Nature
of Loan. The Borrower may at its option
prepay the Note, in whole or in part, without penalty, plus accrued
interest in the amount prepaid to the date of prepayment. Prepayments are
to be applied to principal installments in inverse order of maturity. The
Note represents a non-revolving line of credit loan whereby any sums
advance hereunder may be repaid but not re-borrowed. |
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D. |
Proceeds of the Loan.
The proceeds of the Loan made to the
Borrower under this Agreement shall be used by the Borrower to fund future
growth, stock repurchases, and other general corporate
purposes. |
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E. |
Non-Usage Fee.
None. |
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| III. |
Collateral.
As security for the payment of the Loan
as described herein (and the other “Obligations” as defined in the Pledge
Agreement defined herein below), the Borrower has pledged or deposited
with Lender and hereby grants to Lender a security interest in the shares
of common stock of SFB (herein referred to as "Pledge Agreement"),
described in Exhibit “D”
attached hereto (including all
cash, stock and other dividends and all rights to subscribe for securities
incident to, declared or granted in connection with such shares of common
stock) which shares of common stock, together with all additions and
substitutions thereafter pledged or deposited with the Lender is the
Collateral. Upon the occurrence of any default under this Agreement,
Lender shall have the remedies of a secured party under this Agreement,
Lender shall have the remedies of a secured party under the Uniform
Commercial Code and, without limiting the generality of the foregoing,
Lender shall have the right, immediately and without further action by it,
to set off against the Loan all the money owed by Lender in any capacity
to Borrower; and Lender shall be deemed to have exercised such right of
set-off and to have made a charge against any such money immediately upon
the occurrence of such defaults even though such a charge is made or
entered on the books of Lender subsequent thereto. The giving of five (5)
Business Days written notice to the Borrower shall constitute reasonable
notice to the Borrower. |
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Conditions of
Borrowing. It shall have been determined prior to funding of the
Loan, that SFB’s pro-forma Tier I Leverage Ratio is 9.0% or better and
their Classified Asset Ratio is 40% or less and the Borrower shall have
furnished to the Lender: |
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(a) |
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a copy, certified by the
Secretary of the Borrower and dated the date hereof, of the resolutions of
the Board of Directors of the Borrower authorizing the borrowings herein
provided for and the execution, delivery and performance of this Agreement
and the Note, in form and substance satisfactory to the
Lender, |
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(b) |
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a copy of all approvals, if any,
from all regulatory agencies with jurisdiction over the Borrower and
SFB. |
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(c) |
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a summary copy of the SFB’s watch
list loans, it’s top ten (10) lending relationships and ten (10) largest
non-performing assets, which said summary shall also include the
loan-to-value ratio and debt service coverage ratio of each
loan/non-performing asset included in such summary and Lender shall be
permitted to independently review the bank files pertaining to said ten
(10) largest NPAs. |
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| V. |
Affirmative
Covenants. Until payment in full of the Note and interest thereon,
the Borrower agrees that it will: |
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A. |
Annual Financial
Statements. Borrower agrees to supply
to Lender (i) within one hundred twenty (120) days of its fiscal year end
of each year, fully completed audited unqualified financial statements on
Borrower and subsidiaries and related management letter to accountants for
the recently completed calendar year prepared by an certified public
accountant selected by the Borrower and satisfactory to the Lender in
conformity with generally accepted accounting principles, applied on a
basis consistent with that of the preceding year or containing disclosure
of the effect on the financial position or results of operations of any
change in the application of such accounting principles during the year,
(ii) the annual operating budget for the Borrower and SFB within 30 days
of board of directors approval, and (iii) quarterly covenant compliance
certificates as to the terms and conditions of this Agreement within 20
days following the end of each calendar quarter commencing with the
calendar quarter of June 30, 2017. |
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B. |
Other
Information. Upon written request on
the part of the Lender, deliver to the Lender promptly such other
information about the financial condition and operations of the Borrower
and its consolidated subsidiaries as the Lender may, from time to time,
reasonably request, subject to the restrictions in Section VIII.Q
hereof. |
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C. |
Inspection. The Borrower and SFB will make available, during
normal office hours, for inspection to a duly authorized officer of the
Lender, any of its books of account and financial records and any of the
books of account and financial records of the consolidated subsidiaries,
when so requested. |
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D. |
Payment of
Obligations. Duly pay and discharge,
and will cause each of its consolidated subsidiaries to duly pay and
discharge, all their respective obligations and liabilities, including
taxes, assessments and governmental charges prior to the date on which
penalties attach thereto, unless and to the extent only that the same
shall be contested in good faith and by appropriate proceedings diligently
prosecuted and against which, if requested by the Lender, the Borrower
will set up reasonable reserves satisfactory to the Lender. |
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E. |
Corporate
Existence. Maintain its corporate
existence, continue to engage in business of the same general type as now
conducted by it and keep its properties in good repair, working order and
condition, and cause each of its consolidated subsidiaries to do the
same. |
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Insurance. Maintain and cause
SFB to maintain, with financially sound and reputable insurance carriers,
insurance, in such amounts against such risks, including but not limited
to, public liability, property damage and business interruption insurance,
as is satisfactory to the Lender, and as is customarily carried by
companies engaged in the same or similar business similarly situated, and
will upon request of the Lender deliver to it the policies concerned or a
schedule of all insurance in force. Upon failure of the Borrower or SFB to
maintain adequate insurance, the Lender may obtain such policies it deems
necessary as long as the face value of such policies is consistent with
the actual value of the assets to be covered, and the Borrower agrees that
the cost thereof may be added to the principal of the Loan. |
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G. |
Notice. Except when prohibited
by Section VIII.Q. herein, promptly notify the Lender in writing of (i)
any litigation, proceeding or action by any regulator that will restrict
the ability of SFB to pay dividends, (ii) any litigation or proceeding
brought against the Borrower or any of its consolidated subsidiaries
which, if adversely determined, would have a material adverse effect on
the financial condition, business or operations of the Borrower or any of
its consolidated subsidiaries, and shall, if requested by the Lender, set
up such reasonable reserves as are satisfactory to the Lender, and (iii)
the occurrence of any Event of Default hereunder or any event or condition
which, with notice or lapse of time, or both, would constitute such an
Event of Default. |
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H. |
Financial
Ratios. At all times during the term of
the Loan, the Borrower or SFB, as the case may be, shall comply with the
following: |
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1. |
SFB shall maintain a Classified
Assets to Tier 1 Capital + ALLL not to exceed 40% (measured
quarterly). |
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2. |
SFB shall maintain a Tier I
Leverage Ratio of at least 9%. |
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3. |
SFB shall maintain a Total
Risk-Based Ratio of at least 12%. |
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4. |
Borrower shall maintain a fixed
charge coverage ratio of at least 1.5:1 times, to be tested on an annual
basis, based on the fiscal year end financials. The ratio is defined as
SFB’s annual net profit after taxes minus any gains on sale of securities,
minus Borrower shareholder distributions, all divided by the Borrower’s
annual fixed charges. (Fixed charges are defined as the sum total of
Borrower’s operating expenses and all debt service payments). |
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For purposes of this
Section V.H. the ratios set forth in subsections 1, 2, and 3 above shall
each be tested quarterly. The ratio set forth in subsection 4 above shall be
tested annually at Borrower’s fiscal year end. |
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I. |
Financial
Covenants. At all times during the term
of the Loan, the Borrower shall comply with the following: |
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1. |
Neither the Borrower nor SFB
shall be a party to or under any investigation with respect to any
corrective, suspension or cease-and-desist order, agreement, consent
agreement, memorandum of understanding or other regulatory enforcement
action, proceeding or order with or by, or a party to any commitment
letter or similar undertaking to, or subject to any directive by, or have
been a recipient of any supervisory letter from, or have adopted any board
resolutions at the request of, any Regulatory Agency (other than civil
fees and flood type violations). A Regulatory Agency means any federal or
state agency charged with the supervision or regulation of depository
institutions or holding companies of depository institutions, or engaged
in the insurance of depository institution deposits, or any court,
administrative agency or commission or other authority, body or agency
having supervisory or regulatory authority with respect to the Borrower or
any of its subsidiaries. |
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2. |
Beginning June 30, 2017 Borrower
shall maintain at least FIVE HUNDRED
THOUSAND DOLLARS AND NO/100 ($500,000.00) in liquid assets (e.g., cash and marketable securities) at all
times during the term of the Loan. |
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J. |
Governmental
Laws. Comply, and cause each of its
consolidated subsidiaries to comply, in all material respects, with all
applicable governmental laws and regulations. |
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Negative
Covenants. Until payment in full of the Note and interest thereon
the Borrower agrees that, without prior written approval of the Lender,
which approval will not be unreasonably withheld, it will
not: |
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A. |
Contingent
Liabilities. Guarantee, endorse or
become liable, directly or indirectly, contingently or otherwise, for the
obligations of others (except by the endorsement of negotiable instruments
payable at sight for deposit or collection) or become a party to any
suretyship, guaranty or other similar type agreement, nor permit any
consolidated subsidiary to do the same (except as may be provided for
herein). |
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B. |
Other
Debts. Hereafter create or assume any
debt or other liability for money borrowed or the equivalent. |
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C. |
Disposal of
Assets. Sell, lease, convey or
otherwise dispose of any of its assets or property except for leases
entered into in the ordinary course of business, the sale of mortgages in
the secondary market or other banking transactions in the usual course of
business, nor permit SFB to do the same; provided, however, should the
Borrower or SFB propose to sell certain real estate interests, which it
owns or they own or at any time during the term hereof use to conduct
business operations, but is not then required for the successful conduct
of its business, they may do so at prices consistent with the then
existing market values. |
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D. |
Retirement of Term
Debt. Retire any long term or funded
debt entered into prior to or subsequent to the date of this Agreement, at
a date in advance of its legal obligation to do so, other than retirement
of the Treasury Securities and the debt evidenced by the
Note. |
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E. |
Encumbrances. Create or permit,
or permit SFB to create or permit, to exist against any of their
respective assets now owned or hereafter acquired, any pledge, mortgage,
lien, encumbrance, or security interest of any kind whatsoever
except: |
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1. |
existing liens evidenced by
Exhibit
“A”; |
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2. |
security interests in favor of
the Lender which is required by this Agreement; |
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3. |
liens for taxes being contested
in good faith; |
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4. |
liens accruing under provisions
of the law in connection with employee benefits; and |
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5. |
transactions in the normal course
of banking business, including but not limited to securing public
deposits, secured borrowing at the discount window and repurchase
agreements. |
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F. |
Investments. Make, or permit any
consolidated subsidiary to make, investments in any other company or
entity, except: (i) as permitted by this Agreement and (ii) investments
made by SFB in the ordinary course of
business. |
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G. |
Conduct of
Business. Make, nor permit any
consolidated subsidiary to make, material changes in the general conduct
of their respective business. |
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H. |
Dividends, Stock Purchases,
etc. Directly or indirectly declare,
order, pay or make any cash dividend distribution on account of any shares
of its capital stock of any class now or hereafter outstanding, if such
transaction will cause the Borrower to not be in compliance with any of
its obligations under this Agreement. Redeem, purchase or otherwise
acquire any shares of its capital stock of any class now or hereafter
outstanding, if such transaction will cause the Borrower to not be in
compliance with of any of its obligations under this
Agreement. |
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I. |
Acquisition of
Assets. Acquire or transfer assets from
any consolidated subsidiary that would cause the Borrower to not be in
compliance with the ratios in Section V, Paragraph H. |
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J. |
Merger or Sale. Become a party to, or permit SFB to become a party to,
a sale, a merger, or a consolidation with any other company or sell all or
substantially all of their assets, except (i) a merger with a consolidated
subsidiary in which the Borrower is the surviving company (ii) a merger or
consolidation of two or more subsidiaries of Borrower with each other or
(iii) where the Loan is to be paid in full as a condition of the sale,
merger or consolidation. |
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| VII. |
Events of
Default. It shall be considered an Event of Default under this Agreement if: (i) the Borrower
fails to pay any interest or principal within 10 days of the day when due under the terms of the Note; (ii)
the Borrower or consolidated subsidiary fails to pay any other indebtedness of the Borrower or any
consolidated subsidiary to the Lender within 20 days of due date; (iii) any covenant, condition or
provisions, contained in Section V or VI hereof shall be breached or defaulted and such breach or default
shall continue unremedied for a period of thirty (30) days after the occurrence thereof; (iv) any covenant,
condition or provision elsewhere contained in this Agreement shall be breached or defaulted by the
Borrower and such breach or default shall continue unremedied for a period of thirty (30) days after
written notice thereof shall have been given to the Borrower by the Lender; (v) any covenant, condition
or provision contained in any other agreement is breached or defaulted by Borrower or any consolidated
subsidiary the effect of which is to permit any indebtedness of the Borrower of any consolidated
subsidiary to become due prior to its stated maturity; (vi) any representation or warranty made by the
Borrower in this Agreement or any certificate, financial or other statement furnished by the Borrower
pursuant hereto shall prove to be false in any material respect at the time when made; (vii) any
proceeding or action is commenced by or against the Borrower or any of its consolidated subsidiaries
in bankruptcy or seeking reorganization, arrangement, readjustment of its debts, dissolution, liquidation,
winding-up, composition or any other relief under any federal or state bankruptcy or insolvency,
reorganization, liquidation, dissolution, arrangement, composition, readjustment of debtor or any similar
act or law and such action is not stayed within thirty (30) days of the filing thereof, (viii) any judgment
shall be entered against the Borrower or any of its consolidated subsidiaries, or any attachment shall be
made against any property of the Borrower or any of its consolidated subsidiaries, if such judgment or
attachment is in excess of $750,000.00 when entered or made, and if the same remains unappealed,
undischarged, unbounded, or undismissed for a period of thirty (30) days, or (ix) the Borrower shall be
in breach or in default of any non-payment related covenant, condition, or provisions contained in the
Note, the Pledge Agreement or any other agreement between the Borrower and the Lender and such
default remains uncured or unremedied for a period of thirty (30) days after the occurrence thereof.
Upon any Event of Default hereinabove, the Lender may elect after thirty (30) days’ notice to cure such
default, except that as to (i), (ii) and (vi) above there are no days to cure, to (i) make immediately due
and payable all sums owned to the Lender hereunder and under the Note without demand, presentment,
protest or notice of any type, all of which are hereby expressly waived, and/or (ii) require the Borrower
to pledge additional collateral to the Lender as security for the payment of such sums, from the
Borrower’s assets and properties, the acceptability and sufficiency of such collateral to be determined
solely by the Lender. The rights and remedies provided in the Loan Documents are cumulative,
concurrent and not exclusive of any rights or remedies provided by law, and may be pursued separately,
successively or together against any Borrower, any property encumbered by the Loan Documents or
any part or parcel thereof, any other collateral, or any one or more of them, at the sole discretion of
Lender, and may be exercised as often as occasion therefor shall arise, all to the maximum extent
permitted by the laws of the State of Florida.
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| VIII. |
Miscellaneous. |
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A. |
Indirect Acts. Any act which the Borrower is prohibited from doing
hereunder shall not be done indirectly through a consolidated subsidiary
or by any other indirect means. |
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B. |
No Waiver. Neither the failure nor any delay on the part of the
Lender to exercise any right, power or privilege shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law. |
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C. |
Severability. In case any one or more of the provisions contained in
the Agreement or the Note shall be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained in the Note and this Agreement shall not in any way
be affected or impaired thereby, and this Agreement and the Note shall
otherwise remain in full force and effect. |
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D. |
Applicable Law. This Agreement and the Note and the rights and
obligations of the parties hereunder, and under the Note and any other
instruments or documents issued hereunder shall be construed and
interpreted in accordance with the laws of the State of Florida and shall
be binding upon and inure to the benefit of the successors and assigns of
the parties hereto, provided, however, that no rights or obligations under
this Agreement may be assigned or transferred by the Borrower without the
prior written consent of the Lender. |
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E. |
Holidays. Whenever any payment to be made hereunder shall be
stated to be due on a Saturday, Sunday or a public holiday under the laws
of the State of Florida, such payment may be made on the next succeeding
business day and such extension of time shall in such case be included in
computing interest, if any, in connection with such payment. |
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F. |
Waiver. The Lender may, by written notice to the Borrower, at
any time and from time to time, waive any Event of Default hereunder. Any
such waiver shall be for such period and subject to such conditions as
shall be specified in any such notice, but no such waiver shall extend to
any subsequent or other Event of Default, or impair any right consequent
thereon. |
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G. |
Expense. The Borrower agrees to pay, or reimburse the Lender
for, actual out-of-pocket expenses (including legal fees) incurred by the
Lender in connection with the preparation of, the enforcement of, or the
preservation of any rights under this Agreement and the Note. |
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H. |
Counterparts; Effective
Date. This Agreement may be signed in
any number of separate counterparts, no one of which need contain all of
the signatures of the parties, and as many of such counterparts as shall
together contain all of the signatures of the parties shall be deemed to
constitute one and the same instrument. A set of counterparts of this
Agreement signed by all parties hereto shall be lodged with Lender. This
Agreement shall become effective upon the receipt by Lender of signed
counterparts of this Agreement from each of the parties hereto or telex
confirmation of the signing of counterparts of this Agreement by each of
the parties hereto. |
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I. |
Participations. Borrower recognizes that Lender may enter into a
participation agreement with other financial institutions, including one
or more banks or other lenders, whereby Lender will allocate a portion of
the Loan contemplated hereunder. For the benefit of such other banks and
lenders, Borrower agrees that such other banks and lenders shall have the
same rights of set off against Borrower granted Lender in Section III
hereof. Upon the written request of Borrower, Lender will advise Borrower
of the names of any participants and the extent of their interest
herein. |
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J. |
Venue. The parties hereto agree that venue for any and all actions,
suits, or other legal proceedings arising under the Loan Documents or
related thereto shall lie in the appropriate court of competent
jurisdiction in Polk County, Florida. |
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K. |
Complete
Agreement. The Loan Documents contain
the final, complete, and exclusive expression of the understanding of
Borrower and Lender with respect to the transactions contemplated by the
Loan Documents and supersede any prior or contemporaneous agreement or
representation, oral or written, by or between the parties related to the
subject matter hereof. |
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L. |
Relief from Automatic
Stay. The Borrower hereby agrees that,
in consideration of the Lender funding the Loan, in the event that the
Borrower shall: (i) file with any bankruptcy court of competent
jurisdiction or be the subject of any petition under Title 11 of the
United States Code, as amended ("Title 11"); (ii) be the subject of any
order for relief issued under Title 11; (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state
act or law relating to insolvency or bankruptcy, or other relief from
creditors for debtors; (iv) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator, or liquidator; or (v)
be the subject of any order, judgment, or decree entered by any court of
competent jurisdiction approving a petition filed against such party for
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or
state act or law relating to insolvency or bankruptcy, or other relief
from creditors for debtors, the Lender shall thereupon be entitled to
relief from any automatic stay imposed by Section 362 of Title 11, or
otherwise, on or against the exercise of the rights and remedies otherwise
available to the Lender under this Loan Agreement and the Loan Documents,
and as otherwise provided by law. |
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M. |
No Claims/Set Off, Etc.
The Borrower acknowledges by the
execution hereof that as of the date hereof all principal and interest
evidenced by the Note through the date of this Agreement are
unconditionally due and owing to the Lender as provided in the said Note
and that the Borrower has no actions, defenses, demands and/or claims of
set-off or deduction whatsoever, against (a) the Lender, or (b) the
indebtedness evidenced by the Note and owed to the Lender, or (c) the
Pledge Agreement. Furthermore, the Borrower acknowledges that, as of the
date hereof, the Lender has in no way defaulted or performed any act or
omission under the Note, the Pledge Agreement or the other Loan Documents
or any other agreements between the Borrower and the Lender which would
give rise to any action or actions, cause or causes of actions, suits,
debts, sums of money, damages, claims, costs, expenses and or demands
whatsoever, in law or in equity or otherwise, by the Borrower against the
Lender. |
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N. |
WAIVER OF RIGHT TO JURY TRIAL.
BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS LOAN AGREEMENT AND ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER ENTERING INTO THIS AGREEMENT AND MAKING THE LOAN OR EXTENSION OF
CREDIT EVIDENCED BY THE NOTE. |
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O. |
Notices. All notices, requests, and demands to or upon the
respective parties hereto shall be deemed to have been given or made when
deposited in the mail, certified and postage prepaid, addressed as follows
or to such other address as may hereafter be designated in writing by the
respective parties hereto: |
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The Borrower:
SOUTHERN FIRST BANCSHARES, INC.
100 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx,
00000
Xttention: Xxxxxxx X. Xxxxxxx,
Chief Financial Officer |
| Loan and
Security Agreement |
Page 10 of
15 |
| SOUTHERN FIRST
BANCSHARES, INC. |
|
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The Lender:
CENTERSTATE BANK, NATIONAL
ASSOCIATION
1100 0xx Xxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxx
00000
Xttention: Xxx X. Xxxxx, Vice President |
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P. |
Definitions. The following
definitions shall be used when calculating the ratios in Section V
Paragraph H. |
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1. |
Tier I Leverage Ratio
= the ratio of Tier 1 capital to total
assets, as calculated under Part 324 of Title 12 Code of Federal
Regulations. |
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2. |
Tier 1 Capital
= the meaning given to such term as set
forth in 12 CFR Section 324.2 and any successor regulation. |
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3. |
Total Risk-Based Ratio
= the meaning given to such term as set
forth in 12 CFR Section 324.2 and any successor regulation. |
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4. |
Classified Assets
= nonperforming assets, plus loans
classified as “substandard” or lower as such terms maybe defined in 12 CFR
Section 324.2. |
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5. |
ALLL= allowance for loan losses computed in accordance with
generally accepted accounting principles, applied on a consistent
basis. |
Q. Confidential Supervisory Information.
No disclosure, representation, or warranty shall be required to be made (or any
other action taken) pursuant to this Agreement that would involve the disclosure
of confidential supervisory information of a Regulatory Agency by any Party
hereto to the extent prohibited by applicable Law, and to the extent legally
permissible, appropriate substitute disclosures or actions shall be made or
taken under circumstances in which the limitations of this sentence apply.
Confidential supervisory information is defined as any information that is
prepared by, on behalf of, or for the use of the Federal Reserve Board, a
Reserve Bank, or a state or federal banking supervisor, including any
information related to an examination, inspection, or visitation of an
institution. Confidential supervisory information also includes any
correspondence between an institution and its regulators.
REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK.
| Loan and
Security Agreement |
Page 11 of
15 |
| SOUTHERN FIRST
BANCSHARES, INC. |
|
IN WITNESS WHEREOF, Borrower and Lender have caused these presents to be
executed by their proper officers under due corporate authority, and their
corporate seals to be affixed, this the day and year first above written.
|
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“BORROWER” |
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SOUTHERN FIRST BANCSHARES,
INC., |
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a South Carolina
corporation |
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By: |
/s/ Xxxxxxx X. Xxxxxxx |
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Xxxxxxx X.
Xxxxxxx, Chief Financial Officer |
| (CORPORATE SEAL) |
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“LENDER” |
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|
CENTERSTATE
BANK, |
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|
NATIONAL
ASSOCIATION |
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|
a national banking
association |
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|
By: |
/s/ Xxx X. Xxxxx |
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|
Xxx X. Xxxxx,
Vice President |
| Loan and
Security Agreement |
Page 12 of
15 |
| SOUTHERN FIRST
BANCSHARES, INC. |
|
EXHIBIT
“A”
| (A) |
Liens or
Encumbrances. Neither Borrower nor SFB,
its wholly-owned subsidiary, has any liens or encumbrances on their
respective properties and assets, except for the following: (i) liens for
taxes, assessments, or governmental charges, carriers’, warehousemen’s,
repairmen’s, mechanics’, materialmen’s and other like liens, which are
either not delinquent or are being contested in good faith by appropriate
proceedings which will prevent foreclosure of such liens, and against
which adequate cash reserves have been provided; (ii) easements,
restrictions, minor title irregularities and similar matters which have no
material adverse effect upon the ownership and use of the affected
property; (iii) liens or deposits in connection with worker’s
compensation, unemployment insurance, social security or other insurance
or to secure customs duties, public or statutory obligations in lieu of
surety, stay or appeal bonds, or to secure performance of contracts or
bids, other than contracts for the payment of money borrowed, or deposits
required by law as a condition to the transaction of business or other
liens or deposits of a like nature made in the ordinary course of
business; (iv) liens in favor of the Lender pursuant to the Loan
Documents; (v) liens evidenced by conditional sales, purchase money
mortgages or other title retention agreements on, or leases with respect
to, machinery and equipment (acquired in the ordinary course of business
and otherwise permitted to be acquired hereunder) which are created at the
time of the acquisition of such property solely for the purposes of
securing the Indebtedness incurred to finance the cost of such property,
provided no such lien shall extend to any property other than the property
so acquired and identifiable proceeds; (vi) liens granted to the Federal
Home Loan Bank; (vii) government deposit security pledges; and (viii)
liens and pledges made in connection with repurchase agreements entered
into by SFB. |
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| (B) |
Guaranty
Agreements. Neither Borrower nor SFB,
its wholly owned subsidiary, is a party to any suretyship, guaranty, or
other similar type agreement, nor has either of them offered their
endorsement to any individual or concern which would in any way create a
contingent liability that does not appear in their financial
statements. |
| |
| (C) |
Litigation. To the knowledge of the Borrower, there is no
litigation or proceeding pending or threatened, financial or otherwise,
which might have a material adverse effect on the financial condition or
business affairs of Borrower or SFB, its wholly-owned subsidiary, except
for the following: None |
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| (D) |
Taxes. No claims have been assessed and remain unpaid with
respect to any federal, state and local taxes assessed against Borrower or
SFB, its wholly-owned subsidiary, except for the following:
None |
| Loan and
Security Agreement |
Page 13 of
15 |
| SOUTHERN FIRST
BANCSHARES, INC. |
|
EXHIBIT “B”
| Subsidiaries of Borrower |
|
Ownership
Percentage |
| Southern First Bank |
|
100% |
| Greenville
Statutory Trusts I and II |
|
100% |
| Loan and Security
Agreement |
Page 14 of 15 |
| SOUTHERN FIRST BANCSHARES,
INC. |
|
EXHIBIT “C”
The form of the Promissory Note.
| Loan and
Security Agreement |
Page 15 of
15 |
| SOUTHERN FIRST
BANCSHARES, INC. |
|
EXHIBIT “D”
The Collateral
850,000 shares of Southern First Bank,
Share Certificate No. 001
