Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Form 10-K 13 86K
2: EX-2.1 Stock Purchase Agreement 45 205K
4: EX-10.10 Loan Agreement Deposit Guaranty National Bank 14 60K
5: EX-10.11 Loan Agreement, Nations Bank 18 67K
6: EX-10.12 Consulting Agreement 5 24K
7: EX-10.13 Consulting Agreement 5 24K
3: EX-10.9 Non-Employee Director Stock Option Plan 8 35K
8: EX-13.1 Annual Report to Security Holders 32 127K
9: EX-21.1 Subsidiaries of the Company 1 5K
10: EX-23.1 Consent of Ernst & Young 1 7K
11: EX-27 Financial Data Schedule 1 7K
EX-10.10 — Loan Agreement Deposit Guaranty National Bank
Exhibit Table of Contents
EXHIBIT 10.10
LOAN AGREEMENT
This LOAN AGREEMENT (hereinafter referred to as the "Agreement") is
made as of this 16th day of February, 1996, by and between Deposit Guaranty
National Bank (hereinafter referred to as "Lender"), with an office located at
Post Office Box 1200, Jackson, Mississippi, 39215-1200, and National Picture &
Frame Company, a Delaware corporation, and its wholly owned subsidiary, NPF
Company, a Delaware corporation, with their offices located at 1500 Commerce
Street, Greenwood, Mississippi (hereinafter referred to jointly as "Borrowers").
WITNESSETH
WHEREAS, Borrowers desires to borrow the sum of Five Million and
No/100ths Dollars ($5,000,000.00) from Lender, and Lender is willing to make a
loan in such amount to Borrowers upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any extension of credit made by Lender to Borrowers, the
parties hereto agree as follows:
I. THE LOAN
1.1 THE LOAN. Upon the terms and subject to the conditions hereof.
Lender agrees to make a loan (the "Loan") to Borrowers in an amount not to
exceed the sum of Five Million and No/100ths Dollars ($5,000,000.00) pursuant
to the requirements set forth in this Agreement.
1.2 INTEREST. Borrowers agree to pay to Lender interest on the unpaid
principal amount of the Loan from the date of such Loan until the Loan is paid
in full, with interest to be calculated based on thirty (30) day LIBOR rate as
of the date of the closing plus 150 basis points to be adjusted as of the first
business day of each month during the term of the Loan (e.g., as of February
16, 1995 5.31 + 1.50 = 6.81 %).
1.3 TERM NOTE. The Borrowers' obligation to repay the Loan shall be
evidenced by a promissory note (the "Note") in a form to be provided by Lender.
1.4 TERM OF LOAN. Pursuant to the Note and this Agreement to be
executed under even date, as well as the Commitment Letter of Lender to
Borrowers dated December 8, 1995 (all collectively referred to as the "Loan
Documents") the indebtedness under the Note will be amortized over a five (5)
year (60 months) period with the entire unpaid balance of principal and accrued
interest to be payable five (5) years (sixty months) from date of the Note.
Provided, however, that the Note shall be subject to call and be deemed in
default for failure of Borrowers to meet any material requirements, ratios or
covenants herein.
1.5 USE OF PROCEEDS. The proceeds of the Loan shall be used by
Borrowers in part to pay in part that revolver or revolving line of credit with
Provident Bank, which in any event shall be paid in full upon disbursement of
this Loan and the NationsBank loan described herein.
1.6 FEES. Borrowers have agreed to pay all fees and expenses of
Lender in connection with this Loan including, but not limited to, reasonable
legal fees, title examination and filing fees of Lender in connection with the
transactions contemplated hereby.
II. PAYMENTS
2.1 INSTALLMENT PAYMENTS. The Loan shall be repaid in sixty (60)
monthly installments of equal principal amounts and accrued interest based on
the amortization as described in Paragraph 1.2 above, beginning April 1, 1996
with the entire outstanding principal balance and all accrued interest
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being due and payable five (5) years (sixty months) from date of the first
installment set out above.
2.2 PREPAYMENT. Borrowers may prepay the Note in accordance with the
provisions of Note and at any time without penalty.
2.3 NON-BUSINESS DAYS. If any payment under this Agreement falls due on a
day which is not a business day, the due date thereof shall be extended to the
next succeeding business day.
III. TERMS AND CONDITIONS OF LOAN
The making of advances by Lender pursuant to the terms of the Note shall be
subject to the fulfillment to the satisfaction of Lender of the following
conditions precedent:
3.1 RECEIPT OF NECESSARY DOCUMENTS. Lenders shall have received from
Borrowers all documentation and information requested by it in preparation for
extending the Loan.
3.2 SECURITY INTERESTS. The Loan will be secured by a first perfected
Deed of Trust as defined below.
3.3 NO DEFAULT. On the date of the Loan, Borrowers shall be in compliance
with all the terms and provisions contained herein as well as in the other Loan
Documents on its part to be observed or performed, and no Event of Default, as
set out below, or event which with notice or lapse of time or both which would
constitute an Event of Default shall have occurred and be continuing.
3.4 DEED(S) OF TRUST. All deeds of trust and/or leasehold deeds of trust
or other documents relating to the Collateral (as defined in Section IV, below)
shall have been duly executed and filed in all offices in which filing is
required in order to perfect for the benefit of Lender the first perfected lien
in and on the Collateral of Borrowers granted by Borrowers pursuant to this
Agreement. Borrowers shall have delivered to Lender and filed no later than
closing the Release or Subordination, as deemed fit by Lender, of all
preexisting liens and encumbrances upon the Collateral previously granted by
Borrowers to any entities or individuals.
3.5 PAYMENT OF TAXES AND SATISFACTION OF TAX LIENS. At or before closing,
Borrowers must provide proof of satisfaction of all Federal and State tax liens
or obligations to the satisfaction of Lender.
IV. COLLATERAL AND GRANT OF SECURITY INTEREST
4.1. COLLATERAL. To secure the prompt and complete payment, when due, of
the obligations of Borrowers pursuant to the Loan Documents, Borrowers hereby
pledge, assign and transfer to Lender, and grant to Lender a continuing security
interest in and to the following (hereinafter collectively referred to as the
"Collateral"):
(a) A first Deed of Trust covering the fee simple and leasehold
interests held by Borrowers or and any one of them in that property located in
Leflore County, Mississippi and on which Borrowers' 165,000 square foot
manufacturing facility is located, said property being more fully described in
said Deed of Trust.
4.2 GRANT OF SECURITY INTEREST. Borrowers hereby grant to Lender a
continuing security interest in and to all of the Collateral aforementioned.
All of the obligations of Borrowers pursuant to the Loan Documents shall be
secured by Lender's security interest in the Collateral, and by all other
security interests, security agreements, liens, claims, assignments, and
encumbrances now and from time to time hereafter granted by Borrowers to Lender.
Lender may, in its sole discretion, (a) exchange, enforce, waive or release any
security or portion of the Collateral, and any security agreement,
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lien, claim, assignment, or encumbrance relating to any Collateral owned by
Borrowers, (b) apply any security or Collateral and direct the order or manner
of sale thereof as Lender may, from time to time, determine, and (c) settle,
compromise, collect or otherwise liquidate any security or Collateral of
Borrowers' obligations pursuant to the Loan Documents in any manner following
the occurrence and continuance of any Event of Default as defined below without
affecting or impairing Lender's right to take any other action with respect to
any security or Collateral for the obligation of Borrowers or any part thereof.
4.3 PERFECTION OF SECURITY INTEREST.
(a) Borrowers shall take and perform any and all steps
necessary or appropriate to perfect, maintain, and protect Lender's security
interest in the Collateral until all obligations have been satisfied in full,
including, without limitation, executing and recording any assignments or
notices of assignments with respect to the Collateral, or amendments thereof
maintaining complete and accurate records, in taking such steps as are deemed
necessary by Lender to maintain Lender's control of the Collateral.
(b) To the extent permitted by applicable law, Lender may
file one or more Deeds of Trust to perfect its lien on said Collateral.
(c) If Borrowers fail to pay any taxes or charges assessed
on the Collateral, Lender may (but shall not be required to) pay the same and
charge the costs thereof to Borrowers as part of the obligation owed by
Borrowers pursuant to the Loan Documents payable on demand and secured by the
Collateral. In order to protect or perfect any security interest which Lender
is granted hereunder, Lender may, in its sole discretion, discharge any lien or
encumbrance or bond the same, pay any insurance, maintain guards, pay any
service bureau, on obtaining any record and add the costs of any of the
foregoing to the obligations of Borrowers pursuant to the Loan Documents,
payable on demand and secured by the Collateral.
4.4 RIGHTS AND REMEDIES OF LENDER RELATING TO COLLATERAL.
The rights and remedies of the parties with respect to the Collateral shall be
fully set out in Deed(s) of Trust to executed as appropriate by the Borrowers
or any of them.
V. REPRESENTATIONS AND WARRANTIES
In addition to the representations and warranties made by Borrowers
elsewhere in this Agreement and the other Loan Documents, Borrowers represent
and warrant to Lender that:
5.1 ORGANIZATION AND CORPORATE POWERS. Each of the Borrowers is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, duly qualified to do business in the State of
Mississippi, and has the corporate power and authority to own its properties and
assets, and to carry on its business, all as, and in the places where, such
properties and assets are now owned or operated or such business is now
conducted or presently proposed to be conducted. Borrowers have not been known
as or used any other corporate or fictitious names except as disclosed herein.
5.2 TRANSACTION IS LEGAL AND AUTHORIZED. The borrowing of the
principal amount of the Loan hereunder and pursuant to the Note, the issuance
of the Note and compliance by Borrowers with all of the provisions of this
Agreement and the other Loan Documents are within the corporate powers of
Borrowers. Each of the Loan Documents including this Agreement have been duly
authorized, executed and delivered and are the legal, valid, and
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binding obligations of Borrowers, enforceable in accordance with their terms.
The Note has been fully authorized and, when executed and delivered in
accordance with this Agreement, will be the legal, valid, and binding
obligation of Borrowers enforceable in accordance with its terms. The
execution, delivery, and/or performance by Borrowers of the Loan Documents
shall not, by the lapse of time, the giving of notice or otherwise, constitute
a violation of any applicable law or a breach of any provision contained in
Borrowers' Bylaws or Certificates of Incorporation, or contained in any
material agreement, instrument or document to which either of such Borrowers is
now a party or by which either is bound.
5.3 APPROVALS, PERMITS, CERTIFICATES, INSPECTIONS, CONSENTS, ETC.
Borrowers have, and are in good standing with respect to, all material
approvals, permits, certificates,inspections, consents and franchises issued by
governmental authorities, including all state and federal agencies necessary to
continue to conduct its business as heretofore conducted by it and to own or
lease and operate its property as now owned or leased by it.
5.4 FINANCIAL STATEMENTS AND CONDITION. Borrowers have delivered to
Lender various financial statements. All such audited and unaudited financial
statements fairly present in all material respects the financial condition,
assets and liabilities of Borrowers at their respective dates and the results
of its operations for such periods; and have been prepared in accordance with
generally accepted accounting principles consistently maintained since the
beginning of such periods except that any such unaudited statements may not
contain footnoted disclosures and shall be subject to year-end adjustments
consistent with generally accepted accounting principles. Those financial
statements provided to Lender by Borrowers prior to closing are, to the best
knowledge of Borrowers, correct and complete.
5.5 CONDITION OF ASSETS: ABSENCE OF LIENS.
(a) Borrowers have good, indefeasible, merchantable and marketable
title to and ownership of the Collateral, free and clear of all liens,
marketable title to and ownership of the Collateral, free and clear of all
liens, claims, security interests and encumbrances. Borrowers' assets are of
quality, are usable or saleable in the ordinary course of its business, are in
good operating condition, ordinary wear and tear excepted.
(b) Borrowers enjoy peaceful and undisturbed possession under all of
the leases under which it is operating, none of which contains any provision
that will materially adversely affect or impair the operations of Borrowers.
Each of such leases is valid, subsisting and in full force and effect, none of
such leases is in default and no event has occurred which with the passage of
time or the giving of notice, or both, would constitute a default under any
thereof.
(c) The office and/or location where Borrowers keep any portions of
the aforementioned Collateral and its books and records concerning such
Collateral are at the address of Borrowers stated above which constitutes all of
Borrowers' places of business and are Borrowers' only offices and places of
business.
5.6 ABSENCE OF LIENS AND GRANTING OF LIENS. Borrowers represent and
warrant that no mortgage, security agreement, financing statement or other title
retention agreement (except those executed in favor of Lender) has or will be
executed with respect to any real property, personal property, chattel or
fixture used in connection with the construction, operation or maintenance of
the Collateral, without the prior written consent of Lender.
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5.7 LITIGATION. There are no actions, suits, investigations, or
proceedings, (whether or not purportedly on behalf of Borrowers) pending or to
the knowledge and belief of Borrowers, threatened against or affecting
Borrowers, except for that litigation resulting in the Judgment in the favor of
Lajennifer J. Harbin, but none of which could reasonably be expected to (i)
result in any material adverse change in business, operation, or financial
condition of Borrowers or the ability of Borrowers to perform this Agreement or
any other obligation pursuant to the Loan Documents or (ii) materially adversely
affect the Collateral or interests of Lender pursuant to the Loan Documents.
5.8 NO DEFAULTS OR RESTRICTIONS. The execution and delivery of this
Agreement and the remaining Loan Documents, in compliance with the terms and
conditions hereof and thereof, do not and will not, with the passage of time
or the giving of notice or both result in a breach of, or constitute a default
under, any agreement, instrument or judicial action by which Borrowers or its
properties may be bound or affected. Borrowers are not in default in the
performance of any of the terms contained in any agreement, instrument or
judicial action by which Borrowers or any of their properties may be bound or
affected.
5.9 TAXES. Borrowers have filed all United States income tax returns and
all state and municipal tax returns (including income tax and franchise tax
returns) which are required to be filed, and have paid, or made provision for
the payment, of all taxes which have become due except such taxes, if any, being
contested in good faith and as to which adequate reserves have been provided.
5.10 GOVERNMENTAL CONSENT. No governmental authorizations are required to
be obtained, and no registrations or declarations are required to be filed by
Borrowers in connection with the execution and delivery of the Loan Documents
for the consummation of the transactions contemplated hereby and thereby.
5.11 COMPLIANCE WITH LAW. Borrowers have complied in all material
respects with all applicable statutes and with all regulations of any
government in respect of the conduct of its businesses and ownership of their
properties.
5.12 FULL DISCLOSURE. The balance sheets and financial statements
provided to Lender prior to the date of closing referenced in paragraph 5.4,
above, and the balance sheets and financial statements do not, nor does this
Agreement nor any of the Loan Documents furnished by Borrowers to Lender in
connection with the negotiations, execution or delivery of this Agreement or the
other Loan Documents, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading. As to those financial statements provided to Lender by Borrowers
prior to closing, Lender makes the same acknowledgments and Borrowers the same
representations and warranties as set forth in paragraph 5.4, above.
5.13 SURVIVAL OF WARRANTIES AND REPRESENTATIONS. Borrowers covenant,
warrant and represent to Lender that all representations and warranties of
Borrowers contained in this Agreement and the other Loan Documents shall be true
at the time of Borrowers' execution of this Agreement and the other Loan
Documents, shall survive the execution, delivery and acceptances thereof and of
any supplemental documentation by the parties thereto and the closing of the
transactions described therein and related thereto.
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VI. AFFIRMATIVE COVENANTS
In addition to the covenants made by Borrowers elsewhere in this
Agreement and in the other Loan Documents, Borrowers covenant and agree that
so long as this Agreement shall remain in effect or any obligation hereunder or
pursuant to other Loan Documents shall be unpaid, unless Lender shall otherwise
consent in writing:
6.1 PUNCTUAL PAYMENT OF OBLIGATIONS. Borrowers will pay
punctually when due all of the amounts due and owing in respect of the Note and
other obligations pursuant to the Loan Documents.
6.2 MAINTENANCE OF CORPORATE EXISTENCE. Borrowers will at all
times do or cause to be done all things necessary to maintain its
corporate existence and to comply with all related laws applicable to them,
provided, however, that nothing contained in this paragraph shall, subject to
compliance with any applicable provision of this Agreement, (a) require
Borrowers to maintain any affiliation not necessary or desirable in the conduct
of the business of Borrowers, or (b) require Borrowers to comply with any law
so long as the validity or applicability thereof shall be contested in good
faith.
6.3 MAINTENANCE OF ASSETS. Borrowers will, insofar as it is not
prevented by causes beyond its control, at all times, maintain, preserve,
protect and keep, or cause to be maintained their property in good
condition, ordinary wear and tear excepted.
6.4 PAYMENT OF TAXES AND CLAIMS. Borrowers will file all tax
returns and other reports Borrowers are required by law to file, maintain
adequate reserves for the payment of all taxes and charges, and pay promptly,
when due, all such taxes and charges. Borrowers will duly pay and discharge,
as the same become due and payable, all taxes and charges which are, or which
if are unpaid might become, a lien or charge upon the franchises or properties
of Borrowers.
6.5 INSURANCE. Borrowers will provide or cause to be provided for
itself insurance against loss or damage of the kinds customarily insured
against by corporations similarly situated, including, but not limited to,
fire, hazard and products liability insurance, with reputable insurers, in such
amounts, with such deductibles and by such methods as generally maintained by
other companies engaged in similar businesses. Each such policy shall include
a provision requiring thirty (30) days prior written notice to Lender of any
cancellation and shall show Lender as a loss payee as its interests may appear.
6.6 COMPLIANCE WITH LAW. Borrowers have obtained all consents
required to be obtained by Borrowers from any governmental agency with respect
to the transactions contemplated by the Loan Documents including this
Agreement. Borrowers will comply with all applicable statutes or regulations
of any governmental department or agency or of any judicial authority.
6.7 FINANCIAL PERFORMANCE COVENANTS AND CERTIFICATES OF
COMPLIANCE. Borrowers shall furnish to Lender on a quarterly basis a
Certificate of Compliance executed by its Chief Financial Officer and properly
attested in the form of Exhibit "A" attached hereto certifying that Borrower is
in compliance with the following affirmative covenants:
(a) That the tangible net worth of Borrowers at the end of each fiscal
quarter as that phrase is defined and used in the November 2, 1995 commitment
letter of NationsBank to Borrowers regarding credit facilities between
NationsBank and Borrowers and any related documents (said facilities hereafter
referred to as the "NationsBank Facilities") provided to Lender in
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connection with application for this Loan shall not be less than
$17,500,000.00, and further that the minimum tangible net worth requirement
shall increase by forty percent (40%) of Borrowers' net profit after taxes for
each fiscal year end. The tangible net worth shall be derived from the
respective quarter ending consolidated balance sheets for Borrowers and their
subsidiaries, but in any event said amounts shall be derived pursuant to
generally accepted accounting principles;
(b) That at the end of each fiscal quarter there shall be no
greater than a maximum ratio of funded debt to EBITDA (net income plus
interest expense, taxes, depreciation, amortization, and other non-cash
expenses), as defined in connection with the NationsBank Facilities, of 3.00 to
1.00. The funded debt and EBITDA as well as the derivation of the ratio shall
be from the respective quarter ending consolidated balance sheets for Borrowers
and their subsidiaries, but in any event said amounts shall be derived pursuant
to generally accepted accounting principles; and
(c) That for each fiscal quarter there shall be a minimum cash flow
coverage, as that term is used in connection with the NationsBank Facilities,
of no less than 2.0 times calculated on a rolling four quarter basis (defined
as net profit plus depreciation and amortization, plus interest expense, minus
dividends, divided by interest expense plus prior year current maturity of
long-term debt). The minimum cash flow coverage shall be derived from the
respective quarter ending consolidated balance sheets for Borrowers and their
subsidiaries, but in any event said amounts shall be derived pursuant to
generally accepted accounting principles.
6.8 FINANCIAL STATEMENTS. Within forty-five (45) days after the
end of each fiscal quarter, a certificate of the chief financial officer shall
be provided with accompanying quarterly, interim financial statements prepared
by Borrowers. Likewise, within 120 days of the end of each fiscal year of
Borrowers, Borrowers shall provide audited, unqualified financial statements
from a reputable accounting firm acceptable to Lender and prepared in
accordance with generally accepted accounting principles. Promptly, from time
to time, such other information regarding the operations, business affairs and
financial condition of Borrowers as Lender may reasonably request shall also be
provided.
6.9 NOTICE OF EVENT OF DEFAULT AND OTHER ADVERSE EVENTS.
(a) In the event any officer of Borrowers knows at any time of
any Event of Default as defined below which shall have occurred or knows of the
occurrence of any event which with notice or lapse of time or both, would
constitute an Event of Default, such person will promptly furnish to Lender a
written statement ("Notice of Event of Default") as to such occurrence, specify
the nature and extent thereof and the action (if any) which is proposed to be
taken by Borrowers with respect thereto.
(b) Borrowers shall notify Lender in writing, promptly upon
Borrowers' learning thereof, of any claim or litigation affecting Borrowers,
whether or not the claim is considered by Borrowers to be covered by insurance,
and of the institution of any suit or administrative proceeding, which may
materially and adversely affect Borrowers' operations, financial condition,
business or Lender's security interest in the Collateral.
(c) Borrowers shall advise Lender by written notice
delivered to Lender at least thirty (30) days prior thereto of Borrowers'
closing of that facility located upon the Collateral pledged in connection with
this Loan.
(d) Borrowers shall notify Lender in writing within three (3)
business days after occurrence thereof, of Borrowers' default or of any claim
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that any event has occurred which constitutes or with notice or passage of time
will constitute such a default under any note, indenture, Loan agreement,
mortgage, lease, deed or other similar agreement to which Borrowers is a party
or by which Borrowers is bound.
(e) Borrowers shall notify Lender in writing, promptly upon the
occurrence thereof, of any event which may materially adversely affect
Borrowers' ability to comply with the terms and conditions of this Agreement or
any other Loan Documents.
VII. NEGATIVE COVENANTS
In addition to the covenants made by Borrowers elsewhere in this Agreement,
Borrowers covenant and agree that, so long as this Agreement shall remain in
effect or any obligation under the Loan Documents shall be unpaid, unless
Lender shall otherwise consent in writing:
7.1 INDEBTEDNESS: GUARANTEES.
(a) Borrowers will not incur, create, assume or permit to
exist any indebtedness for borrowed money, or any indebtedness evidenced by
Note, bonds, debentures or similar obligations of Borrowers except for: (i) the
obligations of Borrowers pursuant to the Loan Documents, or (ii) any
indebtedness of Borrowers to third parties incurred in the ordinary course of
Borrowers' business so long as Borrowers are in compliance with all terms,
convenants and requirements herein.
(b) Borrowers will not guarantee or otherwise, in any way,
become liable with respect to the obligations or liabilities of any other
entity or person except guarantees by endorsement of a negotiable instrument
for deposit or collection in the ordinary course of Borrowers' business.
7.2 LIENS. Borrowers will not incur, create, assume or permit to
exist any mortgage, lien or any other encumbrance of any nature whatsoever on
the Collateral pledged in connection with this Loan, except:
(a) Liens incurred or pledges or deposits made in
connection with Workmen's Compensation, unemployment insurance, old age
pensions, social security and public liability and similar legislation;
(b) Liens, pledges, or deposits to secure the performance
of bids, tenders, leases, contracts (other than for the repayment of borrowed
money), statutory obligations, surety and appeal bonds and other obligations of
like nature, incurred as an incidence to and in ordinary course of business;
(c) Statutory liens of landlords other liens imposed by
law, such as carriers', warehousemen's, mechanics', materialmen's and
vendors' liens, incurred in good faith in the ordinary course of business;
(d) The security interest of Lender to secure payment of
obligations of Borrowers pursuant to the Loan Documents; and
(e) Liens granted by Borrowers to NationsBank in connection
with financing for purposes of acquisitions.
7.3 DISPOSITION OF ASSETS. Borrowers will not sell, lease, assign,
transfer, or otherwise dispose of any of the Collateral other than in the
ordinary course of Borrowers' business and for fair market value.
7.4 TRANSACTIONS WITH AFFILIATES. Borrowers will not enter into
any transaction with any affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of Borrowers' business and upon
terms found by the Board of Directors of Borrowers to fair and reasonable and
no less favorable to Borrowers than would obtain in a comparable arm's length
transaction with a person or entity not an affiliate or a subsidiary.
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7.5 CHANGE OF NAME. Borrowers will not use any other corporate or
fictitious name.
VIII. SURVIVIAL OF OBLIGATIONS UPON TERMINATION OF AGREEMENT
Except as otherwise expressly provided for in this Agreement and in
the other Loan Documents, no termination or cancellation (regardless of cause
or procedure) of this Agreement or the other Loan Documents shall in any way
affect or impair the powers, obligations, duties, rights and liabilities of
Borrowers or of Lender in any way or respect relating to the warranties and
representations of Borrowers or Borrowers' liability for the payment of
indebtedness due pursuant to the Loan Documents, until all the indebtedness has
been repaid in full. All such undertakings, agreements, covenants, and
representations shall survive such termination cancellation.
IX. EVENTS OF DEFAULT AND REMEDIES
9.1 NATURE OF EVENTS. An "Event of Default" shall exist if any of
the following occur:
(a) Borrowers shall fail to pay any obligation or
indebtedness due pursuant to the Loan Documents including, but not limited to
those obligations set out in Section II above, within fifteen (15) days after
it is due.
(b) Default shall be made in the performance or observance
of any material covenant, condition or agreement contained in this Agreement or
any Event of Default or event which with notice or lapse of time or both would
become such an Event of Default shall occur under any of the Loan Documents.
(c) Any warranty, representation or other statement by or
on behalf of Borrowers contained in this Agreement or any other Loan Document
or in any instrument furnished in compliance with or connection with any of the
foregoing is false or misleading in any material respect or the Borrowers
shall hereafter make any material misrepresentation or omission to Lender or
any of its affiliates;
(d) Either of the Borrowers shall: (i) file a petition
seeking relief for itself under the Bankruptcy Code, or file an answer
consenting to, admitting the material allegations of, or otherwise not
controverting, or failing timely to controvert such a petition or (ii) file
such petition or answer with respect to relief under the provisions of any
other now existing or future applicable bankruptcy law.
(e) An order or relief is entered against either of the
Borrowers under the Bankruptcy Code or similar law which order is not
stayed, adjudging it as a bankrupt or insolvent, or of any substantial part of
its property, or ordering the reorganization, winding-up or liquidation of its
affairs; or upon the expiration of thirty (30) days after the filing of any
involuntary petition against it seeking any of the relief specified in this
paragraph 9.1(e) without the petition being dismissed prior to that time.
(f) Either of the Borrowers shall: (i) make a general
assignment for the benefit of its creditors, or (ii) consent to the appointment
of, or have all or any portion of its property taken possession of by, a
receiver, liquidator or trustee or Borrowers or any substantial part of its
property, or (iii) admit its insolvency or inability to pay its debts generally
as such debts become due, or (iv) fail generally to pay its debts as such debts
become due or (v) take or permit any action looking to the dissolution or
liquidation of Borrowers.
(g) Either of the Borrowers shall fail to pay when due any
of their indebtedness including the obligations represented by the Loan
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Documents and any indebtedness, liability, guarantees, endorsements and other
contingent obligations (excluding trade payables in the ordinary course of
Borrowers' business, and which do not represent indebtedness from borrowed
money) and any grace period provided with respect to such payment shall have
lapsed; any other relief shall occur which shall cause or permit the holder of
any of those indebtednesses to cause such indebtedness to become due prior to
its date of maturity; or if any event shall occur which shall result in the
termination of, or permit any person or entity, any agreement whose termination
would materially adversely affect Borrowers, its properties or the Collateral;
(h) There shall hereafter occur any material and adverse change in
the business operations and condition, financial or otherwise, of Borrowers;
(i) The Security Agreement(s) or Deed(s) of Trust or any other Loan
Documents shall terminate or cease to be in full force and effect by reason of
Borrowers' breach thereof;
(j) At any time Borrowers are deemed to be in default with respect to
the NationsBank Facilities; and
(k) At any time, Borrowers fail to meet any of the requirements set
out in any of the Loan Documents.
9.2 REMEDIES.
(a) In case any one or more of the Events of Default specified above
in section 9.1 shall have happened and be continuing, Lender shall have no
further duty under this Agreement to make the Loan or to meet any other
obligations pursuant to the Loan Documents. In addition to the rights and
remedies set forth elsewhere in this Agreement, Lender may proceed to protect
and enforce its rights either by suit in equity and/or in an action at law for
foreclosure, attachment or by other appropriate proceedings, or to enforce any
other legal or equitable right of Lender. Lender's rights and remedies under
this Agreement and any Deed(s) of Trust and other Loan Documents will be
cumulative and not exclusive of any other right or remedy which Lender may have,
and exercise of any one or more of such rights and remedies shall not be deemed
to preclude the exercise of any other rights and remedies.
(b) In particular, without limiting the generality of the foregoing,
Lender shall have the right to declare all debts and obligations hereunder to
be, inasmuch as obligations shall thereupon forthwith become, due and payable,
without any presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived,and Borrowers will forthwith pay to Lender the
entire outstanding principal of, and interest accrued on, all obligations
hereunder and pursuant to the other Loan Documents.
(c) No termination or cancellation (regardless of cause or procedure)
of this Agreement shall in any way affect or impair the powers, obligations,
duties, rights and liabilities of the parties hereto in any way with respect to:
(i) any transaction or event occurring prior to such termination or
cancellation, (ii) the Collateral, or (iii) any of Borrowers' undertakings,
agreements, covenants, warranties and representations contained in this
Agreement or any of the Loan Documents and all such undertakings, agreements,
covenants, warranties and representations shall survive such termination or
cancellation.
10
X. MISCELLANEOUS
10.1 EXPENSES. Whether or not the transactions contemplated by this
Agreement shall be consummated, Borrowers will pay on the date of this
Agreement all reasonable expenses of Lender and its assignees incident to the
transactions contemplated by this Agreement or the other Loan Documents or in
connection with any modification, amendment, alteration, assignment, filing,
recording or enforcement of this Agreement, any other Loan Document and the
real property filings, including, but not limited to, the costs of, or
incidental to, any title searches with respect to the Collateral, any
appraisals of the Collateral, and any recording or filing of any Security
Agreement or financing statements concerning the Collateral, Lender's and its
assignees' out-of-pocket expenses and the charges and disbursements of their
attorneys associated with the transactions contemplated by this Agreement. The
obligations of Borrowers under this Section 10.1 shall survive the payment of
any other obligations pursuant to the Loan Documents.
10.2 LAW AND JURISDICTION. This Agreement and the other Loan Documents
shall be interpreted and the rights and liabilities of the parties hereto
determined in accordance with the laws of the State of Mississippi.
10.3 CONFLICT OF TERMS. The provisions of the other Loan Documents and any
schedule or exhibit thereto are incorporated in this Agreement by this reference
thereto. Except as otherwise provided in the other Loan Documents by specific
reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in conflict with, or inconsistent with,
any provision in the loan Documents, the provision contained in this Agreement
shall govern and control.
10.4 WAIVER BY BORROWERS. Except as otherwise provided for in this
Agreement, Borrowers waive (i) presentment, demand and protest and notice of
presentment, protest, default, non-payment, maturity, release, compromise or
settlement; and (ii) the benefit of all valuations, appraisals, homestead and
exemption laws.
10.5 NON-WAIVER OF LENDER. No course of dealing between Borrowers or
Lender or any delay or failure on the part of Lender in exercising any rights
hereunder shall operate as a waiver of such rights or otherwise prejudice
Lender's rights, powers and remedies; no waiver by Lender will be effective
unless it is in writing and then only to the extent specifically stated, and no
waiver by Lender on any occasion shall affect or diminish Lender's rights
thereafter to require strict performance by Borrowers of any provision of this
Agreement, the Note or any other Loan Document contemplated hereby or thereby.
10.6 THE ENTIRE AGREEMENT: AMENDMENTS. This Agreement, the Security
Agreement(s) and Note and all other documents referenced in this Agreement and
the financing statements (including any schedules and exhibits thereto) sets
forth the entire agreement between the parties with respect to the transactions
contemplated hereby and thereby. This Agreement may not be terminated, amended
or supplemented except by a writing signed by all parties hereto.
10.7 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11
10.8 PARTIES. This Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
successors and assigns of Borrowers and Lender. This provision, however, shall
not be deemed to modify section 10.10 hereof.
10.9 ASSIGNMENT. Lender shall have the right to assign any or all of this
rights under this Agreement; all of the rights, privileges, remedies, options
given to Lender hereunder shall inure to the benefit of Lender's successors and
assigns; and all the terms of this Agreement shall inure to the benefit of and
shall bind the representatives, successors and asides of Borrowers and Lender,
respectively. Borrowers may not assign any of their rights under this Agreement
without the written consent of Lender and Lender shall not be required to lend
under this Agreement except to Borrowers as presently existing.
10.10 NO JOINT VENTURE. Lender and Borrowers intend and agree
that the relationship between them shall be solely that of creditor and debtor.
Nothing contained herein or in any of the other Loan Documents shall be deemed
or construed to create a partnership, tenancy-in-common, joint tenancy, joint
venture or co-ownership by or between Lender and Borrowers. Lender shall not
in any way be responsible for the debts, losses, or obligations or Borrowers
with respect to its business operations or the Collateral or otherwise. All
obligations to pay real property taxes, assessments, insurance premiums, and
all other fees and charges arising from the ownership, operation or occupancy
of Borrowers' business and to perform all other agreements and contracts
relating to Borrowers' business shall be the sole responsibility of Borrowers.
Borrowers, at all times consistent with the terms hereof and of the other Loan
Documents, shall be free to determine and follow their own policies and
practices in the conduct of its business on the Premises. Borrowers hereby
agree to indemnify and hold Lender harmless from and against any and all
liabilities, losses, injuries, costs, expenses and damages, including, without
limitation, attorneys' fees and litigation costs, which it may suffer or incur
as a result hereof and of and from any and all claims and demands whatsoever
which may be instituted against it by reason of any alleged obligation or
undertaking on its part to perform or discharge any of the terms, covenants or
agreements contained in any lease, agreement or contract relating to the
premises to which Lender is not a direct and express party. Should Lender
incur any such liability under any such lease, agreement, or contract, or under
or by virtue hereof or of the other Loan Documents or in the defense of any
claims or demands related thereto, the amount thereof, including costs,
expenses and attorneys' fees, shall constitute a part of the indebtedness and
obligations owing from Borrowers to Lender, shall be secured by the Security
Agreement or the other Loan Documents as well as the financing statements, and
shall be payable to Lender on demand, together with interest at the rate of
twelve percent (12%) per annum from the date incurred OR THE FEDERAL DISCOUNT
RATE PLUS SEVEN PERCENT (7%) PER ANNUM FROM THE DATE INCURRED.
10.11 NOTICE. Accept as otherwise provided herein, any notice
required hereunder shall be in writing, and shall be given by telex, telegram,
hand delivery or through the United States mails, certified or registered,
return receipt requested, with proper postage prepaid, and shall be addressed
to the party to be notified at the address set forth in the first paragraph of
this Agreement or to such other address as each party may designate for itself
by like notice. Each such notice shall be effective upon receipt by the party
being notified.
12
10.12 TITLES. The article and section titles obtained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the Agreement between the parties hereto.
IN WITNESS WHEREOF, this Borrowers and Lender have caused this
Agreement to be executed on the day and year first above written.
NATIONAL PICTURE & FRAME
COMPANY
BY:_________________________
NAME:_______________________
TITLE:______________________
[Seal]
Attest:____________________
Title:_____________________
STATE OF MISSISSIPPI
COUNTY OF___________
PERSONALLY appeared before me, the undersigned authority in and for the
said county and state, on this the _______day of February, 1996, within my
jurisdiction, the within named____________________, who acknowledged that he is
______________________________ of National Picture & Frame Company, a
______________ corporation, and that for and on behalf of said corporation and
as its act and deed, he executed the above and foregoing Agreement after first
having been duly authorized by said corporation so to do.
------------------------------------
Notary Public
My Commission Expires:_______________________________
NPF COMPANY
BY:________________________________
NAME:______________________________
TITLE:_____________________________
[Seal]
Attest:_______________________
Title:________________________
13
STATE OF MISSISSIPPI
COUNTY OF___________
PERSONALLY appeared before me, the undersigned authority in and for the
said county and state, on this the _______day of February, 1996, within my
jurisdiction, the within named____________________, who acknowledged that he is
______________________________ of NPF Company, a ______________ corporation,
and that for and on behalf of said corporation and as its act and deed, he
executed the above and foregoing Agreement after first having been duly
authorized by said corporation so to do.
------------------------------------
Notary Public
My Commission Expires:_______________________________
LENDER: DEPOSIT GUARANTY
NATIONAL BANK
BY:________________________________
NAME:______________________________
TITLE:_____________________________
[Seal]
Attest:_______________________
Title:________________________
STATE OF MISSISSIPPI
COUNTY OF___________
PERSONALLY appeared before me, the undersigned authority in and for the
said county and state, on this the _______day of February, 1996, within my
jurisdiction, the within named____________________, who acknowledged that he is
______________________________ of Deposit Guaranty National Bank, a Mississippi
banking institution, and that for and on behalf of said corporation and as its
act and deed, he executed the above and foregoing Agreement after first having
been duly authorized by said corporation so to do.
------------------------------------
Notary Public
My Commission Expires:_______________________________
14
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/29/96 | | | | | | | None on these Dates |
| For Period End: | | 4/30/96 |
| | 4/1/96 | | 1 |
| | 12/8/95 | | 1 |
| | 11/2/95 | | 6 |
| List all Filings |
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