PROMISSORY NOTE
Principle Loan Date Maturity Loan No. Account Officer Initials
$12,638.00 10-11-01 10-15-02 521592389888
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References in the shaded area are for Lenders 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 : U.S. Patriot, Inc. (TIN: 57-1107699) Lender: SouthTrust Bank
P.O. Box 6125 Forest Acres Office
Columbia, SC 29206 5490 Forest Dr.
Columbia, SC 29206
(803) 787-0698
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Principle Amount: $12638.00 Initial Rate: 6.500% Date of Note: 11 OCT 01
PROMISE TO PAY. U.S. Patriot , Inc. (Borrower) promises to pay to
SouthTrust Bank (Lender) , or order, In lawful money of the
United States of America, the principal amount of Twelve Thousand
Six Hundred Thirty-eight & 00/100 Dollars ( $12,638.00), together
with interest on the unpaid principal balance from October
11,2001, until paid in full.
PAYMENT-Subject to any payment changes resulting form changes in
the index. Borrower will pay this loan in 11 payments of
$1,091.91 each payment and an irregular last payment estimated at
$1,091.96. Borrower's first payment will be due on November 15,
2001, and all subsequent payments are due on the same day of
each month after that. Borrower's final payment will be due on
October 15, 2001, and will be for all principal and all accrued
interest not yet paid. Pay include principal and interest. Unless
otherwise agreed or required by applicable law, payments will be
applied first to any unpaid collection costs and any late
charges, then to any unpaid interest, and any remaining amount to
principal. The annual interest rate for this Note is computed on
a 365/360 basis: that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay
lender at Lenders 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 "base rate". The term "base rate" means the rate o Interest
designated by the Lender periodically as it's Base rate( the
Index). The Index is not necessarily the lowest rate charged by
Lender on it's loans and is set by Lender in it's 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 day the Index Rate charges. Borrower
understands that Lender may make loans based on other rates as
well. The Index currently is 6.600% per annum. The Interest rate
to be applied to the unpaid principal balance of this Note will
be at a rate of 1.000 percentage point over the Index, resulting
in the initial rate of 6.600% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law. Whenever increases
occur in the interest rate, Lender, at it's option may do one or
more of the following: A Increase Borrower's payments to ensure
Borrower's loan will pay off by it's original final maturity
date. B) Increase Borrower's payments to cover accruing interest.
(C) Increase the number of Borrower's payments, and (D) continue
Borrower 's payments at the same amount and increase Borrower's
final payments.
PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earliest 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, early payments will reduce the
principal balance due and may result in Borrower's making fewer
payments. 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
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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:
SouthTrust Bank, Forest Acres Office, 5490 Forest Acre Drive,
Columbia, SC 29205.
LATE CHARGE. If a payment is 10 days or more late, Borrower will
be charged 5.000% of the unpaid portion of the regularly
scheduled payment or $0.50, whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay
upon final maturity, at Lender's option, and if permitted by
applicable law, Lender may add any unpaid accrued Interest to
principal and such sum will bear interest therefrom until paid at
the rate provided in the Note. Upon default the total sum due
under this Note will bear Interest from the date of acceleration
or maturity. At the variable interest rate on this Note. The
Interest rate will not exceed the maximum rate permitted by
applicable law.
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.
Default in Favor of Third Parties. Borrower or any Grantor
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.
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 gin 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, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or
Insolvency laws or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of
foreclosures 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
calm which is the basic 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 the amount determined by Lender,
in it's 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 event of death, Lender, at it's 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 at twenty-five
percent (25%) or more of the common stock of Borrower.
Address Change. A material adverse change occurs in
Borrowers financial condition, or Lender believes the
prospect of payment performance of this Note is impaired.
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Insecurity. Lender in good faith believes itself insecure.
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
and (no event of default will have occurred) if Borrower ,
after receiving written notice from Lender demanding cure
of such default: 1) cures the default within (15) days or
20 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 RIGHT'S. 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 Lenders reasonable
attorney's fees in an amount not less than fifteen percent (15%)
of the amount owing on this Note and Lender's legal expenses
whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings
including efforts to modify or vacate any automatic stay or
injunction and appeal. If not prohibited by applicable law,
Borrower also will pay any court costs. In addition to all other
sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any
jury trial in any action, proceeding, or counterclaim brought by
either Lender or Borrower against the other. Initial Here_______
GOVERNING LAW. This Note will be governed by construed and
enforced in accordance with federal law and the laws of the State
of South Carolina. This note has been accepted by Lender in the
State of South Carolina.
RIGHT OF SETOFF. To the extent permitted by applicable law.
Lender reserves a right of setoff in all Borrower's accounts with
Lender (whether checking, savings, or some other accounts). This
includes all accounts Borrower holds jointly with someone else
and all accounts Borrower any open in the future. However, this
does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable la, to charge or
setoff all sums owing on the indebtedness against any and all
accounts , and at Lender's option, to administratively freeze all
such accounts to allow Lender to protect Lender's charge and
setoff right's provided in this paragraph.
COLLATERAL. Borrower acknowledges this Note is secured by Any and
All Commercial Security Agreements describing One (1) Embroidery
Machine EMT1/ EDSIV with Embroidery Software.: Guaranty of
Payment executed by Phil Dee.
FINANCIAL STATEMENTS. Until this loan is paid in full. Borrower
will furnish to Lender, as soon as available but in any event
within 120 days after the end of each fiscal year. Borrower's
balance sheet and statements of income, cash flows and changes in
capital for the fiscal year just ended. Setting forth in
comparative form the corresponding figures for the prior year,
together with accompanying schedule and footnotes. If the
financial statements were complied or certified by a public
accountant, Borrower will also furnish Lender the accountants
letter accompanying the financial statements. Borrower will
furnish to Lender, as soon as available, but in any event within
30 days after the end of the first three quarters of Borrower's
fiscal year. Borrower's balance sheet and profit and loss
statement for the quarter just ended,. All financial reports
provided to Lender will be certified in writing by the chief
executive officer, managing partner or comparable financial
officer of Borrower to be true and complete to the heat of his or
her knowledge and belief and to have been prepared in accordance
with generally accepted accounting principles applied on a basic
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consistent with the financial statements previously furnished to
Lender or, if not so prepared, setting forth the manner in which
the financial statements depart therefrom. Borrower will cause
each guarantor or endorser of this loan to furnish to Lender,
within 90 days after Lender's request therefor, a current
financial statement of such guarantor or endorser in form
acceptable to Lender and a copy of the federal income tax return
most recently filed by such guarantor or endorser.
CHANGE IN OWNERSHIP. Any aggregate change of twenty -five (25%)
or more in the ownership of the common stock or other ownership
interest in Borrower in any period of 12 consecutive months shall
constitute a default under this loan.
OBLIGATION TO DEVELOP BUSINESS PLAN. Before approving this loan,
Lender required Borrower to furnish Lender with financial
statements and other information concerning the financial history
and future prospects of Borrower's business. Lender requested and
reviewed that information solely to enable it to make a decision
whether to extend credit. Borrower understands that Lender has
not necessarily approved Borrower's business plan and has not
undertaken any duty or obligation to advise Borrower on business
matters now or in the future. Lender is not a financial or
business advisor, and borrower will not look to Lender for
business advise. Lender's role is solely hat of a Lender and
Borrower's relationship with Lender is that of debtor and
creditor. Lender expressly disclaims any fiduciary or other
duties or obligations to Borrower except those expressly provided
in the written loan documents signed by Lender.
NO ORAL AGREEMENTS. Lender's agreements to lend, Borrower's
obligation to repay the loan, and all other agreements between
Lender and Borrower have been reduced to writing. This instrument
and the other documents signed concurrently with it contain the
entire agreement between Lender and Borrower. Any prior
conversations and discussions that Lender or Borrower may have
had concerning the transaction are not binding unless reflected
in the written loan documents. Borrower acknowledges that the
loan documents reflects everything the Lender has agreed to do or
not to do in connection with the transaction.
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 to Lender
and it's 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:
SouthTrust Bank P.O. Box 2554 Birmingham, AL35290
GENERAL PROVISIONS. Lender may delay or forge enforcing any of
it's rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses
this Note, t the extent allowed by law, waive 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 sighs this Note, whether as maker, guarantor,
accommodation make 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 or notice to anyone
other than the party with whom the modification is made. The
obligations under this Note are joint and several.
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 ACKNOWLEGES RECEIPT OF A COMPLETEDD COPY OF THIS
PROMISSARY NOTE.
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BORROWER:
U.S. PATRIOT, INC.
By:___________________________
Phil Dee, President/ Secretary of U.S. Patriot, Inc.