Document:

EX-10.3 COMMERCIAL PROMISSORY NOTE

EXHIBIT 10.3

	 	 	 
	COMMERCIAL PROMISSORY NOTE

	 	Nexity Bank
	 

	 	3500 Blue Lake Drive, Suite 330
	 

	 	Birmingham, Alabama 35243
	 

	 	(877)738-6391

	 	 	 	 	 	 	 
	NOTE DATE	 	PRINCIPAL AMOUNT	 	LOAN TERM	 	MATURITY DATE
	February 6, 2007
	 	$400,000.00
	 	12 months
	 	February 6, 2008
	 
	 	 
	 	 
	 	 

			
	LOAN PURPOSE: Provide funds for bank in Organization	 	 

BORROWER INFORMATION

Home Federal Savings Bank

4405 Mundy Mill Road

Oakwood, GA 30566

NOTE. This Commercial Promissory Note will be referred to in this document as the “Note”.

LENDER. “Lender” means Nexity Bank whose address is 3500 Blue Lake Drive, Suite 330, Birmingham,
Alabama 35243, its successors and assigns.

BORROWER. “Borrower” means each person or legal entity who signs this Note.

PROMISE TO PAY. For value received, receipt of which is hereby acknowledged, on or before the
Maturity Date, the Borrower promises to pay the principal amount of Four Hundred Thousand and
00/100 Dollars ($400,000 00) or such lesser amount as shall have been advanced by Lender, from time
to time, to or on behalf of Borrower under the terms of this Note, and all interest and any other
charges, including service charges, to the order of lender at its office at the address noted above
or at such other place as Lender may designate in writing. The Borrower will make all payments in
lawful money of the United States of America.

PAYMENT SCHEDULE. This loan will be paid according to the following schedule: 11 consecutive
payments of Interest only beginning on March 6, 2007 and continuing on the same day of each month
thereafter. One final payment shall be due on the Maturity Date in an amount equal to the then
unpaid principal and accrued and unpaid interest. All payments received by the Lender from the
Borrower for application to the Loan may be applied to the Borrower’s obligations under the Loan in
such order as determined by the Lender.

INTEREST RATE AND SCHEDULED PAYMENT CHANGES. The initial variable interest rate on this Note will
be 7.250% per annum. This interest rate may change on February 7, 2007 and every day thereafter.
Each date on which the interest rate may change is called the “Change Date.” Beginning with the
first Change Date, Lender will calculate the new interest rate based on Wall Street Journal Prime
in effect on the Change Date (the “Index”) minus 1.000 percentage points (the “Margin”). If the
Index is not available at that time, Lender will choose a new Index which is based on comparable
information The Index is used solely to establish a base from which the actual rate of interest
payable under this Note will be calculated, and is not a reference to any actual rate of interest
charged by any lender to any particular borrower. The interest rate will never be greater than 18
000% or less than 0.000%.

Nothing contained herein shall be construed as to require the Borrower to pay interest at a greater
rate than the maximum allowed by law. If, however, from any circumstances, Borrower pays interest
at a greater rate than the maximum allowed by law, the obligation to be fulfilled will be reduced
to an amount computed at the highest rate of interest permissible under applicable law and if, for
any reason whatsoever, Lender ever receives interest in an amount which would be deemed unlawful
under applicable law, such interest shall be automatically applied to amounts owed, in Lenders sole
discretion, or as otherwise allowed by applicable law. An increase in the interest rates will
result in a higher payment amount. Interest on this Note is calculated on a 365/360 day basis The
unpaid balance of this loan shall, while any Event of Default exists under this Note or any other
agreement related to the loan, be subject to a Default Rate of interest equal to 18.000% per annum,
and after Maturity, whether by acceleration or otherwise, shall be subject to a Post-Maturity Rate
of interest equal to the same fixed or variable rate basis in effect before maturity.

LATE PAYMENT CHARGE. If any required payment is mare than 15 days late, then at Lender’s option,
Lender will assess a late payment charge of $25.00 or 5.000% of the amount past due, whichever is
greater.

PREPAYMENT PENALTY. This Note may be prepaid, in full or in part, at any time, without penalty.

ADVANCES. This is a Multiple Advance-Closed End Term Loan. The Borrower and lender agree that the
Borrower may borrow up to the maximum amount of principal only one time. Principal advances will
be made to the Borrower provided none of the following conditions exist:

	 	•	 	Maximum amount on this Note is outstanding
	 
	 	•	 	Undersigned has breached any of the terms, provisions, representations,
requirements or promises contained in this Note or any other agreement

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	 	•	 	Undersigned makes a request for an advance after the Maturity Date cited above
	 
	 	•	 	The Note or any other agreement relating to the extension of credit is in default
	 
	 	•	 	The Lender his deemed itself insecure or there has been a material adverse change
of conditions
	 
	 	•	 	the Lender is precluded by law from making the advance

Advances under this Note may be requested orally or in writing by the Borrower or by an authorized
person.

The total of any advance requested and unpaid principal cannot exceed the available principal
amount. The available principal amount refers to the principal amount minus the aggregate amount of
outstanding advances, accrued but unpaid interest and outstanding fees and charges.

All advances made will be charged to a loan account in Borrower’s name on Lender’s books, and the
Lender shall debit in such account the amount of each advance made to, and credit to such account
the amount of each repayment made by Borrower. The Lender shall provide to Borrower periodic
statements of Borrower’s loan account, which shall be deemed to be correct, accepted by, and
binding upon Borrower unless Lender receives a written statement of exception from Borrower within
10 days after such statement is furnished.

RIGHT OF SET OFF. To the extent permitted by law, Borrower agrees that Lender has the right to set
off any amount due and payable under this Note, whether matured or unmatured, against any amount
owing by Lender to Borrower including any or all of Borrower’s accounts with Lender. This shall
include all accounts Borrower holds jointly with someone else and all accounts Borrower may open in
the future. Such right of setoff may be exercised by Lender against Borrower or against any
assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor of
Borrower, or against anyone else claiming through or against Borrower of such assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of setoff has not been exercised by Lender prior to the making, filing or
issuance or service upon Lender of or of notice of, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of execution, subpoena or
order or warrant.

DISHONORED ITEM FEE. If Borrower makes a payment on the loan with a cheek or preauthorized charge
which is later dishonored, a fee in the amount of $25.00 will be charged.

DEFAULT. Upon the occurrence of any one of the following events (each, an “Event of Default” or
“default” or “event of default”), Lender’s obligations, if any, to make any advances will, at
Lender’s option, immediately terminate and Lender, at its option, may declare all indebtedness of
Borrower to Lender under this Note to be immediately due and payable without further notice of any
kind notwithstanding anything to the contrary in this Note or any other agreement: (a) Borrower’s
failure to make any payment on time or in the amount due; (b) any default by Borrower under the
terms of this Note or any other agreement, security agreement executed in connection with this Note
(individually, a “Loan Document” and collectively, the “Loan Documents”); (c) any default by
Borrower under the terms of any other loan agreement, security agreement, mortgage or other
document in favor of Lender; (d) the death, dissolution, or termination of existence of Borrower or
any guarantor; (e) Borrower is generally not paying Borrower’s debts as such debts become due; (f)
the commencement of any proceeding under bankruptcy or insolvency laws by or against Borrower or
any guarantor or the appointment of a receiver; (g) any default under the terms of any other
indebtedness of Borrower to any other creditor; (h) any writ of attachment, garnishment, execution,
tax lien or similar instrument is issued against any collateral securing the loan, if any, or any
of Borrower’s property or any judgment is entered against Borrower or any guarantor; (i) any part
of Borrower’s business is sold to or merged with any other business, individual, or entity; (j) any
representation or warranty made by Borrower to Lender in any of the Loan Documents or any financial
statement delivered to Lender proves to have been false in any material respect as of the time when
made or given; (k) if any guarantor, or any other party to any agreement or instrument with or in
favor of Lender entered into or delivered in connection with the Loan terminates, attempts to
terminate or defaults under any such agreement or instrument; (l) Lender has deemed itself insecure
or there has been a material adverse change of condition of the financial prospects of Borrower or
any collateral securing the obligations owing to Lender by Borrower.

OTHER APPLICABLE AGREEMENTS. If this Note is secured by a security agreement, mortgage, deed of
trust, trust deed, security deed or loan agreement of even or previous date, it is subject to all
the terms thereof.

GENERAL WAIVERS. To the extent permitted by law, the Borrower severally waives any required notice
of presentment, demand, acceleration, intent to accelerate, protest and any other notice and
defense due to extensions of time or other indulgence by Lender or to any substitution or release
of collateral. No failure or delay on the part of Lender, and no course of dealing between
Borrower and Lender, shall operate as a waiver of such power or right, nor shall any single or
partial exercise of any power or right preclude other or further exercise thereof or the exercise
of any other power or right.

JOINT AND SEVERAL LIABILITY. If permitted by law, each Borrower executing this Note is jointly and
severally bound.

SEVERABILITY. If a court of competent jurisdiction determines any term or provision of this Note is
invalid or prohibited by applicable law, that term or provision will be ineffective to the extent
required. Any term or provision that has been determined to be invalid or prohibited will be
severed from the rest of this Note without invalidating the remainder of either the affected
provision or this Note.

SURVIVAL. The rights and privileges of the Lender hereunder shall inure to the benefits of its
successors and assigns, and this Note shall be binding on all heirs, executors, administrators,
assigns and successors of Borrower.

ASSIGNABILITY. Lender may assign, pledge or otherwise transfer this Note or any of its rights and
powers under this Note without notice, with all or any of the obligations owing to Lender by
Borrower, and in such event the assignee shall have the same rights as if originally named

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herein in place of Lender. Borrower may not assign this Note or any benefit accruing to it
hereunder without the express written consent of the Lender.

ORAL AGREEMENTS DISCLAIMER. This Note represents the final agreement between the parties and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.

GOVERNING LAW. This Note is governed by the laws of the state of Alabama except to the extent that
federal law controls.

HEADING AND GENDER. The headings preceding text in this Note are for general convenience in
identifying subject matter, but have no limiting impact on the text which follows any particular
heading. All words used in this Note shall be construed to be of such gender or number as the
circumstances require.

ATTORNEYS’ FEES AND OTHER COSTS. If legal proceedings are instituted to enforce the terms of this
Note, Borrower agrees to pay all of the costs of the Lender in connection therewith, including
reasonable attorneys’ fees, to the extent permitted by law.

WAIVER OF JURY TRIAL. All parties to this Note hereby waive, to the fullest extent permitted by
law, any right to trial by jury with respect to any dispute, whether in contract, tort, or
otherwise, arising out of, in connection with, related to, or incidental to the relationship
established between them in this Note or any other instrument, document, or agreement executed or
delivered in connection herewith or the transaction related hereto.

By signing this Note, Borrower acknowledges reading, understanding, and agreeing to all its
provisions. CAUTION — IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT.

Home Federal Savings Bank

	 	 	 	 	 	 	 
	/s/ Gary H. Anderson
 

By:  Gary H. Anderson	
2/6/07 

Date
	 	/s/ Alfred J. Couch
 

By:  Alfred J. Couch
	2/6/07 

Date
	Its:  Organizer/Manager	 	 	 	Its:  Organizer	 	 
	/s/ James Bryan House
 

By:  James Bryan House	
2/6/07 

Date
	 	/s/ Larry S. Bullock
 

By:  Larry S. Bullock
	2/6/07 

Date
	Its:  Organizer	 	 	 	Its:  Organizer	 	 
	/s/ Randall L. Crow
 

By:  Randall L. Crow	
2/6/07 

Date
	 	/s/ William G. Ruppenthal
 

By:  William G. Ruppenthal
	2/6/07 

Date
	Its:  Organizer	 	 	 	Its:  Organizer	 	 
	/s/ Ricky Dale Davis
 

By:  Ricky Dale Davis	
2/6/07 

Date
	 	/s/ Gary James Wytiaz
 

By:  Gary James Wytiaz
	2/6/07 

Date
	Its:  Organizer	 	 	 	Its:  Organizer	 	 
	/s/ Phillip J. Markert
 

By:  Phillip J. Markert	
2/6/07 

Date	 	 	 	 
	Its:  Organizer	 	 	 	 	 	 

Page 3 of 3EX-10.4 ORGANIZING LINE OF CREDIT

EXHIBIT 10.4

	 	 	 
	CHANGE IN TERMS AGREEMENT

	 	Nexity Bank

3500 Blue Lake Drive, Suite 330

Birmingham, Alabama 35243

(877)738-6391

	 	 	 	 	 	 	 
	LINE OF CREDIT LIMIT
	 	CURRENT LINE OF

CREDIT BALANCE
	 	ORIGINAL AGREEMENT

DATE
	 	AGREEMENT CHANGE DATE
	 
	 	 
	 	 
	 	 
	$750,000.00
	 	$311,075.19
	 	February 6, 2007
	 	September 18, 2007
	 
	 	 
	 	 
	 	 

DESCRIPTION OF THE EXISTING DEBT (“Credit Line”)

Promissory Note in the amount of $400,000.00 dated February 6, 2007

BORROWER INFORMATION

HFHC Group, LLC d/b/a F/K/A Home Federal Savings Bank

4405 Mundy Mill Road

Oakwood, GA 30566

BORROWER The term “Borrower” means each party identified above.

LENDER The term “Lender” means Nexity Bank whose address is 3500 Blue Lake Drive, Suite 330,
Birmingham, Alabama 35243, its successors and assigns.

TERMS AND PROVISIONS In consideration of the promises contained in this Agreement and in the
instruments evidencing the Credit Line, and of other good and valuable consideration, the
sufficiency of which is acknowledged by the execution of this Agreement, Borrower agrees to the
following provisions:

	 	1.	 	The instrument evidencing the Credit Line is modified and supplemented as
follows:
	 
	 	 	 	To increase loan #3000003378 by an additional $350,000.00. Two guarantors; Gary H.
Anderson & Bryan House will be released from the line. The maturity date will be
extended to June 6, 2008.

	 	2.	 	Ratification and Continued Validity. Except for the terms expressly modified by
this Agreement, by signing this Agreement, Borrower acknowledges that Borrower is still
bound by the terms of the instruments arid prior modifications, extensions, and
supplements evidencing the Credit Line as if they were fully set forth and repeated in
this Agreement and that those terms will continue to bind Borrower as provided in this
Agreement and those instruments. Lender’s consent to this Agreement does not waive the
right to strictly enforce Lender’s rights under this Agreement or the instruments
evidencing the Credit Line. Lenders consent to this Agreement does not mean that Lender
must enter into another agreement like this one in the future. Lender and Borrower
intend that this Agreement does not replace the Credit Line but restates it as modified.

	 	3.	 	Others Responsible for the Debt. Lender and Borrower intend that anyone else who
is liable for the Credit Line, including, without limitation, cosigners, guarantors, and
coborrowers, are not relieved of any obligation except as expressly relieved in this
Agreement or other writing Borrower agrees that the liability of each person who signed
the instruments evidencing the Credit Line, whether primary or secondary, continues in
full force and effect, even if that person does not sign this Agreement. This promise
applies not only to this Agreement but also to any extension, modification, or other
agreement Borrower makes with Lender that represents a debt which includes cosigners,
guarantors, coborrowers, and others having similar liability. Borrower understands that
this Agreement is contingent on the continued liability of each person who signed the
documents evidencing the Credit Line, whether or not that person signs this Agreement.

	 	4.	 	Pronouns and Gender. In this Agreement, whenever the circumstances or the
context so requires, the singular shall be construed as the plural., the masculine shall
be construed as the feminine and/or the neuter and vice versa.

	 	5.	 	Miscellaneous Terms. Borrower agrees that if Lender delays or forgoes enforcing
Lender’s rights under this Agreement in any particular instance, Lender retains the
right to strictly enforce the same provision in any other instance, or later in the same
instance. Every person signing this Agreement waives, to the extent allowed by law,
presentment, demand, protest, and notice of dishonor. Every person signing this
Agreement agrees that Lender may renew, extend, supplement, or otherwise modify the debt
represented by this Agreement and the documents evidencing the Credit Line without the
permission of any other person who is liable, and such modification will not release or
reduce the liability of any party, even if that party does not sign this Agreement.

ORAL AGREEMENTS DISCLAIMER. This Agreement represents the final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.

Page 1 of 2

 

By signing this Change In Terms Agreement, each Borrower acknowledges reading, understanding, and
agreeing to all its provisions, and receiving a copy.

HFHC Group, LLC d/b/a F/K/A Home Federal Savings Bank

	 	 	 	 	 	 	 
	/s/ Alfred J. Couch
 

By:  Alfred J. Couch

Its:  President/CEO	 

	9/18/07  

Date	 	/s/ John W. Bailey
 

By:  John W. Bailey

Its:  Organizer
	 

	9/18/07  

Date
	/s/ Larry S. Bullock
 

By:  Larry S. Bullock

Its:  Organizer	 

	9/21/07  

Date	 	/s/ Randall L. Crow
 

By:  Randall L. Crow

Its:  Organizer
	 

	9/18/07  

Date
	/s/ William G. Ruppenthal
 

By:  William G. Ruppenthal

Its:  Organizer	 

	9/18/07  

Date	 	/s/ Ricky Dale Davis
 

By:  Ricky Dale Davis

Its:  Organizer
	 

	9/20/07  

Date
	/s/ Gary James Wytiaz
 

By:  Gary James Wytiaz

Its:  Organizer	 

	9/21/07  

Date	 	/s/ Phillip J. Markert
 

By:  Phillip J. Markert

Its:  Organizer
	 

	9/20/07  

Date
	/s/ Lawrence R. Dunn
 

By:  Lawrence R. Dunn

Its:  Organizer	 

	9/27/07  

Date	 	/s/ John King Bailey
 

By:  John King Bailey

Its:  Organizer
	 

	9/27/07  

Date
	/s/ William Richard Clarke
 

By:  William Richard Clarke

Its:  Organizer	 

	10/3/07  

Date	 	/s/ William Gary Bagwell
 

By:  William Gary Bagwell

Its:  Organizer
	 

	9/21/07  

Date
	/s/ Daniel Olejnik
 

By:  Daniel Olejnik

Its:  Organizer	 

	9/27/07  

Date	 	/s/ Trent Peter Gaites
 

By:  Trent Peter Gaites

Its:  Organizer
	 

	9/19/07  

Date
	/s/ John Alan Drillot
 

By:  John Alan Drillot

Its:  Organizer	 

	10/4/07  

Date	 	/s/ Nancy Parker Pegg
 

By:  Nancy Parker Pegg

Its:  Organizer
	 

	9/28/07  

Date

By signing this Change in Terms Agreement, Lender acknowledges, reading, understanding, and
agreeing to all its provisions.

Nexity Bank

	 	 	 	 	 	 	 
	/s/ Jack Gardner
 

By:  Jack Gardner

Its:  SVP	 

	   

Date	 	 
	 	 
	/s/ Alfred C. Couch
 

Notary Public

My Commission Expires: 11/20/07

[NOTARY SEAL]	 

	   

 

	 	 	 	 

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