UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
__X___QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended.....................June 30, 1997
_____TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ..... to .....
COMMISSION FILE NUMBER 2-91-000FW
MIDSOUTH BANCORP, INC.
Louisiana 72 -1020809
102 Versailles Boulevard, Lafayette, Louisiana
70501
(318) 237-8343
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.YES __X__NO _____
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Outstanding as of July 31, 1997
Common stock, $.10 par value 1,554,717*
Preferred stock, no par value, $14.25 stated value 171,656
* as adjusted for a 12.5% stock dividend payable on August 27,
1997 to shareholders of record August 6, 1997
Transitional Small Business Disclosure Format:
Yes _______ No __X__
Page 1
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Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
Financial Highlights 3
Statements of Condition - June 30, 1997 and
December 31, 1996 4
Statements of Income - Three and Six Months Ended
June 30, 1997 and 1996 5
Statement of Stockholders' Equity - Six Months
Ended June 30, 1997 6
Statements of Cash Flows - Six Months Ended
June 30, 1997 and 1996 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 16
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
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<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
______________________________________________________________________________________________
Three Months Ended Six Months Ended
June 30, June 30,
EARNINGS DATA 1997 1996 1997 1996
____________________________________________________
<S> <C> <C> <C> <C>
Net interest income $2,430,987 $1,953,049 $4,668,949 $3,834,113
Provision for loan losses 209,332 190,000 362,600 310,000
Other income 814,171 563,275 1,410,660 1,004,840
Other expense 2,368,565 1,856,421 4,551,732 3,636,812
Income tax expense 184,750 133,490 301,344 267,481
Net income 482,511 336,413 863,933 624,660
Preferred dividend requirement 39,946 39,133 79,753 78,853
Net income available to common
shareholders $442,565 $297,280 $784,180 $545,807
==============================================================================================
PER COMMON SHARE DATA
Primary earnings per share $0.28 $0.20 $0.51 $0.37
Fully diluted earnings per share $0.25 $0.18 $0.46 $0.34
Book value at end of period $6.16 $5.25 $6.16 $5.25
Market price at end of period $12.89 $9.34 $12.89 $9.34
Weighted average shares outstanding
Primary 1,553,923 1,501,545 1,547,985 1,494,191
Fully diluted 1,906,817 1,860,877 1,896,029 1,853,523
==============================================================================================
AVERAGE BALANCE SHEET DATA
Total assets $205,894,127 $163,166,466 $198,940,158 $158,991,376
Earning assets 185,878,244 147,619,153 179,680,868 143,560,405
Loans and leases 106,759,581 83,006,087 101,739,790 81,209,483
Interest-bearing deposits 143,677,505 110,755,512 138,034,371 107,428,628
Total deposits 190,730,243 150,725,423 184,349,417 146,626,600
Common stockholders' equity 9,446,536 8,143,791 9,270,020 7,987,598
Total stockholders' equity 11,892,634 10,727,237 11,717,721 10,604,641
==============================================================================================
SELECTED RATIOS
Return on average assets (annualized) 0.86% 0.73% 0.79% 0.69%
Return on average common equity (annualized) 18.79% 14.64% 17.06% 13.70%
Return on average total equity ( annualized) 14.93% 11.12% 13.50% 10.32%
Leverage capital ratio 5.79% 6.64% 5.79% 6.64%
Tier 1 risk-based capital ratio 9.85% 11.83% 9.85% 11.83%
Total risk-based capital ratio 10.95% 12.99% 10.95% 12.99%
Allowance for loan losses as a %
of total loans 1.16% 1.24% 1.16% 1.24%
==============================================================================================
PERIOD ENDING BALANCE SHEET DATA 6/30/97 6/30/96 Net Change % Change
Total assets $212,617,670 $169,340,543 $43,277,127 25.56%
Earning assets 189,611,750 153,528,979 36,082,771 23.50%
Loans and leases 114,379,507 85,441,751 28,937,756 33.87%
Interest-bearing deposits 144,797,535 115,308,059 29,489,476 25.57%
Total deposits 195,081,301 157,448,003 37,633,298 23.90%
Common stockholders' equity 9,573,596 7,825,251 1,748,345 22.34%
Total stockholders' equity 12,019,694 10,386,774 1,632,920 15.72%
==============================================================================================
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3
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<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
___________________________________________________________________________________________________________
June 30, December 31,
ASSETS 1997 1996
___________ ___________
<S> <C> <C>
Cash and due from banks $14,081,776 $11,314,562
Federal funds sold - 14,100,000
___________ ___________
Total cash and cash equivalents 14,081,776 25,414,562
Interest bearing deposits in banks 171,236 406,798
Securities available-for-sale, at fair value (cost of $58,138,592
in June 1997 and $47,387,766 in December 1996) 57,936,992 47,249,059
Securities held-to-maturity (estimated market value of $17,535,184
in June 1997 and $9,700,307 in December 1996) 17,124,015 9,547,853
Loans, net of allowance for loan and lease losses of
$1,331,951 in June 1997 and $1,087,790 in December 1996 113,047,556 93,740,719
Bank premises and equipment, net 6,841,218 5,808,952
Other real estate owned, net 146,552 180,270
Accrued interest receivable 1,660,153 1,386,596
Goodwill, net 259,212 276,523
Other assets 1,348,960 1,216,920
___________ ___________
Total assets $212,617,670 $185,228,252
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $50,283,766 $49,943,207
Interest bearing 144,797,535 121,673,301
___________ ___________
Total deposits 195,081,301 171,616,508
Securities sold under repurchase agreements
and federal funds purchased 2,297,324 104,414
Accrued interest payable 471,343 397,259
Notes payable 2,533,240 1,521,435
Other liabilities 214,768 228,465
___________ ___________
Total liabilities 200,597,976 173,868,081
___________ ___________
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, no par value, $14.25 stated value - 5,000,000 shares authorized,
171,656 and 171,956 issued and outstanding on June 30, 1997 and
December 31, 1996, respectively 2,446,098 2,450,373
Common stock, $.10 par value-
5,000,000 shares authorized, 1,554,263 and 1,537,649
issued and outstanding on June 30, 1997 and
December 31, 1996, respectively 138,152 136,491
Surplus 6,921,558 6,738,943
Unearned ESOP shares (145,832) (30,836)
Unrealized gains/losses on securities available-for-sale, net of deferred
taxes of $62,450 in June 1997 and $24,177 in December 1996 (139,150) (114,530)
Retained earnings 2,798,868 2,179,730
___________ ___________
Total stockholders' equity 12,019,694 11,360,171
___________ ___________
Total liabilities and stockholders' equity $212,617,670 $185,228,252
=========== ===========
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4
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<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
______________________________________________________________________________________________
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
___________________________ ___________________________
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $2,756,657 $2,129,466 $5,216,405 $4,166,894
Securities and interest-bearing 990,571 782,181 1,881,592 1,458,409
Federal funds sold 145,355 149,300 348,270 346,343
__________ __________ __________ __________
TOTAL 3,892,583 3,060,947 7,446,267 5,971,646
__________ __________ __________ __________
INTEREST EXPENSE:
Interest on deposits 1,418,057 1,087,514 2,702,252 2,098,029
Interest on notes payable 43,539 20,384 75,066 39,504
__________ __________ __________ __________
TOTAL 1,461,596 1,107,898 2,777,318 2,137,533
__________ __________ __________ __________
NET INTEREST INCOME 2,430,987 1,953,049 4,668,949 3,834,113
PROVISION FOR LOAN LOSSES 209,332 190,000 362,600 310,000
__________ __________ __________ __________
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,221,655 1,763,049 4,306,349 3,524,113
__________ __________ __________ __________
OTHER OPERATING INCOME:
Service charges on deposits 522,862 364,170 961,076 687,370
Gain on sales of securities, net 85,355 - 85,355 -
Other charges and fees 205,954 199,105 364,229 317,470
__________ __________ __________ __________
TOTAL OTHER INCOME 814,171 563,275 1,410,660 1,004,840
__________ __________ __________ __________
OTHER EXPENSES:
Salaries and employee benefits 1,126,065 879,388 2,154,037 1,741,859
Occupancy expense 534,910 421,490 1,040,434 814,927
Professional fees 89,683 75,158 148,758 139,602
FDIC assessments 5,283 1,000 9,695 1,500
Marketing expenses 115,010 78,821 223,251 159,438
General and bond insurance 37,733 32,515 69,879 65,587
Data processing expenses 35,748 35,413 75,850 65,063
Postage 57,585 35,832 106,473 70,169
Director fees 26,309 22,732 51,284 49,005
Education and travel 36,916 44,128 62,309 77,490
Printing and supplies 73,852 56,165 143,368 107,896
Telephone 50,987 44,970 99,765 85,060
Expenses on other real estate ow 2,727 1,640 39,599 1,813
Other 175,757 127,169 327,030 257,403
__________ __________ __________ __________
TOTAL OTHER EXPENSES 2,368,565 1,856,421 4,551,732 3,636,812
__________ __________ __________ __________
NET INCOME BEFORE INCOME TAXES 667,261 469,903 1,165,277 892,141
PROVISION FOR INCOME TAXES 184,750 133,490 301,344 267,481
__________ __________ __________ __________
NET INCOME $482,511 $336,413 $863,933 $624,660
__________ __________ __________ __________
PREFERRED DIVIDEND REQUIREMENT 39,946 39,133 79,753 78,853
__________ __________ __________ __________
INCOME AVAILABLE TO COMMON
SHAREHOLDERS $442,565 $297,280 $784,180 $545,807
========== ========== ========== ==========
EARNINGS PER COMMON SHARE:
PRIMARY $0.28 $0.20 $0.51 $0.37
========== ========== ========== ==========
FULLY DILUTED $0.25 $0.18 $0.46 $0.34
========== ========== ========== ==========
5
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<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
_________________________________________________________________________________________________________________________________
UNREALIZED
(GAINS) LOSSES
ON SECURITIES
PREFERRED STOCK COMMON STOCK ESOP AVAILABLE- RETAINED
SHARES AMOUNT SHARES AMOUNT SURPLUS OBLIGATION OR-SALE EARNINGS TOTAL
____________________ ___________________ __________ _________________________________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31, 1996 171,956 $2,450,373 1,364,903 $136,491 $6,738,943 ($30,836) ($114,530) $2,179,730 $11,360,171
Issuance of common stock 16,083 1,608 178,393 180,001
Dividends paid on common
stock (164,995) (164,995)
Dividends paid on
Preferred stock (79,753) (79,753)
Preferred stock
conversion (300) (4,275) 531 53 4,222 (47) (47)
Net income 863,933 863,933
ESOP obligation, net of
repayments (114,996) (114,996)
Net change in unrealized
gain/loss on securities
available-for-sale,
net of tax (24,620) (24,620)
________ __________ _________ ________ __________ ________ _________ __________ ___________
BALANCE,
JUNE 30, 1997 171,656 $2,446,098 1,381,517 $138,152 $6,921,558 ($145,832) ($139,150) $2,798,868 $12,019,604
======== ========== ========= ======== ========== ======== ========= ========== ===========
6
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<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997 and 1996
_____________________________________________________________________________________
June 30, June 30,
1997 1996
_________ _________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $863,933 $624,660
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 408,807 300,871
Provision for loan losses 362,600 310,000
Provision for deferred taxes 40,116 (83,733)
Premium amortization, net (20,449) 81,747
Net (gain) loss on sales of securities (85,356) -
Net (gain) loss on sale of fixed assets - (22,650)
Net (gain) loss on sale of other real estate owned - (163)
Write-down of other real estate owned 33,718 -
Change in accrued interest receivable (273,557) (207,490)
Change in accrued interest payable 74,084 74,845
Change in other liabilities 35,030 131,464
Change in other assets (182,613) (743,050)
___________ ___________
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,256,313 466,501
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease (increase) in interest-bearing deposits 235,562 (268,144)
Proceeds from maturities and calls of securities
available-for-sale 1,343,689 1,790,367
Proceeds from sales of securities available-for-sale 8,494,338 -
Purchases of securities held-to-maturity (8,737,947) (3,006,069)
Purchases of securities available-for-sale (19,321,260) (12,426,113)
Loan originations, net of repayments (19,784,433) (6,876,754)
Purchases of premises and equipment (1,423,762) (799,213)
Proceeds from sale of other real estate owned - 3,500
Proceeds from sales of fixed assets - 149,758
___________ ___________
NET CASH USED IN INVESTING ACTIVITIES (39,193,813) (21,432,668)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 23,464,793 18,418,440
Net increase (decrease) in repurchase
agreements and federal funds purchased 2,192,910 (108,542)
Issuance of notes payable 2,564,210 -
Repayments of notes payable (1,552,405) (81,558)
Proceeds from issuance of common stock 180,001 78,979
Payment of dividends (244,748) (116,931)
Payment of fractional shares resulting from
conversion preferred stock (47) -
Proceeds from exercise of stock options - 97,657
___________ ___________
NET CASH PROVIDED BY FINANCING ACTIVITIES 26,604,714 18,288,045
___________ ___________
NET DECREASE IN CASH & CASH EQUIVALENTS (11,332,786) (2,678,122)
CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR 25,414,562 26,098,209
___________ ___________
CASH & CASH EQUIVALENTS AT END OF QUARTER $14,081,776 $23,420,087
=========== ===========
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7
MIDSOUTH BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. STATEMENT BY MANAGEMENT CONCERNING THE REVIEW OF UNAUDITED
FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements and
notes thereto contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial
position of MidSouth Bancorp, Inc. ("MidSouth") and its subsidiaries
as of June 30, 1997 and the results of their operations and their
cash flows for the periods presented. The consolidated financial
statements should be read in conjunction with the annual
consolidated financial statements and the notes thereto included
in MidSouth's 1996 annual report and Form 10-KSB.
The results of operations for the six month period ended June 30,
1997 are not necessarily indicative of the results to be expected
for the entire year.
2. ALLOWANCE FOR LOAN AND LEASE LOSSES
An analysis of the activity in the allowance for loan and lease
losses is as follows:
Six Months Ended
June 30,
(in thousands) 1997 1996
______ ______
Balance at beginning of year $1,087 $1,052
Provision for loan losses 363 310
Recoveries 163 80
Loans charged off (281) (379)
______ ______
Balance at end of quarter $1,332 $1,063
====== ======
3. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128,
" Earnings per Share." This new standard requires dual
presentation of basic and diluted earnings per share (EPS) on
the face of the earnings statement and requires a
reconciliation of the numerators and denominators of the basic
and diluted EPS calculations. This statement will be effective
for financial statements issued for periods ending after
December 15, 1997. Basic and diluted earnings per shares, as
computed under SFAS No. 128, would have been $.28 and $.25,
respectively, for the three months ended June 30, 1997. For
the six months ended June 30, 1997, basic earnings per share
would have been $.51 and diluted earnings per share would have
been $.46.
4. NOTES PAYABLE
On June 23, 1997, MidSouth refinanced its $2.5 million line of
credit with another finanical institution, paying out existing
borrowings of $833,355 and receiving advances of $1,385,024
under the new line of credit. At any time prior to June 30, 2007,
MidSouth may request advances up to but not exceeding an
aggregate principal amunt of $2,500,000 at any one time
outstanding. Advances under the line of credit bear interest
at a variable rate equal to the prime commercial rate of interest
quoted in the "Money Rates" section of the Wall Street Journal
minus fifty basis points (0.50%). The current rate is 8.00%.
Interest under the note is due and payable quarterly in arrears
on the last day of each quarter beginning September 30, 1997.
Beginning June 30, 1999, principal payments in the amount of
11.11% of the loan balance on June 30, 1999 are due and payable
in eight consecutive annual installments on June 30 of each
succeeding calendar year. The entire outstanding balance of the
loan is due and payable in a ninth and final installment on
June 30, 2007.
The Finance Company paid out borrowings of $600,000 against its
line of credit on June 23, 1997 with $675,000 in advances
against a new $1,200,000 line of credit. Advances under the new
line of credit bear interest at a variable rate equal to the
commercial prime rate as quoted in the "Money Rates" section
of the Wall Street Journal plus twenty five basis point (0.25%).
The current rate is 8.75%. Interest on the line is payable
monthly, with principal due at maturity on May 1, 1998.
5. STOCK DIVIDEND
On July 16, 1997, the Board of Directors declared a 12.5% stock
dividend payable on August 27, 1997 to shareholders of record
on August 6, 1997. All per share an weighted average share
data have been restated to reflect this stock dividend.
8
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERTION
This review should be read in conjunction with MidSouth Bancorp
Inc.'s ("MidSouth") consolidated financial statements and
accompanying notes contained herein, as well as with MidSouth's
1996 annual consolidated financial statements, the notes thereto
and the related Management's Discussion and Analysis.
All per share data has been adjusted for a 12.5% common stock
dividend payable on August 27, 1997 to common shareholders of
record on August 6, 1997.
MidSouth reported net income for the second quarter of 1997 of
$482,511, representing a 43% increase over net income for the
second quarter of 1996 of $336,413. Income available to common
shareholders totaled $442,565 for the second quarter of 1997
compared to $297,280 for the second quarter of 1996. Primary
earnings per share were $.28 and $.18 for the quarters ending
June 30, 1997 and 1996, respectively. Fully diluted earnings per
share was $.25 for the second quarter of 1997 compared to $.20
for the second quarter of 1996. Year-to-date earnings totaled
$863,933 at June 30, 1997 compared to $624,660 at June 30, 1996.
Net income available to common shareholders for the six months
ending June 30, 1997 totaled $784,180 compared to $545,807 for
the same period in 1996. Primary earnings per common share were
$.51 and $.37 for the two six month periods ending June 30, 1997
and 1996, respectively. Fully diluted year-to-date earnings per
share was $.46 at June 30, 1997 and $.34 at June 30, 1996.
A bustling Acadiana economy stimulated a second quarter of strong
growth for MidSouth in the current year. Increased business
activity and low unemployment have boosted loan demand and
deposit account balances. Loans, net of Allowance for Loan and
Lease Losses ("ALLL"), increased 33%, or $28.6 million, from
$84.4 million in the second quarter of 1996 to $113.0 million in
the second quarter of 1997. Deposits grew 24%, or $37.7 million,
from $157.4 million at June 30, 1996 to $195.1 million at June
30, 1997. Net interest income increased 24% in quarterly
comparison and 22% in year-to-date comparison primarily due to
increased loan volume. A significant quarterly increase of 45%
and year-to-date increase of 40% was recorded in non-interest
income primarily due to service charges on deposit accounts and
net gains of $85,355 on sales of securities.
The combined increases in net interest income and non-interest
income more than offset a 27% quarterly and 25% year-to-date
increase in non-interest expenses for 1997 as compared to 1996.
Operational costs associated with the expansion of MidSouth's
market presence over the past 24 months continued to impact
earnings, but, significant loan fundings in the first half of
1997 improved offsetting revenues for most of the new markets.
Provisions for loan and lease losses increased $19,332 for the
quarter and $52,600 for the six months ending June 30, 1997
as compared to the same periods in 1996, primarily due to loan
growth. Nonperforming loans as a percentage of total loans
was .45% for the current quarter ending compared to .43% for the
second quarter of 1996. The ALLL represents 256.80% of
nonperforming loans as of June 30, 1997.
9
<PAGE>
MidSouth ended the second quarter of 1997 with total assets of
$212,617,670, an increase of 14.8% over the $185,228,252 reported
at year-end 1996 and an increase of 25.6% over the $169,340,543
reported at the end of the second quarter of 1996. As of June
30, 1997, MidSouth's annualized return on average common equity
was 17.06% and annualized return on average assets was .79% The
leverage capital ratio was 5.79% at the current quarter-end.
Earnings Analysis
Net Interest Income
Average earning assets increased 25.3%, or $36.2 million, from
$143.5 million for the six months ending June 30, 1996 to $179.7
million for the six months ending June 30, 1997. The earning
asset mix remained relatively unchanged in six month comparison,
with 56.6% in loans and 43.4% in securities and federal funds
sold. A review of the quarterly average earnings asset mix
reflects a slight increase in the percentage attributable to
loans to 57.4% of total earning assets as of June 30, 1997. These
changes in the earning asset mix resulted in increased interest
income of $831,636 in quarterly comparison and $1,474,621 in six
month comparison.
Volume increases in interest bearing deposits yielded most of the
$353,698 quarterly increase and $639,785 year-to-date increase in
interest expense. Additionally, the percentage of average
interest bearing deposits to average total deposits increased in
both quarterly and six month comparisons, reflective of a high
volume of interest bearing public fund deposits. For both the
three and six month periods ending June 30, 1997, 75.3% of total
average deposits were interest bearing and 24.7% were non-
interest bearing. An increase in the amount of notes payable
contributed to the increase in interest expense for the three
and six month periods ending June 30, 1997. MidSouth borrowed
an additional $500,000 in the second quarter of 1997 for a
capital injection in its bank subsidiary, MidSouth National
Bank (the "Bank"). The Finance Company borrowed an additional
$435,000 in the same period for loan fundings.
The net effect of changes in the volume and mix of earning assets
and interest bearing liabilities
was increased net interest income of $477,938 in quarterly
comparison and $834,836 in year-to-date comparison. Slight
changes in yields on earning assets and rates paid on interest
bearing liabilities had little impact on net interest income for
the three and six month periods reviewed. The net yield on
average earning assets fell 12 basis points, from 5.36% for the
six month period ending June 30, 1996, to 5.24% for the six
month period ending June 30, 1997.
10
<PAGE>
Non-interest Income
MidSouth's primary source of non-interest income, service charges
on deposit accounts, increased $158,692 for the quarter and
$273,706 for the six months ending June 30, 1997 as compared to
the same periods in 1996. The increases result primarily from
additional insufficient funds fees and fees earned on deposit
accounts added in the past twelve months.
Excluding a one-time gain of $22,650 on the sale of fixed assets
in the second quarter of 1996, other non-interest income
increased $29,499 and $69,409 in quarterly and year-to-date
comparisons, respectively. Increases were recorded the second
quarter of 1997 in income from the sale of credit life
insurance, lease income from Royal Alliance (a third party
investment company), and VISA debit card income. The
increase in year-to-date comparisons resulted primarily
from non-interest income of $48,207 recognized by the Finance
Company for the six months ended June 30, 1997.
Non-interest Expense
Non-interest expense increased 27.6% for the three months and
25.2% for the six months ended June 30, 1997 as compared to the
same periods ended June 30, 1996. The increase resulted
primarily from start up and operational costs associated with new
office facilities and promotions to expand MidSouth's market
presence. Specifically, increases were recorded in salaries and
employee benefits, occupancy expenses, marketing expenses,
postage, and printing and supplies. Additionally, a quarterly
increase was recorded in professional fees primarily due to fees
associated with MidSouth's stock transfer services and legal fees
associated with a stock option incentive plan and a dividend
reinvestment plan.
Salaries and employee benefits increased due to the addition of
the Morgan City Office and Lake Charles Office staffs and an
increase in incentive compensation. The number of full-time
equivalent ("FTE") employees increased by 8 from 125 in June 1996
to 133 in June 1997.
Occupancy expense increased in the three and six month periods
ending June 30, 1997 as compared to the same periods of 1996 due
to increases in building lease expense, depreciation and
maintenance expenses associated with furniture and equipment,
fuel and maintenance of bank autos and ad valorem taxes. These
increases result primarily from the Super 1 Lafayette and
Morgan City offices added in 1996 and early 1997 and the loan
production office opened in Lake Charles in the fourth quarter
of 1996. Marketing and promotional expenses increased due to
the introduction of MidSouth to these new markets and to
quality service programs and special loan and deposit promotions.
11
<PAGE>
Balance Sheet Analysis
MidSouth ended the second quarter of 1997 with consolidated
assets of $212,617,670, an increase of 14.8% over the
$185,228,252 reported for December 31, 1996. Deposits increased
over the six months ended June 30, 1997 by $23.5 million.
Substantially all of this increase, combined with $16.1 million
in federal funds and $9.8 million in cash flows from sales and
maturities of securities, funded $19.6 million in loan growth
and the purchase of $28.1 million in securities.
Of the $23.5 million increase in deposits, approximately $13
million is associated with a public funds contract that expired
July 31, 1997. Total funds on deposit under the contract
amount to approximately $28 million. Management expects the
majority of these funds to be withdrawn by August 31, 1997.
Borrowing lines with correspondent banks and the Federal Home
Loan Bank of Dallas, Texas are available if needed to cover the
withdrawal of these funds. Additional increases were recorded in
commercial demand and money market deposits and certificates
of deposit due to favorable economic conditions and increased
business activity throughout MidSouth's market.
Loan growth experienced in the first six months of 1997 was
primarily in the commercial, agricultural and real estate
portfolios. The Bank's new Morgan City Office and Lake Charles
Loan Production Office contributed $2.7 million and $6.2 million,
respectively, to the $19.6 million growth in loans during this
period. A direct leasing program introduced in the third
quarter of 1996 recorded an increase of $1.3 million for the same
period.
Securities available-for-sale increased $10.7 million, from $47.2
million at December 31, 1996 to $57.9 million at June 30, 1997.
The net increase reflects purchases of $19.2 million in U. S.
Treasury and mortgage-backed securities and liquidation of
approximately $7.5 million in adjustable rate mortgage-backed
securities and a $1.0 million mutual fund investment as part of
a repositioning of the portfolio. Net gains recorded with the
sales totaled $85,355. Tax-free municipal securities totaling
$8.7 million were purchased for the held-to-maturity portfolio
during the six months ended June 30, 1997. Additionally, $1.3
million in maturities and principal paydowns were received on
mortgage-backed securities during the first six months of 1997.
Unrealized losses in the securities available-for-sale portfolio,
net of unrealized gains and tax effect, were $139,150 at June 30,
1997, compared to a net unrealized loss of $114,530 at December
31, 1996. These amounts result from interest rate fluctuations
and do not represent permanent impairment of value. Moreover,
classification of securities as available-for-sale does not
necessarily indicate that the securities will be sold prior to
maturity.
Notes payable to financial institutions increased $1.0 million
from December 31, 1996 to June 30, 1997. On June 23, 1997,
MidSouth refinanced its $2.5 million line of credit with another
financial institution, paying out existing borrowings of $833,355
and receiving advances of $1,385,024 under the new line of credit.
At any time prior to June 30, 2007, MidSouth may request advances
up to but not exceeding an aggregate principal amount $2,500,000
at any one time outstanding. Advances under the line of credit
bear interest at a variable rate equal to the prime commercial
rate of interest quoted in the "Money Rates" section of the
Wall Street Journal minus fifty basis points (0.50%). The
current rate is 8.00%. Interest under the note is due and
payable quarterly in arrears on the last day of each quarter
beginning September 30, 1997. Beginning June 30, 1999, principal
payments in the amount of 11.11% of the amount of the loan
balance on June 30, 1999 ares due and payable in eight consecutive
annual installments on June 30 of each succeeding calendar year.
The entire outstanding balance of the loan is due and payable
in a ninth and final installment on Jun 30, 2007. The
additional $500,000 advanced under the line was injucted into
the capital of the Bank.
Additionally, the Finance Company paid out borrowings of
$600,000 against its line of credit on June 23, 1997 with
$675,000 in advances against a new $1,200,000 line of credit.
Advances under the line of credit bear interest at a variable
rate equal to the commercial prime rate as quoted in the
"Money Rates" section of the Wall Street Journal plus twenty
five basis points (0.25%). The current rate is 8.75%.
Interest on the line is payable monthly, with principal due
at maturity on May 1, 1998.
12
<PAGE>
Capital Ratios
As of June 30, 1997, MidSouth's leverage ratio was 5.79% as
compared to 6.30% at December 31, 1996. Tier 1 capital to risk-
weighted assets was 9.85% and total capital to risk-weighted
assets was 10.95% at the end of the second quarter of 1997. At
year-end 1996, Tier 1 capital to risk-weighted assets was 10.82%
and total capital to risk-weighted assets was 11.87%.
13
<PAGE>
<TABLE>
<CAPTION>
Nonperforming Assets and Past Due Loans
Table 1 summarizes MidSouth's nonaccrual, past due and
restructured loans and nonperforming assets.
TABLE 1
Nonperforming Assets and
Loans Past Due 90 Days
===============================================================
June 30, December 31, June 30,
1997 1996 1996
===============================================================
<S> <C> <C> <C>
Nonperforming loans
Nonaccrual loans $518,675 $523,020 $362,537
Restructured loans - 835 853
________________________________
Total nonperforming loans 518,675 523,855 363,390
Other real estate owned, net 146,552 180,270 180,270
Other assets repossessed 26,040 10,015 6,718
________________________________
Total nonperforming assets $691,267 $714,140 $550,378
================================
Loans past due 90 days
or more and still accruing $59,675 $448,281 $338,294
Nonperforming loans as a
% of total loans .45% 0.55% 0.43%
Nonperforming loans as a
% of total loans, other
real estate owned and
other assets repossessed 0.60% 0.75% 0.64%
ALLL as a % of
nonperforming loans 256.80% 207.65% 292.50%
</TABLE>
14
Nonperforming assets were $691,267 as of June 30, 1997, a
decrease of $22,873 from the $714,140 reported for December 31,
1996 and an increase of $140,889 from the $550,378 reported for
June 30, 1996. No significant changes occurred during the first
six months of 1997. The increase of $140,889 resulted primarily
from the addition of one commercial credit in September 1996 that
represents a pool of automobile loans. The initial service
provider had discontinued processing payments on the pool, which
resulted in placement of the credit on nonaccrual. Subsequently,
a new service provider continued payments on the pool and MidSouth
has experienced no loss in payments to date.
Loans past due 90 days or more decreased from $448,281 in June
1996 to $338,294 in December 1996 and to $59,675 as of June 30,
1997.
Specific reserves have been established in the ALLL to cover
potential losses on nonperforming assets. The ALLL is analyzed
quarterly and additional reserves, if needed, are allocated at
that time. Management believes the $1,331,951 in the reserve as
of June 30, 1997 is sufficient to cover potential losses in
nonperforming assets and in the loan and lease portfolios. Loans
classified for regulatory purposes but not included in Table 1 do
not represent material credits about which management has serious
doubts as to the ability of the borrower to comply with loan
repayment terms.
15
<PAGE>
Page 16
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders of MidSouth Bancorp, Inc.
held May 14, 1997 at 2:00 p.m., the following Class 1 Directors
were elected and MidSouth's Stock Incentive Plan was approved.
The following provides information as to the votes:
Election of Directors For Withheld Abstentions Broker Non-Votes
C. R. Cloutier 1,118,921 257,537
J.B. Hargroder 1,119,581 257,537
William M. Simmons 1,118,921 257,537
For Against Abstentions Broker Non-Votes
1997 MidSouth Stock
Incentive Plan 957,495 14,846 11,797 395,451
<PAGE>
Item 6. Exhibits and Reports on Form 8-K Page 17
(a) Exhibits
Exihibit NumberDocument Description
3.1 Amended and Restated Articles of Incorporation of
MidSouth Bancorp, Inc. is included as Exhibit 3.1
to the MidSouth's Report on Form 10-K for the year
ended December 31, 1993, and is incorporated
herein by reference.
3.2 Articles of Amendment to Amended and Restated
Articles of Incorporation dated July 19, 1995
are included as Exhibit 4.2 to MidSouth's
Registration Statement on Form S-8 filed
September 20, 1995 and is incorporated herein
by reference.
3.3 Amended and Restated By-laws adopted by the Board
of Directors on April 12, 1995 are included as
Exhibit 3.2 to Amendment No. 1 to MidSouth's
Registration Statement on Form S-4 (Reg.
No. 33-58499) filed on June 1, 1995.
10.1 MidSouth National Bank Lease Agreement with
Southwest Bank Building Limited Partnership is
included as Exhibit 10.7 to the Company's annual
report on Form 10-K for the Year Ended December
31, 1992, and is incorporated herein by reference.
10.2 First Amendment to Lease between MBL Life
Assurance Corporation, successor in interest to
Southwest Bank Building Limited Partnership in
Commendam, and MidSouth National Bank is included
as Exhibit 10.1 to Report on the Company's annual
report on Form 10-KSB for the yearended
December 31, 1994, and is incorporated herein by
reference.
10.3 Amended and Restated Deferred Compensation Plan
and Trust is included as Exhibit 10.3 to the
Company's annual report on Form 10-K for the year
ended December 31, 1992 and is incorporated herein
by reference.
10.4 Employment Agreements with C. R. Cloutier and
Karen L. Hail are included as Exhibit 5(c) to
MidSouth's Form 1-A and are incorporated
herein by reference.
10.5 Description of the Incentive Compensation Plan for
Officers of MidSouth National Bank is included as
Exhibit 10.5 to the Company's annual report
on Form 10-K for the year ended December 31, 1993,
and is incorporated herein by reference.
<PAGE>
Page 18
10.6 MidSouth Bancorp, Inc.'s 1997 Stock Incentive
Plan is included as Exhibit 4.5 to MidSouth's
definitive Proxy Statement filed April 11, 1997,
and is incorporated herein by reference.
10.7 Notes Payable
11 Computation of earnings per share
(b) Reports Filed on Form 8-K
(none)
Signatures
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MidSouth Bancorp, Inc.
(Registrant)
Date: August 13, 1997
___________________________
C. R. Cloutier, President & CEO
____________________________
Karen L. Hail, Executive Vice
President & CFO
__________________________________
Teri S. Stelly, Senior Vice
President & Controller
Exhibit 10.7
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made and
entered into as of the 23rd day of June, 1997, by and between THE
BANKERS BANK, a banking corporation organized under the laws of
Georgia (the "Lender"), and MIDSOUTH BANCORP, INC., a Louisiana
corporation (the "Borrower").
RECITALS
WHEREAS, the Borrower wishes to obtain from the Lender
a loan in the principal amount of up to $2,500,000, and the
Lender, on the terms and conditions hereinafter set forth, is
willing to lend such sum to the Borrower;
NOW, THEREFORE, for and in consideration of the
premises, and the mutual agreements, warranties and
representations herein made, the Lender and the Borrower agree as
follows:
ARTICLE 1 - DEFINITIONS
1.1. "Bank Stock" means all of the issued and
outstanding capital stock of MidSouth National Bank.
1.2. "Capital" means all capital or all components of
capital, other than any allowance for loan and lease losses that
would otherwise be included and net of any intangible assets, as
defined from time to time by the Borrower's or each MidSouth
Subsidiary's primary federal regulator (as the case may be).
1.3. "Collateral" means and includes all property
assigned or pledged to the Lender or in which the Lender has been
granted a security interest or to which the Lender has been
granted security title under this Agreement or the other
Financing Documents or any other agreement, instrument, or
document and the proceeds thereof.
1.4. "ERISA" means the Employee Retirement Income
Security Act of 1974, P.L. No. 93-406, as amended from time to
time.
1.5. "Event of Default" shall have the meaning set
forth in Article VII hereof.
1.6. "Financing Documents" means and includes this
Agreement, the Note, the Pledge Agreement, and all other
associated loan and collateral documents including, without
limitation, all guaranties, suretyship agreements, stock powers,
security agreements, security deeds, subordination agreements,
exhibits, schedules, attachments, financing statements, notices,
consents, waivers, opinions, letters, reports, records,
assignments, documents, instruments, information and other
writings related thereto, or furnished by the Borrower to the
Lender in connection therewith or in connection with any of the
Collateral, and any amendments, extensions, renewals,
modifications or substitutions thereof or therefor.
<PAGE>
1.7. "Lender" shall include transferees, assignees and
successors of the Lender, and all rights of the Lender under the
Financing Documents shall inure to the benefit of its
transferees, successors and assigns. All obligations of the
Borrower under the Financing Documents shall bind its heirs,
legal representatives, successors, and assigns.
1.8. "Liabilities" means all indebtedness, liabilities,
and obligations of the Borrower or any Subsidiary thereof of any
nature whatsoever which the Lender may now or hereafter have, own
or hold, and which are now or hereafter owing to the Lender
regardless of however and whenever created, arising or evidenced,
whether now, heretofore or hereafter incurred, whether now,
heretofore or hereafter due and payable, whether alone or
together with another or others, whether direct or indirect,
primary or secondary, absolute or contingent, or joint or
several, and whether as principal, maker, endorser, guarantor,
surety or otherwise, and also regardless of whether such
Liabilities are from time to time reduced and thereafter
increased or entirely extinguished and thereafter reincurred,
including without limitation the Note and any amendments,
extensions, renewals, modifications or substitutions thereof or
therefor.
1.9. "Loan" shall have the meaning set forth in Section
2.1 hereof.
1.10."MidSouth National Bank" means MidSouth National
Bank, a National Banking Association formed under the laws of the
United States, regulated by the Comptroller of the Currency, and
authorized to do business in Louisiana.
1.11."MidSouth Subsidiaries" means each and every bank
Subsidiary of the Borrower, now or hereafter in existence,
including, but not limited to, MidSouth National Bank.
1.12."Non-Performing Loans" are those loans on non-
accrual plus all other loans 90 days or more past due (in the
case of consumer and credit card loans, 120 days or more, or
MidSouth Subsidiary's policy, whichever is less), less the
government guaranteed portions of those loans.
1.13."Note" shall have the meaning set forth in Section
2.2 hereof.
1.14."Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
1.15."Pledge Agreement" shall have the meaning set
forth in Section 2.4(a) hereof.
1.16."Subsidiary" means each of the MidSouth
Subsidiaries and each other corporation for which the Borrower
has the power, directly or indirectly, to direct its management
or policies or to vote 25% or more of any class of its voting
securities, but excluding Finance Company of the South, Inc. if
it accounts for no more than 10% of the Borrower's assets or
revenues on a consolidated basis.
2
<PAGE>
1.17."Total Risk-Based Capital Ratio" means the Total
risk-based capital ratio as defined by the capital maintenance
regulations of the primary federal bank regulatory agency of the
relevant MidSouth Subsidiary.
1.18."Weighted Average Return on Assets" means (i) with
respect to the Borrower, its net income for the previous calendar
year plus the amount of any interest payments by it on the Loan
during the previous calendar year, divided by its average assets
during the previous calendar year, and (ii) with respect to each
MidSouth Subsidiary, its net income for the previous calendar
year divided by its average assets during the previous calendar
year.
1.19.All accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles in effect from time to time.
ARTICLE 2 - THE LOAN
2.1. Subject to the terms and conditions of this
Agreement, the Lender agrees to lend to the Borrower the
principal sum of up to $2,500,000 (the "Loan") in a series of
advances as requested from time to time by the Borrower in a
period beginning on the date of this Agreement and ending on the
date 24 months after the date of this Agreement. Each such
advance will reduce the remaining commitment to lend hereunder
and repayments of advances shall not permit the Borrower to
receive an additional advance of such funds.
2.2. The Loan shall be evidenced by a grid promissory
note, in form and substance satisfactory to the Lender, duly
executed and delivered by the Borrower in favor of the Lender.
Said grid promissory note and any amendment(s), extension(s),
renewal(s), modification(s) or substitution(s) thereof or
therefor which is in effect at any particular time is hereinafter
called the "Note." The Note shall provide that:
(a) The Loan shall bear interest at a rate per
annum, calculated on the basis of a 360-day year and actual days
elapsed, equal to the Prime Rate Basis (as defined in the Note).
(b) Accrued interest shall be payable quarterly
in arrears on the last day of each quarter, commencing September
30, 1997, and continuing to be due on the last day of each
quarter (March 31, June 30, September 30, or December 31)
thereafter until the Loan is paid in full. Interest shall also
be due and payable when the Loan shall become due (whether at
maturity, by reason of acceleration or otherwise).
(c) Commencing June 30, 1999, and continuing on
June 30 of each succeeding calendar year, the Loan shall be due
and payable in eight (8) consecutive annual installments of
principal, each in the amount of 11.11% of the principal amount
of the Loan outstanding on June 30, 1999, plus all accrued and
unpaid interest as hereinabove provided. The entire outstanding
balance of the Loan, together with all accrued and unpaid
interest, shall be due and payable in a ninth (9th) and final
installment on June 30, 2007.
3
<PAGE>
(d) No penalty or premium shall be imposed for
the prepayment in whole or in part of the principal balance of
the Loan. Any prepayment in full shall be accompanied by the
payment in full of all accrued but unpaid interest on the Loan
through the prepayment date, whether or not such interest is
otherwise due and payable. Partial prepayments of the Loan shall
be applied against the principal installments thereof in reverse
order of maturity and shall not alter the amount of the regularly
scheduled payments under the Loan; provided, however, that at
Borrower's election a prepayment of principal in the amount equal
to a full principal installment shall be applied to the next
principal installment due.
In the event of conflict between the terms of this
Section 2.2 and those of the Note, the Note shall control.
2.3. The proceeds of the Loan shall be used by the
Borrower to refinance existing debt in the principal amount of
$883,355.13 and to provide funds for future expansion.
2.4. To secure the repayment of the Loan:
(a) The Borrower shall execute and deliver to the
Lender a stock pledge agreement (the "Pledge Agreement") in form
and substance satisfactory to the Lender, and pursuant to which
the Borrower shall grant to the Lender a security interest in the
Bank Stock. On or before the day the Loan is made, the Borrower
shall deliver to the Lender the certificate(s) representing the
Bank Stock together with stock transfer powers for the same in
form and substance satisfactory to the Lender. If at any time
prior to repayment in full of the Loan the Borrower acquires any
additional shares of the Bank Stock, the Borrower shall promptly
deliver certificates evidencing such shares of the Bank Stock to
the Lender and such additional shares shall be added to the
collateral already pledged to the Lender under the Pledge
Agreement, and the Lender shall have a security interest in such
additional shares.
(b) If at any time prior to repayment in full of
the Loan the aggregate book value (as determined in accordance
with generally accepted accounting principles) of the shares of
Bank Stock under pledge to the Lender becomes less than 200% of
the then-outstanding principal and interest balance of the Loan,
the Borrower shall promptly deliver to the Lender on demand
additional collateral of a type and value acceptable to the
Lender (and the Lender's judgment in valuing same shall be
conclusive) so that the sum of the value of such additional
collateral plus the aggregate book value of the Bank Stock then
under pledge is equal to or in excess of 200% of the then-
outstanding principal and interest balance of the Loan. In
connection with the Borrower's delivery of any additional
collateral under this Section 2.4(b), the Borrower will execute
any and all security documents as the Lender may request to
evidence and perfect the Lender's rights in such additional
collateral.
2.5. In connection with the Loan, the Borrower also
will deliver to the Lender the resolutions and other agreements
or instruments specified in Section 6.5 hereof and such other
documents as may be reasonably required by the Lender.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
4
<PAGE>
The Borrower represents and warrants to the Lender that
each of the following is true, correct, complete and accurate in
all respects:
3.1. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Louisiana, and is qualified to do business in all
jurisdictions where such qualification is necessary, except where
the failure to so qualify would not have a material adverse
effect on the Borrower or its business. The Borrower is
registered as a bank holding company with the Board of Governors
of the Federal Reserve System and the Louisiana Commissioner of
Financial Institutions.
3.2. MidSouth National Bank is a National Banking
Association formed under the laws of the United States, regulated
by the Comptroller of the Currency, and authorized to do business
in Louisiana. The Borrower owns all of the outstanding capital
stock of MidSouth National Bank, and there are no outstanding
options, warrants or other rights which can be converted into
shares of capital stock of MidSouth National Bank (other than
those, if any, issued in favor of Borrower). Schedule 3.2 sets
forth the number and class of all of the outstanding shares of
capital stock of MidSouth National Bank. MidSouth National Bank
has all requisite corporate power and authority and possesses all
licenses, permits and authorizations necessary for it to own its
properties and conduct its business as presently conducted.
3.3. Each financial statement of the Borrower or any
Subsidiary which has been delivered to the Lender presents fairly
the financial condition of the Borrower or such Subsidiary as of
the date indicated therein and the results of its operations for
the period(s) shown therein. There has been no material adverse
change, either existing or threatened, in the financial condition
or operations of the Borrower or any Subsidiary since the date of
said financial statement.
3.4. The Borrower has full power and authority to make,
execute and perform in accordance with the respective terms
thereof each of the Financing Documents. The execution and
performance by the Borrower of each and every one of the
Financing Documents have been duly authorized by all requisite
action, and each and every one of them constitutes the legal,
valid and binding obligation of the Borrower enforceable in
accordance with its respective terms.
3.5. Execution, delivery, and performance by the
Borrower of each and every one of the Financing Documents do not
violate any provision of law or regulations and will not result
in a breach of or constitute a default under any agreement,
indenture or other instrument to which the Borrower or any
Subsidiary is a party or which the Borrower or any Subsidiary is
bound.
3.6. Except for the security interest created by the
Pledge Agreement, the Borrower owns the Bank Stock free and clear
of all liens, charges and encumbrances. The Bank Stock is duly
issued, fully paid and non-assessable (except as provided in 12
U.S.C. 55), and the Borrower has the unencumbered right to pledge
the Bank Stock.
3.7. There is no claim, action, suit, arbitration,
investigation, condemnation or other proceeding at law or in
equity, or by or before any federal, state, local or other
5
<PAGE>
governmental agency, or by or before any other agency or
arbitrator, nor is there any judgment, order, writ, injunction or
decree of any court pending, anticipated or threatened against
the Borrower or any Subsidiary or against any of their properties
or assets, which might have a material adverse effect on the
Borrower, any Subsidiary, or their respective properties or
assets, or which might call into question the validity or
enforceability of any of the Financing Documents, or which might
involve the alleged violation by the Borrower or any Subsidiary
of any material federal, state, local or other law, rule or
regulation.
3.8. All of the Borrower's outstanding capital stock
has been validly issued, fully paid and is non-assessable. The
Borrower is not in material violation of any applicable federal,
state, local, or other securities laws and regulations with
respect to the issuance of any of its capital stock or any other
of its securities.
3.9. The Borrower and each Subsidiary have accurately
prepared and timely filed (or caused to be filed) in all material
respects all required federal, state, local, or other tax returns
and have paid (except as otherwise permitted by Section 4.3
hereof) all governmental taxes and other charges imposed upon it
or on any of its properties or assets. The Borrower does not
know of any proposed additional tax assessment against it or any
Subsidiary.
3.10.No consent, approval, order, authorization,
designation, registration, declaration, or filing with or of any
federal, state, local, or other governmental authority or public
body on the part of the Borrower or any Subsidiary is required in
connection with the Borrower's execution, delivery or performance
of any of the Financing Documents; or if required, all such
prerequisites have been, or as of the date the Loan is advanced
will be, fully satisfied.
3.11.Neither the Borrower nor any Subsidiary has
incurred any material accumulated funding deficiency within the
meaning of ERISA, or has incurred any material liability to the
Pension Benefit Guaranty Corporation established under ERISA (or
any successor thereto under such Act) in connection with any
employee benefit plan established or maintained by the Borrower
or any Subsidiary.
3.12. None of the transactions contemplated in this
Agreement (including, without limitation, the use of the proceeds
of the Loan) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without
limitation, Regulations G, T, U, and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R., Parts 207, 220, 221,
and 224. None of the proceeds of the Loan hereunder will be used
to purchase or carry (or refinance any borrowing the proceeds of
which were used to purchase or carry) any "margin stock" within
the meaning of said Regulation U.
ARTICLE 4 - AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, and unless
the Lender expressly consents in writing otherwise or to the
contrary, the Borrower hereby expressly covenants and agrees as
follows:
6
<PAGE>
4.1. Upon request of the Lender, the Borrower and each
Subsidiary shall make available its officers and employees to the
Lender to discuss the financial affairs of the Borrower or such
Subsidiary, at such times and intervals as the Lender may
reasonably request, and the Borrower and each Subsidiary shall
promptly confirm or furnish in reasonable detail whatever
information relative to the Borrower or such Subsidiary as the
Lender's authorized representative, auditor or counsel may
reasonably request.
4.2. The Borrower shall promptly furnish to the Lender:
(a) not later than one hundred twenty (120) days after and as of
the end of each fiscal year, audited consolidated and
consolidating financial statements of the Borrower, to include a
balance sheet and statements of income, changes in stockholders'
equity and cash flows, all in reasonable detail, prepared in
accordance with generally accepted accounting principles and
certified by Deloitte & Touche or other independent accounting
firm acceptable to the Lender; (b) not later than forty-five (45)
days after and as of the end of each of the first three (3)
quarters of each fiscal year, unaudited consolidated financial
statements of the Borrower, to include a balance sheet and
statements of income, changes in stockholders' equity and cash
flows, all in reasonable detail, prepared in accordance with
generally accepted accounting principles (subject to changes
resulting from normal year-end adjustments), and certified by the
chief financial officer of the Borrower; (c) not later than
thirty (30) days after and as of the end of each of the first
three (3) quarters of each year, copies of the Report of
Condition and the Report of Income and Dividends of each of the
MidSouth Subsidiaries as filed with the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System
or the Office of Comptroller of the Currency (as the case may
be); (d) not later than thirty (30) days after and as of the end
of each quarter of each year, a statement of the Borrower's chief
financial officer describing in reasonable detail the status of
compliance with each of the covenants set forth in Articles IV
and V hereof, and, in the event of non-compliance with any of
such covenants, also setting forth in reasonable detail the
action which the Borrower proposes to take with respect thereto;
(e) as soon as available, copies of all proxy materials,
financial statements and reports (if any) which the Borrower
sends to its stockholders and copies of all regular, periodic and
special reports and all registration statements which the
Borrower files with the Securities and Exchange Commission or any
state securities commission or regulatory agency; (f) immediately
after the occurrence of a material adverse change in the
business, properties, condition, management or prospects,
financial or otherwise, of the Borrower or any Subsidiary,
including, without limitation, imposition of any formal or
informal letter agreement, memorandum of understanding, cease and
desist order, or other similar regulatory action involving the
Borrower or any Subsidiary, a statement of the Borrower's chief
executive officer or chief financial officer setting forth in
reasonable detail such change and the action which the Borrower
or any Subsidiary proposes to take with respect thereto; and (g)
from time to time upon request of the Lender, such other
information relating to the operations, business, condition,
management, properties and prospects of the Borrower or any
Subsidiary as the Lender may reasonably request.
4.3. The Borrower shall permit the Lender's appropriate
officers and employees to inspect the financial books and records
of Borrower and each Subsidiary, to perform a review of the loan
portfolio of each MidSouth Subsidiary as reasonably deemed
necessary, and to review regulatory reports to the extent
permitted by the Borrower's and each Subsidiary's regulatory
authorities.
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4.4. The Borrower and each Subsidiary shall punctually
pay and discharge all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or upon any of its
property, as well as all claims of any kind, which if unpaid,
might by law become a lien or charge upon its property, except
taxes, assessments, charges, levies or claims which are in good
faith being timely litigated or otherwise properly contested by
the Borrower or the Subsidiary and as to which the contestant has
established an adequate reserve on its books.
4.5. The Borrower and each Subsidiary shall comply in
all material respects with the requirements of all provisions of
constitutions, statutes, rules, regulations and orders of
governmental bodies or regulatory agencies applicable to it, and
all orders and decrees of all courts and arbitrators in
proceedings or actions to which it is a party or by which it is
bound.
4.6. To the maximum extent permitted by applicable law,
and provided that the Lender's correspondent services are
available and competitively priced, the Borrower shall cause each
of the MidSouth Subsidiaries to maintain the Lender as its
primary correspondent.
4.7. The Borrower shall immediately report to the
Lender any significant change in Borrower's management or any
increase or decrease in any one year in the beneficial ownership
of the Borrower's common stock by any officer, director or 5% or
greater stockholder of the Borrower, other than any increase or
decrease of less than 1% of the Borrower's common stock
outstanding in any one year.
ARTICLE 5 - NEGATIVE COVENANTS
For so long as this Agreement is in effect, and unless
the Lender expressly consents in writing otherwise or to the
contrary, the Borrower hereby expressly covenants and agrees to
the following negative covenants:
5.1. The Borrower shall not permit its Capital as of
the end of any fiscal quarter during the term of this Agreement
to be less than $10,500,000 (excluding the accounting effects of
FASB Statement No. 91).
5.2. The Borrower shall not permit the Total Risk-Based
Capital Ratio of the Borrower or any of the MidSouth Subsidiaries
as of the end of any fiscal year during the term of this
Agreement to be less than 10.0%.
5.3. The Borrower shall not, and shall not permit any
of the MidSouth Subsidiaries to, fail to comply with any minimum
capital requirement imposed by any of their federal and state
regulators.
5.4. The Borrower shall not permit the earnings of the
MidSouth Subsidiaries, on an annualized basis as of the end of
each calendar quarter (taking into account any retained net
profits in accordance with OCC regulations regarding the payment
of dividends) during the term of this Agreement, to be less than
adequate on a prospective basis to pay to the Borrower in the
immediately succeeding calendar year legally permissible
dividends in amounts sufficient to fund the payments of principal
and interest on the Loan required under the Note and this
Agreement during such year, except to the extent that new funds
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<PAGE>
available for debt service in an amount sufficient to cover the
prospective deficiency are made available to the Borrower in a
manner that does not violate any covenant in this Agreement or
any other Financing Document.
5.5. The Borrower shall not permit its or any MidSouth
Subsidiaries' Weighted Average Return on Assets for each fiscal
year ending during the term of this Agreement to be less than
0.50%.
5.6. The Borrower shall not permit the allowance for
loan and lease losses of any of the MidSouth Subsidiaries to be
less than 1.0% of its gross loans for each fiscal quarter ending
during the term of this Agreement.
5.7. The Borrower and each MidSouth Subsidiary shall
maintain the following asset quality ratios:
(a) Net Charge Offs will be less than 1.00% of
average loans.
(b) Non-Performing Loans shall be less than 1.50%
of gross loans.
(c) Non-Performing Loans plus other real estate
owned shall be less than 2.00% of total
assets.
5.8. The Borrower shall neither declare nor pay any
dividend nor make any distribution on any shares of stock of the
Borrower or to its stockholders (other than dividends or
distributions payable in shares of stock of the Borrower) nor
shall the Borrower retire, redeem, purchase or otherwise acquire
for value, directly or indirectly, any shares of the capital
stock of the Borrower (nor permit any Subsidiary to do so) if
such declaration, payment, distribution, retirement, purchase,
redemption or other acquisition would result in an Event of
Default hereunder or an event which, with the giving of notice or
passage of time (or both), would constitute such an Event of
Default.
5.9. The Borrower shall not, nor permit any MidSouth
Subsidiary to, incur, create, assume or permit to exist any
indebtedness or liability for borrowed money other than to the
Lender, the Borrower or a wholly-owned Subsidiary of the
Borrower, without prior Lender approval, except that this
covenant shall not apply to deposits, repurchase agreements,
overdrafts, borrowing of federal funds, FHLB advances, and other
banking transactions entered into by a MidSouth Subsidiary in the
ordinary course of its business.
5.10.The Borrower shall not in any manner, directly or
indirectly, become a guarantor of any obligation of, or an
endorser of, or otherwise assume or become liable upon any notes,
obligations, or other indebtedness of any other Person (other
than a Subsidiary) except in connection with the normal and
ordinary course of business.
5.11.The Borrower shall not, nor permit any Subsidiary
to, transfer all or substantially all of its assets to,
consolidate with or merge with any other Person or acquire all or
substantially all of the properties or capital stock of any other
Person, or create any Subsidiary or enter into any partnership or
joint venture.
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5.12.The Borrower shall not, nor permit any Subsidiary
to, change or amend its articles or certificate of incorporation
or association or its by-laws.
5.13.The Borrower shall not permit any Subsidiary
(either directly or indirectly by the issuance of rights or
options for, or securities convertible into, such shares) to
issue, sell or otherwise dispose of any shares of any class of
its stock (other than directors' qualifying shares) except to the
Borrower or a wholly-owned Subsidiary of the Borrower.
5.14.The Borrower shall not sell or otherwise dispose
of, or part with control of, any securities or indebtedness of
any Subsidiary, and the Borrower shall not pledge, hypothecate,
assign, transfer or grant a security interest in any of the
capital stock or other securities of any of its Subsidiaries.
5.15.Neither the Borrower nor any Subsidiary shall
incur or suffer to exist any material accumulated funding
deficiency within the meaning of ERISA or incur any material
liability to the Pension Benefit Guaranty Corporation established
under ERISA (or any successor thereto under ERISA).
ARTICLE 6 - CONDITIONS PRECEDENT
All of the Lender's obligations under this Agreement,
including without limitation any obligation to make any advance
of the Loan to the Borrower, are subject to the prior fulfillment
of each of the following conditions, and the Borrower shall use
its best efforts to cause each of the following conditions to be
so fulfilled:
6.1. All representations and warranties of the Borrower
contained in this Agreement and in each and every one of the
other Financing Documents shall be true, correct, complete and
accurate in all material respects on and as of the date of each
advance of the Loan.
6.2. The Borrower and each Subsidiary shall have duly
and properly performed in all material respects all covenants,
agreements, and obligations required by the terms of this
Agreement or any of the other Financing Documents to be performed
by the Borrower or the Subsidiary.
6.3. The Borrower shall not have taken or permitted to
be taken any actions which would conflict with any of the
provisions of Article V hereof.
6.4. Since the date of this Agreement no material
adverse change shall have occurred in the Borrower's or any
Subsidiary's condition (financial or otherwise), or in the
business, properties, assets, liabilities, prospects, or
management of the Borrower or any Subsidiary.
6.5. Prior to the advance of the Loan, the Borrower
shall have delivered to the Lender the following described
documents:
(a) This Agreement duly executed by the Borrower;
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(b) The Note duly executed by the Borrower;
(c) The Pledge Agreement duly executed by the
Borrower;
(d) A Certificate of the Borrower's Secretary or
Assistant Secretary, in form and substance
satisfactory to the Lender, with respect to
the corporate documents of the Borrower and
MidSouth National Bank, the resolutions of
the Borrower's directors authorizing the
execution of this Agreement and the other
Financing Documents, and such other matters
as the Lender may reasonably require;
(e) A copy of the Borrower's certificate or
articles of incorporation certified by the
Secretary of State of the state of its
incorporation;
(f) A certificate of the Secretary of State of
the state of the Borrower's incorporation
certifying that the Borrower is a corporation
duly organized and in good standing under the
laws of such state;
(g) A copy of MidSouth National Bank's
certificate or articles of incorporation or
association certified by its chartering
authority;
(h) An opinion of legal counsel, in form and
substance satisfactory to the Lender, with
respect to the Borrower's and MidSouth
National Bank's organization and authority,
the enforceability of this Agreement and the
Financing Documents, and such other matters
as the Lender may reasonably require; and
(i) Such other documents, instruments and
agreements as may be reasonably required by
the Lender or the Lender's counsel in
connection with the Loan hereunder.
6.6. No Event of Default or event which, with the
giving of notice or passage of time (or both), would constitute
an Event of Default under the terms of this Agreement, shall have
occurred.
6.7. All other matters incidental to the Loan hereunder
shall be satisfactory to the Lender.
ARTICLE 7 - EVENTS OF DEFAULT
The occurrence of any one or more of the following
events will constitute an event of default (herein called an
"Event of Default") by the Borrower under this Agreement:
7.1. Failure of the Borrower punctually to make payment
of any amount payable, whether principal or interest or other
amount, on any of the Liabilities, whether at maturity, or at a
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<PAGE>
date fixed for any prepayment or partial prepayment, or by
acceleration or otherwise.
7.2. If any statement, representation, or warranty of
the Borrower made in this Agreement or in any of the other
Financing Documents or at any time furnished by or on behalf of
the Borrower to the Lender proves to have been untrue, incorrect,
misleading, or incomplete in any material respect as of the date
made.
7.3. Failure of the Borrower punctually and fully to
perform, observe, discharge or comply with any of the covenants
set forth in Article V hereof.
7.4. Failure of the Borrower punctually and fully to
perform, observe, discharge or comply with any of the other
covenants set forth in this Agreement, which failure is not cured
within thirty (30) days after notice from the Lender to the
Borrower.
7.5. The occurrence of a default, an event of default,
or an Event of Default under any of the other Financing Documents
or under any other agreement to which the Borrower and the Lender
are parties or under any other instrument executed by the
Borrower in favor of the Lender.
7.6. If the Borrower or any Subsidiary becomes
insolvent as defined in the Uniform Commercial Code of Georgia or
makes an assignment for the benefit of creditors; or if any
action is brought by the Borrower or any Subsidiary seeking
dissolution of the Borrower or such Subsidiary or liquidation of
its assets or seeking the appointment of a trustee, interim
trustee, receiver, or other custodian for any of its property; or
if the Borrower or any Subsidiary commences a voluntary case
under the Federal Bankruptcy Code; or if any reorganization or
arrangement proceeding is instituted by the Borrower or any
Subsidiary for the settlement, readjustment, composition or
extension of any of its debts upon any terms; or if any action or
petition is otherwise brought by the Borrower or any Subsidiary
seeking similar relief or alleging that it is insolvent or unable
to pay its debts as they mature; provided that this Section shall
not apply to an action for receivership or dissolution under the
Louisiana Business Corporation Law so long as such action is
contested in good faith by the Borrower.
7.7. If any action is brought against the Borrower or
any Subsidiary seeking dissolution of the Borrower or such
Subsidiary or liquidation of any of its assets or seeking the
appointment of a trustee, interim trustee, receiver or other
custodian for any of its property, and such action is consented
to or acquiesced in by the Borrower or such Subsidiary or is not
dismissed within 30 days of the date upon which it was
instituted; or if any proceeding under the Federal Bankruptcy
Code is instituted against the Borrower or any Subsidiary and (i)
an order for relief is entered in such proceeding or (ii) such
proceeding is consented to or acquiesced in by the Borrower or
such Subsidiary or is not dismissed within 30 days of the date
upon which it was instituted; or if any reorganization or
arrangement proceeding is instituted against the Borrower or any
Subsidiary for the settlement, readjustment, composition, or
extension of any of its debts upon any terms, and such proceeding
is consented to or acquiesced in by the Borrower or such
Subsidiary or is not dismissed within 30 days of the date upon
which it was instituted; or if any action or petition is
otherwise brought against the Borrower or any Subsidiary seeking
similar relief or alleging that it is insolvent, unable to pay
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<PAGE>
its debts as they mature, or generally not paying its debts as
they become due, and such action or petition is consented to or
acquiesced in by the Borrower or such Subsidiary or is not
dismissed within 30 days of the date upon which it was brought;
provided that this Section shall not apply to an action for
receivership or dissolution under the Louisiana Business
Corporation Law so long as such action is contested in good faith
by the Borrower.
7.8. If the Borrower or any Subsidiary is in default on
indebtedness to another Person or an event has occurred which,
with the giving of notice or passage of time, or both, will cause
the Borrower or any Subsidiary to be in default on indebtedness
to another Person, and the amount of such indebtedness exceeds
$100,000 or the acceleration of the maturity of such indebtedness
would have a material adverse effect upon the Borrower or such
Subsidiary.
7.9. Any other material adverse change occurs in the
Borrower's financial condition or means or ability to pay the
Liabilities.
7.10.If any cease and desist order has been entered
against Borrower or any Subsidiary by any federal or state bank
or bank holding company regulatory agency or body, or if the
Borrower or any Subsidiary enters into any form of memorandum of
understanding, plan of corrective action, or letter agreement
with any such federal or state bank or bank holding company
regulatory agency or body concerning a material aspect of its
business, or if any other regulatory enforcement action is taken
against Borrower or any Subsidiary relating to the
capitalization, management or material operation of the Borrower
or any Subsidiary.
7.11.If Borrower or any Subsidiary is indicted or
convicted or pleads guilty or nolo contendere to any charge that
Borrower or such Subsidiary has violated the Federal Money
Laundering Control Act, the Controlled Substances Act, the
Currency and Foreign Transactions Reporting Act or any other
federal, state or local drug, controlled substances, money
laundering, currency reporting, racketeering, or racketeering-
influenced-and-corrupt-organization statute or regulations, or
any other similar federal, state or local forfeiture statute
(including without limitation 18 U.S.C. Section 1963).
7.12.If any Person (other than a Person who controls
Borrower as of the date of this Agreement) or group of Persons
acting in concert (other than a group of Persons which controls
Borrower as of the date of this Agreement) shall at any time
after the date of the Agreement acquire control of the Borrower,
as such term is defined by the Change in Bank Control Act of
1978, as amended, 12 U.S.C. Section 1817(j), and the rules and
regulations adopted thereunder; provided, however, that the
Borrower's employee stock option plan and J. B. Hargroder, M. D.
may each acquire up to an aggregate of 25% and 12%, respectively,
of the Borrower's stock without constituting an Event of Default
hereunder.
7.13.If the Borrower ceases to own 100% of the issued
and outstanding capital stock of, or to control, the MidSouth
Subsidiaries.
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ARTICLE 8 - REMEDIES UPON DEFAULT
8.1. Upon the occurrence of an Event of Default:
(a) Any of the Liabilities may (notwithstanding
any provisions contained therein or herein to the contrary), at
the option of the Lender and without presentment, demand, notice
or protest of any kind (all of which are expressly waived by the
Borrower in this Agreement), be declared due and payable,
whereupon they immediately will become due and payable;
(b) Except as otherwise provided in the Pledge
Agreement, the Lender may also, at its option, and without notice
or demand of any kind, exercise from time to time any and all
rights and remedies available to it under this Agreement or under
any of the other Financing Documents, as well as exercise from
time to time any and all rights and remedies available to a
secured party when a debtor is in default under a security
agreement as provided in the Uniform Commercial Code of Georgia,
or available to the Lender under any other applicable law or in
equity, including without limitation the right to any deficiency
remaining after disposition of the Collateral; and
(c) The Borrower shall pay all of the reasonable
costs and expenses incurred by the Lender in enforcing its rights
under this Agreement and the other Financing Documents. In the
event any claim under this Agreement or under any of the other
Financing Documents is referred to an attorney for collection, or
collected by or through an attorney at law, the Borrower will be
liable to the Lender for all expenses incurred by it in seeking
to collect the Liabilities or to enforce its rights hereunder, in
the other Financing Documents or in the Collateral, including,
without limitation, reasonable attorneys' fees.
8.2. Any proceeds from disposition of any of the
Collateral may be applied by the Lender first to the payment of
all expense and costs incurred by the Lender in collecting such
Liabilities, in enforcing the rights of the Lender under each and
every one of the Financing Documents and in collecting, retaking,
holding, preparing the Collateral for and advertising the sale or
other disposition of and realizing upon the Collateral,
including, without limitation, reasonable attorneys' fees as well
as all other legal expenses and court costs. Any balance of such
proceeds may be applied by the Lender toward the payment of such
of the Liabilities and in such order of application as the Lender
may from time to time elect. The Lender shall pay the surplus,
if any, to the Borrower. The Borrower shall pay the deficiency,
if any, to the Lender.
ARTICLE 9 - MISCELLANEOUS
9.1. Time is of the essence of this Agreement.
9.2. This Agreement, together with all of the other
Financing Documents, supersedes all prior discussions,
understandings and agreements by and between the Borrower and the
Lender with respect to the Loan and the Collateral, and together
they constitute the sole and entire agreement between the
parties.
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9.3. This Agreement and the security interests and
security title conveyed under the Financing Documents shall
remain in full force and effect until such time as (i) the
Liabilities are repaid in full, (ii) the Lender is under no
obligation to make loans or other financial accommodations to the
Borrower, and (iii) either party in writing notifies the other
that it is thereby terminating this Agreement.
9.4. The Lender will not be deemed as a consequence of
any act, delay, failure, omission, or forbearance (including
without limitation failure to exercise its rights of accelerating
the maturity of any of the Liabilities or other indulgences
granted from time to time by the Lender) or for any other reason:
(i) to have waived, or to be estopped from exercising, any of its
rights or remedies under this Agreement or under any of the other
Financing Documents; or (ii) to have modified, changed, amended,
terminated, rescinded, or superseded any of the terms of this
Agreement or of any of the other Financing Documents unless such
waiver, modification, amendment, change, termination, rescission,
or supersession is express, in writing and signed by a duly
authorized officer of the Lender. No single or partial exercise
by the Lender of any right or remedy will preclude other or
further exercise thereof or preclude the exercise of any right or
remedy, and a waiver expressly made in writing on one occasion
will be effective only in that specific instance and only for the
precise purpose for which given, and will not be construed as a
consent to or a waiver of any right or remedy on any future
occasion.
9.5. Except as provided otherwise in this Agreement,
all notices and other communications under this Agreement are to
be in writing and are to be deemed to have been duly given and to
be effective upon delivery to the party to whom they are
directed. If sent by U.S. mail, first class, certified, return
receipt requested, postage prepaid, and addressed to the Lender
or to the Borrower at their respective addressees set forth
below, such notices, demands and other communications are to be
deemed to have been delivered on the second business day after
being so posted.
If to the Lender: The Bankers Bank
300 Northcreek, Suite 800
3715 Northside Parkway
Atlanta, Georgia 30327
Attn: Jack Gardner, Vice President
If to the Borrower: MidSouth Bancorp, Inc.
Versailles Centre
102 Versailles Boulevard
Lafayette, Louisiana 70501
Attn:C.R. Cloutier, President
and Chief Executive Officer
Either the Lender or the Borrower may, by written notice to the
other, designate a different address for receiving notices under
this Agreement; provided, however, that no such change of address
will be effective until written notice thereof is actually
received by the party to whom such change of address is sent.
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9.6. The Borrower may not, without the consent of the
Lender, assign or transfer any of its rights or duties hereunder
or under any of the other Financing Documents.
9.7. The Lender may at any time grant participation in
or sell, assign, transfer or otherwise dispose of, all or any
portion of the indebtedness of the Borrower outstanding pursuant
to this Agreement and the Note. The Borrower hereby agrees that
any holder of a participation in, and any assignee or transferee
of, all or any portion of any amount owed by the Borrower under
this Agreement and the Note (i) shall be entitled to the benefits
of the provisions of this Agreement as the Lender hereunder, and
(ii) may exercise any and all rights of the banker's lien, set-
off or counterclaim with respect to any and all amounts owed by
the Borrower to such assignee, transferee or holder as fully as
if such assignee, transferee or holder had made the Loan in the
amount of the obligation in which it holds a participation or
which is assigned or transferred to it.
9.8. All statements, reports, certificates, opinions,
and other documents or information furnished to the Lender under
the Financing Documents shall be supplied by the Borrower without
cost to the Lender. Further, the Borrower shall reimburse the
Lender on demand for all out-of-pocket costs and expenses
(including legal fees) incurred by the Lender in connection with
the preparation, establishment, interpretation, operation, and
enforcement of the Financing Documents or the protection or
preservation of any right or claim of the Lender with respect to
the Financing Documents.
9.9. The Borrower will pay all taxes (if any) in
connection with this Agreement, any of the other Financing
Documents, any loan made in connection with this Agreement, or
the issuance or ownership of any of the Financing Documents and
in connection with any modification of said loan, this agreement,
or any of the Financing Documents (excluding, however, any taxes
imposed upon or measured by the net income of the Lender), and
will save the Lender harmless without limitation as to time
against any and all liabilities with respect to all such taxes.
The obligations of the Borrower under this section shall survive
the payment of the Liabilities and the termination of this
Agreement.
9.10. In addition to any other amounts payable by
Borrower under this Agreement, Borrower hereby agrees to pay and
indemnify Lender from and against all claims, liabilities,
losses, costs, and expenses (including, without limitation,
reasonable attorneys' fees and expenses) which Lender may (other
than as a result of the gross negligence or willful misconduct of
Lender), incur or be subject to as a consequence, directly or
indirectly, of (i) any breach by Borrower of any warranty, term
or condition in, or the occurrence of any default under, this
Agreement or any other Financing Document, including all fees or
expenses resulting from the settlement or defense of any claims
or liabilities arising as a result of any such breach or default,
(ii) Lender's making, holding, or administering the Loan or the
Collateral, (iii) allegations of participation or interference by
Lender in the management, contractual relations or other affairs
of Borrower or any Subsidiary, (iv) allegations that Lender has
joint liability with Borrower or any Subsidiary for any reason,
and (v) any suit, investigation, or proceeding as to which Lender
or such participant is involved as a consequence, directly or
indirectly, of its execution of this Agreement or any other
Financing Document, or any other event or transaction
contemplated by any of the foregoing. The obligations of
Borrower under this Section 9.10 shall survive the termination of
this Agreement.
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9.11. Upon the occurrence of an Event of Default
hereunder, the Lender, without notice or demand of any kind, may
hold and set off against such of the Liabilities (whether matured
or unmatured) as the Lender may elect, any balance or amount to
the credit of the Borrower in any deposit, agency, reserve,
holdback or other account of any nature whatsoever maintained by
or on behalf of the Borrower with the Lender at any of its
offices, regardless of whether such accounts are general or
special and regardless of whether such accounts are individual or
joint. Any Person purchasing an interest in debt obligations
under this Agreement held by the Lender may exercise all rights
of offset with respect to such interest as fully as if such
Person were a holder of debt obligations hereunder in the amount
of such interest.
9.12. If at any time the Lender upon advice of its
counsel shall determine that any further document shall be
required to effect this Agreement and the transactions and other
agreements contemplated thereby, the Borrower shall, and shall
cause its Subsidiaries to, execute and deliver such document and
otherwise carry out the purposes of this Agreement.
9.13. This Agreement and all of the other Financing
Documents have been made and delivered in the State of Georgia,
and the terms, provisions and performance thereof are in all
respects, including without limitation all matters of
construction, interpretation, validity, enforcement, and
performance, to be construed in accordance with and governed by
the laws of that State, including without limitation the Uniform
Commercial Code of Georgia, as amended from time to time.
Wherever possible, each provision of this Agreement and of each
and every one of the other Financing Documents is to be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision thereof is prohibited or
invalid under such law, such provision is to be ineffective only
to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement or of any of the other Financing
Documents.
9.14. "Herein," "hereof," and "hereunder" and other
words of similar import refer to this Agreement as a whole and
not to any particular article, paragraph, section or other
subdivision.
9.15. The titles of the Articles appear as a matter of
convenience only and shall not affect the interpretation hereof.
9.16. Words importing the singular number shall
include the plural number and vice versa, and pronouns used shall
be deemed to cover all genders.
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<PAGE>
IN WITNESS WHEREOF, the Lender has executed this
Agreement, and the Borrower has executed this Agreement and
placed its seal hereon, all as of the day and year first above
written.
BORROWER:
MIDSOUTH BANCORP, INC.
By: ____________________________
C. R. Cloutier
Title: President and Chief
Executive Officer
___________________
Attest: ___________________
Title: ___________________
[CORPORATE SEAL]
LENDER:
THE BANKERS BANK
By: ____________________________
Jack Gardner
Title: Vice President
___________________
Attest: ___________________
Title: ___________________
[BANK SEAL]
18
<PAGE>
Schedule 3.2
Number and Class of All Authorized and Outstanding
Stock of MidSouth National Bank
Common stock, par value $5.00 per share, 437,500 shares
authorized and 350,000 shares issued and outstanding.
19
<PAGE>
GRID PROMISSORY NOTE
$2,500,000 June 23, 1997
FOR VALUE RECEIVED, the undersigned, MIDSOUTH BANCORP, INC.,
a Louisiana corporation (the "Borrower"), promises to pay to the
order of THE BANKERS BANK, a Georgia banking corporation
(hereinafter called the "Lender" and, together with any holder
hereof, called the "Holder"), at 300 Northcreek, Suite 800, 3715
Northside Parkway, Atlanta, Georgia 30327 (or at such other place
as the Holder may designate in writing to the Borrower), in
lawful money of the United States of America, the principal sum
of TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($2,500,000) or, if less, so much thereof as has been advanced
and is outstanding hereunder, plus interest as hereinafter
provided.
This Note is the Note made and given as described in that
certain Loan Agreement dated as of June 23, 1997, between the
Borrower and the Lender (the "Loan Agreement"). In the event of
any inconsistency between this Note and the Loan Agreement, this
Note shall control. All capitalized terms used herein shall have
the meanings ascribed to such terms in the Loan Agreement, except
to the extent such capitalized terms are otherwise defined or
limited herein.
The Borrower shall be entitled to borrow funds hereunder
pursuant to the terms and conditions of the Loan Agreement.
The Borrower hereby authorizes the Holder to endorse on the
Schedule annexed to this Note all advances of funds made to the
Borrower and all payments of principal amounts in respect of the
Loan, which endorsements shall, in the absence of manifest error,
be conclusive as to the outstanding principal amount of the Loan;
provided, however, that the failure to make such notation with
respect to any Loan or payment shall not limit or otherwise
affect the obligations of the Borrower under this Note.
The Borrower promises to pay interest on the unpaid
principal amount outstanding hereunder, at a simple interest rate
per annum equal to the Prime Rate Basis. "Prime Rate Basis"
shall mean, on any day, a simple interest rate per annum equal to
the Prime Rate minus fifty basis points (0.50%).
"Prime Rate" shall mean, on any day, the rate of interest
published as the "Prime Rate" as of such day appearing in the
"Money Rates" section of the Eastern Edition of the Wall Street
Journal or any successor to such section. If more than one such
rate shall be published, then the Prime Rate shall be the higher
or highest of such rates. The Prime Rate in effect as of the
close of business of each day shall be the applicable Prime Rate
for the day and each succeeding non-business day in determining
the applicable Prime Rate Basis.
Interest shall be calculated on the basis of a 360-day year
for the actual number of days elapsed.
<PAGE>
Interest under this Note shall be due and payable quarterly
in arrears on the last day of each quarter, commencing September
30, 1997, and continuing to be due on the last day of each
quarter (March 31, June 30, September 30, or December 31)
thereafter until this Note is paid in full. Interest shall also
be due and payable when this Note shall become due (whether at
maturity, by reason of acceleration or otherwise). After
default, interest shall also be due and payable upon demand from
time to time by the Holder as provided below.
Commencing June 30, 1999, and continuing on June 30 of each
succeeding calendar year, the indebtedness evidenced by this Note
shall be due and payable in eight (8) consecutive annual
installments of principal, each in the amount of 11.11% of the
amount of the Loan on June 30, 1999, plus all accrued and unpaid
interest as hereinabove provided. The entire outstanding balance
of the indebtedness evidenced by this Note, together with all
accrued and unpaid interest, shall be due and payable in a ninth
(9th) and final installment on June 30, 2007.
Overdue principal shall bear interest for each day from the
date it became so due until paid in full, payable on demand, at a
rate per annum (computed on the basis of a 360-day year for the
actual number of days elapsed) equal to the Prime Rate Basis plus
three percent (3%).
In no event shall the amount of interest due or payable
hereunder exceed the maximum rate of interest allowed by
applicable law, and in the event any such payment is
inadvertently paid by the Borrower or inadvertently received by
the Holder, then such excess sum shall be credited as a payment
of principal, unless the Borrower shall notify the Holder, in
writing, that the Borrower elects to have such excess sum
returned to it forthwith. It is the express intent hereof that
the Borrower not pay and the Holder not receive, directly or
indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by the Borrower under applicable law.
All parties now or hereafter liable with respect to this
Note, whether the Borrower, any guarantor, endorser, or any other
person or entity, hereby waive presentment for payment, demand,
notice of non-payment or dishonor, protest and notice of protest,
or any other notice of any kind with respect thereto.
Time is of the essence of this Note.
No delay or omission on the part of the Holder in the
exercise of any right or remedy hereunder, under the Loan
Agreement or any Financing Document, or at law or in equity,
shall operate as a waiver thereof, and no single or partial
exercise by the Holder of any right or remedy hereunder, under
the Loan Agreement or any Financing Document, or at law or in
equity, shall preclude or estop another or further exercise
thereof or the exercise of any other right or remedy.
Should this Note, or any part of the indebtedness evidenced
hereby, be collected by law or through an attorney-at-law or
under advice therefrom, the Holder shall be entitled to collect
reasonable attorneys' fees and all costs of collection.
2
<PAGE>
This Note is entitled to the benefits of the Loan Agreement,
which contains provisions with respect to the acceleration of the
maturity of this Note upon the happening of certain stated
events, and for prepayment of the Loan. Prepayment of the Loan
may be made by the Borrower only as provided in the Loan
Agreement.
The Holder shall be under no duty to exercise any or all of
the rights and remedies given by this Note and the Loan Agreement
or under any of the other Financing Documents and no party to
this instrument shall be discharged from the obligations or
undertakings hereunder (a) should the Holder release or agree not
to sue any person against whom the party has, to the knowledge of
the Holder, a right to recourse, or (b) should the Holder agree
to suspend the right to enforce this Note or Holder's interest in
any collateral pledged or any guarantee given to secure this Note
against such person or otherwise discharge such person.
This Note shall be deemed to be made pursuant to the laws of
the State of Georgia.
IN WITNESS WHEREOF, the duly authorized officers of the
Borrower have executed, sealed, and delivered this Note, as of
the day and year first above written.
MIDSOUTH BANCORP, INC.
By: _____________________________
C. R. Cloutier
Title: President and Chief
Executive Officer
______________________
ATTEST: ______________________
Title: ______________________
[CORPORATE SEAL]
3
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE TO GRID NOTE
Date Amount of Amount of Unpaid Signature of Person
Advance Principal Principal Making Notation
Repaid Balance of
Note
<S> <C> <C> <C> <C>
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
CORPORATE RESOLUTION TO BORROW
</TABLE>
<TABLE>
<CAPTION>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,200,000.00 06-23-1997 05-01-1998 531699 AT:91 PT:63 780BC
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C>
Borrower: Financial of the South, Inc. (TIN: 72-1320872) Lender: LBA Savings Bank TIN: 72023n60
315 Johnston Street (P O Box 4921) Commercial Lending Division
Lafayette,LA 70502 P. O. Box 3607
101 W. Vermilion
Lafayette, LA 70502
=====================================================================================================
</TABLE>
I, the undersigned Secretary or Assistant Secretary of Financial Services of
the South, Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State of
Louisiana as a corporation for profit, with its principal office at 315
Johnston Street (P O Box 4921), Lafayette, LA 70502, and is duly authorized
to transact business in the State of Louisiana.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on _____________, at which a quorum was present and voting, or
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:
NAMES POSITIONS ACTUAL SIGNATURES
Ben P Huval President X ______________________
Karen L Hail Secretary X ______________________
be and they are hereby specifically authorized, empowered and directed, but
without limitation, to do the following for and on behalf of and in the name of
the Corporation:
Loan. To negotiate and obtain a revolving line of credit from Lender in the
amount of One Millon Two Hundred Thousand & 00/100 Dollars (U.S. S1,200,000.00)
under such terms and conditions as said officers or employees may agree to in
their sole discretion, and for such additional sum or sums of money as in their
Judgment should be borrowed, without limitation.
Loan Agreement. To negotiate and execute a loan agreement in favor of Lender
governing the aforesaid revolving line of credit, containing such terms and
conditions, affirmative and negative covenants and other obligations as said
officers or employees may agree to in their sole discretion.
Note. To execute and deliver to Lender a promissory note evidencing the
Corporation's obligations and indebtedness under the aforesaid revolving line
of credit.
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
otherwise encumber and deliver to Lender, as security for the payment of any
loans or credit accommodations so obtained, any promissory notes so executed
(including any amendments to or modifications, renewals, and extensions of such
promissory notes), or any other or further indebtedness of the Corporation to
Lender at any time owing, however the same may be evidenced, any property now
or hereafter belonging to the Corporation or in which the Corporation now or
hereafter may have an interest, including without limitation all real
(immovable) property and all personal (movable) property and rights of the
Corporation. Such property may be mortgaged, pledged, transferred, endorsed,
hypothecated, encumbered or otherwise secured at the time such loans are
obtained or such indebtedness is incurred, or at any other time or times, and
may be either in addition to or in lieu of any property therefore mortgaged,
pledged, transferred, endorsed, hypothecated, encumbered or otherwise secured.
Security Agreements. To execute and deliver one or more mortgages, collateral
mortgages, pledge agreements and other security agreements in favor of Lender
to secure the prompt and punctual payment and satisfaction of the aforesaid
revolving line of credit, under which said officers or employees may grant a
continuing security interest in the property and/or the rights of the
Corporation as more fully described therein, which mortgages, collateral
mortgages, pledge agreements and other security agreements may contain
provisions for foreclosure under Louisiana executory process procedures,
confessions of judgment, waivers of appraisal and other rights and notices,
all of which remedies upon default are specifically consented to by this Board
of Directors.
Negotiate Items. To draw, endorse, and discount with Lender all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation in which the Corporation may have an interest, and
either to receive cash for the same or to cause such proceeds to be credited to
the account of the Corporation with Lender, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.
Further Acts. In the case of revolving lines of credit, to designate additional
or alternate individuals as being authorized to request advances thereunder,
and in all cases, to do and perform such other acts and things, to pay any and
all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions. The
following person or persons currently are authorized to request advances and
authorize payments under the revolving line of credit until Lender receives
written notice of revocation of their authority: Ben P Huval, President; and
Karen L Hail, Secretary.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect
at the time notice is given.
BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation,, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity, or
(f) change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.
I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on June 23, 1997 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X ________________________________
X ________________________________
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as on of the signing officers, it is advisable to have
this certificate signed by a secon Officer or Director of the Corporation.
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<CAPTION>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AT:91 PT:63 780BC
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C>
Borrower: Financial of the South, Inc. (TIN: 72-1320872) Lender: LBA Savings Bank TIN: 72023n60
315 Johnston Street (P O Box 4921) Commercial Lending Division
Lafayette,LA 70502 P. O. Box 3607
101 W. Vermilion
Lafayette, LA 70502
Guarantor: MidSouth Bancorp. Inc.
P.O. Box 3745
Lafayette, LA 70502
=====================================================================================================
</TABLE>
AMOUNT OF GUARANTY. The amount of this Guaranty Is Unlimited.
DEFINITIONS. The following terms shall have the following meanings when used in
this Agreement:
Agreement. The word "Agreement" means this Guaranty Agreement as this Agreement
may be amended or modified from time to time.
Borrower. The word "Borrower" means individually, collectively and
Interchangeably Financial Services of the South, Inc..
Guarantor. The word "Guarantor". means individually, collectively and
interchangeably MidSouth Bancorp, Inc. and all other persons guaranteeing
payment and satisfaction of Borrower's Indebtedness as hereinafter defined.
Indebtedness. The word "Indebtedness" means Individually, collectively,
interchangeably and without limitation any and all present and future loans,
loan advances, extensions of credit, obligations and/or liabilities that
Borrower may now and/or in the future owe to and/or incur in favor of Lender,
whether direct or indirect, or by way of assignment or purchase of a
participation interest, and whether absolute or contingent, voluntary or
involuntary, determined or undetermined, liquidated or unliquidated, due or to
become due, secured or unsecured, and whether Borrower may be liable
individually, jointly or solidarily with others, whether primarily or
secondarily, or as a guarantor or otherwise, and whether now existing or
hereafter arising, of every nature and kind whatsoever, in principal, interest,
costs, expenses and attorneys' fees and other fees and charges including
without limitation Borrower's indebtedness and obligations under a certain
commercial loan agreement and promissory note in favor of Lender dated June
23, 1997 in the fixed principal amount of U.S. $1,200,000.00. In addition,
all Interest thereon, costs, expenses, attorneys' fees and other fees and
charges related thereto under Borrower's Indebtedness shall be fully
guaranteed hereunder.
Lender. The word "Lender" means LBA Savings Bank, Commercial Lending Division
TIN: 720232760, its successors and assigns, and any subsequent holder or
holders of Borrower's Indebtedness.
GUARANTEE OF BORROWER'S INDEBTEDNESS. Guarantor hereby absolutely and
unconditionally agrees to, and by these presents does hereby, guarantee the
prompt and punctual payment, performance and satisfaction of any and all of
Borrower's present and future Indebtedness In favor of Lender.
CONTINUING GUARANTY. THIS IS A CONTINUING GUARANTY AGREEMENT UNDER WHICH
GUARANTOR AGREES TO GUARANTEE PAYMENT OF BORROWER'S PRESENT AND FUTURE
INDEBTEDNESS IN FAVOR OF LENDER ON A CONTINUING BASIS. Guarantor's obligations
and liability under this Agreement shall be open and continuous in effect.
Guarantor intends to and does hereby guarantee at all times the prompt and
punctual payment, performance and satisfaction of all of Borrower's present and
future Indebtedness in favor of Lender. Accordingly, any payments made on
Borrower's Indebtedness will not discharge or diminish the obligations and
liability of Guarantor under this Agreement for any remaining and succeeding
Indebtedness of Borrower in favor of Lender.
JOINT, SEVERAL AND SOLIDARY LIABILITY. Guarantor's obligations and liability
under this Agreement shall be on a "solidary" or "joint and several" basis
along with Borrower to the same degree and extent as if Guarantor had been
and/or will be a co-borrower, co-principal obligor and/or co-maker of
Borrower's Indebtedness In the event that there is more than one Guarantor
under this Agreement, or in the event that there are other guarantors,
endorsers or sureties of all or any portion of Borrower's Indebtedness,
Guarantor's obligations and liability hereunder shall further be on a
"solidary" or "joint and several" basis along with such other guarantors,
endorsers and/or sureties.
DURATION OF GUARANTY. This Agreement and Guarantor's obligations and liability
hereunder shall remain in full force and effect until such time as this
Agreement may be cancelled or otherwise terminated by Lender under a written
cancellation instrument in favor of Guarantor (subject to the automatic
reinstatement provisions hereinbelow). It is anticipated that fluctuations may
occur in the aggregate amount of Borrower's Indebtedness guaranteed under this
Agreement and it is specifically acknowledged and agreed to by Guarantor that
reductions in the amount of Borrower's Indebtedness, even to zero ($0.00)
dollars, prior to Lender's written cancellation of this Agreement, shall not
constitute or give rise to a termination of this Agreement.
CANCELLATION OF AGREEMENT; EFFECT. Unless otherwise indicated under such a
written cancellation instrument, Lender's agreement to terminate or otherwise
cancel this Agreement shall affect only, and shall be expressly limited to,
Guarantor's continuing obligations and liability to guarantee Borrower's
Indebtedness incurred, originated and/or extended (without prior commitment)
after the date of such a written cancellation instrument; with Guarantor
remaining fully obligated and liable under this Agreement for any and all of
Borrower's Indebtedness incurred, originated, extended, or committed to prior
to the date of such a written cancellation instrument. Nothing under this
Agreement or under any other agreement or understanding by and between
Guarantor and Lender, shall in any way obligate, or be construed to obligate,
Lender to agree to the subsequent termination or cancellation of Guarantor's
obligations and liability hereunder; it being fully understood and agreed to
by Guarantor that Lender has and intends to continue to rely on Guarantor's
assets, Income and financial resources in extending credit and other
Indebtedness to and in favor of Borrower, and that to release Guarantor from
Guarantor's continuing obligations and liabilities under this Agreement would
so prejudice Lender that Lender may, within its sole and uncontrolled
discretion and judgment, refuse to release Guarantor from any of its
continuing obligations and liability under this Agreement for any reason
whatsoever as long as any of Borrower's Indebtedness remains unpaid and
outstanding, or otherwise.
DEFAULT. Should any event of default occur or exist under any of Borrower's
Indebtedness in favor of Lender, Guarantor unconditionally and absolutely
agrees to pay Lender the then unpaid amount of Borrower's Indebtedness, in
principal, interest, costs, expenses, attorneys' fees and other few and
charges. Such payment or payments shall be made at Lender's offices indicated
above, immediately following demand by Lender.
GUARANTOR'S WAIVERS. Guarantor hereby waives:
(a) Notice of Lender's acceptance of this Agreement.
(b) Presentment for payment of Borrower's Indebtedness, notice of dishonor and
of nonpayment, notice of intention to accelerate, notice of acceleration,
protest and notice of protest, collection or institution of any suit or other
action by Lender in collection thereof, including any notice of default in
payment thereof, or other notice to, or demand for payment thereof, on any
party.
(c) Any right to require Lender to notify Guarantor of any nonpayment relating
to any collateral directly or indirectly securing Borrower's Indebtedness, or
notice of any action or nonaction on the part of Borrower, Lender, or any other
guarantor, surety or endorser of Borrower's Indebtedness, or notice of the
creation of any new or additional Idebtedness subject to this Agreement
(d) Any rights to demand or require collateral security from the Borrower or
any other person as provided under applicable Louisiana law or otherwise.
(e) Any right to require Lender to notify Guarantor of the terms, time and
place of any public or private sale of any collateral directly or indirectly
securing Borrower's Indebtedness.
(f) Any "one action" or "anti-deficiency" law or any other law which may prevent
Lender from brining any action, including a claim for deficiency, against
Guarantor, before or after Lender's commencement or completion of any
foreclosure action, or any action in lieu of foreclosure.
(g) Any election of remedies by Lender that may destroy or impair Guarantor's
subrogation rights or Guarantor's right to procceed for reimbursement against
Borrower or any other guarantor, surety or endorser of Borrower's Idebtedness,
including without limitation, any loss of rights Guarantor may suffer by reason
of any law limiting, qualifying, or discharging Borrower's Indebtedness.
(h) Any disability or other defense of Borrower, or any other guarantor, surety
or endorser, or any other person, or by reason of the cessation from any cause
whatsoever, other than payment in full of Borrower's Indebtedness.
(i) Any statute of limitations or prescriptive period, if at the time an action
or suit brought by Lender against Guarantor is commenced, there is any
outstanding Indebtedness of Borrower to Lender which is barred by any
applicable statute of limitations or prescriptive period.
Guarantor warrants and agrees that each of the waivers set forth above is made
with Guarantor's full knowledge of its significance and consequences, and that,
under the circumstances, such waivers are reasonable and not contrary to pubic
policy or law. If any such waiver is determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by law.
GUARANTOR'S SUBORDINATION OF RIGHTS. In the event that Guarantor should for
any reason (a) advance or lend monies to Borrower, whether
<PAGE>
06-23-1997 COMMERCIAL GUARANTY Page 2
Loan No 531699 (Continued)
===============================================================================
or not such funds are used by Borrower to make payment(s) under Borrower's
Indebtedness, and/or (b) make any payment(s) to Lender or others for and on
behalf of Borrower under Borrower's Indebtedness, and/or (c) make any payment
to Lender in total or partial satisfaction of Guarantor's obligations and
liabilities under this Agreement, and/or (d) if any of Guarantor's property is
used to pay or satisfy any of Borrower's Indebtedness, Guarantor hereby agrees
that any and all rights that Guarantor may have or acquire to collect from or
to be reimbursed by Borrower (or from or by any other guarantor, endorser or
surety of Borrower's Indebtedness), whether Guarantor's rights of collection
or reimbursement arise by way of subrogation to the rights of Lender or
otherwise, shall in all respects, whether or not Borrower is presently w
subsequently becomes insolvent, be subordinate inferior and junior to the
rights of Lender to collect and enforce payment, performance and satisfaction
of Borrower's then remaining Indebtedness, until such time as Borrower's
Indebtedness is fully paid and satisfied. In the event of Borrower's
insolvency or consequent liquidation of Borrower's assets, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment
of claims of both Lender and Guarantor shall be paid to Lender and shall be
first applied by Lender to Borrower's then remaining Indebtedness. Guarantor
hereby assigns to Lender all claims which it may have or acquire against
Borrower or any assignee or trustee of Borrower in bankruptcy;
provided that, such assignment shall be effective only for the purpose of
assuring to Lender full payment of Borrower's Indebtedness guaranteed under
this Agreement.
If now or hereafter (a) Borrower shall be or become insolvent, and (b)
Borrower's Indebtedness shall not at all times until paid be fully secured by
collateral pledged by Borrower, Guarantor hereby forever waives and
relinquishes in favor of Lender and Borrower, and their respective successors,
any claim or right to payment Guarantor may now have or hereafter have or
acquire against Borrower, by subrogation or otherwise, so that at no time
shall Guarantor be or become a "creditor" of Borrower within the meaning of
11 U.S.C. section 547(b), or any successor provision of the Federal
bankruptcy laws.
GUARANTOR'S RECEIPT OF PAYMENTS. Guarantor further agrees to refrain from
attempting to collect and/or enforce any of Guarantor's collection and/or
reimbursement rights against Borrower (or against any other guarantor, surety
or endorser of Borrower's Indebtedness), arising by way of subrogation or
otherwise, until such time as all of Borrower's then remaining Indebtedness in
favor of Lender is fully paid and satisfied. In the event that Guarantor
should for any reason whatsoever receive any payment(s) from Borrower (or any
other guarantor, surety or endorser of Borrower's Indebtedness) that Borrower
(or such a third party) may owe to Guarantor for any of the reasons stated
above, Guarantor agrees to accept such payment(s) in trust for and on behalf
of Lender, advising Borrower (or the third parry payee) of such fact. Guarantor
further unconditionally agrees to immediately deliver such funds to Lender,
with such funds being held by Guarantor over any interim period, in trust for
Lender. In the event that Guarantor should for any reason whatsoever receive
any such funds from Borrower (or any third party), and Guarantor should deposit
such funds in one or more of Guarantor's deposit accounts, no matter where
located, Lender shall have the right to attach any and all of Guarantor's
deposit accounts in which such funds were deposited, whether or not such funds
were commingled with other monies of Guarantor, and whether or not such funds
then remain on deposit in such an account or accounts. To this end and to
secure Guarantor's obligations under this Agreement, Guarantor collaterally
assigns and pledges to Lender, and grants to Lender a continuing security
interest in, any and all of Guarantor's present and future rights, title and
interest in and to all monies that Guarantor may now and/or in the future
maintain on deposit with banks, savings and loan associates and other
entities (other than tax deterred accounts with Lender), in which Guarantor
may at any time deposit any such funds that may be received from Borrower (or
any other guarantor, endorser or surety of Borrower's indebtedness) in favor
of Lender.
DEPOSIT ACCOUNTS. As collateral security for repayment of Guarantor's
obligations hereunder and under any additional guaranties previously granted or
to be granted by Guarantor in the future, and additionally as collateral
security for any present and future indebtedness of Guarantor in favor of Lender
(with the exception of any indebtedness under a consumer credit card account),
Guarantor is granting Lender a continuing security interest in any and all funds
that Guarantor may now and in the future have on deposit with Lender or in
certificates of deposit or other deposit accounts as to which Guarantor is an
account holder (with the exception of IRA, pension, and other tax-deferred
deposits). Guarantor further agrees that Lender may at any time apply any funds
that Guarantor may have on deposit with Lender or in certificates of deposit or
other deposit accounts as to which Guarantor is an account holder against the
unpaid balance of any and all other present and future obligations and
indebtedness of Guarantor to Lender, in principal, interest, fees, costs,
expenses, and attorneys' fees.
ADDITIONAL COVENANTS. Guarantor agrees that Lender may, at its sole option, at
any time, and from time to time, without the consent of or notice to Guarantor,
or any of them, or to any other party, and without incurring any responsibility
to Guarantor or to any other party, and without impairing or releasing any of
Guarantor's obligations or liabilities under this Agreement:
(a) Make additional secured and/or unsecured loans to Borrower.
(b) Discharge, release or agree not to sue any party (including, but not limited
to, Borrower or any other guarantor, surety, or endorser of Borrower's
Indebtedness), who is or may be liable to Lender for any of borrowers
Indebtedness.
(c) Sell, exchange, release, surrender, realize upon, or otherwise deal with, in
any manner and in any order, any collateral directly or indirectly securing
repayment of any of Borrower's Indebtedness.
(d) Alter, renew, extend, accelerate, or otherwise change the manner, place,
terms and/or times of payment or other terms of Borrower's Indebtedness, or any
part thereof, including any increase or decrease in the rate or rates of
interest on any of Borrower's Indebtedness.
(e) Settle or compromise any of Borrower's Indebtedness.
(t) Subordinate and/or agree to subordinate the payment of all or any part of
Borrower's Indebtedness, or Lender's security rights in any collateral directly
or indirectly securing any such Indebtedness, to the payment and/or security
rights of any other present and/or future creditors of Borrower.
(g) Apply any payments and/or proceeds to any of Borrower's Indebtedness in such
priority or with such preferences as Lender may determine in its sole
discretion, regardless of which of Borrower's Indebtedness then remains unpaid.
(h) Take or accept any other collateral security or guaranty for any or all of
Borrower's Indebtedness.
(i) Enter into, deliver, modify, amend, or waive compliance with, any instrument
or arrangement evidencing, securing or otherwise affecting, all or any pan of
Borrower's Indebtedness.
NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. No course of dealing between Lender
and Borrower (or any other Guarantor, surety or endorser of Borrower's
Indebtedness), nor any failure or delay on the part of Lender to exercise any of
Lender's rights and remedies under this Agreement or any other agreement or
agreements by and between Lender and Borrower (or any other guarantor, surety or
endorser), shall have the effect of impairing or releasing Guarantor's
obligations and liabilities to Lender, or of waving any of Lender's rights and
remedies under this Agreement or otherwise. Any partial exercise of any rights
and remedies granted to Lender shall furthermore not constitute a waiver of any
of Lender's other rights and remedies; it being Guarantor's intent and agreement
that Lenders' rights and remedies shall be cumulative in nature. Guarantor
further agrees that, should Borrower default under any of its Indebtedness, any
waiver or forbearance on the part of Lender to pursue Lender's available rights
and remedies shall be binding upon Lender only to the extent that Lender
specifically agrees to such waiver or forbearance in writing. A waiver or
forbearance on the part of Lender as to one event of default shall not
constitute a waiver or forbearance as to any other default.
NO RELEASE OF GUARANTOR. Guarantor's obligations and liabilities under this
Agreement shall not be released, impaired, reduced, or otherwise affected by,
and shall continue in full force and effect notwithstanding the occurrence of
any event, including without limitation any one or more of the following events:
(a) The death, insolvency, bankruptcy, aggangement, adjustment, composition,
liquidation, disability, dissolution, or lack of authority (whether corporate,
partnership or trust) of Borrower ( or any person acting on Borrower's behalf),
or of any guarantor, surety or endorser of Borrower's Indebtedness.
(b) Any payment by Borrower, or any other party, to Lender that is held to
constitute a preferential transfer or a fraudulent conveyance under any
applicable law, or any such amounts or payment which, for any reason, Lender is
required to refund or repay to Borrower or to any other person.
(c) Any dissolution of Borrower, or any sale, lease or transfer of all or any
part of Borrower's assets
(d) Any failure of Lender to notify Guarantor of the making of additional loans
or other extensions of credit in reliance on this Agreement.
AUTOMATIC REINSTATEMENT. This Agreement and Guarantor's obligations and
liabilities hereunder shall continue to be effective, and/or shall automatically
and retroactively be reinstated, if a release or discharge has occurred, or if
at any time, any payment or part thereof to Lender with respect to any of
Borrower's Indebtedness, is rescinded or must otherwise be restored by Lender
pursuant to any insolvency, bankruptcy, reorganization, receivership, or any
other debt relief granted to Borrower or to any other party to Borrower's
Indebtedness or any such security therefor. In the event that Lender must
rescind or restore any payment received in total or partial satisfaction of
Borrower's Indebtedness, any prior release or discharge from the terms of this
Agreement given to Guarantor shall be without effect, and this Agreement and
Guarantor's obligations and liabilities hereunder shall authomatically and
retroactively be renewed and/or reinstated and shall remain in full force and
effect to the same degree and extent as if such a release or discharge had never
been granted. It is the intention of Lender and Guarantor that Guarantor's
obligations and liabilities hereunder shall not be discharged except by
Guarantor's full and complete performance and satisfaction of such obligations
and liabilities; and then only to the extent of such performance.
LEGAL EXISTENCE. Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Louisiana. Guarantor is
duly qualified and in good standing as a foreign corportion in each jurisdiction
where in the nature of the business transacted and the property owned by
Guarantor makes such qualification necessary. Guarantor's guaranty of
Borrower's Indebtedness and this Agreement does not
<PAGE>
06-23-1997 COMERCIAL GUARANTY Page 3
Loan No 531699 (Continued)
==============================================================================
violate Guarantor's Articles of incorporation or Bylaws. Guarantor has taken all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement.
REPRESENTATIONS AND WARRANTIES BY GUARANTOR. Guarantor represents and warrants
that:
(a) Guarantor has the lawful power to own its properties and to engage in its
business as presently conducted.
(b) Guarantor's guaranty of Borrower's Indebtedness and Guarantor's execution,
delivery and performance of this Agreement are not in violation of any laws and
will not result in a default under any contract, agreement, or instrument to
which Guarantor is a party, or by which Guarantor or its property may be bound.
(c) Guarantor has agreed and consented to execute this Agreement and to
guarantee Borrower's Indebtedness in favor of Lender, at Borrower's request and
not at the request of Lender.
(d) Guarantor will receive and/or has received a direct or indirect material
benefit from the transactions contemplated herein and/or arising out of
Borrower's Indebtedness.
(e) This Agreement, when executed and delivered to Lender, will constitute a
valid, legal and binding obligation of Guarantor, enforceable in accordance with
its terms.
(f) Guarantor has established adequate means of obtaining information from
Borrower on a continuing basis regarding Borrower's financial condition.
(g) Lender has made no representations to Guarantor as to the creditworthiness
of Borrower.
ADDITIONAL OBLIGATIONS OF GUARANTOR. So long as this Agreement remains in
effect, Guarantor has not and will not, without Lender's prior written consent,
sell, lease, assign, pledge, hypothecate, encumber, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets. Guarantor agrees to
keep adequately informed of any facts, events or circumstances which might in
any way affect Guarantor's risks under this Agreement. Guarantor further agrees
that Lender shall have no obligation to disclose to Guarantor any information or
material relating to Borrower or Borrower's Indebtedness.
ADDITIONAL DOCUMENTS; FINANCIAL STATEMENTS. Upon the reasonable request of
Lender, Guarantor will, at any time, and from time to time, execute and deliver
to Lender any and all such financial instruments and documents, and supply such
additional information, as may be necessary or advisable in the opinion of
Lender to obtain the full benefits of this Agreement. Guarantor further agrees
to provide Lender with such financial statements and other related information
at such frequencies and in such detail as Lender may reasonably request.
TRANSFER OF INDEBTEDNESS. This Agreement is for the benefit of Lender and for
such other person or persons as may from time to time become or be the holders
of all or any part of Borrower's Indebtedness. This Agreement shall be
transferable and negotiable with the same force and effect and to the same
extent as Borrower's Indebtedness may be transferable; it being understood and
agreed to by Guarantor that, upon any transfer or assignment of all or any part
of Borrower's Indebtedness, the holder of such Indebtedness shall have all of
the rights and remedies granted to Lender under this Agreement. Guarantor
further agrees that, upon any transfer of all or any portion of Borrower's
Indebtedness, Lender may transfer and deliver any and all collateral securing
repayment of such Indebtedness (including, but not limited to, any collateral
provided by Guarantor) to the transferee of such Indebtedness, and such
collateral shall secure any and all of Borrower's Indebtedness in favor of such
a transferee. Guarantor additionally agrees that, after any such transfer or
assignment has taken place, Lender shall be fully discharged from any and all
liability and responsibility to Borrower and Guarantor with respect to such
collateral, and the transferee thereafter shall be vested with all the powers
and rights with respect to such collateral.
CONSENT TO PARTICIPATION. Guarantor recognizes and agrees that Lender may, from
time to time, one or more times, transfer all or any part of Borrower's
Indebtedness through sales of participation interests in such Indebtedness to
one or more third party lenders. Guarantor specifically agrees and consents to
all such transfers and assignments, and Guarantor further waives any subsequent
notice of such transfers and assignments as may be provided under Louisiana law.
Guarantor additionally agrees that the purchaser of a participation interest in
Borrower's Indebtedness will be considered as the absolute owner of a percentage
interest of such Indebtedness and that such a purchaser will have all of the
rights granted under any participation agreement governing the sale of such a
participation interest. Guarantor waives any rights of offset that Guarantor may
have against Lender and/or any purchaser of such a participation interest, and
Guarantor unconditionally agrees that either Lender or such a purchaser may
enforce Guarantor's obligations and liabilities under this Agreement,
irrespective of the failure or insolvency of Lender or any such purchaser.
NOTICES. Any notice provided in this Agreement must be in writing and will be
considered as given on the day it is delivered and or deposited in the U.S.
mail, postage prepaid, addressed to the person to whom the notice is to be given
at the address shown above or at such other address as any party may designate
to the other in writing. If there is more than one Guarantor under this
Agreement, notice to any Guarantor shall constitute notice to all Guarantors.
ADDITIONAL GUARANTIES. Guarantor recognizes and agrees that Guarantor may have
previously granted, and may in the future grant, one or more additional
guaranties of Borrower's Indebtedness in favor of Lender. Should this occur, the
execution of this Agreement and any additional guaranties on the part of
Guarantor will not be construed as a cancellation of this Agreement or any of
Guarantor's additional guaranties; it being Guarantor's full intent and
agreement that all such guaranties of Borrower's Indebtedness in favor of Lender
shall remain in full force and effect and shall be cumulative in nature and
effect.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
Amendment. No amendment, modification, consent or waiver of any provision of
this Agreement, and no consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing signed by a duly authorized
officer of Lender, and then shall be effective only as to the specific instance
and for the specific purpose for which given.
Caption Headings. Caption headings of the sections of this Agreement are for
convenience purposes only and are not to be used to interpret or to define their
provisions. In this Agreement, whenever the context so requires the singular
includes the plural and the plural also includes the singular.
Severability. If any provision of this Agreement is held to be illegal, invalid
or unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable. This Agreement shall be construed and
enforceable as if the illegal, invalid or unenforceable provision had never
comprised a part of it, and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement, a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and legal,
valid and enforceable.
Successors and Assigns Bound. Guarantor's obligations and liabilities under this
Agreement shall be binding upon Guarantor's successors, heirs, legatees,
devisees, administrators, executors and assigns.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY 0' THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED. NO
FORMAL ACCEPTANCE: LENDER'S NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS
GUARANTY IS DATED JUNE 23, 1997.
GUARANTOR:
MidSouth Bancorp, Inc.
By: ___________________
C R "Rusty" Cloutier, President/CEO
<PAGE>
COMMERCIAL PLEDGE AND SECURITY AGREEMENT
<TABLE>
<CAPTION>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,200,000.00 06-23-1997 05-01-1998 531699 AT:91 PT:63 780BC
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
<TABLE>
<CAPTION>
<S> <C>
Borrower: Financial of the South, Inc. (TIN: 72-1320872) Lender: LBA Savings Bank TIN: 72023n60
315 Johnston Street (P O Box 4921) Commercial Lending Division
Lafayette,LA 70502 P. O. Box 3607
101 W. Vermilion
Lafayette, LA 70502
Guarantor: MidSouth Bancorp. Inc.
P.O. Box 3745
Lafayette, LA 70502
=====================================================================================================
</TABLE>
THIS COMMERCIAL PLEDGE AND SECURITY AGREEMENT is entered into among Financial
Services of the South, Inc. (referred to below as "Borrower"); MidSouth Bancorp,
Inc. (referred to below as "Grantor"); and LBA Savings Bank (referred to below
as "Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a continuing security interest in the Collateral to secure the Indebtedness and
agrees that Lender shall have the rights stated In this Agreement with respect
to the Collateral, in addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement:
Agreement. The word "Agreement" means this Commercial Pledge and Security
Agreement, as this Commercial Pledge and Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached or
to be attached to this Commercial Pledge and Security Agreement from time to
time.
Borrower. The word "Borrower" means individually, collectively and
interchangeably each and every person or entity signing the Note, including
without limitation Financial Services of the South, Inc.
Collateral. The word "Collateral" means individually, collectively and
interchangeably Grantor's present and future rights, title and interest in and
to the following, together with any and all present and future additions
thereto, substitutions therefore, and replacements thereof, together with any
and all present and future certificates and/or instruments evidencing any Stock,
and further together with all Income and Proceeds as described below:
1000.000 shares of Financial Services of the South, Inc., Certificate No.0001
Encumbrances. The word Encumbrances" means individually, collectively and
interchangeably any and all presently existing and/or future mortgages, liens,
privileges and other contractual and/or statutory security interests and rights
of every nature and kind that, now and/or in the future, may affect the
Collateral or any part or parts thereof.
Event of Default. The words "Event of Default" mean individually, collectively,
and interchangeably any of the Events of Default set forth below in the section
titled "Events of Default."
Grantor. The word "Grantor" means individually, collectively and interchangeably
MidSouth Bancorp, Inc. Any Grantor who signs this Agreement, but does not sign
the Note, is signing this Agreement solely to grant a security interest as
affecting Grantor's interest in the Collateral and will not be personally liable
to Lender under the Note except as otherwise provided by contract or by law
(e.g., personal liability under a guaranty or as a surety).
Guarantor. The word "Guarantor" means and includes individually, collectively,
interchangeably and without limitation each and all of the guarantors, sureties,
and accommodation parties in connection with the Indebtedness.
Income and Proceeds. The words "Income and Proceeds" mean all present and future
income, proceeds, earnings, increases, and substitutions from or for the
Collateral of every kind and nature, including without limitation all payments,
interest, profits, distributions, benefits, rights, options, warrants,
dividends, stock dividends of every type and description, stock splits, stock
rights, regulatory dividends, distributions, subscriptions, monies, claims for
money due and to become due, proceeds of any insurance on the Collateral, and
all other types of proceeds, shares of stock of different par value or no par
value issued in substitution or exchange for shares included in the Collateral,
and all other property of every type and description which Grantor is entitled
to receive on account of such Collateral, including accounts, documents,
instruments, chattel paper, and general intangibles. The words "Income and
Proceeds" also specifically include, without limitation, (a) any and all of
Grantor's present and future options, warrants and/or rights accruing from, or
arising out of, or in any way connected with the Collateral, including without
limitation, Grantor's rights to exercise and/or enforce such options, warrants
or rights; (b) any and all of Grantor's present and future rights, title and
interest in and to any and all dividends and other distributions, of every type
and description, to be paid or payable under, or on account of, or attributable
to the Collateral, including without limitation, Grantor's rights to receive and
to collect such dividends and other distributions and Grantor's rights to
enforce performance, collection and/or payment thereof; (c) any and all of
Grantor's present and future rights, title and interest in and to all interest,
income, profits and other benefits and distributions, of every type and
description, derived or to be derived from the Collateral, including without
limitation, Grantor's rights to receive such interest, income, profits, benefits
and other distributions and Grantor's rights to enforce performance, collection
and/or payment thereof, (d) all general intangibles in any way related to the
Collateral; and (e) any and all of Grantor's present and future rights, title
and interest in and to any and all proceeds, of every type and description,
derived or to be derived from the sale, transfer, assignment and/or other
distribution of the Collateral, including the right to receive such proceeds and
Grantor's rights to enforce performance, collection and/or payment thereof.
Indebtedness. The word Indebtedness" means the indebtedness evidenced by the
Note, in principal, interest, costs, expenses and attorneys' fees and all other
fees and charges, together with all other indebtedness and costs and expenses
for which Borrower or Grantor is responsible under this Agreement or under any
of the Related Documents. In addition, the word "Indebtedness" also includes any
and all other loans, extensions of credit, obligations, debts and liabilities,
plus interest thereon, of Borrower or Grantor that may now and in the future be
owed to or incurred in favor of Lender, as well as all claims by Lender against
Borrower or Grantor, whether existing now or later; whether they are voluntary
or involuntary, whether related or unrelated, whether committed or purely
discretionary, due or to become due, direct or indirect or by way of assignment,
determined or undetermined, absolute or contingent, liquidated or unliquidated;
whether Borrower or Grantor may be liable individually or jointly with others,
of every nature and kind whatsoever, in principal, interest, costs, expenses and
attorneys' fees and all other fees and charges; whether Borrower or Grantor may
be obligated as guarantor, surety, accommodation party or otherwise; whether
recovery upon such indebtedness may be or hereafter may become barred by any
statute of limitations; and whether such indebtedness may be or hereafter may
become void or otherwise unenforceable. Notwithstanding the foregoing, Grantor's
pledged "Margin Stock" will not secure additional loans, extensions of credit,
obligations or liabilities in favor of Lender, as provided above, unless and
until Lender complies with the purpose statement requirements of Federal Reserve
Board Regulation U. to the extent applicable.
Lender. The word "Lender" means LBA Savings Bank TIN: 720232760, its
successors and assigns, and any subsequent holder or holders of the Note, or any
interest therein.
Notes, Instruments and Chattel Paper. The words "Notes, Instruments and Chattel
Paper" mean individually, collectively and interchangeably Grantor's various
promissory notes, credit sales agreements, installment sale contracts, equipment
leases, instruments, security agreements, chattel paper, and all other similar
obligations and indebtedness, that may now and in the future be owed to or held
by Grantor from whatever source arising, and whcih are pledged to Lender subject
to this Agreement.
Margin Stock. The term "Margin Stock" means Grantor's Stock that maybe subject
to the applicable loan to value ratio requirements of Federal Reserve Board
Regulation U(12 C.F.R. 221.1, et seq.). Nothwithstanding the foregoing,
Grantor's pledge "Margin Stock" will not secure additional loans, extensions of
credit, obligations or liabilities in favor of Lender, as provided above , that
are made or incurred after the date of this Agreement, unless and until Lender
complies with the purpose statement requirements of Federal Reserve Board
Regulation U, to the extent applicable.
Note. The word "Note" means the note or credit agreement dated June 23, 1997,
in the principal amount of $1,200,000.00 from Borrower to Lender, together with
all substitute or replacement notes therefor, as well as renewals, extensions,
modifications, refinancings, consolidations and substitutions of and for the
note or credit agreement.
Obligor. The word "Obligor" means and includes individually, collectivey and
interchangeably without limitation any and all persons or entitites obligated to
pay money or to perform some other act under the Collateral. In the context of
Grantor's Collateral, the word "Obligor" means the issuer or issuers of the
Collateral.
Related Documents. The words "Related Documents" mean and include individually,
collectively, interchangeably and without limitation all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, collateral mortgages, deeds of trust, and all
other instruments and documents, whether now or hereafter existing, executed in
connection with
<PAGE>
06-23-1997 COMMERCIAL PLEDGE AND SECURITY AGREEMENT Page 2
Loan No 531699 (Continued)
===============================================================================
the Indebtedness.
Stock. The word "Stock" means individually, collectively and interchangeably, to
Grantor's stock, and other securities subject to pledge under this Agreement,
together with any and all additions thereto, substitutions therefor or
replacements thereof.
DELIVERY OF COLLATERAL. Contemporaneous with the execution of this Agreement,
Grantor has delivered or will deliver to Lender or Lender's designated agent the
above described Collateral, including without limitation, any and all
certificates and/or instruments evidencing Grantor's Collateral subject to this
Agreement, appropriately endorsed in blank, together with irrevocable stock
powers also endorsed in blank. As long as this Agreement remains in effect,
Grantor further agrees to immediately deliver to Lender, or Lender's designated
agent, any and all additions to and/or substitutions or replacements for the
Collateral, including without limitation any and all future certificates
representing Stock subject hereto that are subsequently issued in favor of
Grantor or that are otherwise held or owned by Grantor. In the event that
Grantor is unable to deliver any of the Collateral to Lender or Lender's
designated agent at the time this Agreement is executed, or should Grantor ever
withdraw or obtain temporary possession of any of the Collateral while this
Agreement remains in effect, either under a trust receipt or otherwise, Grantor
unconditionally agrees to deliver immediately to Lender the Collateral or,
alternatively, such substitute or replacement collateral security as may then be
satisfactory to Lender.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor
affirms that Grantor has granted a continuing security interest in the
Collateral in favor of Lender to secure any and all present and future
indebtedness of Borrower and Grantor in favor of Lender, as may be outstanding
from time to time, in principal, interest, costs, expenses, attorneys' fees and
other fees and charges, with the continuing preferences and priorities provided
under applicable Louisiana law.
DURATION. This Agreement shall remain in full force and effect until such time
as this Agreement and the security interests created hereby are terminated and
cancelled by Lender under a written cancellation instrument in favor of Grantor.
BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this
Agreement or by applicable law, (a) Borrower agrees that Lender need not tell
Borrower about any action or inaction Lender takes in connection with this
Agreement; (b) Borrower assumes the responsibility for being and keeping
informed about the Collateral; and (c) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without limitation
any failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral and Borrower agrees to remain liable under the
Note no matter what action Lender takes or fails to take under this Agreement.
DEPOSIT ACCOUNTS. As collateral security for repayment of the Indebtedness and
all renewals and extensions, as well as to secure any and all other loans,
notes, indebtedness and obligations that Borrower or Grantor (or any of them)
may now and in the future owe to Lender or incur in Lender's favor, whether
direct or indirect, absolute or contingent, due or to become due, of any nature
and kind whatsoever (with the exception of any indebtedness under a consumer
credit card account), Grantor is granting Lender a continuing security interest
in any and all funds that Grantor may now and in the future have on deposit with
Lender or in whatsoever of deposit or other deposit accounts as to which Grantor
is an account holder (with the exception of IRA, pension, and other tax-deterred
deposits). Grantor further agrees that Lender may at any time apply any funds
that Grantor may have on deposit with Lender or in certificates of deposit or
other deposit accounts as to which Grantor is an account holder against the
unpaid balance of Borrower's Note and any and all other present and future
indebtedness and obligations that Borrower or Grantor (or any of them) may then
owe to Lender, in principal, interest, fees, costs, expenses, and attorneys'
fees.
GRANTOR'S OBLIGATIONS TO DELIVER COLLATERAL CERTIFICATES, DIVIDENDS,
DISTRIBUTIONS, ETC. In the event that Grantor should ever receive any: (a)
certificates and/or instruments representing any of the Collateral, including
without limitation, any certificates and/or instruments representing Collateral
issued in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off, or split-off or any renewal or refinancing of any
Collateral; (b) options, warrants or rights, whether as an addition to, or in
substitution of, or exchange for, any of the Collateral, or otherwise; (c)
non-cash dividends and/or other distributions payable in property, including
securities issued by third parses other than the issuer(s) of the Collateral;
(d) cash and/or cash equivalent interest, dividends or other distributions;
and/or (e) proceeds and/or payments, whether in wash or otherwise, derived or to
be derived from the sale, transfer, assignment, delivery or other distribution
of the Collateral; then Grantor shall accept the same as Lender's agent, in
trust for and on behalf of Lender, and Grantor shall deliver them forthwith to
Lender in the exact form received, with Grantor's endorsement in blank, when
necessary, and/or with irrevocable Collateral powers duly executed by Lender in
blank, with the same to be held in pledge by Lender, subject to the terms and
conditions of this Agreement, as collateral security for repayment of the
Indebtedness, as heretofore stated.
Notwithstanding the foregoing, Grantor shall be entitled to receive for
Grantor's own use, all interest and/or cash dividends on the Stock, paid or to
be paid out of earned surplus, until such time as Lender should otherwise notify
Grantor in writing. Upon delivery of such a notice, Lender may require that all
interest and/or cash dividends on the Stock be paid and delivered to Lender as
additional wash security hereunder, or Lender may, at Lender's sole and
exclusive option, elect to apply such interest and/or cash dividends towards the
satisfaction of the indebtedness in the manner provided below.
LENDER'S RIGHT TO REGISTER COLLATERAL IN LENDER'S NAME. Grantor unconditionally
agrees that Lender may, at Lender's sole and exclusive option, and at any time,
whether or not an Event of Default has occurred or exists under this Agreement,
require that the Collateral and any and all certificates issued thereunder, be
registered in Lender's name or in the name of Lender's designated nominee.
Grantor additionally agrees that, upon Lender's request, Grantor will cause the
Collateral issuer(s), transfer agent(s), or registrar(s) to effect such
registration.
GRANTOR'S RETENTION OF VOTING RIGHTS PRIOR TO DEFAULT. Grantor shall retain all
voting rights with regard to the Stock until such time as an Event of Default
should occur or exist under this Agreement. In the event that Lender should
elect to require that the shares of Stock and the certificates issued thereunder
be registered in Lender's name or in the name of Lender's designated nominee
prior to any default hereunder, Lender agrees to execute and deliver to Grantor
all necessary proxies required to permit Grantor to continue to exercise voting
rights with regard to the Stock, which proxies shall provide for automatic
expiration upon the occurrence of any Event of Default under this Agreement.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. Grantor
represents and warrants to Lender that:
Ownership. Grantor at all times will continue to be the legal and lawful owner
of the Collateral free and clear of all security interests, liens, Encumbrances
and claims of others except as disclosed to and accepted by Lender in writing
prior to execution of this Agreement.
Right to Pledge. Grantor has the right, power and authority to enter into this
Agreement and to grant a continuing security interest
in the Collateral in favor of Lender.
Authorttzation. Grantor's execution, delivery and performance of this Agreement
have been duly authorized, and do not conflict with, and will not result in a
violation of, or constitute or give rise to an event of default under any
agreement or other instrument which may be binding upon Grantor, or under any
law or governmental regulation or court decree or order applicable to Grantor
and/or Grantor's properties.
Protection of Security Interest. Upon delivery of the Collateral to Lender,
including without limitation delivery of the certificates and/or instruments
evidencing and representing the Collateral, this Agreement shall create a valid
first lien upon, and perfect a security interest in the Collateral subject to no
prior security interest, lien, charge, Encumbrance or other agreement purporting
to grant to any third party a security interest in the Collateral. Grantor
agrees to execute such financing statements and to take whatever other actions
are requested by Lender to perfect and continue Lender's security interest in
the Collateral. Lender may at any time, and without further authorization from
Grantor, file a carbon, photographic, facsimile, or other reproduction of any
financing statement or of this Agreement for use as a financing statement.
Grantor will reimburse Lender for all expenses for the perfection, termination,
and the conHnuaHon of the pertecHon of Lender's security interest in the
Collateral.
Binding Effect. This Agreement is binding upon Grantor, as well as Grantor's
heirs, successors, representatives and assigns, and is legally enforceable in
accordance with its terms.
Valid Isuance of Stock. All of the Stock has been duly and validly issued and
is fully paid and nonassessable.
Free Transferability of Stock. Unless otherwise previously disclosed to Lender
in writing, all of the shares of Stock are freely transferable and subject to
sale without being subject to limitations, restrictions, stock legends, or
prohibitive covenants under any agreements, or otherwise under which Grantor or
the issuer of any such Stock may be bounds and/or obligated.
Stock Dividend; Stock Split. In order to prevent Lender's collateral position
from becoming diluted by any stock dividends and/or stock splits, Grantor agrees
to notify Lender immediately when knowledge of said transaction or transactions
becomes known, and to deliver all of said stock certificates to lender for
pledging within five (5) days of receipt of said stock dividend and/or stock
split together with appropriately executed stock powers.
No Further Assignment. Grantor has not, and will not, sell, assign, transfer,
encumber or otherwise dispose of any of Grantor's rights in the Collateral
except as provided in this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of Notes,
Instruments and/or Chattel Paper, the Collateral is enforceable in accordance
with its terms, is genuine, and complies with applicable laws concerning from,
content and manner of preparatino and execution, and all persons appearing to be
obligated on the Collateral have authority and capacity to contract and are in
fact obligated as they appear to be on the Collateral.
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06-23-1 997 COMMERCIAL PLEDGE AND SECURITY AGREEMENT Page 3
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No Defaults. There are no defaults existing under the Collateral, and there
are no offsets or counterclaims to the same. Grantor will strictly and
promptly perform each of the terms, conditions, covenants and agreements
contained in the Collateral which are to be performed by Grantor, if any.
No Violation. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit any
term or condition of this Agreement.
Survivorship of Representations and Warranties. The foregoing representations
and warranties and all other representations and warranties of Grantor under
this Agreement shall be continuing in nature and shall survive the
termination of this Agreement.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO COLLATERAL. Lender shall have
the following rights in addition to all other rights it may have by law:
Maintenance and Protection of Collateral. Lender may, but shall not be
obligated to, take such steps as it deems necessary or desirable to protect,
maintain, insure, store, or care for the Collateral, including payment of any
liens or claims against the Collateral. Lender may charge any cost incurred
in so doing to Grantor.
Income and Proceeds from the Collateral. Lender shall have the right, whether
or not an Event of Default exists under this Agreement, to directly collect
and receive any and all Income and Proceeds as such become due and payable.
In order to permit the foregoing, Grantor unconditionally agrees to deliver
to Lender, immediately following demand, any and all such Income and Proceeds
that may be received by or that may be payable to Grantor. Grantor further
unconditionally agrees that Lender shall have the right to notify the
issuer(s) of the Collateral and all other Obligors to pay and/or deliver such
Income and Proceeds directly to Lender or Lender's nominee at an address to
be designated by Lender, and to do any and all other things as Lender may
deem necessary and proper, within Lender's sole discretion, to carry out the
terms and intent of this Agreement. Lender shall have the further right,
where appropriate, and within Lender's sole discretion, to file suit, either
in Lender's own name or in the name of Grantor, to collect and/or enforce
performance, payment and/or delivery of any and all such Income and Proceeds.
Where it is necessary for Lender to enforce performance, payment and/or
delivery of any such Income and Proceeds from the Obligor therefor, Grantor
unconditionally agrees that Lender may compromise or take such other actions,
either in Grantor's name or in the name of Lender, as Lender may deem
appropriate, within Lender's sole judgment, with regard to performance,
collection and/or payment of the same, without affecting the obligations and
liabilities of Grantor under this Agreement and/or any Indebtedness secured
hereby. In order to further permit the foregoing, Grantor agrees that Lender
shall have the additional irrevocable rights, coupled with an interest, to:
(a) receive, open and dispose of all mail addressed to Grantor pertaining to
any of the Collateral; (b) notify the postal authorities to change the
address and delivery of mail addressed to Grantor pertaining to any of the
Collateral to such address as Lender may designate; and (c) endorse Grantor's
name on any and all notes, acceptances, checks, drafts, money orders or other
Instruments of payment of such Income and Proceeds that may come into
Lender's possession, and to deposit or otherwise collect the same, applying
such funds to the unpaid balance of the Indebtedness in the manner provided
below.
In the event that Grantor should, for any reason, receive any Income and
Proceeds subject to this Agreement, and Grantor should deposit such funds
into one or more of Grantor's deposit accounts, no matter where located,
Lender shall have the additional right following any Event of Default under
this Agreement, to attach any and all of Grantor's deposit accounts in which
such funds may have been deposited, whether or not any such funds were
commingled with other funds of Grantor, and whether or not any such funds
then remain on deposit in such an account or accounts. To this end, Grantor
additionally collaterally assigns and pledges to Lender and grants to Lender
a continuing security interest in and to any and all of Grantor's present and
future rights, title and interest in and to any and all funds that Grantor
may now and/or in the future maintain on deposit with banks, savings and loan
associations and other financial institutions, as well as money market
accounts with other types of entities, in which Grantor at any time may
deposit any such Income and Proceeds.
Application of Cash. At Lender's option, Lender may apply any cash, whether
included in the Collateral or received as Income and Proceeds or through
liquidation, sale, or retirement, of the Collateral, to the satisfaction of
the Indebtedness or such portion thereof as Lender shall choose, whether or
not matured. Lender may alternatively and at its sole option and election
hold such cash as additional "cash collateral" to secure the Indebtedness.
Transactions with Others. Lender may (a) extend time for payment or other
performance, (b) grant a renewal or change in terms or conditions, or (c)
compromise, compound or release any obligation, with any one or more
Obligors, endorsers, or Guarantors of the Indebtedness as Lender deems
advisable, without obtaining the prior written consent of Grantor, and no
such act or failure to act shall affect Lender's rights against Grantor or
the Collateral.
Perfection of Security Interest. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's interest upon any and all chattel paper if not delivered to Lender
for possession by Lender. When applicable law provides more than one method
of perfection of Lender's security interest, Lender may choose the method(s)
to be used. Upon request of Lender, Grantor will sign and deliver any
writings necessary to perfect Lender's security interest. If the Collateral
consists of investment property for which no certificate has been issued,
Grantor agrees, at Lender's option, either to request issuance of an
appropriate certificate or to execute appropriate instructions on Lender's
forms instructing the issuer, transfer agent, mutual fund company, or broker,
as the case may be, to record on its books or records, by book-entry, initial
transaction statement, registered by pledge, or otherwise, Lender's security
interest in the Collateral. Grantor hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor file a
carbon, photographic facsimile, or other reproduction of any financing
statement. Grantor will reimburse Lender for all expenses for the perfection,
termination, and the continuation of the perfection of Lender's security
interest in the Collateral. Grantor promptly will notify Lender before any
change in Grantor's name including any change to the assumed business names
of Grantor. Grantor also promptly will notify Lender of any change in
Grantor's Social Security Number or Employer Identification Number. Grantor
represents and warrants to Lender that Grantor has provided Lender with
Grantor's correct Social Security Number or Employer identification Number
and that Grantor has no other Social Security or Employer Identification
Numbers. Grantor promptly shall notify lender should Grantor apply for or
obtain a new Social Security or Employer Identification Number.
All Collateral Secures Indebtedness. All Collateral shall be security for the
Indebtedness, whether the Collateral is located at one or more offices or
branches of Lender and whether or not the office or branch where the
Indebtedness is created is aware of or relies upon the Collateral.
ADDITIONAL COVENANTS. Grantor additionally agrees with respect to the
Collateral:
No Settlement or Compromise. Grantor will not, without the prior written consent
of Lender, compromise, settle, adjust or extend payment under any of the
Collateral.
Books and Records. Grantor will keep proper books and records with regard to
Grantor's business activities and the Notes, Instruments and Chattel Paper,
which books and records shall at all times be open to inspection and copying by
Lender or Lender's designated agent. Lender shall also have the right to inspect
Grantor's books and records, and to discuss Grantor's affairs and finances with
Grantor at such reasonable times as Lender may designate.
Notice to Debtors. Upon request by Lender, Grantor will immediately notify
individual debtors under the Notes, Instruments and/or Chattel Paper, advising
such debtors of the fact that their obligations have been assigned and pledged
to Lender. In the event that Grantor should fail to provide such notices for
any reason upon request by Lender, Grantor agrees that Lender may forward
appropriate notices to such debtors, either in Lender's name or in the name of
Grantor.
Additional Documents. Grantor further agrees to execute all additional
documents, including, without limitation, appropriate endorsements of the Notes,
Instruments and/or Chattel Paper, in blank, which Lender may deem necessary and
proper, within Lender's sole discretion, to better reflect the true intent of
this Agreement.
Verifications. Grantor additionally agrees that Lender or Lender's agents may
periodically contact individual debtors whose Notes, Instruments and Chattel
Paper have been assigned and pledged hereunder in order to verify the amounts
then owing such obligations, to determine whether such debtors have any offsets
or counterclaims against Grantor, and such other matters about which Lender may
inquire.
Notification of Lender. Grantor will promptly deliver to Lender all written
notices, and a will promptly give Lender written notice of any other notices
received by Grantor will respect the Collateral.
Irrevocable Nature of Powers of Attorney. The various agencies and powers of
attorney conveyed on Lender under this Agreement are granted for purposes of
security and may not be revoked by Grantor until such time as the same may be
renounced by Lender.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses in connection with Lender's exercise of rights under this
Agreement. If not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, including without limitation all taxes,
Encumbrances and other claims, at any time levied or placed on the Collateral.
Lender also may (but shall not be obligated to) pay all costs for insuring,
maintaining and preserving the Collateral, including, without limitation, the
purchase of insurance protecting only Lender's interest in the Collateral.
Lender may further take such other action or actions and incur limitation, the
purchase of insurance protecting only Lender's interest in the Collateral.
Lender may further take such other action or actions to incur such additional
expenditures as Lender may deem necessary and proper to cure or rectify any
actions or inactions on Grantor's part as may be such additional expenditures as
Lender may deem to be necessary and proper to cure or rectify any actions or
inactions on Grantor's part as may be ____________. Nothing under this
Agreement shall obligate Lender to take any such actions or to incur any such
<PAGE>
06-23-1997 COMMERCIAL PLEDGE AND SECURITY AGREEMENT Page 4
Loan No 531699 (Continued)
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additional expenditures on Grantor's behalf, or as making Lender in any way
responsible or liable for any loss, damage, or injury to the Collateral, to
Grantor, or to any other person or persons, resulting from Lender's election not
to take such actions or to incur such additional expenses. In addition, Lender's
election to take any such actions to incur such additional expenditures shall
not constitute a waiver or forbearance by Lender of any Event of Default under
this Agreement. All such expenditures incurred or paid by Lender for such
purposes will then bear interest at the rate charged under the Note from the
date incurred or paid by Lender to the date of repayment. All such expenses
shall become a part of the Indebtedness and, at Lender's option, will be payable
on demand. This Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon the occurrence of an Event of Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of the Collateral in Lender's
possession, but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation, Lender shall have no
responsibility for (a) any depreciation in value of the Collateral or for the
collection or protection of any Income and Proceeds from the Collateral, (b)
preservation of rights against parses to the Collateral or against third
persons, (c) ascertaining any maturities, calls, conversions, exchanges, offers,
tenders, or similar matters relating to any of the Collateral, or (d) informing
Grantor about any of the above, whether or not Lender has or is deemed to have
knowledge of such matters. Except as provided above, Lender shall have no
liability for depreciation or deterioration of the Collateral.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
Default Under Loan Agreement. Should an event of default occur or exist under
the terms of Borrower's Loan Agreement in favor of Lender.
Default under the Indebtedness. Should Borrower or Grantor default in the
payment of principal or interest under any of the Indebtedness.
Default under this Agreement. Should Grantor violate, or fail to comply fully
with any of the terms and conditions of, or default under this Agreement.
Default Under Other Agreements. Should any event of default occur or exist under
any Related Document which directly or indirectly secures repayment of any of
the Indebtedness.
Other Defaults In Favor of Lender. Should Borrower, Grantor, or any Guarantor
default under any other loan, extension of credit, security agreement, or
obligation in favor of Lender.
Default In Favor of Third Parties. Should Borrower, Grantor, or any Guarantor
default under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Grantor's property, or Borrower's or
Grantor's or any Guarantor's ability to perform their respective obligations
under this Agreement, or any Related Document, or pertaining to the
Indebtedness.
Insolvency. Should the suspension, failure or insolvency, however evidenced, of
Borrower, Grantor, or any Guarantor occur or exist.
Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any insolvency law
be brought by or against Borrower, Grantor, or any Guarantor.
Assignment for Benefit of Creditors. Should Borrower, Grantor, or any Guarantor
file proceedings for a respite or make a general assignment for the benefit of
creditors.
Receivership. Should a receiver of all or any part of Borrower's or Grantor's
property, or the property of any Guarantor, be applied for or appointed.
Dissolution Proceedings. Should proceedings for the dissolution or appointment
of a liquidator of Borrower, Grantor, or any Guarantor be commenced.
False Statements. Should any representation or warranty of Borrower or Grantor
or any Guarantor made in connection with the Indebtedness prove to be incorrect
or misleading In any respect.
Insecurity. Should Lender deem itself to be insecure with regard to repayment of
the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender may exercise any one or more of the
following rights and remedies:
Accelerate Indebtedness. Lender, at its sole option, may accelerate the maturity
and declare and demand immediate payment in full of any and all Indebtedness
secured hereby in principal, interest, costs, expenses, attorneys fees and other
fees and charges.
Collect the Collateral. Collect any of the Collateral and, at Lender's option
retain possession thereof while suing on the Indebtedness.
Sell the Collateral. Sell the Collateral, at Lender's discretion, as a unit or
in parcels, at one or more public or private sales, or through any exchange or
broker, at such prices and on such terms as Lender may deem best, for cash or on
credit or future delivery, without assumption of any credit risk, without any
further demand or notice upon Grantor for performance, without appraisal,
without the intervention of any court and without any formalities other than
those provided herein. For purposes of selling the Collateral, Lender has been
and is hereby made and constituted the agent of Grantor, such agency being
coupled with an interest. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Lender shall give or mail to Grantor, or any of them, notice at least
ten (10) days in advance of the time and place of any public sale, or of the
date after which any private sale may be made. Grantor agrees that any
requirement of reasonable notice is satisfied if Lender mails notice by ordinary
mail addressed to Grantor, or any of them, at the last address Grantor has given
Lender in writing. If a public sale is held, there shall be sufficient
compliance with all requirements of notice to the public by a single publication
in any newspaper of general circulation in the parish or county where the
Collateral is located, setting forth the time and place of sale and a brief
description of the property to be sold. Lender may be a purchaser at any public
sale. Grantor agrees that any such sale shall be conclusively deemed to be
conducted in a commercially reasonable manner if it is made consistent with the
standard of similar sales of collateral by commercial banks in Lafayette,
Louisiana.
Rights and Remedies with Respect to Investment Property, Financial Assets and
Related Collateral. In addition to other rights and remedies granted under this
Agreement and under applicable law, Lender may exercise any or all of the
following rights and remedies, at any time, and from time to time, whether or
not an Event of Default has occurred or exists: (a) register with any issuer or
broker or other securities intermediary any of the Collateral consisting of
investment property or financial assets (collectively herein, investment
property) in Lender's sole name or in the name of Lender's broker, agent or
nominee; (b) cause any issuer, broker or other securities intermediary to
deliver to Lender any of the Collateral consisting of securities, or investment
property capable of being delivered; (c) enter into a control agreement or power
of attorney with any issuer or securities intermediary with respect to any
Collateral consisting of investment property, on such terms as Lender may deem
appropriate, in its sole discretion, including without limitation, an agreement
granting to Lender any of the rights provided hereunder without further notice
to or consent by Grantor; (d) execute any such control agreement on behalf of
and in the name of Grantor, with Grantor hereby irrevocably appointing Lender as
its agent and attorney-in-fact, coupled with an interest, for the purpose of
executing such control agreement on behalf of Grantor; (e) exercise any and ail
rights of Lender under any such control agreement or power of attorney; (f)
exercise any voting, conversion, registration, purchase, option, or other rights
with respect to any Collateral; (g) collect, with or without legal action, and
issues receipts concerning, any notes, checks, drafts, remittances or
distributions that are paid or payable with respect to any Collateral consisting
of investment property. Any control agreement entered with respect to any
investment property shall contain the following provisions, at Lender's
discretion. Lender shall be Authorized to instruct the issuer. broker or other
securities intermediary to take or to refrain from taking such actions with
respect to the investment property, on such terms as Lender may deem
appropriate, in its sole discretion, including without limitation, an agreement
granting to Lender any of the rights provided hereunder without further notice
to or consent by Grantor; (d) execute any such control agreement on behalf of
and in the name of Grantor, with Grantor hereby irrevocably appointing Lender as
its agent and attorney-in-fact, coupled with an interest, for the purpose of
executing such control agreement on behalf of Grantor; (e) exercise any and all
rights of Lender under any such control agreement or power of attorney; (f)
exercise any voting, conversion, registration, purchase option, or other rights
with respect to any Collateral; (g) collect, with or without legal action, and
issues receipts concerning, any notes, checks, drafts, remittances or
distributions that are paid or payable with respect to any Collateral consisting
of investment property. Any control agreement entered with respect to any
investment property shall contain the following provisions, at Lender's
discretion. Lender shall be authorized to instruct the issuer, broker or other
securities intermediary to take or to refrain from taking such actions with
respect to the investment property as Lender may instruct, without further
notice to or consent by Grantor. Such actions may include without limitation
the issuance of property as Lender may instruct, without further notice to or
consent by Grantor. Such actions may include without limitation the issuance of
entitlement orders, account instructions, general trading or buy or sell orders,
transfer and redemption orders, and stop loss orders. Lender shall be further
entitled to instruct the issuer, broker or securities intermediary to sell or to
liquidate any investment property, or to pay the cash surrender or account
termination value with respect to any and all investment property, and to
deliver all such payments and liquidation proceeds to Lender. Any such control
agreement shall contain such authorizations as are necessary to place Lender in
"control" of such investment collateral, as contemplated under the provisions of
the Uniform Commercial Code, and shall fully authorize Lender to issue
"entitlement orders" concerning the transfer, redemption, liquidation or
disposition of investment collateral, in conformance with the provisions of the
Uniform Commercial Code.
Sale of Stock. Grantor recognizes that Lender may not be able to effect a
public sale on all or part of the Stock, and Lender may be compelled or deem it
best to resort to one or more private sales to a restricted group of purchasers,
who may be obligated to agree, among other things, to acquire the Stock for
their own account for investment purposes only and not with a view of
distribution or resale. Grantor acknowledges that any private sale of the Stock
may be at prices and on terms less favorable than those of public sales, and
Grantor unconditionally agrees that such private sales shall be deemed to have
been made in a commercially reasonable manner, and that Lender has no obligation
to delay the sale of any Stock to permit the issuer(s) to register it for sale
under the Securities Act of 1933, as amended (the "Securities Act") or to
qualify such Stock under the "Blue Sky" laws of any state. Grantor additionally
agrees to use Grantor's best efforts to cause any issuer, transfer agent, or
registrar of the Stock to take all such actions and execute all such documents
as may be necessary or appropriate, upon request by Lender, (a) to remove any
restrictive legends placed on the Stock that are not legally required, (b) to
effect any sale or sales of the Stock in accordance with Rule 144 of the
Securities Act, and/or (c) to effect any sale or other disposition of the Stock
at any lawful public or private sale or other disposition.
Registration of Stock. If Lender shall elect to exercise its right to sell or
otherwise dispose of all or any part of the Collateral at public or private sale
and if in the opinion of counsel for Lender, it is necessary to have the Stock
or any portion thereof registered under the provisions of the
<PAGE>
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Loan No 531699 (Continued)
==============================================================================
Securities Act, Grantor unconditionally and covenants to use its best efforts to
cause: (a) the issuer(s) of the Stock, its directors and officers, to take all
action necessary to register the Stock or the portion thereof to be disposed of,
under the provisions of the Securities Act, at Grantor's expense, (b) the
registration statement relating thereto to become effective and to remain so for
not less than one (1 ) year from the date of the first public offering of the
Stock or that portion thereof to be disposed of, and to make all amendments
thereto and to the related prospectus, which, in the opinion of Lender and its
counsel, may be necessary or advisable, all in conformity with requirements of
the Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto; (c) the issuer(s) of the Stock to comply with the
provisions of the "Blue Sky" laws of any jurisdiction that the Lender shall
designate, and (d) the issuer(s) of the Stock to make available to its security
holders, as soon as practical (but in no event later than sixteen (16) months
after the effective date of such registration statement), an earning statement
(which need not be audited) covering a period of at least twelve (12) months
beginning with the first month after the effective date of any such registration
statement, which earnings statement Will satisfy the provisions of Section 11(a)
of the Securities Act. Grantor acknowledges that a breach of any of the
covenants contained in (a) through (d) above may cause irreparable injury to
Lender, and that Lender will have no adequate remedy at law with respect to any
such breach, and, as a consequence, that Grantor's covenants as set forth in
this Agreement are enforceable against Grantor. Grantor hereby waives, to the
extent such waiver is enforceable under law, and Grantor shall not assert, any
defenses against an action for specific performance of such covenants, except
for a defense that Borrower is not in default under any of its Indebtedness in
favor of Lender.
Lender's Right to Vote Stock. Immediately and without further notice, upon the
occurrence of any Event of Default under this Agreement, whether or not the
Stock may have previously been registered in the name of Lender or in the name
of Lender's nominee, Lender or its nominee shall have the right to exercise all
voting rights with respect to the Stock. Lender or its nominee shall have the
further right to exercise any and all additional corporate rights and all other
conversion, exchange, or subscription rights, privileges and/or options with
regard thereto, including, without limitation, the right to exchange any and all
shares of Stock upon the merger, consolidation, reorganization, recapitalization
or other readjustment of the issuer(s) thereof or upon the exercise by any such
issuer(s) of any rights, privileges or options pertaining thereto. Lender or its
nominee shall have the additional right to deliver the Stock to any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as Lender may determine, all without liability except to account
for property actually received by Lender. Lender shall have no duty to exercise
any of the foregoing rights, privileges or options and shall not be responsible
for any failure to do so or delay in doing so. Lender may by written notice to
Grantor, relinquish, either partially or completely in accordance with any terms
or conditions Lender may set forth in such notice, any or all voting rights
Lender may acquire pursuant to this Agreement.
Foreclosure. Maintain a judicial suit for foreclosure and sale of the
Collateral.
Specific Performance. Lender may, in addition to the foregoing remedies, or in
lieu thereof, and in Lender's sole discretion, commence an appropriate action or
actions against Borrower and Grantor seeking specific performance of any
covenants contained herein, or in aid of the execution or enforcement of any
power herein granted.
Transfer Title. Effect transfer of tide upon sale of all or part of the
Collateral. For this purpose, Grantor irrevocably appoints Lender as its
attorney-in-fact to execute endorsements, assignments and instruments in the
name of Grantor and each of them (if more than one) as shall be necessary or
reasonable.
Other Rights and Remedies. Have and exercise any or all of the rights and
remedies of a secured creditor under the provisions of the Louisiana Commercial
Laws (La. R.S. 10: ~101, et seq.), at law, in equity, or otherwlse.
Application of Proceeds and Payments. Any and all proceeds, interest, profits,
and Income and Proceeds that Lender actually receives and collects, whether
resulting from the public or private sale of the Collateral and/or collection or
exercise of any of Lender's rights provided hereunder, shall be applied first to
reimburse Lender for its costs of collecting the same (including, but not
limited to, any attorneys' fees incurred by Lender and Lender's court costs,
whether or not there is a lawsuit, including any fees on appeal incurred by
Lender in connection with the collection or sale of the Collateral), with the
balance being applied to principal, interest, costs, expenses, attorneys' fees
and other fees and charges under the Indebtedness, in such order and with such
preferences and priorities as Lender shall determine within its sole discretion.
Cumulative Remedles. All of Lender's rights and remedies, whether evidenced by
this Agreement or by any other writing, shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Agreement, after
Grantor's failure to perform, shall not affect Lender's right to declare a
default and to exercise its remedies. Nothing under this Agreement or otherwise
shall be construed so as to limit or restrict the rights and remedies available
to Lender following an Event of Default, or in any way to limit or restrict the
rights and ability of Lender to proceed directly against Grantor and/or Borrower
and/or against any Guarantor and/or to proceed against any other collateral
directly or indirectly securing the Indebtedness.
ASSIGNMENT OF INDEBTEDNESS; TRANSFER OF COLLATERAL. Grantor hereby recognizes
and agrees that Lender may assign all or any porter of the Indebtedness to one
or more third party creditors. Such transfers may include but are not limited
to, sales of participation interests in the Indebtedness. Grantor specifically
agrees and consents to all such transfer and assignments and further waives any
subsequent notice of such transfers or assignments as may be provided under
applicable Louisiana law. Grantor additionally agrees that any and all of
Borrower's other and future loans, extensions of credit, liabilities and
obligations in favor of such a third party assignee will be secured by the
Collateral. Grantor further agrees that Lender may transfer all or any portion
of the Collateral to such a third party assignee, in which case Lender will be
fully released from any and all of Lender's obligations and responsibilities to
Grantor with regard to the transferred Collateral. Any third party creditor to
whom the Collateral is transferred will acquire all of Lender's rights and
powers with respect to the transferred Collateral, with Lender retaining all
powers and rights with regard to any of the Collateral which is not transferred
to another party.
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor agrees to appear in and to
defend all actions or proceedings purporting to affect Lender's security rights
and interests granted under this Agreement. In the event that Lender elects to
defend any such action or proceeding, Grantor agrees to reimburse Lender for
Lender's costs associated therewith, including without limitation, Lender's
attorneys' fees, which additional costs and expenses shall be secured by this
Agreement.
INDEMNIFICATION OF LENDER. Grantor agrees to indemnify, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs, expenses (including without limitation, Lender's reasonable
attorneys' fees), demands, liabilities, penalties, fines and forfeitures of any
nature whatsoever which may be asserted against or incurred by Lender, arising
out of or in any manner occasioned by this Agreement or the rights and remedies
granted to Lender hereunder. The foregoing indemnity provision shall survive the
cancellation of this Agreement as to all masers arising or accruing prior to
such cancellation, and the foregoing indemnity provision shall further survive
in the event that Lender elects to exercise any of the remedies as provided
under this Agreement following any Event of Default hereunder.
ADDITIONAL OBLIGATIONS OF GRANTOR. Grantor shall have the following additional
obligations under this Agreement:
Additions Collateral. In the event that any of the Collateral should at any time
decline In value or become unsatisfactory to Lender for an, reason, Grantor
agrees to immediately provide Lender with such additional collateral security as
may then be acceptable to Lender.
No Sale or Encumbrance. As long as this Agreement remains In effect, Grantor
unconditionally agrees not to sell, option, assign, pledge, or create or permit
to exist any lien or security interest in or against any of the Collateral in
favor of any person other than Lender.
No Settlement or Compromise of Rights. Grantor will not, without the prior
written consent of Lender, compromise, settle, adjust or extend payment under
any of Grantor's Collateral.
No Consent to Issuance of Additional Stock. Grantor will not, without the prior
written approval of Lender, consent to, or approve of, the issuance of any
additional shares of any class of capital stock of the issuer(s) of the Stock,
or any securities convertible voluntarily by the holder thereof, or
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such shares, or any warrants, options, rights or
other commitments entitling any person to purchase or otherwise acquire any such
shares.
Notice to Obligors. Upon request by Lender, Grantor will immediately notify
individual obligors under Grantor's Collateral and/or Rights, advising such
obligors of the fact that their obligations have been collaterally assigned and
pledged to Lender. In the event that Grantor should fail to provide such
notices for any reason, upon request by Lender, Grantor agrees that Lender may
forward appropriate notices to such obligors, either in Lender's name or int he
name of Grantor.
Additional Pledge Agreement; Effect. Grantor acknowledges and agrees that
Grantor may, from time to time, one or more times, enter into additional pledge
and security agreements with Lender under which Grantor may undertake to pledge
or grant to Lender a security interest in the same Collateral. Grantor further
acknowledges and agrees that the execution of such additional agreements,
including any such agreements now in effect, will not have the effect of
cancelling, novating or otherwise modifying this Agreement; it being Grantor's
full intent and agreement that all such pledge agreements (including this
Agreement) shall be cumulative in nature and shall remain in full force and
effect until expressly cancelled by Lender under a written cancellation
instrument delviered to Grantor.
Additional Documents. Grantor agrees, at any time, from time to time, one or
more times, upon written request by Lender, to execute and deliver such further
documents and do such further acts and things as Lender may reasonably request,
within Lender's sole discretion, to effect the purposes of this Agreement.
Nofification of Lender. Grantor will promptly deliver to Lender all written
notices, and will promptly give Lender written notice of any other notices
received by Grantor with respect to the Collateral.
<PAGE>
06-23-1997 COMMERCIAL PLEDGE AND SECURITY AGREEMENT Page 6
Loan No 531699 (Continued)
===============================================================================
EFFECT OF WAIVERS. Grantor has waived, does by these presents waive, presentment
for payment, protest, notice of protest and notice of nonpayment under all of
the Indebtedness secured by this Agreement. Grantor has further waived, and/or
does by these presents waive, all pleas of division and discussion, and all
similar rights with regard to the Indebtedness, and agrees that Grantor shall
remain liable, together with Borrower and any and all Guarantors of the
Indebtedness, on a "solidary" or "joint and several" basis. Grantor further
agrees that discharge or release of any party who is, may, or will be gable to
Lender under any of the Indebtedness, or the release of the Collateral or any
other collateral directly or indirectly securing repayment of the same, shall
not have the effect of releasing or otherwise diminishing or reducing the actual
or potential liability of Grantor and/or any other party or parties guaranteeing
payment of the Indebtedness, who shall remain liable to Lender, and/or remain
liable to Lender, and/or of releasing any Collateral or other collateral that is
not expressly released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than in
accordance with the terms of any agreement, or agreements governing repayment of
the Indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing Grantor, and/or
any other party or parties guaranteeing payment of the Indebtedness, from their
respective obligations to Lender, and/or of releasing any of the Collateral or
other collateral directly or indirectly securing repayment of the Indebtedness.
In addition, no course of dealing between Grantor and Lender, nor any failure or
delay on the part of Lender to exercise any of the rights and remedies granted
to Lender under this Agreement, or under any other agreement or agreements by
and between Grantor and Lender, shall have the effect of waiving any of Lender's
rights and remedies. Any partial exercise of any rights and remedies granted to
Lender shall furthermore not constitute a waiver of any of Lender's other rights
and rerr~dies it being Grantor's intent and agreement that Lender's rights and
remedies shall be cumulative in nature. Grantor further agrees that, upon the
occurrence of any Event of Defeat under this Agreement, any waiver or
forbearance on the part of Lender to pursue the rights and remedies available to
Lender, shall be binding upon Lender only to the extent that Lender specifically
agrees to any such waiver or forbearance in wnting. A waiver or forbearance as
to one Event of Default shall not constitute a waiver or forbearance as to any
other Event of Default. None of the warranties, conditions, provisions and terms
contained in this Agreement or any other agreement, document, or instrument now
or hereafter executed by Grantor and delivered to Lender, shall be deemed to
have been waived by any act or knowledge of Lender, Lender's agents, officers or
employees; but only by an instrument in writing specifying such waiver, signed
by a duly authorized officer of Lender and delivered to Grantor.
If now or hereafter (a) Borrower shall be or become insolvent, and (b)
Borrower's Indebtedness shall not at all times until paid be fully secured by
collateral pledged by Borrower, Guarantor hereby forever waives and relinquishes
in favor of Lender and Borrower, and their respective successors, any claim or
right to payment Guarantor may now have or hereafter have or acquire against
Borrower, by subrogation or otherwise, so that at no time shall Guarantor be or
become a "creditor" of Borrower within the meaning of 11 U.S.C. section 547(b),
or any successor provision of the Federal bankruptcy laws.
FURTHER COVENANTS. Grantor further represents, warrants and agrees that: (a)
Grantor has agreed and consented to grant the security interest provided herein
to secure payment of Borrower's Indebtedness in favor of Lender at Borrower's
request and not at the request of Lender; (b) Grantor will receive and/or has
received a direct or indirect material benefit from the transactions
contemplated herein and/or ansing out of Borrower's Indebtedness; (c) Grantor
has established adequate means of obtaining information from Borrower on a
continuing basis with regard to Borrower's financial condition; (d) Lender has
made no representations to Grantor as to the creditworthiness of Borrower.
Grantor agrees to keep adequately informed of any facts, events or circumstances
which might in any way affect Grantor's risks with regard to Borrower's
Indebtedness. Grantor further agrees that Lender shall have no obligation to
disclose to Grantor any information or material relating to Borrower's
Indebtedness.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.
Applicable Law. This Agreement has been delivered 10 Lender and accepted by
Lender In the State of Louisiana. This Agreement shall be governed by and
construed In accordance with the laws of the State of Louisiana.
Attorneys' Fees; Expenses. Borrower and Grantor agree to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, incurred in connection with the enforcement of this Agreement. Lender
may pay someone else to help enforce this Agreement, and Borrower and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings (and
including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection seances. Borrower and
Grantor also shall pay all court costs and such additional fees as may be
directed by the court.
Caption Headings Caption headings in this Agreement are for convenience purposes
only and are not to be used to interpret or define the provisions of this
Agreement.
Notices. To give Borrower or Grantor any notice required under this Agreement,
Lender may hand deliver or mail such notice to Borrower or Grantor. Lender will
deliver or mail any notice to Borrower or Grantor (or any of them if more than
one) at any address which Borrower or Grantor may have given Lender by written
notice as provided in this paragraph. In the event that there is more than one
Borrower or Grantor under this Agreement, notice to a single Borrower or Grantor
shall be considered as notice to all Borrower and Grantors. To give Lender any
notice under this Agreement, Borrower or Grantor (or any Borrower or Grantor)
shall mail the notice to Lender by registered or certified mail at the address
specified in this Agreement, or at any other address that Lender may have given
to Borrower or Grantor (or any Borrower or Grantor) by written notice as
provided in this paragraph. All notices required or permitted under this
Agreement must be in writing and will be considered as given on the day it is
delivered by hand or deposited in the U.S. Mail, by registered or certified mail
to the address specified in this Agreement.
Severabillity. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain
valid and enforceable.
Sole Discretion of Lender. Whenever Lender's consent or approval is required
under this Agreement, the decision as to whether or not to consent or approve
shall be in the sole and exclusive discretion of Lender and Lender's decision
shall be final and conclusive.
Successors and Assigns Bound; Solidary Liability. Grantor's obligations and
agreements under this Agreement shall be binding upon Grantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. In the event
that there is more than one Grantor under this Agreement, all of the agreements
and obligations made and/or incurred by Grantors under this Agreement shall be
on a "solidary" or "joint and several" basis.
BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS PLEDGE
AND SECURITY AGREEMENT, AND BORROWER AND GRANTOR AGREE TO ITS TERMS. THIS
Agreement IS DATED JUNE 23,1997.
BORROWER:
Financial Services of the South, Inc.
BY: _____________________________
Ben P Huval, President
GRANTOR:
MidSouth Bancorp, Inc.
By: ______________________________
C R "Rusty" Cloutier, President/CEO
<TABLE>
<CAPTION>
MIDSOUTH BANCORP, INC. AND SUBSIDIARY EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE (Unaudited) Page 19
For the Three and Six Months Periods Ended June 30, 1997 and 1996
____________________________________________________________________________________________________
Second Quarter Second Quarter Year to Date Year to Date
June 30, June 30, June 30, June 30,
PRIMARY 1997 1996 1997 1996
______________ ______________ ____________ ____________
<S> <C> <C> <C> <C>
Earnings:
Income applicable to common
stock $442,565 $297,280 $784,180 $545,807
========== ========= ========= =========
Shares:
Weighted average number of
common shares outstanding 1,553,923 1,491,804 1,547,985 1,484,332
========== ========= ========= =========
Earnings per common share:
Income applicable to common
stock $0.28 $0.20 $0.51 $0.37
========== ========= ========= =========
Weighted average number of
common shares outstanding 1,553,923 1,491,804 1,547,985 1,484,332
Assuming exercise of options,
reduced by the number of
shares which could have
been purchased with the
proceeds from exercise of
such options at the average
issue price - 9,741 - 9,859
__________ _________ _________ _________
Weighted average number of
common shares outstanding,
as adjusted 1,553,923 1,501,545 1,547,985 1,494,191
========== ========= ========= =========
Primary earnings per common share $0.28 $0.20 $0.51 $0.37
========== ========= ========= =========
FULLY DILUTED
Earnings:
Net income $482,511 $336,413 $863,933 $624,660
========== ========= ========= =========
Weighted average number of
common shares outstanding 1,553,923 1,491,804 1,547,985 1,484,332
Assuming exercise of options,
reduced by the number of
shares which could have
been purchased with the
proceeds from exercise of
such options at the higher
of the average issue price
or period end price 9,754 9,741 4,904 9,859
Assuming conversion of
outstanding shares of
preferred stock at a
conversion rate of
1 to 1.999 shares 343,140 359,332 343,140 359,332
_________ _________ ________ _________
Weighted average number of
common shares outstanding,
as adjusted 1,906,817 1,860,877 1,896,029 1,853,523
========== ========= ========= =========
Fully diluted earnings per common
share $0.25 $0.18 $0.46 $0.34
========== ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 14,081,776
<INT-BEARING-DEPOSITS> 171,236
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,936,992
<INVESTMENTS-CARRYING> 17,124,015
<INVESTMENTS-MARKET> 17,535,184
<LOANS> 114,379,507
<ALLOWANCE> 1,331,951
<TOTAL-ASSETS> 212,617,670
<DEPOSITS> 195,081,301
<SHORT-TERM> 2,297,324
<LIABILITIES-OTHER> 686,111
<LONG-TERM> 2,533,240
0
2,446,098
<COMMON> 138,152
<OTHER-SE> 12,019,694
<TOTAL-LIABILITIES-AND-EQUITY> 212,617,670
<INTEREST-LOAN> 2,756,657
<INTEREST-INVEST> 990,571
<INTEREST-OTHER> 145,355
<INTEREST-TOTAL> 3,892,583
<INTEREST-DEPOSIT> 1,418,057
<INTEREST-EXPENSE> 43,539
<INTEREST-INCOME-NET> 2,430,987
<LOAN-LOSSES> 209,332
<SECURITIES-GAINS> 85,355
<EXPENSE-OTHER> 2,368,565
<INCOME-PRETAX> 667,261
<INCOME-PRE-EXTRAORDINARY> 482,511
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 482,511
<EPS-PRIMARY> .28
<EPS-DILUTED> .25
<YIELD-ACTUAL> 5.24
<LOANS-NON> 519
<LOANS-PAST> 60
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,087,790
<CHARGE-OFFS> 281,002
<RECOVERIES> 162,563
<ALLOWANCE-CLOSE> 1,331,951
<ALLOWANCE-DOMESTIC> 176,937
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,155,014
</TABLE>
