EXHIBIT 7.1
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$196,000.00 01-14-2000 06-14-2008 9004 511 E38843 JKSOM
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References 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: XXXXXXXXX X. XXXXXXXX LENDER: KEYBANK NATIONAL ASSOCIATION
0000 XXXXX XXXX XXXXX XXXXXXXXXXXXX XXXXXXX
XXXXXXX, XX 00000 0000 XXXXXXX XXXXXX
P.O. BOX 11600 WA-31-03-0258
TACOMA, WA 98411-6500
[SCAN MARKS]
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Principal amount: $196,000.00 Date of Note: January 14, 2000
PROMISE TO PAY, XXXXXXXXX X. XXXXXXXX ("Borrower") promises to pay to KEYBANK
NATIONAL ASSOCIATION ("Lender"), or order, in lawful money of the United States
of America, the principal amount of One Hundred Ninety Six Thousand & 00/100
Dollars ($196,000.00), together with interest on the unpaid principal balance
from December 27, 1999, until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
100 consecutive monthly interest payments, beginning February 14,
2000, with interest calculated on the unpaid principal balances at an
interest rate of 0.500 percentage points over the Index described below; 7
consecutive annual principal payments of $26,133.33 each, beginning March
14, 2001, with interest calculated on the unpaid principal balances at an
amount of $13,167.96 on June 14, 2006, with interest calculated on the
unpaid principal balances at an interest rate of 0.500 percentage points
over the Index described below. This estimated tenant payment is based on
the assumption that all payments will be made exactly as scheduled and that
the Index does not change; the actual final payment will be for all
principal and accrued interest not yet paid, together with any other unpaid
amounts under this Note.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days, times
the outstanding principal balance, times the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Xxxxxx'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.
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 Prime Rate announced by
Xxxxxx (the "Index"). The interest rate will change automatically and
correspondingly on the date of each announced change of the index by Xxxxxx. The
index is not necessarily the lowest rate charged by Lender on its loans and is
set by Lender in its sole discretion. If the index becomes unavailable during
the term of this loan, the Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current index rate upon
Xxxxxxxx's request. Borrower understands that Lender may make loans based on
other rates as well. The interest rate change will not occur more often than
each day that the Index changes. The Index currently is 5.500% per annum. The
interest rate or rates to be applied to the unpaid principal balance of this
Note will be the rate or rates set forth above in the "Payment" section.
Notwithstanding any other provision of this Note, the variable interest rate or
rates provided for in this Note will be subject to the following minimum and
maximum rates. NOTICE: Under no circumstances will the interest rate on this
Note be less than 0.500 per annum or more than the maximum rate allowed by
applicable law. Whenever increases occur in the interest rate, Lender, at its
option, may do one or more of the following: (a) increase Borrower's payments to
ensure Borrower's loan will pay off by its 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 payment.
PREPAYMENT. Xxxxxxxx agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Xxxxxx in writing, relieve Xxxxxxxx of
Xxxxxxxx'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 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $80.00, whichever is greater.
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 dies or become insolvent, a receiver
is appointed for any part of Xxxxxxxx's property, Xxxxxxxx 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 Xxxxxxxx's accounts
with Xxxxxx, (g) Any of the 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 Xxxxxx believes the prospect of payment or
performance of the indebtedness is impaired, (i) Lender in good xxxxx xxxxx
itself insecure.
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: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Xxxxxx'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 RIGHTS. Upon default, Xxxxxx may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately
01-14-2000 PROMISSORY NOTE Page 2
Loan No 9004 (Continued)
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due, 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 variable interest rate on this
Note by 3,000 percentage points. The interest rate will not exceed the maximum
rate permitted by applicable law. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Xxxxxxxx also will pay Lender that
amount. This includes, subject to any limits under applicable law, Xxxxxx's
attorneys' fees and Xxxxxx's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Xxxxxxxx also will pay any court costs, in
addition to all other sums provided by law. This Note has been delivered to
Lender and accepted by Xxxxxx in the State of Washington. If there is a lawsuit,
Xxxxxxxx agrees upon Xxxxxx's request to submit to the jurisdiction of the
courts of King or Xxxxxx County, the State of Washington. Xxxxxx and Xxxxxxxx
hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Xxxxxx or Borrower against the other. This Note
shall be governed by and construed in accordance with the laws of the State of
Washington.
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, Xxxxxxxx'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 Xxxxx accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Xxxxxx, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Note against any and all such accounts.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any 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 Xxxxxx'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 Xxxxxx 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, XXXXXXXX READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. XXXXXXXX AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
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| ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO |
| FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER |
| WASHINGTON LAW. |
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BORROWER:
X /s/ Xxxxxxxxx X. Xxxxxxxx
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XXXXXXXXX X. XXXXXXXX
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