Document:

Unassociated Document

 

EXHIBIT 10.9

OPTIONS MEDIA GROUP HOLDINGS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

NON-PLAN

THIS STOCK OPTION AGREEMENT (the “Agreement”) entered into as of December 11, 2009 between Options Media Group Holdings, Inc. (the “Company”) and ___________ (the “Optionee”).

WHEREAS, pursuant to the authority of the Board of Directors (the “Board”), the Company has granted the Optionee the right to purchase common stock of the Company.

NOW THEREFORE, in consideration of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:

1.           Grant of Non-Qualified Options.  The Company irrevocably granted to the Optionee, as a matter of separate agreement and not in lieu of salary or other compensation for services, the right and option to purchase all or any part of an aggregate of __________ shares of authorized but unissued or treasury common stock of the Company (the “Options”) on the terms and conditions herein set forth.  The common stock shall be unregistered unless the Company voluntarily files a registration statement covering such shares with the Securities and Exchange Commission.  The Options are not intended to be Incentive Stock Options as defined by Section 422 of the Internal Revenue Code of 1986 (the “Code”) and are not issued under any of the Company’s equity incentive plans.  This Agreement replaces any stock option agreement or offer letter previously provided to the Optionee, if any, with respect to the Options.

2.           Price.  The exercise price of the shares of common stock subject to the Options shall be $0.035 per share.

3.           Vesting - When Exercisable.

(a)           The Options shall vest annually over three years in equal increments with the first vesting date being December 11, 2010, subject to the Optionee continuing to perform services for the Company in the capacity in which the grant was received on each applicable vesting date.  In lieu of fractional vesting, the number of Options shall be rounded up each time until fractional Options are eliminated.

(b)           Subject to Sections 3(c) and 4 of this Agreement, Options may be exercised prior to vesting and remain exercisable until 6:00 p.m. New York time on December 11, 2014.

  

  

  

 

(c)           However, notwithstanding any other provision of this Agreement (including Section 4), all Options, whether vested or unvested shall be immediately forfeited in the event of:

(1)           Purchasing or selling securities of the Company without written authorization in accordance with the Company’s inside information guidelines then in effect;

(2)           Breaching any duty of confidentiality including that required by the Company’s inside information guidelines then in effect;

(3)           Competing with the Company; or

(4)           Recruitment of Company personnel after termination of employment, whether such termination is voluntary or for cause.

4.           Termination of Relationship.

(a)           If for any reason, except death or disability as provided below, the Optionee ceases to perform the services for which the Options were granted, all rights granted hereunder shall terminate effective two years from the date the Optionee ceases to perform such services, except as otherwise provided for herein.

(b)           If the Optionee shall die while performing services for the Company, his estate or any Transferee, as defined herein, shall have the right within two years from the date of death to exercise the Optionee’s vested Options. For the purpose of this Agreement, “Transferee” shall mean a person to whom such shares are transferred by will or by the laws of descent and distribution.

(c)           If the Optionee becomes disabled while performing services for the Company within the meaning of Section 22(e)(3) of the Code, the Optionee shall have the right within two years from date the Optionee becomes disabled to exercise the Optionee’s vested Options.

5.           Profits on the Sale of Certain Shares; Redemption.  If any of the events specified in Section 3(c) of this Agreement occur within one year from the last date the Optionee performed services for the Company (the “Termination Date”), all profits earned from the sale of the Company’s securities, including the sale of shares of common stock underlying Options, during the two-year period commencing one year prior to the Termination Date shall be forfeited and forthwith paid by the Optionee to the Company.  Further, in such event, the Company may at its option redeem shares of common stock acquired upon exercise of Options by payment of the exercise price to the Optionee.  The Company’s rights under this Section 5 do not lapse one year from the Termination Date but are a contract right subject to any appropriate statutory limitation period.

6.           Transfer.                      No transfer of the Options by the Optionee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other evidence as the Board may deem necessary to establish the authority of the state and the acceptance by the Transferee or Transferees of the terms and conditions of the Options.

  

  

  

 

7.           Method of Exercise.  The Options shall be exercisable by a written notice which shall:

(a)           state the election to exercise the Options, the number of shares to be exercised, the person in whose name the stock certificate or certificates for such shares of common stock is to be registered, his address and social security number (or if more than one, the names, addresses and social security numbers of such persons);

(b)           contain such representations and agreements as to the holder’s investment intent with respect to such shares of common stock as set forth in Section 11 hereof;

(c)           be signed by the person or persons entitled to exercise the Options and, if the Options are being exercised by any person or persons other than the Optionee, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons to exercise the Options; and

(d)           be accompanied by full payment of the purchase or exercise price in United States dollars by wire transfer or by check.

The certificate or certificates for shares of common stock as to which the Options shall be exercised shall be registered in the name of the person or persons exercising the Options.

8.           Sale of Shares Acquired Upon Exercise of Options.  If the Optionee is an officer (as defined by Section 16(b) of the Securities Exchange Act of 1934 (“Section 16(b)”)) or director of the Company, any shares of the Company’s common stock acquired pursuant to Options granted hereunder cannot be sold by the Optionee until at least six months elapse from the date of grant of the Options except in case of death or disability or if the grant was exempt from the short-swing profit provisions of Section 16(b).  Any shares of the Company’s common stock acquired pursuant to the exercise of Options granted under this Agreement, cannot be sold by the Optionee except for vested Options.

9.           Adjustments.  Upon the occurrence of any of the following events, the Optionee’s rights with respect to Options granted to him hereunder shall be adjusted as hereinafter provided unless otherwise specifically provided in a written agreement between the Optionee and the Company relating to such Options:

(a)           If the shares of common stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of its common stock as a stock dividend on its outstanding common stock, the number of shares of common stock deliverable upon the exercise of Options shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made in the exercise price per share to reflect such subdivision, combination or stock dividend.

 

  

  

  

 

(b)           If the Company is to be consolidated with or acquired by another entity pursuant to an acquisition, the Board of any entity assuming the obligations of the Company hereunder (the “Successor Board”) shall either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the shares then subject to such Options the consideration payable with respect to the outstanding shares of common stock in connection with the Acquisition; or (ii) terminate all Options in exchange for a cash payment equal to the excess of the fair market value of the shares subject to such Options over the exercise price thereof.

(c)           In the event of a recapitalization or reorganization of the Company (other than a transaction described in Section 9(b) above) pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of common stock, the Optionee upon exercising Options shall be entitled to receive for the purchase price paid upon such exercise, the securities he would have received if he had exercised his Options prior to such recapitalization or reorganization.

(d)           Except as expressly provided herein, no issuance by the Company of shares of common stock of any class or securities convertible into shares of common stock of any class shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options.  No adjustments shall be made for dividends or other distributions paid in cash or in property other than securities of the Company.

(e)           No fractional shares shall be issued and the Optionee shall receive from the Company cash in lieu of such fractional shares.

(f)           The Board or the Successor Board shall determine the specific adjustments to be made under this Section 9, and its determination shall be conclusive.  If the Optionee receives securities or cash in connection with a corporate transaction described in Section 9(a), (b) or (c) above as a result of owning such restricted common stock, such securities or cash shall be subject to all of the conditions and restrictions applicable to the restricted common stock with respect to which such securities or cash were issued, unless otherwise determined by the Board or the Successor Board.

10.           Necessity to Become Holder of Record.  Neither the Optionee, the Optionee’s estate, nor the Transferee have any rights as a shareholder with respect to any shares covered by the Options until such person shall have become the holder of record of such shares.  No adjustment shall be made for cash dividends or cash distributions, ordinary or extraordinary, in respect of such shares for which the record date is prior to the date on which such holder shall become the holder of record thereof.

11.           Conditions to Exercise of Options.  In order to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the Company may require the Optionee, the Optionee’s estate, or any Transferee as a condition of the exercising of the Options granted hereunder, to give written assurance satisfactory to the Company that the shares subject to the Options are being acquired for his own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.

 

  

  

  

 

The Options are subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification of the shares of common stock subject to the Options upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of shares under the Options, the Options may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected.

12.           Duties of Company.  The Company will at all times during the term of the Options:

(a)           Reserve and keep available for issue such number of shares of its authorized and unissued common stock as will be sufficient to satisfy the requirements of this Agreement;

(b)           Pay all original issue taxes with respect to the issue of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith; and

(c)           Use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

13.           Severability.  In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

14.           Arbitration.  Any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in Broward County, Florida (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the rules of the American Arbitration Association then in effect. The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

15.           Benefit.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.

16.           Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted delivery, as follows:

 

	 	The Optionee: 	__________________________
	 	 	__________________________
	 	 	__________________________

 

  

  

  

 

 

 

	 	 
The Company:

	 
Options Media Group holdings, Inc.

	 	 	 
123 NW 13th Street, Suite 300

	 	 	 
Boca Raton, FL 33432

	 	 	 
	 	 
with a copy to:

	 
Michael D. Harris, Esq.

	 	 	Harris Cramer LLP
	 	 	1555 Palm Beach Lakes Blvd., Suite 310
	 	 	West Palm Beach, FL 33401

 

or to such other address as either of them, by notice to the other may designate from time to time.  Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

17.           Attorney’s Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorney’s fee, costs and expenses.

18.           Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the laws of the State of Florida without regard to choice of law considerations.

19.           Oral Evidence.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

20.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

21.           Section or Paragraph Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

  

  

  

 

 

IN WITNESS WHEREOF the parties hereto have set their hand and seals the day and year first above written.

 

 

	 	 	 	 
THE COMPANY

	 	 	 	 
	 	 	 	 
	_________________________________________________________	 	By:	___________________________________________
	 	 	 	Scott Frohman
	 	 	 	Chief Executive Officer
	 	 	 	 
	 	 	 	OPTIONEE:
	 	 	 	 
	 	 	 	___________________________________________
	_________________________________________________________	 	 	___________________________________________dii_ex10aa3.htm

    EXHIBIT 10AA.3

     

    MODIFICATION
AGREEMENT

     

    THIS
MODIFICATION AGREEMENT (the “Agreement”) is made effective as of September 30,
2009 (“Effective Date”) by and between WACHOVIA BANK, NATIONAL
ASSOCIATION whose address is 225 Water Street, Jacksonville,
FL  32202 (“Wachovia”), and DECORATOR INDUSTRIES, INC., a
Pennsylvania corporation, whose address is 10011 Pines Boulevard, Suite 201,
Pembroke Pines, FL  33024 (“Borrower”).

     

    W
I T N E S S E T H:

     

    WHEREAS,
Wachovia is the owner and holder of that certain Amended and Restated Revolving
Promissory Note (the “Note”) executed by Borrower in favor of Wachovia dated
April 25, 2008 in the original principal amount of FIVE MILLION AND NO/100
DOLLARS ($5,000,000.00) (the “Loan”); and

     

    WHEREAS,
Borrower and Wachovia executed that certain Loan Agreement dated May 24, 2006
which was subsequently amended by that certain First Amendment to Loan Agreement
dated April 25, 2008 (collectively, the “Loan Agreement”); and

     

    WHEREAS,
At the request of Borrower and after discussions between the parties as to the
paydown of the Loan, Wachovia signed that certain letter dated June 26, 2009,
which extended the maturity date of the Note to September 30, 2009 (the
“Extension Letter”); and

     

    WHEREAS,
the Note and the Loan Agreement, the Extension Letter, this Agreement, the
Mortgages (as defined herein) and all other documents executed by Borrower in
connection with such loan, are hereinafter sometimes referred to as the “Loan
Documents”); and

     

    WHEREAS,
Borrower has advised Wachovia it cannot repay the Loan in full as of September
30, 2009; and

     

    WHEREAS,
Borrower has requested that Wachovia extend the current Maturity Date of the
Loan from September 30, 2009 and requests that certain other terms of the Loan
Documents be modified and Wachovia has agreed to modify the Loan Documents, but
only upon the terms and subject to the conditions hereinafter set
forth.

     

    NOW
THEREFORE, in consideration of the premises hereof, the mutual covenants
contained herein and the sum of TEN AND NO/100 DOLLARS ($10.00) in hand paid by
Borrower to Wachovia, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:

     

    1.           RECITALS.  The
Recitals contained hereinabove are true and correct and are made a part
hereof.

     

    2.           DEFINITIONS.  Unless
otherwise defined herein, all initially capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the Loan
Agreement.

     

    3.

     

    
      
        
          

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10AA.3

          

        

      

    

    EXISTING
STATUS OF THE LOAN.  In order to induce Wachovia to enter into
this Agreement, Borrower does hereby stipulate and acknowledge that: (a) the
Loan matures on September, 30, 2009 and Borrower cannot pay the Loan in full as
of September 30, 2009 and said failure to pay the Loan is an event of default
under the Loan Documents; (b)  the Borrower has not met the Senior Funded
Debt to EBITDA Ratio (as set forth in Section 4 of the Loan Agreement) which is
an event of default under the Loan Documents; (c) the principal balance and
accrued interest of the indebtedness represented by the Note as of the Effective
Date is THREE MILLION NINETY-NINE THOUSAND FOUR HUNDRED AND NO/100 DOLLARS
($3,099,400.00); and (d) the Loan Documents, as modified by this Agreement are
in full force and effect.

     

    4.           REPRESENTATIONS
AND WARRANTIES.  Borrower hereby represents and warrants to
Wachovia as of the Effective Date each of the following

     

    (a)           Enforceability of Loan
Documents.  The Loan Agreement, the Note, the Mortgages, this
Agreement and any other Loan Documents executed by Borrower with regard to the
Loan are valid and binding upon Borrower and enforceable in accordance with the
terms thereof.

     

    (b)           Authority.  If
Borrower is other than a natural person: (i) Borrower is duly organized,
validly existing and in good standing in the state of Borrower's origin;
(ii) Borrower has all necessary power and authority to execute this
Agreement and to perform the transactions contemplated hereby;
(iii) Borrower's execution of this Agreement has been duly authorized by
all necessary action on the part of Borrower; and (iv) those persons
executing this Agreement on behalf of Borrower have been duly authorized by all
necessary action on Borrower's behalf.

     

    (c)           Consents.  Neither
the execution and delivery by Borrower of this Agreement, nor the performance by
Borrower of its obligations hereunder requires (i) the consent,
authorization or approval of, the giving of notice to, or the registration with,
or the taking of any other action in respect of, any federal, state, foreign or
local governmental authority or agency, pursuant to any law, rule or regulation
applicable to Borrower or pursuant to any order, injunction or decree of any
such authority or agency, or (ii) the consent, authorization or approval
of, or the giving of notice to any partner or creditor of Borrower.

     

    (d)           Conflicts.  Neither
the execution and delivery by Borrower of this Agreement, nor the performance by
Borrower of its obligations hereunder, will (i) conflict with, or result in
a breach of, any of the terms, conditions or provisions of any law, rule or
regulation applicable to Borrower or any order, injunction or decree of any
court or governmental instrumentality or of any bond, debenture, note, mortgage,
deed of trust, guaranty, indenture, agreement or other instrument to which
Borrower is now a party or by which it may be bound, or constitute a default
thereunder or, if Borrower is other than a natural person, any partnership
agreement, articles of incorporation, by-laws or other formation or charter
documents, respectively, of Borrower or any of its general partners, or
(ii) result in the creation or imposition of any claim, lien, security
interest, charge or other encumbrance of any nature whatsoever upon any property
of Borrower pursuant to the terms of any such agreement or
instrument.

     

    (e)

     

    
      
        
          

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10AA.3

          

        

      

    

    Litigation.  There
are no actions, suits or proceedings, pending or, to Borrower's knowledge,
threatened against or affecting Borrower or the Properties (as defined herein),
at law or in equity, before any court or commission, agency or instrumentality
which would materially and adversely affect the business of Borrower or the
financial condition of Borrower or the ability of Borrower to perform its
obligations under the Loan, this Agreement or the Loan Documents.

     

    (f)           No Bankruptcy or Assignment
for the Benefit of Creditors Filing.  Borrower is not a debtor
in any outstanding action or proceeding pursuant to any bankruptcy law or
assignment for the benefit of creditors law, and none has, upon the Effective
Date of this Agreement, any current intent either to file a petition by it under
any bankruptcy law or assignment for the benefit of creditors law, or the
liquidation of all or any portion of its assets or property, and Borrower is not
aware that any other person has any current intent to file against any such
person a petition under any bankruptcy law or assignment for the benefit of
creditors law.

     

    (g)           Title.  The
Properties are owned in fee simple by Borrower and are free and clear of all
liens, charges, and other monetary encumbrances such that the Mortgages shall be
first priority liens as to each of the Properties.

     

    5.           CONDITIONS
TO MODIFICATION.

     

    (a)           Execution of
Documents.  Borrower shall have executed, acknowledged, where
applicable, and delivered to Wachovia, this Agreement, the Mortgages, and if
required by Lender, UCC-1 or UCC-3 Financing Statements and any other documents
necessary to effectuate the terms of this Agreement.

     

    (b)           Reaffirmation of
Representations and Warranties.  By its execution hereof,
Borrower hereby reaffirms to Wachovia the continued truth, accuracy and
completeness in all material respects of each of the representations and
warranties of Borrower set forth in Paragraph 4 above and in the Loan Documents
with the same force and effect as if each were separately stated herein and made
as of the date hereof.

     

    (c)           Title
Policies.   At Borrower’s cost, Lawyers Title Insurance
Company or other nationally-recognized title company selected by Wachovia at its
sole determination, shall issue to Wachovia, loan policies and endorsements as
to each of the Properties.  Said policies shall be acceptable to
Wachovia at its sole discretion.  To the extent that a title search of
the Property reveals any material defects or monetary encumbrances to which
Wachovia objects, Borrower shall cure the same on or before November 9, 2009 and
failure to cure shall be an event of default under the Loan
Documents.   Borrower shall provide any other documentation,
including but not limited to corporate documents, due authorization and/or
affidavits as may be required by the title company to issue said
policies.

     

    (d)           Modification Costs and
Expenses.  Borrower shall have paid or shall pay within ten
(10) calendar days of presentation of an invoice for the same by Wachovia, all
reasonable costs and expenses of the closing of this modification of the Loan
Documents (the "Closing").  Said costs and expenses shall include, but
not be limited to title fees and costs, recording fees and costs, mortgages or
intangible taxes (including those due on the Note pursuant to
Florida

     

    (e)

     

    
      
        
          

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    law),
appraisal fees, environmental reports, attorneys fees and costs and any other
costs incurred by Lender in connection with this Agreement.  Borrower
agrees to defend, indemnify and hold harmless Wachovia from and against any and
all such costs and expenses, and agrees that the Wachovia shall not in any way
be held liable for such costs and expenses.

     

    (f)           Property
Taxes.  Borrower shall have paid or shall pay within thirty
(30) days of Closing any and all outstanding ad valorem property taxes and
governmental assessments or impositions applicable to the Property and shall
provide evidence of the payment of same from the office of the County tax
collector on or before the Closing.

     

    (g)           Cash Management
Services.  Borrower shall maintain its cash management services
with Wachovia.

     

    6.           LOAN
MODIFICATION TERMS.   The Loan and the Loan Documents are
modified as follows:

     

    (a)           Maturity
Date.  The Maturity Date is extended to December 31, 2010,
provided however, if there is an event of default under the Loan Documents or
this Agreement which is not cured within the applicable cure period set forth in
the Loan Documents or this Agreement, the Loan shall be accelerated and
immediately due and payable

     

    (b)           Interest
Rate.  The Interest Rate as defined in the Note shall
be:

     

    Interest (computed on the basis of a
360-day year from the actual number of days elapsed) on the outstanding balance
of principal evidenced by this Note shall accrue at a variable rate per annum
(the “Interest Rate”) equal to the “Prime Rate” plus two percent (2.0%). The
term “Prime Rate” shall be the prime rate announced from time to time by Lender
which rate is a reference rate for the information and use of Lender in
establishing the actual rates to be charged its borrowers. The variable rate
applied to this loan will be adjusted prospectively (on the date the Prime Rate
changes).    

     

    (c)           Bank Modification
Fees.  Borrower shall pay to Wachovia a fee equal to one
percent (1%) of the Commitment Cap (as defined in subsection (d)) per
year.  The Commitment Cap shall be measured on the last day of the
quarter and the fee to be paid shall be that Commitment Cap amount multiplied by
one-quarter of one percent (0.25%) and shall be payable on the first day of the
month of the second month of the quarter (for example, if the Commitment Cap is
measured as of March 30, 2010, the bank fee shall be paid on May 1,
2010).

     

    (d)           Advances under $5,000,000.00
Revolving Facility.  Further advances under the Note shall be
per permitted pursuant to the terms of the Loan Documents, provided however, the
outstanding balance of the Note shall not exceed the lesser of (i) $4,000,000.00
or (ii) seventy-five percent (75%) of the loan to value ratio of the Properties
(the “Collateral Base Value”) at any time during the Loan term.  The
term “Commitment Cap” shall mean the amount that is the lesser of subsection (i)
and (ii) herein.  The value of the Properties shall be acceptable to
Wachovia in its sole discretion.  Notwithstanding the foregoing, the
parties acknowledge and agree that value of the Properties has not yet been
determined by Wachovia and therefore, the $4,000,000.000 amount set forth in
subsection (i) above may be adjusted prior to the Maturity Date.  If
said amount is adjusted, Wachovia shall provide written notice to Borrower of
any said

     

    (e)    adjusted amount and that adjusted amount
shall replace the $4,000,000.00 amount set forth in subsection (i) for all
purposes and shall be adjusted on the earlier of: (y) the 90th day
following the date of written notice to Borrower or (z) the date upon which
Borrower has secured  financing from an Operations Lender (as set
forth in subsection (g) below).

     

    
      
        
          

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    (f)           Repayment
Terms.

     

    (i)           Borrower
shall make all monthly interest and/or other payments required under the Note
from the Effective Date through the Maturity Date.  In any event, all
outstanding principal and interest shall be due and payable on the Maturity
Date.

     

    (ii)           Borrower
shall also remit any net proceeds from the sale of any of the Properties to
Wachovia as additional paydown of the outstanding balance of the
Note.  The Commitment Cap shall be reduced dollar for dollar in the
amount of the additional paydown.  Borrower shall be permitted to sell
any of the Properties and Wachovia shall release the mortgage related to the
sold Properties so long the net proceeds have been received by Wachovia and if
the loan to value ratio after the sale is at least equal to seventy-five percent
(75%).

     

    (g)           Additional Collateral to be
provided to Secure Repayment of the Loan.  In consideration of
modifying the Loan Documents as set forth herein, Borrower shall provide the
following as additional collateral to secure repayment of the Loan
(collectively, the “Mortgages”):

     

    (i)           First
mortgage security interest on the property located at 2927 N. 35th Avenue,
Phoenix, AZ  85017;

    

    (ii)           First
mortgage security interest on the property located at 2118 Broxton Road,
Douglas, GA 31533;

    

    (iii)           First
mortgage security interest on the property located at 1655 Gateway Court,
Elkhart, IN 46514;

    

    (iv)           First
mortgage security interest on the property located at 18 Industrial
Drive,  Bloomsburg, PA 17815;

    

    (v)           First
mortgage security interest on the property located at 1050 Hill Avenue,
Haleyville, AL 35565;

    

    (vi)           First
mortgage security interest on the property located at 125 Hospital Road
Northeast, Red Bay, AL 35582

    

    (all of
the Properties included in subsections (i)-(vi) are collectively, the “Property”
or “Properties”).  The form of the mortgages are attached hereto and
incorporated herein by reference in Exhibit
“A.”

    

    

    
      
        
          

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    Borrower
may establish other credit lines.

    (i)           Borrower
may establish a credit line with an asset-based lender (the “Operations Lender”)
using accounts receivable and inventory collateral (the “Operations
Collateral”).  Upon written request by Borrower to Wachovia which
shall include the Operations Lender’s loan documents, Wachovia will (i) remove
the negative pledge with regard to the Operations Collateral and (ii) remove the
primary depositor restriction, as may be required by the Operations Lender
(collectively, the “Loan Document Negative Pledges”) regarding the Operations
Collateral.

     

    (ii)           Notwithstanding
the foregoing, Wachovia shall only be required to remove the Loan Document
Negative Pledges with regard to Operations Collateral in the event that either
(y) the Commitment Cap exceeds the outstanding principal amount of the Loan on
the date of the removal of the Loan Document Negative Pledges, or (z) after, and
as an express condition to, giving effect to the removal of the Loan Document
Negative Pledges, a portion of the initial proceeds of the credit line from the
Operations Lender will be used to reduce the outstanding principal of the Loan
to an amount equal to the Commitment Cap.

     

    7.           DEFAULT
AND REMEDIES.  If Borrower fails to comply with any provision
of this Agreement and/or fails to comply with any provision of the Loan
Documents (as modified by this Agreement), such failure shall constitute an
event of default and Wachovia may seek any and all relief to which it is
entitled pursuant to the Loan Documents or this Agreement or may pursue any
other remedy available in equity or at law, at its sole option.

     

    8.           NO
FURTHER AMENDMENTS.  Borrower
acknowledges and agrees that Wachovia is under no obligation to further amend or
modify the Loan Agreement, the Note (including but not limited to the Maturity
Date),  the Mortgages or the other Loan Documents.

     

    9.           NOTICES.

     

    
      	
              As
      to Wachovia:

            	
              Wachovia
      Bank, National Association

              Attention:  Michael
      L. Williamson

              Senior
      Vice President

              441
      Seabreeze Boulevard

              Daytona
      Beach, FL 32118

              Phone:  (386)
      254-1801

              Facsimile:  (386)
      254-1811

              Email:
      mike.williamson@wachovia.com

               

            
	 
      	 
      
	
              and
      a copy to:

            	
              Gary
      Soles, Esquire

              Lowndes,
      Drosdick, Doster, Kantor & Reed, P.A.

              450
      South Orange Avenue, Suite 800

              Post
      Office Box 2809

              Orlando,
      FL  32802-2809

              Phone:
      (407) 418-6331

              Facsimile:
      (407) 843-4444

              Email:
      gary.soles@lddkr.com

            
	 
      	 
      
	
              As
      to Borrower:

            	
              Decorator
      Industries, Inc.

              Attention:  Michael
      K. Solomon

              10011
      Pines Boulevard, Suite 201

              Pembroke
      Pines, FL 33024

              Phone:
      (954) 436-8909

              Facsimile:  (954)
      436-1778

              Email:  Michael.solomon@DecInd.com

            
	 
      	 
      
	
              with
      a copy to:

            	
              Jason
      A. D’Amico

              Buchanan
      Ingersoll & Rooney P.C.

              One
      Oxford Centre

              301
      Grant Street, 20th
      Floor

              Pittsburgh,
      PA 15219-1410

              Phone:  (412)
      392-2152

              Facsimile:
      (412) 562-1041

              Email:  Jason.damico@bipc.com

            
	 
      	 
      
	 
      	 
      

    

    10.           MISCELLANEOUS.  Except
as amended by this Agreement, no term or condition of the Loan, this Agreement
or the other Loan Documents shall be modified and the same shall remain in full
force and effect; provided, however, if any provision of this Agreement is in
conflict with, or inconsistent with, any provision in the Loan Agreement or the
other Loan Documents, then the provision contained in this Agreement shall
govern and control.

     

    11.           SUCCESSORS
AND ASSIGNS.  This Agreement shall be binding upon, and shall
inure to the benefit of, the respective successors and assigns of the parties
hereto.

     

    12.           COUNTERPARTS.  This
Agreement may be executed in one or more counterparts and signatures transmitted
electronically or by facsimile shall be deemed an original.  Said
counterparts shall constitute but one and the same instrument and shall be
binding upon each of the undersigned individually as fully and completely as if
all had signed but one instrument so that the joint and several liability of
each of the undersigned shall be unaffected by the failure of any of the
undersigned to execute any or all of said counterparts.

     

    13.           FURTHER
ASSURANCES.  Solely to the limited extent necessary for the
parties to discharge or perform their obligations and agreements under this
Agreement, Borrower will in good faith, execute and deliver (in recordable form,
if necessary), such further instruments and will take such other action as
Wachovia may reasonably request.

     

    14.           GOVERNING
LAW AND VENUE.  This Agreement shall be interpreted under the
laws of the State of Florida regardless of the domicile of any party, and
without regard to conflicts-of-law principles, and shall be deemed for such
purposes to have been made, executed and performed in the State of
Florida.  Any action brought in connection with this Agreement shall
be brought in the Circuit Court in and for Orange County, Florida, or any county
where the property subject to the Mortgages lies.

     

     

     

    
      
        
          

           

        

         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10AA.3

          

        

      

    

        15.    RELEASE.  AS A MATERIAL
INDUCEMENT FOR WACHOVIA TO EXECUTE THIS AGREEMENT, BORROWER DOES HEREBY RELEASE,
WAIVE, DISCHARGE, COVENANT NOT TO SUE, ACQUIT, SATISFY AND FOREVER DISCHARGE
WACHOVIA, ITS OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS AND ITS AFFILIATES AND
ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS, COUNTERCLAIMS, DEFENSES, ACTIONS,
CAUSES OF ACTION, SUITS, CONTROVERSIES, AGREEMENTS, PROMISES AND DEMANDS
WHATSOEVER IN LAW OR IN EQUITY WHICH THE BORROWER EVER HAD, NOW HAS, OR WHICH
ANY PERSONAL REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF BORROWER HEREAFTER
CAN, SHALL OR MAY HAVE AGAINST WACHOVIA, ITS OFFICERS, DIRECTORS, EMPLOYEES, AND
AGENTS, AND ITS AFFILIATES AND ASSIGNS, FOR, UPON OR BY REASON OF ANY MATTER,
CAUSE OR THING WHATSOEVER THROUGH THE DATE THAT THIS AGREEMENT IS
EXECUTED.  BORROWER FURTHER EXPRESSLY AGREES THAT THE FOREGOING
RELEASE AND WAIVER AGREEMENT IS INTENDED TO BE AS BROAD AND INCLUSIVE AS
PERMITTED BY THE LAWS OF THE STATE OF FLORIDA.

     

    16.           WAIVER OF
JURY TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER BY EXECUTION HEREOF AND WACHOVIA BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLULNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COUIRSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH
RESPECT HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT TO WACHOVIA
TO ACCEPT THIS AGREEMENT.

     

    BORROWER
AND WACHOVIA AGREE THAT THEY SHALL NOT HAVE A REMEDY OF PUNITIVE OR EXEMPLARY
DAMAGES AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES THEY HAVE NOW OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY DISPUTE WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION OR
JUDICIALLY.

     

    17.           WAIVER OF
BANKRUPTCY STAY.  BORROWER HEREBY AGREES, IN CONSIDERATION OF
THE RECITALS AND MUTUAL COVENANTS CONTAINED HEREIN, AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, INCLUDING THE FORBEARANCE OF WACHOVIA FROM GOING TO
TRIAL AND EXERCISING THEIR OTHER RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO IT,
THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THAT IN THE EVENT
THAT BORROWER SHALL FILE WITH ANY BANKRUPTCY COURT OF COMPETENT JURISDICTION OR
BE THE SUBJECT OF ANY PETITION UNDER TITLE 11 OF THE UNITED STATES CODE THE
AUTOMATIC STAY IMPOSED BY SECTION 362 OF TITLE 11 OF THE UNITED STATES CODE IS
WAIVED, AND SUCH WAIVER CONSTITUTES “CAUSE” PURSUANT TO 11 U.S.C. SECTION
362(d)(1) FOR THE IMMEDIATE LIFTING OF THE AUTOMATIC STAY IN FAVOR OF WACHOVIA,
AND

     

     

     

    
      
        
          

           

        

         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10AA.3

          

        

      

    

        

     

    18.    BORROWER HEREBY KNOWINGLY AND IRREVOCABLY
WAIVES ALL DEFENSES AND OBJECTIONS TO SUCH LIFTING OF THE AUTOMATIC
STAY.

     

    19.           CONFIDENTIALITY.  Borrower
and Wachovia hereby agree that this Agreement shall be kept
confidential.  Notwithstanding the foregoing, Borrower and Wachovia
may disclose terms of this Agreement if prior to making any disclosure of any of
the terms of this Agreement, (i) the disclosing party notifies the other party
to this Agreement of any requirement to disclose information, pursuant to law or
otherwise and the contents of said disclosure and (ii) shall give the other
party a reasonable opportunity to comment on such disclosure prior to the
disclosure thereof.

     

    

     

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          EXHIBIT
10AA.3

          

        

      

    

    

     

    IN
WITNESS WHEREOF, this Agreement has been executed by the parties hereto in
manner and form sufficient to bind them as of the day and year first above
written.

     

    
      
        	 	“WACHOVIA”	 
	Signed,
      sealed and delivered in the	WACHOVIA BANK, National
      Association	 
	presence
      of the following witnesses:	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Michael
      L. Williamson	 
	 	 	Name:
      Michael L. Williamson	 
	 	 	 	Title:Senior
      Vice President 	 
	 Name: 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 Name:  	 	 (SEAL)	 

      

    

     

    STATE OF
____________

    COUNTY
OF___________

     

    The
foregoing instrument was acknowledged before me on October __,
2009  by ________________________, as ________________________________
of WACHOVIA BANK, National
Association, on behalf of said entity.  He/She is personally
known to me or produced ___________________________________ as identification
and did not take an oath.

     

    
      	 
      	
              NOTARY
      SIGNATURE

              PRINTED
      NOTARY SIGNATURE

              Notary
      Public, State of

               ________________________

              Commission
      Number:                                                      

              My
      Commission Expires:

            
	 
      	 
      

    

    

    

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          EXHIBIT
10AA.3

          

        

      

    

    
      	 	“BORROWER”	 
	Signed,
      sealed and delivered in the	DECORATOR INDUSTRIES, INC.,
      a Pennsylvania corporation	 
	presence
      of the following witnesses:	 	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/ William
      A. Johnson	 
	 	 	Name:
      William A. Johnson	 
	 	 	 	Title:
      CEO / President	 
	 Name: 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 Name:  	 	 (SEAL)	 

    

     

    STATE OF
__________

    COUNTY OF
________

     

    The
foregoing instrument was acknowledged before me on October __, 2009 by
_______________________________, as ____________________________ of DECORATOR INDUSTRIES, INC., a
Pennsylvania corporation, on behalf of said entity.  He/She is
personally known to me or produced ___________________________________ as
identification and did not take an oath.

     

    
      	 
      	
              NOTARY
      SIGNATURE

              PRINTED
      NOTARY SIGNATURE

              Notary
      Public, State of

               ________________________

              Commission
      Number:

              My
      Commission Expires:

            

    

    

    

    
      
        
          

           

        

         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10AA.3

          

        

      

    

    Exhibit
”A”

    Form of
Mortgages

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