1
EXHIBIT 10.69
MODIFIED AND RESTATED
PROMISSORY NOTE
U.S. $19,500,000 November 16, 1998
FOR VALUE RECEIVED, the undersigned, CONSO INTERNATIONAL CORPORATION
f/k/a, 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
NINETEEN MILLION FIVE HUNDRED THOUSAND DOLLARS (U.S. $19,500,000)
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 has previously made a term loan of $20,000,000 to
the Borrowers (the "Term Loan") the outstanding principal balance of which on
the date hereof is $19,500,000.
Principal. The outstanding principal balance of the Term Loan shall be
repayable in 19 consecutive quarterly installments on the first day of each
January, April, July and October commencing January 1, 1999. The first 18 of
such installments shall each be in the principal amount of $500,000. The 19th
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 for each
Interest Period shall bear interest at a rate equal to the Adjusted LIBOR Rate
for such Interest Period plus 1.45% per annum. Accrued interest calculated at
the foregoing rate shall be payable in arrears on the first day of each calendar
quarter. 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.
As used herein, "Interest Period" means the period from the date hereof through
December 31, 1998 and each three month period
-1-
2
commencing on January 1, 1999; provided, however, that each Interest Period
which would otherwise end on a day which is not a business day shall end on the
next succeeding business day unless such succeeding business day falls in the
next calendar month and then in such case on the next preceding business day;
"Adjusted LIBOR Rate" means for the respective Interest Period, a per annum
interest rate offered by the Bank to the Borrower in accordance with the
foregoing terms equal to the per annum rate obtained by dividing (a) the rate of
interest determined by the Bank to be the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a multiple)
of the per annum rates at which deposits in U.S. dollars are offered to the Bank
in the London interbank market in an amount substantially equal to the then
outstanding principal balance hereunder and for a period equal to such Interest
Period by (b) a percentage (expressed as a decimal fraction) equal to 100% minus
maximum reserve requirements which may be applicable thereafter.
Indemnification. The Borrower agrees to indemnify the Bank against all
reasonable losses, expenses and liabilities sustained by the Bank on account of
the Borrower making a prepayment prior to the last day of an Interest period.
Subject to the foregoing, the Borrowers may prepay this Note in whole or in part
at any time without any penalty whatsoever; provided, however, partial
prepayments shall be applied to principal installments in the inverse order of
maturities.
Yield Indemnification. In the event the Bank shall determine (which
determination shall be presumed correct absent evidence of error) that:
(i) Unavailability. On any date for determining the
appropriate Adjusted LIBOR Rate for any Interest Period, that by reason
of any changes arising on or after the date of this Note affecting the
London interbank dollar market, dollar deposits in the principal amount
requested are not generally available in the London interbank market or
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted
LIBOR Rate then pricing based upon the Adjusted LIBOR Rate will not be
available until such time as the Bank shall notify the Borrower that
the circumstances giving rise thereto no longer exist.
(ii) Increased Costs. At any time that the Bank shall incur
increased costs or reductions in the amounts received or receivable
hereunder because of any change since the date of this Note in any
applicable law, governmental rule, regulation, guideline or order (or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline
or order) including without limitation the imposition, modification or
deemed applicability of any reserves, deposits or similar requirements
as related to pricing based upon the Adjusted LIBOR Rate (such as, for
example, but not limited to, a change in official reserve requirements,
but, in all events, excluding reserves to the extent included in the
computation of the Adjusted LIBOR Rate), then the Borrower shall pay to
the Bank promptly upon written demand therefor (which demand shall
state the basis therefor), such additional amounts (in the
-2-
3
form of an increased rate of, or a different method of calculating,
interest or otherwise as the Bank may determine in its reasonable
discretion) as may be required to compensate the Bank for such
increased costs or reductions in amounts receivable hereunder. Upon
determining in good faith that any additional amounts will be payable
pursuant to this subsection, the Bank will give prompt written notice
thereof to the Borrower, which notice shall set forth in reasonable
detail the basis of the calculation of such additional amounts.
(iii) Illegality. At any time that the offering of interest
rates based on the Adjusted LIBOR Rate has become unlawful by
compliance by the Bank in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force
of law even though the failure to comply therewith would not be
unlawful), or has become impractical as a result of a contingency
occurring after the date of this Note which materially and adversely
affects the London interbank dollar market, then pricing based on the
Adjusted LIBOR Rate will no longer be available.
Payments. All payments made on this Note shall be in U.S. dollars.
Amounts repaid may not be reborrowed.
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.
-3-
4
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.
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. Xxxx Xxxxxxx
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
-4-
5
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.
Modification and Restatement. This Note modifies, restates and replaces
that certain Promissory Note, dated June 19, 1998, executed by the Borrowers in
favor of the Bank in the original principal amount of $20,000,000.
-5-
6
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 INTERNATIONAL CORPORATION
f/k/a CONSO PRODUCTS COMPANY
ATTEST:
By: /s/ Konstance X.X. Xxxxxxx By: /s/ X. Xxxx Xxxxxxx
Title: Secretary Title: President
(Corporate Seal)
SIMPLICITY PATTERN CO., INC.
ATTEST:
By: /s/ Konstance X.X. Xxxxxxx By: /s/ X. Xxxx Xxxxxxx
Title: Secretary Title: President
(Corporate Seal)
-6-
