<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
--------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------------- -----------------
Commission File Number 1-5091
------
- --------------------------------------------------------------------------------
VISTA RESOURCES, INC.
---------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-1988043
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ATLANTIC CENTER, SUITE 5000
1201 W. PEACHTREE STREET, N.W., ATLANTA, GEORGIA 30309
------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 404-815-2000
------------
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
--------- ---------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of April 30, 1995, there
were 3,762,464 shares of Common Stock, Par Value $2.50 per share outstanding.
<PAGE> 2
VISTA RESOURCES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
- March 31, 1995 and December 31, 1994
Condensed Consolidated Statements of Income
- for three months ended March 31, 1995 and March 31, 1994
Condensed Consolidated Statements of Cash Flows
- for three months ended March 31, 1995 and March 31, 1994
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Forms 8-K
</TABLE>
(i)
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
VISTA RESOURCES, INC. AND SUBSIDIARIES
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- -----------
<S> <C> <C>
ASSETS
Non-Insurance Current Assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 933 $ 4,335
Investments available for sale . . . . . . . . . . . . . . . . . . . . . . . 10,291 9,884
Receivables, less allowance of $450 . . . . . . . . . . . . . . . . . . . . . 18,452 16,220
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,682 20,543
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 333
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,229 1,432
-------------------------
Total Non-Insurance Current Assets . . . . . . . . . . . . . . . . . . . . 54,832 52,747
-------------------------
Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . 27,731 27,529
Less Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . (12,587) (12,561)
-------------------------
Net Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . 15,144 14,968
-------------------------
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 234
-------------------------
Total Non-Insurance Assets . . . . . . . . . . . . . . . . . . . . . . . . 70,255 67,949
Total Insurance Assets (Detail below) . . . . . . . . . . . . . . . . . . . 101,468 90,777
-------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $171,723 $158,726
=========================
Insurance Assets
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58,494 $ 57,497
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 6,345 6,111
Premiums receivable, less allowance of $200 . . . . . . . . . . . . . . . . . 16,168 2,972
Reinsurance receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,538 13,039
Deferred policy acquisition costs . . . . . . . . . . . . . . . . . . . . . . 2,024 1,429
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,330 1,917
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,547 1,749
Intangibles, principally goodwill, less amortization of $603; 1994, $562 . . 6,022 6,063
-------------------------
Total Insurance Assets . . . . . . . . . . . . . . . . . . . . . . . . . . $101,468 $ 90,777
-------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
1
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
VISTA RESOURCES, INC. AND SUBSIDIARIES
(Dollars in thousands, except share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-Insurance Liabilities
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,250 $ 11,750
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . 7,446 8,490
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 967 1,014
Long-term liabilities due within one year . . . . . . . . . . . . . . . . . . 1,050 1,026
-------------------------
Total Non-Insurance Current Liabilities . . . . . . . . . . . . . . . . . . 23,713 22,280
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464 588
Long-term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,296 14,445
-------------------------
Total Non-Insurance Liabilities . . . . . . . . . . . . . . . . . . . . . 38,473 37,313
Total Insurance Liabilities (Detail below) . . . . . . . . . . . . . . . . 65,200 57,091
-------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,673 94,404
-------------------------
Stockholders' Equity
Preference Stock, $1 par value:
authorized 8,000,000 shares; none issued . . . . . . . . . . . . . . . . . - -
Common Stock, $2.50 par value:
authorized 20,000,000 shares; issued 3,831,670 shares . . . . . . . . . . . 9,579 9,579
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . 14,374 14,374
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,633 44,188
Unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . (186) (2,469)
Treasury stock - at cost: 69,246 shares; . . . . . . . . . . . . . . . . . . (1,350) (1,350)
-------------------------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . 68,050 64,322
-------------------------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . . $171,723 $158,726
=========================
Insurance Liabilities
Unpaid losses and loss adjustment expenses . . . . . . . . . . . . . . . . . $ 35,292 $ 37,826
Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,794 13,476
Commissions and other payables . . . . . . . . . . . . . . . . . . . . . . . 2,437 4,128
Reinsurance payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,472 1,451
Accrued income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . 205 210
-------------------------
Total Insurance Liabilities . . . . . . . . . . . . . . . . . . . . . . . . $ 65,200 $ 57,091
-------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
VISTA RESOURCES, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For Three Months Ended
March 31, March 31,
1995 1994
--------- ---------
<S> <C> <C>
LEATHER OPERATIONS
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,840 $ 28,525
-------------------------
Costs and Expenses
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,874 25,070
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . 1,661 1,638
-------------------------
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 25,535 26,708
-------------------------
Income from Leather Operations Before Interest
Expense and Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . $ 1,305 $ 1,817
-------------------------
INSURANCE OPERATIONS
Revenues
Net earned premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,919 $ 9,391
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,137 763
-------------------------
Total insurance revenues . . . . . . . . . . . . . . . . . . . . . . . . . 11,056 10,154
-------------------------
Costs and Expenses
Losses and loss adjustment expenses . . . . . . . . . . . . . . . . . . . . 7,139 6,354
Commission and underwriting expenses . . . . . . . . . . . . . . . . . . . 2,262 2,111
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . 41 47
-------------------------
Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 9,442 8,512
-------------------------
Income from Insurance Operations Before Interest
Expense and Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . $ 1,614 $ 1,642
-------------------------
CORPORATE INCOME AND EXPENSES
Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 199 $ 90
General and Administrative Expenses . . . . . . . . . . . . . . . . . . . . . 556 596
-------------------------
Net Corporate Expenses Before Interest
Expense and Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . $ (357) $ (506)
-------------------------
INCOME BEFORE INTEREST EXPENSE AND INCOME TAXES . . . . . . . . . . . . . . . . 2,562 2,953
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 547 314
-------------------------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 2,015 2,639
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570 837
-------------------------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,445 $ 1,802
=========================
PER SHARE:
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .37 $ .47
-------------------------
Common shares and equivalents . . . . . . . . . . . . . . . . . . . . . . . . 3,865 3,865
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
VISTA RESOURCES, INC. AND SUBSIDIARIES
(Dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For Three Months Ended
March 31, March 31,
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Total Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (4,714) $ (1,827)
Total Insurance (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . (489) 1,449
-------------------------
Net Cash Used in Operating Activities . . . . . . . . . . . . . . . . . . (5,203) (378)
-------------------------
INVESTING ACTIVITIES
Non-Insurance
Sales of available for sale investments . . . . . . . . . . . . . . . . . . - 94
Purchases of available for sale investments . . . . . . . . . . . . . . . . (407) (636)
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . (656) (761)
-------------------------
Total Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,063) (1,303)
Total Insurance (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,623 70
-------------------------
Net Cash Provided by (Used in) Investing Activities . . . . . . . . . . . 560 (1,233)
-------------------------
FINANCING ACTIVITIES
Non-Insurance
Net increase in notes payable . . . . . . . . . . . . . . . . . . . . . . . 2,500 2,500
Payment of long-term liabilities . . . . . . . . . . . . . . . . . . . . . (261) (166)
Additional long-term liabilities . . . . . . . . . . . . . . . . . . . . . 136 68
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . - 254
Acquired shares for treasury . . . . . . . . . . . . . . . . . . . . . . . - (298)
-------------------------
Total Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,375 2,358
Total Insurance (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . (900) (600)
-------------------------
Net Cash Provided by Financing Activities . . . . . . . . . . . . . . . . 1,475 1,758
-------------------------
Increase (Decrease) in Cash and Cash Equivalents
Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,402) (772)
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 919
-------------------------
Cash and Cash Equivalents, Beginning of Year
Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,335 4,812
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,111 8,315
-------------------------
Cash and Cash Equivalents, End of Period
Non-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 933 $ 4,040
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,345 $ 9,234
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 7
VISTA RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
1. PER SHARE CALCULATIONS:
Per share calculations are based on the average number of shares outstanding
plus common stock equivalents. Common stock equivalents include the effect of
options granted to key employees under Vista's Stock Option Plan. Fully diluted
per share calculations are not significantly different from those reported.
2. MANDATORY CHANGES IN ACCOUNTING FOR INVESTMENTS:
Effective January 1, 1994, Vista adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"). In accordance with SFAS 115, prior period financial
statements have not been restated to reflect the change in accounting
principle. The cumulative effect on net income as of January 1, 1994 of
adopting SFAS 115 for investments which previously were classified as held to
maturity and are now classified as trading securities was immaterial. The
balance of stockholders' equity as of January 1, 1994 was increased by
$1,238,000, net of income taxes, to reflect the net unrealized gains on
investments previously classified as held to maturity which are now classified
as available for sale.
3. INVENTORIES:
Inventories consisted of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
(Dollars in thousands) 1995 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finished goods $ 3,393 $ 4,016
Work in progress 12,065 9,213
Raw materials and supplies 8,224 7,314
-------- --------
$ 23,682 $ 20,543
======== ========
</TABLE>
4. SUPPLEMENTAL CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(Dollars in thousands) 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest payments $ 439 $ 237
-------- --------
Income tax payments $ 601 $ 344
-------- --------
</TABLE>
5. CAPITAL STOCK:
During the first three months of 1995, there were no options exercised and
Vista did not purchase any shares for its treasury.
During the first three months of 1994, options for 17,550 shares of common
stock were exercised at $8.50 per share, leaving 490,625 shares reserved in
connection with Vista's stock option plans. Also, during the first three
months of 1994, Vista purchased 13,069 shares of common stock for its treasury
at a total cost of $298,000.
5
<PAGE> 8
6. STATEMENT OF CASH FLOWS - INSURANCE:
Cash flows of the insurance operations were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(Dollars in thousands) 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities
Net cash provided by (used in) operating activities $ (489) $ 1,449
-------- --------
Investing activities
Sales of available for sale investments 1,827 8,294
Purchases of available for sale investments (204) (8,224)
-------- --------
Net cash provided by investing activities 1,623 70
-------- --------
Financing activities
Dividends paid (900) (600)
-------- --------
Net cash used in financing activities (900) (600)
-------- --------
Increase in cash and cash equivalents 234 919
Cash and cash equivalents, beginning of year 6,111 8,315
-------- --------
Cash and cash equivalents, end of period $ 6,345 $ 9,234
======== ========
</TABLE>
7. INSURANCE INVESTMENTS:
Investments in securities at March 31, 1995 were as follows:
<TABLE>
<CAPTION>
COST OR GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
(Dollars in thousands) COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available For Sale
Preferred stocks $ 8,024 $ 0 $ (184) $ 7,840
Debt securities issued by state
& political subdivisions 20,522 556 (79) 20,999
Debt securities issued by the U.S.
Treasury and other U.S. Government
corporations & agencies 25,506 115 (332) 25,289
Corporate debt securities 300 119 0 419
-------- -------- -------- --------
$ 54,352 $ 790 $ (595) $ 54,547
-------- -------- -------- --------
Held to Maturity
Debt securities issued by state
& political subdivisions $ 1,513 $ 4 $ (18) $ 1,499
Debt securities issued by the U.S.
Treasury & other U.S. Government
corporations & agencies 1,640 9 (28) 1,621
Corporate debt securities 100 0 (11) 89
-------- -------- -------- --------
$ 3,253 $ 13 $ (57) $ 3,209
-------- -------- -------- --------
Trading Securities
Preferred stocks $ 694 $ 0 $ 0 $ 694
-------- -------- -------- --------
</TABLE>
In accordance with SFAS 115, available for sale investments and trading
securities are recorded at fair value and held to maturity investments are
carried at cost.
6
<PAGE> 9
8. PREMIUMS CEDED AND INSURANCE RECOVERIES:
For the three months ended March 31, 1995, premiums ceded were $1,660,000
(1994, $1,519,000). Reinsurance recoveries in the first quarter of 1995 were
$534,000 (1994, $1,273,000).
-----------------------
The unaudited condensed financial statements reflect all adjustments
(consisting of normal recurring accruals) which are, in the opinion of
management, necessary to a fair statement of the results for the interim
periods. It is suggested that these unaudited condensed consolidated financial
statements be read in conjunction with the consolidated financial statements
and notes thereto included in Vista's 1994 Annual Report.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OPERATIONS
Leather Operations:
Net sales of the leather operations decreased 5.9% in the first quarter of
1995 versus the comparable period of 1994, principally as a result of decreased
volume of leather shipped to producers of shoes who were adversely impacted by
weak winter months in the retail apparel markets due in part to mild winter
weather. Sales to foreign customers, representing 30.1% of net sales in the
first quarter of 1995, increased 21.2% over the first quarter of 1994. The
leather operations' backlog of orders at March 31, 1995 was $49.5 million which
was 28.5% higher than the amount of backlog at March 31, 1994. The backlog at
March 31, 1995 includes $4.8 million related to a new product to be produced
and shipped in the second half of 1995.
The gross profit margin decreased to 4.9% of sales in the first quarter of
1995 from 6.4% in the comparable period of 1994, primarily due to the reduction
in production volume and higher costs associated with start up of a new product
in the first quarter of 1995.
Selling and administrative expenses increased 1.4% in the first quarter of
1995 compared to the first quarter of 1994, representing 6.2% of net sales as
compared to 5.7% a year ago. The increase of selling and administrative
expenses as a percentage of net sales in the first quarter of 1995 was due to
increases in selling costs associated with the higher level of foreign sales.
Accounts receivable were higher, $18,238,000 at March 31, 1995, as compared
to $16,220,000 at December 31, 1994, due principally to increased foreign sales
and seasonal factors. During the first quarter of 1995, inventories increased
15.3%, from $20,543,000 at December 31, 1994 to $23,682,000 at March 31, 1995,
as a result of the new product start-up and delivery rescheduling in the first
quarter of 1995.
Capital expenditures were $616,000 in the first quarter of 1995, and it is
expected that capital expenditures for the full year of 1995 will be
approximately $1,600,000, not including approximately $1,000,000 of
expenditures for environmental facilities. Depreciation expense for Vista in
the first quarter of 1995 was $480,000 as compared to $426,000 in the
comparable period of 1994.
Insurance Operations:
Net earned premiums in the first quarter of 1995 were $9,919,000, an
increase of 5.6% as compared to the $9,391,000 reported in the first quarter of
1994. This increase was due to favorable premium adjustments on certain
accounts associated with claims and to a new customer. Net premiums written
for the first quarters of 1995 and 1994 were approximately $22,237,000 and
$24,045,000, respectively. Investment income was $1,137,000 in the first
quarter of 1995, including $149,000 of pre-tax capital gains, and was $763,000
in the first quarter of 1994, which included $88,000 of pre-tax capital losses.
Investment income, before the impact of capital gains and losses, increased
15.3% in 1995 as compared to 1994, due to higher yields.
7
<PAGE> 10
Total losses and loss adjustment expenses for the first quarter of 1995 were
$7,139,000 compared to $6,354,000 for the comparable period of 1994, an
increase of 12.4%. The increase was due to unusually high claims in March 1995
and the fact that the first quarter of 1994 included an unusually low level of
claims.
The increases from December 31, 1994 to March 31, 1995 of both premiums
receivable (from $2,972,000 to $16,168,000) and unearned premiums (from
$13,476,000 to $25,794,000) are seasonal and result from writing a significant
amount of premiums during the first quarter which will be earned during the
remainder of the year. Premiums receivable at March 31, 1995 were 1.0% below
the level at March 31, 1994.
Corporate Income and Expense:
Investment income in the first quarter of 1995 was $199,000 as compared to
$90,000 in the comparable quarter of 1994. There were no capital gains from
sales of securities in the first quarter of 1995 or 1994.
General and administrative expenses in the first quarter of 1995 were
approximately 6.7% less than the comparable period in 1994 due to expense
reductions in 1995.
Interest expense increased from $314,000 in the first quarter of 1994 to
$547,000 in the first quarter of 1995, due principally to interest rate
increases and additional borrowings by Vista's leather subsidiaries which were
used to finance higher levels of receivables.
In the first quarter of 1994, Vista adopted Statement of Financial
Accounting Standard No. 115 ("SFAS 115"), which changed the accounting and
reporting for investments in certain debt and equity securities. The
cumulative effect of adopting SFAS 115 was to increase equity by $1,238,000 as
of January 1, 1994 for the unrealized gains, net of tax, on investments
previously classified as held to maturity which are now classified as available
for sale. The cumulative effect on net income as of January 1, 1994 from
investments which were classified as held to maturity and are now classified as
trading securities was immaterial.
Vista's financial statements are accounted for on the basis of historical
cost. While it is difficult to measure the impact of inflation, management
believes that the effects of inflation on Vista have not been significant. To
the extent that inflationary pressures have an adverse effect through higher
raw material and asset replacement costs, Vista will attempt to minimize these
effects through cost reductions and productivity improvements, as well as price
increases.
LIQUIDITY AND CORPORATE DEVELOPMENT:
Vista's non-insurance cash and cash equivalents and investments at March 31,
1995 were $11,224,000 compared to $14,219,000 at December 31, 1994 and
$8,564,000 at March 31, 1994. The non-insurance current ratio was 2.3 to 1 at
March 31, 1995 and 2.4 to 1.0 at December 31, 1994, as compared to 2.0 to 1 at
March 31, 1994.
At March 31, 1995, American Southern had $64,839,000 of cash and cash
equivalents and investments, as compared to $63,608,000 at December 31, 1994.
American Southern has historically provided positive cash flow.
In March 1995, Vista's leather operations amended its agreement for
short-term borrowings to support working capital. The amended agreement
provides the leather operations with additional borrowing capacity of
$5,000,000 at comparable terms and rates as the previous agreement.
Management believes that Vista and its subsidiaries have adequate liquidity
and borrowing capacity to meet obligations when due.
Vista's corporate development goal is to maximize stockholder value. In
this regard, management continuously considers and evaluates various courses of
action including, but not limited to, mergers, acquisitions and dispositions.
8
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders was held on April 29, 1995, at which
time stockholders were asked to elect the Directors for the ensuing year. The
nominees received the following votes:
<TABLE>
<CAPTION>
NOMINEES FOR WITHHELD
-------- --- --------
<S> <C> <C>
J. B. Fuqua 3,440,306 8,080
J. Rex Fuqua 3,441,148 7,238
W. Clay Hamner 3,441,558 6,828
Frank W. Hulse IV 3,441,558 6,828
Richard C. Larochelle 3,441,758 6,628
Samuel W. Norwood III 3,441,758 6,628
Clark L. Reed, Jr. 3,440,798 7,588
D. Raymond Riddle 3,442,318 6,068
Roy S. Thompson, Jr. 3,441,488 6,898
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Listing of Exhibits
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
--------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-K EXHIBITS COMMISSION DOCUMENT
- -------------- -------------------------------------- ------------------------------- -------------------
<S> <C> <C> <C>
3(a) Restated Certificate of Incorporation Annual Report on Form 10-K Exhibit 3(a)
and Amendments thereto of Vista for the year ended December 31,
1989
3(b) Bylaws of Vista Annual Report on Form 10-K Exhibit 3(b)
for the year ended December 31,
1989
4(a) Revolving Credit and Loan Agreement Quarterly Report on Form 10-Q Exhibit 4(a)
between Fleet Bank of Maine ("Lender") for the three months ended
and Irving Tanning Company March 31, 1994
("Borrower") dated April 5, 1994
4(b) First Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated September 15,
1994
4(c) Second Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated November 23,
1994
4(d) Third Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated March 28,
1995
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
--------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-K EXHIBITS COMMISSION DOCUMENT
- -------------- -------------------------------------- ------------------------------- -------------------
<S> <C> <C>
4(e) Term Note between Fleet Bank of Maine Quarterly Report on Form 10-Q Exhibit 4(b)
("Lender") and Irving Tanning Company for the three months ended
("Borrower") dated April 5, 1994 March 31, 1994
4(f) First Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
dated September 15, 1994
4(g) Second Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
dated November 23, 1994
4(h) Third Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
dated March 28, 1995
4(i) Security Agreement dated April 5, 1994 Quarterly Report on Form 10-Q Exhibit 4(c)
between Fleet Bank of Maine ("Lender") for the three months ended
and Irving Tanning Company ("Borrower") March 31, 1994
4(j) Limited Guaranty dated March 29, 1995
between Fleet Bank of Maine ("Lender"),
Irving Tanning Company ("Borrower") and
Seagrave Leather Corporation ("Guarantor")
4(k) Limited Guaranty dated March 29, 1995
between Fleet Bank of Maine ("Lender"),
Irving Tanning Company ("Borrower") and
Kroy Tanning Company, Incorporated
("Guarantor")
4(l) Agreement between Town of Hartland, Quarterly Report on Form 10-Q Exhibit 4(d)
Maine and Irving Tanning Company for the three months ended
dated September 26, 1994 related to September 30, 1994
General Obligations Bonds
10(a) Management Agreement between Annual Report on Form 10-K Exhibit 10(b)
Vista and Fuqua National Corporation for the year ended December 31,
dated April 10, 1989 1989
10(b) Assignment to Fuqua Capital Corpo- Annual Report on Form 10-K Exhibit 10(b)(1)
ration of the Management Agreement for the year ended December 31,
between Vista and Fuqua National 1990
Corporation
10(c) First Amendment to Management Agree- Quarterly Report on Form 10-Q Exhibit 10(b)(2)
ment between Fuqua Capital Corpo- for the three months ended
ration and Vista dated September 14, September 30, 1994
1994
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
--------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-K EXHIBITS COMMISSION DOCUMENT
- -------------- -------------------------------------- ------------------------------- -------------------
<S> <C> <C> <C>
10(d)* 1989 Stock Option Plan of Vista Annual Report on Form 10-K Exhibit 10(c)
for the year ended December 31,
1989
10(e)* 1992 Stock Option Plan Registration Statement on Form Exhibit 28
S-8 (Registration No. 33-54164)
10(f)* Employment Agreement and amend- Annual Report on Form 10-K Exhibit 10(e)
ments thereto through December 15, 1989 for the year ended December 31,
between Richard C. Larochelle and 1992
Irving Tanning Company, a subsidiary
of Vista
10(g)* Employment Agreement between Roy S. Annual Report on Form 10-K Exhibit 10(f)
Thompson, Jr. dated October 11, 1991 for the year ended December 31,
and American Southern, a subsidiary 1992
of Vista
10(h) Lease Agreement between Vista (Lessee) Annual Report on Form 10-K Exhibit 10(f)
and Sumitomo Life Realty (N.Y.) Inc. for the year ended December 31,
(Lessor) dated January 17, 1990 1990
10(i) First Amendment to the Lease Agreement Annual Report on Form 10-K Exhibit 10(g)
between Vista (Lessee) and Sumitomo for the year ended December 31,
Life Realty (N.Y.) Inc. (Lessor) 1990
dated September 6, 1990
10(j) Second Amendment to Lease Agreement Annual Report on Form 10-K Exhibit 10(p)
between Vista (Lessee) and Sumitomo for the year ended December 31,
Life Realty (N.Y.) Inc. (Lessor) 1991
dated February 21, 1992
10(k) Third Amendment to Lease Agreement Quarterly Report on Form 10-Q Exhibit 10(i)(1)
between Vista (Lessee) and Sumitomo for the three months ended
Life Realty (N.Y.) Inc. (Lessor) September 30, 1994
dated October 28, 1994
10(l) Sublease Agreement between Vista Annual Report on Form 10-K Exhibit 10(l)
and Fuqua Capital Corporation, for the year ended December 31,
dated October 31, 1994 1994
10(m) Stock Purchase Agreement dated Interim Report on Form 8-K Exhibit 2(i)
September 17, 1991, among Vista, for the month of October 1991
Concorde Finance & Investment, Inc.,
InterRedec, Inc., InterRedec
Southern Company, Inc. and American
Southern
10(n) Non-negotiable Promissory Note, Interim Report on Form 8-K Exhibit 10(i)
dated October 11, 1991, between Vista for the month of October 1991
and InterRedec Southern Company, Inc.
10(o) Stock Pledge and Security Agreement, Interim Report on Form 8-K Exhibit 10(ii)
dated October 11, 1991, between Vista for the month of October 1991
and InterRedec Southern Company, Inc.
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
--------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-K EXHIBITS COMMISSION DOCUMENT
- -------------- -------------------------------------- ------------------------------- -------------------
<S> <C> <C> <C>
10(p) Lease Agreement between American Annual Report on Form 10-K Exhibit 10(n)
Southern (Lessee) and Northcreek for the year ended December 31,
Associates (Lessor) dated July 10, 1991
1989
10(q) First Amendment to Lease Agreement Annual Report on Form 10-K Exhibit 10(o)
between American Southern (Lessee) for the year ended December 31,
and Northcreek Associates (Lessor) 1991
dated April 23, 1990
10(r) Lease Agreement between Empire State Annual Report on Form 10-K Exhibit 10(q)
Building Company (Lessor) and Vista for the year ended December 31,
Resources, Inc. (Lessee) dated March 1, 1993
1993 along with Lease Modification
Agreement and Space Deletion Agree-
ment dated February 18, 1994
27 Financial Data Schedules (for SEC use only)
27.1 Consolidated Totals
27.2 Article 5
27.3 Article 7
</TABLE>
- ---------------------------
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended
March 31, 1995.
12
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VISTA RESOURCES, INC.
REGISTRANT
/s/ Brady W. Mullinax, Jr.
---------------------------------------
Brady W. Mullinax, Jr., Vice President-
Finance, Treasurer and Chief Financial
Officer (Principal Financial and
Accounting Officer and Executive
Officer duly authorized to sign on
behalf of the registrant)
Date: May 15, 1995
13
<PAGE> 16
VISTA RESOURCES, INC.
FILED WITH FORM 10-Q QUARTERLY REPORT
EXHIBIT INDEX
MARCH 31, 1995
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
---------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-Q EXHIBITS COMMISSION DOCUMENT
-------------- ------------------------------ ----------------------------- ---------------------
<S> <C> <C> <C>
3(a) Restated Certificate of Incorporation Annual Report on Form 10-K Exhibit 3(a)
and Amendments thereto of Vista for the year ended December 31,
1989
3(b) Bylaws of Vista Annual Report on Form 10-K Exhibit 3(b)
for the year ended December 31,
1989
4(a) Revolving Credit and Loan Agreement Quarterly Report on Form 10-Q Exhibit 4(a)
between Fleet Bank of Maine ("Lender") for the three months ended
and Irving Tanning Company March 31, 1994
("Borrower") dated April 5, 1994
4(b) First Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated September 15,
1994
4(c) Second Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated November 23,
1994
4(d) Third Amendment to Revolving Credit and
Loan Agreement between Fleet Bank of
Maine ("Lender") and Irving Tanning
Company ("Borrower") dated March 28,
1995
4(e) Term Note between Fleet Bank of Maine Quarterly Report on Form 10-Q Exhibit 4(b)
("Lender") and Irving Tanning Company for the three months ended
("Borrower") dated April 5, 1994 March 31, 1994
4(f) First Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
dated September 15, 1994
4(g) Second Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
date November 23, 1994
4(h) Third Amendment to Promissory Note
between Fleet Bank of Maine ("Lender")
and Irving Tanning Company ("Borrower")
dated March 28, 1995
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
------------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-Q EXHIBITS COMMISSION DOCUMENT
-------------- ------------------------------ ----------------------------- ----------------------
<S> <C> <C> <C>
4(i) Security Agreement dated April 5, 1994 Quarterly Report on Form 10-Q Exhibit 4(c)
between Fleet Bank of Maine ("Lender") for the three months ended
and Irving Tanning Company ("Borrower") March 31, 1994
4(j) Limited Guaranty dated March 29, 1995
between Fleet Bank of Maine ("Lender"),
Irving Tanning Company ("Borrower") and
Seagrave Leather Corporation ("Guarantor")
4(k) Limited Guaranty dated March 29, 1995
between Fleet Bank of Maine ("Lender"),
Irving Tanning Company ("Borrower") and
Kroy Tanning Company, Incorporated
("Guarantor")
4(l) Agreement between Town of Hartland, Quarterly Report on Form 10-Q Exhibit 4(d)
Maine and Irving Tanning Company for the three months ended
September 26, 1994 related to September 30, 1994
General Obligations Bonds
10(a) Management Agreement between Annual Report on Form 10-K Exhibit 10(b)
Vista and Fuqua National Corporation for the year ended December 31,
dated April 10, 1989 1989
10(b) Assignment to Fuqua Capital Corpo- Annual Report on Form 10-K Exhibit 10(b)(1)
ration of the Management Agreement for the year ended December 31,
between Vista and Fuqua National 1990
Corporation
10(c) First Amendment to Management Agree- Quarterly Report on Form 10-Q Exhibit 10(b)(2)
ment between Fuqua Capital Corpo- for the three months ended
ration and Vista dated September 14, September 30, 1994
1994
10(d) 1989 Stock Option Plan of Vista Annual Report on Form 10-K Exhibit 10(c)
for the year ended December 31,
1989
10(e) 1992 Stock Option Plan Registration Statement on Form Exhibit 28
S-8 (Registration No. 33-54164)
10(f) Employment Agreement and amend- Annual Report on Form 10-K Exhibit 10(e)
ments thereto through December 15, 1989 for the year ended December 31,
between Richard C. Larochelle and 1992
Irving Tanning Company, a subsidiary
of Vista
10(g) Employment Agreement between Roy S. Annual Report on Form 10-K Exhibit 10(f)
Thompson, Jr. dated October 11, 1991 for the year ended December 31,
and American Southern, a subsidiary 1992
of Vista
10(h) Lease Agreement between Vista (Lessee) Annual Report on Form 10-K Exhibit 10(f)
and Sumitomo Life Realty (N.Y.) Inc. for the year ended December 31,
(Lessor) dated January 17, 1990 1990
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBITS INCORPORATED HEREIN BY REFERENCE
--------------------------------------------------------
DESIGNATION DOCUMENT WITH WHICH EXHIBIT DESIGNATION OF SUCH
OF EXHIBIT IN DESCRIPTION OF WAS PREVIOUSLY FILED WITH EXHIBIT IN THAT
THIS FORM 10-K EXHIBITS COMMISSION DOCUMENT
-------------- -------------------------------------- ------------------------------- -------------------
<S> <C> <C> <C>
10(i) First Amendment to the Lease Agreement Annual Report on Form 10-K Exhibit 10(g)
between Vista (Lessee) and Sumitomo for the year ended December 31,
Life Realty (N.Y.) Inc. (Lessor) 1990
dated September 6, 1990
10(j) Second Amendment to Lease Agreement Annual Report on Form 10-K Exhibit 10(p)
between Vista (Lessee) and Sumitomo for the year ended December 31,
Life Realty (N.Y.) Inc. (Lessor) 1991
dated February 21, 1992
10(k) Third Amendment to Lease Agreement Quarterly Report on Form 10-Q Exhibit 10(i)(1)
between Vista (Lessee) and Sumitomo for the three months ended
Life Realty (N.Y.) Inc. (Lessor) September 30, 1994
dated October 28, 1994
10(l) Sublease Agreement between Vista Annual Report on Form 10-K Exhibit 10(l)
and Fuqua Capital Corporation, for the year ended December 31,
dated October 31, 1994 1994
10(m) Stock Purchase Agreement dated Interim Report on Form 8-K Exhibit 2(i)
September 17, 1991, among Vista, for the month of October 1991
Concorde Finance & Investment, Inc.,
InterRedec, Inc., InterRedec
Southern Company, Inc. and American
Southern
10(n) Non-negotiable Promissory Note, Interim Report on Form 8-K Exhibit 10(i)
dated October 11, 1991, between Vista for the month of October 1991
and InterRedec Southern Company, Inc.
10(o) Stock Pledge and Security Agreement, Interim Report on Form 8-K Exhibit 10(ii)
dated October 11, 1991, between Vista for the month of October 1991
and InterRedec Southern Company, Inc.
10(p) Lease Agreement between American Annual Report on Form 10-K Exhibit 10(n)
Southern (Lessee) and Northcreek for the year ended December 31,
Associates (Lessor) dated July 10, 1991
1989
10(q) First Amendment to Lease Agreement Annual Report on Form 10-K Exhibit 10(o)
between American Southern (Lessee) for the year ended December 31,
and Northcreek Associates (Lessor) 1991
dated April 23, 1990
10(r) Lease Agreement between Empire State Annual Report on Form 10-K Exhibit 10(q)
Building Company (Lessor) and Vista for the year ended December 31,
Resources, Inc. (Lessee) dated March 1, 1993
1993 along with Lease Modification
Agreement and Space Deletion Agree-
ment dated February 18, 1994
27 Financial Data Schedules (for SEC use only)
27.1 Consolidated Totals
27.2 Article 5
27.3 Article 7
</TABLE>
<PAGE> 1
EXHIBIT 4(b)
FIRST AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
First Amendment to Revolving Credit and Term Loan Agreement dated as of
September 15, 1994 by and between Irving Tanning Company, a Delaware
corporation with a place of business Hartland, Maine (the "Borrower" or the
"Debtor") and Fleet Bank of Maine, a Maine banking corporation with a place of
business in Portland, Maine (hereinafter called the "Lender" or the "Bank").
1. Reference to Loan Agreement; Background. Reference is made to the
Revolving Credit and Term Loan Agreement dated as of April 5, 1994 by and
between the Borrower as borrower and the Bank as lender. The Revolving Credit
and Term Loan Agreement, as the same may be amended from time to time, is
hereinafter referred to as the "Loan Agreement". Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Loan
Agreement, except to the extent that such meanings may be amended hereby.
The parties desire to increase the amount available to Debtor under the
revolving credit facility described in the Loan Agreement by a total of
$1,000,000. To effectuate the foregoing, the parties hereto hereby agree to
amend the Loan Agreement, effective as of the date hereof as follows:
2. Amendments to Loan Agreement. Section 2.1 of the Loan Agreement is
hereby amended by deleting the same in its entirety and substituting therefore
the following:
<PAGE> 2
2.1 Establishment of Credit. Subject to the terms of this
Agreement, Lender agrees to make advances to Borrower from time to time
hereunder up to an amount not to exceed in the aggregate Five Million
Dollars ($5,000,000). Borrower may borrow in full or in part, repay in
full or in part, and reborrow amounts under this revolving credit
facility in accordance with the terms of this Agreement, provided that
in no event shall the amount outstanding hereunder at any one time
exceed Five Million Dollars ($5,000,000). Lender shall make advances
permitted hereunder from time to time upon Lender's receipt of a
request by a duly authorized officer or representative of Borrower.
Each such request shall be in such form as the Lender may require but
shall include the amount of the advance; the interest rate option
selected for such advance; and the Fixed Rate Interest Period for such
advance, if applicable. The Borrower requests and authorizes Lender to
credit the amount of any advance so requested by Borrower directly to
Borrower's account with Lender.
3. No Default. The Debtor hereby represents and warrants to the Bank
that all of the conditions to lending specified in the Loan Agreement have been
satisfied in all respects as of the date hereof. Without limiting the
generality of the foregoing the Debtor hereby confirms that the representations
and warranties contained in the Loan Agreement are true upon and as of the date
hereof as if made on such date; that Debtor is in compliance in all respects
with all of the terms and provisions of the Loan Agreement and the other loan
documents; and that after giving effect to this amendment, no event of default
specified in the Loan Agreement or any event which with the giving of notice,
the passage of time or both would constitute an event of default shall have
occurred.
4. Miscellaneous. (a) The Debtor hereby acknowledges, agrees and
confirms that the revolving credit loans, as amended by the terms hereof,
constitute "Loans: and "Obligations" for purposes of the Loan Agreement.
-2-
<PAGE> 3
(b) This Agreement may be executed in any number of counterparts, each
of which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maine and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(d) Debtor hereby represents and warrants that this First Amendment
Agreement has been executed and delivered by duly authorized officers of the
Debtor and acknowledges and agrees that it will execute and deliver such
additional amendments, agreements and documents as the Bank may reasonably
require to confirm the foregoing.
WITNESS FLEET BANK OF MAINE
Penney M. Ward By: Raymond T. Kelly, Jr.
- -------------------------- ------------------------------
Its: Vice President
-----------------------------
IRVING TANNING COMPANY
Linda S. Archer By: Robert M. Jones
- --------------------------- ------------------------------
Its: Vice President/Treasurer
-----------------------------
-3-
<PAGE> 1
EXHIBIT 4(c)
SECOND AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Second Amendment to Revolving Credit and Term Loan Agreement dated as
of November 23, 1994 by and between Irving Tanning Company, a Delaware
corporation with a place of business in Hartland, Maine (the "Borrower" or the
"Debtor") and Fleet Bank of Maine, a Maine banking corporation with a place of
business in Portland, Maine (hereinafter called the "Lender" or the "Bank").
1. Reference to Loan Agreement: Background. Reference is made to the
Revolving Credit and Term Loan Agreement dated as of April 5, 1994 by and
between the Borrower as borrower and the Bank as lender and to the First
Amendment to Revolving Credit and Term Loan Agreement dated as of September 15,
1994 between Borrower and Bank (the "First Amendment"). The Revolving Credit
and Term Loan Agreement, as the same may be amended from time to time, is
hereinafter referred to as the "Loan Agreement". Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Loan
Agreement, except to the extent that such meanings may be amended hereby.
The parties desire to increase the amount available to Debtor under the
revolving credit facility described in the Loan Agreement, as amended by the
First Amendment, by a total of $1,000,000. To effectuate the foregoing, the
parties hereto hereby agree to amend the Loan Agreement, effective as of the
date hereof as follows:
<PAGE> 2
2. Amendments to Loan Agreement. Section 2.1 of the Loan Agreement, as
amended by the First Amendment, is hereby further amended by deleting the same
in its entirety and substituting therefor the following:
2.1 Establishment of Credit. Subject to the terms of this Agreement,
Lender agrees to make advances to Borrower from time to time hereunder up
to an amount not to exceed in the aggregate Six Million Dollars
($6,000,000). Borrower may borrow in full or in part, repay in full or in
part, and reborrow amounts under this revolving credit facility in
accordance with the terms of this Agreement, provided that in no event
shall the amount outstanding hereunder at any one time exceed Six Million
Dollars (S6,000,000). Lender shall make advances permitted hereunder from
time to time upon Lender's receipt of a request by a duly authorized
officer or representative of Borrower. Each such request shall be in such
form as the Lender may require but shall include the amount of the
advance; the interest rate option selected for such advance; and the Fixed
Rate Interest Period for such advance, if applicable. The Borrower
requests and authorizes Lender to credit the amount of any advance so
requested by Borrower directly to Borrower's account with Lender.
3. No Default. The Debtor hereby represents and warrants to the Bank that
all of the conditions to lending specified in the Loan Agreement have been
satisfied in all respects as of the date hereof. Without limiting the
generality of the foregoing the Debtor hereby confirms that the representations
and warranties contained in the Loan Agreement are true upon and as of the date
hereof as if made on such date; that Debtor is in compliance in all respects
with all of the terms and provisions of the Loan Agreement and the other loan
documents; and that after giving effect to this amendment, no event of default
specified in the Loan Agreement or any event which with the giving of notice,
the passage of time or both would constitute an event of default shall have
occurred.
-2-
<PAGE> 3
4. Miscellaneous. (a) The Debtor hereby acknowledges, agrees and confirms
that the revolving credit loans, as amended by the First Amendment and by the
terms hereof, constitute "Loans" and "Obligations" for purposes of the Loan
Agreement.
(b) This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maine and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(d) Debtor hereby represents and warrants that this Second Amendment
Agreement has been executed and delivered by duly authorized officers of the
Debtor and acknowledges and agrees that it will execute and deliver such
additional amendments, agreements and documents as the Bank may reasonably
require to confirm the foregoing.
WITNESS FLEET BANK OF MAINE
By: Raymond T. Kelly, Jr.
- ------------------------------ --------------------------
Its: Vice President
-------------------------
IRVING TANNING COMPANY
Linda S. Archer
- ------------------------------ By: Robert M. Jones
--------------------------
Its: Vice President/Treasurer
-------------------------
-3-
<PAGE> 1
EXHIBIT 4(d)
THIRD AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
Third Amendment to Revolving Credit and Term Loan Agreement dated as of
March 28, 1995, by and between IRVING TANNING COMPANY, a Delaware corporation
with a place of business in Hartland, Maine (the "Borrower" or the "Debtor")
and FLEET BANK OF MAINE, a Maine banking corporation with a place of business
in Portland, Maine (the "Lender" or the "Bank").
1. Reference to Loan Agreement: Background. Reference is made to the
Revolving Credit and Term Loan Agreement dated as of April 5, 1994, by and
between the Borrower as borrower and the Bank as lender, to the First Amendment
to Revolving Credit and Term Loan Agreement dated as of September 15, 1994,
between Borrower and Bank (the "First Amendment"), and to the Second Amendment
to Revolving Credit and Term Loan Agreement dated as of November 23, 1994,
between Borrower and Bank (the "Second Amendment"). The Revolving Credit and
Term Loan Agreement, as the same may be amended from time to time, is
hereinafter referred to as the "Loan Agreement". Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Loan
Agreement, except to the extent that such meanings may be amended hereby.
The parties desire to increase the amount available to Debtor under the
revolving credit facility described in the Loan Agreement, as amended by the
First Amendment and by the Second Amendment, by a total of $5,000,000. The
parties also desire to amend certain financial covenants described in the Loan
<PAGE> 2
Agreement, to make certain provisions for the payment of dividends by the
Debtor to its parent corporation, and to make certain provisions for lending by
the Debtor to its affiliates, Kroy Tanning Company, Incorporated and Seagrave
Leather Corporation. To effectuate the foregoing, the parties hereto hereby
agree to amend the Loan Agreement, effective as of the date hereof, as follows:
2. Amendments to Loan Aareement.
(a) Section 2.1 of the Loan Agreement, as amended by the First
Amendment and by the Second Amendment, is hereby further amended by deleting
the same in its entirety and substituting therefor the following:
2.1 Establishment of Credit. Subject to the terms of this
Agreement, Lender agrees to make advances to Borrower from time to time
hereunder up to an amount not to exceed in the aggregate Eleven Million
Dollars ($11,000,000). Borrower may borrow in full or in part, repay in
full or in part, and reborrow amounts under this revolving credit
facility in accordance with the terms of this Agreement, provided that
in no event shall the amount outstanding hereunder at any one time
exceed Eleven Million Dollars ($11,000,000). Lender shall make advances
permitted hereunder from time to time upon Lender's receipt of a
request by a duly authorized officer or representative of Borrower.
Each such request shall be in such form as the Lender may require but
shall include the amount of the advance; the interest rate option
selected for such advance; and the Fixed Rate Interest Period for such
advance, if applicable. The Borrower requests and authorizes Lender to
credit the amount of any advance so requested by Borrower directly to
Borrower's account with Lender.
(b) Section 2 of the Loan Agreement is hereby amended by adding the
following paragraph:
2.6 Advances by Borrower to Affiliates. Upon notice from
Borrower to Bank, Borrower may advance proceeds received by Borrower
from Bank hereunder to Kroy Tanning Company, Incorporated, an
affiliate of Borrower duly organized and existing under the laws of the
State of Delaware ("Kroy") and/or to Seagrave Leather Corporation, an
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<PAGE> 3
affiliate of Borrower duly organized and existing under the laws of the
State of Maine ("Seagrave"), provided that the amount of such advances
to Kroy and/or Seagrave of loan proceeds from the Bank shall not exceed
in the aggregate Three Million Five Hundred Thousand Dollars
($3,500,000). The parties contemplate that Kroy and Seagrave may borrow
a portion of such Bank loan proceeds from Borrower in full or in part,
repay in full or in part, and reborrow amounts advanced by Bank to
Borrower pursuant to this section, provided that in no event shall the
amount of intercompany indebtedness related to advances by Bank to
Borrower at any one time exceed $3,500,000. Borrower hereby grants to
Bank a security interest in the obligations of Kroy and Seagrave to
Borrower resulting from advances by Borrower of loan proceeds from the
Bank hereunder. If such obligations of Kroy and/or Seagrave to the
Borrower resulting from advances by Bank to Borrower become evidenced
by a note or notes, Borrower agrees to deliver such evidence of
indebtedness to Bank upon request, together with an assignment of the
same in such form as the Bank may require. Borrower warrants and
covenants to the Bank that upon request of Bank it will promptly
execute and deliver to Bank such financing statements, assignments,
endorsements, security agreements, certificates and other documents or
instruments as may be necessary to enable the Bank to perfect or from
time to time renew the security interest granted hereby.
(c) Section 6 of the Loan Agreement is hereby amended by
adding the following paragraph:
6.4 Dividends to Parent Company. The Borrower will not pay any
dividends to Vista unless (a) Borrower has reported a net profit in its
most recent fiscal year of at least $1,000,000; (b) Borrower is in
compliance with all of the terms and conditions of this Agreement,
including but not limited to the Minimum Tangible Net Worth covenant
contained in section 7.1 hereof; (c) the payment of such dividend will
not cause Borrower's Tangible Net Worth to fall below $15,000,000; and
(d) Borrower has given Bank thirty (30) days prior written notice of
its intention to declare dividends.
6.5 Advances to Affiliates. The Borrower will not advance or
loan to Kroy and/or Seagrave, pursuant to Section 2.6 of this
Agreement, an amount exceeding in the aggregate $3,500,000. The
Borrower may advance or loan to Kroy and/or Seagrave an additional
$3,500,000 from proceeds of loans to Borrower from other lenders.
-3-
<PAGE> 4
(d) Section 7.1 of the Loan Agreement is hereby amended by deleting
the same in its entirety and substituting therefor the following:
7.1 Minimum Tangible Net Worth. The Borrower shall maintain a
minimum Tangible Net Worth of at least $13 million from the date hereof
through December 31, 1994 and thereafter Borrower's Tangible Net Worth
shall increase to $18 million for the year ending 1995; $19 million for
the year ending 1996; and $20 million for the year ending 1997 and
thereafter. Compliance with this covenant will be measured annually
upon review of the year-end audited financial statements. For purposes
of determining compliance with this covenant, Borrower's Tangible Net
Worth is defined so as to include the amount of dividends paid during
the term of this Agreement which are made in compliance with Section
6.4 of this Agreement such that the amount of such dividend(s) shall be
added back in any determination of Borrower's Tangible Net Worth.
(e) Section 8.1 of the Loan Agreement is hereby amended by adding the
following subparagraph:
(g) The Bank shall have received notice in writing from Kroy or
Seagrave that it has revoked its guaranty of the Borrower's obligations
to Bank under the Demand Note or under documents or documentation
relating thereto, including any and all amendments or modifications
thereto, substitutions therefor, and renewals, extensions and
rearrangements thereof;
3. No Default. The Debtor hereby represents and warrants to the Bank
that all of the conditions to lending specified in the Loan Agreement have been
satisfied in all respects as of the date hereof. Without limiting the
generality of the foregoing, the Debtor hereby confirms that the
representations and warranties contained in the Loan Agreement are true upon
and as of the date hereof as if made on such date; that Debtor is in compliance
in all respects with all of the terms and provisions of the Loan Agreement and
the other Loan Documents; and that after giving effect to this amendment, no
event of default specified in the Loan Agreement or any event which with the
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<PAGE> 5
giving of notice, the passage of time or both would constitute an event of
default shall have occurred.
4. Miscellaneous. (a) The Debtor hereby acknowledges, agrees and confirms
that the revolving credit loans, as amended by the First Amendment, the Second
Amendment and by the terms hereof, constitute "Loans" and "obligations" for
purposes of the Loan Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Maine and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(d) Debtor hereby represents and warrants that this Third Amendment
Agreement has been executed and delivered by duly authorized officers of the
Debtor and acknowledges and agrees that it will execute and deliver such
additional amendments,
[The next page is the signature page.]
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<PAGE> 6
agreements and documents as the Bank may reasonably require to
confirm the foregoing.
WITNESS FLEET BANK OF MAINE
Shelly M. Pray By: Raymond T. Kelly, Jr.
- -------------------------- --------------------------
Its: Vice President
-------------------------
IRVING TANNING COMPANY
Linda S. Archer By: Robert M. Jones
- -------------------------- --------------------------
Its: Vice President/Treasurer
-------------------------
-6-
<PAGE> 1
EXHIBIT 4(f)
FIRST AMENDMENT TO
PROMISSORY NOTE
First Amendment to Promissory Note made as of the 15th day of September,
1994 by and between Fleet Bank of Maine, a financial institution organized and
existing under the laws of the State of Maine (the "Bank") and Irving Tanning
Company, a Delaware corporation with a place of business on Main Street,
Hartland, Maine (the "Maker").
W I T N E S S E T H :
WHEREAS, on April 5, 1994, the Bank and the Maker entered into a Revolving
Credit and Term Loan Agreement (the "Agreement") between the Bank as lender and
the Maker as borrower pursuant to which the Bank, among other matters, and
subject to the terms and conditions set forth therein, established a $4,000,000
revolving credit facility in favor of the Maker; and
WHEREAS, on April 5, 1994, the Maker executed a certain Demand Promissory
Note (the "Note") in the original principal amount of $4,000,000 to evidence
revolving credit loans made by the Bank to Maker under the Agreement from time
to time; and
WHEREAS, the undersigned have entered into a First Amendment to Revolving
Credit and Term Loan Agreement of even date herewith pursuant to which the
parties agree to amend the Agreement to increase the amount available under the
revolving credit facility from $4,000,000 to $5,000,000; and
WHEREAS, the parties desire to amend the Demand Note to confirm such
changes;
<PAGE> 2
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
to modify the Note as follows:
1. Effective as of the date hereof, but not retroactively, the Note is
hereby amended by increasing the face amount thereof to $5,000,000 by deleting
the first paragraph thereof in its entirety and substituting the following:
FOR VALUE RECEIVED, Irving Tanning Company, a Delaware corporation
with a business address of Main Street, Hartland, Maine (the "Maker"),
promises to pay to Fleet Bank of Maine, a financial institution with a
business office at 511 Congress Street, Portland, Maine (the "Bank"), or
order, ON DEMAND, the principal sum of Five Million Dollars ($5,000,000),
or such lesser amount as may be outstanding at the maturity hereof
(whether upon demand or otherwise).
2. It is the intention of the parties hereto that the only modification to
the Note contemplated hereby shall be the modification specifically effected
above. Except as so modified, the terms, provisions, covenants and agreements
set forth in the Note are hereby ratified and affirmed in all respects.
3. All collateral pledged or mortgaged by the Maker to secure the Note as
modified hereby shall continue to secure such Note as so modified and shall not
be effected in any way by the modifications to the Note agreed to herein by the
Bank and the Maker hereby agrees and confirms that the Note, as amended hereby,
constitutes a "Secured Obligation" for purposes of the Security Agreement dated
April 5, 1994 by and between Maker as debtor and Bank as secured party. The
Maker and the Bank hereby agree that the indebtedness evidenced by the Note is
amended hereby but shall remain the same indebtedness originally
-2-
<PAGE> 3
evidenced by said Note and that this Amendment represents a modification of
the original indebtedness evidenced by said Note.
4. The Maker hereby agrees that this Note, as amended hereby, is and shall
be one integrated instrument and such instrument constitutes the legal, valid
and binding obligation of the Maker in accordance with its terms.
5. The Bank hereby agrees to affix and attach this Amendment to the Note.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
WITNESS: FLEET BANK OF MAINE
Penney M. Ward By: Raymond T. Kelly, Jr.
- ---------------------------- ----------------------------
Its: Vice President
---------------------------
IRVING TANNING COMPANY
Linda S. Archer By: Robert M. Jones
- ---------------------------- ----------------------------
Its: Vice President/Treasurer
---------------------------
-3-
<PAGE> 1
EXHIBIT 4(g)
SECOND AMENDMENT TO
PROMISSORY NOTE
Second Amendment to Promissory Note made as of the 23 day of November,
1994 by and between Fleet Bank of Maine, a financial institution organized and
existing under the laws of the State of Maine (the "Bank") and Irving Tanning
Company, a Delaware corporation with a place of business on Main Street,
Hartland, Maine (the "Maker").
W I T N E S S E T H :
WHEREAS, on April 5, 1994, the Bank and the Maker entered into a Revolving
Credit and Term Loan Agreement (the "Agreement") between the Bank as lender and
the Maker as borrower pursuant to which the Bank, among other matters, and
subject to the terms and conditions set forth therein, established a $4,000,000
revolving credit facility in favor of the Maker; and
WHEREAS, on April 5, 1994, the Maker executed a certain Demand Promissory
Note (the "Note") in the original principal amount of $4,000,000 to evidence
revolving credit loans made by the Bank to Maker under the Agreement from time
to time; and
WHEREAS, on September 15, 1994, the undersigned entered into a First
Amendment to Revolving Credit and Term Loan Agreement pursuant to which the
parties agreed to amend the Agreement to increase the amount available under
the revolving credit facility from $4,000,000 to $5,000,000; and
<PAGE> 2
WHEREAS, on September 15, 1994, the undersigned amended the Note to
confirm such changes, by a First Amendment to Promissory Note; and
WHEREAS, the undersigned have entered into a Second Amendment to Revolving
Credit and Term Loan Agreement of even date herewith pursuant to which the
parties agree to further amend the Agreement to increase the amount available
under the revolving credit facility from $5,000,000 to $6,000,000; and
WHEREAS, the parties desire to further amend the Note to confirm such
changes;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
to modify the Note as follows:
1. Effective as of the date hereof, but not retroactively, the Note is
hereby amended by increasing the face amount thereof to $6,000,000 by deleting
the first paragraph thereof in its entirety and substituting the following:
FOR VALUE RECEIVED, Irving Tanning Company, a Delaware corporation
with a business address of Main Street, Hartland, Maine (the "Maker"),
promises to pay to Fleet Bank of Maine, a financial institution with a
business office at 511 Congress Street, Portland, Maine (the "Bank"), or
order, ON DEMAND, the principal sum of Six Million Dollars ($6,000,000),
or such lesser amount as may be outstanding at the maturity hereof
(whether upon demand or otherwise).
2. It is the intention of the parties hereto that the only modification to
the Note contemplated hereby shall be the modification specifically effected
above. Except as so modified, the terms, provisions, covenants and agreements
set forth in the Note are hereby ratified and affirmed in all respects.
-2-
<PAGE> 3
3. All collateral pledged or mortgaged by the Maker to secure the Note as
modified hereby shall continue to secure such Note as so modified and shall not
be affected in any way by the modifications to the Note agreed to herein by the
Bank and the Maker hereby agrees and confirms that the Note, as amended hereby,
constitutes a "Secured Obligation" for purposes of the Security Agreement dated
April 5, 1994 by and between Maker as debtor and Bank as secured party. The
Maker and the Bank hereby agree that the indebtedness evidenced by the Note is
amended hereby but shall remain the same indebtedness originally evidenced by
said Note and that this Amendment represents a modification of the original
indebtedness evidenced by said Note.
4. The Maker hereby agrees that this Note, as amended hereby, is and shall
be one integrated instrument and such instrument constitutes the legal, valid
and binding obligation of the Maker in accordance with its terms.
5. The Bank hereby agrees to affix and attach this Amendment to the Note.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
WITNESS: FLEET BANK OF MAINE
By: Raymond T. Kelly, Jr.
- ---------------------------- ----------------------------
Its: Vice President
---------------------------
-3-
<PAGE> 4
IRVING TANNING COMPANY
Linda S. Archer By: Robert M. Jones
- ---------------------------- ----------------------------
Its: Vice President/Treasurer
---------------------------
-4-
<PAGE> 1
EXHIBIT 4(h)
THIRD AMENDMENT TO
PROMISSORY NOTE
Third Amendment to Promissory Note made as of the 28th day of March, 1995,
by and between FLEET BANK OF MAINE, a financial institution organized and
existing under the laws of the State of Maine (the "Bank") and IRVING TANNING
COMPANY, a Delaware corporation with a place of business on Main Street,
Hartland, Maine (the "Maker").
W I T N E S S E T H :
WHEREAS, on April 5, 1994, the Bank and the Maker entered into a Revolving
Credit and Term Loan Agreement (the "Agreement") between the Bank as lender and
the Maker as borrower pursuant to which the Bank, among other matters, and
subject to the terms and conditions set forth therein, established a $4,000,000
revolving credit facility in favor of the Maker; and
WHEREAS, on April 5, 1994, the Maker executed a certain Demand Promissory
Note (the "Note") in the original principal amount of $4,000,000 to evidence
revolving credit loans made by the Bank to Maker under the Agreement from time
to time; and
WHEREAS, on September 15, 1994, the undersigned entered into a First
Amendment to Revolving Credit and Term Loan Agreement pursuant to which the
parties agreed to amend the Agreement to increase the amount available under
the revolving credit facility from $4,000,000 to $5,000,000; and
<PAGE> 2
WHEREAS, on September 15, 1994, the undersigned amended the Note to
confirm such changes, by a First Amendment to Promissory Note; and
WHEREAS, on November 23, 1994, the undersigned entered into a Second
Amendment to Revolving Credit and Term Loan Agreement pursuant to which the
parties agreed to further amend the Agreement to increase the amount available
under the revolving credit facility from $5,000,000 to $6,000,000; and
WHEREAS, on November 23, 1994, the undersigned amended the Note to confirm
such changes, by a Second Amendment to Promissory Note; and
WHEREAS, the undersigned have entered into a Third Amendment to Revolving
Credit and Term Loan Agreement of even date herewith pursuant to which the
parties agree to further amend the Agreement to increase the amount available
under the revolving credit facility from $6,000,000 to $11,000,000, among other
things; and
WHEREAS, the parties desire to further amend the Note to confirm such
change.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
to modify the Note as follows:
1. Effective as of the date hereof, but not retroactively, the Note is
hereby amended by increasing the face amount thereof to $11,000,000, and by
deleting the first paragraph thereof in its entirety and substituting the
following:
-2-
<PAGE> 3
FOR VALUE RECEIVED, Irving Tanning Company, a Delaware
corporation with a business address of Main Street, Hartland, Maine
(the "Maker"), promises to pay to Fleet Bank of Maine, a financial
institution with a business office at 511 Congress Street, Portland,
Maine (the "Bank"), or order, ON DEMAND, the principal sum of Eleven
Million Dollars ($11,000,000), or such lesser amount as may be
outstanding at the maturity hereof (whether upon demand or
otherwise).
2. It is the intention of the parties hereto that the only modification to
the Note contemplated hereby shall be the modification specifically effected
above, namely, an increase in the amount of the obligation from $6,000,000 to
$11,000,000. Except as so modified, the terms, provisions, covenants and
agreements set forth in the Note are hereby ratified and affirmed in all
respects.
3. The Maker and the Bank hereby agree that the indebtedness evidenced by
the Note as amended hereby shall remain the same indebtedness originally
evidenced by said Note and that this Amendment represents a modification of the
original indebtedness evidenced by said Note.
4. The Maker hereby agrees that this Note, as amended hereby, is and shall
be one integrated instrument and such instrument constitutes the legal, valid
and binding obligation of the Maker in accordance with its terms.
5. The Bank hereby agrees to affix and attach this Amendment to the Note.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
WITNESS: FLEET BANK OF MAINE
Elliott Wilsar By: Raymond T. Kelly, Jr.
- ----------------------------- ---------------------------
Its: Vice President
--------------------------
IRVING TANNING COMPANY
Linda S. Archer By: Robert M. Jones
- ----------------------------- ---------------------------
Its: Vice President/Treasurer
--------------------------
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<PAGE> 1
EXHIBIT 4(j)
LIMITED GUARANTY
(Seagrave Leather Corporation)
TO: Fleet Bank of Maine ("Bank")
511 Congress Street
P.O. Box 1280
Portland, ME 04104
To induce Bank to make or continue to make loans, advances, or grant
other financial accommodations to Irving Tanning Company (the "Borrower"),
pursuant to the terms and provisions of a Revolving Credit and Term Loan
Agreement dated April 5, 1994, as amended by First Amendment dated September
15, 1994, by Second amendment dated November 23, 1994, and by Third Amendment
or even date herewith (as the same may be further amended, extended or modified
from time to time, the "Loan Agreement"), which loans are evidenced by the
issuance, execution and delivery of a Demand Note, as amended to date, in the
principal amount of $11,000,000 (together with any and all amendments or
modifications thereto, substitutions therefor, and renewals, extensions and
rearrangements thereof, the "Note") or under documents and documentation
relating to any of the foregoing (collectively, the "Loan Documents," as
defined in the Loan Agreement); and, in consideration thereof, and in
consideration of advances to be made by Borrower to the undersigned Guarantor
from proceeds of loans made by the Bank to Borrower from time to time, all as
authorized by the Loan Agreement and the continuing administrative and
operating support the undersigned Guarantor receives from the Borrower, the
business of Guarantor being integrated with the business of Borrower, the
undersigned Guarantor unconditionally, absolutely and irrevocably guarantees,
without offset or deduction, the punctual payment, when due, whether at
maturity, acceleration or otherwise, to Bank of sums which may be presently due
and owing or which shall in the future become due and owing to Bank from
Borrower, up to a limit of $3,500,000, whether under the Loan Documents (as
defined in the Loan Agreement), or otherwise (collectively, the "Guaranteed
Obligations") prior to receipt by the Bank of notice in writing from Guarantor
of the revocation of this Guaranty, and the undersigned Guarantor also
guarantees the due performance by the Borrower of all of its obligations under
the Guaranteed Obligations as limited hereby. Any notice of revocation shall
not in any way affect the liability of Guarantor as to any obligations incurred
prior to receipt of such revocation by the Bank. Notwithstanding the
foregoing, it is agreed and understood that the Guaranteed Obligations shall
not include the obligations of Borrower to Bank under the Term Note from
Borrower to Bank dated April 5, 1994 in the original principal amount of
$1,500,000, or the obligations of Borrower to Bank under any documents or
documentation relating solely to said Term Note. Notwithstanding anything
herein to the contrary, the liability of the Guarantor to pay any Guaranteed
Obligation of the Borrower to the Bank pursuant to this Guaranty is limited to
and in no event shall exceed $3,500,000.
<PAGE> 2
Guarantor further agrees that this Guaranty shall not be impaired by
any modification, supplement, extension or amendment of any contract or
agreement to which the parties thereto may hereafter agree, nor by release of
any party liable therefor, nor by any modification, release, compromise,
impairment, substitution, or other alteration of any of the Guaranteed
Obligations hereby guaranteed or of any security or collateral therefor, nor by
any agreements or arrangements whatever with the Borrower or any one else.
Guarantor further agrees that the liability of the Guarantor hereunder
is direct and unconditional and may be enforced without requiring Bank first to
resort to any other right, remedy, person, entity or security; that the
Guarantor hereunder waives any right of exoneration; that the Guarantor shall
not have any right of marshaling; and that the Guarantor shall have no rights
of subrogation, reimbursement, contribution, or indemnity whatsoever, nor any
right of recourse to any security or collateral for the debts and obligations
of the Borrower to Bank, until the Guaranteed Obligations are fully and
indefeasibly paid.
Guarantor further agrees that if there is more than one Guarantor, the
liability of the Guarantors shall be joint and several; that if the Borrower or
any Guarantor should at any time become insolvent or make a general assignment,
or if a petition in bankruptcy or any insolvency or reorganization proceedings
shall be filed or commenced by, against or in respect of the Borrower or any
guarantor, any and all obligations of each Guarantor shall, at Bank's option,
forthwith become due and payable; and that Bank's books and records showing the
account between Bank and the Borrower shall be admissible in any action or
proceeding, shall be binding upon each Guarantor for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.
Guarantor further agrees that this Guaranty is, as to Guarantor, a
continuing guaranty which shall remain effective until the Guarantor has fully
and indefeasibly satisfied its obligations hereunder, or until Bank releases
Guarantor.
Guarantor further agrees that nothing shall discharge or satisfy the
liability of Guarantor hereunder except the full, indefeasible payment and
performance of all of the Guarantor's obligations hereunder and that,
notwithstanding such full payment, however, or any release or compromise with
Guarantor, Guarantor agrees that to the extent any payment or payments by
Borrower or for Borrower's benefit to the Bank, which payment or payments are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and are required to be repaid to Borrower, its estate, receiver or any other
person or party under any bankruptcy or insolvency law, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the liability or part thereof which has been paid, reduced, satisfied or
released shall be reinstated and included
-2-
<PAGE> 3
within the Guaranteed Obligations as of the date such initial payment,
reduction or satisfaction is repaid, and this Guaranty extends and shall extend
to such invalidated payments.
Guarantor waives all demands, notices of acceptance hereof,
presentment and protest of any instrument, and notice thereof; all notices of
default and dishonor, and other notices to which Guarantor might otherwise be
entitled under the Maine Commercial Code; and all suretyship defenses generally
except to the extent such waivers are expressly prohibited by law.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of Maine. This Guaranty shall inure to the
benefit of Bank's successors and assigns.
Waiver of Jury Trial. THE BANK AND THE GUARANTOR AGREE THAT NEITHER
OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY RELATED INSTRUMENTS, OR THE DEALINGS
OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE
ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS
NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY
THE BANK AND THE GUARANTOR, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NEITHER THE BANK NOR THE GUARANTOR HAS AGREED WITH OR REPRESENTED
TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
If any obligation or portion of this Guaranty is determined to be
invalid or unenforceable under law, it shall not affect the validity or
enforceability of the remaining obligations or portions thereof.
DATED: March 29th, 1995
WITNESS: SEAGRAVE LEATHER CORPORATION,
a Maine corporation
Shelly M. Pray
- -------------------------- By: Robert M. Jones
----------------------
Its: Treasurer
----------------------
SEEN AND AGREED TO:
FLEET BANK OF MAINE
By: Raymond T. Kelly, Jr.
---------------------
Its: Vice President
---------------------
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<PAGE> 1
EXHIBIT 4(k)
GUARANTY
(Kroy Tanning Company)
TO: Fleet Bank of Maine ("Bank")
511 Congress Street
P.O. Box 1280
Portland, ME 04104
To induce Bank to make or continue to make loans, advances, or grant other
financial accommodations to Irving Tanning Company (the "Borrower"), pursuant
to the terms and provisions of a Revolving Credit and Term Loan Agreement dated
April 5, 1994, as amended by First Amendment dated September 15, 1994, by
Second Amendment dated November 23, 1994, and by Third Amendment of even date
herewith (as the same may be further amended, extended or modified from time to
time, the "Loan Agreement"), which loans are evidenced by the issuance,
execution and delivery of a Demand Note, as amended to date, in the principal
amount of $11,000,000 (together with any and all amendments or modifications
thereto, substitutions therefor, and renewals, extensions and rearrangements
thereof, the "Note") or under documents and documentation relating to any of
the foregoing (collectively, the "Loan Documents," as defined in the Loan
Agreement); and, in consideration thereof, and in consideration of advances to
be made by Borrower to the undersigned Guarantor from proceeds of loans made by
the Bank to Borrower from time to time, all as authorized by the Loan Agreement
and the continuing business the undersigned Guarantor receives from the
Borrower, the business of Guarantor being fully integrated with the business of
Borrower, the undersigned Guarantor unconditionally, absolutely and irrevocably
guarantees, without offset or deduction, the punctual payment, when due,
whether at maturity, acceleration or otherwise, to Bank of all sums which may
be presently due and owing and of all sums which shall in the future become due
and owing to Bank from Borrower, whether under the Loan Documents (as defined
in the Loan Agreement), or otherwise (collectively, the "Obligations") prior to
receipt by the Bank of notice in writing from Guarantor of the revocation of
this Guaranty, and the undersigned Guarantor also guarantees the due
performance by the Borrower of all of its obligations under the Obligations.
Any notice of revocation shall not in any way affect the liability of Guarantor
as to any obligations incurred prior to receipt of such revocation by the Bank.
Notwithstanding the foregoing, it is agreed and understood that the obligations
guaranteed by this Guaranty shall not include the obligations of Borrower to
Bank under the Term Note from Borrower to Bank dated April 5, 1994 in the
original principal amount of $1,500,000, or the obligations of Borrower to Bank
under any documents or documentation relating solely to said Term Note.
Guarantor further agrees that this Guaranty shall not be impaired by any
modification, supplement, extension or amendment
<PAGE> 2
of any contract or agreement to which the parties thereto may hereafter
agree, nor by release of any party liable therefor, nor by any modification,
release, compromise, impairment, substitution, or other alteration of any of
the Obligations hereby guaranteed or of any security or collateral therefor,
nor by any agreements or arrangements whatever with the Borrower or any one
else.
Guarantor further agrees that the liability of the Guarantor hereunder is
direct and unconditional and may be enforced without requiring Bank first to
resort to any other right, remedy, person, entity or security; that the
Guarantor hereunder waives any right of exoneration; that the Guarantor shall
not have any right of marshaling; and that the Guarantor shall have no rights
of subrogation, reimbursement, contribution, or indemnity whatsoever, nor any
right of recourse to any security or collateral for the debts and obligations
of the Borrowers to Bank, until the Obligations are fully and indefeasibly
paid.
Guarantor further agrees that if there is more than one Guarantor, the
liability of the Guarantors shall be joint and several; that if the Borrower or
any Guarantor should at any time become insolvent or make a general assignment,
or if a petition in bankruptcy or any insolvency or reorganization proceedings
shall be filed or commenced by, against or in respect of the Borrower or any
guarantor, any and all obligations of each Guarantor shall, at Bank's option,
forthwith become due and payable; and that Bank's books and records showing the
account between Bank and the Borrower shall be admissible in any action or
proceeding, shall be binding upon each Guarantor for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.
Guarantor further agrees that this Guaranty is, as to Guarantor, a
continuing guaranty which shall remain effective until the Obligations are
fully and indefeasibly paid, or until Bank releases Guarantor.
Guarantor further agrees that nothing shall discharge or satisfy the
liability of Guarantor hereunder except the full, indefeasible payment and
performance of all of the Borrowers' debts and obligations to Bank with all
interest, costs of collection and attorneys' fees thereon and other amounts due
thereunder; and that, notwithstanding such full payment, however, or any
release or compromise with Guarantor, Guarantor agrees that to the extent any
payment or payments by Borrower or for Borrower's benefit to the Bank, which
payment or payments are subsequently invalidated, declared to be fraudulent or
preferential, set aside and are required to be repaid to Borrower, its estate,
receiver or any other person or party under any bankruptcy or insolvency law,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the liability or part thereof which has been paid,
reduced, satisfied or released shall be reinstated and included
-2-
<PAGE> 3
within the Obligations as of the date such initial payment, reduction
or satisfaction is repaid, and this Guaranty extends and shall extend to such
invalidated payments.
Guarantor waives all demands, notices of acceptance hereof, presentment
and protest of any instrument, and notice thereof; all notices of default and
dishonor, and other notices to which Guarantor might otherwise be entitled
under the Maine Commercial Code; and all suretyship defenses generally except
to the extent such waivers are expressly prohibited by law.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of Maine. This Guaranty shall inure to the
benefit of Bank's successors and assigns.
Waiver of Jury Trial. THE BANK AND THE GUARANTOR AGREE THAT NEITHER OF
THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM OR ANY RELATED INSTRUMENTS, OR THE DEALINGS OR THE
RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE BANK
AND THE GUARANTOR, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NEITHER THE BANK NOR THE GUARANTOR HAS AGREED WITH OR REPRESENTED TO THE OTHER
THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
If any obligation or portion of this Guaranty is determined to be invalid
or unenforceable under law, it shall not affect the validity or enforceability
of the remaining obligations or portions thereof.
DATED: March 29, 1995
WITNESS: KROY TANNING COMPANY,
a Delaware corporation
Linda S. Archer By: Robert M. Jones
- ---------------------------- ----------------------------
Its: Treasurer
---------------------------
SEEN AND AGREED TO:
FLEET BANK OF MAINE
By: Raymond T. Kelly, Jr.
-------------------------
Its: Vice President
------------------------
-3-
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1995 CONDENSED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<TOTAL-ASSETS> 171,723
<COMMON> 9,579
0
0
<OTHER-SE> 58,471
<TOTAL-LIABILITY-AND-EQUITY> 171,723
<TOTAL-REVENUES> 37,896
<INCOME-TAX> 570
<INCOME-CONTINUING> 2,015
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,445
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1995 CONDENSED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 933
<SECURITIES> 10,291
<RECEIVABLES> 18,452
<ALLOWANCES> 450
<INVENTORY> 23,682
<CURRENT-ASSETS> 54,832
<PP&E> 27,731
<DEPRECIATION> 12,587
<TOTAL-ASSETS> 70,255
<CURRENT-LIABILITIES> 23,713
<BONDS> 14,296
<COMMON> 9,579
0
0
<OTHER-SE> 22,203
<TOTAL-LIABILITY-AND-EQUITY> 70,255
<SALES> 26,840
<TOTAL-REVENUES> 26,840
<CGS> 23,874
<TOTAL-COSTS> 25,535
<OTHER-EXPENSES> 357
<LOSS-PROVISION> 15
<INTEREST-EXPENSE> 326
<INCOME-PRETAX> 621
<INCOME-TAX> 227
<INCOME-CONTINUING> 394
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 394
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1995 CONDENSED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 46,707
<DEBT-CARRYING-VALUE> 3,253
<DEBT-MARKET-VALUE> 3,209
<EQUITIES> 8,534
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 58,494
<CASH> 6,345
<RECOVER-REINSURE> 9,538
<DEFERRED-ACQUISITION> 2,024
<TOTAL-ASSETS> 101,468
<POLICY-LOSSES> 35,292
<UNEARNED-PREMIUMS> 25,794
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
<COMMON> 3,000
0
0
<OTHER-SE> 33,268
<TOTAL-LIABILITY-AND-EQUITY> 101,468
9,919
<INVESTMENT-INCOME> 988
<INVESTMENT-GAINS> 149
<OTHER-INCOME> 0
<BENEFITS> 7,139
<UNDERWRITING-AMORTIZATION> (595)
<UNDERWRITING-OTHER> 2,898
<INCOME-PRETAX> 1,393
<INCOME-TAX> 342
<INCOME-CONTINUING> 1,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,051
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
