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EXHIBIT 10.1
PROMISSORY NOTE
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(line of credit)
$1,100,000 December 6, 1996
FOR VALUE RECEIVED, the undersigned, ARNOLD PALMER GOLF COMPANY
(hereinafter referred to as "Borrower"), promises to pay to the order of JOHN
T. LUPTON (hereinafter referred to as "Lender") and any subsequent holder(s)
hereof (Lender and any subsequent holder being hereinafter referred to
collectively as "Holder"), at the office of Lender at 702 Tallan Building, Two
Union Square, Chattanooga, Tennessee 37402 or at such other place as Holder may
designate to Borrower in writing from time to time, the principal sum of One
Million One Hundred Thousand Dollars ($1,100,000), or the aggregate unpaid
principal amount of all advances made by Lender to the Borrower (which
aggregate unpaid principal amount shall be equal to the amount duly endorsed
and set forth opposite the date last appearing on the sheet attached to this
Note), whichever is less. Borrower may borrow, repay and reborrow up to One
Million One Hundred Thousand Dollars ($1,100,000) from time to time under this
Note provided Borrower is not in default in the payment of principal and
interest hereunder and no other event of default exists under this Note at the
time. The aggregate principal amount of each Borrowing under this Note shall
not be less than $1,000 and shall be in integral multiples of $1,000. The
proceeds of the borrowings under this Note will be used by the Borrower solely
to provide working capital. Interest shall be paid at maturity on the
outstanding balance of such principal sum at the Northern Trust Company prime
based rate less .25% as announced by Norther Trust Company from time to time.
The entire outstanding principal balance hereof together with accrued
interest, and all other sums owing hereunder, shall be due and payable in full
on January 31, 1997, if not sooner paid.
All payments hereon shall be credited first to interest due hereunder,
and thereafter to the reduction of the principal balance and other sums, if
any, due hereunder, until the full amount of the principal, interest and other
sums, if any, have been paid in full.
This Note may be prepaid in whole or in part at any time without
premium or penalty.
The occurrence of any one or more of the following shall constitute a
default hereunder (herein a "Default" or an "Event of Default"): (1) The
Borrower shall fail to pay when due any interest or principal payable
hereunder; (2) The Borrower shall admit its
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inability to pay its debts as they mature or shall make an assignment for the
benefit of any of its creditors; (3) A voluntary or involuntary petition in
bankruptcy or receivership shall be filed by or against the Borrower; or (4)
The Borrower shall fail to pay any indebtedness for borrowed money due to any
third person and such failure shall continue beyond any applicable grace
period. Should any Event of Default occur, the unpaid principal balance and
all accrued interest owing under this Note shall, at the option of the Holder
of the Note, become immediately due and payable.
Such due principal and (to the extent legally enforceable) interest
hereof shall bear interest from the due date thereof until paid at the maximum
legal rate permitted under the laws of the State of Tennessee for obligations
of this type. Anything herein to the contrary notwithstanding, the obligations
of the Borrower under this Note shall be subject to the limitation that
payments of interest shall not be required to the extent that receipt of any
such payment by the Holder would be contrary to provisions of law applicable to
the Holder limiting the maximum rate of interest which may be charged or
collected by the Holder.
Time is of the essence of this Note.
In the event this Note or any part thereof is collected by or through
an attorney at law, Borrower agrees to pay all costs of collection, including
but not limited to, reasonable attorney's fees and court costs.
Presentment for payment, demand, protest and notice of demand, protest
and nonpayment and all other notices are hereby waived by Borrower. No failure
to accelerate the debt evidenced hereby by reason of default hereunder,
acceptance of a past due installment, or indulgences granted from time to time
shall be construed (i) as a novation of this Note or as a reinstatement of the
indebtedness evidenced hereby or as a waiver of such right of acceleration or
of the right of Holder thereafter to insist upon strict compliance with the
terms of this Note, or (ii) to prevent the exercise of such right of
acceleration or any other right granted hereunder or by the laws of the State
of Tennessee; and Borrower hereby expressly waives the benefit of any statute
or rule of law or equity now provided, or which may hereafter be provided,
which would produce a result contrary to or in conflict with the foregoing. No
extension of time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for the
payment of this Note shall operate to release, discharge, modify, change or
affect the original liability of Borrower under this Note, either in whole or
in part unless Holder agrees otherwise in writing. This Note may not be
changed orally, but only in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
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This Note is intended as a contract under and shall be construed and
enforceable (both as to validity and performance) in accordance with the laws
of the State of Tennessee.
Whenever possible, each provision of this instrument shall be
interpreted in such manner as to be effective and valid under enforceable law,
but if any provision of this instrument shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this instrument.
As used herein the terms "Borrower" and "Holder" shall be deemed to
include their respective heirs, successors, legal representatives and assigns,
whether by voluntary action of the parties or by operation of law.
IN WITNESS WHEREOF, Borrower has executed this Note to be effective as
of the date first above written.
BORROWER:
ARNOLD PALMER GOLF COMPANY
By: /s/ George H. Nichols
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Title: President & C.O.O.
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