Document:

ex10-7.htm

Exhibit 10.7

 

SECURED PROMISSORY NOTE

Missoula, Montana

 

	
$450,000.00 
	
 Dated: November 9, 2016

                                   

  

FOR VALUE RECEIVED, the undersigned, 4B’s Holdings, Inc., a Delaware corporation (“Borrower”), promises to pay to Robert E. Wheaton and Suzanne H. Wheaton, husband and wife, or its assignee (“Lender”), the principal sum of Four Hundred Fifty Thousand Dollars ($450,000.00) together with interest at the rate set forth in section 1 below, due and payable in accordance with Section 2 below.

 

 

	 	
1.
	
INTEREST. The unpaid principal amount of this Note shall accrue interest annually at a rate of eleven and half percent (11.5%) per annum. Calculations of interest shall be based upon the actual number of days elapsed over a year deemed to consist of three hundred sixty-five (365) days. The Borrower will pay the Lender $3,000.00 in loan costs.

 

	 	
2.
	
PAYMENT OF PRINCIPAL AND INTEREST. The Borrower shall make monthly payments of principal and interest in the amount of Fourteen Thousand Eight Hundred Thirty-nine Dollars and 20/100 ($14,839.20) per month payable on the ninth day of each month, commencing December 9, 2016 and continuing to be due and payable on the ninth day of each month until November 9, 2019 at which time all unpaid principal together with all accrued and unpaid interest shall be due and payable in full, as further set forth in the amortization table attached hereto as Exhibit "A". All payments hereunder shall be made to Lender at the address below, or at such other place as the holder may designate.

 

	 	
3.
	
DEFAULT. This Note and the entire principal amount and any accrued and unpaid interest thereon may, at the option of the Lender, be declared immediately due and payable if the Borrower shall fail to pay by the due date any payment of principal or interest due after ten (10) days written notice by Lender to Borrower. 

 

	 	
4.
	
SECURITY. This Note is secured by the Second Mortgage encumbering the real property and improvements located at 1533 US Highway 49, Magee, MS (the "Property"). The Lender will be entitled to the benefits of the security provided by the Second Mortgage and will have the right to enforce the covenants and agreements of Borrower contained in the Second Mortgage. This Note is also guaranteed by Star Buffet, Inc. and JB's Star Holdings, Inc. pursuant to a Guaranty executed concurrently herewith.

  

 

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5.
	
NOTICE. Any notice to Borrower or Lender shall be given by personal delivery or by mailing such notice by overnight mail by recognized national carrier, first class or certified mail, return receipt requested, to Borrower or Lender at the address stated below, or at such other address as may be designated by written notice. Notices by first class or certified mail shall be deemed delivered and received three (3) days after deposit in accordance with this provision in United States mail. 

 

	
 
	
To Borrower at: 
	
4B’s Holdings, Inc.

	
 
	
 
	
c/o Bob Wheaton

	
 
	
 
	
2501 N. Hayden Road, Suite 103

	
 
	
 
	
Scottsdale, AZ 85257

	
 
	
 
	
 

	
 
	
To Lender at: 
	
Robert E. and Suzanne H. Wheaton

	
 
	
 
	
4716 E. Valley Vista Lane

	
 
	
 
	
Paradise Valley, AZ 85253

             

            

  

	 	
6.
	
PREPAYMENT. Borrower may, at any time, prepay all or any part of the principal of this Note without premium or penalty. Prepayments shall first be applied to any costs, fees, late charges or other charges incurred in connection with the indebtedness evidenced by this Note; next to the payment of accrued interest, then to principal.

 

	 	
7.
	
MISCELLANEOUS

	 	
(a)
	
Principal and interest due hereunder are payable in lawful money of the United States.

	 	
(b)
	
If a monthly installment is not paid within seven (7) calendar days of its due date, a one hundred dollar ($100.00) late fee will apply.

	 	
(c)
	
The prevailing party in any action to enforce or interpret this Note shall be entitled to reasonable attorney’s fees and costs.

	 	
(d)
	
This Note shall be governed by and construed in accordance with the laws of the State of Arizona. Any action brought under this Note shall be venued in Scottsdale, Arizona.

	 	
(e)
	
Notwithstanding anything to the contrary contained in this Note, it is the intention of Borrower and Lender that the interest charged on this note shall at all times comply with applicable usury laws. If the interest charged hereunder shall at any time be determined by a court of competent jurisdiction to exceed the highest applicable federal or state usury limit, at the Lenders option, the amount of excessive interest shall be credited against the outstanding principal balance of this Note or shall be refunded to Borrower.

	 	
(f)
	
This Note shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. Borrower may not assign or transfer any interest hereunder without the prior written consent of Lender which consent shall not be unreasonably withheld.

	 	
(g)
	
No amendment of any provision of this Note (including a waiver thereof or consent relating thereto) shall be effective unless the same shall be in writing and signed by both parties.

	 	
(h)
	
Demand for payment, protest, notice of dishonor, and all other notices and demands under this Note and any and all lack of diligence in the enforcement of this Note are hereby waived by all who are or shall become parties to this Note and the same hereby assent to each and every extension or postponement of the time of payment, at or after demand, or other indulgence, and hereby waive any and all notice thereof.

  

 

2

 

 

       IN WITNESS WHEREOF, Borrower has duly executed this Note on November 9, 2016.

 

4B’S HOLDINGS, INC.

 

 

By:      /s/ Ron Dowdy                                                             

     Ron Dowdy, Secretary

 

 

3ex4-1.htm

Exhibit 4.1

 

THIRD LOAN MODIFICATION AGREEMENT

 

THIS THIRD LOAN MODIFICATION AGREEMENT, is made as of the 27th day of April, 2017, by and between OPTICAL CABLE CORPORATION, a Virginia corporation (the “Borrower”), and BANK OF NORTH CAROLINA, a North Carolina banking corporation (the “Lender”). 

 

RECITALS

 

A.     The Borrower and the Lender entered into that certain Credit Agreement dated April 26, 2016, as amended and modified by Loan Modification Agreement dated December 21, 2016, and by Second Loan Modification Agreement dated February 28, 2017 (collectively, the “Credit Agreement”). Pursuant to the Credit Agreement, the Borrower made and delivered certain Notes described therein. 

 

B.      The Borrower and the Lender desire to amend and modify the terms of the Credit Agreement, the Term Loan A Note, and the Term Loan B Note, as provided herein. The Lender is the holder of the Term Loan A Note and the Term Loan B Note.

 

NOW, THEREFORE, in consideration of the mutual promises and conditions contained herein, the parties hereto agree as follows:

 

1.       The foregoing recitals are incorporated in and constitute terms of this Agreement.

 

2.       Capitalized terms contained in this Agreement which are not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

3.       The Term Loan A Note is amended and modified as follows: 

 

(a)    Change in Interest Rate: The interest rate of four and 25/100 percent (4.25%) per annum as stated in Section 2 of the Term Loan A Note (and previously reduced to 3.75% by the Loan Modification Agreement dated December 21, 2016), is hereby changed and revised to three and 95/100 Percent (3.95%) per annum, effective as of April 27, 2017. All other provisions of Section 2 of the Term Loan A Note remain unchanged. 

 

 

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(b)     Change in Monthly Payment: Section 3(a) of the Term Loan A Note is hereby amended and modified to provide as follows: 

 

3 (a) The Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $12,533.02 on the first day of each month commencing on May 1, 2016, and continuing through and including January 1, 2017; and the Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $12,077.06 on the first day of each month commencing on February 1, 2017, and continuing through and including May 1, 2017; and the Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $10,962.76 on the first day of each month commencing on June 1, 2017, plus one final payment of principal and interest in the amount of $1,255,850.49 and all then outstanding principal, interest, fees, and costs due on May 1, 2024 (the “Term Loan A Termination Date”). A portion of the payment due on May 1, 2016, includes interest which has accrued under the Prior Note from April 1, 2016, through the date hereof.

 

4.       The Term Loan B Note is amended and modified as follows:

 

(a)    Change in Interest Rate: The interest rate of four and 25/100 percent (4.25%) per annum, as stated in Section 2 of the Term Loan B Note (and previously reduced to 3.75% by the Loan Modification Agreement dated December 21, 2016), is hereby changed and revised to three and 95/100 Percent (3.95%) per annum, effective as of April 27, 2017. All other provisions of Section 2 of the Term Loan B Note remain unchanged. 

 

(b)     Change in Monthly Payment: Section 3(a) of the Term Loan B Note is hereby amended and modified to provide as follows: 

 

3 (a) The Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $36,426.17 on the first day of each month commencing on May 1, 2016, and continuing through and including January 1, 2017; and the Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $35,045.04 on the first day of each month commencing on February 1, 2017, and continuing through and including May 1, 2017; and the Borrower shall make consecutive monthly payments of principal and accrued interest in the amount of $31,811.57 on the first day of each month commencing on June 1, 2017, plus one final payment of principal and interest in the amount of $3,644,210.90 and all then outstanding principal, interest, fees, and costs due on May 1, 2024 (the “Term Loan B Termination Date”). A portion of the payment due on May 1, 2016, includes interest which has accrued under the Prior Note from April 1, 2016, through the date hereof.

 

 

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5.       Except as expressly amended and modified hereby, all terms and conditions of the Credit Agreement, the Term Loan A Note, the Term Loan B Note, and the other Financing Documents remain unchanged, and of full force and effect in accordance with their terms. All references in the Credit Agreement to the Term Loan A Note and the Term Loan B Note shall mean such Notes as amended and modified by this Agreement. The amendments and modifications contained in this Agreement do not constitute or create a novation of the Credit Agreement, the Notes, or any of the other Financing Documents, or the obligations of the Borrower evidenced thereby.

 

6.       The Borrower hereby acknowledges the Lender's performance of all of the Lender's obligations under the Financing Documents, ratifies all of the Financing Documents, as expressly amended and modified hereby, and certifies that they are enforceable in accordance with their terms, without defense or offset. 

 

7.       The Borrower represents and warrants to the Lender to induce the Lender to enter into this Agreement, that the execution, delivery and performance of this Agreement has been duly authorized by all requisite action and such authorization has not been rescinded, and that all representations and warranties made by it in the Financing Documents are true, correct and enforceable on and as of the date hereof.

 

8.       The effective date of this Agreement shall be April 27, 2017.

 

9.       This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Virginia. The parties consent to the jurisdiction and venue of the courts of the Commonwealth of Virginia, specifically to the courts of the City of Roanoke, Virginia, and to the jurisdiction and venue of the United States District Court for the Western District of Virginia in connection with any action, suit or proceeding arising out of or relating to this Agreement.

 

 

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10.     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

11.     This Agreement may be signed in several counterparts, each of which shall be an original and all of which shall constitute one and the same document. 

 

IN WITNESS WHEREOF, the parties have caused this Loan Modification Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

 

 

[The signature pages follow] 

 

 

4

 

 

Signature Page of Borrower

 

 

 

	 	 	BORROWER:	 
	
Witness: 
	
 
	
OPTICAL CABLE CORPORATION
	
 

	 	 	 	 	 
	 	 	 	 	 
	
 /s/ Karen Ellis
	
 
	
By:
	
 /s/ Tracy G. Smith
	
 (Seal)

	
Name:
	
 
	
 
	
     Tracy G. Smith
	
 

	 	
 
	
 
	
     Chief Financial Officer & Senior Vice President
	
 

 

 

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Signature Page of Lender

 

 

 

	 	 	 	LENDER:	 
	Witness:	 	 	BANK OF NORTH CAROLINA	 
	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 

	
 /s/ Karen Ellis
	
 
	
By:
	
 /s/ Shannon S. Miller
	
 (Seal)

	
Name:
	
 
	
 
	
                 Shannon S. Miller
	
 

	
 
	
 
	
 
	
                 Vice President 
	
 

 

 

 

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