EXHIBIT 10.7
Peoples Bank Master Note
Newton, NC 28658 SIMPLE INTEREST
PROMISSORY NOTE
Debtor(s): Loan Number 101700168
SAGEBRUSH, INC. Date 01/31/1997
PO BOX 730 Loan Amount $3,000,000.00
CLAREMONT, NC 28610
FOR MONEY BORROWED the undersigned (hereinafter "debtor" whether one or more),
jointly and severally, promises to pay to PEOPLES BANK (hereinafter "Bank"), or
order, at any office of Bank, the principal sum of Three Million and 00/100
Dollars ($3,000,000.00), plus interest from and including Jan 31, 1997 at the
rate of Prime Rate (8.250%) per year, on the unpaid balance until paid.
All interest calculations shall be based on a 360 day year.
Payment shall be made as follows: One principal payment of $3,000,000.00 due
01/31/1998. Interest payable monthly on 03/01/1997 and on the same date of each
successive month thereafter to and including 01/31/1998.
In the event periodic accruals of interest shall exceed the periodic fixed
payment amount, the fixed payment amount shall be immediately increased, or
additional supplemental payments required on the same periodic basis as
specified herein (increased fixed payments or supplemental payments to be
determined in the Bank's sole discretion), in such amounts and at such times as
shall be necessary to pay all accruals of interest for the period and all
accruals of unpaid interest from previous periods. Such adjustments to the fixed
payment amount or supplemental payments shall remain in effect for so long as
the interest accruals shall exceed the original fixed payment amount and shall
be further adjusted upward or downward to reflect changes in the variable
interest rate. In no event shall the fixed payment amount be reduced below the
original fixed payment amount specified above.
This Promissory Noted is secured by dated .
As security for the payment of all present, existing or future debts to Bank,
Debtor hereby grants to Bank a security interest in all amounts on deposit with
the Bank or owed to Debtor by the Bank. The time for making payments is of the
essence. Unless otherwise agreed or required by law, each payment shall be
applied in such order and manner as the Bank may elect to unpaid interest, fees,
premiums, other charges and to principal. Prepayments may, at the Bank's
discretion, be applied in reverse order of the dates periodic payments are due.
The amount of any final payment or the number of payments required to pay the
indebtedness in full may differ from any payment schedule disclosed since the
schedule contemplates that all amounts will be paid on exact due dates, and
interest will accrue daily on the principal balance outstanding. If this
obligation has a variable rate, the payment schedule may be affected by a change
in the interest rate; however, notwithstanding any such change the rate will
not exceed the highest rate permitted by law. When used as a variable rate,
Peoples Bank's Prime Rate means the "Prime Rate" designated by the Bank as
Peoples Bank's Prime Rate, and not necessarily the lowest rate charged by the
Bank to others. Where this obligation contains a variable rate it is agreed
that the rate will change on the date of any change in the Peoples Bank's
Prime Rate, and the annual percentage rate during the term of the loan will not
exceed n.a. % per annum, or the maximum rate allowed by law.
The following shall be grounds for declaration of default: (a) failure of any
Debtor to pay any amount due to the Bank as agreed, (b) failure of any Debtor to
comply with any other obligation to the Bank, (c) the death, or declaration of
incompetency, of any individual Debtor (or the dissolution, merger or
reorganization of any corporate Debtor), (d) loss or destruction of any
collateral securing payment to the Bank, (e) the filing of any petition in
bankruptcy or insolvency by or against any Debtor, (f) determination by the
Bank that any information supplied to the Bank by the Debtor in connection with
this credit is materially false or incomplete, (g) determination by the Bank
that the prospect of payment of this obligation is impaired, or (h) if the Bank
deems itself insecure. Upon determination by the Bank of the existence of any
such ground for default, the Bank may, without notice, declare all amounts due
hereunder, and under any other obligation to the Bank, immediately due and
payable. Any failure of the Bank to declare a default, or to otherwise exercise
any right or remedy available to it, shall not constitute a waiver by the Bank
of any such right or remedy. All amounts due to the Bank after the Bank
declares Debtor in default, shall bear interest at the maximum rate allowed by
law, but if there is no such maximum, then at Prime Rate per annum until paid.
Upon default, Debtor agrees to pay the Bank such reasonable attorney fees as
may be allowed by law, plus all other expenses reasonably incurred by the Bank
(including attorney fees) in exercising its rights or remedies, enforcing its
rights against others, or in storing, protecting, or repossessing any
collateral.
Unless this Promissory Note is payable in a single payment, and not by
installments of interest or principal and interest, Debtor agrees to pay a late
fee of 4.00% of the amount of any payment past due for 15 days or more.
All parties to this Promissory Note, including each Debtor and any sureties,
endorsers, or guarantors hereby waive protest, presentment, notice of dishonor
and all other notices required by law. All parties agree to remain bound
hereunder notwithstanding any release of other parties, the release or
surrender of collateral, or any extension of time for payment.
IN TESTIMONY WHEREOF, as of the day and year first above written, each
individual Debtor has hereunto set his hand and adopted as his seal the word
"SEAL" appearing beside his name, and each corporate Debtor has, pursuant to
proper corporate authority, caused this Promissory Note to be executed by its
President.
SAGEBRUSH, INC.
/s/ Noland M. Mewborn By: /s/ L. Dent Miller
Attest President