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EXHIBIT 10.1
PEOPLES BANK
P.O. BOX 467 SIMPLE INTEREST LOAN NUMBER 101115497
NEWTON, NC 28658 PROMISSORY NOTE Reference Number B0000001959
and Date 04-17-2001
Borrower(s): SECURITY AGREEMENT Loan Amount 1,500,000.00
P F MANAGEMENT INC Maturity Date 07-15-2006
PO BOX 3967
HICKORY, NC 28603-
FOR MONEY BORROWED the Borrower(s) signing below (hereinafter "Borrower" whether
one or more), jointly and severally, promises to pay to PEOPLES BANK
(hereinafter "Bank"), or order, at any office of Bank, the principal sum of One
Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), plus interest
from and including 04-17-2001 at the rate of Peoples Bank's Prime Rate Plus One
percent (P+1.000%) per year, on the unpaid balance until paid. All interest
calculations will be based on a 360 day year. Payment shall be made as follows:
ACCRUED INTEREST IS PAYABLE IN CONSECUTIVE QUARTERLY
PAYMENTS, BEGINNING JULY 15, 2001 AND EACH QUARTER
THEREAFTER. COMMENCING JULY 15, 2002, AN ANNUAL PRINCIPAL
PAYMENT OF $300,000.00 WILL BE DUE AND EACH YEAR THEREAFTER
WITH ALL UNPAID PRINCIPAL AND ACCRUED INTEREST DUE JULY 15,
2006.
If the Borrower has obtained credit life insurance and/or credit disability
insurance, the payment amount set forth above includes the premium for such
insurance, which the Borrower agrees to pay.
The amount of the final payment required to discharge the indebtedness in full
may be different from any final payment amount set forth above because the
schedule set forth above assumes that all amounts will be paid on exact due
dates, and interest will accrue daily on the principal balance outstanding. If
this obligation has a variable rate, the final payment amount may also be
increased or decreased as a result of changes in the interest rate.
Notwithstanding anything in this Promissory Note to the contrary, unless sooner
due and payable pursuant to the terms of this Promissory Note, all remaining
unpaid principal, interest and other sums evidenced by this Promissory Note
shall be due and payable in full on the Maturity Date set forth above.
[X] (Checked if applicable.) In the event periodic accruals of interest shall
exceed the periodic fixed payment amount, the fixed payment amount shall be
immediately increased, or additional supplemental payments required on the same
periodic basis as specified herein (increased fixed payments or supplemental
payments to be determined in the Bank's sole discretion), in such amounts and at
such times as shall be necessary to pay all accruals of interest for the period
and all accruals of unpaid interest from previous periods. Such adjustments to
the fixed payment amount or supplemental payments shall remain in effect for so
long as the interest accruals shall exceed the original fixed payment amount and
shall be further adjusted upward or downward to reflect changes in the variable
interest rate. In no event shall the fixed payment amount be reduced below the
original fixed payment amount specified above.
The purpose of this loan is PAYOFF HERTH MANAGEMENT INC DEBT - Business Use.
[X] Single Advance: Borrower will receive all of this principal sum on
4-17-2001. No additional advances are contemplated under this
Promissory Note.
[] Multiple Advance: The principal sum shown above is the maximum amount
of principal Borrower can borrow under this Promissory Note. On ______
____________________, Borrower will receive the amount of $____________
and future principal advances are contemplated.
The time for making payments is of the essence. Unless otherwise agreed or
required by law, each payment shall be applied in such order and manner as the
Bank may elect to unpaid interest, fees, premiums, other charges and to
principal. Prepayments may, at the Bank's discretion, be applied in reverse
order of the dates periodic payments are due.
[X] VARIABLE RATE TERMS. (Checked if applicable.) If checked, this loan has a
variable interest rate, and the provisions set forth in this paragraph are
applicable. When used as a variable rate, "Prime Rate" means the "Prime Rate"
designated by the Bank from time to time as its "Prime Rate", which is not
necessarily the lowest rate charged by the Bank to its borrowers. When used as a
variable rate, "WSJ Prime Rate" means the "Prime Rate" published in the "Money
Rates" section of the Wall Street Journal, Eastern Edition; provided, however,
if more than one "Prime Rate" is so published, the highest "Prime Rate" shall be
used. Where this obligation contains a variable rate it is agreed that the rate
will change
[X] daily as of the date that the Peoples Bank's Prime Rate
changes,
[ ] as of the first day of the calendar month next following the
most recent change in the ______ or
[ ] as of the first day of the calendar quarter next beginning
after the most recent change in the _______.
(Applicable box is checked. If no box is checked, the rate will change daily as
of the date the applicable index changes.) The interest rate shall not exceed
the maximum rate authorized by applicable law.
SECURITY INTEREST: As security for the payment of all indebtedness evidenced by
this Promissory Note, the payment of all other present, existing or future debts
of any Borrower to Bank and the performance of all other obligations of any
Borrower to Bank, Borrower hereby grants to the Bank a security interest in all
amounts on deposit with the Bank or owed to the Borrower by the Bank, and
Borrower and each person or entity signing this Promissory Note and Security
Agreement as a Grantor ( hereinafter "Grantor", whether one or more) hereby
grant to the Bank a Security Interest in all of the property ("Collateral")
described below, and together also with all proceeds of the Collateral
(including insurance proceeds and unearned premiums) and all parts or
accessories now or hereafter attached to tangible Collateral. Notwithstanding
anything herein to the contrary, if the Collateral described below consists of
property which will be used as the principal dwelling of any Borrower, then such
Collateral shall only secure the indebtedness and other obligations evidenced by
this Promissory Note and shall not secure any other present, existing or future
debts of any Borrower.
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Description of Collateral. 311,729 SHARES OF PIERRE FOODS INC COMMON STOCK, IN
THE NAME OF P F MANAGEMENT INC.
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AGREEMENTS, OBLIGATIONS AND AFFIRMATIONS OF BORROWER AND GRANTOR: Borrower and
any Grantor agree to insure a tangible Collateral against theft, loss, and
destruction with policies acceptable to the Bank and payable to the owner of
such Collateral and Bank as their interest may appear. Bank may act as attorney
in adjusting and canceling any such insurance coverage and in endorsing any
insurance draft. Xxxxxxxx and Grantor appoint Bank as their attorney in fact to
execute any financing statement or other document, or do any act which Bank
deems necessary to protect or realize upon its interest in the Collateral.
Borrower and Grantor agree: Not to dispose of the Collateral without Bank's
consent; to keep the Collateral free from liens; unless it is delivered to the
Bank, the Collateral will be kept principally at the address of the owner of
such Collateral in this State; to pay all ad valorem taxes or other assessments
and charges associated with ownership of the Collateral; and that the Collateral
will not be changed, misused, used for illegal purposes or allowed to
deteriorate, reasonable wear and tear excepted. Unless otherwise agreed neither
the Borrower nor any Grantor will affix tangible Collateral to real property or
to other personal property.
Initials /s/ DC
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If, with respect to any Collateral in the form of investment securities, a stock
dividend is declared, or any stock split made, or right to subscribe issued, all
certificates and rights will be promptly endorsed and delivered to the Bank as
additional Collateral. Borrower and Grantor will also pledge and deliver to the
Bank, upon demand, additional Collateral satisfactory to the Bank and in
accordance with all margin requirements. Bank can, at its option, purchase
insurance or perform any other obligations of the Borrower or any Grantor for
the account of the Borrower and unless the Bank is promptly reimbursed for such
advances, Bank may, as of the day of such advance, add such advance to the
unpaid balance of the principal of the debt evidenced by this Promissory Note,
and increase any periodic payments proportionately. The Bank may assign this
Promissory Note and Security Agreement and the assignee shall be entitled to all
rights and remedies hereunder.
GROUNDS FOR DEFAULT: Borrower shall be in default upon (a) failure of any
Borrower or Grantor to pay any amount due to the Bank as agreed, (b)
noncompliance with or nonperformance of any Borrower's or Grantor's obligations,
affirmations, warranties or agreements hereunder or under any other instrument
or agreement executed by any Borrower or Grantor in favor of the Bank now
existing or hereafter arising, including, without limitation, any loan
agreement, loan commitment, promissory note, deed of trust, security agreement
or assignment, (c) the death, or declaration of incompetency, of any individual
Borrower or any guarantor or other person or entity obligated to pay the
indebtedness evidenced hereby (or the dissolution, merger or reorganization of
any corporate Borrower or any corporate guarantor or other person or entity
obligated to pay the indebtedness evidenced hereby), (d) loss or destruction of
any collateral securing payment to the Bank, (e) filing of any petition in
bankruptcy, reorganization or insolvency by or against any Borrower or Grantor
or guarantor or other person or entity obligated to pay the indebtedness
evidenced hereby, (f) determination by the Bank that any information supplied to
the Bank by the Borrower or Grantor or any guarantor in connection with this
credit is materially false or incomplete, (g) any guarantor failing to satisfy
or comply with the terms of any guaranty agreement in favor of the Bank, (h)
determination by the Bank that the prospect of payment of this obligation is
impaired, or (i) the Bank deeming itself insecure.
REMEDIES UPON DEFAULT: Upon the occurrence of a default, the Bank may, without
notice, declare all amounts due hereunder, and under any other obligation of
Borrower to the Bank, immediately due and payable. All amounts due to the Bank
after the Bank declares Borrower in default shall bear interest at 16% per annum
until paid, but not in excess of the maximum rate allowed by law. Upon such
default the Bank shall have all rights and remedies available under the law,
including but not limited to all rights and remedies under the Uniform
Commercial Code, and the Bank may enter upon Borrower's or Grantor's premises to
take possession of the Collateral or render it unusable. Bank may dispose of
Collateral within or without this State at public or private sale (at which
public sale the Bank may be the purchaser) with or without having the Collateral
present at the sale. If the Collateral is sold, notice of such sale (or notice
of the date after which a private sale may be conducted) shall be posted or
mailed to the Borrower or any Grantor, at their last known address, at least
five business days before such sale, and any such posting or mailing shall
constitute reasonable notice or advertising. Upon default, Xxxxxxxx agrees to
pay the Bank such reasonable attorney fees as may be allowed by law. Borrower
will also pay all reasonable costs (including attorney fees) incurred by the
Bank in exercising its rights and remedies hereunder regardless of whether suit
is commenced, including any costs of repossessing, storing or protecting the
Collateral, or protecting the Bank's interest therein. The Bank shall have no
obligation to foreclose upon or take any other action with respect to the
Collateral; however, if the Bank does dispose of all or any part of the
Collateral, and the net proceeds of such disposal are insufficient to discharge
the entire indebtedness evidenced hereby (including, without limitation,
attorneys fees and other collection expenses), then the Borrower shall remain
obligated to pay any such deficiency on demand. In addition to all other rights
and remedies provided to the Bank herein or by law or equity, in the event of a
default hereunder, the Bank, to the fullest extent permitted by applicable law,
without advance notice to any Borrower, any Grantor or other person, may set off
and apply to the indebtedness evidenced hereby, any and all deposits at any time
held and any other indebtedness at any time owing by the Bank to or for the
credit of any Borrower or any party obligated to pay this Promissory Note or any
portion thereof.
LATE CHARGES: Unless this Promissory Note is payable in a single payment, and
not by installments of interest or principal and interest, Xxxxxxxx agrees to
pay a late fee of 4% of the amount of any payment unpaid for 15 days or more
after the end of the calendar month in which such payment is due (or 30 days or
more after the end of such month if interest is paid in advance.)
WAIVER: Any failure of the Bank to declare a default, or otherwise exercise any
right or remedy available to it, shall not constitute a waiver by the Bank of
any such right or remedy. All parties to this Promissory Note and Security
Agreement, including each Borrower, each Grantor and any sureties, endorsers, or
guarantors hereby waive protest, presentment, notice of dishonor and all other
notices required by law. All parties agree to remain bound hereunder
notwithstanding any release of other parties, the release or surrender of
collateral, or any extension of time for payment. The validity, interpretation
and enforcement of this Promissory Note and Security Agreement shall be in
accordance with North Carolina law.
This Promissory Note and Security Agreement is delivered in and shall be
construed under the internal laws and judicial decisions of the State of North
Carolina, and, to the extent the same may be applicable, the laws of the United
States. In any litigation in connection with or to enforce this Promissory Note
and Security Agreement against any person, including, but not limited to, any
maker, surety, guarantor, grantor or endorser, each such obligor irrevocably
consents to and confers personal jurisdiction on the courts of the State of
North Carolina or the United States courts located in the State of North
Carolina, and expressly waives any objections as to venue in any such courts,
and agrees that service of process may be made on such obligor by mailing a copy
of the summons and complaint to them by registered or certified mail, return
receipt requested. Nothing contained herein shall, however, prevent the Bank or
any other holder of this Promissory Note and Security Agreement from bringing
any action or exercising any rights within any other state or jurisdiction or
from obtaining personal jurisdiction by any other means available by applicable
law.
IN TESTIMONY WHEREOF, each individual Borrower and Grantor has executed this
Agreement under seal, and each Borrower and Grantor which is not an individual
has caused this Agreement to be executed under seal by its duly authorized
officer, partner or manager and each person or entity signing which is not a
corporation adopts as the seal of such person or entity the word "(SEAL)"
appearing beside the name of such person or entity,
PEOPLES BANK BORROWERS:
By: (SEAL)
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GRANTORS: (providing collateral, but
not obligated to pay principal
or interest unless pursuant to a
separate guaranty or other agreement) (SEAL)
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(SEAL) (SEAL)
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(SEAL) (SEAL)
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P F MANAGEMENT INC.
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Name of Corporation Name of Corporation
By: By: /s/ Xxxxx X. Xxxxx
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President President
/s/ XXXXX X. XXXXX
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Attest Attest
Secretary (Corporate Seal) Secretary (Corporate Seal)
(SEAL) (SEAL)
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Name of Partnership or Limited Name of Partnership or Limited
Liability Company Liability Company
By: (SEAL) By: (SEAL)
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By: (SEAL) By: (SEAL)
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By: (SEAL) By: (SEAL)
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By: (SEAL) By: (SEAL)
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By: (SEAL) By: (SEAL)
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