PROMISSORY NOTE
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
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$900,000.00 08-21-1997 08-21-1999 9008949 000 0000000 gs196
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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.
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Borrower: Colonial Downs Holdings, Inc. Lender: Citizens and Farmers Bank
0000 Xxxxx Xxxxx Xxxxx Xxxx Xxxxxxxxxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000 P. O. Box 000
000 Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
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IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGEMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGEMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
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Principal Amount: $900,000.00 Date of Note: August 21, 1997
PROMISE TO PAY. Colonial Downs Holdings, Inc. ("Borrower") promises to pay to
Citizens and Farmers Bank ("Lender"), or order, in lawful money ot the Untted
States ot America, the principal amount ot Ntne Hundred Thousand & 00/100
Dollars (S900,000.00), together with interest on the unpaid principal balance
from August 21, 1997, until paid in full.
PAYMENT. SubJect to any payment changes resulting trom changes in the Index,
Borrower will pay this loan in accordance with the following payment schedule:
23 consecutive monthly principal payments ol S15,000.00 each, beginning
September 21, 1997, with Interest calculated on the unpaid principal balances at
an Interest rate ot 1.000 percenbge points over the Index described below; 23
consecutive monthly Interest payments, beginning September 21, 1997, with
Interest calculated on the unpaid prtacipal balances at an interest rate ot
1.000 percentage points over the Index described below, and 1 prlocipal and
Interest payment In the Initlal amount ot S559,540.21 on August 21, 1999, with
Interest calculated on the unpaid prlacipal balances at an Interest rate ot
1.000 percentage polots over the Index described below. This estimated final
payment Is based on the assumption thst all payments will be made exactly as
scheduled and that the Index does not change; the actual flnal payment will be
tor 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,
multiplied by the outstanding principal balance, multiplied by 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
wnting. Uniess 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 collechon 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 independent index which is the Pnme rate as
published in the Wall Street Journal (the ~Indexn). The Index is not necessanly
the lowest rate charged by Lender on its loans. If the Index becomes unavailable
dunog the term of this loan, Lender may designate a substitute index after
notice to Bonrower. Lender will tell 8Onrower the current Index rate upon
Xxxxxxxx's request. Borrower understands that Lender may make loans based on
other rates as weli. The interest rate change will not occur more often than
each time Wall Street Journal Pnme Rate changes. The Index currently Is 8.500%
per annum. The Interest rate or rstes to be applied to the unpaid prtncipal
balance ot tints Note will be the rate or rates set forth above in the "Payment"
section. 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 its option, may do one or more of the
following: (a) increase Bonrower's payments to ensure Borrower's loan will pay
off by its onginal final matunty date, (b) increase Bonrower's payments to cover
accruing interest, (c) increase the number of Bonrower's payments, and (d)
continue Bonrower's payments at the same amount and increase Bonrower's final
payment.
PREPAYMENT; MINIMUM INTEREST CHARGE. Xxxxxxx 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. In any event, even upon full
prepayment of this Note, Xxxxxxx understands that Xxxxxx is entiHed to a mintmum
interest charge ot S25.00. Cther than Xxxxxxx's obligation to pay any minimum
interest charge, Bonower 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 wndng, relieve Bonower of Xxxxxxx's obligation to continue to make payments
under the payment schedule. Rather, they will reduce the pnncipal balance due
and may result in Bonower making fewer payments.
LATE CHARGE. If a payment is 7 days or more late, Bonower will be charged 5.000%
ot the unpaid portton of the regularly scheduled payment or S1.00, whtchever is
greater.
DEFAULT. Bonower will be in default if any of the following happens: (a) Bonower
fails to make any payment when due. (b) Bonower breaks any promise Bonower has
made to Lender, or Bonower fails to comply with or to perform when due any other
term, obligation, covenant, or condihon contained in this Note or any agreement
related to this Note, or in any other agreement or loan Bonower has with Lender.
(c) Borrower defaults under any loan, extension of credit, secunty agreement,
purchase or sales agreement, or any other agreement, in favor of any other
creditor or person that may matenally affect any of Bonower's property or
Xxxxxxx's ability to repay this Note or perform Xxxxxxx's obligahons under this
Note or any of the Related Documents. (d) Any representation or statement made
or furnished to Lender by Bonower or on Xxxxxxx's behalf is false or misleading
in any matenal respect either now or at the hme made or furnished. (e) Xxxxxxx
becomes insolvent, a receiver is appointed for any part of Xxxxxxx's property,
Xxxxxxx makes an assignment for the benefit of creditors, or any proceeding is
commenced either by Bonower or against Bonower under any bankruptcy or
insolvency laws. (f) Any creditor tnes to take any of Xxxxxxx's property on or
in which Xxxxxx has a lien or secunty interest. This ir~cludes a garnishment of
any of Xxxxxxx's accounts with Xxxxxx. (9) Any guarantor dies or any of the
other events descnbed in this default sechon - -.curs with respect to any
guarantor of this Note. (h) A material adverse change occurs in Xxxxxxx's
financial conditiorl, or Xxxxxx believes the ~spect of payment or performance of
the Indebtedness is impaired.
RIDER'S RlGHTS. Upon default, Xxxxxx may declare the entire unpaid pnocipal
balance on this Note and all accrued unpaid interest, together with !her
applicable fees, costs and charges, if any, immediately due and payable, without
notice, and then Bonower will pay that amount. Upon
.It, including failure to pay upon final matunty, Lender, at its option,
may also, if permitted under applicable law, increase the variable interest rate
o,. - Note by 4.000 percentage points. The interest rate will not exceed the
maximum rate permitted by applicable law. Furthermore, subject to any limit~
~der applicable law, upon default, Xxxxxxx also agrees to pay Xxxxxx's
attorneys, fees, and all of Xxxxxx's other collechon expenses, whether
or not . -? is a lawsuit and including without limitation legal expenses for
bankruptcy proceedings. This Note shall be governed by, construed and forcea
accordance with the laws of the Commonweaith of Virginia. Xxxxxx and Xxxxxxx
hereby waive the nght to any jury tnal in any achon, ~eea~- ar counterclaim
brought by either party against the other.
08-21-1997 PROMISSORY NOTE Page 2
Loan No 9008949 (Continued)
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CONFESSION OF JUDGMENT. Upon a default in payment of the Indebtedness at
maturity, whether by acceleration or otherwise, Xxxxxxxx hereby irrevocably
authorizes and empowers Xxxxx X. Xxxxxx, lil as Xxxxxxx's attorney-in-fact to
appear in the King Xxxxxxx County clerk's offlce and to confess judgment against
Borrower for the unpaid amount of this Note as evidenced by an affidavit signed
by an offlcer of Lender setting forth the amount then due, plus attorneys'fees
as provided in this Note, plus costs of suit, and to release all errors, and
waive all rights of appeal. If a copy of this Note, verified by an affidav~t,
shall have been filed in the proceeding, it will not be necessary to file the
original as a warrant of attorney. Xxxxxxx waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter in effect. No
single exercise of the foregoing wanant and power to confess judgment will be
deemed to exhaust the power, whether or not any such exercise shall be held by
any court to be invalid, voidable, or void; but the power will continue
undiminished and may be exercised from time to time as Lender may elect until
all amounts owing on this Note have been paid in full.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of 525.00 if Bonower
makes a payment on Xxxxxxxx's loan and the check or preauthonzed charge with
which Borrower pays is later dishonored.
RIGHT OF SETOFF. Bonower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's nght, 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 secunty interest would be
prohibited by law. Bonower authonzes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by a Secunty Agreement from Colonial Downs
Holdings, Inc. and Colonial Downs, L.P. to Lender dated August 21, 1997 on a
lighting system which is more fully described in the Security Agreement.
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. Ail 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 mod)fication 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.
BORROWER:
Colonial Downs Holdings, Inc.
By: BORROWER:
Colonial Downs Holdings, Inc.
By: /s/ X. Xxxxx Xxxxxxxx, III [SEAL]
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X. Xxxxx Xxxxxxxx, III, President
