FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended May 28, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from [ ] to [ ]
Commission File Number 1-7832
PIER 1 IMPORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-1729843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
301 Commerce Street, Suite 600, Fort Worth, Texas 76102
(Address of principal executive offices including zip code)
(817) 878-8000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ]. No [ ].
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares outstanding as of June 10, 1994
Common Stock, $1.00 par value 37,653,580
<PAGE>
<PAGE>
PART I
Item 1. Financial Statements.
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 28, May 29,
1994 1993
-------- --------
<S> <C> <C>
Net sales $161,486 $158,593
Operating costs and expenses:
Cost of sales (including buying and
store occupancy) 96,135 96,903
Selling, general and administrative expenses 50,188 47,098
Depreciation and amortization 3,853 3,694
-------- --------
150,176 147,695
-------- --------
Operating income 11,310 10,898
Interest expense, net 3,299 4,276
-------- --------
Income before income taxes 8,011 6,622
Provision for income taxes 2,476 1,920
-------- --------
Net income $ 5,535 $ 4,702
======== ========
Earnings per share $.15 $.12
==== ====
Average shares outstanding during period,
including common stock equivalents 37,710,000 37,669,000
========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
May 28, Feb. 26,
1994 1994
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash, including temporary investments of $9,014
and $7,466, respectively $ 20,968 $ 17,123
Accounts receivable, net 56,403 51,722
Inventories 217,482 219,646
Other current assets 47,146 32,901
-------- --------
Total current assets 341,999 321,392
Properties, net 110,715 111,510
Other assets 30,636 30,400
-------- --------
$483,350 $463,302
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt $ 24,639 $ 2,639
Accounts payable and accrued liabilities 80,361 89,772
-------- --------
Total current liabilities 105,000 92,411
Long-term debt 145,308 145,231
Deferred income taxes 3,029 3,407
Other non-current liabilities 24,731 21,160
Stockholders' equity:
Common stock, $1.00 par, 100,000,000 shares
authorized, 37,617,000 outstanding 37,617 37,617
Paid-in capital 92,657 92,670
Retained earnings 81,193 76,597
Cumulative translation adjustments (1,152) (964)
Less - 30,200 and 98,000 common shares in
treasury, at cost, respectively (308) (884)
Less - subscriptions receivable and unearned
compensation (1,307) (1,369)
Less - unrealized loss on marketable equity securities (3,418) (2,574)
-------- --------
205,282 201,093
-------- --------
$483,350 $463,302
======== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 28, May 29,
1994 1993
-------- --------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 5,535 $ 4,702
Adjustments to reconcile to net cash used in
operating activities:
Depreciation and amortization 3,853 3,694
Deferred taxes and other 3,307 1,765
Changes in cash from:
Inventories 2,164 (14,930)
Accounts receivable and other current assets (7,829) (6,705)
Accounts payable and accrued expenses (9,411) (3,863)
Other assets, liabilities and other, net (542) (1,246)
------- -------
Net cash used in operating activities (2,923) (16,583)
------- -------
Cash flow from investing activities:
Capital expenditures (3,971) (2,634)
Proceeds from the disposition of properties 3 720
Purchase of Sunbelt Nursery Group, Inc. bank debt (9,600) --
Other investing activities (1,193) (3,000)
------- -------
Net cash used in investing activities (14,761) (4,914)
------- -------
Cash flow from financing activities:
Cash dividends (939) (749)
Net borrowings under line of credit agreements 22,000 14,000
Proceeds from sales of capital stock, treasury
stock, and other 468 731
------- -------
Net cash provided by financing activities 21,529 13,982
------- -------
Change in cash 3,845 (7,515)
Cash at beginning of year 17,123 73,585
------- -------
Cash at end of period $20,968 $66,070
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MAY 28, 1994
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Subscriptions
Cumulative Receivable Unrealized Loss Total
Common Paid-in Retained Translation Treasury and Unearned on Marketable Stockholders'
Stock Capital Earnings Adjustments Stock Compensation Equity Securities Equity
------ ------- -------- ----------- -------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
February 26,
1994 $37,617 $92,670 $76,597 ($ 964) ($884) ($1,369) ($2,574) $201,093
Restricted stock
grant and
amortization 62 62
Stock purchase
plan, exercise
of stock options
and other (13) 576 563
Currency transla-
tion adjustments (188) (188)
Unrealized loss on
marketable equity
securities (844) (844)
Cash dividends (939) (939)
Net income 5,535 5,535
------- ------- ------- ------- ----- ------- ------- --------
Balance, May 28,
1994 $37,617 $92,657 $81,193 ($1,152) ($308) ($1,307) ($3,418) $205,282
======= ======= ======= ======= ===== ======= ======= ========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>
PIER 1 IMPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MAY 28, 1994 AND MAY 29, 1993
(Unaudited)
The accompanying unaudited financial statements should be read in
conjunction with the Form 10-K for the year ended February 26, 1994. All
adjustments that are, in the opinion of management, necessary for a fair
statement of the financial position as of May 28, 1994, and the results of
operations and cash flows for the three months ended May 28, 1994 and May 29,
1993 have been made and consist only of normal recurring adjustments. The
results of operations for the three months ended May 28, 1994 and May 29,
1993 are not indicative of results to be expected for the fiscal year because
of, among other things, seasonality factors in the retail business.
<PAGE>
<PAGE>
PART I
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Pier 1 Imports, Inc. ("the Company") had a net sales increase of $2.9
million to $161.5 million, or 1.8% for the three-month period ended May 28,
1994 over the same period of the prior year. Current year results of the
Company exclude the operations of approximately 50 Pier 1 Imports stores
scheduled for closing during fiscal 1995, as the operating results of these
stores were included in the store closing provision recorded in fiscal 1994.
Nine stores were closed through the store-closing program during the first
quarter of fiscal 1995. Same-store sales during the quarter increased
approximately 4% over the first quarter of fiscal 1994. This resulted from
an increase in hard goods' sales such as furniture and decorative accessories
of approximately 7% offset partially by a decline of 19% in soft goods' sales
including clothing, jewelry and accessories. Four new stores were opened
during the fiscal 1995 first quarter bringing the total number of stores to
590 compared to 605 at the end of the first quarter of fiscal 1994.
Gross profit, after related buying and store occupancy costs, expressed as
percentage of net sales, improved 160 basis points to 40.5% for the first
quarter of fiscal 1995 from 38.9% for the comparable period in fiscal 1994.
As a percent of sales, occupancy costs improved 100 basis points and
merchandise margins improved 60 basis points. Product categories with margin
improvements over the first quarter of fiscal 1994 included furniture and
decorative accessories.
Selling, general and administrative expenses, expressed as a percentage of
net sales, increased 1.4% from 29.7% for the first quarter of fiscal 1994 to
31.1% for the comparable period in fiscal 1995. In total dollars, expenses
during the first quarter of fiscal 1995 increased $3.1 million compared to
the same period of the prior year, primarily due to an increase in management
bonus accruals, last year's recognition of favorable medical and general
liability insurance trends and slightly higher general and administrative
expenses.
Net interest expense during the first quarter of fiscal 1995 declined $1.0
million over the same period the prior year due to lower short-term debt,
offset slightly by lower interest income on lower cash balances.
The Company's effective tax rate for the first quarter of fiscal 1995
increased to 31% compared to 29% for the last fiscal year.
Operating income increased $0.4 million to $11.3 million during the first
quarter of fiscal 1995 compared to $10.9 million in the first quarter of
fiscal 1994. Net income for the fiscal 1995 first quarter aggregated $5.5
million with earnings per share of $.15 compared to fiscal 1994 first quarter
net income of $4.7 million and earnings per share of $.12.<PAGE>
Liquidity and Capital Resources
Cash increased $3.8 million during the first quarter of fiscal 1995
compared to a $7.5 million cash decline during the first quarter of fiscal
1994. Cash provided by operations improved $13.7 million compared to the
first quarter of fiscal 1994 due to planned inventory growth during the first
quarter of fiscal 1994 which was not repeated during the first quarter of
fiscal 1995. Additionally, the improvement in cash provided by operations
resulted from higher earnings partially offset by an increase in accounts
receivable related to the Pier 1 preferred card. Cash used in investing
activities includes the purchase from banks of $9.6 million of Sunbelt
Nursery Group, Inc. ("Sunbelt") debt that had been previously guaranteed by
the Company. A total of $11.6 million in working capital loans due from
Sunbelt is included in the balance sheet caption "Other current assets."
During fiscal 1995, the Company paid a quarterly cash dividend of $.025
per share and declared a dividend of $.025 per share payable on August 16,
1994. The Company currently expects to continue paying modest cash dividends
in fiscal 1995 and intends to retain most of its future earnings for growth
of the Company's business.
Cash requirements to close the 50 stores in fiscal 1995 in the store-
closing program are estimated to aggregate $16 million and will be funded
through working capital and operations. A total of 50 new stores are planned
for the 1995 fiscal year. Financing for new store land and building costs
will be provided by operating leases and inventory and fixtures are estimated
to cost approximately $14 million, which will be funded by operations,
working capital and bank lines of credit.
The minimum future operating lease commitments for fiscal 1995 are $65
million and the present value of all existing operating lease commitments is
$357 million.
Working capital requirements will continue to be provided by cash and $165
million in available short-term revolving lines of credit. Under these lines
of credit, $22 million is outstanding in the form of short-term borrowings
and an additional $60 million is committed under letters of credit at May 28,
1994. The Company's current ratio at the end of the first quarter of fiscal
1995 was 3.3 to 1 compared to 3.5 to 1 at 1994 fiscal year end, and 3.3 to 1
at the first quarter of fiscal 1994.
In connection with the Company's sale of its investment in Sunbelt to
General Host Corporation, the Company is currently providing Sunbelt a line
of credit aggregating $11.6 million, all of which was outstanding at May 28,
1994. To enable Sunbelt to raise funds to refinance the $11.6 million debt,
the Company has granted Sunbelt an extension of the credit facility until
September 21, 1994. The Company is also committed to provide Sunbelt $22.8
million of non-revolving store development financing which expires in stages
from September 1994 to October 1995 and the Company guarantees approximately
$4.5 million of Sunbelt store lease obligations.
<PAGE>
<PAGE>
PART II
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Shareholders of the Company was held
June 23, 1994 for the purposes of electing seven (7) Directors to
hold office until the next Annual Meeting of Shareholders and to
vote upon the adoption of the Senior Management Annual Bonus Plan.
Director Election
Director FOR WITHHELD
------- --- --------
Clark A. Johnson 29,258,725 338,044
Marvin J. Girouard 29,266,128 330,641
Charles R. Scott 29,209,036 387,733
Sally F. McKenzie 29,266,204 330,565
James M. Hoak, Jr. 29,268,353 328,416
Kenneth N. Pontikes 29,267,697 329,072
Martin L. Berman 29,257,771 338,998
Senior Management Annual Bonus Plan
FOR AGAINST ABSTAINED
--- ------- ---------
26,805,414 2,529,594 261,761
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits See exhibit index.
(b) Reports on Form 8-K None.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PIER 1 IMPORTS, INC. (Registrant)
Date: July 8, 1994 By: /s/ Robert G. Herndon
------------ -------------------------------------------
Robert G. Herndon, Executive Vice President
and Chief Financial Officer
Date: July 8, 1994 /s/ Charles H. Turner
------------ -------------------------------------------
Charles H. Turner, Controller and Principal
Accounting Officer
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page No.
- - --- ----------- --------
10.15.3 Second Extension Agreement
dated as of June 29, 1994
between Registrant, Pier-SNG,
Inc. and Sunbelt
EXHIBIT 10.15.3
SECOND EXTENSION AGREEMENT
This Second Extension Agreement (this "Agreement"), entered into on June
29, 1994, by and between Sunbelt Nursery Group, Inc., a Delaware corporation
("Borrower"), and Pier 1 Imports, Inc., a Delaware corporation ("Pier 1"),
and Pier-SNG, Inc., a Delaware corporation ("Pier-SNG" and, collectively with
Pier 1, sometimes referred to as "Lender").
RECITALS
A. The parties hereto have previously entered into that certain
Extension Agreement, dated April 25, 1994 (the "First Extension"), providing
for the extension of the date of the maturity (the "Maturity Date") of the
Credit Agreement and of the Notes (as such terms are defined in the First
Extension).
B. The Maturity Date of the Credit Agreement and of the Notes, as so
extended, is June 30, 1994.
C. Borrower is attempting to refinance (the "New Financing") its
obligations under the Credit Agreement and the Notes, and to facilitate the
New Financing, Borrower has requested that Lender amend the Credit Agreement
and the Notes to further extend the maturities thereof as herein provided.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto agree as follows:
1. Defined Terms. Capitalized terms not otherwise defined herein
shall have the meanings defined for such terms in the First Extension.
2. Extension Consideration. In consideration of Lender's agreement to
extend the Maturity Date to September 21, 1994, Borrower shall,
contemporaneously with the execution of this Agreement, deliver to Lender the
Borrower's 8% promissory note due September 21, 1994, in the principal amount
of $100,000 (the "Consideration").
3. Amendments of the Credit Agreement and the Notes.
(a) Amendment of the Credit Agreement. The definition "Termination
Date" in Section 1.1 of the Credit Agreement is, effective as of the date of
this Agreement and Lender's receipt of the Consideration (the "Effective
Date"), hereby replaced in its entirety as follows:
"Termination Date" shall mean September 21, 1994, or the earlier
date of termination in whole of the Commitment pursuant to Sections
2.7 or 6.2
(b) Amendment of the TCB Note. The definition "Original Termination
Date" in Section 1.1 of the TCB Facility is, effective as of the Effective
Date, hereby replaced in its entirety as follows:
"Original Termination Date" shall mean September 21, 1994.
(c) Amendment to the Standard Chartered Note. The definition
"Termination Date" in Section 1.1 of the SCB Facility is, effective as of the
Effective Date, hereby replaced in its entirety as follows:
"Termination Date" shall mean September 21, 1994, or the earlier
date of termination in whole of the Commitment pursuant to Sections
2.7 or 6.2.
(d) Payment of Accrued Interest. The Notes and Credit Agreement are
hereby amended so as to provide for Borrower's delivery to Lender of the
following interest payments thereunder:
(i) Accrued interest on the Revolving Credit Balance as provided
for under the Notes and Credit Agreement (''Accrued Interest")
for the month of June 1994 shall be payable to Lender on or
before June 30, 1994;
(ii) Accrued Interest for the month of July 1994 shall be payable
to Lender on or before July 31, 1994;
(iii) Accrued Interest for the month of August 1994 shall be
payable to Lender on or before August 31, 1994; and
(iv) Accrued Interest from September 1, 1994, to September 21,
1994, shall be payable to Lender on or before September 21,
1994.
(e) Forgiveness of Certain Indebtedness. In the event Borrower repays
to Lender on or before the Maturity Date an amount equal to the Revolving
Credit Balance less the sum of $220,000 (being the amount of consideration
paid by Borrower under the First Extension and under this Agreement), Lender
shall forgive the amount payable under Borrower's promissory note
constituting the Consideration herein.
(f) Amendment of the Notes and Credit Agreement. Notwithstanding any
provision in the Notes or the Credit Agreement to the contrary, Borrower
shall not have the right to obtain any additional extensions of credit under
the Notes or the Credit Agreement.
4. Waiver. Lender hereby waives until the Maturity Date any default,
breach, violation or event of default under the Credit Agreement, the TCB
Facility or the SCB Facility, and the Notes issued thereunder, including any
cross default(s) arising under (A) Section 6.1(c) of the Credit Agreement and
(B) Section 6.1(d) of each of the TCB Facility and the SCB Facility, and the
Notes issued thereunder, resulting from the failure of Borrower to satisfy
the current ratio requirement set forth in Section 4.1(k)(iv) of each of the
TCB Facility and the SCB Facility, and the failure to timely deliver notice
of such defaults required by Section 4.1(k)(iv) of each of the Credit
Agreement, the TCB Facility and the SCB Facility.
5. Representations and Warranties. (a) To induce Lender to enter into
this Agreement, Borrower hereby represents and warrants to Lender that (i)
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power
and authority to perform its obligations under this Agreement, (ii) the
execution, delivery and performance of this Agreement have been duly
authorized by all requisite action on the part of Borrower and do not and
will not violate the certificate of incorporation or bylaws of Borrower or
any other agreement to which Borrower is a party, or any law, rule or
regulation, or any order of any court, governmental authority or arbitrator
by which it or any of its properties is bound and (iii) Borrower will apply
the net proceeds of the New Financing to repay the Revolving Credit Balance.
(b) Lender hereby represents and warrants to Borrower that (i)
Pier-SNG is the sole owner of the notes and is successor in interest to the
respective banks under the SCB Facility and the TCB Facility with full power
and authorization to amend such facilities, (ii) each of Pier 1 and Pier-SNG
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the corporate power and authority
to perform its obligations under this Agreement and (iii) the execution,
delivery and performance of this Agreement have been duly authorized by all
requisite action on the part of Pier 1 or Pier-SNG and do not and will not
violate the certificate of incorporation or bylaws of Pier 1 or Pier-SNG or
any other agreement to which either Pier 1 or Pier-SNG is a party, or any
law, rule or regulation, or any order of any court governmental authority or
arbitrator by which they or any of their properties is bound.
6. Covenants. Notwithstanding any provisions to the contrary
contained in the Credit Agreement, Borrower hereby covenants and agrees that
it will perform, observe and comply with each of the following covenants:
(a) Weekly Financial Report. Borrower shall provide to Lender by
2:00 p.m., Fort Worth, Texas time, on the second business day of each week a
financial report for Borrower for the previous week containing income,
expense and cashflow information. All such reports shall be prepared in
accordance with sound accounting principles consistently applied and shall be
certified by the chief executive officer or the chief financial officer of
Borrower to be true and correct to the best of such person's knowledge.
(b) Other Indebtedness. Borrower shall not, and shall not suffer
its subsidiaries to, repay any indebtedness owing to any parent, affiliate or
controlling person prior to repayment in full of the Revolving Credit
Agreement.
7. Ratification of Loan Documents. Borrower hereby acknowledges and
agrees that the Credit Agreement, the Notes, and all guarantees thereof and
security interests granted in connection therewith in favor of Lender shall
remain in full force and effect and binding on the respective parties
thereto, enforceable in accordance with their respective terms. Except as
provided herein, Borrower hereby ratifies and confirms the Notes and Credit
Agreement and all of its obligations thereunder.
8. No Obligation of Lender. Except as provided herein, Lender shall
have no further obligation whatsoever to extend the maturity of the Notes or
Credit Agreement, waive any Event of Default or defer any payment. Borrower
hereby acknowledges and understands that upon the maturity of the Notes or
Credit Agreement, as extended hereby, Lender shall have the right to proceed
to exercise any and all rights and remedies to which it is entitled, which
may include foreclosure on any collateral securing the Notes and the Credit
Agreement and the institution of legal proceedings.
9. No Implied Waivers. No failure or delay on the part of Lender in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement, the Credit Agreement, the Notes or any
document related thereto shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this
Agreement, the Notes or the Credit Agreement preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
10. Expenses of lender. Borrower agrees to pay on demand all
reasonable costs and expenses incurred by Lender in connection with the
preparation, negotiation, execution and administration of this Agreement, and
all reasonable costs and expenses incurred by Lender in connection with the
enforcement or preservation of any rights or remedies under this Agreement,
the Credit Agreement or the Notes, including without limitation the
reasonable fees and expenses of Lender's legal counsel.
11. Indemnification. Section 2.16 of the Credit Agreement is
applicable to this Agreement.
12. Survival of Representations and Warranties. All representations
and warranties made in this Agreement shall survive the execution and
delivery of this Agreement, and no investigation by Lender or any closing
shall affect the representations and warranties or the right of Lender to
rely upon them.
13. Review and Construction of Documents. Borrower hereby
acknowledges, and represents and warrants to Lender, that (i) Borrower has
had the opportunity to consult with legal counsel of its own choice and has
been afforded an opportunity to review this Agreement with its legal counsel,
(ii) Borrower has reviewed this Agreement and fully understands the effects
thereof and all terms and provisions contained therein, and (iii) Borrower
has executed this Agreement of its own free will and volition.
14. Entire Agreement; Amendment. This agreement embodies the final,
entire agreement between the parties hereto regarding the maturity extensions
granted herein and supersedes any and all prior commitments, representations
and understandings, whether written or oral, relating to the subject matter
hereof. The provisions of this Agreement may be amended or waived only by an
instrument in writing signed by the partes hereto. The Notes, Credit
Agreement and related documents, including but not limited to the Loan Papers
(as defined in the Credit Agreement), continue to evidence the agreement of
the parties with respect to the subject matter thereof
15. Notices. All notices, requests, demands and other communications
under this Agreement shall be given in accordance with the provisions of the
Loan Papers (as defined in the Credit Agreement).
16. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns, provided that Borrower may not
assign any rights or obligations under this Agreement without the prior
written consent of Lender.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.
18. Interpretation. Wherever the context hereof shall so require, the
singular shall include the plural, the masculine gender shall include the
feminine gender and the neuter and vice versa. The headings, captions and
arrangements used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.
19. Severability. In case any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions hereof, and this
Agreement shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
20. Counterparts. This Agreement may be executed and delivered in any
number of counterparts, and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts taken together shall constitute
one and the same instrument.
21. Further Assurances. Each party to this Agreement agrees to
execute, acknowledge, deliver, file and record such further certificates,
instruments and documents, and to do all other acts and things, as may be
reasonably necessary or advisable to carry out the intents and purposes of
this Agreement.
IN WITNESS WHEREOF, the parties hereby have executed this Agreement as
of the day and year first above written.
SUNBELT NURSERY GROUP, INC.
By:
Title:
PIER 1 IMPORTS, INC.
By:
Title:
PIER-SNG, INC.
By:
Title:
<PAGE>
To induce Lender to enter into the foregoing Agreement, each of the
undersigned consent and agree (a) to the execution and delivery of the
foregoing Agreement, (b) that such Agreement shall in no way release,
diminish, impair, reduce or otherwise adversely affect any obligations,
guarantees or assurances heretofore granted by each of the undersigned to
Pier 1 or Pier-SNG, which shall each continue to be in full force and effect.
Each of the undersigned parties waive notice of acceptance of this Agreement
by Lender, which Agreement shall be binding upon each of the undersigned and
the successors and assigns of each of the undersigned and shall inure to the
benefit of Lender and their successors and assigns. It is understood that
SNG Acquisition, Inc. is not guaranteeing the performance of Borrower under
Borrower's $100,000 promissory note constituting the Consideration for the
Second Extension.
SNG ACQUISITION COMPANY, INC.
By:
Title:
WOLFE NURSERY GROUP, INC.
By:
Title:
TIP TOP NURSERIES, INC.
By:
Title:
HOUSTON PATIO & GARDEN CENTERS, INC.
By:
Title:
GREEN BROS. NURSERY, INC.
By:
Title:
SUNBELT MANAGEMENT SERVICES, INC.
By:
Title:
NURSERYLAND GARDEN CENTERS, INC.
By:
Title:
