PROMISSORY NOTE
- --------------- -------------- -------------- -------------- ------------- -------------- ------------- -------------- -------------
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$137,500.00 05-01-1998 05-01-2003 bl13711 1E 10 OLS
- --------------- -------------- -------------- -------------- ------------- -------------- ------------- -------------- -------------
Reference 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.
- --------------------------------------------------------------------------------
Borrower: Spurlock Adhesives, Inc. (TIN: 54-1522700) Lender: JAMES RIVER BANK
P.O. Box 8 MAIN OFFICE
Waverly, VA 23890 209 W MAIN STREET
P. O. BOX 47
WAVERLY, VA 23890-0047
================================================================================
Principal Amount: $137,500.00 Interest Rate: 8.250% Date of Note: May 1, 1998
PROMISE TO PAY. Spurlock Adhesives, Inc. ("Borrower') promises to pay to JAMES
RIVER BANK ("Lender"), or order, in lawful money of the United States of
America, the principal amount of One Hundred Thirty Seven Thousand Five Hundred
& 00/100 Dollars ($137,500.00), together with interest at the rate of 8.250% per
annum on the unpaid principal balance from May 1, 1998, until paid in full.
PAYMENT. Borrower will pay this loan In 59 regular payments of $1,334.23 each
and one irregular last payment estimated at $110,091.79 Borrower's first payment
is due June 1, 1998, and all subsequent payments are due on the same day of each
month after that. Borrower's final payment due May 1, 2003, will be for all
principal, accrued interest, and all other applicable fees, costs and charges,
if any, not yet paid Payments include principal and interest. 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. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal and
any remaining amount to any unpaid collection costs and late charges.
PREPAYMENT. Borrower may pay 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 under the payment
schedule. Rather, they will reduce the principal balance due and may result in
Borrower making fewer payments.
LATE CHARGE. If a payment is 7 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $50.00, whichever is less.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower' property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired. (i) Lender
in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest, together with all other
applicable fees, costs and charges, if any, immediately due and payable, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the interest rate on the Note 4.000 percentage points.
The interest rate will not exceed the maximum rate permitted by applicable law.
Furthermore, subject to any limits under applicable law, upon default, Borrower
also agrees to pay Lender's attorney fees equal to 25.000% of the principal
balance due on the Note, and all of Lender's other collection expenses, whether
or not there is a lawsuit and including without limitation legal expenses for
bankruptcy proceedings. The Note shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Virginia. Lender and Borrower
hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either party against the other.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $24.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keog accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Note against any and all such accounts, and, at
Lender's option, to administratively freeze all such accounts to allow Lender to
protect Lender's charge and setoff rights provided on this paragraph.
COLLATERAL. This Note is secured by COMMERCIAL DEED OF TRUST AS RECORDED IN THE
CLERK'S OFFICE OF THE CIRCUIT COURT OF SUSSEX COUNTY, VIRGINIA ON PROPERTY
LOCATED AT 125 BANK STREET, WAVERLY, VA.
05-01-1998 PROMISSORY NOTE Page 2
Loan No bl13711 (Continued)
================================================================================
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and an other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest 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 to 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.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.
BORROWER:
Spurlock Adhesives, Inc.
By: /s/ Phillip S. Sumpter (SEAL) By: /s/ Irvine R. Spurlock (SEAL)
-------------------------------------- -----------------------------------------
PHILLIP S. SUMPTER, CHAIRMAN AND CEO IRVINE R. SPURLOCK, PRESIDENT
================================================================================
ALL that certain lot piece or parcel of land lying and being situate on the East
side of Bank Street in the town of Waverly, Sussex County, Virginia, and
containing 0.506 acres, more or less, and being shown and designated on a
certain plat of survey entitled "SURVEY AND PLAT OF PROPERTY BELONGING TO THE
TOWN OF WAVERLY', made by Lee B. Carpenter, Certified Surveyor, September 21,
1959, which said plat of survey is duly recorded in the Clerk's Office of the
Circuit Court of Sussex County, Virginia in Plat Book 10 at page 80 and
reference to which is heremade for a more full and complete description.
LESS, SAVE, AND EXCEPT a small triangle of land containing 718.3 square feet
conveyed to Commonwealth of Virginia, Department of Conservation and Economic
Development, Division of Forestry, by deed dated 28 January, 1960, and duly
recorded in the Clerk's Office of the Circuit Court of Sussex County, Virginia
in Deed Book 59 at page 451, with plat attached and recorded in Plat Book 10 at
page 95.
IT BEING the same and identical property conveyed from James River Bank to
Spurlock Adhesives, Inc., by deed dated 29 April 1998 and to be recorded in the
Clerk's Office of the Circuit Court of Sussex County, Virginia.
ALL that certain lot, piece or parcel of land lying and being situate on the
East side of Bank Street in the town of Waverly, Sussex County, Virginia, and
containing 0.506 acres, more or less, and being shown and designated on a
certain plat of survey entitled "SURVEY AND PLAT OF PROPERTY BELONGING TO THE
TOWN OF WAVERLY, made by Lee B. Carpenter, Certified Surveyor, September 21,
1959, which said plat of survey is duly recorded in the Clerk's Office of the
Circuit Court of Sussex County, Virginia in Plat Book 10 at page 80 and
reference to which is heremade for a more full and complete description.
LESS, SAVE, AND EXCEPT a small triangle of land containing 718.3 square feet
conveyed to Commonwealth of Virginia, Department of Conservation and Economic
Development, Division of Forestry, by deed dated 28 January, 1960, and duly
recorded in the Clerk's Office of the Circuit Court of Sussex County, Virginia
in Deed Book 59 at page 451, with plat attached and recorded in Plat Book 10 at
page 95.
IT BEING the same and identical property conveyed from James River Bank to
Spurlock Adhesives, Inc., by deed dated 29 April 1998 and to be recorded in the
Clerk's Office of the Circuit Court of Sussex County, Virginia.
VIRGINIA: In the Clerk's Office of the Circuit Court of Sussex County. The
foregoing instrument was this day presented in the office aforesaid and is,
together with the certificate of acknowledgment annexed, admitted to record this
____ day of ______________, 19__ at _______ p.m.
TESTE: ____________________________ Clerk