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EXHIBIT 10.2
PROMISSORY NOTE
U.S. $20,000,000 June 19, 1998
FOR VALUE RECEIVED, the undersigned, CONSO PRODUCTS COMPANY, a South
Carolina corporation ("Conso"), and SIMPLICITY PATTERN CO., INC., a Delaware
corporation ("Simplicity") (hereinafter Conso and Simplicity are sometimes
collectively referred to as the "Borrowers"), jointly and severally promise to
pay to the order of
NATIONSBANK, N.A., a national banking association (the "Bank") at its
office in Charlotte, North Carolina (or at such other place or places as the
Bank may designate) the principal sum of up to
TWENTY MILLION DOLLARS (U.S. $20,000,000) pursuant to the terms and
conditions hereinafter set forth and the terms and conditions set forth in that
certain Modified and Restated Loan Agreement, dated June 19, 1998, executed by
and among the Borrowers and the Bank (the "Loan Agreement").
Term Loan. The Bank agrees to make a term loan of $20,000,000 to the
Borrowers (the "Term Loan") on the date hereof.
Principal. The outstanding principal balance of the Term Loan shall be
repayable in 20 consecutive quarterly installments on the first day of each
January, April, July and October commencing October 1, 1998. The first 19 of
such installments shall each be in the principal amount of $500,000. The 20th
and final of such installments due and payable on July 1, 2003 shall be in an
amount equal to the remaining principal balance of the Term Loan.
Interest. The outstanding principal balance of the Term Loan shall bear
interest at a fixed rate equal to 7.4% per annum. Accrued interest calculated at
the foregoing rate shall be payable in arrears on the first day of each month.
Whenever a payment on this Note is stated to be due on a day which is not a
business day, such payment shall be made on the next succeeding business day
with interest accruing to the date of payment. Interest hereunder shall be
computed on the basis of actual number of days elapsed over a year of 360 days.
Payments. All payments made on this Note shall be in U.S. dollars.
Amounts repaid may not be reborrowed.
Prepayments. Subject to the prepayment penalty set forth below, the
Borrowers may prepay this Note in whole or in part at any time without any
penalty whatsoever; provided,
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however, partial prepayments shall be applied to principal installments in the
inverse order of maturities.
Prepayment Penalty. If the Borrowers prepay all or any portion of the
Term Loan during the period commencing on the date hereof through December 31,
1999, the Borrowers shall pay the Bank on the date of any such prepayment an
amount equal to 1% of the amount prepaid. If the Borrowers prepay all or any
portion of the Term Loan during the period commencing on January 1, 2000 through
December 31, 2001, the Borrowers shall pay the Bank on the date of any such
prepayment an amount equal to 1/2% of the amount prepaid. If the Borrowers
prepay all or any portion of the Term Loan during the period commencing on
January 1, 2002 through June 30, 2003, the Borrowers shall pay the Bank on the
date of any such prepayment an amount equal to 1/4% of the amount prepaid.
Events of Default. Upon the occurrence of an Event of Default under the
Loan Agreement, (a) this Note and all other debts due the Bank by the Borrowers
shall immediately become due and payable upon written notice to the Borrowers
(except that in the case of any Event of Default relating to a bankruptcy
petition filed by either Borrower, this Note and all other debts due the Bank
shall become immediately due and payable without the necessity of demand or
other action by the Bank) without the necessity of any other demand,
presentment, protest or notice of any kind, all of which are hereby waived by
the Borrowers, (b) the then remaining unpaid principal amount and accrued but
unpaid interest shall bear interest at a per annum rate equal to the prime rate
of NationsBank (as it changes from time to time) plus two percent (2%) until
such principal and interest has been paid in full and (c) regardless of the
adequacy of the collateral, the Bank shall have the right, immediately and
without further action by it, to set-off against this Note all money owed by the
Bank in any capacity to either Borrower, whether or not due, and the Bank shall
be deemed to have exercised such right of set-off and to have made a charge
against any such money immediately upon the occurrence of such Event of Default
even though such charge is made or entered on the books of the Bank subsequent
thereto.
No Waiver. No failure or delay on the part of the Bank in the exercise
of any right, power or privilege hereunder or under any other Loan Document
shall operate as a waiver of any such right, power or privilege nor shall it
preclude any other or further exercise thereof. The Borrowers assent to any one
or more extensions or postponements of the time of payment or other indulgences,
to any substitutions, exchanges or releases of collateral if at any time there
is collateral available to the holder of this Note, and to the additions or
releases of any other parties or persons primarily or secondarily liable.
Late Charge. Should any payment due hereunder be in default for more
than fifteen (15) days, there may be imposed, to the extent permitted by law, a
delinquency charge not to exceed four percent (4%) of such payment in default.
In addition, at the option of the Bank, any accrued and unpaid interest, fees or
charges may, for purposes of computing accruing interest on a daily basis after
the due date for such interest fees or charges, be deemed to be a part of the
principal balance thereof, and interest shall accrue on a daily compounded basis
after such date at the rate provided for hereunder until the entire balance of
principal and interest is paid in full.
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Notices. All notices and other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or when mailed by
registered or certified mail, postage prepaid, addressed as follows:
(a) If to the Borrowers:
c/o Conso Products Company
000 Xxxxx Xxxxxx Xxxxxx
P.O. Box 326
Union, South Carolina 29379
Attn: Mr. X. Xxxxx Xxxxxxxxxxx, Xx.
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
NationsBank Corporate Center
Suite 0000
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) If to the Bank:
NationsBank, N.A.
NationsBank Plaza, NC1-002-03-10
Charlotte, North Carolina 28255
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attorneys' Fees. In the event this Note is not paid when due at any
stated or accelerated maturity, the Borrowers will pay, in addition to principal
and interest, all costs of collection, including reasonable attorneys' fees.
Choice of Law. This Note shall be governed by and construed in
accordance with, the laws of the State of North Carolina. In addition, the
Borrowers hereby consent and submit to the jurisdiction and venue of the federal
and state courts located in Mecklenburg County, North Carolina.
Joint and Several Obligations. The obligations of the Borrowers
hereunder shall be joint and several.
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IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by its duly authorized officers as of the day and year first above
written.
CONSO PRODUCTS COMPANY
ATTEST:
By /s/ Konstance X.X. Xxxxxxx By /s/ X. Xxxx Xxxxxxx
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Title Secretary Title Chairman
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(Corporate Seal)
SIMPLICITY PATTERN CO., INC.
ATTEST:
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxxx
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Title Secretary Title President and Chief Executive Officer
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(Corporate Seal)
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