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EXHIBIT 10.19
TERM NOTE
$5,500,000.00
March 29, 1996
Albany, New York
FOR VALUE RECEIVED, FIRST ALBANY COMPANIES INC., a domestic
corporation with its principal executive office and place of business
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower")
promises to pay to the order of ONBANK & TRUST CO., a domestic banking
corporation with its principal executive office located at Syracuse, New
York (the "Lender"), at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such
other place as the Lender may, from time to time, designate in writing, the
principal sum of Five Million Five Hundred Thousand and no/100
($5,500,000.00) Dollars together with interest on the principal balance
from time to time unpaid hereon from the date hereof, at a fluctuating per
annum interest rate (the "Note Rate") in the following manner:
Interest only on the unpaid principal amount hereof, at the Note Rate,
shall be due and payable on April 1, 1996. On the first day of each month
thereafter, commencing May 1, 1996 and concluding April 1, 2000, the
Borrower shall make payments of interest at the Note Rate together with
payments of principal calculated in accordance with a four (4) year
straight line amortization schedule. In addition, the entire unpaid
principal balance hereof, together with accrued interest thereon and
accrued late charges, if any, and all other sums due hereunder shall be
finally due and payable on April 1, 2000.
The Note Rate shall be equal, at all times, to the average yield to an
investor for United States Treasury Securities adjusted to a constant
maturity of ninety (90) days (the "Index") plus two and one-half (2.5%)
percent. The Note Rate shall be initially established by reference to the
most recent index published by the Federal Reserve Board prior to the
closing and, thereafter, the Note Rate shall be adjusted on the first day
of each calendar quarter (each such date being an "Adjustment Date") with
reference to the most recent Index published by the Federal Reserve Board
prior to each Adjustment Date.
All payments hereunder shall be applied first to the payment of
accrued late payments, if any, then to the payment of interest at the
aforesaid rate on the principal amount remaining unpaid and the balance, if
any, shall be applied in reduction to principal. Interest shall be
computed on the basis of a year of 360 days for the actual number of days
elapsed and shall accrue from the date of advance of funds until receipt of
payment by the Lender.
This Note may be prepaid without penalty at any time.
In the event that any payment required by this Note shall
become overdue for a period in excess of fifteen (15) days, a late charge
of six (.06) cents for each One ($1.00) dollar so overdue may be charged by
the holder hereof for the purpose of defraying the expense incident to
handling such delinquent payment.
The Borrower agrees that in the event of a happening of one or more of
the following, each of which shall be an "Event of Default", and the
expiration of fifteen (15) days from the date of ▇▇▇▇▇▇▇▇'s actual receipt
of written notice of said Event(s) of Default, provided said Event(s) of
Default are not cured or substantially remedied within said fifteen (15)
days, (1) the breach of any of the covenants and agreements contained in
this Note or in the GENERAL SECURITY AGREEMENT dated on even date herewith
from the Borrower to the Lender (the "Agreement") which secures this Note;
(2) the occurrence of an event of default pursuant to the Agreement;(3) the
dissolution of the Borrower; (4) any petition of bankruptcy being filed by
or against the Borrower hereof and said petition, if involuntary, is not
dismissed within six (6) months from the date of filing thereof; (5) the
making by the Borrower of an assignment for the benefit of creditors then
the whole of the principal sum or any part thereof, and of other sums of
money secured by the Agreement, shall, forthwith or thereafter, at the
option of the Lender become immediately due and payable without demand or
notice.
All of the covenants, agreements, terms and conditions of the
Agreement are hereby incorporated herein with the same and effect as if set
forth at length.
The Borrower shall deliver to the Lender, so long as the indebtedness
evidenced by this Note shall be outstanding, (1) within 120 days (120) of
its fiscal year end, an audited financial statement (Form 10K) for Borrower
prepared by ▇▇▇▇▇▇▇▇'s Certified Public Accountant; and (2) within forty-
five (45) days of the end of each fiscal quarter an interim financial
statement (Form 10Q).
The Borrower shall maintain, at all times, a minimum net capital equal
to three (3) times the minimum net capital as calculated and defined by the
Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15C 3-
1).
The Borrower shall not grant any security interest in the Collateral
(as that term is defined in the Agreement) without the prior written
approval of the Lender, which approval may be withheld in the exercise of
the Lender's sole discretion.
The Borrower shall maintain, with respect to the Collateral (as that
term is defined in the Agreement), a physical hazard insurance policy
providing insurance coverage against loss or damage to the Collateral by
fire and any of the risk covered by
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insurance of the type now known as "all risk coverage" in an amount not
less than the principal balance of the loan evidenced by this Note. All
such insurance maintained by the Borrower shall name the Lender as an
additional insured, shall be non-cancelable and non-amendable without
thirty (30) days written notice to the Lender, and shall be in the form and
substance satisfactory to the Lender and its counsel. Duplicate originals
or certified copies of each such policy of insurance shall be delivered to
the Lender upon the execution of this Note and renewal certificates
therefor shall be delivered to the Lender by the Borrower at least thirty
(30) days prior to the expiration date of each such policy. Coinsurance is
not permitted.
Notwithstanding anything to the contrary herein contained, to the
extent that the total amount of interest received in any year exceeds the
maximum rate permitted by law, then the amount so determined to be in
excess shall be applied in reduction of principal of this Note.
This Note may not be changed or terminated orally.
Presentment for payment, notice of dishonor, protest and notice of
protest are hereby waived. No waiver of any provision hereof shall be
enforceable against the Lender unless in writing, signed by an officer of
the Lender, and shall be limited solely to the one event specified therein.
In the event this Note is placed with an attorney for collection, the
Borrower shall pay all reasonable attorney fees and expenses incurred by
the Lender in connection therewith.
IN WITNESS WHEREOF, the undersigned has executed this Note the day and
year first above written.
FIRST ALBANY COMPANIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
STATE OF NEW YORK )
) SS.:
COUNTY OF ALBANY )
On this 29th day of March, 1996, before me personally came ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, to me known, who being by me duly sworn, did depose and say
that he is a Senior Vice President of FIRST ALBANY COMPANIES INC., the
corporation described in, and which executed the above instrument, and that
he signed his name thereto by order of the board of directors of said
corporation as the act and deed of said corporation.
Notary Public /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
GENERAL SECURITY AGREEMENT
In consideration of one or more loans, letters of credit or other
financial accommodations made, issued or extended by ONBANK & TRUST CO., a
domestic banking corporation with its principal executive office located
in Syracuse, New York and a place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank") to the undersigned (the "Borrower") , the
Borrower hereby agrees that the Bank shall have the rights, remedies and
benefits hereinafter set forth.
The term "Liabilities" shall mean and include any and all
indebtedness, obligations and liabilities of any kind of the Borrower to
the Bank or to others to the extent of their participations granted or
interest therein created or acquired by them or for them by the Bank, now
or hereafter existing, arising directly between the Borrower and the Bank
or acquired outright, conditionally, or as collateral security from
another by the Bank, absolute contingent, joint and/or several, secured or
unsecured, due or not due, liquidated or unliquidated, arising by
operation of law or otherwise, direct or indirect, including but not
limiting the generality of the foregoing, indebtedness,
obligations or liabilities to the Bank of the Borrower regardless of how
or when incurred.
The term "Collateral" shall mean and include all of the Borrower's
furniture, trade fixtures, equipment, including, but not limited to,
machinery, of every kind, nature and description, including but not
limited to the computers and computer equipment, wherever located, and to
the full extent of Borrower's interest therein, whether now owned or
hereafter acquired including any substitutions, additions, and
replacements thereof.
The term "Securities Collateral" shall mean and include the
securities described on Schedule "All attached hereto and made part hereof
consisting of one (1) pages.
In order to secure repayment of the Liabilities the Borrower hereby
grants the Bank a security interest in the Collateral and Securities
Collateral.
At any time and from time to time, upon the request of the Bank, the
Borrower will give, execute, deliver, file and/or record any notice,
statement, instrument, document, agreement or other papers that may be
necessary or desirable, or that the Bank may request, in order to create,
preserve, perfect or validate any security interest granted pursuant
hereto or to enable the Bank to exercise and enforce its rights hereunder
or with respect to such security interest, and, further, permit
representatives of the Bank, at any time, upon reasonable notice to the
Borrower, to inspect the Collateral.
The right is expressly granted to the Bank, at its discretion, to file
in those jurisdictions where the same is permitted one or more financing
statements under the Uniform Commercial Code signed only by the Bank,
naming the Borrower as debtor and the Bank as secured party, and
indicating therein the types or describing the items of Collateral herein
specified. Without the prior written consent of the Bank, the Borrower
will not file or authorize or permit to be filed in any jurisdiction any
such financing or like statement in which the Bank is not named as sole
secured party.
The Borrower hereby acknowledges that the security
interests) previously granted by the Borrower to The ▇▇▇▇▇▇ City Savings
Institution ("▇▇▇▇▇▇ City") have been or will be assigned by the Bank and
specifically consents to the assignment of any and all financing
statements filed by or on behalf of ▇▇▇▇▇▇ City to the Bank. The Borrower
specifically consents that the security interest in the Collateral shall
apply as security for the Liabilities.
The Bank shall have the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether
or not the Code is in effect in the jurisdiction where the rights and
remedies are asserted). In addition, with respect to the Collateral, or
any part thereof, the Bank may, in the event of default, sell or cause the
Collateral to be sold in the City of Albany, New York, or elsewhere, in
one or more sales or parcels, at such price as the Bank may deem best, and
for cash or on credit or for future delivery, without assumption of any
credit risk, all or any portion of the Collateral, at public or private
sale, without demand or performance or notice of intention to sell or of
time or place of sale (except such notice as is required by applicable
statute and cannot be waived) and the Bank or anyone else may be the
purchaser of any or all of the Collateral so sold and thereafter hold the
same absolutely, free from any claim or right of whatsoever kind, any such
demand, notice or right and equity being hereby expressly waived and
released. The Borrower will pay to the Bank all expenses incidental to
the enforcement of any of the provisions hereof, including but not limited
to attorney's fees, expenses incurred by the Bank in connection with
repossession or any actual or attempted sale of any of the Collateral or
receipt of the proceeds thereof, and for the care of the Collateral and
defending or asserting the rights and claims of the Bank in respect
thereof, by litigation or otherwise, including expenses of insurance; and
all such expenses shall be Liabilities within the terms of this agreement.
No delay on the part of the Bank in exercising any power or right
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any power or right hereunder preclude other or further
exercise thereof or the exercise of any
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other power or right. No waiver shall be enforceable against the Bank
unless in writing, signed by an officer of the Bank, and shall be limited
solely to the one event specified therein. The rights, remedies and
benefits herein expressly specified are cumulative and not exclusive of
any rights, remedies or benefits which the Bank may otherwise have.
No provision hereof shall be modified or limited except by a written
instrument signed by an officer of the Bank, expressly referring hereto
and to the provision so modified or limited. This agreement shall be
binding upon the assigns or successors of the Borrower, and shall inure to
the benefit of and be enforceable by the Bank, its successors, transferees
and assigns; shall constitute a continuing agreement, applying to all
future as well as existing transactions; and if all transactions between
the Bank and the Borrower shall be at any time terminated, shall be
equally applicable to any new transactions thereafter. Unless the context
otherwise requires all terms used herein which are defined in the Uniform
Commercial Code shall have the meaning therein stated.
If this agreement shall be terminated or revoked by operation of law,
the Borrower will indemnify and save the Bank harmless from any loss which
may be suffered or incurred by the Bank in acting hereunder prior to the
receipt by the Bank, its successors, transferees or assigns of notice of
such termination or revocation. In the event that any part of this
agreement is determined by any court of competent jurisdiction to be
unenforceable, the balance of this agreement shall remain in full force
and effect unless the Bank gives the Borrower written notice by registered
mail, return receipt requested, of its intention to terminate this
agreement, in which event all of the obligations of the Borrower to the
Bank shall immediately become due and payable.
The Borrower warrants and represents that all Collateral in which a
security interest is or will be granted to the Bank is and will at all
times be valid and subsisting, free and clear of all liens and
encumbrances, except the one created hereunder; is and will be without
defenses, offsets and counterclaims; that the Borrower will defend the
title and security interest at its own cost and expense; will furnish the
Bank with such financial statements as the Bank may reasonably request;
will keep the collateral in good condition and repair; will not assign or
otherwise dispose of the Collateral; will furnish the Bank from time to
time, upon the request of the Bank, a list of the Collateral specifying
the cost, acquisition date, and location of each item; will keep the
Collateral fully insured against all risk and procure an extended coverage
rider and a rider providing that in the event of a loss, the proceeds then
shall be payable to the Bank, and said insurance policy or policies shall
not be cancelable unless on thirty (30) days written notice to the Bank;
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that all representations are continuing in nature; that the Borrower is
authorized to execute this agreement; that the Borrower is in good standing
in the state of its incorporation, is authorized and licensed to do
business in every state where it does business, that the execution of this
agreement does not violate its certificate of incorporation, its by-laws or
any other agreement.
This agreement has been executed in the State of New York and shall
be interpreted, and the rights and liabilities of the parties hereto
determined, in accordance with the laws of State of New York. As part of
the consideration for the Bank making any loans hereunder, the Borrower
hereby agrees that all actions or proceedings arising directly or
indirectly from or touching upon this agreement shall be litigated only in
courts having a situs within of the State of New York, and the Borrower
hereby consents to the jurisdiction of any local, state or federal court
located within the State of New York.
Notwithstanding any term, provision or covenant to the contrary
contained herein, upon receipt of evidence, satisfactory to the Bank and
its counsel, that the security interest granted herein has been duly
perfected as a first security interest and lien in the Collateral in all
jurisdictions in which the Collateral is located, the Bank shall terminate
and release its security interest in the Securities Collateral.
This agreement shall be a continuing agreement and shall apply to all
future as well as existing transactions.
Dated: March 29, 1996 Albany, New York
FIRST ALBANY COMPANIES INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
AGREED TO THIS 29th DAY OF
MARCH, 1996,
ONBANK & TRUST CO.
By: ____________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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ESCROW AGREEMENT
AGREEMENT made this 29 day of March, 1996 by and between FIRST ALBANY
COMPANIES INC., a domestic corporation with its principal executive office
and on office for the transaction of business located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Street, Albany, New York 12207 (the "Assignor"), ONBANK & TRUST CO., a
domestic banking corporation with its principal executive office located in
Syracuse, New York and an office for transaction of business located at 80
State Street, Albany, New York (the "Assignee"), and FIRST ALBANY
CORPORATION, a domestic corporation with its principal executive office and
an office for the transaction of business located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
Albany, New York 12207 (the "Escrow Agent").
W I T N E S S E T H
WHEREAS, the Assignor is indebted to the Assignee in the amount of Five
Million Five Hundred Thousand and 00/100 ($S,500,000.00) Dollars as
evidenced by the TERM NOTE (the "Note") given by the Assignor to the
Assignee, for valuable consideration, on even date herewith (the "Loan");
and
WHEREAS, in order to induce the Assignee to make one or more loans to
the Assignee, the Assignor has executed and delivered a GENERAL SECURITY
AGREEMENT, dated on even date herewith (the "Agreement"), whereby the
Assignor has granted a security interest in certain property of the
Assignor as identified and described therein.
NOW, the parties hereto, for valuable consideration, the receipt and
sufficiency of which is ▇▇▇▇▇▇ acknowledged, agree as follows that:
1. The parties have delivered to Escrow Agent an executed duplicate
original of the Agreement, in which the Assignor has pledged and granted
to the Assignee a security interest in, inter alia, the securities held by
Assignor in First Albany Corporation account number 3301-1020, consisting
of the securities described on Schedule "A" attached hereto and made part
hereof (the "Securities Collateral"), as security for a loan from the
Assignee to the Assignor. The parties acknowledge that the Collateral has
been assigned and pledged to the Assignee by the Assignor, that the
Assignee has a security interest therein and that the Collateral is being
held by the Escrow Agent.
2. Subject to Section 3 hereof the Escrow Agent shall not be
authorized to sell the securities constituting the Securities Collateral
or to buy new securities without prior written consent of the Assignor and
the Assignee. The Escrow Agent has no liability to either the Assignor or
the Assignee with respect to fluctuations in the value of the securities
constituting the Securities Collateral, or to maintain any minimum value
of the securities constituting the Securities Collateral.
3. Unless restrained by court order or stayed by operation of
bankruptcy law, upon receipt of written notice from the Assignee that an
event of default (as defined in the Agreement or in the Note) has
occurred, the Escrow Agent will immediately
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transfer all Securities Collateral to the Assignee in cash or in kind
(less customary brokerage liquidation expenses, if any) irrespective of
direction subsequent to the date hereof from the Assignor or its
representatives to the contrary.
4. The Assignor has heretofore delivered to the Escrow Agent all
necessary documents of transfer or stock powers and authorizations to
transfer the Securities Collateral to the Assignee at any future time, and
the Escrow Agent will not require any other written documentation or
release from the Assignee other than the written notice referred to in
paragraph 2 above, and a simple receipt from the Assignee for Securities
Collateral following, or simultaneously with, tender of possession, in
order to transfer the Securities Collateral to the Assignee. The Escrow
Agent waives any right of set-off it may have against the Securities
Collateral senior to that of the Assignee.
5. Until receipt of written notice from the Assignee, all income
generated from the Securities Collateral will be reported pursuant to the
tax identification number for the Assignor. All dividends and interest
received by the Escrow Agent on the Securities Collateral will be held by
the Escrow Agent as part of the Securities Collateral.
6. The Assignor and the Escrow Agent hereby represent and warrant
that the Securities Collateral is not subject to any claim pledge,
assignment or other encumbrance except as set forth in this Agreement.
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7. The Escrow Agent agrees to make appropriate notations on its
records (including computer software) to clearly indicate that the
Securities Collateral has been assigned and pledged to the Assignee, and
the Assignee has a first security interest in and lien on said Securities
Collateral which has been perfected by delivery of the Securities
Collateral to the Escrow Agent. Said Securities Collateral will not be
commingled with any 'other account of the Assignor, but shall remain
segregated subject to the terms of and conditions of the Agreement.
8. The Escrow Agent shall have no duties or responsibilities other
than those expressly set forth herein.
9. The Escrow Agent may rely conclusively and shall be protected in
acting upon any order, notice, demand, certification, statement,
instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as
to the truth and acceptability of any information therein contained) which
is believed by the Escrow Agent to be genuine and to be signed or presented
by the proper person or persons. The Escrow Agent shall not be bound by
any notice or demand, or any waiver, modification, termination or
rescission of this agreement or any of the terms hereof, unless evidenced
by a writing delivered to the Escrow Agent signed by all other parties
hereto and, if the duties or rights of the Escrow Agent are affected,
unless it shall give its prior written consent thereto.
10. The Escrow Agent shall be indemnified and held harmless
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by the Assignor from and against any and all expenses (including reasonable
counsel fees and disbursements and including any liability for taxes and
for penalties in respect of taxes, or investment income on the Securities
Collateral), or loss suffered by the Escrow Agent in connection with any
action, suit or other proceeding involving any claim, or in connection with
any claim or demand which in any way, directly or indirectly, arises out of
or relates to this Agreement, the services of the Escrow Agent hereunder,
the Securities Collateral or other property held by it hereunder or any
income earned from investment of such Securities Collateral, unless it
shall have been judicially determined that such claim or demand arises out
of gross negligence of the Escrow Agent. For the purposes hereof, the term
"expense" or "loss" shall include all amounts paid or payable to satisfy
any claim, demand, action, suit or proceeding settled with the express
written consent of the Escrow Agent, and all costs and expenses,
disbursements, paid or incurred in investigating or defending against any
such claim, demand, action, suit or proceeding.
ii. It is understood and agreed that should any dispute arise with
respect to the payment and/or ownership or right of possession of the
Securities Collateral and earnings thereon, the Escrow Agent is authorized
and directed, subject to the provisions contained herein, to retain in its
possession, without liability to anyone, all or any part of said Securities
Collateral and payments, thereon until such dispute shall have been settled
either by mutual agreement by the parties concerned
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or by the final order, decree or judgment of a court or other tribunal of
competent jurisdiction in the United States of America and time for appeal
has expired and no appeal has been perfected, but the Escrow Agent shall be
under no duty whatsoever to institute or defend any such proceedings.
12. The Escrow Agent may resign at any time by giving fifteen (15)
days written notice to the other parties hereto in which case the
Securities Collateral shall be delivered to the Assignee.- with all
necessary documents of transfer, or stock powers and authorizations to
effect transfer of the Securities Collateral to the Assignee as collateral
for the Loan.
13. Notwithstanding anything to the contrary contained herein, the
Escrow Agent shall disburse and/or release the Securities Collateral or any
portion thereof, pursuant to the terms of any joint written order signed by
duly authorized officer of the Assignor and a duly authorized officer of
the
Assignee.
14. This agreement shall terminate automatically on the first to
occur of (i) the disposition of the Securities Collateral and all earnings
thereon in accordance with this Agreement or (ii) the payment of the Loan.
This Agreement may also be terminated by written notice to the Escrow Agent
duly executed by the Assignor and the Assignee that this Agreement has been
terminated. Unless written notice is received by the Escrow Agent that an
event of default has occurred, in the event of termination all Securities
Collateral, including all earnings
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thereon, shall be disbursed to the Assignor.
15. This Agreement may be executed in several counterparts, each of
which shall be considered a legal original for all purposes. Any fully
signed counterpart may be introduced into evidence in any action or
proceeding without having to produce the others.
16. Any notices required or permitted to be given hereunder shall be:
(i) given by registered or certified mail, postage prepaid, return receipt
requested, or (ii) personally delivered or (iii) forwarded by overnight
courier service (iv) or by facsimile, transmission confirmed, in each
instance addressed to the addresses set forth below or facsimile numbers
(or such other addresses as the parties may for themselves designate in
writing as provided herein for the purpose of receiving notices ▇▇▇▇▇▇▇▇▇);
IF TO THE ASSIGNOR:
First Albany Companies Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO THE ASSIGNEE:
OnBank & Trust Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Commercial Credit Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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IF TO THE ESCROW AGENT:
First Albany Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
All notices shall be in writing and shall be deemed given upon actual
delivery.
IN WITNESS WHEREOF, the undersigned parties hereto have signed this
Agreement as of the 29th day of March, 1996.
FIRST ALBANY COMPANIES INC.
BY:________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
FIRST ALBANY CORPORATION
BY:________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Chief Financial Officer
ONBANK & TRUST CO.
BY:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
PARTICIPATION AGREEMENT
THIS AGREEMENT made the 29 day of March, 1996, between OnBank & Trust Co.,
a New York banking corporation, located and having its principal place of
business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, hereinafter referred
to as "OnBank", and The ▇▇▇▇▇▇ City Savings Institution, a New York banking
corporation, located and having its principal place of business at One
▇▇▇▇▇▇ City Centre, Hudson, New York 12534, hereinafter referred to as
"▇▇▇▇▇▇",
WHEREAS, the above parties desire to participate in the funding of a
loan to First Albany Companies Inc. in the proportions hereinafter set
forth which loan shall be evidenced by a certain note in the principal
amount of Five Million Five Hundred Thousand and 00/100 Dollars
($5,500,000.00), a copy of which is attached hereto as Exhibit A,
hereinafter referred to as the "Note", running from First Albany Companies
Inc. to OnBank, and which Note shall be secured by a security interest in
all furniture, fixtures, machinery and equipment of First Albany Companies
Inc., as evidenced by a general Security Agreement ("Agreement") , a copy
of which is attached hereto as Exhibit B, now owned or hereafter acquired,
and wheresoever located, including all proceeds therefrom, and
WHEREAS, said Lenders are authorized by law and by their governing
Boards to grant this loan,
NOW, THEREFORE, in consideration of One Dollar ($1.00) lawful money of
the United States, each to the other in hand paid, receipt and sufficiency
whereof is hereby acknowledged, and the covenants and agreements herein
contained, the parties hereto do hereby
mutually covenant and agree as follows:
1. The principal amount of the Note to be granted to First Albany
Companies Inc. shall be in the sum of $5,500,000.00 and the participation
of each of the parties hereto shall be as follows:
OnBank 50% or $2,750,000.00
The ▇▇▇▇▇▇ City Savings Institution 50% or $2,750,000.00
TOTAL 100% or $5,500,000.00
The parties hereto each agree to make these funds available at the loan
closing, provided, however, that the attorneys for each of the parties
shall be fully satisfied that First Albany Companies Inc. is in compliance
with all of the terms and conditions of the commitment letters, has
executed and/or delivered all documents required in connection with this
loan, and is not otherwise in default. The investment made by each of said
parties hereto shall not be junior or subordinate one to the other, but
shall be equal and coordinate in lien.
2. The ownership rights of ▇▇▇▇▇▇ as set forth herein shall not in any
way be affected by any rights of any secured or unsecured creditor of
OnBank, including any trustee in bankruptcy, nor shall same in any manner
be considered an asset of OnBank.
3. The Note and Security Agreement shall run to and be taken in the
name of OnBank and the parties hereto are to participate as aforesaid in
the proportion of such original principal amount or any reduced amount from
time to time outstanding. It is agreed by the
parties hereto that this loan shall be serviced by OnBank without a
servicing fee. In this regard, OnBank will handle all collections and will
keep all records thereof in its normal course of business, which records,
among other things, shall reflect the interest of the parties
hereto in the Note in the manner satisfactory to the examining authority.
Such records shall be accessible for inspection by ▇▇▇▇▇▇ at all reasonable
times during business hours. In the event it is necessary for OnBank to
incur any out-of-pocket expenses during the course of servicing the loan,
OnBank shall consult with ▇▇▇▇▇▇ prior to incurring such expenses, such
expenses shall be borne equally by the parties and ▇▇▇▇▇▇ shall pay to
OnBank its proportionate share of such out-of-pocket expenses upon request.
4. In the event of any default under the terms and conditions of
the said Note or Security Agreement, OnBank will immediately notify ▇▇▇▇▇▇
of such default and, after consultation with ▇▇▇▇▇▇, all appropriate and
commercially reasonable steps will be taken to immediately remedy such
default; if such default is not cured, appropriate proceedings shall be
instituted by OnBank for the benefit of both parties hereto to include
collecting the amount due and/or exercising the rights granted under the
Security Agreement; in the event of repossession of the collateral pledged
by First Albany Companies Inc., ▇▇▇▇▇▇ agrees to take possession of the
collateral in its name and to hold the same in trust in proportion to the
respective unpaid balances of OnBank's and ▇▇▇▇▇▇'▇ shares of the loan.
OnBank agrees to consult with ▇▇▇▇▇▇ regarding collection, safeguarding
and disposition of the collateral and to act in a commercially reasonable
manner in this regard. Any monies received from disposition of the
collateral (after deduction of necessary expenses incurred in connection
with the collection, safeguarding and disposition of the collateral) shall
be paid to OnBank and ▇▇▇▇▇▇ in equal shares. No distribution of monies
shall be made to one of the parties, without the other party also receiving
the same amount, to be paid at the same time.
5. If requested, each of the parties hereto shall receive certified
true copies of the Note and Security Agreement, as well as applicable
certificates of insurance and also copies of all other documents executed
by First Albany Companies Inc. and/or any of its subsidiaries, agents,
attorneys or other representatives in connection with the loan.
6. OnBank shall maintain possession of the original Note and
Security Agreement and all other original instruments, documents,
agreements and policies of fire and other hazard insurance in connection
with this loan, as a trustee for the parties pursuant to this Agreement.
7. OnBank agrees to use its best efforts to collect all sums due in
accordance with the terms of the Note, Security Agreement, and all
agreements supplemental thereto, to act in a commercially reasonable manner
and to receive same for the pro rata benefit of the parties hereto,
including any and all interest or other payments on account of income, and
any and all amortization or other payments on account of principal, and any
other funds paid to it in connection with the Note and Security Agreement,
and to promptly remit to ▇▇▇▇▇▇ its proportionate share.
8. OnBank shall consult with ▇▇▇▇▇▇ regarding all management
decisions and shall not take any action in this regard (except for normal
loan servicing) without first consulting ▇▇▇▇▇▇, and shall not, without the
prior written consent of ▇▇▇▇▇▇, make or consent to any modification or
alteration of the terms of the Note, Security Agreement
or any other loan documents, or make or consent to any release,
substitution or exchange of the collateral.
9. The parties acknowledge that the current indebtedness owing by
First Albany Companies Inc. to ▇▇▇▇▇▇ shall be paid in full out -of the
proceeds of this new loan. If requested by ▇▇▇▇▇▇, and after payment in
full by First Albany Companies Inc. to ▇▇▇▇▇▇ of all amounts due on the
current outstanding obligation of First Albany Companies Inc., ▇▇▇▇▇▇
agrees to assign to OnBank, for the purposes of this loan, all UCC-1
filings made pursuant to the provisions of 1 previous Security Agreements
given to ▇▇▇▇▇▇ by First Albany Companies Inc. and also by First Albany
Corporation. Such assignments will not effect ▇▇▇▇▇▇'▇ rights pursuant to
this Participation Agreement.
10. No party hereto makes any warranty of any kind, express or
implied, with respect to the Note and no party shall be liable to the other
for any loss not due to its own negligence. Specifically, and without
limiting the above, ▇▇▇▇▇▇ makes no warranties or representations with
respect to the validity of any UCC-1 statements previously filed by ▇▇▇▇▇▇
which are to be assigned to OnBank, and neither party shall have any
liability to the other with respect to any claim that such documents were
not properly filed and/or that ▇▇▇▇▇▇ does not have a perfected security
interest in the collateral previously pledged to ▇▇▇▇▇▇ by First Albany
Companies Inc. and/or First Albany Corporation pursuant to previous
Security Agreements.
ii. OnBank shall forward to ▇▇▇▇▇▇ copies of any and all
correspondence, demands, notices or other pertinent information regarding
the condition of the loan and shall provide ▇▇▇▇▇▇ with
monthly status reports regarding the payment history of the loan. 12.
This Agreement, the Note and Security Agreement, or any part thereof or
interest therein, shall not be assigned, sold, or in any manner pledged as
collateral by either party without the express written consent of the other
party.
the 13.
This Agreement contains the entire- agreement between
parties and the same cannot be modified or changed, except by an instrument
in writing executed on behalf of the parties hereto in like manner. This
Agreement effects only the rights of the parties hereto and no rights shall
arise herefrom for the benefit of any other party. No other person or
entity, other than the parties hereto shall be entitled to rely upon any of
the terms hereof.
14. Any notices or demands required by this Agreement shall be in
writing and delivered personally or mailed to the party entitled to such
notice or demand at the address set forth above, opposite its name, or at
such other address as any party may notify the others in writing. Such
notices shall be directed as follows:
ONBANK ▇▇▇▇▇▇
OnBank & Trust Co. The Hudson City Savings Institution
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ One ▇▇▇▇▇▇ City Centre
P.O. Box 1191 P.O. Box 76
Albany, NY 12201-1191 ▇▇▇▇▇▇, New York 12534
Att: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Att: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice-President Senior Vice President
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers the day and year
first above written.
ONBANK & TRUST CO. THE ▇▇▇▇▇▇ CITY SAVINGS INSTITUTION
By:___________________________ By:_____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. MAY
Vice President Commercial Loan Officer
STATE OF NEW YORK :
Ss.:
COUNTY OF ALBANY :
On this 29th day of March, 1996, before me personally came ▇▇▇▇▇▇▇ ▇.
▇▇▇, to me known, who, being by me duly sworn, did depose and say that he
resides in Saratoga, New York; that he is a Commercial Loan Officer at The
▇▇▇▇▇▇ City Savings Institution, the corporation described in and which
executed the foregoing instrument; and that he signed his name thereto by
order of the Board of Trustees of said corporation.
________________________
Notary Public
STATE OF NEW YORK :
Ss.:
COUNTY OF ALBANY :
On this 29th day of March, 1996, before me personally came ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that is
the Vice President of OnBank & Trust Co., the corporation described in and
which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of said corporation.
________________________
Notary Public
