EXHIBIT 10:29
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$1,529,784.00 06-16-1999 06-16-2000 *** 3200548-9002 076
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References in shaded area are for Lender's use only and do not
limit the applicability of this document to an
particular loan or item. Any item above containing *** has been
omitted due to text length limitations.
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BORROWER: Wellington Hall, Limited LENDER: Lexington State Bank
000 Xxxx Xxxx Xxxx Xxx XXX Xxxxx
Xxxxxxxxx, XX 00000 XX Xxx 000
Xxxxxxxxx, XX 00000
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Principal Amount: $1,529,784.00 Initial Rate: 8.500%
Date of Note: June 16, 1999
PROMISE TO PAY. Wellington Hall, Limited ('borrower") promises to pay to
Lexington State Bank ("Lender"), or order, in lawful money of the United States
of America, the principal amount of One Million Five Hundred Twenty Nine
Thousand Seven Hundred Eighty Four & 00/100 Dollars ($1,529,784.00), together
with Interest on the unpaid principal balance from June 16, 1999, until paid in
full.
PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 11 regular payments of $19,000.00 each and one
Irregular last payment estimated at $1,449,100.26. Xxxxxxxx's first payment is
due July 16, 1999, and all subsequent payments are due on the same day of each
month after that. Xxxxxxxx's final payment will be due on June 16, 2000, and
will be for all principal and accrued interest not yet paid. Payments include
principal and interest. 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. The
annual interest rate for this Note is computed on a 365/360 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
writing.
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 Xxxxxx's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Xxxxxxxx's request. The interest rate
change will not occur more often than each day. Borrower understands that Lender
may make loans based on other rates as well. The Index currently is 7.750% per
annum. The interest rate to be applied to the unpaid principal balance of this
Note will be at a rate of 0.750 percentage points over the Index, resulting in
an initial rate of 8.500% per annum. 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 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. 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 Borrower of Xxxxxxxx's obligation to continue to make payments
of accrued unpaid inters. Rather, early payment will reduce the principal
balance due and may result in Borrower's making fewer payments.
LATE CHARGE. If a payment is 15 days or more late Borrower will be charged
4.000% of the unpaid portion of the regularly scheduled payment. This late
charge shall be paid to Lender by Borrower to compensate Lender for Xxxxxx's
extra costs and expenses caused by the late payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the total sum due under this Note will bear interest from the date of
acceleration or maturity at the variable interest rate on this Note. The
Interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related document or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
borrower.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note or
the related documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Insolvency. The dissolution or termination of Xxxxxxxx's existence as a
going business, the insolvency of Xxxxxxxx, the appointment of a received
for any part of Xxxxxxxx's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor or Borrower or by any
governmental agency against any collateral securing the loan. This includes
a garnishment of any of Xxxxxxxx's accounts including deposit accounts,
with Xxxxxx. However, this Event of Default shall not apply if there is a
good faith dispute by Xxxxxxxx as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Xxxxxx written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determine by Lender, in its
sole discretion, as being inadequate reserve or bond
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness. In the event of death,
Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under
the guaranty in a manner satisfactory to Lender, and, in doing so, cure any
Event of Default.
Change In Ownership. Any change in ownership of twenty-five (25%) or more
of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Xxxxxx believes the prospect of payment or performance of
this Note is impaired.
Insecurity. Lender in good faith believes itself secure.
Cure Provisions. 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)
cure the default within fifteen (15) days; or (b) if the cure requires more
than fifteen (15) days, immediately initiate steps which Lender deems in
Xxxxxx's sole discretion to be sufficient to cure the default and
thereafter continue and complete 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 due, and then
Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
the loan if Borrower does not pay. Xxxxxxxx also will pay Lender that amount.
This includes, subject to any limits under applicable law, Xxxxxxx's attorneys'
fees and Xxxxxx's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Xxxxxxxx also will pay any court costs, in
addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of North Carolina. This
Note has been accepted by Xxxxxx in the State of North Carolina.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.
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 an to all Borrowers accounts with Lender
(whether checking, savings, or some other account). This includes all accounts
Borrower may open in the future. However, this does not include any IRA or Xxxxx
accounts, or any trust accounts for which the grant of a security interest would
be prohibited by law. Xxxxxxxx authorizes Xxxxxx, to the extent permitted by
applicable law , to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by a Deed of Trust in the
amount of $1,829,784.00 dated June 16, 1999, Trustee Services, Inc., Trustee.
Xxxxxxxx acknowledges this Note is also secured by other collateral as described
in Addendum A dated June 16, 1999, executed by Wellington Hall, Limited.
Page 2
PROMISSORY NOTE
(Continued)
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YEAR 2000. Borrower warrants and represents that all software utilized in the
conduct of its business will have appropriate capabilities and compatibility for
operation to handle calendar dates falling on or after January 1, 2000, and all
information pertaining to such calendar dates, in the same manner and with the
same functionality as the software does respecting calendar dates falling on or
before December 31, 1999. Further the Borrower warrants and represents that the
data-related user interface functions, data-fields, and data-related program
instructions and functions of the Software include the indication of the
century.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower any any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, 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 release 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 Xxxxxx 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. The obligation
under this Note are joint and several.
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.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.
GRANTOR: (CORPORATE SEAL)
ATTEST: /s/ XXXXXXX X. XXXXXXXX
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WELLINGTON HALL, LIMITED XXXXXXX X. XXXXXXXX, SECRETARY
BY: /s/ XXXX X. XXXXXXX, XX. (SEAL) BY: /s/ XXXXXXX X. XXXXXXXX
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XXXX X. XXXXXXX, XX. PRESIDENT OF XXXXXXX X. XXXXXXXX, SECRETARY OF
WELLINGTON HALL, LIMITED WELLINGTON HALL, LIMITED
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ADDENDUM A
REGARDING LEXINGTON STATE BANKS' (LENDER) PROMISSORY NOTES, DATED JUNE 16, 1999
EXECUTED BY XXXXXXXXXX XXXX, LIMITED (BORROWER) IN THE RESPECTIVE AMOUNTS OF
$1,529,784.00 AND $300,000.00
The above-referenced Promissory Notes are secured by the following collateral.
The documents below have been executed by Wellington Hall, Limited:
* Deed of Trust in the amount of $1,829,784.00 dated June 16, 1999, Trustee
Services, Inc., Trustee
* Deed of Trust in the amount of $650,000.000 dated April 15, 1987, Xxx X.
Xxxxxxx, Trustee
* Deed of Trust in the amount of $420,000.00 dated February 17, 1984, Xxx X.
Xxxxxxx, Trust
* Commercial Pledge Agreement dated June 16, 1999 covering Assignments of
Life Insurance Policies:
1. Policy Nos. 3058458 and 3069359 by General American Life Insurance
company on the life of Xxxx Xxxxxx Xxxxxxx, Xx.
2. Policy No. VIYW004826 by CNA/Valley Forge Life Insurance Company on
the life of Xxxxxx X. Xxxxxxx.
* Commercial Security Agreement dated June 16, 1999 covering all Accounts
Receivable, Equipment, Machinery, Furniture and Fixtures now owned or
hereafter acquired.
* Business Loan Agreement dated June 16, 1999.
Xxxxxxxxxxx and agreed this 16th day of June, 1999, this Addendum shall continue
in full force and effect until such time as all of Borrower's loans in favor of
Lender have been paid in full, in principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
WELLINGTON HALL, LIMITED
By: /s/ Xxxx X. Xxxxxxx, Xx. ATTEST: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxx, Xx. Xxxxxxx X. Xxxxxxxx
BY: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx (CORPORATE SEAL)
