Exhibit 10.35
First American First American National Bank
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BUSINESS LINE PLUS AGREEMENT
THIS AGREEMENT is entered into as of AUGUST 15, 1996 by and between DISPLAY ARTS
INC (individually and collectively, "Borrower"), and FIRST AMERICAN NATIONAL
BANK "FANB"), Nashville, Tennessee
1. Definitions. For the purposes of this Agreement:
(a) An "Advance" is any advance of funds or payment by FANB under
this Agreement.
(b) The "Line" is the line of credit granted by FANB to Borrower
under this Agreement.
(c) The "Collateral" is;
S/A COVERING A/R, INV, EQUIP
(d) The "Credit Limit" is the maximum principal balance that may be
outstanding under this Agreement during the Draw Period and is initially
$50,000,00.
(e) The "Line Indebtedness" is the aggregate amount owing hereunder
from time to time, including outstanding principal, accrued interest, and fees.
(f) A "Guarantor" is any person now or hereafter guaranteeing, or
otherwise having or assuming liability (whether as surety, partner, or
otherwise) to FANB for payment of the Line Indebtedness or any portion thereof.
(g) The "Index Rate" is the reference or base rate established by
FANB from time to time and generally utilized in contracting for interest on its
variable rate domestic commercial loans not utilizing an externally established
reference rate.
(h) The "Margin" is 3.000000% per annum.
(i) The "Maximum Rate" is the maximum applicable lawful contract
rate in effect from time to time. If no applicable law restricts the rate of
interest that may be charged hereon, the Maximum Rate shall be the rate of
interest otherwise applicable under this Agreement from time to time, plus 3%
per annum.
(j) The "Draw Period" is that period of time during which Borrower
may, subject to the conditions of this Agreement, obtain advances hereunder.
(k) The "Repayment Period" is that period of time following the
expiration or termination of the Draw Period consisting of 36 consecutive
monthly payment due dates.
(l) "Herein", "hereunder", and words of similar import refer to this
Agreement as a whole. Any term defined elsewhere in this Agreement shall be
accorded the same meaning throughout this Agreement.
2. Security interest. To secure the payment of the Line Indebtedness,
Borrower hereby grants FANB a security interest in the Collateral and any
proceeds thereof. Any security agreement, assignment, deed of trust, or similar
instrument that by its terms, either general or specific, secures the Line
Indebtedness shall be effective according to such terms, whether or not the
property therein described is the Collateral.
3. Advances; Draw Period; Interest.
(a) Borrower shall have the right to obtain an Advance only during
the Draw Period and only if: (1) Borrower's request therefor is received by FANB
in sufficient time reasonably to enable FANB to make the Advance prior to the
expiration of the Draw Period; (2) the resulting principal balance of the Line
Indebtedness will not exceed the Credit Limit; and (3) no Event of Default is in
effect at the time Borrower is otherwise entitled to obtain the Advance.
(b) The Draw Period expires one year from the date of this
Agreement, but FANB may, at its sole discretion, extend the Draw Period for four
consecutive one year extensions. FANB may, from time to time and at its sole
discretion, make Advances (1) requested by Borrower in a circumstance under
which Borrower has no right to obtain Advances, or (2) for the protection and
preservation of any security for the Line Indebtedness. All such Advances shall
be subject to this Agreement and shall be incorporated into the Line
Indebtedness, except that, (a) that portion of the outstanding principal balance
of the Line Indebtedness in excess of the Credit Limit and (b) any Advance made
after the end of the Draw Period or the maturity of the Line Indebtedness, in
either case together with all interest accrued thereon, shall be due and payable
on demand by FANB. No one or more such discretionary Advances shall constitute a
waiver of, or modification to, any condition precedent to further Advances under
this Agreement.
(c) The principal balance of the Line Indebtedness outstanding from
time to time shall bear interest at the Index Rate plus the Margin, except as
otherwise provided herein. The rate of interest hereunder shall be adjusted on
the date that the Index Rate changes, and the interest may at the option of FANB
be computed on the basis of a 360 day or a 365 day year.
4. Payments. Borrower promises, absolutely and unconditionally and without
any setoff, counterclaim, or deduction, to pay to the order of FANB the Line
Indebtedness in accordance with this Agreement and the billing statements
rendered hereunder by FANB. In the event this Agreement does not otherwise
provide either a due date or a means of ascertaining the due date of an amount
owing hereunder or in connection herewith, such amount shall be due and payable
on FANB's demand.
(a) During the Draw Period, each payment shall consist of all
interest accrued hereunder and shall be due and payable 25 days from the date of
each monthly statement rendered by FANB.
(b) During the Repayment Period, the Line Indebtedness shall be due
and payable in consecutive monthly payments of principal and accrued interest on
the same day of each consecutive month. FANB shall select the initial monthly
payment date which shall be not less than 25 days after the conclusion of the
Draw Period and shall give Borrower not less than 30 days notice thereof. The
amount of each monthly payment shall be that amount which, given the rate of
interest in effect hereunder as of the expiration or termination of the Draw
Period, would repay the principal balance then outstanding in equal monthly
installments by the scheduled end of tine Repayment Period. In the event the
Line Indebtedness is not repaid in full by the final scheduled payment date, the
Repayment Period shall be extended, and Borrower shall make additional monthly
payments in the same amount and on the same day of each month until the earlier
of (i) the date the Line Indebtedness in paid in full or (ii) one (1) year from
the originally scheduled end of the Repayment Period, and any remaining Line
Indebtedness shall be due and payable in full no later than the end of the
Repayment Period as extended.
(c) Borrower may prepay the Line Indebtedness in whole or in part at
any time, but no prepayment shall postpone or diminish any required monthly
payment, to the extent of the remaining unpaid balance thereof. All payments
shall be made in collected funds at FANB's main office or at such other location
as FANB directs in writing. and shall be applied to principal, accrued interest,
and charges and expenses owing under or in connection with this Agreement, in
such order as FANB elects, except that payments shall be applied to accrued
interest before principal.
5. Other Charges.
(a) If any payment is past due by fifteen days or more, Borrower
shall pay FANB a late charge of (i) 5% of such payment amount or (ii) any lesser
maximum amount permitted under applicable law. No late charge, however, shall be
imposed on any payment made on time and in full solely by reason of any
previously accrued and unpaid late charge.
(b) During the initial Draw Period and, unless Borrower terminates
its right to obtain Advances by notice to FANB, during each one-year extension
thereof, Borrower shall pay to FANB an annual fee of $150. In no event, however,
shall this annual fee and all other costs and expenses (exclusive of filing fees
and recording taxes) incurred by Borrower in connection with the establishment
of the Line or the renewal of the Draw Period (collectively, the "Annual
Charges") exceed 4% of the Credit Limit.
6. Additional Covenants. Borrower covenants and agrees as follows:
(a) No deterioration shall occur in any of the following, in
relation to that reflected in the most recent financial information provided to
FANB prior to the inception of this Agreement or pursuant to subparagraph (c) of
this Paragraph 6: (i) the combined adjusted net worth of Borrower and the
Guarantors; (ii) Borrower's cash flow; (iii) the ratio of Borrower's liabilities
to Borrower's net worth; or (iv) the ratio of Borrower's current liabilities to
Borrower's current assets.
(b) No deterioration shall occur in the credit payment history of
Borrower or any Guarantor, in relation to that reflected in information obtained
by FANB prior to the inception of this Agreement.
(c) On an annual basis, Borrower shall provide, and shall cause each
Guarantor to provide, to FANB, such information concerning Borrower's and each
Guarantor's financial condition and income as FANB may request and within 30
days after such request. All financial statements required hereunder shall be
prepared, and all agreements and covenants herein pertaining to Borrower's and
any Guarantor's financial condition or performance shall be construed, in
accordance with generally accepted accounting principles, consistently applied.
(d) Borrower shall: (i) if a partnership or corporation, maintain
its existence and good standing and avoid dissolution in any form; and (ii)
cause each Guarantor constituting a partnership or corporation to do likewise.
(e) Borrower shall utilize Advances solely for business, commercial,
or agricultural purposes.
(f) For not less than 30 days (which need not be consecutive) during
the Draw Period and during each one-year extention thereof (if any), the balance
of the Line Indebtedness shall be zero.
(g) During the Initial Draw Period and during each annual extension
thereof, Borrower shall obtain Advances at least equal to the Annual Charges
then imposed divided by .04, but Borrower's failure to do so shall not subject
Borrower to any interest, penalty, damages, or charges other than such Annual
charges.
7. Events of Default. The Line Indebtedness shall be immediately due and
payable in full, or FANB may terminate the Draw Period, reduce the Credit Limit,
or suspend making Advances, in either case at FANB's option and without prior
notice in any one of the following events (each an "Event of Default"): (a) any
required payment of principal, interest, or any other charge is not made when
due; (b) or Obligor (which term shall include Borrower and any Guarantor) either
dies, becomes the subject of any bankruptcy or insolvency proceeding, makes any
material misrepresentation in any financial information provided hereunder or in
connection herewith or in any way fails to perform in full and on time any
obligations hereunder; (c) any Obligor or other person fails to perform in
accordance with any security agreement or deed of trust securing, or other
agreement pertaining to, this Agreement or the Line Indebtedness; or (d) In
FANB's good faith judgment, there is a material adverse change in the financial
condition of any Obligor or otherwise in FANB's prospects of payment in due
course, without consideration of any collateral securing the Line Indebtedness
or of a legal action by FANB to enforce its rights hereunder.
FANB's rights hereunder are continuing ones, nor subject to waiver by
non-use on its part. After maturity, whether by acceleration or otherwise, the
unpaid Line Indebtedness shall, at FANB's option, bear interest at the Maximum
Rate until paid in full. Borrower agrees to pay FANB's reasonable attorneys'
fees and all other costs of collection incurred by FANB following an Event of
Default.
8. Miscellaneous.
(a) Except as otherwise specified therein, each provision of this
Agreement shall be effective during the Draw Period, the Repayment Period, and
extension of either, and until the Line Indebtedness is paid in full.
(b) FANB may send all notices and statements hereunder to Borrower's
address as shown on FANB's records. Each statement sent by FANB concerning the
outstanding balance of the Line Indebtedness shall, unless contested within a
reasonable time thereafter, constitute an account stated for the period covered
therein, and FANB's records concerning the Line shall constitute prima facie
evidence of the balance of the Line Indebtedness. Any notice from FANB to
Borrower shall be in writing and shall be deemed given (i) when received by
Borrower or (ii) two (2) business days after having been sent by U.S. Mail,
postage prepaid, to the address to which FANB sends periodic statements
concerning the Line. Borrower may change this address by giving FANB 15 day's
notice. Any notice from Borrower to FANB shall be in writing and shall be deemed
given when received by the FANB officer having direct responsibility for the
Line, or as FANB may hereafter direct Borrower in writing:
(c) If FANB notifies Borrower that an extension of the Draw Period
is conditioned upon Borrower's acceptance of one or more amendments hereto set
forth in FANB's notice, Borrower's obtaining of an Advance during such extension
shall constitute Borrower's agreement to such amendment(s). This Agreement may
otherwise be amended only in writing signed by both Borrower and FANB.
(d) This Agreement is governed by, and shall be construed in
accordance with, the laws of the State of Tennessee, without regard to its
conflict of laws rules, subject to any applicable laws of the United States. In
no event shall the rate of interest or any other charge hereunder exceed,
respectively, the Maximum Rate or the maximum of such other charge as is
allowable under applicable law, and any excess shall be deemed applied to the
outstanding principal balance of the Line Indebtedness.
FIRST AMERICAN NATIONAL BANK BORROWER
DISPLAY ARTS INC
BY: /s/ [ILLEGIBLE] BY: /s/ Xxxxxx X. XxXxxxx
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XXXXXX X. XXXXXXX
TITLE: Vice President TITLE: President
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BY: /s/ Xxxxx X. XxXxxxx
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XXXXX X. XXXXXXX
TITLE: Secretary
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FORM BLP3 REV. 6/95 FOR INTERNAL USE ONLY APPLICATION 010301962251226320
