Exhibit 10.2
GUARANTY FEE AGREEMENT
THIS GUARANTY FEE AGREEMENT ("Agreement") is made as of May 23, 2002
between PIERRE FOODS, INC., a North Carolina corporation (the "Corporation"),
and XXXXX X. XXXXX ("Xxxxx").
A. In connection with the Corporation's borrowing of funds from
Foothill Capital Corporation ("Foothill Capital"), Xxxxx has executed a guaranty
of the Corporation's indebtedness and obligations to Foothill Capital (the
"Guaranty").
B. In consideration for Xxxxx'x execution of the Guaranty, the
Corporation has agreed to pay to Xxxxx an annual guaranty fee so long as Xxxxx
is required to guaranty the Corporation's obligations to Foothill Capital.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in the Agreement, the parties agree as follows:
1. Guaranty Fee. So long as the Guaranty is effective, or Xxxxx is
required by Foothill Capital, as a condition to Foothill Capital's granting of
credit or the making of loans to the Corporation, to otherwise guaranty any
obligation or indebtedness of the Corporation to Foothill Capital, the
Corporation shall pay to Xxxxx on an annual basis a guaranty fee equal to one
and one-half percent (1.50%) of the Maximum Credit Line (as such term is defined
in the letter of intent between the Corporation and Foothill Capital (the
"Letter of Intent")) which is made available to the Corporation under the
revolving loan, letter of credit subline, term loan subline and capital
expenditure subline described in the Letter of Intent. The guaranty fee shall be
paid to Xxxxx in cash on the Closing Date (as such term is defined in the Letter
of Intent) and annually thereafter on the anniversary of the Closing Date.
2. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
(b) Notices. All notices given under this Agreement shall be
deemed to be effectively given when personally delivered to the party entitled
to receive the notice, or when placed in the United States mails, registered or
certified, postage prepaid, at the addresses stated below:
Xxxxx: XX Xxx 0000
000 Xxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxx Xxxxxxxx 00000
The Corporation: XX Xxx 0000
000 Xxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Either party may change his or its address for the purpose of notice by giving
notice of the change of address to the other party in accordance with the
provisions of this Section.
(c) Waiver and Modification. No waiver of any term or
condition of this Agreement shall be effective unless in writing signed by the
waiving party. The waiver of the breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any other or
subsequent breach of the same or any other term or condition. This Agreement may
only be modified in a writing signed by both parties.
(d) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforce-ability of any
other provision.
(e) Applicable Law. The Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
(f) Entire Agreement. The parties agree that this Agreement
shall be the sole agreement between the parties respecting the within subject
matter. All prior written and oral agreements respecting such subject matter are
superseded in full.
(g) Time of Essence. Time is of the essence of this Agreement.
(h) Corporate Authority. The Corporation represents and
warrants to Xxxxx that (i) all necessary corporate action has been taken on
behalf of the Corporation to authorize the execution and delivery of this
Agreement by the undersigned officer of the Corporation and the satisfaction by
the Corporation of its obligations hereunder, (ii) the Corporation has full
power and authority to enter into this Agreement and to perform hereunder and
(iii) the Corporation's execution and delivery of this Agreement does not
violate or contravene any other agreement by which the Corporation is bound.
These representations and warranties shall survive the Closing Date and all
deliveries hereunder.
(i) Representations and Warranties of Xxxxx. Xxxxx represents
and warrants to the Corporation that (i) he has full power and authority to
enter into this Agreement and to perform hereunder and (ii) his execution and
delivery of this Agreement does not violate or contravene any other agreement by
which he is bound. These representations and warranties shall survive the
Closing Date and all deliveries hereunder.
(j) Counterparts. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original and all of which together shall constitute one and the same agreement.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
PIERRE FOODS, INC.
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Xxxxxx X. Xxxxxxx, Chief Financial Officer
(L.S.)
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XXXXX X. XXXXX
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