Exhibit 10.12
Promissory Note for Line of Credit between Tidelands Bancshares, Inc. and The
Bankers Bank dated January 27, 2003.
Exhibit 10.12
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No.
$200,000.00 01-27-2003 04-28-2003
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Call / Cell Account Officer Initials
GRR
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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.
Any item above containing ***** has been omitted due to text length limitations.
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Borrower: Tidelands Bancshares, Inc. Lender: THE BANKERS BANK
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Principal Amount: $200,000.00 Initial Rate: 4.250%
Date of Note: January 27, 2003
PROMISE TO PAY. Tidelands Bancshares, Inc. ("Borrower") promises to pay to THE
BANKERS BANK ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Two Hundred Thousand & 00/100 Dollars
($200,000.00), together with interest on the unpaid principal balance from
January 27, 2003, until paid in full.
PAYMENT. Borrower will pay this loan in one principal payment of $200,000.00
plus interest on April 28, 2003. This payment due on April 28, 2003, will be for
all principal and all accrued interest not yet paid. Unless otherwise agreed or
required by applicable law, payment swill be applied first to any unpaid
collection costs and any late charges, then to any unpaid interest, and any
remaining amount to principal. Interest on this Note is computed on a 365/365
simple interest basis; that is, by applying the ratio of the annual interest
rate over the number of days in a year, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent Index which is the Prime Rate as
published in the Money Rates section of the Wall Street Journal., Eastern
Edition, printed edition, (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute Index after notice to
Borrower. Lender will tell Borrower the current Index rate upon Borrower's
request. The interest rate change will not occur more often than each day.
Borrower understands that Lender may make loans based on other rates as well.
The Index currently is 4.250% per annum. The lowest rate to be applied to the
unpaid principal balance of this Note will be at a rate equal to the Index,
resulting in an initial annual rate of simple interest of 4.250%. NOTICE: Under
no circumstances will the interest rate on this Note be more than the maximum
rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payment
▇▇▇▇▇▇ the payment schedule. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked "paid in full,"
"without recourse,", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: THE
BANKERS BANK, 2410 Paces Ferry Road, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
$100.00 regardless of any partial payments Lender has received.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, at Lender's option, and if permitted by applicable law, Lender may add
any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any increased
rate). Upon default, Lender, at its option, may, if permitted under applicable
law, increase the variable interest rate on this Note to 3.000 percentage points
over the Index. The interest rate will not exceed the maximum rate permitted by
applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply
if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written
notice of the creditor or forfeiture proceeding and deposits with the
Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor: Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this
Note. In the event of a death, Lender, at its option, may, but shall
not be required to, permit the Guarantor's assets to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if Borrower,
after receiving written notice from Lender demanding cure of such
default: (1) cures the default within fifteen (15) days; or (2) if the
cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliances as soon as reasonably
practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's costs of
collection, including court costs and fifteen percent (15%) of the principal
plus accrued interest as attorneys' fees, if any sums owing under this Note are
collected by or through an attorney at law, whether or not there is a lawsuit,
and legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), and appeals. If not prohibited by
applicable law, Borrower also will pay any court costs, in addition to all other
sums provided by law.
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Georgia. This Note has
been accepted by Lender in the State of Georgia.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of ▇▇▇▇ County, State of Georgia.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower hold
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any ▇▇▇ or ▇▇▇▇▇ accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorized Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall insure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties waive any right to
require Lender to take action against any other party who signs this Note as
provided in O.C.G.A. Section 10-7-24 and agree that Lender may renew or extend
(repeatedly and for any length of time), this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.
THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
BORROWER:
TIDELANDS BANCSHARES, INC.
By:\s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Seal) By: \s\ ▇▇▇▇▇▇ ▇. Coffee, President (Seal)
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Authorized Signer for Authorized Signer for
Tidelands Bancshares, Inc. Tidelands Bancshares, Inc.
LENDER:
THE BANKERS BANK
X /s/ xxxxx
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Authorized Signer