Document:

Promissory Note

 Exhibit 10.12 
  

	
	Savings Bank
	OF MENDOCINO COUNTY
	A Full Service Commercial Bank

  
 PROMISSORY NOTE

  

															
	 Principal

	 	 Loan Date

	 	 Maturity

	  	Loan No

	  	Call/Coll

	  	Account

	  	Officer

	  	Initials

	$30,000.00	 	11-19-2004	 	11-19-2005	  	7010042309	  	24/210	  	00000000074018	  	TEB	  	 

  
 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. 
  

							
	Borrower:	 	 Thanksgiving Coffee Company, Inc.
 PO BOX 1918

FORT BRAGG, CA 95437
	 	Lender:	  	 Savings Bank of Mendocino County
 Main Office

PO BOX 3600
 200 N SCHOOL ST
 UKIAH, CA 95482

  

					
	Principal Amount: $30,000.00	 	Initial Rate: 8.000%	 	Date of Note: November 19, 2004

  
 PROMISE TO PAY. Thanksgiving Coffee
Company, Inc. (“Borrower”) promises to pay to Savings Bank of Mendocino County (“Lender”), or order, in lawful money of the United States of America, the principal amount of Thirty Thousand & 00/100 Dollars ($30,000.00) or so
much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. The interest rate will not increase above
10.000%. 
  
 PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on November 19, 2005. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning January 1, 2005, with all subsequent interest
payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; and then to any late charges. 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 (366 during leap years), 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 index which is
the Savings Bank of Mendocino County’s Base Commercial Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each FIRST AND
FIFTEENTH OF THE MONTH. Borrower understands that Lender may make loans based on other rates as well. The index currently is 5.000% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 3.000
percentage points over the index, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 8.000% per annum. Notwithstanding the foregoing, the variable interest rate or rates provided for
in this Note will be subject to the following minimum and maximum rates. NOTICE: Under no circumstances will the interest rate on this Note be less than 7.750% per annum or more than the lesser of 10.000% per annum or the maximum rate allowed by
applicable law. 
  
 PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees
that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. In any event,
even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $100.00. Other than Borrower’s obligation to pay any minimum interest charge, 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 payments of accrued unpaid interest. 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: Savings Bank of Mendocino County, Main Office, PO BOX 3600, 200 N
SCHOOL ST, UKIAH, CA 95482. 
  
 LATE CHARGE. If a payment is 10 days or
more late, Borrower will be charged $10.00. 
  
 INTEREST AFTER DEFAULT.
Upon default, the total sum due under this Note will bear interest at the interest rate on this Note. 
  
 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 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 

 LOAN REQUEST SUMMARY 
  

															
	 Principal

	 	 Loan Date

	 	 Maturity

	  	Loan No

	  	Call/ Coll

	  	Account

	  	Officer

	  	Initials

	 $30,000.00
	 	11-19-2004	 	11-19-2005	  	7010042309	  	24/210	  	00000000074018	  	TEB	  	 

  
 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. 
  

							
	 Borrower:
	  	 Thanksgiving Coffee Company, Inc.
 PO BOX 1918

FORT BRAGG, CA 95437
	  	Lender:	  	 Savings Bank of Mendocino County
 Main Office

PO BOX 3600
 200 N SCHOOL ST
 UKIAH, CA 95482

  
 REVOLVING LINE OF
CREDIT 
 (Variable Rate) 
  
  
  
  

							
	 	  	Financed

	  	In Cash

	 AMOUNT REQUESTED:
	  	$	30,000.00	  	 	 
	 PREPAID FINANCE CHARGES:
	  	 	 	  	 	 
	 LOAN DOCUMENTATION FEE
	  	 	 	  	 	250.00
	 SECURITY INTEREST CHARGES:
	  	 	0.00	  	 	 
	 	  	
	
	  	
	

	 NOTE AMOUNT:
	  	$	30,000.00	  	$	250.00

  
 PAYMENT CALCULATION:

  

			
	 Interest Method:
	  	365/365
	 Disbursement Date:
	  	11-19-2004
	 First Int Payment Date:
	  	01-01-2005
	 Due Date:
	  	11-19-2005
	 Int Payment Period:
	  	Monthly
	 Variable Interest Rate:
	  	8.000
	 Credit Insurance:
	  	None

  
 Payment Schedule.
Borrower’s payment schedule consists of 11 monthly consecutive payments, beginning January 1, 2005, with interest calculated on the unpaid principal balances at an interest rate based on the Savings Bank of Mendocino County’s Base
Commercial Rate (currently 5.000%), plus a margin of 3.000%, resulting in an initial interest rate of 8.000%; and one payment of $30,059.18 on November 19, 2005, with interest calculated on the unpaid principal balances at an interest rate based on
the Savings Bank of Mendocino County’s Base Commercial Rate (currently 5.000%), plus a margin of 3.000%, resulting in an initial interest rate of 8.000%. This estimated final payment is based on the assumption that all payments will be made
exactly as scheduled and that the Index does not change; the actual final payment will be for all principal and accrued interest not yet paid, together with any other unpaid amounts under the Note. 
  

									
	 	  	 APR

	  	 FINANCE CHARGE

	  	 AMOUNT FINANCED

	  	 TOTAL OF PAYMENTS

	 e
	  	 9.828%
	  	$1,449.61	  	$29,750.00	  	$31,199.61

	e	means estimate 

  
 COLLATERAL: UCC - Financing Statement Collateral. 
  
 TRANSACTION NUMBER: 42171 
  

			
	 NOTICE:
	  	This Loan Request Summary is for informational purposes only and does not obligate Lender in any way to make this loan or any other loan to Borrower. The fees and charges listed above are
estimates only; and, if a loan is made, different or additional fees and charges may be imposed.

					
	Loan No: 7010042309	 	 PROMISSORY NOTE
 (Continued)
	 	Page 2

  
 event of a death,
Lender, at its option, may, but shall not be required to, permit the Guarantor’s estate 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 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 compliance 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 attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit,
including attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. 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 California. This Note has been accepted by Lender in the State of California. 
  
 CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of MENDOCINO County, State of
California. 
  
 DISHONORED ITEM FEE. Borrower will pay a fee to Lender of
$10.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored. 
  
 LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower’s accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the
instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records,
including dally computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s
guarantee of this Note or any other loan with Lender; or (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender. 
  
 ADDITIONAL PROVISIONS. THIS NOTE IS SECURED BY A COMMERCIAL SECURITY AGREEMENT DATED 11/19/2004. 
  
 DISPUTE RESOLUTION. Borrower and Lender desire to resolve quickly and efficiently any
disputes that might arise between them. For any controversy, claim or judicial action arising from or relating to this Note or any related agreement, transaction or conduct, whether sounding in contract tort or otherwise: Judicial Reference. Where
an action is pending before a court of any judicial district of the State of California, Borrower and Lender shall each have the right to require that all questions of fact or law be submitted to general reference pursuant to California Code of
Civil Procedure Section 638 et seq., and any successor statutes thereto. (1) A single referee who is a retired superior court judge shall be appointed by the court pursuant to Code of Civil Procedure 640 and shall preside over the reference
proceeding. If Borrower and Lender do not agree upon the referee, each of them may submit to the court up to three nominees who are retired superior court judges. (2) If Borrower and Lender do not agree on how the payment of the referee’s fees
and expenses will be shared, the court may apportion such fees and expenses between Borrower and Lender in a fair and reasonable manner that is consistent with Code of Civil Procedure Section 645.1. (3) Borrower and Lender shall be entitled to
discovery, and the referee shall oversee discovery and may enforce all discovery orders in the same manner as any trial court judge. (4) The referee’s statement of decision shall contain written findings of fact and conclusions of law, and the
court shall enter judgment thereon pursuant to Code of Civil Procedure Sections 644(a) and 645. The decision of the referee shall then be appealable as if made by the court. No provision of this section shall limit the right of any party to exercise
self-help remedies, to foreclose against or sell any real or personal property collateral or to obtain provisional or ancillary remedies, such as injunctive relief or appointment of a receiver, from a court of competent jurisdiction before, after,
or during the pendency of any reference proceeding. The exercise of a remedy does not waive the right of either party to resort to reference. Jury Trial Waiver. In any action pending before any court of any jurisdiction, Borrower waives, and Lender
shall not have, any right to a jury trial. ATTORNEYS’ FEES. In any action arising from or relating to this Note and subject to any limits under applicable law, the prevailing party shall be entitled to reasonable attorneys’ fees in
accordance with California Civil Code Section 1717. Whether or not an action is involved, the expenses of Lender described in the paragraph of this Note titled “Expenses” include, without limitation, attorneys’ fees incurred by
Lender. 
  
 SUCCESSOR INTERESTS. The terms of this Note shall be binding
upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. 
  
 NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate
information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: Savings Bank of Mendocino County 200 N SCHOOL ST UKIAH, CA 95482 

 
 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 any applicable statute of limitations, 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
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. 

					
	 	 	PROMISSORY NOTE	 	 
	Loan No: 7010042309	 	(Continued)	 	Page 3

  
 PRIOR TO SIGNING THIS NOTE,
BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. 
  
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. 
  

BORROWER: 
  
 THANKSGIVING COFFEE COMPANY, INC. 
  

							
	By:	 	 COPY

	 	By:	 	 COPY

	 	 	 Joan Katzeff, President of Thanksgiving Coffee
 Company,
Inc.
	 	 	 	 Paul Katzeff, Secretary of Thanksgiving Coffee
 Company,
Inc.Amendment to Employee Agreement

 Exhibit 10(c) 
  
 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT 
  
 THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amended Agreement”) is made and entered into as of June
    , 2004, by and between First Century Bankshares, Inc. (the “Company”) and Byron K. Satterfield (the “Executive”); 
  
 WHEREAS, Company and Executive entered into an Employment Agreement dated as of January 10, 2002 (the “Employment
Agreement”); 
  
 WHEREAS, pursuant to the Employment
Agreement, Company agreed that beginning on April 2, 2004, and continuing until April 1, 2009 (the “Consulting Period”), the Company would retain Executive part-time as a consultant for the Company performing certain tasks as set forth in
Section 2(c) of the Employment Agreement; and 
  
 WHEREAS, the
Company and the Executive desire to amend the Employment Agreement to clarify that during the Consultant Period, Executive will act as an independent contractor/consultant for the Company. 
  
 NOW, THEREFORE, in consideration of the mutual promises and covenants made in
this Agreement, the parties agree as follows: 
  
 1.
Compensation. Paragraphs 3(b) and 3(c) shall be amended to read as follows: 
  

	 	(b)	Consulting Period Compensation. During the Consulting Period, Bank shall pay Executive compensation in the amount of $52,000 per year, payable in substantially equal monthly
installments. 

  

	 	(c)	Additional Compensation in the Event of Death or Disability. In the event of the death or disability of Executive during the Term, Executive or his estate shall be entitled
to compensation in the amount of $260,000 to be paid in five equal annual installments of $52,000 each. In the event of the death or disability of the Executive during the Consulting Period, Executive or his estate shall be entitled to the
difference between $260,000 and the gross amount of compensation paid to Executive pursuant to Section 3(b) above. The first annual installment of payments hereunder shall be due no later than six (6) months after the date of Executive’s death
or disability. 

  
 2. Independent Contractor.
Paragraph 9 shall be amended to include a new paragraph (h) which shall provide as follows: 
  
 (h) Independent Contractor. It is understood that at all times during the Consulting Period, Executive shall be deemed to be an independent contractor, and is not an employee, agent, partner or representative
of the Company, and shall not hold himself out to the public as an employee, agent, partner or representative of the Company. As such, Executive is responsible at his sole cost, to secure professional and general liability insurance, Workers’
Compensation insurance, disability benefits insurance and any other insurance as may be required by law, except for health insurance, which shall be provided as set forth in Exhibit A of the Employment Agreement. 
  
 3. Amendment to Exhibit A. Paragraph 3 entitled Defined Pension
Benefit Plant of Exhibit A shall be amended to include the following: 
  
 During the Consulting Period, Executive shall not be entitled to contribute to nor shall he be eligible to participate in the Company’s Defined Pension Benefit Plan and 401(k) Plan. For purposes of receipt of benefits under the
Company’s Defined Pension Benefit Plan and 401(k) Plan, Executive shall be deemed retired. 

 4. Amendment Controls Over Employment Agreement. Unless otherwise expressly amended herein, all
terms and conditions of the Employment Agreement remain in full force and effect. This Amendment shall control to the extent any conflict or ambiguity arises between the Employment Agreement and/or this Amendment. 
  

			
	FIRST CENTURY BANKSHARES, INC.
		
	By:	 	  

	Its:	 	  

	
	  

	Byron K. Satterfield

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