<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 365,960
<SECURITIES> 0
<RECEIVABLES> 6,523,623
<ALLOWANCES> 123,000
<INVENTORY> 29,237,194
<CURRENT-ASSETS> 42,050,152
<PP&E> 10,800,605
<DEPRECIATION> 3,665,817
<TOTAL-ASSETS> 56,895,764
<CURRENT-LIABILITIES> 30,587,820
<BONDS> 7,924,221
<COMMON> 51,436
0
0
<OTHER-SE> 18,296,644
<TOTAL-LIABILITY-AND-EQUITY> 56,895,764
<SALES> 37,305,092
<TOTAL-REVENUES> 37,305,092
<CGS> 21,907,924
<TOTAL-COSTS> 21,907,924
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,060,423
<INCOME-PRETAX> (1,920,697)
<INCOME-TAX> (500,000)
<INCOME-CONTINUING> (1,420,697)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,420,697)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> (0.30)
</TABLE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-10475
PAGES, INC.
Incorporated - Delaware I.R.S. Identification No. 34-
1297143
801 94th Avenue North, St. Petersburg, Florida 33702
Registrant's Telephone Number (813) 578-3300
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 such 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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of latest practicable date: 5,048,131
common shares outstanding, each with $0.01 par value, as of
August 8, 1995.
PAGES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1995 and December 31, 1994
-----------------------------------
<TABLE>
<CAPTION>
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
Current Assets:
Cash $ 365,960 $ 671,602
Accounts receivable, net of allowance
for doubtful accounts of $123,000
and $168,000, respectively 6,400,623 13,965,086
Inventory 29,237,194 33,014,774
Prepaid expenses 3,567,641 3,394,212
Deferred income taxes 2,478,734 1,966,200
----------- -----------
Total current assets 42,050,152 53,011,874
----------- -----------
Property and equipment:
Buildings 4,035,673 3,313,721
Equipment 6,133,464 5,696,782
----------- -----------
10,169,137 9,010,503
Less accumulated depreciation (3,665,817) (3,014,424)
----------- -----------
6,503,320 5,996,079
Land 631,468 216,468
----------- -----------
Total property and equipment 7,134,788 6,212,547
Other assets:
Assets held for disposition, net
of allowance $270,838 1,195,520
Cost in excess of net assets acquired,
net of accumulated amortization of
$398,033 and $312,345, respectively 6,286,912 5,903,553
Deferred income taxes 153,200 153,200
Other 1,270,712 1,257,872
----------- -----------
7,710,824 8,510,145
----------- -----------
TOTAL ASSETS $56,895,764 $67,734,566
----------- -----------
----------- -----------
</TABLE>
See accompanying notes.
PAGES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1995 and December 31, 1994
-----------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY 1995 1994
----------- -----------
<S> <C> <C>
Current liabilities:
Accounts payable $ 5,143,086 $10,887,683
Short-term debt obligations 14,785,935 16,090,039
Accrued liabilities 1,304,683 2,678,058
Accrued tax liabilities 3,217,901 3,248,821
Deferred revenue 5,914,985 6,139,486
Current installments on long-term debt
obligations 159,594 144,035
Current installments on capitalized lease
obligations 61,636 26,468
----------- -----------
Total current liabilities 30,587,820 39,214,590
----------- -----------
Long-term obligations 7,924,221 8,927,312
----------- -----------
Stockholder's Equity:
Preferred shares: $.01 par value; authorized
300,000 shares; none issued and outstanding
Common shares; $.01 par value; authorized
20,000,000 shares; issued 5,143,621 and
5,087,921 shares, respectively 51,436 50,879
Capital in excess of par value 22,537,507 22,489,048
Foreign currency translation, net of tax (273,198) (400,295)
Accumulated deficit (3,726,542) (2,305,845)
----------- -----------
18,589,203 19,833,787
Less 298,713 shares of common stock in
treasury, at cost (241,123) (241,123)
----------- -----------
Total stockholders' equity 18,348,080 19,592,664
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $56,895,764 $67,734,566
----------- -----------
----------- -----------
</TABLE>
See accompanying notes.
PAGES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and the six months ended June 30, 1995
-----------------------------------------------------------
and the three months and the six months ended June 30, 1994
-----------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Six Months
------------------------ -----------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $17,657,526 $15,899,769 $37,305,092 $35,269,961
----------- ----------- ----------- -----------
Costs and expenses:
Cost of goods sold 10,362,886 9,263,484 21,907,924 20,520,375
Selling, general and
administrative 7,245,732 6,624,633 15,479,891 13,714,014
Interest 504,949 402,503 1,060,423 743,372
Depreciation and
amortization 393,119 342,115 777,581 684,132
Foreign exchange (30) (1,405) (30) 386
----------- ----------- ----------- -----------
18,506,656 16,631,330 39,225,789 35,662,279
----------- ----------- ----------- -----------
Loss before income
taxes (849,133) (731,561) (1,920,697) (392,318)
Income tax benefit 150,000 273,000 500,000 145,000
----------- ----------- ----------- -----------
NET LOSS $ (699,133) $ (458,561) $(1,420,697)$ (247,318)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Loss per common and
common equivalent
share $ (0.15) $ (0.13) $ (0.30)$ (0.07)
----------- ----------- ----------- -----------
Weighted average common
and common equivalent
shares outstanding 4,806,000 3,531,000 4,797,000 3,531,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See accompanying notes.
PAGES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1995 and 1994
-----------------------------------------------
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,420,697) $ (247,318)
------------ ------------
Adjustments to reconcile net loss
to cash provided by operating activities:
Depreciation and amortization 777,581 684,132
Deferred income taxes (500,000) (145,000)
Foreign exchange (30) 386
Changes in assets and liabilities, net of
effects of business acquisitions:
(Increase) decrease in assets:
Accounts receivable 7,926,179 6,160,221
Inventory 4,047,148 (524,386)
Prepaid expenses and other assets (172,238) (975,696)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (7,139,264) (5,142,376)
Deferred revenue (574,501) (61,700)
------------ ------------
Total adjustments 4,364,875 (4,419)
------------ ------------
Net cash provided by (used in) operating
activities 2,944,178 (251,737)
------------ ------------
Cash flows from investing activities:
Proceeds from sale of property and equipment 300 1,550
Payments for purchases of property and equipment (258,288) (238,791)
Payment for acquisition by children's
literature segment (733,000) (40,000)
------------ ------------
Cash used in investing activities (990,988) (277,241)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of stock 49,016 299
Proceeds from debt and lease obligations 33,408,254 18,585,666
Principal payments on debt and lease
obligations (35,709,120) (17,851,649)
------------ ------------
Cash provided by (used in) financing
activities (2,251,850) 734,316
------------ ------------
Effect of exchange rate changes on cash (6,982) (38,577)
------------ ------------
Increase (decrease) in cash (305,642) 166,761
Cash, beginning period 671,602 299,717
------------ ------------
Cash, end of period $ 365,960 $ 466,478
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
PAGES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have not
been audited, but reflect all adjustments which, in the opinion
of management, are necessary for a fair presentation of financial
position, results of operations and cash flows for the periods
presented, after elimination of all material intercompany
accounts and transactions. All adjustments are of a normal and
recurring nature. The consolidated group will be collectively
referred to as "the Company". The operations of School Book
Fairs, Inc. ("SBF") are the Company's children's literature
business segment and the operations of Clyde A. Short Company,
Inc. ("CAS") are the Company's incentive/recognition awards
business segment.
The Company's business segments are highly seasonal with the
children's literature business cycle correlating the school year
and the incentive/recognition awards business skewed toward the
end of a calendar year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
During the Spring of 1993, the Company was advised that the
Internal Revenue Service ("IRS") may assess additional income
taxes in connection with the examination of the tax returns of
School Book Fairs and its affiliates for the fiscal years ending
July 31, 1989, 1990, and 1991. In June 1993, the Company
recorded a $2 million adjustment to its purchase price allocation
of SBF assets, which increased the cost in excess of assets
acquired (i.e. - goodwill) and recorded a corresponding increase
in accrued tax liabilities and related costs. The IRS has
notified the Company that the significant issues being examined
relate to the transfer of assets between related companies during
fiscal 1989, interest imputed on intercompany accounts during
fiscal 1989, 1990, and 1991 and rent deductions taken on certain
rental properties in fiscal 1989, 1990 and 1991.
In December 1994, the IRS notified the Company of its
preliminary intent to make adjustments to taxable income related
to these issues. If the notice of proposed adjustments becomes a
final assessment and the assessment is ultimately sustained, it
could generate a tax liability of as much as approximately $5.2
million, exclusive of interest and penalties. The Company
believes the IRS' position regarding the proposed adjustments to
taxable income for the value of assets transferred and related
impact on intercompany interest is substantially overstated.
Accordingly, although no formal assessment has been received from
the IRS, the Company intends to vigorously defend its position
against such proposed adjustments, including litigation, if
necessary. The Company is unable to determine the ultimate
outcome of this uncertainty and accordingly, has not provided for
any additional amounts in excess of the $2 million relating to
this proposed assessment in the June 30, 1995 financial
statements.
On February 28, 1995, John Minnick d/b/a Minnick Capital
Management filed a class action suit in the United States
District Court, Middle District of Florida, Tampa Division on
behalf of all persons who sold PAGES, Inc. common stock between
11:49 a.m., January 9, 1995 and January 16, 1995, against PAGES,
Inc. and corporate officers S. Robert Davis, Richard A. Stimmel
and Charles A. Davis alleging that those defendants violated
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-
5 thereunder by selectively disclosing only adverse information
while in possession of material non-public positive information
about the Company during the period between January 9 and January
16, 1995. The action seeks class certification, a judgment
declaring the conduct to be in violation of the law, an award of
unspecified damages and interest costs, attorneys' fees and
expert witness fees and costs along with such other further
relief as the court deems proper or just. The Company and the
other defendants deny any wrongdoing and intend to vigorously
defend the action.
The Company continues to implement specific plans to reduce
operating costs, streamline operating procedures, and renew
marketing strategies. As of August 1, 1995, full-time staffing
levels have been reduced by approximately 52 personnel or 16%
from year-end levels. The immediate objective is to return both
business segments to profitability. For the long-term, PAGES is
focusing resources and efforts on the primary business segment -
children's literature - and expanding its distribution network
with a renewed emphasis on book fairs. As a result of the
seasonal nature of the Company's business cycle, the Company
anticipates reporting an operating loss for its upcoming third
quarter, and an operating profit during the fourth quarter of
1995.
The Company plans to move from a leased warehouse facility
of approximately 80,000 square feet to a building, presently
owned by the Company, in the same area. Accordingly, the owned
building and related land, previously classified as an asset held
for disposition, have been reclassed to property and equipment
for the June 30, 1995 balance sheet.
In June 1995, The Huntington National Bank renewed the
Company's domestic lines of credit totalling $25 million through
June of 1996 and 1997. These lines of credit, scheduled to
expire during June 1995 and 1996, were renewed under the same
terms and conditions that were in place prior to their renewal.
These credit lines principally provide working capital and do not
represent any additional debt burden to the Company.
As of August 8, 1995, options and warrants for the purchase
of 2,469,666 shares of common stock were outstanding. During
1995, options were granted for the purchase of 92,308 shares of
common stock (in connection with the May 1992 acquisition of
School Book Fairs, Inc.). Options for the purchase of 402,990
shares of common stock expired and options for the purchase of
258,923 shares of common stock were exercised. Additionally, as
of August 8, 1995, 5,048,131 shares of PAGES, Inc. common stock
were outstanding.
Quarter and Six Months Ended June 30, 1995
-------------------------------------------
Compared to
------------
Quarter and Six Months Ended June 30, 1994:
-------------------------------------------
Information about the Company's operations by business segements:
<TABLE>
<CAPTION>
Incentive/ Children's
Recognition Awards Literature Corporate Consolidated
-------------------- -------------------- --------- ---------------------
Millions Percentage Millions Percentage Millions Millions Percentage
-------- ---------- -------- ---------- -------- -------- ----------
Quarter Ended June 30, 1995:
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $4.4 100.0 $13.3 100.0 $17.7 100.0
Gross profit 1.7 38.6 5.6 42.1 7.3 41.2
Selling, general & admin. 1.8 40.9 5.2 39.1 0.2 7.2 40.7
Depreciation & amort. 0.1 2.3 0.3 2.3 0.4 2.3
Operating profit (0.2) (4.5) 0.1 0.8 (0.2) (0.3) (1.7)
Interest expense 0.5 2.8
Foreign exchange 0.0 0.0
Income (loss) before
income taxes (0.8) (4.5)
Quarter Ended June 30, 1994:
Revenues 5.0 100.0 10.9 100.0 15.9 100.0
Gross profit 2.1 42.0 4.5 41.3 6.6 41.5
Selling, general & admin. 1.8 36.0 4.6 42.2 0.2 6.6 41.5
Depreciation & amort. 0.1 2.0 0.3 2.8 0.4 2.5
Operating profit 0.2 4.0 (0.3) (2.8) (0.2) (0.3) (1.9)
Interest expense 0.4 2.5
Foreign exchange 0.0 0.0
Income (loss) before
income taxes (0.7) (4.4)
Six Months Ended June 30, 1995:
Revenues 9.2 100.0 28.1 100.0 37.3 100.0
Gross profit 3.7 40.2 11.7 41.6 15.4 41.3
Selling, general & admin. 3.8 41.3 11.3 40.2 0.4 15.5 41.6
Depreciation & amort. 0.2 2.2 0.6 2.1 0.8 2.1
Operating profit (0.3) (3.3) (0.1) (0.4) (0.4) (0.8) (2.1)
Interest expense 1.1 2.9
Foreign exchange 0.0 0.0
Income (loss) before
income taxes (1.9) (5.1)
Six Months Ended June 30, 1994:
Revenues 10.8 100.0 24.5 100.0 35.3 100.0
Gross profit 4.5 41.7 10.2 41.4 14.7 41.6
Selling, general & admin. 4.0 37.0 9.3 38.0 0.4 13.7 38.8
Depreciation & amort. 0.1 1.0 0.6 2.4 0.7 2.0
Operating profit 0.4 3.7 0.4 1.6 (0.4) 0.4 1.1
Interest expense 0.7 2.0
Foreign exchange 0.0 0.0
Income (loss) before
income taxes (0.4) (1.1)
</TABLE>
Consolidated revenues for the three months ended June 30, 1995,
approximated $17.7 million compared to approximately $15.9
million for the three months ended June 30, 1994, an increase of
11% or approximately $1.8 million. The Company's children's
literature business segment accounted for approximately $13.3
million of revenues for the three months ended June 30, 1995
compared to approximately $10.9 million in revenues for the three
months ended June 30, 1994 an increase of 23% or approximately
$2.4 million. The increase in revenues is principally
attributable to the current quarter including revenues from the
operations of third quarter 1994 acquisitions, as well as
revenues from the operations of an acquisition in January 1995.
International revenues in U.S. dollars associated with the
children's literature business segment were approximately $3.2
million for the three months ended June 30, 1995, compared to
$3.1 million for the three months ended June 30, 1994. In local
currencies, before the impact of foreign currency fluctuations,
international revenues for the three months ended June 30, 1995
declined approximately $100,000 over the comparable period in
1994.
The Company's incentive/recognition awards business segment
accounted for approximately $4.4 million in revenues for the
three months ended June 30, 1995, compared to $5 million of
revenues for the three months ended June 30, 1994, a decrease of
14% or approximately $600,000. The decline in revenues is
primarily due to a decrease in volume on certain existing
customers coupled with
delayed redemption on new accounts. The majority of revenues
generated by the incentive/recognition awards business segment
are from the sale of products, and revenues from services are
insignificant.
Consolidated revenues for the six months ended June 30, 1995
approximated $37.3 million, compared to approximately $35.3
million for the six months ended June 30, 1994, a 6% increase or
approximately $2 million. The Company's children literature
business segment accounted for $28.1 million of revenues for the
six months ended June 30, 1995 compared to $24.5 million for the
six months ended June 30, 1994, a 15% increase or approximately
$3.6 million. The increase is principally attributable to the
aforementioned acquisitions.
International revenues in U.S. dollars associated with the
children's literature business segment approximated $7 million
for the six months ended June 30, 1995, compared to $7.2 million
for the six months ended June 30, 1994. In local currencies,
international revenues for the 1995 period decreased 8% over the
comparable 1994 period, however, due to foreign currency
fluctuations, the U.S. dollar revenues from foreign operations
were down 4%. The decline in international revenues is
principally attributable to lower revenues per event in the
elementary school market.
The Company's incentive/recognition awards business segment
accounted for $9.2 million of revenues for the six months ended
June 30, 1995 compared to $10.8 million for the same period in
1994, a decline of approximately $1.6 million or 15%. The
decrease
in sales is attributable to a decrease in volume on certain
existing customers coupled with delayed redemption on new
accounts.
Consolidated cost of goods sold was approximately $10.4 million
for the three months ended June 30, 1995, compared to
approximately $9.3 million for the same period in 1994, an
increase of 12%, or approximately $1 million. The Company's
children's literature business segment accounted for
approximately $7.8 million of consolidated cost of goods sold for
the three months ended June 30, 1995, compared to $6.3 million
for the three months ended June 30, 1994, an increase of 23% or
approximately $1.5 million. The increase in cost of goods sold
for the children's literature business segment is a result of the
increased revenues for the three months ended June 30, 1995. As
a percentage of revenues, cost of goods sold for the children's
literature business segment remained constant with the prior
period.
The Company's incentive/recognition awards business segment
accounted for approximately $2.6 million of consolidated cost of
goods sold for the three months ended June 30, 1995, compared to
$2.9 million for the three months ended June 30, 1994, a decrease
of 11% or approximately $300,000. The decline in cost of goods
sold is attributable to the decline in revenues. As a percentage
of revenues, cost of goods sold from the incentive/recognition
awards business segment, increased 1.8% from 58.2% to 60%. This
increase is a result of the change in product mix sold.
Consolidated cost of goods sold for the six months ended June
30, 1995 was approximately $21.9 million, compared to $20.5
million for the same period in 1994, an increase of 7%, or
approximately $1.4 million. Cost of goods sold associated with
the Company's children literature business segment was
approximately $16.5 million for the six months ended June 30,
1995, compared to approximately $14.3 million for the six months
ended June 30, 1994, an increase of 15% or approximately $2.2
million. The increase in cost of goods sold is consistent with
the increase in revenues for the children's literature business
segment.
The Company's incentive/recognition awards business reports
cost of goods sold for the six months ended June 30, 1995 of
approximately $5.4 million compared to approximately $6.2 million
for the comparable period in 1994. This 13% decline in cost of
goods sold is a result of the incentive/recognition awards
business segment's decline in revenues for the six months ended
June 30, 1995.
Consolidated selling, general, and administrative expense was
approximately $7.2 million for the three months ended June 30,
1995, compared to approximately $6.6 million for the three months
ended June 30, 1994, an increase of 9%, or approximately
$600,000. Selling, general, and administrative expenses
associated with the Company's children's literature business
segment for the three months ended June 30, 1995 was
approximately $5.2 million compared to approximately $4.6 million
for the three months ended June 30, 1994, an increase of 14% or
approximately or $600,000. The increase in the current period is
due to the Company incurring selling, general, and administrative
costs associated with late 1994 and early 1995 children's
literature business segment acquisitions. As a percentage of
revenues, selling, general and administrative expense associated
with the children's literature business segment decreased
approximately 3% during the current period.
Selling, general and administrative expense associated with the
Company's incentive/recognition awards business segment was
approximately $1.8 million for the three months ended June 30,
1995 and 1994, respectively. As a percentage of revenues,
selling, general and administrative expense associated with the
incentive/recongition awards business segment increased 4.5% as a
result of increasing promotional costs during the current period.
Consolidated selling, general, and administrative expense for
the six months ended June 30, 1995 was approximately $15.5
million, compared to approximately $13.7 million for the same
period in 1994, an increase of 13%, or approximately $1.7
million. Selling, general and administrative expense associated
with the Company's children literature business segment was
approximately $11.3 million for the six months ended June 30,
1995, compared to approximately $9.2 million for the six months
ended June 30, 1994, an increase of 23% or approximately $2.1
million. The increase in selling, general, and administrative
expense for the six months ended June 30, 1995 is due to the late
1994 and early 1995 children's literature business acquisitions
previously mentioned, as well as the Company incurred selling,
general, and administrative expenses as a result of the change in
the historical channels of product distribution and additional
costs incurred to support the higher revenue levels that did not
materialize. As a percentage of revenues, selling, general and
administrative expense associated with the children's literature
segment increased approximately 2% for the six months ended June
30, 1995.
The Company's incentive/recognition awards business segment
incurred selling, general, and administrative expense for the six
months ended June 30, 1995 of approximately $3.8 million,
compared to $4 million for the same period in 1994, a decrease of
6%, or approximately $200,000. The decrease in selling, general
and administrative expense is primarily due to a reduction in
promotional costs incurred during the first quarter ended March
31, 1995.
Consolidated general corporate and administrative expense was
approximately $246,000 and $434,000 for the three and six months
ended June 30, 1995, respectively compared to $223,000 and
$407,000 for the three and six months ended June 30, 1994,
respectively.
Consolidated interest expense was approximately $505,000 for
the three months ended June 30, 1995, compared to approximately
$402,000 for the three months ended June 30, 1994, an increase of
26% or approximately $100,000. For the six months ended June 30,
1995, consolidated interest expense approximated $1 million,
compared to $743,000 for the same period in 1994, an increase of
approximately $300,000, or 43%. The increase for both the three
and six months ended June 30, 1995, is a result of the children's
literature business segment having higher levels of borrowing on
higher interest rates.
Consolidated depreciation and amortization expense was
approximately $394,000 for the three months ended June 30, 1995,
compared to approximately $342,000 for the three months ended
June 30, 1994, an increase of 15%, or approximately $52,000.
Consolidated depreciation and amortization expense was
approximately $778,000 and $684,000 for the six months ended June
30, 1995 and 1994, respectively. The increase for both the three
and six months ended June 30, 1995 is primarily due to
acquisitions made in the children's literature business segment
during the third quarter of 1994 and the first quarter of 1995
which increased depreciable assets.
The income tax benefit for the three and six months ended June
30, 1995 was $150,000 and $500,000, respectively. These income
tax benefits are based on the Company's anticipated annual
effective tax rate.
Loss per common and common equivalent share increased to a loss
of $0.15 for the three months ended June 30, 1995, compared to a
loss of $0.13 for the three months ended June 30, 1994. Loss per
common and common equivalent share increased to a loss of $0.30
for the six months ended June 30, 1995, compared to a loss of
$0.07 per share for the six months ended June 30, 1994. The
increase in loss per common and common equivalent share for both
periods in 1995 compared to 1994 is due to the decline in
earnings, somewhat offset by an increase in common and common
equivalent shares outstanding.
Quarter and Six Months Ended June 30, 1994
-------------------------------------------
Compared to
------------
Quarter and Six Months Ended June 30, 1993:
-------------------------------------------
Consolidated revenues for the quarter ended June 30, 1994,
increased approximately $871,000 from the quarter ended June 30,
1993. The change by business segment is as follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $1,012,000 10
Incentive/Recognition Awards $ (141,000) (3)
</TABLE>
The increase in revenues for the children's literature segment
is due to an increase in volume, coupled with the Easter-Spring
holiday vacation falling in the first quarter in 1994, versus the
second quarter of 1993.
The slight decline in revenues in the incentive/recognition
awards segment for the quarter is principally due to a change in
customer mix.
International revenues in U.S. dollars associated with the
children's literature business segment were approximately $3.1
million for the quarter ended June 30, 1994, compared to $3.3
million for the quarter ended June 30, 1993. In local
currencies, before the impact of foreign currency fluctuations,
international revenues for the current quarter declined the
equivalent of approximately $100,000.
Consolidated revenues for the six months ended June 30, 1994,
increased approximately $2,656,000 from the six months ended June
30, 1993. The change by business segment is as follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $ 1,308,000 6
Incentive/Recognition Awards $ 1,348,000 14
</TABLE>
The increase in revenues for the children's literature segment is
principally attributable to 1994 including six months of revenues
from acquisitions made in the second through fourth quarters of
1993.
During the second quarter ended June 30, 1993, the Company
expanded its incentive/recognition awards business segment and
related customer base through a marketing alliance with a
manufacturer of emblematic jewelry. The expanded customer base
accounted for the increase in revenues in the current year. The
majority of revenues generated by the incentive/recognition
awards business segment are from the sale of products, and
revenues from services are insignificant.
International revenues in U.S. dollars associated with the
children's literature business segment were approximately $7.3
million for the six months ended June 30, 1994, compared to $7.4
million for the six months ended June 30, 1993. In local
currencies, international revenues for the current six month
period were approximately even with the comparable period last
year.
For the quarter ended June 30, 1994, consolidated cost of goods
sold increased approximately $281,000. The change by business
segment is as follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $ 666,000 12
Incentive/Recognition Awards $ (385,000) (11)
</TABLE>
The increase in cost of goods sold for the children's literature
segment is due to increased sales levels. As a percentage of
revenues, cost of goods sold for the children's literature
segment remained constant with the prior period.
The decrease in cost of goods sold for the
incentive/recognition awards segment is attributable to the
decrease in revenues and a change in product mix. Cost of goods
sold as a percentage of revenues for the incentive/recognition
awards segment improved approximately 6% and is principally due
to a change in product mix.
Consolidated cost of goods sold for the six months ended June
30, 1994 increased approximately $1,110,000 from the six months
ended June 30, 1993. The change by business segment was as
follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $ 788,000 6
Incentive/Recognition Awards $ 322,000 5
</TABLE>
The increase in cost of goods sold for both business segments
is attributable to increased revenues. As a percentage of
revenues, cost of goods sold for the children's literature
segment remained constant with the prior period. Cost of goods
sold as a percentage of revenues for the incentive/recognition
awards segment improved approximately 5% and is principally due
to a change in product mix.
Consolidated selling, general and administrative expenses for
the quarter ended June 30, 1994 increased approximately $278,000
from the quarter ended June 30, 1993. The change by business
segment is as follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $ 399,000 9
Incentive/Recognition Awards $ (84,000) (4)
Corporate $ (37,000) (14)
</TABLE>
The increase in selling, general and administrative expenses in
the children's literature segment corresponds with the increase
in revenues for the quarter ended June 30, 1994. Additionally,
the increase is due to the Company incurring in the current
quarter selling and general expenses for sales promotion, selling
and marketing expenses associated with expansion and development
of product lines.
The decrease in selling, general and administrative expenses in
the incentive/recognition awards segment is due to the previous
quarter ended June 30, 1993, including start-up costs associated
with the expansion of the incentive/recognition awards business
through the marketing alliance with a manufacturer of emblematic
jewelry.
Consolidated selling, general and administrative expenses for
the six months ended June 30, 1994 increased approximately
$956,000 from the six months ended June 30, 1993. The change by
business segment is as follows:
<TABLE>
<CAPTION>
Change % Change
------ --------
<S> <C> <C>
Children's Literature $ 660,000 8
Incentive/Recognition Awards $ 348,000 9
Corporate $ (52,000) (11)
</TABLE>
The increase in selling, general and administrative expenses
for the six months ended June 30, 1994 for the children's
literature segment is principally attributable to 1994 including
six months of expenses for the business acquisitions made in the
second through fourth quarters of 1993, as well as the inclusion
of additional expenses incurred for sales promotion, selling and
marketing expenses.
The increase in selling, general and administrative expenses
for the six months ended June 30, 1994 in the
incentive/recognition awards segment is due to increased expenses
associated with the previously mentioned expansion of the
business segment and customer base.
Depreciation and amortization expense for the quarter ended
June 30, 1994 declined approximately $4,000 over the prior period
principally as a result of the fluctuation in foreign currency
rates. For the six months ended June 30, 1994, consolidated
depreciation and amortization expense increased approximately
$46,000 over the prior period and is attributable to the
children's literature second through fourth quarter 1993 business
acquisitions, which increased depreciable assets; and the
commencement during the second quarter of 1993 of the
amortization of costs in excess of net assets acquired associated
with the School Book Fairs, Inc. purchase price adjustment all of
which are slightly offset by the previously mentioned fluctuation
in foreign currency rates.
Interest expense for the quarter and six months ended June 30,
1994, increased approximately $158,000 and $233,000,
respectively, over the prior periods and is attributable to
higher levels of borrowings by both business segments at slightly
higher interest rates. The higher levels of borrowings are
associated with seasonal needs and business expansion.
Liquidity and Capital Resources:
--------------------------------
The Company's primary sources of liquidity have been cash
generated from operating activities from both of its business
segment, and amounts available under its existing credit
facilities. The Company's primary uses of funds consist of
financing inventory and receivables for both business segments,
with the funding of acquisitions as a secondary use.
The following table presents a summary of the Company's cash
flows (in thousands) for the six months ended June 30, 1995 and
1994:
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1995 1994
--------- --------
<S> <C> <C>
Cash provided by operating activities $ 2,944 $ (252)
Capital expenditures, net (258) (239)
Net borrowings on debt obligations (2,301) 734
Payment for business acquisitions (733) (40)
Other 42 (36)
--------- --------
Net increase (decrease) in cash $ (306) $ 167
--------- --------
--------- --------
</TABLE>
The Company has a $25 million revolving credit facility which
consists of the following: a $6 million short-term credit line
($3,175,011 unused at June 30, 1995) for use in the
incentive/recognition awards business (the "CA Short Line"), a $7
million short-term credit line ($90,078 unused at June 30, 1995)
for use in the children's literature business (the "School Book
Fairs Line"), a $9.5 million line ($2,784,217 unused at June 30,
1995) for acquisitions and for working capital (the "Acquisition
Line")and a $2.5 million short term note obtained in July 1994
for use in funding an acquisition (the "Time Credit"). The CA
Short Line and School Book Fairs Line are due in full on June 7,
1996, subject to annual renewal. The Time Credit is due in full
on June 7, 1996 and the Acquisition Line is due on June 3, 1997.
Additionally, the Company has a $2.8 million credit facility in
the United Kingdom ($246,376 unused at June 30, 1995) for use in
its children's literature business. The United Kingdom facility
is payable on demand.
The Company anticipates that operating cash flows during the
next twelve months, coupled with the renewal or extension of
short-term credit facilities will cover operating expenditures
and meet the current maturities on long-term obligations. The
Company has no reason to believe existing short-term credit
facilities will not be renewed or extended. The Company does not
anticipate any material expenditures for property, plant and
equipment during the next twelve months.
Seasonality:
------------
Both of the Company's business segments are highly seasonal
with the children's literature business cycle closely correlating
the school year and the incentive/recognition awards business
skewed towards the end of a calendar year. Due to the
seasonality of its businesses, the Company experiences negative
cash flow during the summer months. Further, in order to build
its inventory for its fall sales, the Company's borrowings
increase over the summer and generally peak during late fall. As
a result of the Company's seasonality, inventory and receivables
reach peak levels during the months of October through December.
PART II
ITEMS 1: LEGAL PROCEEDINGS
--------
The description of the legal proceedings included in
Management's Discussion and Analysis of Financial
Condition and Results of Operations included in Part I
of this report is incorporated herein by reference.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
-------
(a) Exhibit Number 11
Computation of Earnings Per Share
(b) No reports on Form 8-K have been filed during the
quarter ended June 30, 1995.
ITEM 10: MATERIAL CONTRACTS
--------
(a) Exhibit Number 10
First Amendment to Amended and Restated Loan
Agreement with The Huntington National Bank.
Signature
Pursuant to the requirements of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
PAGES, INC.
Registrant
Date: August 9, 1995 By: R.A. Stimmel
----------------------- -------------------------------
R. A. Stimmel, President
and Principal Financial Officer
EXHIBIT 11
PAGES, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1995 June 30, 1995
------------------ ----------------
<S> <C> <C>
Primary:
Weighted average number of
common shares outstanding 4,806,000 4,797,000
Adjustment for stock options
which have a dilutive effect
based upon the average market
price for common stock:
Add dilutive stock options _ _
Deduct shares that could be
repurchased from the proceeds
of dilutive options _ _
----------- -----------
Weighted average common and
common equivalent shares 4,806,000 4,797,000
----------- -----------
----------- -----------
Net loss $ (699,133) $(1,420,697)
Earnings adjustment (20% rule) _ _
----------- -----------
Net loss for computation purposes $ (699,133) $(1,420,697)
----------- -----------
----------- -----------
Loss per common and
common equivalent share $ (0.15) $ (0.30)
----------- -----------
----------- -----------
Fully Diluted:
Weighted average number of
common shares outstanding 4,806,000 4,797,000
Adjustment for stock options
which have a dilutive effect
based upon the market price
for common stock at end of
period:
Add dilutive stock options _ _
Deduct shares that could be
repurchased from the proceeds
of the dilutive options _ _
----------- -----------
Fully diluted shares 4,806,000 4,797,000
----------- -----------
----------- -----------
Net loss $ (699,133) $(1,420,697)
Earnings adjustment (20% rule) _ _
----------- -----------
Net loss for computation purposes $ (699,133) $(1,420,697)
----------- -----------
----------- -----------
Loss per common and common
equivalent share assuming full
dilution $ (0.15) $ (0.30)
----------- -----------
----------- -----------
</TABLE>
EXHIBIT 10
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDMENT (this "Amendment") to the Amended and Restated Loan
Agreement is entered into as of the 28th day of June, 1995, by and between
Pages, Inc. ("Pages"), Clyde A. Short Company ("Clyde Short"), School Book
Fairs, Inc. ("School Book F airs") (Pages, Clyde Short and School Book Fairs
shall be individually referred to as a "Borrower" and collectively as the
"Borrowers"), Craftmark Inc. ("Craftmark") and School Book Fairs, Limited
("Limited") Craftmark and Limited shall individually referred to as a
"Guarantor" and collectively as the "Guarantors") (each of the Borrowers and the
Guarantors shall be individually referred to as a "Company" and collectively as
the "Companies"), and The Huntington National Bank ("Bank").
RECITALS:
A. As of August 2, 1994, the Companies, Graham Hamilton
Properties, an Ohio general partnership ("Graham Hamilton"), and the Bank
executed a certain Amended and Restated Loan Agreement (hereinafter the "Loan
Agreement"), setting forth the term s of certain loans and extensions of credit
to the Borrowers; and
B. As of February 28, 1990, Clyde Short executed and delivered to
the Bank, inter alia, a certain revolving note in the original principal sum of
Ten Million Dollars ($10,000,000.00), which note was modified by a First Note
Modification Agreement dated June 12, 1992, that, inter, alia, decreased the
maximum principal amount of the obligation evidenced by such note to Six Million
Dollars ($6,000,000.00), by a Second Note Modification Agreement dated June 30,
1993, by a Third Note Modification and Extension Agreement dated June 29, 1994,
and by a Fourth Note Modification Agreement dated as of August 2, 1994
(hereinafter collectively the "Short Note"); and
C. As of August 2, 1994, the Borrowers executed and delivered to
the Bank, inter alia, a certain revolving note in the original principal sum of
Seven Million Dollars ($7,000,000.00) (hereinafter the "School Book Fairs
Note"); and
D. As of August 2, 1994, the Borrowers executed and delivered to
the Bank, inter alia, a certain Revolving Note in the original principal amount
of Nine Million Five Hundred Thousand Dollars ($9,500,000.00) (hereinafter the
"Pages Revolving Note "); and
E. As of July 21, 1994, the Borrowers executed and delivered to the
Bank, inter alia, a certain Time Note in the original principal sum of Two
Million Five Hundred Thousand Dollars ($2,500,000.00) (hereinafter the "Pages
Time Note") (the Short Note, the School Book Fairs Note, the Pages Revolving
Note and the Pages Time Note are hereinafter collectively referred to as the
"Notes"); and
F. In connection with the Loan Agreement and the Notes, the
Companies and Graham Hamilton executed and delivered to the Bank certain other
loan documents, promissory notes, a deed of trust, assignment of rents and
security agreement, lockbox agreements, consents, assignments, security
agreements, agreements, instruments and financing statements in connection with
the indebtedness referred to in the Loan Agreement (all of the foregoing,
together with the Notes and the Loan Agreement, are hereinafter collectively
referred to as the "Loan Documents"); and
G. Graham Hamilton was dissolved in August, 1994; and
H. The Companies and the Bank desire to amend and modify certain
terms in the Loan Agreement and to extend the maturity of the Notes.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, each of the Companies and the
Bank, for themselves an d their successors and assigns do hereby agree, recite,
represent and warrant as follows:
1. Section 1.2, "The Loans," of the Loan Agreement is hereby
amended to recite in its entirety that:
1.2 The Loans. The Bank, subject to the terms and
conditions hereof, will make loans and advances on a
revolving basis and will extend commercial letters of
credit to the Borrowers up to the aggregate sum of
$25,725,000.00 (the "Loans"). The Loans shall be
comprised of (a) credit extensions, subject to the
terms and conditions hereof, to Clyde A. Short Company
in an amount up to the aggregate sum of $6,000,000.00
(the "Short Revolving Credit"), (b) a revolving credit
facility, subject to the terms and conditions hereof,
to the Borrowers in an amount up to the principal sum
of $7,000,000 (the "School Book Fairs Revolving
Credit"), (c) a revolving credit facility, subject to
the terms and conditions hereof, to the Borrowers in an
amount up to the principal sum of $9,500,000.00 (the
"Pages Revolving Credit"), (d) a time credit facility
to the Borrowers in the principal sum of $2,500,000.00
(the "Pages Time Credit"), and (e) a standby letter of
credit facility providing for the issuance of a standby
letter of credit in the stated amount of $725,000.00
for the account of the Borrowers (the "Pages Standby
Letter of Credit").
2. Section 1.6, "School Books Fairs Lending Formula," of the Loan
Agreement is hereby amended to recite in its entirety that:
1.6 School Books Fairs Lending Formula. "School
Book Fairs Borrowing Base" shall mean the sum of (a)
the applicable School Book Fairs Inventory Advance
Rate, multiplied by Eligible Inventory owned by School
Book Fairs, Inc., up to the School Boo k Fairs Maximum
Inventory Advance, plus (b) 80% of Eligible Accounts
owned by School Book Fairs, Inc. "School Book Fairs
Inventory Advance Rate" shall mean up to 50% beginning
June 1, and continuing through October 31 of each
calendar year, and up t o 40% beginning November 1 and
continuing through May 31 of the next succeeding
calendar year. "School Book Fairs Maximum Inventory
Advance" shall mean up to $9,000,000.00 beginning June
1, and continuing through October 31 of each calendar
year and $6,500,000.00 beginning November 1, and
continuing through May 31 of the next succeeding
calendar year.
3. Section 1.7, "Pages Revolving Credit and Pages Time Credit," of
the Loan Agreement is hereby redesignated and amended to recite in its entirety
that:
1.7 Pages Revolving Credit, Pages Time Credit and
Pages Standby Letter of Credit. The aggregate
principal balance of the Pages Revolving Credit and the
Pages Time Credit shall not exceed the lesser of
$12,000,000.00 or the Pages Borrowing Base. In
addition, so long as the Pages Standby Letter of Credit
is outstanding, the aggregate principal balance of the
Pages Revolving Credit and the Pages Time Credit, plus
the stated amount of the Pages Standby Letter of Credit
shall not exceed the lesser of $12,725,000.00 or the
Pages Borrowing Base. Notwithstanding any other
provisions of this Agreement, the Bank may decline to
make any requested advance under the Pages Revolving
Credit in connection with any acquisition if it in good
faith believes that it would incur liability to any
target entity or affiliates, shareholders or creditors
of such target entity by providing financing in
connection with such acquisition.
4. Section 2.1, "Eligible Accounts," of the Loan Agreement is
hereby amended to recite in its entirety that:
2.1 Eligible Accounts. With respect to the
accounts of Clyde A. Short Company or School Book
Fairs, Inc. or Pages, Inc., as the case may be, the
term "Eligible Accounts" means the portion of such
Company's accounts that the Bank determines from time
to time, based on credit policies, market conditions,
such Company's business and other matters, is eligible
for use in calculating either the Short Borrowing Base,
the School Book Fairs Borrowing Base or the Pages
Borrowing Base. Without limiting the Bank's right to
determine which accounts are Eligible Accounts, no
account will be an Eligible Account unless, at a
minimum, such account arises in the ordinary course of
such Company's business, is due and owing to such
Company exclusive of sales or other taxes from a party
(the "Account Debtor") that meets the qualifications
stated herein, and meets all the following requirements
until it is collected in full: (a) the account is due
and payable not more than 30 days from the date of the
original invoice therefor and is not more than 60 days
past-due, or if a special dating program has been
approved in writing by the Bank, the account is due and
payable on a date permitted by the terms of such dating
program and is not past-due; ( b) the account arises
from such Company's completed performance of a sale of
goods and/or related services, all such goods having
been lawfully shipped and invoiced to the Account
Debtor, and upon the Bank's request, copies of all
invoices, together with all shipping documents and
delivery receipts evidencing such shipment having been
delivered to the Bank; (c) except for accounts arising
from contracts with schools or libraries and accounts
of School Book Fairs, Inc. arising from consumer trans
actions, the account does not arise from a contract
with any government or agency thereof, from a consumer
transaction, or from a progress billing; (d) the
account does not, when added to all other accounts of
School Book Fairs, Inc. arising from consumer
transactions, produce an aggregate indebtedness to
School Book Fairs, Inc. from Account Debtors in
connection with consumer transactions, or an aggregate
indebtedness to School Book Fairs, Inc. that is
reflected on its books and records as unpaid fair
accrual, in excess of $4,000,000.00; (e) the account is
not subject to any prior assignment, claim, lien,
security interest, or setoff; (f) the account is not
subject to any credit, contra account, allowance,
adjustment, levy, return of goods , or discount
(collectively a "Contra"), provided, however, that
unless the Account Debtor has asserted a Contra, if the
amount of the account exceeds the amount of the Contra,
such excess shall be deemed to be an Eligible Account
if such excess meet s all other requirements of this
Section; (g) the account does not arise from a
transaction with a person, corporation or entity
affiliated with the Companies; (h) the account does
not, when added to all other accounts of the Account
Debtor with the Company, produce an aggregate
indebtedness from the Account Debtor of more than 20%
of the total of all such Company's Eligible Accounts;
(i) such Company has not received notice of bankruptcy
or insolvency of the Account Debtor; (j) the account is
not evidenced by any chattel paper, promissory note,
payment instrument or written agreement; (k) the
account does not arise from an Account Debtor whose
mailing address or executive office is located outside
the United States or Canada; (l) the account does arise
from an Account Debtor to whom the Company has
determined to ship goods on a "cash on delivery" or
C.O.D. basis; (m) the account does not arise from an
Account Debtor who has more than 50% of its accounts
with such Company more than 60 days past due; and (n)
the Bank has not notified such Company that the account
or the Account Debtor is unsatisfactory or unacceptable
(although the Bank reserves the right to do so in its
sole discretion at any time).
5. Paragraph (a) of Section 3.3, "LIBO Rate," of the Loan Agreement
is hereby amended to recite that:
(a) the actual or estimated arithmetic mean of
the per annum rates of interest at which deposits in
U.S. dollars for the related Interest Period and in an
aggregate amount comparable to the amount of such LIBO
Rate Advance are being offered to U. S. banks by one
or more prime banks in the London interbank market, as
determined by the Bank in its discretion based upon
reference to information appearing in Telerate, a
service of Telerate Systems Incorporated, in the
section captioned "British Bankers Assoc. Interest
Settlement Rates," or any comparable index selected by
the Bank, the obtaining of rate quotations, or any
other reasonable procedure, at approximately 11:00 a.m.
London, England, time, on the second LIBO business day
prior to t he first day of the related Interest Period;
all as determined by the Bank, such sum to be rounded
up, if necessary, to the nearest whole multiple of 1/16
of 1%; divided by
The remainder of Section 3.3 shall remain as originally written.
6. The definition of "Termination Date" set forth in Section 3.3,
"LIBO Rate," of the Loan Agreement is hereby amended to recite in its entirety
that:
"Termination Date" shall mean, (a) with respect to any
Advances under the Short Revolving Credit or School
Book Fairs Revolving Credit, June 7, 1996, and (b) with
respect to any Advances under the Pages Revolving
Credit, June 3, 1997.
7. Section 3.12, "Fees," of the Loan Agreement is hereby amended to
recite in its entirety that:
3.12 Fees. The Borrowers, jointly and severally,
agree to pay to the Bank the following: (a) with
respect to Short Revolving Credit, the sum of
$15,000.00 payable upon the initial funding under the
Short Revolving Credit; (b) with respect to the School
Book Fairs Revolving Credit, the sum of $17,500.00
payable upon the initial funding under the School Book
Fairs Revolving Credit; (c) with respect to the Pages
Revolving Credit, the sum of $23,750.00 payable upon
the initial funding under the Pages Revolving Credit;
and (d) with respect to the Pages Time Credit, the sum
of $12,500.00, which amount has been paid to the Bank
as of July 21, 1994. The Borrowers jointly and
severally agree to pay a fee in respect of the Pages
Revolving Credit equal to three-eighths of one percent
per annum (3/8%) of the difference, if any, between
$9,500,000.00 and the average daily principal balance
of the Pages Revolving Credit during any full or
partial calendar quarter the Pages Revolving Credit is
in effect, payable quarterly in arrears, beginning on
the first day of October, 1994, and continuing on the
first day of each January, April, July, and October
thereafter during the period the Pages Revolving Credit
is in effect. With respect to the Letters of Credit,
the Borrowers jointly and severally agree to pay upon
issuance of each Letter of Credit an issuance fee equal
to one-quarter of one percentage point of the stated
amount of such Letter of Credit; provided, however,
that each issuance fee shall be not less than $35.00,
plus fees for service and handling as established from
time to time by the Bank's International Department.
The Borrowers jointly and severally agree to pay upon
issuance of the Pages Standby Letter of Credit a fee of
one and one-quarter percent of the stated amount of
said letter of credit, plus fees for service and
handling as established from time to time by the Bank's
International Department.
8. Section 3.15, "Maturity," of the Loan Agreement is hereby
amended to recite in its entirety that:
3.15 Maturity. The Short Revolving Credit and
School Book Fairs Revolving Credit shall be due and
payable on June 7, 1996, and as extended from time to
time in the sole discretion of the Bank. The Pages
Revolving Credit shall be due and payable on June 3,
1997, and as extended from time to time in the sole
discretion of the Bank. The Pages Time Credit shall be
due and payable on June 7, 1996. None of the Letters
of Credit shall have an expiry date later than the
maturity or the extended maturity of the Short
Revolving Credit. The Pages Standby Letter of Credit
shall not have an expiry date later than January 31,
1996. In addition, the Loans, or any of them, at the
option of the Bank, shall become due and payable
without notice or demand upon the occurrence of any
Event of Default under this Agreement.
9. Section 5.1, "Organization and Authority," of the Loan Agreement
is hereby amended to recite in its entirety that:
5.1 Organization and Authority. Such Company (a)
is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction set
forth below:
Pages, Inc. -- Delaware
Clyde A. Short Company -- North Carolina
School Book Fairs, Inc. -- Florida
Craftmark Inc. -- Ohio
School Book Fairs, Limited -- United Kingdom
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its
properties and to carry on its business as now
conducted and as presently proposed to be conducted in
the locations set forth in Exhibit C to the First
Amendment to Amended and Restated Loan Agreement; and
(c) to the best of such Company's knowledge, by reason
of ownership or lease of real property, has qualified
to do business in each jurisdiction in which it owns or
leases such real property.
10. Section 7.7, "Minimum Security," of the Loan Agreement is hereby
amended to recite in its entirety that:
7.7 Minimum Security. Clyde A. Short Company shall
maintain as minimum security for the Short Revolving
Credit, Eligible Inventory, Eligible Accounts, and
Eligible Real Estate having an aggregate value such
that the Short Borrowing Base will equal or exceed the
aggregate credit outstanding under the Short Revolving
Credit, and if such Company fails to do so, such
Company shall immediately pay to the Bank the
difference. School Book Fairs, Inc. shall maintain as
minimum security for the School Book Fairs Revolving
Credit, Eligible Inventory and Eligible Accounts,
having an aggregate value such that the School Book
Fairs Borrowing Base will equal or exceed the aggregate
credit outstanding under the School Book Fairs
Revolving Credit, and if such Company fails to do so,
such Company shall immediately pay to the Bank the
difference. Pages, Inc. will maintain as minimum
security for the Pages Revolving Credit, the Pages Time
Credit and the Pages Standby Letter of Credit, Eligible
Inventory, Eligible Accounts, and Unused Availability
having an aggregate value such that the Pages Borrowing
Base will equal or exceed the aggregate principal
balances outstanding under the Pages Revolving Credit
and the Pages Time Credit and the stat ed amount of the
Pages Standby Letter of Credit, and if such Company
fails to do so, such Company shall immediately pay to
the Bank the difference.
11. Section 7.12, "Consolidated Tangible Net Worth," of the Loan
Agreement is hereby amended to recite in its entirety that:
7.12 Consolidated Tangible Net Worth. The Parent,
on a combined and consolidated basis, shall achieve a
Consolidated Tangible Net Worth of not less than the
amounts specified below as of the dates also specified
below:
As of June 30, 1995 - not less than $11,000,000.00
As of September 30, 1995 - not less than $9,000,000.00
As of December 31, 1995 - not less than $13,750,000.00
As of March 31, 1996 - not less than $14,000,000.00
As of June 30, 1996 - not less than $13,000,000.00
As of September 30, 1996 - not less than $9,000,000.00
As of December 31, 1996 - not less than $14,000,000.00
12. Section 7.13, "Working Capital," of the Loan Agreement is hereby
amended to recite in its entirety that:
7.13 Working Capital. The Parent, on a combined and
consolidated basis, shall maintain at all times a
Working Capital of not less than the following amounts
during the following fiscal years:
At all times from At all times from
December 31, 1994, December 31, 1995,
through December 30, 1995 and thereafter
Not less than Not less than
$12,000,000.00 $14,000,000.00
"Working Capital" shall mean, on a combined and consolidated
basis, the excess of current assets over current liabilities.
For the purposes of calculation of Working Capital, the Short
Revolving Credit and the School Book Fairs Revolving Credit shall
be classified as short term liabilities, and the Pages Revolving
Credit and the Pages Time Credit shall be classified as long term
liabilities of the Companies.
13. Section 7.14, "Ratio of Total Liabilities to Consolidated
Tangible Net Worth," of the Loan Agreement is hereby amended to recite in its
entirety that:
7.14 Ratio of Total Liabilities to Consolidated
Tangible Net Worth. The Parent, on a combined and
consolidated basis, shall achieve a ratio of Total
Liabilities to Consolidated Tangible Net Worth of not
greater than the following ratios as of the dates
specified below:
As of As of
December 31, 1995 December 31, 1996
Not greater than Not greater than
3.50 to 1.00 3.25 to 1.00
"Total Liabilities" shall mean with respect to the
Companies (a) all indebtedness for borrowed money or
for the deferred purchase price of property or
services, (b) any other indebtedness which is evidenced
by a note, bond, debenture or similar instrument, (c)
all obligations with respect to any letter of credit
issued for the account of the Company, (d) all
obligations in respect of acceptances issued or created
for the account of the Companies, or any of them (e)
lease obligations which, in accordance with GAAP,
should be capitalized, (f) all liabilities (including
lease obligations) secured by any lien or encumbrance
on any property owned by any of the Companies even
though any such Company has not assumed or otherwise
become liable for the payment thereof, (g) all
obligations of the Companies, or any of them, with
respect to interest rate protection agreements (valued
at the termination value thereof computed in accordance
with a method approved by the International Swap
Dealer's Association), and (i) all other obligations of
the Companies, or any of them, which, in accordance
with GAAP, would be classified upon a balance sheet as
liabilities (except capital stock and surplus earned).
14. Section 7.21, "Prospective Participant or Co-Lender," of the
Loan Agreement is hereby amended to recite in its entirety:
7.21 Prospective Participant or Co-Lender. The
Companies agree that after the execution of this
Agreement, the Bank may submit such information
regarding the Companies' financial conditions or
affairs, as the Bank may from time to time possess to
any prospective participant or co-lender for the Loans.
With respect to all documents, instruments, and
agreements executed in connection with the Loans,
including without limitation this Agreement, the term
"Bank" shall be deemed to include any participant or
co-lender as well. No later than 120 days after the
date of the execution of the First Amendment to Amended
and Restated Loan Agreement, the Companies shall obtain
a bank or other satisfactory financial institution to
purchase or hold not less than 40% of the principal
amount of the Loans.
15. Section 8, "Financial Information and Reporting," of the Loan
Agreement is hereby amended to recite in its entirety that:
8. Financial Information and Reporting. The
Parent shall deliver the following to the Bank on a
consolidated and consolidating basis: (a) within 30
days after the end of each month, financial statements,
including a balance sheet and statements of income and
surplus, and statement of cash flows of each of the
Companies, certified by the president or chief
financial officer of the Parent (a "Financial Officer")
as fairly representing the Company's financial
condition as of the end of such period; (b) within 45
days after the end of each quarter, statements signed
by a Financial Officer certifying the compliance of
each of the Companies with the terms of this Agreement
and the calculation of the financial covenants
contained in Section 7 above; (c) a current loan and
collateral report, borrowing certificate, or other
writings satisfactory to the Bank for the calculation
of, or setting forth the calculation of the Short
Borrowing Base, the School Book Fairs Borrowing Base
and the Pages Borrowing Base, as the case may be, with
each advance request pursuant to the respective
revolving loans if such borrowing base does not
reflect sufficient availability for such advance, but,
in any event, no less frequently than once every month
with respect to Clyde A. Short Company and Pages, Inc.
and once every week with respect to School Book Fairs,
Inc.; (d) within 30 days after the end of each month,
an accounts reconciliation report and an inventory
reconciliation report, signed by a Financial Officer,
in detail satisfactory to the Bank; (e) within 30 days
after the end of each month, a report signed by a
Financial Officer of the Parent for each of the
Companies setting forth the number and dollar total of
accounts receivable past due for not more than 30 days,
the number and dollar total past due for not more than
60 days, the number and dollar total past due for not
more than 90 days, and the number and dollar total past
due for more than 90 days; (g) within 30 days after the
end of each month, a report signed by a Financial
Officer setting forth for each of the Companies, the
number, dollar amount and party of accounts payable
remaining due and payable less than 31 days from the
date of the original invoice there for, less than 61
days from the date of the original invoice therefor,
less than 91 days from the date of the original invoice
therefor, and more than 90 days from the date of the
original invoice therefor; (h) within 90 days after
the end of each fiscal year, audited financial
statements with consolidating schedules, prepared in
accordance with generally accepted accounting
principles consistently applied and certified by
independent public accountants satisfactory to the
Bank, containing a balance sheet, statements of income
and surplus, statements of cash flows and
reconciliation of capital accounts, along with any
management letters written by such accountants; (i)
within 90 days after the end of each fiscal year, a
statement signed by the Parent's independent public
accountants certifying that during the course of their
examination, nothing has come to their attention that
would leave them to believe that the Companies are in
violation of the terms of this Agreement; (j) within 60
days after the end of each fiscal year, financial
projections with respect to each of the Companies'
projected financial conditions for the current fiscal
year; (k) immediately upon the filing or release, as
the case may be, copies of any Securities and Exchange
Commission or State Securities Law disclosures,
filings, documents or any press releases; and (l) at
the request of the Bank, such other information as the
Bank may from time to time reasonably require.
16. Section 10.1, "Notices," of the Loan Agreement is hereby amended
to recite in its entirety that:
10.1 Notices. (a) All communications under this
Agreement or under the notes executed pursuant hereto
shall be in writing and shall be mailed by first class
mail, postage prepaid, (1) if to the Bank, at the
following address, or at such other address as may have
been furnished in writing to such Company by the Bank:
The Huntington National Bank
41 South High Street
Columbus, Ohio 43215
Attn: Andrew W. Livingston, Vice President
(2) if to any of the Companies, at the following
address, or at such other address as may have been
furnished in writing to the Bank by the Borrower:
Pages, Inc.
801 94th Avenue North
St. Petersburg, Florida 33702
Attn: Richard A. Stimmel, President
(b) any notice so addressed and mailed by registered or
certified mail shall be deemed to be given when so
mailed.
17. Concurrently with the execution of this Amendment, the
Borrowers shall execute and deliver to the Bank promissory notes, dated of even
date herewith, with the blanks appropriately filled in, and such notes shall be
in the form of Exhibits A-2 , A-3 and A-4, respectively, attached to this
Amendment to evidence the indebtedness referenced in the Loan Agreement. After
receipt of the new promissory notes, the Bank will mark the old promissory notes
being replaced hereby, "Replaced."
18. Concurrently with the execution of this Amendment, Clyde Short
shall execute and deliver to the Bank a Fifth Note Modification Agreement with
the blanks appropriately filled in and such Fifth Note Modification Agreement
shall be in the form o f Exhibit A-1 attached to this Amendment and shall extend
the maturity of the indebtedness under the Short Revolving Credit referenced in
the Loan Agreement.
19. Concurrently with the execution of this Amendment, the Borrowers
shall execute and deliver to the Bank a Standby Letter of Credit Reimbursement
Agreement substantially in the form of Exhibit A-6 attached to this Amendment to
evidence the liability of each of the Borrowers to reimburse the Bank for any
draws made under the Pages Standby Letter of Credit referenced in the Loan
Agreement.
20. The liability of the Borrowers under the Standby Letter of
Credit Reimbursement Agreement executed in connection with this Amendment are
and shall be secured by the security interests granted by such Borrowers in
their respective personal property pursuant to the security agreements executed
and delivered to the Bank by such Borrowers in connection with the Loan
Agreement.
21. Exhibit C, "Schedule of Business Locations," to the Loan
Agreement is amended to recite in its entirety as set forth in Exhibit C to this
Amendment.
22. All references in the Loan Agreement to Graham Hamilton
Properties, an Ohio general partnership, shall hereafter be of no further force
and effect and Graham Hamilton Properties, an Ohio general partnership, shall
hereafter cease to be a part y to the Loan Agreement.
23. Each reference to the Loan Agreement, whether by use of the
phrase "Loan Agreement," "Amended and Restated Loan Agreement," "Agreement," the
prefix "herein" or any other term, and whether contained in the Loan Agreement
itself, in this Amendment or any document executed concurrently herewith or in
any loan documents executed hereafter, shall be construed as a reference to the
Loan Agreement as amended by this Amendment.
24. Each of the Companies hereby reaffirms each and every warranty
and representation made in the Loan Documents as if the same were made as of the
date this Amendment becomes effective, except to the extent that such warranties
and representations expressly relate to an earlier date.
25. Except as modified herein, the Loan Agreement, Loan Documents
and all other agreements as to payment, guarantee of payment or security
executed in connection therewith shall remain as written originally and in full
force and effect in all respects, and nothing herein shall affect, modify, limit
or impair any of the rights and powers which the Bank may have thereunder. Any
modification or waiver of any of the agreements, covenants, or terms of the Loan
Agreement or the Loan Documents shall not be construed as the Bank's agreement
or intention to agree to any further modifications or waivers.
26. Each of the Companies agrees to perform and observe all of the
covenants, agreements, stipulations, and conditions to be performed under the
Loan Agreement, Loan Documents, and all other related agreements, as amended
hereby.
27. Each of the Companies represents and warrants that no "Event of
Default," as defined in the Loan Agreement, has occurred and is continuing, nor
will any occur immediately after the execution and delivery of this Amendment by
the performance o r observance of any provision hereof.
28. Each of the Companies hereby represents and warrants to the Bank
that (a) such Company has legal power and authority to execute and deliver the
within Amendment; (b) the officer executing the within Amendment on behalf of
such Company has be en duly authorized to execute and deliver the same and bind
such Company with respect to the provisions provided for herein; (c) the
execution and delivery hereof by such Company and the performance and observance
by such Company of the provisions hereof do not violate or conflict with the
articles of incorporation, memorandum and articles of association, regulations
or by-laws of such Company or any law applicable to such Company or result in
the breach of any provision of or constitute a default under any agreement,
instrument or document binding upon or enforceable against such Company; and (d)
this Amendment constitutes a valid and legally binding obligation upon such
Company in every respect.
29. Each of the undersigned Companies authorizes any attorney-at-law
to appear in any court of record in the State of Ohio or in any state or
territory of the United States after the indebtedness referred to in the Loan
Agreement becomes due, whether by acceleration or otherwise, to waive the
issuing and service of process, and to confess judgment against any one or more
of the undersigned Companies in favor of the Bank for the amount then appearing
due, together with costs of suit, and thereupon to waive all errors and all
rights of appeal in stays of execution. No such judgment or judgments against
less than all the undersigned Companies shall be a bar to a subsequent judgment
or judgments against any one or more of the undersigned Companies against whom
judgment has not been obtained hereon, this being a joint and several warrant of
attorney to confess judgment. The attorney-at-law authorized hereby to appear
for the undersigned Companies may be an attorney-at-law representing the Bank,
and each of the undersigned Companies hereby expressly waives any conflict of
interest that may exist by virtue of such representation.
30. THIS AMENDMENT shall become effective only upon its execution by
all parties hereto.
31. The capitalized terms herein shall have the same meanings as the
capitalized terms in the Loan Agreement as amended hereby.
IN WITNESS WHEREOF, each of the Companies and the Bank have hereunto set their
hands at Columbus, Ohio as of the date first set forth above.
COMPANIES:
PAGES, INC.
By
Its
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
CLYDE A. SHORT COMPANY
By
Its
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
SCHOOL BOOK FAIRS, INC.
By
Its
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
CRAFTMARK INC.
By
Its
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
SCHOOL BOOK FAIRS, LIMITED
By
Its
BANK:
THE HUNTINGTON NATIONAL BANK
By
Its
COLUMBUS/0147061.01
EXHIBIT A-1
FIFTH NOTE MODIFICATION AGREEMENT -- $6,000,000.00
This Fifth Note Modification Agreement (this "Agreement") is entered
into as of the 28th day of June, 1995, by and between The Huntington National
Bank (hereinafter the "Bank") and Clyde A. Short Company (hereinafter the
"Company").
WITNESSETH:
A. As of February 28, 1990, the Bank and the Company entered into
and executed a certain Loan and Security Agreement (hereinafter the "First Loan
Agreement"); and
B. As of February 28, 1990, the Company executed and delivered to
the Bank, inter alia, a certain revolving note in the original principal amount
of Ten Million Dollars ($10,000,000), which was modified by a First Note
Modification Agreement dated June 12, 1992, thereby decreasing the principal
amount to Six Million Dollars ($6,000,000.00), by a Second Note Modification
Agreement dated June 30, 1993, by a Third Note Modification and Extension
Agreement dated June 29, 1994, and by a Fourth Note Modification Agreement dated
August 2, 1994 (hereinafter collectively the "Note"); and
C. To secure the repayment of the Note, the Company granted to the
Bank, inter alia, a security interest in (a) the collateral described in the
First Loan Agreement, and (b) a Deed of Trust, Assignment of Rents and Security
Agreement upon certain real property owned by the Company and located in
Cleveland County, North Carolina, (hereinafter collectively the "Real and
Personal Property"); and
D. The Bank's security interests and deed of trust in the Real and
Personal Property were perfected properly by the filing of financing statements
and the recording of a deed of trust with various recording authorities; and
E. In connection with the First Loan Agreement and the Note, the
Company executed and delivered to the Bank certain other loan documents,
promissory notes, agreements, instruments and financing statements in connection
with the indebtedness referred to in the First Loan Agreement (all of the
foregoing, together with the Note and the First Loan Agreement, are hereinafter
collectively referred to as the "First Loan Documents"); and
F. On or about June 12, 1992, the Company, the Bank and certain
affiliates of the Company entered into a certain Loan Agreement (the "Second
Loan Agreement"), thereby amending and restating the terms of the First Loan
Agreement; and
G. In connection with the Second Loan Agreement, the Company
executed and delivered to the Bank certain other loan documents, promissory
notes, agreements, and instruments in connection with the indebtedness referred
to in the Second Loan Agreement, including, but not limited to, a Security
Agreement (the "Security Agreement") with respect to the Personal Property (all
of the foregoing, together with the Second Loan Agreement, are hereinafter
collectively referred to as the "Second Loan Documents"); and
H. As of August 2, 1994, the Company, the Bank and certain
affiliates of the Company entered into a certain Amended and Restated Loan
Agreement, that was amended by a certain First Amendment to Amended and Restated
Loan Agreement dated of even d ate herewith (collectively, the "Third Loan
Agreement"), which Third Loan Agreement amended and restated the terms of the
Second Loan Agreement; and
I. In connection with the Third Loan Agreement, the Company
executed and delivered to the Bank certain other loan documents, promissory
notes, agreements and instruments in connection with the indebtedness referred
to in the Third Loan Agreement (hereinafter collectively the "Third Loan
Documents") (all of the foregoing, together with the First Loan Documents, the
Second Loan Documents and the Third Loan Agreement are hereinafter collectively
referred to as the "Loan Documents").
J. The Company remains the owner of the Real and Personal Property
and the Bank holds the Loan Documents; and
K. The Company and the Bank desire and are willing to extend the
maturity date of the Note.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Company and the Bank, for
themselves and their successors and assigns do hereby agree, recite, represent
and warrant as follows:
1. The section titled "Manner of Payment" of the Note is hereby
amended to recite in its entirety that:
The Principal Sum shall be payable on June 7, 1996, and
at maturity, whether by demand, acceleration, or
otherwise. In addition, accrued interest shall be due
and payable monthly beginning on July 1, 1995, and
continuing on the first day of each month thereafter
and at maturity, whether by demand, acceleration or
otherwise.
2. The Company hereby covenants and agrees that the Bank's
agreement in this Agreement to modify the Note shall not be construed and shall
not be the Bank's agreement to further modify the Note.
3. The Company represents and warrants that no "Event of Default,"
as defined in the Third Loan Agreement, has occurred and is continuing, nor will
any such Event of Default occur immediately after the delivery of this Agreement
by the performance or observance of any provision hereof.
4. Nothing contained in this Agreement shall be construed to
affect, modify, or cure in any manner, or effect a waiver of the occurrence
and/or continuance of any Event of Default, or default or breach of any term,
condition, covenant or agreement contained in the Third Loan Agreement, the
Note, the Loan Documents, or any other agreement executed in connection
therewith.
5. Except as modified herein, the Note, the Third Loan Agreement,
the Loan Documents and all other agreements as to payment, guarantee of payment
or security executed in connection therewith shall remain as written originally
and in full force a nd effect in all respects, and nothing herein shall affect,
modify, limit or impair any of the rights and powers which the Bank may have
thereunder.
6. The Company agrees to perform and observe all of the covenants,
agreements, stipulations, and conditions to be performed under the Note, the
Third Loan Agreement, Loan Documents, and all other related agreements, as
amended hereby. Except as modified by this Agreement, all the terms, conditions
and covenants of the Note, the Third Loan Agreement, the Loan Documents and any
other related agreements shall remain as originally written.
7. The Company agrees to execute such continuation statements,
financing statements, or other documents, if any, as may be necessary or
desirable to continue in full force and effect the security interest granted to
the Bank.
8. THIS AGREEMENT shall become effective only upon its execution by
all parties hereto.
IN WITNESS WHEREOF, the Company and the Bank have hereunto set their
hands at Columbus, Ohio, as of the date first set forth above.
COMPANY:
CLYDE A. SHORT COMPANY
By:
Its:
BANK:
THE HUNTINGTON NATIONAL BANK
By:
Its:
CONSENT OF GUARANTORS
Each of the undersigned, being a guarantor of the Company's indebtedness
to the Bank pursuant to certain guaranty agreements with the Bank, hereby
consents and agrees to be bound by the terms, conditions and execution of the
above Fifth Note Modification Agreement and hereby further agrees that its
obligations shall be continuing as provided in said guaranty agreements and said
guaranty agreements shall remain as written originally and continue in full
force and effect in all respects.
PAGES, INC.
By:
Its:
SCHOOL BOOK FAIRS, INC.
By:
Its:
CRAFTMARK INC.
By:
Its:
SCHOOL BOOK FAIRS, LIMITED
By:
Its:
COLUMBUS/147693.01
EXHIBIT A-2
THE HUNTINGTON NATIONAL BANK
Revolving Note
City Office __________ Division __________ Branch __________ [XX] Secured
Account No. __________ Note No. __________ [ ] Unsecured
Account Name: School Book Fairs, Inc., Pages, Inc. and Clyde A. Short Company
[XX] Corporations [ ] Partnerships [ ] Individuals/Proprietorships
[ ] Other
$7,000,000.00 Columbus, Ohio June 28, 1995
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of The Huntington National Bank (hereinafter called the "Bank,"
which term shall include any holder hereof) at such place as the Bank may
designate or, in the absence of such designation, at any of the Bank's offices,
the sum of Seven Million Dollars ($7,000,000.00) or so much thereof as shall
have been advanced by the Bank at any time and not thereafter repaid
(hereinafter referred to as "Principal Sum") tog ether with interest as
hereinafter provided and payable at the time and in the manner hereinafter
provided. The proceeds of the loan evidenced hereby may be advanced, repaid and
readvanced in partial amounts during the term of this revolving note (t his
"Note") and prior to maturity. Each such advance shall be made to the
undersigned upon receipt by the Bank of the undersigned's application therefor
and disbursement instructions, which shall be in such form as the Bank shall
from time to time prescribe. The Bank shall be entitled to rely on any oral or
telephonic communication requesting an advance and/or providing disbursement
instructions hereunder, which shall be received by it in good faith from anyone
reasonably believed by the Bank to be the undersigned, or the undersigned's
authorized agent. The undersigned agree that all advances made by the Bank will
be evidenced by entries made by the Bank into its electronic data processing
system and/or internal memoranda maintained by t he Bank. The undersigned
further agree that the sum or sums shown on the most recent printout from the
Bank's electronic data processing system and/or on such memoranda shall be
rebuttably presumptive evidence of the amount of the Principal Sum and of the
amount of any accrued interest.
This Note is executed and the advances contemplated hereunder are to be
made pursuant to an Amended and Restated Loan Agreement by and between the
undersigned and the Bank dated as of August 2, 1994, and all amendments,
modifications, and supplements thereto from time to time (hereinafter called the
"Loan Agreement"), and all the covenants, representations, agreements, terms,
and conditions contained therein, including but not limited to additional
conditions of default, are incorporated herein as if fully rewritten.
INTEREST
The undersigned agree to pay interest in like money and in immediately
available funds at such office on the unpaid Principal Sum hereof from time to
time from the date hereof until such amount shall become due and payable
(whether at the stated maturity, by acceleration or otherwise) on the dates and
at the applicable rates per annum as provided in the Loan Agreement.
MANNER OF PAYMENT
The Principal Sum shall be due and payable on June 7, 1996, and at
maturity, whether by demand, acceleration or otherwise. Accrued interest shall
be due and payable monthly beginning on July 1, 1995, and continuing on the
first day of each month thereafter, and at maturity, whether by demand,
acceleration or otherwise.
LATE CHARGE
Any installment or other payment not made within 10 days of the date
such payment or installment is due shall be subject to a late charge equal to 5%
of the amount of the installment or payment.
SECURITY
This Note is secured by the security interests, assignments, and
mortgages granted and/or referenced in the Loan Agreement and by various
security agreements dated of even date herewith or various other dates.
DEFAULT
Upon the occurrence of any of the following events:
(a) the undersigned fail to make any payment of interest
or of the Principal Sum on or before the date such payment is
due;
(b) an "Event of Default" under the Loan Agreement shall
have occurred and be continuing;
then the Bank may, at its option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Bank shall institute any action
for the enforcement or collection of the obligations evidenced hereby, the
undersigned agrees to pay all costs and expenses of such action, including
reasonable attorneys' fees, to the extent permitted by law.
GENERAL PROVISIONS
Each of the parties executing this Note, and any indorser, surety, or
guarantor, hereby jointly and severally waive presentment, notice of dishonor,
protest, notice of protest, and diligence in bringing suit against any party
hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of a person against whom the Bank has any right of
recourse, and any defenses of any accommodation maker and consent that without
discharging any of them, the time of payment and any other provision of this
promissory note may be extended or modified an unlimited number of times before
or after maturity without notice to the undersigned. Each of the undersigned
jointly and severally agrees that it will pay the obligations evidenced hereby,
irrespective of any action or lack of action on the Bank's part in connection
with the acquisition, perfection, possession, enforcement, disposition, or
modification of all the obligations evidenced hereby or any and all security
therefore, and no omission or delay on the Bank's part in exercising any right
against, or taking any action to collect from or pursue the Bank's remedies
against any party hereto will release, discharge, or modify the duties of the
undersigned, or any of them, to make payments hereunder. Each of the
undersigned agrees that the Bank, without notice to or further consent from the
undersigned, may release or modify any collateral, security, document or other
guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of the undersigned, or any of them, hereunder. Each of the
undersigned agrees that the Bank will not be required t o pursue or exhaust any
of its rights or remedies against the undersigned, or any of them, or any
guarantors of the obligations evidenced hereby with respect to the payment of
any said obligations, or to pursue, exhaust or preserve any of the Bank's rights
or remedies with respect to any collatera, security or other guaranties given to
secure said obligations. Each of the undersigned waives any claim or other
right which it might now have or hereafter acquire against any other person or
entity that is primarily or contingently liable on the obligations that arise
from the existence or performance of each of the undersigned's obligations under
this Note, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of the Bank or any collateral security which
the Bank now has or hereafter acquires, whether such claim, remedy or right
arises in equity, under contract or statute, at common law, or otherwise.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security interest or mortgage which secures the obligations evidenced hereby
shall remain in full force and effect notwithstanding any such substitution,
renewal, or extension.
The captions used herein are for references only and shall not be deemed
a part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected. This Note shall be governed by and construed in
accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
EACH OF THE UNDERSIGNED HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE UNDERSIGNED OR THE BANK, OR ANY OF THEM, WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH OF THE UNDERSIGNED HEREBY AGREE AND CONSENT THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT THE UNDERSIGNED, OR ANY OF THEM, OR THE BANK MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH OF THE UNDERSIGNED TO THE WAIVE R OF THE RIGHT
OF THE UNDERSIGNED TO TRIAL BY JURY.
WARRANT OF ATTORNEY
Each of the undersigned authorizes any attorney at law to appear in any
Court of Record in the State of Ohio or in any state or territory of the United
States after the above indebtedness becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against any one or more of the undersigned in favor of the Bank for the amount
then appearing due together with costs of suit, and thereupon to waive all
errors and all rights of appeal and stays of execution. No such judgment or
judgments against less than all of the undersigned shall be a bar to a
subsequent judgment or judgments against any one or more of the undersigned
against whom judgment has not been obtained hereon, this being a joint and
several warrant of attorney to confess judgment.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Borrower: Borrower:
SCHOOL BOOK FAIRS, INC. PAGES, INC.
By: By:
Its: Its:
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Borrower:
CLYDE A. SHORT COMPANY
By:
Its:
COLUMBUS/147717.01
EXHIBIT A-3
THE HUNTINGTON NATIONAL BANK
Revolving Note
City Office __________ Division __________ Branch __________ [XX] Secured
Account No. __________ Note No. __________ [ ] Unsecured
Account Name Pages, Inc., School Book Fairs, Inc. and Clyde A. Short Company
[XX] Corporations [ ] Partnerships [ ] Individuals/Proprietorships
[ ] Other
$9,500,000.00 Columbus, Ohio June 28, 1995
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of The Huntington National Bank (hereinafter called the "Bank,"
which term shall include any holder hereof) at such place as the Bank may
designate or, in the absence of such designation, at any of the Bank's offices,
the sum of Nine Million Five Hundred Thousand Dollars ($9,500,000.00) or so much
thereof as shall have been advanced by the Bank at any time and not thereafter
repaid (hereinafter referred to as "Principal Sum") together with interest as
hereinafter provided and payable at the time and in the manner hereinafter
provided. The proceeds of the loan evidenced hereby may be advanced, repaid and
readvanced in partial amounts during the term of t his revolving note (this
"Note") and prior to maturity. Each such advance shall be made to the
undersigned upon receipt by the Bank of the undersigned's application therefor
and disbursement instructions, which shall be in such form as the Bank shall
from time to time prescribe. The Bank shall be entitled to rely on any oral or
telephonic communication requesting an advance and/or providing disbursement
instructions hereunder, which shall be received by it in good faith from anyone
reasonably believed by the Bank to be the undersigned, or the undersigned's
authorized agent. The undersigned agree that all advances made by the Bank will
be evidenced by entries made by the Bank into its electronic data processing
system and/or internal memoranda maintained by the Bank. The undersigned
further agree that the sum or sums shown on the most recent printout from the
Bank's electronic data processing system and/or on such memoranda shall be
rebuttably presumptive evidence of the amount of t he Principal Sum and of the
amount of any accrued interest.
This Note is executed and the advances contemplated hereunder are to be
made pursuant to an Amended and Restated Loan Agreement by and between the
undersigned and the Bank dated as of August 2, 1994, and all amendments,
modifications, and supplements thereto from time to time (hereinafter called the
"Loan Agreement"), and all the covenants, representations, agreements, terms,
and conditions contained therein, including but not limited to additional
conditions of default, are incorporated herein as if fully rewritten.
INTEREST
The undersigned agree to pay interest in like money and in immediately
available funds at such office on the unpaid Principal Sum hereof from time to
time from the date hereof until such amount shall become due and payable
(whether at the stated maturity, by acceleration or otherwise) on the dates and
at the applicable rates per annum as provided in the Loan Agreement.
MANNER OF PAYMENT
The Principal Sum shall be due and payable on June 3, 1997, and at
maturity, whether by demand, acceleration or otherwise. Accrued interest shall
be due and payable monthly beginning on July 1, 1995, and continuing on the
first day of each month thereafter, and at maturity, whether by demand,
acceleration or otherwise.
LATE CHARGE
Any installment or other payment not made within 10 days of the date
such payment or installment is due shall be subject to a late charge equal to 5%
of the amount of the installment or payment.
SECURITY
This Note is secured by the security interests, assignments, and
mortgages granted and/or referenced in the Loan Agreement and by various
security agreements dated of even date herewith or various other dates.
DEFAULT
Upon the occurrence of any of the following events:
(a) the undersigned fail to make any payment of
interest or of the Principal Sum on or before the date such
payment is due;
(b) an "Event of Default" under the Loan Agreement
shall have occurred and be continuing;
then the Bank may, at its option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Bank shall institute any action
for the enforcement or collection of the obligations evidenced hereby, the
undersigned agrees to pay all costs and expenses of such action, including
reasonable attorneys' fees, to the extent permitted by law.
GENERAL PROVISIONS
Each of the parties executing this Note, and any indorser, surety, or
guarantor, hereby jointly and severally waive presentment, notice of dishonor,
protest, notice of protest, and diligence in bringing suit against any party
hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of a person against whom the Bank has any right of
recourse, and any defenses of any accommodation maker and consent that without
discharging any of them, the time of payment and any other provision of this
promissory note may be extended or modified an unlimited number of times before
or after maturity without notice to the undersigned. Each of the undersigned
jointly and severally agrees that it will pay the obligations evidenced hereby,
irrespective of any action or lack of action on the Bank's part in connection
with the acquisition, perfection, possession, enforcement, disposition, or
modification of all the obligations evidenced hereby or any and all security
therefore, and no omission or delay on the Bank's part in exercising any right
against, or taking any action to collect from or pursue the Bank's remedies
against any party hereto will release, discharge, or modify the duties of the
undersigned, or any of them, to make payments hereunder. Each of the
undersigned agrees that the Bank, without notice to or further consent from the
undersigned, may release or modify any collateral, security, document or other
guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of the undersigned, or any of them, hereunder. Each of the
undersigned agrees that the Bank will not be required t o pursue or exhaust any
of its rights or remedies against the undersigned, or any of them, or any
guarantors of the obligations evidenced hereby with respect to the payment of
any said obligations, or to pursue, exhaust or preserve any of the Bank's rights
or remedies with respect to any collatera, security or other guaranties given to
secure said obligations. Each of the undersigned waives any claim or other
right which it might now have or hereafter acquire against any other person or
entity that is primarily or contingently liable on the obligations that arise
from the existence or performance of each of the undersigned's obligations under
this Note, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of the Bank or any collateral security which
the Bank now has or hereafter acquires, whether such claim, remedy or right
arises in equity, under contract or statute, at common law, or otherwise.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security interest or mortgage which secures the obligations evidenced hereby
shall remain in full force and effect notwithstanding any such substitution,
renewal, or extension.
The captions used herein are for references only and shall not be deemed
a part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected. This Note shall be governed by and construed in
accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
EACH OF THE UNDERSIGNED HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE UNDERSIGNED OR THE BANK, OR ANY OF THEM, WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH OF THE UNDERSIGNED HEREBY AGREE AND CONSENT THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT THE UNDERSIGNED, OR ANY OF THEM, OR THE BANK MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH OF THE UNDERSIGNED TO THE WAIVE R OF THE RIGHT
OF THE UNDERSIGNED TO TRIAL BY JURY.
WARRANT OF ATTORNEY
Each of the undersigned authorizes any attorney at law to appear in any
Court of Record in the State of Ohio or in any state or territory of the United
States after the above indebtedness becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against any one or more of the undersigned in favor of the Bank for the amount
then appearing due together with costs of suit, and thereupon to waive all
errors and all rights of appeal and stays of execution. No such judgment or
judgments against less than all of the undersigned shall be a bar to a
subsequent judgment or judgments against any one or more of the undersigned
against whom judgment has not been obtained hereon, this being a joint and
several warrant of attorney to confess judgment.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Borrower: Borrower:
PAGES, INC. SCHOOL BOOK FAIRS, INC.
By: By:
Its: Its:
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Borrower:
CLYDE A. SHORT COMPANY
By:
Its:
COLUMBUS/147724.01
EXHIBIT A-4
THE HUNTINGTON NATIONAL BANK
COMMERCIAL LOAN NOTE
Business Purpose
City Office __________ Division __________ Branch __________ [X] Secured
Account No. __________ Note No. __________ [ ] Unsecured
Account Name: Pages, Inc., School Book Fairs, Inc., and Clyde A. Short Company
[ X ] corporations [ ] partnership [ ] individual/proprietorship
[ ] other
$2,500,000.00 Columbus, Ohio June 28, 1995
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of The Huntington National Bank (hereinafter called the "Bank,"
which term shall include any holder hereof), at such place as the Bank may
designate or, in the absence of such designation, at any of the Bank's offices,
the sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00)
(hereinafter called the "Principal Sum"), together with interest as hereinafter
provided. The undersigned promise to pay the Principal Sum and the interest
thereon at the time and in the manner hereinafter provided in this note (this
"Note").
This Note is executed and the advances contemplated hereunder are to be
made pursuant to an Amended and Restated Loan Agreement by and between the
undersigned and the Bank dated August 2, 1994, and all amendments, modifications
and restatements there to from time to time (hereinafter called the "Loan
Agreement") and all the covenants, representations, agreements, terms and
conditions contained therein, including but not limited to additional conditions
of default, are incorporated herein as if fully rewritten.
INTEREST
Interest will accrue on the unpaid balance of the Principal Sum until
paid at a variable rate of interest per annum, which shall change in the manner
set forth below equal to one percentage point (1%) in excess of the Prime
Commercial Rate.
Upon the occurrence of an "Event of Default" pursuant to the Loan
Agreement, interest will accrue on the unpaid balance of the Principal Sum and
unpaid interest, if any, until paid at a variable rate of interest per annum,
which shall change in the manner set forth below, equal to four percentage
points in excess of the Prime Commercial Rate.
All interest shall be calculated on the basis of a 360 day year for the
actual number of days the Principal Sum or any part thereof remains unpaid.
As used herein, Prime Commercial Rate shall mean the rate established by
the Bank from time to time based on its consideration of economic, money market,
business and competitive factors, and it is not necessarily the Bank's most
favored rate. Subject to any maximum or minimum interest rate limitation
specified herein or by applicable law, any variable rate of interest on the
obligation evidenced hereby shall change automatically without notice to the
undersigned immediately with each change in the Prime Commercial Rate.
MANNER OF PAYMENT
The Principal Sum shall be payable on June 7, 1996 and accrued interest
shall be due and payable monthly beginning on July 1, 1995, and continuing on
the first day of each month thereafter, and at maturity, whether by demand,
acceleration or otherwise.
LATE CHARGE
Any installment or other payment not made within 10 days of the date
such payment or installment is due shall be subject to a late charge equal to 5%
of the amount of the installment or payment.
SECURITY
This Note is secured by the security interests granted by or referred to
in the Loan Agreement and by the assignments and the mortgages or other security
documents dated various dates or given contemporaneously herewith.
DEFAULT
Upon the occurrence of any of the following events:
(a) the undersigned fail to make any payment of interest
or of the Principal Sum on or before the date such payment is
due;
(b) an "Event of Default" under the Loan Agreement shall
have occurred and be continuing;
then the Bank may, at its option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Bank shall institute any action
for the enforcement or collection of the obligations evidenced hereby, the
undersigned agrees to pay all costs and expenses of such action, including
reasonable attorneys' fees, to the extent permitted by law.
GENERAL PROVISIONS
Each of the parties executing this Note, and any indorser, surety, or
guarantor, hereby jointly and severally waive presentment, notice of dishonor,
protest, notice of protest, and diligence in bringing suit against any party
hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of a person against whom the Bank has any right of
recourse, and any defenses of any accommodation maker and consent that without
discharging any of them, the time of payment and any other provision of this
promissory note may be extended or modified an unlimited number of times before
or after maturity without notice to the undersigned. Each of the undersigned
jointly and severally agrees that it will pay the obligations evidenced hereby,
irrespective of any action or lack of action on the Bank's part in connection
with the acquisition, perfection, possession, enforcement, disposition, or
modification of all the obligations evidenced hereby or any and all security
therefore, and no omission or delay on the Bank's part in exercising any right
against, or taking any action to collect from or pursue the Bank's remedies
against any party hereto will release, discharge, or modify the duties of the
undersigned, or any of them, to make payments hereunder. Each of the
undersigned agrees that the Bank, without notice to or further consent from the
undersigned, may release or modify any collateral, security, document or other
guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of the undersigned, or any of them, hereunder. Each of the
undersigned agrees that the Bank will not be required t o pursue or exhaust any
of its rights or remedies against the undersigned, or any of them, or any
guarantors of the obligations evidenced hereby with respect to the payment of
any said obligations, or to pursue, exhaust or preserve any of the Bank's rights
or remedies with respect to any collateral, security or other guaranties given
to secure said obligations. Each of the undersigned waives any claim or other
right which it might now have or hereafter acquire against any other person or
entity that is primarily or contingently liable on the obligations that arise
from the existence or performance of each of the undersigned's obligations
under this Note, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of the Bank or any collateral security which
the Bank now has or hereafter acquires, whether such claim, remedy or right
arises in equity, under contract or statute, a t common law, or otherwise.
The obligations evidenced hereby may from time to time be evidenced by
another note or notes given in substitution, renewal or extension hereof. Any
security interest or mortgage which secures the obligations evidenced hereby
shall remain in full force and effect notwithstanding any such substitution,
renewal, or extension.
The captions used herein are for references only and shall not be deemed
a part of this Note. If any of the terms or provisions of this Note shall be
deemed unenforceable, the enforceability of the remaining terms and provisions
shall not be affected. This Note shall be governed by and construed in
accordance with the law of the State of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
EACH OF THE UNDERSIGNED HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE UNDERSIGNED OR THE BANK, OR ANY OF THEM, WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH OF THE UNDERSIGNED HEREBY AGREE AND CONSENT THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT THE UNDERSIGNED, OR ANY OF THEM, OR THE BANK MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH OF THE UNDERSIGNED TO THE WAIVE R OF THE RIGHT
OF THE UNDERSIGNED TO TRIAL BY JURY.
WARRANT OF ATTORNEY
Each of the undersigned authorizes any attorney at law to appear in any
Court of Record in the State of Ohio or in any state or territory of the United
States after the above indebtedness becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against any one or more of the undersigned in favor of the Bank for the amount
then appearing due together with costs of suit, and thereupon to waive all
errors and all rights of appeal and stays of execution. No such judgment or
judgments against less than all of the undersigned shall be a bar to a
subsequent judgment or judgments against any one or more of the undersigned
against whom judgment has not been obtained hereon, this being a joint and
several warrant of attorney to confess judgment.
WARNING
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS
OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
Borrower: Borrower:
PAGES, INC. SCHOOL BOOK FAIRS, INC.
By: By:
Its: Its:
WARNING
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS
OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
Borrower:
CLYDE A. SHORT COMPANY
By:
Its:
COLUMBUS/147707.01
EXHIBIT A-6
STANDBY LETTER OF CREDIT REIMBURSEMENT AGREEMENT
To The Huntington National Bank: June 28, 1995
In consideration of your issuing, or your application for the issuance
by your correspondent at our request, of one or more Standby Letters of Credit
(herein called the "Credit," whether one or more) substantially in accordance
with the application attached hereto, or such applications as may hereafter be
executed and made a part hereof, the undersigned jointly and severally agree as
follows:
1. This Standby Letter of Credit Reimbursement Agreement (the
"Agreement") is executed and the Credit contemplated hereunder are made pursuant
to an Amended and Restated Loan Agreement dated as of August 2, 1994 by and
between the parties hereto, together with any and all modifications and
amendments thereto from time to time (hereinafter called the "Loan Agreement")
and all the covenants, representations, agreements, terms and conditions
contained therein are incorporated by reference herein. All Applications shall
be made on forms substantially identical to Exhibit A attached hereto. Upon
execution by any of the undersigned, each Application shall become a part of,
and subject to, the terms and conditions of the Loan Agreement and this
Agreement.
2. As to drafts drawn under or purporting to be drawn under the
Credit which are payable in United States Currency, we agree (a) in the case of
each sight draft, to reimburse you at your issuing office on demand, in United
Stated legal tender, the amount paid on such draft; or, (b) if so demanded by
you, to pay to you at said office in advance, in such legal tender, the amount
required to pay such draft.
3. As to drafts drawn under or purporting to be drawn under the
Credit which are payable in currency other than United States currency, we agree
in the case of each sight draft to reimburse you at your issuing office, on
demand, the equivalent of the amount paid, in United States legal tender, at the
rate of exchange then current for cable transfers to the place of payment, in
the currency in which such draft is drawn. A demand made on one of us shall fix
the exchange rate as to all of us. If for any reason whatsoever, there shall
be, at the time of your demand of reimbursement or payment, no rate of exchange
current for effective cable transfers to the place of payment and in the
currency in which any such draft is drawn, we agree to pay you, on demand, in
United States legal tender, an amount which, in your sole judgment, shall be
sufficient to meet our obligations hereunder, which amount may be applied by you
at any time as a payment on account of such obligations; or , at your option,
held as security therefor; it being understood, however, that we shall remain
liable for any deficiency which may result if such amount in the United States
legal tender shall prove to be insufficient to effect full payment or
reimbursement to you at the time when a rate of exchange for such transfers
shall again be current.
4. We also agree to pay to you, on demand, your fee of 1.25% P.A.,
and all charges and expenses (including all charges for legal services) paid or
incurred by you in connection with the issuance of each Credit, plus
correspondent's charges, if any, and interest where chargeable. We agree to pay
you after demand for reimbursement interest upon any amounts disbursed hereunder
at a variable rate of interest per annum, which shall change in the manner set
forth below equal to three an d one-half percentage points in excess of the
Prime Commercial Rate of The Huntington National Bank. As used herein, Prime
Commercial Rate shall mean the rate established by the Bank from time to time
based on its consideration of economic, money market, business and competitive
factors, and is not necessarily the Bank's most favored rate. Subject to any
maximum or minimum interest rate limitation specified herein or by applicable
law, the variable rate of interest on the obligation evidenced hereby shall
change automatically without notice to the undersigned immediately with each
change in the Prime Commercial Rate.
5. We agree that, in the event of any extension of the maturity or
time for presentation of drafts, documents, or any other modification of the
terms of the Credit, at the request of any of us, with or without notification
to the others, or in the event of any increase in the amount of the Credit at
our request this Agreement shall be binding upon us with regard to the Credit so
increased or otherwise modified, to drafts, documents, and to any action taken
by you or any of your correspondents in accordance with such extension,
increase, or other modification. We hereby jointly and severally waive
presentment, notice of dishonor, protest, notice of protect and diligence in
bringing suit against any party hereto, waive the defenses of impairment of
collateral for the obligation evidenced hereby, impairment of a person against
whom you have any right of recourse, and any defenses of any accommodation
maker. Each of us jointly and severally agrees that it will pay the obligations
evidenced hereby, irrespective of any action or lack of action on your part in
connection with the acquisition, perfection, possession, enforcement,
disposition or modification of any or all the obligations evidenced hereby or
any and all security therefor, and no omission or delay on your part in
exercising any right against, or taking any action to collect from or pursue
your remedies against any party hereto will release, discharge, or modify the
duties of any of us to make payments hereunder. Each of us jointly and
severally agrees that you may, without notice to or further consent from any of
us, release or modify any collateral, security, document or other guaranties now
held or hereafter acquired, or substitute other collateral, security or other
guaranties, and no such action will release, discharge or modify the duties of
any of us hereunder. Each of us jointly and severally agrees that you will not
be required to pursue or exhaust any of your rights or remedies against any of
us or any guarantors of the obligations evidenced hereby with respect to the
payment of any said obligations, or to pursue, exhaust or preserve any of your
rights or remedies with respect to any collateral, security or other guaranties
given to secure said obligations. If any of us shall at any time pay any sums
on account of any obligations hereunder or take any other action in performance
of any of our obligations hereunder, we shall be subrogated to the rights,
powers, privileges an d remedies of any person or entity that is primarily or
contingently liable on the obligations that arise from the existence or
performance of each of our respective obligations hereunder; provided, that all
such rights of subrogation and all claims and indebtedness arising therefrom
shall be, and each of us jointly and severally agrees that the same are and
shall be at all times, in all respects subordinate and junior to all obligations
of any such person or entity to you, and provided, further , that each of us
jointly and severally agrees that it will not seek to exercise any such rights
of subrogation, reimbursement, exoneration, or indemnity whatsoever or any
rights of recourse to any security for any of the obligations hereunder unless
or until all such obligations shall have been indefeasibly paid in full in cash
and duly and fully performed.
6. We hereby expressly authorize you and any of your correspondents
to pay any drafts drawn under or purporting to be drawn under the Credit,
notwithstanding any discrepancies or irregularities between the drafts and
documents presented, and those required by the terms of the Credit; provided
that as to discrepancies and irregularities not otherwise covered by the
provisions of this Agreement, you or your correspondent so accepting or paying
must be furnished with an indemnity satisfactory to you, which, running in our
favor as well as yours, covers the discrepancies or irregularities, but is
limited to the actual damage directly attributable to such discrepancies or
irregularities.
7. We assume all risks of the acts or omissions of the users of the
Credit. We agree that, should the beneficiary under a Credit upon receipt of
advice, by cable or otherwise, of the issuance of the Credit, but prior to its
actual receipt, negotiate drafts by virtue of such advice, such negotiation
shall be considered a proper one and shall be included under the terms and
subject to all conditions hereof, and we assume all the risks of the misuses of
the Credit, whatsoever. Neither you nor your correspondents shall be
responsible for the form, validity, sufficiency, genuineness, or legal effect of
documents, even if such documents should in fact prove to be in any or all
respect invalid, insufficient, fraudulent, or forged; f or the validity or
sufficiency of any instrument assigning/transferring or purporting to
assign/transfer the Credit or the rights or benefits thereunder or proceeds
thereof in whole or in part, which may prove to be invalid or ineffective for
any reason; for failure of any draft to bear any reference or adequate reference
to the Credit, or failure of documents to accompany any draft at negotiation, or
failure of documents to accompany any draft at payment if sent by duplicate
mail, or failure of any person to note the amount of any draft on the reverse of
the Credit, or to surrender to take up the Credit or to send forward documents
apart from drafts, as required by the terms of the Credit, each of which
provisions, if contained in the Credit itself, it is agreed, may be waived by
you; or for errors, omissions, interruptions, or delays in transmission or
delivery of any messages by mail, cable, telegraph, wireless, or otherwise,
whether or not they be in cipher; nor shall you be responsible for any error,
neglect, or default of any of your correspondents for errors in translation, or
for errors in interpretation of technical terms, or for any consequences arising
from causes beyond your control; and none of the above shall affect, impair, or
prevent the vesting of any of your rights or powers hereunder. You shall have
the right to transmit the terms of the Credit without translating them. We
shall protect you and any other drawee in paying any draft dated on or before
the expiration of any time limit expressed in the Credit, regardless of when
drawn and when or whether negotiated. If the Credit provides that payment is to
be made by your correspondent, neither you nor such correspondent shall be
responsible for the failure of any of the documents specified in the Credit to
come into your hands, or for any delay in connection therewith; and our
obligation to reimburse you for payments made or obligations incurred shall not
be affected by such failure or delay in t he receipt by you of any of such
documents. In furtherance and extension and not in limitation of the specific
provisions herein before set forth, we agree that any action taken by you or any
correspondent of yours, under or in connection with the Credit or the relative
drafts and documents, if taken in good faith, shall be binding on us, and shall
not put you or your correspondent under any resulting liability to us, and we
make the same agreement as to any inaction or omission, unless in breach of good
faith.
You shall not in any way be liable for any failure by you or anyone else
to pay any draft under the Credit resulting from any censorship, law, control or
restriction rightfully or wrongfully exercised by any de facto or de jure
domestic or foreign government or agency, or from any other cause beyond your
control or the control of your correspondents, agents, or sub-agents, or for any
loss or damage to us or anyone else resulting from any such failure to pay, all
such risks being expressly assume d by us, and we agree to indemnify and hold
you harmless from any claim, loss, liability, or expense arising by reason of
any such failure to pay. We are responsible to you for all obligations imposed
upon you with respect to the Credit or the relative drafts and documents.
8. Each of us agrees that the balance of every account of us or any
of us with you and each claim of us or any of us against you existing from time
to time, shall be subject to a lien and subject to be set off against any and
all such liabilities of us or any of us; and you may at any time or from time to
time at your option and without notice, appropriate and apply toward the payment
of any of such liabilities of us or any of us the balance of each such account
of us or any of us with you and each such claim of us or any of us against you,
and we and each of us, will continue liable for any deficiency. Each of us
agrees that all property of every description, now or hereafter in your
possession or custody, or in transit to you for any purpose, including
safekeeping, collection, or pledge, for the account of us or any of us, or as to
which we or any of us may have any interest, right, or power, whether or not
such property is in whole or in part released to us or any of u s on trust or
bailee receipt, are hereby made security and subject to a lien and security
interest in your favor and any and all such liabilities of us or any of us. You
may at any time and from time to time, without notice, transfer into your own
name or that of your nominee, any property so held as collateral. Each of us
agrees that upon the occurrence of an "Event of Default" under the Loan
Agreement or a breach of any of the terms, conditions, or provisions of this
Agreement (a) any and all such liabilities of us or any of us shall, at your
option, become and be immediately due and payable, without notice, presentation,
demand of payment or protest, all such being hereby expressly waived, and
notwithstanding any credit or time allowed to any of us, or any instrument
evidencing such liabilities or otherwise, and (b) you shall have the right from
time to time to sell, re-sell, assign, and deliver all or any part of the
property, securing any liabilities of us or any of us, arrived or to arrive, at
any brokers' Board of Exchange, or at public or private sale, at your option,
without having the property at the place of sale, in such parcel or parcels and
at such time or times and at such place or places, and upon such terms and
conditions as you may deem proper, and in connection therewith, may grant
options, all without demand, advertisement or notice to us or any of us, all of
which are hereby expressly waived, and to apply the net proceeds of such sale or
sales to the payment of any and all such liabilities and we and each of us will
continue liable to you for any deficiency, with interest. Upon such sale, you
may purchase the whole or any part of the property of us or any of us being
sold, free from any right of redemption, which we and each of us hereby
expressly waive and release. Demands or calls for collateral on or any notices
to us or any of us respectively (a) may be made or given by you by leaving same
at the last know address of us or any of us respectively, or by mailing,
telegraphing, cabling, radioing, telephoning, or otherwise sending same to such
address, with the same effect as if delivered to all of us in person; (b) shall
be considered made as of the time of such leaving or mailing, telegraphing,
cabling, radioing, telephoning, or other sending by public agencies of
communication. Each of us agrees that with or without notification to any of
us, you may exchange, release, surrender, realize upon, release on trust receipt
to any of us, or otherwise deal with any property by whomsoever pledged,
mortgaged, or subjected to a security interest to secure directly or indirectly
any of the obligations hereunder or for which any of the undersigned may be
liable.
We will bear and pay all expenses of every kind (including all charges
for legal services) of the enforcement of any of your rights herein mentioned,
of any claim or demand by you against us or any of us, and of any actual or
attempted sale, exchange , enforcement, collection maintenance, retention,
insurance, compromise, settlement, release, delivery on trust receipt, or
delivery of any such security, and of the receipt of proceeds thereof, and will
repay to you any such expenses incurred by you .
9. None of your options, powers or rights (including those
hereunder) shall be waived unless you or your authorized agent shall have
signed such waiver in writing. No such waiver, unless expressly as stated
herein, shall be effective as to any transaction which occurs subsequent to the
date of such waiver, nor as to any continuance of a breach after such waiver.
No segregation or specific allocation by you of specified collateral against
any liability shall waive or affect any lie n of any sort against other
securities or property or any of your options, powers or rights (including
those hereunder).
10. The word "property" as used in this Agreement includes goods,
merchandise, securities, funds, choses in action, and any and all other forms
of property, whether real, personal, or mixed, and any right or interest
therein. Property in your possession shall include property in possession of
anyone for you in any manner whatsoever. Your options, powers and rights
specified in this Agreement are in addition to those otherwise created. You
are hereby expressly given the right and power in furtherance of any right,
power or privilege which you may have hereunder or in connection with the
Credit to execute any endorsements, assignments, or other instruments of
conveyance or transfer in our name, place and stead, covering any property
standing in our name or belonging to us of every kind and description which you
may hold or which may come into your possession under the Credit or by reason
of this Agreement.
11. If the Credit states that except so far as otherwise expressly
stated, it is subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce (Publication No. 500)
(herein called t he "Uniform Customs"), the Credit shall be so subject in all
respects; and (a) that, if the Credit does not state that except so far as
otherwise expressly stated it is subject to the Uniform Customs, you and any of
your correspondents may, without limiting the type of document acceptable
according to any other provisions of this Agreement, accept documents of any
character which comply with the Uniform Customs, or which comply with the laws
or regulations in force and customs and usages of the place of negotiation, and
(b) that you and any of your correspondents may receive, negotiate, and pay as
complying with the terms of the Credit, any drafts or other documents, otherwise
in order, which may be signed by, or issued to, the administrator or executor
of, or the trustee in bankruptcy of, or the receiver for any of the property of
the party in whose name the Credit provides that any drafts or other documents
should be drawn or issued.
12. You are hereby expressly authorized and directed to honor any
request for payment which is made under and in compliance with the terms of said
Credit without regard to, and without any duty on your part to inquire into, the
existence of any disputes or controversies between any of the undersigned, the
beneficiary of the Credit, or any other person, firm or corporation, or the
respective rights, duties, or liabilities of any of them or whether any facts or
occurrences represented in any of the documents presented under the Credit are
true or correct. Furthermore, we fully understand and agree that your sole
obligation to us shall be limited to honoring requests for payment made under
and in compliance with the terms of the Credit and this Agreement and your
obligation remains so limited even if you may have assisted us in the
preparation of the wording of the Credit or any documents required to be
presented thereunder or that you may otherwise be aware of the underlying
transaction giving rise to the Credit and this Agreement.
13. If the undersigned is a banking institution, the undersigned
hereby appoints you as its agent to the extent of issuing the Credit in
accordance with and subject to the terms and provisions of this Agreement.
14. If the Credit shall be issued by your correspondent in
accordance with this Agreement, each of the warranties, liabilities and other
terms of this Agreement or of the Credit shall run in your favor as well as that
of your correspondent so issuing the Credit.
15. Each of the undersigned authorizes any attorney at law to appear
in any Court of Record in the State of Ohio or in any state or territory of the
United States after the above indebtedness becomes due, whether by acceleration
or otherwise, to waive the issuing and service of process, and to confess
judgment against any one or more of the undersigned in favor of the Bank for the
amount then appearing due together with costs of suit, and thereupon to waive
all errors and all rights of appeal and stays of execution. No such judgment or
judgments against less than all of the undersigned shall be a bar to a
subsequent judgment or judgments against any one or more of the undersigned
against whom judgment has not been obtained here on, this being a joint and
several warrant of attorney to confess judgment.
16. EACH OF THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH OF THE UNDERSIGNED HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH OF THE UNDERSIGNED TO THE WAIVER OF EACH OF THE
UNDERSIGNED'S RIGHT TO TRIAL BY JURY.
17. This Agreement shall be binding upon us, our heirs, executors,
administrators, successors, and assigns, and shall inure to the benefit of, and
to be enforceable by, you, your successors, transferees and assigns. If this
Agreement should be terminated or revoked by operation of law as to us, or any
of us, we will indemnify and save you harmless from any loss which may be
suffered or incurred by you in acting hereunder, prior to the receipt by you or
your transferees or assigns of notice in writing of such termination or
revocation. If this Agreement is signed by two or more parties, it shall be the
joint and several agreement of such parties and whenever used herein, the
singular number shall include the plural, and the plural the singular. This
Agreement shall be governed by and construed in accordance with the law of the
State of Ohio.
Very truly yours,
PAGES, INC.
By:
Its:
WARNING
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS
OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
SCHOOL BOOK FAIRS, INC.
By:
Its:
WARNING
BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS
OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
CAUSE.
CLYDE A. SHORT COMPANY
By:
Its:
COLUMBUS/147792.01
INTERCORPORATE FUNDING AGREEMENT
This INTERCORPORATE FUNDING AGREEMENT (this "Agreement") is entered into
as of this 28th day of June, 1995, by and among Pages, Inc. (hereinafter called
"Company") and the subsidiaries and affiliates of Company and their subsidiaries
(all of which a re hereinafter called the "Affiliates" or separately an
"Affiliate") that from time to time become a party to this Agreement, each party
to this Agreement being hereinafter sometimes referred to as a "party," or
collectively, "the parties."
RECITALS
A. The present and future parties to this Agreement consist of
corporations or partnerships affiliated in ownership and related to one another
in the operation of the businesses they conduct. The parties intend to assist
and cooperate with one another in meeting financial obligations and needs and to
cooperate in the conduct of their businesses, including the purchase and sale of
goods and services, and the acquisition of supplies, machinery, equipment and
facilities, all to their mutual advantage and economic benefit in the conduct of
their businesses.
B. Each of the parties hereto recognizes the advantages that accrue
to it from such cooperation and mutual assistance and further recognizes that
the growth, prosperity and strength of each is dependent on the economic
prosperity and strength of all of them.
C. Each of the parties hereto has the valid corporate or
partnership power and legal capacity to execute and perform this Agreement.
Each of the parties deems that the execution of this Agreement in the
circumstances and under the terms hereof is necessary, convenient and expedient
to accomplish the purposes for which each such party was formed and will be
beneficial to the parties in the conduct of their respective businesses.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
SECTION 1.1. This Agreement shall apply to funds advanced (hereinafter
called an "Advance" or "Advances"):
(a) by Company to an Affiliate, or
(b) by an Affiliate to Company, or
(c) by an Affiliate to an Affiliate,
from time to time after becoming parties to this Agreement, unless otherwise
agreed in writing by the parties making and receiving the Advance.
SECTION 1.2. Each Advance shall be repaid on demand of the party making
such Advance (hereinafter called the "Advancing Party") by the transfer of funds
into a specified bank account of the Advancing Party, or in such other manner as
may be specified from time to time by the President, Treasurer, or equivalent
officer (or a person designated in writing by one of them) of the Advancing
Party.
SECTION 1.3. Each party receiving an Advance (hereinafter called the
"Receiving Party") may pay the unpaid principal amount of any Advance made to it
in whole or in part at any time and from time to time. Each such payment of
principal may be made without the payment of accrued and unpaid interest
thereon.
SECTION 1.4. A quarterly statement shall be delivered to each Advancing
Party and Receiving Party, showing for the period all Advances made to the
Receiving Party, all payments or partial payments of the principal amount of the
Advances by the Receiving Party, the accrued and unpaid interest on the
Advances, if any, and such other information as may be necessary or appropriate.
Each party hereto agrees that it will notify the person delivering a quarterly
statement to it of any error in the quarterly statement pertaining to it within
ten calendar days after receiving such statement.
SECTION 2.1. In order to make efficient use of its excess cash, any
party hereto may deposit its excess cash (hereinafter called a "Deposit" or
collectively the "Deposits") in a specified bank or banks at the request of
another party hereto in order to help the party making the request satisfy
compensating balance requirements under the terms of a loan agreement or other
agreement to furnish banking services. Unless otherwise agreed in writing by
the Depositing Party (as hereinafter defined) a nd the Benefited Party (as
hereinafter defined), the terms of this Agreement shall apply to Deposits made
by a party whose compensating balance requirements or needs are being benefited
(hereinafter called the "Benefited Party").
SECTION 2.2. Each Depositing Party shall have exclusive and unfettered
control over its Deposits and shall not have any obligation to any Benefited
Party or any other party to maintain any Deposit in any account. Each
Depositing Party may at any time withdraw its Deposit from any account.
SECTION 2.3. Requests for the making of Deposits, and Deposits made in
response to requests, may be accomplished by oral communications, but written
confirmation of the request for the making of the Deposit shall be given by or
on behalf of the Benefited Party and written confirmation of the making of each
Deposit shall be given by or on behalf of the Depositing Party.
SECTION 2.4. A quarterly statement shall be delivered to each
Depositing Party and Benefited Party showing for the quarter all outstanding
Deposits, and may include the following information: all Deposits made or
discontinued during the period, all Deposits made in a previous period which
have not been discontinued, the amounts of money accrued and owing by the
Benefited Party to the Depositing Party, including the rate or rates at which
compensation payable to the Depositing Party for its Deposits has accrued, and
such other information as may be necessary or appropriate. Each party hereto
agrees that it will notify the person delivering such quarterly statement to it
of any error in the quarterly statement pertaining to it within ten calendar
days after receiving such statement.
SECTION 3.1. Subject to the provisions of SECTION 3.2 hereof, each
party (i) designates Company as its agent to prepare and furnish the statements
and other information provided for in SECTIONS 1.4 and 2.4 hereof, (ii) agrees
that Company may make arrangements with any party to this Agreement for such
party to prepare and deliver the statements and other information provided for
in this Agreement and (iii) agrees that, upon request of the person preparing
and delivering the statements and information, it will pay such person a
reasonable fee for its services.
SECTION 3.2. Any party may at any time terminate the foregoing
authorizations of a person or persons to prepare and deliver the statements and
information relating to its transactions and either prepare and deliver its own
statements and information or designate another person as its agent for such
purpose. Such termination and designation shall be effective when the party
gives notice thereof to Company.
SECTION 4. All notices to be given by one party to another under the
terms of this Agreement shall be deemed to have been given when delivered to the
party to be notified.
SECTION 5. If any provision of this Agreement shall require the payment
of money by a party hereto, which payment shall be prohibited by, or shall be in
excess of, the maximum amount permitted by applicable law, such payment shall be
reduced to the extent necessary to comply with the law. The amount of such
reduction shall be carried forward without interest and, if and when permitted
by applicable law, added to a subsequent payment required to be made under the
terms of this Agreement.
SECTION 6. Nothing in this Agreement shall be deemed to prevent or
restrict any party from agreeing in writing from time to time with another party
to this Agreement, and without the consent of the remaining parties, to (i) the
accrual of interest, if any, on Advances or to the accrual of compensation for
Deposits at a rate or rates different from the terms hereof or (ii) the payment
of such interest or compensation at a time or times earlier than is required by
the terms hereof.
SECTION 7.1. In the event the terms of this Agreement shall apply to
any Advance or Deposit made prior to the date on which the parties to the
Advance or Deposit became parties to this Agreement, any interest or
compensation payable in respect of such Advance or Deposit shall be calculated,
recalculated or adjusted to the extent necessary under the terms hereof from the
date the transaction arose, unless otherwise specified by the parties to the
transaction.
SECTION 7.2. Each party hereto agrees to advise Company promptly of
each Advance or Deposit to which this Agreement may apply, which Advance or
Deposit existed on or before the date it became a party to this Agreement.
SECTION 7.3. In the event any Benefited Party shall fail to pay to any
Depositing Party all or any part of any compensation when due and payable under
the terms of this Agreement, unless otherwise agreed by the party to which the
payment is due and owing, any unpaid amount of any compensation in respect of a
Deposit shall be deemed to be an Advance payable on demand by the Benefited
Party to the Depositing Party from its date (the date on which the unpaid
compensation should have been paid to t he Depositing Party) and shall be
payable as provided in this Agreement for Advances.
SECTION 8.1. Each party to this Agreement acknowledges and agrees that
funds may from time to time be borrowed from third-party lenders by one or more
of the parties to this Agreement and in turn advanced to one or more of the
other parties to this Agreement. The parties further acknowledge that one or
more of the parties may from time to time be required to become obligated as a
maker on indebtedness to such third-party lenders or to guarantee to such third-
party lenders the repayment of loan s that will directly or indirectly benefit
such parties.
SECTION 8.2. Each party to this Agreement agrees that, in each and
every instance where such party is the direct or indirect recipient or
beneficiary of funds borrowed from third-party lenders by itself or by another
party to this Agreement, it will as such recipient or beneficiary indemnify and
hold harmless the party that has promised to pay or guaranteed repayment of such
funds to the lender from and against all loss, cost or expense arising out of
the performance of such promissory note or guaranty. To the extent that any
party to this Agreement shall pay or cause to be paid to any third-party lender
pursuant to such promissory note or guaranty funds in excess of funds received
directly or indirectly, by such party from a third-party lender, each other
party agrees that such party shall have, in addition to any rights granted by
this Agreement, or by law or equity, a contractual right of subrogation and/or a
right to receive repayment from each other party to this Agreement, jointly and
severally, to the extent that any such other party to this Agreement has
received directly or indirectly funds borrowed from a third-party lender. If
for any reason any party hereto shall be unable to discharge its obligations to
any such lender, each other party agrees to exercise its best efforts to make
available to such obligated party, by way of a loan or advance, sufficient funds
to enable such party to discharge such obligations.
SECTION 9.1. Each party to this Agreement agrees that additional
corporations that are subsidiaries of Company or of Company's subsidiaries may
be added to this Agreement from time to time as parties by entering into a
supplement to this Agreement with Company without the consent or approval of any
other party hereto. This Agreement may have an unlimited number of supplements.
SECTION 9.2. Company shall deliver or cause to be delivered to each
party hereto a copy of each supplement hereto. Such copies of supplements need
not be executed counterparts, but any party hereto shall be entitled to inspect
executed counterparts of all supplements at the offices of Company.
SECTION 9.3. Company shall deliver or cause to be delivered from time
to time to each party hereto a current list of the parties to this Agreement.
SECTION 9.4. This Agreement may not be terminated by any party hereto
(hereinafter called the "Terminating Party") prior to June 30, 1997. If Company
is the Terminating Party, the notice shall be given by it to all other parties.
If a party other than Company is the Terminating Party, the notice may be given
only to Company and Company shall notify the other parties hereto. Unless
otherwise agreed in writing, the termination of this Agreement with respect to
any party shall not affect the rights or obligations, or both, of the
Terminating Party and all other parties to this Agreement in respect of (1) the
unpaid principal amount of any Advance made by or to the Terminating Party and
the accrued and unpaid interest, if any, payable there on, or (2) any Deposit
made by or for the benefit of the Terminating Party, and the accrued and unpaid
compensation payable in respect of such Deposit. Company shall render or cause
to be rendered to the appropriate parties hereto for sixty (60) day s after the
effective date of any termination, or such longer period as a party may request,
such statements and information as shall be necessary or appropriate to evidence
the rights and obligations of each Terminating Party in respect of any Advance
or Deposit made to, by, or for the benefit of, the Terminating Party.
SECTION 9.5. This Agreement may be executed in any number of
counterparts, all of which together will constitute a single instrument. It
shall not be necessary that any counterpart of this Agreement be executed by
all of the parties hereto. The terms of this Agreement shall take effect (i) as
to Company, when a counterpart hereof has been executed and delivered by Company
and another party hereto, and (ii) as to parties other than Company, when a
counterpart hereof has been executed and delivered by such party and Company.
IN WITNESS WHEREOF, the parties listed below have executed this
agreement.
COMPANY:
PAGES, INC.
By:
Its:
AFFILIATES:
CLYDE A. SHORT COMPANY
By:
Its:
SCHOOL BOOK FAIRS, INC.
By:
Its:
CRAFTMARK INC.
By:
Its:
SCHOOL BOOK FAIRS, LIMITED
By:
Its:
COLUMBUS/147757.01
GUARANTOR: CRAFTMARK INC. GUARANTOR: PAGES, INC.
ADDRESS: 5720 Avery Road ADDRESS: 801 94th Avenue North
Amlin, Ohio St. Petersburg, Florida 33702
DEBTOR: SCHOOL BOOK FAIRS, INC.
ADDRESS: 801 94th Avenue North
St. Petersburg, Florida 33702
DEBTOR: CLYDE A. SHORT COMPANY
ADDRESS: 4205 East Dixon Blvd.
Shelby, North Carolina 28150
CONTINUING GUARANTY
UNLIMITED
For the purpose of inducing The Huntington National Bank (hereinafter referred
to as "Bank") to lend money or extend credit to Pages, Inc., School Book Fairs,
Inc., and Clyde A. Short Company, or any one or more of the foregoing
(hereinafter separately and/or collectively referred to as "Debtor"), the
undersigned (hereinafter referred to as "Guarantor") hereby unconditionally
guarantees the prompt and full payment to Bank when due, whether by acceleration
or otherwise, of all Obligations of any kind for which Debtor is now or may
hereafter become liable to Bank in any manner.
The word "Obligations" is used in its most comprehensive sense and includes,
without limitation, all indebtedness, debts and liabilities (including
principal, interest, late charges, collection costs, attorneys' fees and the
like) of Debtor to Bank, either created by Debtor alone or together with another
or others, primary or secondary, secured or unsecured, absolute or contingent,
liquidated or unliquidated, direct or indirect, whether evidenced by note,
draft, application for letter of credit, agreements of guaranty or otherwise,
and any and all renewals of, extensions of or substitutes therefor. The word
"Obligations" shall include, BUT NOT BE LIMITED TO, all indebtedness owed by
Debtor to Bank by reason of credit extended or to be extended to Debtor in the
principal amount of $25,725,000.00, pursuant to one or more instruments of
indebtedness and related documents.
Guarantor hereby promises that if one or more of the Obligations are not paid
promptly when due, Guarantor will, upon request of Bank, pay the Obligations to
Bank, irrespective of any action or lack of action on Bank's part in connection
with the acquisition, perfection, possession, enforcement or disposition of any
or all Obligations or any or all security therefor or otherwise, and further
irrespective of any invalidity in any or all Obligations, the unenforceability
thereof or the insufficiency, invalidity or unenforceability of any security
therefor.
Guarantor waives notice of any and all acceptances of this Guaranty. This
Guaranty is a continuing guaranty, and, in addition to covering all present
Obligations of Debtor to Bank, will extend to all future Obligations of Debtor
to Bank, whether such Obligations are reduced amended, or entirely extinguished
and thereafter increased or reincurred. This Guaranty is made and will remain
in effect until the Obligations are paid in full and until the Debtor has no
right
to request further advances under the documents or instruments evidencing the
Obligations. Bank's rights hereunder shall be reinstated and revived, and this
Guaranty shall be fully enforceable, with respect to any amount at any time paid
on account of the Obligations which thereafter shall be required to be restored
or returned by Bank upon the bankruptcy, insolvency or reorganization of Debtor,
Guarantor, or any other person, or as a result of any other fact or
circumstance, all as though such amount had not been paid.
In the event Guarantor shall any time pay any sums on account of any Obligations
or take any other action in performance of any Obligations, Guarantor shall be
subrogated to the rights, powers, privileges and remedies of the Debtor in
respect of such Obligation; provided that all such rights of subrogation and all
claims and indebtedness arising therefrom shall be, and Guarantor hereby agrees
that the same are, and shall be at all times, in all respects subordinate and
junior to all Obligations, and provided, further, that Guarantor hereby agrees
that he shall not seek to exercise any such rights of subrogation,
reimbursement, exoneration, or indemnity whatsoever or any rights of recourse to
any security for any of the Obligations unless o r until all Obligations shall
have been indefeasibly paid in full in cash and duly and fully performed.
Guarantor waives presentment, demand, protest, notice of protest and notice of
dishonor or other nonpayment of any and all Obligations and further waives
notice of sale or other disposition of any collateral or security now held or
hereafter acquired by Bank. Guarantor agrees that no extension of time, whether
one or more, nor any other indulgence granted by Bank to Debtor, or to
Guarantor, and no omission or delay on Bank's part in exercising any right
against, or in taking any action to collect from or pursue Bank's remedies
against Debtor or Guarantor, or any of them, will release, discharge or modify
the duties of Guarantor. Guarantor agrees that Bank may, without notice to or
further consent from Guarantor, release or modify any collateral, security or
other guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of Guarantor hereunder. Guarantor further agrees that Bank
will not be required to pursue or exhaust any of its rights or remedies against
Debtor or Guarantor, or any of them, with respect to payment of any of the
Obligations, or to pursue, exhaust or preserve any of its rights or remedies
with respect to any collateral, security or other guaranties given to secure the
Obligations, or to take any action of any sort, prior to demanding payment from
or pursuing its remedies against Guarantor.
Guarantor agrees to furnish true and complete financial statements from time to
time on request of Bank and at least once a year, within 30 days after the end
of each calendar year and agrees that failure to furnish such financial
statements may constitute or be deemed to constitute a default or event of
default of the Obligations. Guarantor agrees that any legal suit, action or
proceeding arising out of or relating to this Guaranty may be instituted in a
state or federal court of appropriate subject matter jurisdiction in the State
of Ohio; waives any objection which Guarantor may have now or acquire hereafter
to the venue of any such suit, action or proceeding; and irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
WAIVER OF RIGHT TO TRIAL BY JURY
GUARANTOR ACKNOWLEDGES THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE BETWEEN
GUARANTOR AND BANK, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS
GUARANTY ARISES WOULD MAKE ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY.
ACCORDINGLY, GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AS TO ANY AND
ALL DISPUTES THAT MAY ARISE RELATING TO THIS GUARANTY OR TO ANY OF THE OTHER
INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
Guarantor hereby authorizes any attorney at law to appear for Guarantor in any
action on any or all Obligations guaranteed hereby at any time after such
Obligations become due, whether by acceleration or otherwise, in any court of
record in or of the State of Ohio or elsewhere, to waive the issuing and service
of process against, and confess judgment against Guarantor in favor of Bank for
the amount that may be due, including interest, late charges, collection costs,
attorneys' fees and the like as provided for in said Obligations, and costs of
suit, and to waive and release all errors in said proceedings and judgments, and
all petitions in error and rights of appeal from the judgments rendered.
If any Obligation of Debtor is assigned by Bank, this Guaranty will inure to the
benefit of Bank's assignee, and to the benefit of any subsequent assignee, to
the extent of the assignment or assignments, provided that no assignment will
operate to relieve Guarantor from any duty to Bank hereunder with respect to any
unassigned Obligation. In the event that any one or more of the provisions
contained in this Guaranty or any application thereof shall be determined to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and any other
applications thereof shall not in any way be affected or impaired thereby. This
Guaranty shall be construed in accordance with the law of the State of Ohio.
The liabilities evidenced hereby may from time to time be evidenced by another
guaranty or guaranties given in substitution or reaffirmation hereof. Any
security interest or mortgage which secures the liabilities evidenced hereby
shall remain in full force and effect notwithstanding any such substitution or
reaffirmation.
If at the time of payment of the Obligations and any discharge hereof, Guarantor
shall be then directly or contingently liable to Bank as maker, indorser, surety
or guarantor of any other loan or obligation whether the same shall be evidenced
by a note, bill of exchange, agreement of guaranty or other instrument, then
Bank may continue to hold any collateral of Guarantor as security therefor, even
though this Guaranty shall have been surrendered to Guarantor. Bank shall not
be bound to take any steps necessary to preserve any rights in the collateral
against prior parties. If any Obligations hereunder are not paid when due, Bank
may, at its option, demand, sue for, collect or make any compromise or
settlement it deems desirable with reference to any collateral, and shall have
the rights of a secured party under the law of the State of Ohio. Guarantor
shall be liable for any deficiency.
Executed and delivered at Columbus, Ohio, as of the 28th day of June, 1995
GUARANTOR:
CRAFTMARK INC.
BY:
ITS:
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
COLUMBUS/147736.01
GUARANTOR: SCHOOL BOOK FAIRS, INC. DEBTOR: CLYDE A. SHORT COMPANY
ADDRESS: 801 94th Street ADDRESS: 4205 East Dixon Blvd.
St. Petersburg, FL 33702 Shelby, NC 28150
CONTINUING GUARANTY
UNLIMITED
For the purpose of inducing The Huntington National Bank (hereinafter referred
to as "Bank") to lend money or extend credit to Clyde A. Short Company
(hereinafter referred to as "Debtor"), the undersigned (hereinafter referred to
as "Guarantor") here by unconditionally guarantees the prompt and full payment
to Bank when due, whether by acceleration or otherwise, of all Obligations of
any kind for which Debtor is now or may hereafter become liable to Bank in any
manner.
The word "Obligations" is used in its most comprehensive sense and includes,
without limitation, all indebtedness, debts and liabilities (including
principal, interest, late charges, collection costs, attorneys' fees and the
like) of Debtor to Bank, either created by Debtor alone or together with another
or others, primary or secondary, secured or unsecured, absolute or contingent,
liquidated or unliquidated, direct or indirect, whether evidenced by note,
draft, application for letter of credit, agreements of guaranty or otherwise,
and any and all renewals of, extensions of or substitutes therefor. The word
"Obligations" shall include, BUT NOT BE LIMITED TO, all indebtedness owed by
Debtor to Bank by reason of credit extended or to be extended to Debtor in the
principal amount of $6,000,000.00, pursuant to one or more instruments of
indebtedness and related documents.
Guarantor hereby promises that if one or more of the Obligations are not paid
promptly when due, Guarantor will, upon request of Bank, pay the Obligations to
Bank, irrespective of any action or lack of action on Bank's part in connection
with the acquisition, perfection, possession, enforcement or disposition of any
or all Obligations or any or all security therefor or otherwise, and further
irrespective of any invalidity in any or all Obligations, the unenforceability
thereof or the insufficiency, invalidity or unenforceability of any security
therefor.
Guarantor waives notice of any and all acceptances of this Guaranty. This
Guaranty is a continuing guaranty, and, in addition to covering all present
Obligations of Debtor to Bank, will extend to all future Obligations of Debtor
to Bank, whether such Obligations are reduced amended, or entirely extinguished
and thereafter increased or reincurred. This Guaranty is made and will remain
in effect until the Obligations are paid in full and until the Debtor has no
right to request further advances under the documents or instruments evidencing
the Obligations. Bank's rights hereunder shall be reinstated and revived, and
this Guaranty shall be fully enforceable, with respect to any amount at any time
paid on account of the Obligations which thereafter shall be required to be
restored or returned by Bank upon the bankruptcy, insolvency or reorganization
of Debtor, Guarantor, or any other person, or as a result of any other fact or
circumstance, all as though such amount had not been paid.
In the event Guarantor shall any time pay any sums on account of any Obligations
or take any other action in performance of any Obligations, Guarantor shall be
subrogated to the rights, powers, privileges and remedies of the Debtor in
respect of such Obligation; provided that all such rights of subrogation and all
claims and indebtedness arising therefrom shall be, and Guarantor hereby agrees
that the same are, and shall be at all times, in all respects subordinate and
junior to all Obligations, and provided, further, that Guarantor hereby agrees
that he shall not seek to exercise any such rights of subrogation,
reimbursement, exoneration, or indemnity whatsoever or any rights of recourse to
any security for any of the Obligations unless o r until all Obligations shall
have been indefeasibly paid in full in cash and duly and fully performed.
Guarantor waives presentment, demand, protest, notice of protest and notice of
dishonor or other nonpayment of any and all Obligations and further waives
notice of sale or other disposition of any collateral or security now held or
hereafter acquired by Bank. Guarantor agrees that no extension of time, whether
one or more, nor any other indulgence granted by Bank to Debtor, or to
Guarantor, and no omission or delay on Bank's part in exercising any right
against, or in taking any action to collect from or pursue Bank's remedies
against Debtor or Guarantor, or any of them, will release, discharge or modify
the duties of Guarantor. Guarantor agrees that Bank may, without notice to or
further consent from Guarantor, release or modify any collateral, security or
other guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of Guarantor hereunder. Guarantor further agrees that Bank
will not be required to pursue or exhaust any of its rights or remedies against
Debtor or Guarantor, or any of them, with respect to payment of any of the
Obligations, or to pursue, exhaust or preserve any of its rights or remedies
with respect to any collateral, security or other guaranties given to secure the
Obligations, or to take any action of any sort, prior to demanding payment from
or pursuing its remedies against Guarantor.
Guarantor agrees to furnish true and complete financial statements from time to
time on request of Bank and at least once a year, within 30 days after the end
of each calendar year and agrees that failure to furnish such financial
statements may constitute or be deemed to constitute a default or event of
default of the Obligations. Guarantor agrees that any legal suit, action or
proceeding arising out of or relating to this Guaranty may be instituted in a
state or federal court of appropriate subject matter jurisdiction in the State
of Ohio; waives any objection which Guarantor may have now or acquire hereafter
to the venue of any such suit, action or proceeding; and irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
WAIVER OF RIGHT TO TRIAL BY JURY
GUARANTOR ACKNOWLEDGES THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE BETWEEN
GUARANTOR AND BANK, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS
GUARANTY ARISES WOULD MAKE ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY.
ACCORDINGLY, GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AS TO ANY AND
ALL DISPUTES THAT MAY ARISE RELATING TO THIS GUARANTY OR TO ANY OF THE OTHER
INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
Guarantor hereby authorizes any attorney at law to appear for Guarantor in any
action on any or all Obligations guaranteed hereby at any time after such
Obligations become due, whether by acceleration or otherwise, in any court of
record in or of the State of Ohio or elsewhere, to waive the issuing and service
of process against, and confess judgment against Guarantor in favor of Bank for
the amount that may be due, including interest, late charges, collection costs,
attorneys' fees and the like as provided for in said Obligations, and costs of
suit, and to waive and release all errors in said proceedings and judgments, and
all petitions in error and rights of appeal from the judgments rendered.
If any Obligation of Debtor is assigned by Bank, this Guaranty will inure to the
benefit of Bank's assignee, and to the benefit of any subsequent assignee, to
the extent of the assignment or assignments, provided that no assignment will
operate to relieve Guarantor from any duty to Bank hereunder with respect to any
unassigned Obligation. In the event that any one or more of the provisions
contained in this Guaranty or any application thereof shall be determined to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and any other
applications thereof shall not in any way be affected or impaired thereby. This
Guaranty shall be construed in accordance with the law of the State of Ohio.
The liabilities evidenced hereby may from time to time be evidenced by another
guaranty or guaranties given in substitution or reaffirmation hereof. Any
security interest or mortgage which secures the liabilities evidenced hereby
shall remain in full force and effect notwithstanding any such substitution or
reaffirmation.
If at the time of payment of the Obligations and any discharge hereof, Guarantor
shall be then directly or contingently liable to Bank as maker, indorser, surety
or guarantor of any other loan or obligation whether the same shall be evidenced
by a note, bill of exchange, agreement of guaranty or other instrument, then
Bank may continue to hold any collateral of Guarantor as security therefor, even
though this Guaranty shall have been surrendered to Guarantor. Bank shall not
be bound to take any steps necessary to preserve any rights in the collateral
against prior parties. If any Obligations hereunder are not paid when due, Bank
may, at its option, demand, sue for, collect or make any compromise or
settlement it deems desirable with reference to any collateral, and shall have
the rights of a secured party under the law of the State of Ohio. Guarantor
shall be liable for any deficiency.
Executed and delivered at Columbus, Ohio, as of the 28th day of June, 1995.
GUARANTOR:
SCHOOL BOOK FAIRS, INC.
BY:
ITS:
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
COLUMBUS/147750.01
GUARANTOR: PAGES, INC. DEBTOR: CLYDE A. SHORT COMPANY
ADDRESS: 5720 Avery Road ADDRESS: 4205 East Dixon Blvd.
Amlin, Ohio 43002 Shelby, N.C. 28150
CONTINUING GUARANTY
UNLIMITED
For the purpose of inducing The Huntington National Bank (hereinafter referred
to as "Bank") to lend money or extend credit to Clyde A. Short Company
(hereinafter referred to as "Debtor"), the undersigned (hereinafter referred to
as "Guarantor") here by unconditionally guarantees the prompt and full payment
to Bank when due, whether by acceleration or otherwise, of all Obligations of
any kind for which Debtor is now or may hereafter become liable to Bank in any
manner.
The word "Obligations" is used in its most comprehensive sense and includes,
without limitation, all indebtedness, debts and liabilities (including
principal, interest, late charges, collection costs, attorneys' fees and the
like) of Debtor to Bank, either created by Debtor alone or together with another
or others, primary or secondary, secured or unsecured, absolute or contingent,
liquidated or unliquidated, direct or indirect, whether evidenced by note,
draft, application for letter of credit, agreements of guaranty or otherwise,
and any and all renewals of, extensions of or substitutes therefor. The word
"Obligations" shall include, BUT NOT BE LIMITED TO, all indebtedness owed by
Debtor to Bank by reason of credit extended or to be extended to Debtor in the
principal amount of $6,000,000.00, pursuant to one or more instruments of
indebtedness and related documents.
Guarantor hereby promises that if one or more of the Obligations are not paid
promptly when due, Guarantor will, upon request of Bank, pay the Obligations to
Bank, irrespective of any action or lack of action on Bank's part in connection
with the acquisition, perfection, possession, enforcement or disposition of any
or all Obligations or any or all security therefor or otherwise, and further
irrespective of any invalidity in any or all Obligations, the unenforceability
thereof or the insufficiency, invalidity or unenforceability of any security
therefor.
Guarantor waives notice of any and all acceptances of this Guaranty. This
Guaranty is a continuing guaranty, and, in addition to covering all present
Obligations of Debtor to Bank, will extend to all future Obligations of Debtor
to Bank, whether such Obligations are reduced amended, or entirely extinguished
and thereafter increased or reincurred. This Guaranty is made and will remain
in effect until the Obligations are paid in full and until the Debtor has no
right to request further advances under the documents or instruments evidencing
the Obligations. Bank's rights hereunder shall be reinstated and revived, and
this Guaranty shall be fully enforceable, with respect to any amount at any time
paid on account of the Obligations which thereafter shall be required to be
restored or returned by Bank upon the bankruptcy, insolvency or reorganization
of Debtor, Guarantor, or any other person, or as a result of any other fact or
circumstance, all as though such amount had not been paid.
In the event Guarantor shall any time pay any sums on account of any Obligations
or take any other action in performance of any Obligations, Guarantor shall be
subrogated to the rights, powers, privileges and remedies of the Debtor in
respect of such Obligation; provided that all such rights of subrogation and all
claims and indebtedness arising therefrom shall be, and Guarantor hereby agrees
that the same are, and shall be at all times, in all respects subordinate and
junior to all Obligations, and provided, further, that Guarantor hereby agrees
that he shall not seek to exercise any such rights of subrogation,
reimbursement, exoneration, or indemnity whatsoever or any rights of recourse to
any security for any of the Obligations unless o r until all Obligations shall
have been indefeasibly paid in full in cash and duly and fully performed.
Guarantor waives presentment, demand, protest, notice of protest and notice of
dishonor or other nonpayment of any and all Obligations and further waives
notice of sale or other disposition of any collateral or security now held or
hereafter acquired by Bank. Guarantor agrees that no extension of time, whether
one or more, nor any other indulgence granted by Bank to Debtor, or to
Guarantor, and no omission or delay on Bank's part in exercising any right
against, or in taking any action to collect from or pursue Bank's remedies
against Debtor or Guarantor, or any of them, will release, discharge or modify
the duties of Guarantor. Guarantor agrees that Bank may, without notice to or
further consent from Guarantor, release or modify any collateral, security or
other guaranties now held or hereafter acquired, or substitute other collateral,
security or other guaranties, and no such action will release, discharge or
modify the duties of Guarantor hereunder. Guarantor further agrees that Bank
will not be required to pursue or exhaust any of its rights or remedies against
Debtor or Guarantor, or any of them, with respect to payment of any of the
Obligations, or to pursue, exhaust or preserve any of its rights or remedies
with respect to any collateral, security or other guaranties given to secure the
Obligations, or to take any action of any sort, prior to demanding payment from
or pursuing its remedies against Guarantor.
Guarantor agrees to furnish true and complete financial statements from time to
time on request of Bank and at least once a year, within 30 days after the end
of each calendar year and agrees that failure to furnish such financial
statements may constitute or be deemed to constitute a default or event of
default of the Obligations. Guarantor agrees that any legal suit, action or
proceeding arising out of or relating to this Guaranty may be instituted in a
state or federal court of appropriate subject matter jurisdiction in the State
of Ohio; waives any objection which Guarantor may have now or acquire hereafter
to the venue of any such suit, action or proceeding; and irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
WAIVER OF RIGHT TO TRIAL BY JURY
GUARANTOR ACKNOWLEDGES THAT, AS TO ANY AND ALL DISPUTES THAT MAY ARISE BETWEEN
GUARANTOR AND BANK, THE COMMERCIAL NATURE OF THE TRANSACTION OUT OF WHICH THIS
GUARANTY ARISES WOULD MAKE ANY SUCH DISPUTE UNSUITABLE FOR TRIAL BY JURY.
ACCORDINGLY, GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AS TO ANY AND
ALL DISPUTES THAT MAY ARISE RELATING TO THIS GUARANTY OR TO ANY OF THE OTHER
INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
Guarantor hereby authorizes any attorney at law to appear for Guarantor in any
action on any or all Obligations guaranteed hereby at any time after such
Obligations become due, whether by acceleration or otherwise, in any court of
record in or of the State of Ohio or elsewhere, to waive the issuing and service
of process against, and confess judgment against Guarantor in favor of Bank for
the amount that may be due, including interest, late charges, collection costs,
attorneys' fees and the like as provided for in said Obligations, and costs of
suit, and to waive and release all errors in said proceedings and judgments, and
all petitions in error and rights of appeal from the judgments rendered.
If any Obligation of Debtor is assigned by Bank, this Guaranty will inure to the
benefit of Bank's assignee, and to the benefit of any subsequent assignee, to
the extent of the assignment or assignments, provided that no assignment will
operate to relieve Guarantor from any duty to Bank hereunder with respect to any
unassigned Obligation. In the event that any one or more of the provisions
contained in this Guaranty or any application thereof shall be determined to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and any other
applications thereof shall not in any way be affected or impaired thereby. This
Guaranty shall be construed in accordance with the law of the State of Ohio.
The liabilities evidenced hereby may from time to time be evidenced by another
guaranty or guaranties given in substitution or reaffirmation hereof. Any
security interest or mortgage which secures the liabilities evidenced hereby
shall remain in full force and effect notwithstanding any such substitution or
reaffirmation.
If at the time of payment of the Obligations and any discharge hereof, Guarantor
shall be then directly or contingently liable to Bank as maker, indorser, surety
or guarantor of any other loan or obligation whether the same shall be evidenced
by a note, bill of exchange, agreement of guaranty or other instrument, then
Bank may continue to hold any collateral of Guarantor as security therefor, even
though this Guaranty shall have been surrendered to Guarantor. Bank shall not
be bound to take any steps necessary to preserve any rights in the collateral
against prior parties. If any Obligations hereunder are not paid when due, Bank
may, at its option, demand, sue for, collect or make any compromise or
settlement it deems desirable with reference to any collateral, and shall have
the rights of a secured party under the law of the State of Ohio. Guarantor
shall be liable for any deficiency.
Executed and delivered at Columbus, Ohio, as of the 28th day of June, 1995
GUARANTOR:
PAGES, INC.
BY:
ITS:
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
COLUMBUS/46876.01
