Exhibit 10.2


 


THIS NOTE AND THE SUBORDINATED NOTE PURCHASE AGREEMENT
REFERENCED AND INCORPORATED HEREIN IS SUBJECT TO ARBITRATION PURSUANT TO THE
SOUTH CAROLINA UNIFORM ARBITRATION ACT: SC CODE ANN.  §15-48-10 ET
SEQ. AND THE FEDERAL ARBITRATION ACT 9 U.S.C. 1  ET SEQ.


 


The
issuance of this Subordinated Note has not been registered under the Securities
Act of 1933 or applicable state laws, and this Note may not be sold or
transferred except in a transaction that is exempt under such laws or pursuant
to an effective registration under such laws.


 


This
obligation is not a deposit and is not insured by the United States or any
agency or fund of the United States, including the Federal Deposit Insurance
Corporation.  This obligation is
subordinated to the claims of senior indebtedness of the Company and is not
secured.


 


SUBORDINATED NOTE DUE 2020


 


$[              ]    [INSERT APPLICABLE CLOSING DATE], 2010


 


FOR VALUE RECEIVED, the undersigned, HCSB FINANCIAL CORPORATION, a
South Carolina corporation (the “Company”), hereby promises to pay to the order
of
[                            ],
an [individual resident of               /  a
                
corporation/LLC] (“Purchaser”), at its offices at 3640 Ralph Ellis Boulevard,
Loris, South Carolina 29569 (or at such other place as the holder may from time
to time designate) the principal sum of [                    ($            )] on [·], 2020 (the
“Maturity Date”) (or such date as the Company may prepay the principal sum
pursuant to Section 1.4 of the Note Purchase Agreement (as defined below)
or any earlier date of acceleration of the Maturity Date), and to pay interest
accrued on the outstanding principal amount of this Subordinated Note Due 2020
(the “Note”) from [INSERT APPLICABLE CLOSING DATE], 2010, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually on April 5, 2010 and October 5,
2010 of each year, commencing on October 5, 2010 (each, an “Interest
Payment Date”), at a rate per annum of 9.00% (or such rate of interest as then
in affect pursuant to Section 1.2 of the Note Purchase Agreement) until
the principal hereof shall have been paid.


 


This
Note is one of the Notes referred to in the Subordinated Note Purchase
Agreement (as may be amended, modified, or restated from time to time), dated
as of March 29, 2010, by and among the Company and the purchasers of the
Company’s Subordinated Notes Due 2020 (the “Note Purchase Agreement”).
Capitalized terms used in this Note are defined in the Note Purchase Agreement,
unless otherwise expressly stated herein. This Note is entitled to the benefits
of the Note Purchase Agreement and is subject to all of the agreements, terms,
and conditions contained therein, all of which are incorporated herein by this
reference. This Note may be 


 

















 


prepaid,
in whole or in part, in accordance with the terms and conditions set forth in
the Note Purchase Agreement.


 


The
outstanding principal balance of this Note shall be due and payable as provided
in Section 1.4 of the Note Purchase Agreement.  Interest on the principal amount of this Note
from time to time outstanding, and other amounts owing, shall be due and
payable as provided in Section 1.2 of the Note Purchase Agreement
(computed on the basis of the actual number of days elapsed over a 365/366-day
year).  In no event, however, shall
interest exceed the maximum rate permitted by law.


 


If
an Event of Default involving bankruptcy provided for under Section 7.1(F) of
the Note Purchase Agreement occurs, then the principal of, interest accrued on,
and other Obligations payable under the Notes and the Transaction Documents
will immediately become due and payable. Notwithstanding anything to the
contrary herein or in the Note Purchase Agreement, other than Section 7.1(F) of
the Note Purchase Agreement, there is no right of acceleration for any Default,
including a default in the payment of principal or interest or the performance
of any other covenant or obligation by the Company, or Event of Default under
this Note or the Note Purchase Agreement.


 


This
Note is not secured by any assets or commitments of the Company. This Note is a
debt of the Company only and is not an obligation of Horry County State Bank or
any of its affiliates.


 


The
Indebtedness of the Company evidenced by this Note, including the principal,
interest, and premium, if any, is, to the extent and in the manner set forth in
the Note Purchase Agreement, unsecured, subordinated, and junior in right of
payment to its obligations to holders of Senior Indebtedness, as defined in the
Note Purchase Agreement, and each holder of the Notes, by the acceptance
hereof, agrees to and shall be bound by such provisions of the Note Purchase
Agreement.


 


THIS
NOTE SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF SOUTH CAROLINA, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.


 


BINDING
ARBITRATION.  UPON DEMAND OF
ANY PARTY (AS DEFINED IN THE NOTE PURCHASE AGREEMENT) (THE TERM PARTY INCLUDES,
WITHOUT LIMITATION, ANY SUBSEQUENT HOLDER OF THIS NOTE),WHETHER SUCH DEMAND IS
MADE BEFORE OR AFTER INSTITUTION OF ANY JUDICIAL  PROCEEDING, ANY DISPUTE, CLAIM OR CONTROVERSY
ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS NOTE AND/OR ANY OTHER
TRANSACTION DOCUMENT, THEIR SUBJECT MATTER OR FORMATION OR EXECUTION, OR ANY
RIGHT OR OBLIGATION CREATED THEREBY, IRRESPECTIVE OF THE LEGAL THEORY OR CLAIMS
UNDERLYING SUCH DISPUTE, CLAIM OR CONTROVERSY (INCLUDING TORT OR STATUTORY
CLAIMS) (ANY “DISPUTE”) BETWEEN OR AMONG ANY PARTIES SHALL BE RESOLVED BY
BINDING ARBITRATION AS PROVIDED IN SECTION 10 OF THE REFERENCED NOTE
PURCHASE AGREEMENT INCORPORATED HEREIN. 
INSTITUTION OF A JUDICIAL 


 

















 


PROCEEDING
BY A PARTY DOES NOT WAIVE THE RIGHT OF THAT PARTY TO DEMAND ARBITRATION
HEREUNDER. DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS,
COUNTERCLAIMS, DISPUTES AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION,
CLAIMS BROUGHT AS CLASS ACTIONS, CLAIMS RELATING TO ANY TRANSACTION
DOCUMENT EXECUTED IN THE FUTURE, OR CLAIMS ARISING OUT OF OR CONNECTED WITH THE
TRANSACTION REFLECTED BY THIS NOTE.


 


EXCLUSIVE
VENUE SELECTION.  IN THE EVENT THE PRIOR BINDING ARBITRATION IS
FOUND TO BE UNENFORCEABLE (OR IF NO PARTY DEMANDS ARBITRATION), ANY DISPUTE
ARISING BETWEEN OR AMONG ANY PARTIES SHALL BE BROUGHT EXCLUSIVELY IN THE COURT
OF COMMON PLEAS FOR HORRY COUNTY, SOUTH CAROLINA, OR IN THE FEDERAL COURTS OF
THE DISTRICT OF SOUTH CAROLINA, FLORENCE DIVISION.


 


CONSENT
TO JURISDICTION.  EACH PARTY CONSENTS TO THE JURISDICTION OF
THE STATE COURTS OF HORRY COUNTY, SOUTH CAROLINA, AND THE FEDERAL COURTS OF THE
DISTRICT OF SOUTH CAROLINA, FLORENCE DIVISION. 
EACH PARTY EXPRESSLY AND IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSES OF LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE, OR FORUM NON CONVENIENS.


 


EACH
PARTY WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY DISPUTE.  EACH PARTY ACKNOWLEDGES THAT THIS WAVIER IS A
MATERIAL INDUCEMENT FOR COMPANY AND PURCHASER TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE
AND THE OTHER TRANSACTION DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. 
PURCHASER, ANY SUBSEQUENT HOLDERS, AND THE COMPANY REPRESENT AND WARRANT
THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.


 


The
provisions of this Note are continued on the reverse side hereof and such
provisions shall for all purposes have the same effect as though fully set
forth at this place.


 


The
undersigned expressly waives any presentment, demand, protest, notice of
default, notice of intention to accelerate, notice of acceleration, or notice
of any other kind except as expressly provided in the Note Purchase Agreement.


 


This
Note is executed as of the date first written above.


 

















 


	
   

  	
  HCSB
  FINANCIAL CORPORATION,

  
	
   

  	
  a
  South Carolina corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


REVERSE OF SECURITY


 


No
reference herein to the Note Purchase Agreement and no provision of this Note
or of the Note Purchase Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to make all payments due on this
Note at the time and place and at the rate and in the money herein prescribed.


 


Subject
to the terms and conditions of the Note Purchase Agreement, this Note is
transferable by the holder hereof on the register maintained by the Company, or
its agent, upon surrender of this Note for registration of transfer at the
office of the Company duly executed by the holder hereof or such holder’s
attorney duly authorized in writing, and thereupon one or more new Notes of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such registration of transfer.


 


Prior
to due presentment for registration of transfer of this Note, the Company, or
its agent, may deem and treat the holder hereof as the absolute owner hereof
for the purpose of receiving payment of the principal of and premium, if any,
and interest on this Note and for all other purposes, and neither the Company,
nor its agent, shall be affected by any notice to the contrary.