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Exhibit 10.18
REVOLVING CREDIT AGREEMENT
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AGREEMENT made this 10th day of December, 1996, by and between FLEET
NATIONAL BANK, a national banking association with an office located at 000
Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx (the "Lender") and HANOVER CAPITAL
PARTNERS, LTD.., a New York corporation with its principal place of business
located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Borrower").
I. DEFINITIONS
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1.01. CERTAIN DEFINED TERMS. In addition to the definitions contained in
the foregoing recital clause, the following terms shall have the meanings
provided below:
"ADVANCE" OR "ADVANCES" means the loans and advances made under this
Agreement on a revolving basis according to the Borrowing Base.
"AGREEMENT" means this Agreement, as amended from time to time.
"BORROWING BASE" means Receivables under One Hundred Twenty (120)
days, Contracts in Progress and Selected Contracts in Progress.
"BORROWING BASE FORMULA" means Eighty percent (80%) of the advance
rate of the Receivables under One Hundred Twenty (120) days, Forty percent (40%)
of the advance rate of the Contracts in Progress and Fifty-Five percent (55%) of
the advance rate of the Selected Contracts in Progress.
"XXXXXXXX" means Xxxx X. Xxxxxxxx.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning ascribed to such term in the
Security Agreement.
"CONTRACTS IN PROGRESS" means contracts of the Borrower less than Five
Hundred Thousand Dollars ($500,000.00).
"DEFAULT" means any of the events specified in Article VII hereof
which with the passage of time or giving of notice or both would constitute an
Event of Default.
"EVENT OF DEFAULT" means an Event of Default described in Article VII
hereof.
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"GAAP" means generally accepted accounting principles in the United
States.
"GUARANTORS" shall mean Xxxx X. Xxxxxxxx, Hanover Capital Securities,
Inc., Hanover Capital Mortgage Corporation, Hanover Joint Ventures, Inc.,
Hanover Capital Advisors, Inc. and Hanover Capital Mortgage Fund, Inc.
"GUARANTY." shall mean the Guaranty of each of the Guarantors dated of
even date.
"INDEBTEDNESS" means, for the Borrower (i) all indebtedness or other
obligations of the Borrower for borrowed money or for the deferred purchase
price of property or services, (ii) all indebtedness or other obligations of any
other Person for borrowed money or for the deferred purchase price of property
or services the payment or collection of which the Borrower has guaranteed
(except by reason of endorsement for collection in the ordinary course of
business) or in respect of which the Borrower is liable, contingently or
otherwise, including, without limitation, liable by way of agreement to
purchase, to provide funds for payment, to supply funds to or otherwise to
invest in such other Person; or otherwise to assure a creditor against loss,
(iii) all indebtedness or other obligations of any other Person for borrowed
money or for the deferred purchase price of property or services secured by (or
for which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance upon or in property (including, without
limitation, accounts and contract rights) owned by the Borrower, whether or not
the Borrower has assumed or become liable for the payment of such indebtedness
or obligations and (iv) capitalized lease obligations of the Borrower.
"LOAN ACCOUNT" means the account evidencing the Advances into which
the Lender shall record all appropriate debits and credits.
"NOTE" shall mean the Borrower's reducing revolver note in the form
attached hereto as Exhibit A, which Note is hereby incorporated herein by
reference and made a part hereof.
"NOTICE OF BORROWING," means a notice substantially in the form of
EXHIBIT B attached hereto.
"OBLIGATIONS" means all obligations and all liabilities of the
Borrower under this Agreement, the Note and the Security Documents.
"PERMITTED ENCUMBRANCES" shall mean those encumbrances, if any,
permitted by the Lender on the property of the Borrower as set forth in EXHIBIT
C attached hereto and incorporated herein by reference.
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"PERSON" means and includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"RECEIVABLES" means all accounts, contract rights, instruments,
documents, chattel paper and general intangibles (including, without limitation,
choses in action, tax refunds, and insurance proceeds) of the Borrower; any
other obligations or indebtedness owed to the Borrower from whatever source
arising; all rights of the Borrower to receive any payments in money or kind;
and all of the foregoing, whether now existing or hereafter created or acquired
or in which the Borrower may now have or hereafter acquire an interest.
"REVOLVING LOAN CEILING" means an amount equal to the LESSER of the
Borrowing Base subject to the Borrowing Base Formula or: (i) Two Million Dollars
($2,000,000.00) from the date hereof through December 31, 1996, (ii) One Million
Eight Hundred Fifty Thousand Dollars ($1,850,000.00) from January 1,1997 through
June 30,1997, (iii) One Million Seven Hundred Thousand Dollars ($1,700,000.00)
from July 1,1997 through December 31, 1997, (iv) One Million Five Hundred Fifty
Thousand Dollars ($1,550,000.00) from January 1,1998 through June 30,1998, (v)
One Million Four Hundred Thousand Dollars ($1,400,000.00) from July 1,1998
through December 31, 1998, (vi) One Million Two Hundred Fifty Thousand Dollars
($1,250,000.00) from January 1,1999 through June 30,1999, and (vii) One Million
One Hundred Thousand Dollars ($1,100,000.00) from July 1,1999 through December
31, 1999.
"SECURITY AGREEMENT" means the Security Agreement by and between the
Borrower and the Lender dated even date.
"SECURITY DOCUMENTS" means the Security Agreement, the Guaranty and
any other agreement or instrument now or hereafter securing the Note.
"SUBSIDIARIES" means Hanover Capital Securities, Inc., Hanover Capital
Mortgage Corporation, Hanover Joint Ventures, Inc., Hanover Capital Advisors,
Inc. and Hanover Capital Mortgage Fund, Inc.
"SELECTED CONTRACTS IN PROGRESS" means contracts of the Borrower
evidenced in writing and in excess of Five Hundred Thousand Dollars
($500,000.00), and approved by the Lender.
"TARGET BALANCE AGREEMENT" shall mean the target balance agreement in
the form attached hereto as EXHIBIT D, which Target Balance Agreement is hereby
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incorporated herein by reference and made a part hereof.
1.02. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP consistent with those applied
in the preparation of all financial data submitted pursuant to this Agreement
and prepared in accordance with GAAP.
II. GENERAL TERMS
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2.01. REVOLVING LOAN. During the term of this Agreement, the Lender agrees
to make Advances in amounts which in the aggregate at any single time during
said term shall not exceed the Revolving Loan Ceiling; provided that the
Lender's agreement to make Advances shall terminate immediately and all future
Advances shall be at the sole discretion of the Lender if (a) there shall have
occurred or there shall exist an event that constitutes a Default or an Event of
Default or (b) there exists a default under any other agreement between the
Lender and the Borrower. The Advances shall be evidenced by the Borrower's Loan
Account, in which the Lender shall record all appropriate debits and credits as
provided herein, and by the Note.
2.02. LOAN ACCOUNT. Within the limit of the Revolving Loan Ceiling, upon
request by the Borrower for Advances, which include funds advanced under the
Target Balance Agreement (which will be in multiples of One Thousand Dollars
($1,000.00) or the unadvanced balance of the maximum amount of the then-existing
Revolving Loan Ceiling, whichever is less), the Lender will enter such Advances
when made to the Borrower as debits in the Borrower's Loan Account. The Lender
will also record in the Loan Account, in accordance with customary accounting
practice, all other charges, expenses and other items properly chargeable to the
Borrower, all payments by the Borrower and other appropriate debits and credits.
The debit balance in the Loan Account shall reflect the amount of the Borrower's
indebtedness to the Lender, and whatever interest or charges may be due from
time to time. The Loan Account shall be prima facie evidence as to all such
indebtedness and other amounts; PROVIDED, HOWEVER, that the failure of the
Lender to record any amount shall not limit or otherwise affect the obligations
of the Borrower to repay each Advance made or effected hereunder together with
interest thereon.
2.03. STATEMENTS. The Lender shall render a monthly statement of account to
the Borrower which shall be considered correct, accepted by and binding on the
Borrower, unless it notifies the Lender of any changes or corrections within
thirty (30) days of the sending of such statement.
2.04. REPAYMENTS OF PRINCIPAL AND INTEREST. The Borrower promises to repay
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to the Lender the Advances, together with interest thereon, in the amount and
according to the payment schedule set forth in the Note.
2.05. FORM OF PAYMENTS. All payments (including prepayments) by the
Borrower on account of principal, interest or any other fee, reimbursement or
other charge due under this Agreement shall be made to the Lender at its
principal place of business prior to 2:00 p.m., on the date of payment in
immediately available funds.
2.06. TERMINATION. This Agreement shall terminate on December 31, 1999, and
as of the close of business on that date, the then outstanding debit balance in
the Borrower's Loan Account shall automatically become due and payable unless
this Agreement shall be extended by the Lender in writing.
2.07. BORROWING PROCEDURE. In the event that the Target Balance Agreement
is NOT in effect during any portion of this Agreement, then whenever the
Borrower desires to borrow under this Agreement, it shall deliver to the Lender
a Notice of Borrowing (which may be telephonic confirmed promptly in writing) no
later than 11:00 a..m. (Providence, Rhode Island time). The Notice of Borrowing
shall specify (a) the proposed funding date and (b) the amount of the proposed
Advance. The Lender shall not incur any liability to the Borrower in acting upon
any telephonic notice referred to above which the Lender believes in good faith
to have been given by a duly authorized officer or other person authorized to
borrow on behalf of the Borrower or for otherwise acting in good faith and, upon
the funding of an Advance by the Lender in accordance with this Agreement
pursuant to any telephonic notice, the Borrower shall have borrowed such Advance
hereunder. Notwithstanding the foregoing, it shall be agreed by and between the
parties that the terms of the Target Balance Agreement shall be in effect
simultaneous with the execution of this Agreement.
2.08. DISBURSEMENT OF FUNDS. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.07 hereof (or a telephonic notice in lieu
thereof) with respect to an Advance, the Lender shall, subject to Section 2.01
hereof, make the Advance available to the Borrower on such funding date by
causing an amount of same day funds equal to such Advance to be credited to the
account of the Borrower at the office of the Lender.
2.09. USE OF PROCEEDS. The borrowing under this Agreement shall be used
primarily for Borrower's short-term working capital requirements.
2.10. SECURITY FOR THE NOTE. The Note shall be secured by the Security
Documents and by such additional security as shall be agreed to by the Lender
and the Borrower from time to time.
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2.11. PARTICIPATIONS. The Lender reserves the right without notice to the
Borrower to sell participations in the Advances, in whole or in part, provided
that the Borrower's rights under this Agreement will not be modified thereby.
Furthermore, the Lender shall have the right to make available to actual or
potential participants all financial information, public or non-public, that the
Lender receives from the Borrower.
III. REPRESENTATIONS AND WARRANTIES
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To induce the Lender to enter into this Agreement and make the Advances,
the Borrower represents and warrants to the Lender (which representations and
warranties shall survive the delivery of the Note and the making of the
Advances) that:
3.01. FINANCIAL STATEMENTS. All financial statements previously furnished
by the Borrower to the Lender have been prepared in accordance with GAAP applied
on a basis consistent with that of preceding periods, are complete and correct,
and fully and accurately reflect the financial condition of the Borrower as of
said dates, and the results of its operations for the periods stated. To the
best of the Borrower's knowledge and belief, the Borrower does not have any
contingent obligations, liabilities for taxes, unusual long-term commitments or
lease commitments except as specifically mentioned in such financial statements
or the notes thereto. Since the date of the most recent financial statements
submitted to Lender there has been no material adverse change in the financial
condition of the Borrower, and since that date no dividends or other
distributions have been declared or paid or made to the stockholders of the
Borrower.
3.02. ORGANIZATION AND QUALIFICATION. The Borrower (i) is duly organized,
validly existing and in good standing under the laws of its state of
incorporation, (ii) has the corporate power and authority to own its properties
and to carry on business as now being conducted and is qualified to do business
in every jurisdiction where such qualification is necessary and (iii) has the
corporate power to execute and deliver this Agreement, to borrow hereunder and
to execute and deliver to the Lender the Note, the Security Documents and any
other instruments required hereunder.
3.03. NO CONFLICT. (a) The Borrower has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and to authorize the execution, delivery and performance of this Agreement, the
Note, the Security Documents and any other agreements referred to herein or
related to the Advances.
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(b) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any governmental authority, bureau or agency
which are required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, the Note and any other agreements
referred to herein have been duly obtained and are in full force and effect.
(c) The execution, delivery and performance of this Agreement, the
Note, the Security Documents and any other agreement referred to herein will not
be in conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under, any provision of any existing law or
regulation or of any order or decree of any court or governmental authority,
bureau or agency or of the Articles of Incorporation or By-laws of the Borrower
or of any mortgage, indenture, contract or other agreement to which the Borrower
is a party or which purports to be binding upon it or upon any of its properties
or assets, and will not result in the creation or imposition of any lien, charge
or encumbrance on, or security interest in, any of its properties or assets,
except in favor of the Lender.
3.04. LITIGATION. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower which, if adversely determined, would have a material adverse
effect on the business operations, properties, assets or condition (financial or
otherwise) of the Borrower. The Borrower is not in default with respect to any
order of any court, arbitrator or governmental body arising out of any action,
suit or proceeding under any statute or other law.
3.05. NO DEFAULT. The Borrower is not a party to any agreement or
instrument or subject to any restriction adversely affecting its business,
properties or assets, operations or conditions, financial or otherwise. The
Borrower is not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which its assets may be bound, and no
Default or Event of Default as hereinafter specified has occurred and is
continuing hereunder.
3.06. PROPERTIES. The Borrower has good title to, or valid leasehold
interests in, all of its properties and assets, real and personal, free and
clear of all mortgages, liens and encumbrances, except for the Permitted
Encumbrances.
3.07. CAPITALIZATION. EXHIBIT E attached hereto correctly describes the
authorized capital stock of the Borrower, and correctly sets forth the name of
each stockholder of the Borrower and the number of shares owned by each such
stockholder for each class of stock of the Borrower.
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3.08. TAXES. The Borrower has filed or caused to be filed all tax returns
required to be filed, and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it, and no tax liens have been filed
and no claims are being asserted, or proposed or threatened to be asserted, with
respect to any taxes which are not reflected in the financial statements
referred to in Section 3.01 hereof, and the Borrower is currently providing
adequate reserves for all current taxes.
3.09. NO PENDING INSOLVENCY. Any funds advanced to the Borrower under this
Agreement do not and will not render the Borrower insolvent; the Borrower is not
contemplating either the filing of a petition under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
its property and the Borrower has no knowledge of any Person contemplating the
filing of any such petition against it, and none of such properties and assets
owned by the Borrower is subject to any mortgage, security interest, pledge,
lien, charge, encumbrance or title retention or other security agreement or
arrangement of any nature whatsoever, except for the Permitted Encumbrances.
3.10. STATEMENTS. No statement of fact made by or on behalf of the Borrower
in this Agreement or in any certificate or schedule furnished to the Lender
pursuant hereto, contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements contained therein or
herein not misleading. There is no fact presently known to the Borrower which
has not been disclosed to the Lender which materially affects adversely nor as
far as the Borrower can foresee, will materially affect adversely the property,
business, prospects or condition (financial or otherwise) of the Borrower.
3.11. LEGALLY ENFORCEABLE AGREEMENT. This Agreement, the Note, the Security
Documents and any other documents executed by the Borrower in connection with
the Advances, are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms,
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and except as certain remedies thereunder may be subject to equitable
principles.
3.12. REGULATION U. The Borrower is not engaged principally, or as one of
the Borrower's important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System), and will not use the
proceeds of the Advances so as to violate Regulation U as it may be amended or
interpreted from time to time by the Board of Governors of the Federal Reserve
System.
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3.13. PATENTS, ETC. The Borrower possesses all franchises, patents, patent
applications, patent licenses, copyrights, trademarks, service marks,
tradenames, licenses and permits, and rights in respect of the foregoing,
necessary for the conduct of its business substantially as now conducted without
any known conflict with any rights of others.
3.14. BROKERAGE COMMISSIONS. The making of the Advances or the Lender's
acquisition of the Note or any of the Security Documents will not subject the
Lender to any claim for a brokerage commission.
IV. CONDITIONS OF MAKING ADVANCES
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The obligation of the Lender to make the Advances hereunder is subject to
the following conditions precedent:
4.01. REPRESENTATIONS. The representations and warranties set forth in
Article III hereof shall be true and correct on and as of the date hereof and
the date each Advance is made.
4.02. CERTIFICATION. The Borrower shall have executed and delivered to the
Lender, upon the execution of this Agreement, the following: (a) A certificate
of the Secretary of the Borrower certifying to the incumbency of the officers of
the Borrower and the votes of the Borrower's Board of Directors authorizing the
execution and delivery of this Agreement, the Note, the Security Documents and
any other documents related to the Advances, and (b) such other supporting
documents as the Lender may reasonably request.
4.03. GOOD STANDING. The Lender shall have received for the Borrower, upon
the execution of this Agreement, Certificates of Good Standing from the New York
Secretary of State and Division of Taxation.
4.04. LEGAL MATTERS. All legal matters incident to the transactions hereby
contemplated shall be satisfactory to counsel for the Lender.
4.05. NO DEFAULT. No Default or Event of Default shall have occurred.
4.06. COMMITMENT LETTER. There shall be compliance with all terms of the
commitment letter of the Lender to the Borrower dated October 18, 1996, as
amended.
V. AFFIRMATIVE COVENANTS
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The Borrower covenants and agrees that, from the date hereof and until
payment in full of the principal of, and interest on, the Note and any other
Indebtedness of the Borrower to the Lender, whether now existing or arising
hereafter, unless the Lender shall otherwise consent in writing, the Borrower
will:
5.01. MAINTENANCE OF PROPERTIES; INSURANCE. (a) Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
rights, licenses, permits and franchises and comply with all laws and
regulations applicable to it; at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and keep the same in good repair,
working order and condition, and from time to time, make, or cause to be made,
all needful and proper repairs, renewals, replacements, betterments and
improvements thereto, so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; and maintain
insurance in accordance with the requirements of the Security Documents.
(b) Comply with all applicable laws and regulations, whether now in
effect or hereafter enacted or promulgated by any governmental authority having
jurisdiction over the property which is the subject of the Security Documents.
5.02. PAYMENT OF OBLIGATIONS AND TAXES. Pay and discharge or cause to be
paid and discharged all of its obligations and liabilities and all taxes,
assessments and governmental charges or levies imposed upon it or upon its
respective income and profits or upon any of its property, real, personal or
mixed, or upon any part thereof, before the same shall become in default, as
well as all lawful claims for labor, materials and supplies or otherwise, which,
if unpaid, might become a lien or charge upon such properties or any part
thereof; provided that the Borrower shall not be required to pay and discharge
or cause to be paid and discharged any such tax, assessment, charge, levy or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested; and provided, further, that payment with respect to any such tax,
assessment, charge, levy or claim shall be made within ten (10) days after entry
of final judgment and before any of its property shall be seized or sold in
satisfaction thereof.
5.03. LEGAL PROCEEDINGS. Give prompt written notice to the Lender of any
proceedings instituted against it in any Federal or state court or before any
commission or other regulatory body, Federal, state or local, which, if
adversely determined, would have an adverse effect upon its business,
operations, properties, assets, or condition, financial or otherwise.
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5.04. BOOKS, RECORDS AND REPORTS. At all times keep proper books of record
and accounts in which full, true and correct entries will be made of its
transactions in accordance with GAAP and in a manner satisfactory to the Lender.
The Borrower hereby authorizes the Lender to make or cause to be made, at the
Borrower's expense and in such reasonable manner and at such reasonable times as
the Lender may require inspections and audits of any books, records and papers
in the custody or control of the Borrower or others, relating to the Borrower's
financial or business conditions, including the making of copies thereof and
extracts therefrom.
5.05. FINANCIAL STATEMENTS. Furnish to the Lender:
(a) Within one hundred twenty (120) days of the end of each fiscal
year, consolidated audited balance sheets and statements of profit and loss and
retained earnings and cash flows, each prepared in accordance with GAAP,
consistently applied, in reasonable detail and certified without qualification
by independent certified public accountants selected by it and acceptable to the
Lender, the form of certification to be also satisfactory to the Lender, showing
its financial condition at the close of such fiscal year, and the results of
operations during such year.
(b) Within forty-five (45) days after the end of each quarter in each
such fiscal year, consolidated balance sheets and statements of profit and loss
and retained earnings, each prepared in reasonable detail in accordance with
GAAP, consistently applied, and consistent in format with the financial
statements furnished under the preceding subparagraph (a), certified by the
President or Chief Financial Officer of the Borrower and of each of the
Subsidiaries as fairly representing the consolidated financial position of the
Borrower and each of the Subsidiaries, such balance sheets to be as of the close
of such quarter and such other statements to be for the period from the
beginning of the then current fiscal year to the end of such quarter in each
case subject to audit and year-end adjustments.
(c) Within twenty (20) days after the end of each month during the
term of this Agreement, an aged analysis of all outstanding Receivables in form
and substance satisfactory to the Lender.
(d) Within twenty (20) days after the end of each month during the
term of this Agreement, a listing of the Contracts in Progress in form and
substance satisfactory to the Lender.
(e) Within twenty (20) days after the end of each month during the
term of this Agreement, a borrowing base certificate in form and substance
satisfactory to the Lender.
(f) Within thirty (30) days of the prior year's anniversary of
receipt, the
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personal financial statement of Xxxxxxxx, in form and substance satisfactory to
the Lender.
(g) Promptly, from time to time, such other information regarding its
operations, assets, business, affairs and financial condition, as the Lender
may reasonably request.
5.06 ADVERSE CHANGES. Promptly advise the Lender of (a) all litigation and
proceedings affecting the Borrower in which the amount involved is Twenty-Five
Thousand Dollars ($25,000.00) or more and is not covered by insurance; (b) any
material adverse change in its condition, financial or otherwise, or (c) any
Default described in Article VI hereof or of the occurrence of any event which
upon notice or lapse of time or both would constitute such an Event of Default.
5.07. ACCOUNTING. Maintain a standard system of accounting in accordance
with GAAP.
5.08. DEPOSITORY/CASH MANAGEMENT ACCOUNT. Use the Lender as the principal
bank of account of the Borrower's funds. Further, establish a cash management
(target balance) account with the Lender.
5.09. ADDITIONAL INSTRUMENTS. Promptly execute and deliver or cause to be
executed and delivered to the Lender all such additional and/or supplemental
other instruments and documents from time to time as the Lender deems necessary
or appropriate for the performance of the Borrower's obligations under this
Agreement, so long as such additional instruments do not create any additional
liabilities or obligations of the Borrower.
5.10. SUBORDINATION OF DEBT. Subordinate all officer and shareholder debt
to each Advance, pledge all such debt to the Lender as security for the
Advances and not make any payments on account of such debt without the prior
written consent of the Lender.
5.11. FINANCIAL COVENANTS. Maintain (i) maximum debt to worth ratio, as
that ratio is determined by the Lender, of 3.0xl.0 as of December 31, 1996 and
thereafter for the term of this Agreement, which ratio shall be tested annually
as of the Borrower's fiscal year-end, (ii) minimum debt service coverage ratio,
as that ratio is determined by the Lender, of 1.25xl.0 as of December 31, 1996
and thereafter for the term of this Agreement, which ratio shall be tested
quarterly on a rolling four-quarters basis, (iii) maximum down-streaming from
the Borrower to any or all of the Subsidiaries of no more than One Hundred
Thousand Dollars ($100,000.00) in the aggregate, which amount shall be tested
annually at the Borrower's fiscal year-end.
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VI. NEGATIVE COVENANTS
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The Borrower covenants and agrees that, until payment in full of the
principal of, and interest on, the Note and any other Indebtedness of the
Borrower to the Lender, whether now existing or arising hereafter, unless the
Lender shall otherwise consent in writing, it will not, directly or indirectly:
6.01. INDEBTEDNESS. Incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any Indebtedness, liability or lease
commitment, except upon such terms and conditions as may be mutually agreed upon
in advance by the Borrower and the Lender and except:
(a) Indebtedness under this Agreement and/or any of the Security
Documents and/or evidenced by the Note;
(b) Indebtedness with respect to trade obligations and other normal
accruals in the ordinary course of business not yet due and payable in
accordance with customary trade terms or with respect to which the Borrower is
contesting in good faith the amount or validity thereof by appropriate
proceedings and then only to the extent the Borrower has set aside on its books
adequate reserves therefor;
(c) Indebtedness described in the financial statements and existing on
the date hereof; provided that such Indebtedness is paid in accordance with its
stated terms without renewal, extension or modification;
(d) Other Indebtedness in the aggregate not in excess of Twenty-Five
Thousand Dollars ($25,000.00).
6.02. LIENS. Create, incur, make, assume or suffer to exist any assignment,
mortgage, pledge, lien, charge, security interest or other encumbrance of any
nature whatsoever on any of its property or assets, now or hereafter owned,
other than in favor of the Lender or other than:
(a) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by appropriate proceedings,
and as to which there shall have been set aside on its books adequate reserves
or other provisions made in accordance with GAAP;
(b) liens securing the Note;
(c) the Permitted Encumbrances;
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(d) liens imposed by law, such as carriers', warehousemen's and
mechanics' liens, bankers' set off rights and other similar liens arising in the
ordinary course of business for sums not yet due or being contested in good
faith and by appropriate proceedings diligently conducted and for which proper
reserve or other provision has been made in accordance with GAAP;
(e) liens arising in the ordinary course of business out of pledges or
deposits under worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or similar
legislation;
(f) liens incurred as purchase money liens or other liens of a
conditional vendor or refundings thereof on property acquired or held by the
Borrower to secure the purchase price of such property; provided that the liens
permitted by this clause (f) shall at all times be confined solely to the
property so purchased and shall secure Indebtedness which does not exceed the
lower of the fair market value on the date of purchase or the cost of the
property so purchased and that any such obligations shall not otherwise be
prohibited by the terms of this Agreement;
(g) liens arising from or upon any judgment or award, provided that
such judgment or award is being contested in good faith by proper appeal
proceedings and only so long as execution thereon shall be stayed;
(h) liens securing Indebtedness in the aggregate not in excess of
Twenty-Five Thousand Dollars ($25,000.00).
6.03. FUNDAMENTAL CHANGES. Dissolve, liquidate, consolidate with, or merge
with, or otherwise acquire all or substantially all of the assets or properties
of, any other corporation, or make any substantial change in its executive
management, or permit any change in its ownership, or engage, directly or
indirectly, in any business substantially different from the business now being
conducted.
6.04. DIVIDENDS. Declare or pay any dividends, or make any distribution of
cash or property, or both, to holders of shares of its capital stock, or
directly or indirectly, redeem, purchase or otherwise acquire for consideration,
any shares of its capital stock, of any class.
6.05. ACCELERATION OF OTHER INDEBTEDNESS. Accelerate the maturity of any
Indebtedness now or hereafter outstanding to any other bank, supplier, or other
third party, or repay the same otherwise than in accordance with its regular
amortization.
6.06. TRANSFER OF INTERESTS. Permit the direct or indirect transfer of any
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interest in the Borrower by any of its present shareholders or the direct or
indirect dilution of the percentage interest in the Borrower currently held by
any present shareholder without the prior written consent of the Lender.
VII. DEFAULTS AND REMEDIES
--------------------------
7.01. EVENTS OF DEFAULT. The following shall constitute Events of Default:
(a) any representation or warranty made herein, or in any report,
certificate, financial statement or other instrument furnished in connection
with this Agreement, or the borrowing hereunder, shall prove to be false or
misleading in any material respect on or as of the date made or deemed made;
(b) default in the payment of any installment of the principal of,
or fees or interest on, the Note after the date when the same shall become due
and payable, whether at the due date thereof or at a date fixed for prepayment
or by acceleration or otherwise;
(c) default, after the expiration of any applicable grace periods,
in the payment of any installment of the principal of, or fees or interest on,
any other Indebtedness of the Borrower to the Lender after the date when the
same shall become due and payable;
(d) default in the due observance or performance of any covenant,
condition or agreement contained in Articles III, IV, V or VI hereof, in the
Note (other than payment) or in the Security Documents, and the continuance of
such default for a period of five (5) business days after the date of
notification from Lender to borrower in writing that such performance or
observance was due;
(e) default in the due observance or performance of any other
covenant, condition or agreement, on the part of the Borrower to be observed or
performed pursuant to the terms hereof, and the continuance of such default for
a period of five (5) business days after the date of notification from Lender
to borrower in writing that such performance or observance was due;
(f) default, after the expiration of any applicable grace periods,
in the due observance or performance of any covenant, promise or provision
contained in any other agreement of the Borrower in favor of the Lender,
including without limitation, any other loan agreement, mortgage deed or
security document;
(g) default with respect to any evidence of Indebtedness of the
Borrower (other than the Note), if the effect of such default is to accelerate
the maturity of such Indebtedness or to permit the holder thereof to cause such
Indebtedness to
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become due prior to the stated maturity thereof, or if any Indebtedness of the
Borrower is not paid, when due and payable, whether at the due date thereof or a
date fixed for prepayment or otherwise;
(h) the Borrower shall (i) apply for or consent to the appointment
of a receiver, trustee or liquidator of it or any of its property, (ii) admit in
writing inability to pay its debts as they mature, (iii) make a general
assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or
insolvent or (v) file a voluntary petition in bankruptcy, or a petition or an
answer seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such law
or if corporate action shall be taken for the purpose of effecting any of the
foregoing;
(i) an order, judgment or decree shall be entered, without the
application, approval or consent of the Borrower by any court of competent
jurisdiction, approving a petition seeking reorganization of the Borrower or
appointing a receiver, trustee or liquidator of the Borrower or of all or a
substantial part of the assets of the Borrower, provided, however, with respect
to such involuntary proceedings, the Borrower shall have thirty (30) days from
the date of such order, judgment or decree to discharge the same;
(j) final judgment for the payment of money in excess of an
aggregate of Ten Thousand Dollars ($10,000.00) shall be rendered against the
Borrower and the same shall remain undischarged for a period of thirty (30)
consecutive days, during which execution shall not be effectively stayed;
(k) the occurrence of any attachment of any deposits or other
property of the Borrower in the hands or possession of the Lender, or the
occurrence of any attachment of any other property of the Borrower in an amount
exceeding Ten Thousand Dollars ($10,000.00) which shall not be discharged within
thirty (30) days of the date of such attachment;
(1) any Event of Default shall occur and be continuing under the
Guaranty;
(m) loss, theft, damage or destruction of any material portion of
the Collateral for which there is either no insurance coverage or for which, in
the opinion of the Lender, there is insufficient insurance coverage;
(n) the occurrence of any adverse change described in Section 5.06
hereof; or
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(o) the Security Documents shall at any time after their execution
and delivery and for any reason cease (i) to create a valid and perfected
mortgage and/or security interest in and to the property purported to be the
subject thereof and/or in the priority agreed to by the parties thereto; or (ii)
to be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by the Borrower, or the
Borrower shall deny it has any further liability or obligation under the
Security Documents.
7.02. ACCELERATION. Upon the occurrence of any such Event of Default and at
any time thereafter during the continuance of such Event of Default, the Lender
may, by written notice to the Borrower, declare the entire principal amount of
the Note, and any and all other Indebtedness of the Borrower to the Lender,
forthwith to be due and payable, whereupon the Note and/or such other
Indebtedness shall become forthwith due and payable, both as to principal and
interest, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the Note or
other evidence of such Indebtedness to the contrary notwithstanding and any
obligation of the Lender to extend further credit pursuant to any of the terms
hereof shall immediately terminate.
7.03. SET-OFF. The Borrower hereby grants to the Lender the right at any
time after the occurrence of an Event of Default to set off or otherwise apply
by the Lender against the payment of all amounts owing in respect to this
Agreement or of any other liabilities, Obligations and Indebtedness of the
Borrower, or any part thereof, whether or not due, in such order as it shall
determine, all tangible and intangible personal property, credits, accounts,
claims and balances of whatever nature of the Borrower at any time in the
possession or control of or owing by the Lender or its agents (remittances and
property to be deemed in possession of the Lender as soon as put in transit to
it) including, without limitation, any balances on deposit in any account of the
Borrower.
7.04. OTHER REMEDIES. The Lender may look to, utilize, and realize upon any
item or portion of any security held by it hereunder or under the Security
Documents, or other instrument securing the Advances or any other Indebtedness,
liabilities, or Obligations of the Borrower to the Lender, whether now existing
or hereafter contracted or acquired, in any order it may elect without
obligation to equalize the burden between or among the separate items of
security or portions thereof or between or among the owners thereof, or to
marshal the same in any way, and the Lender may apply any proceeds of any
security in such order as it shall determine, and after all Indebtedness,
liabilities, and Obligations now or hereafter of the Borrower to the Lender have
been paid in full, the Lender shall account for any security then remaining or
any surplus proceeds of any security
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then remaining to the owner of such security.
VIII. MISCELLANEOUS
-------------------
8.01. SURVIVAL OF REPRESENTATIONS. This Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto, shall survive the making by the Lender of the
Advances, the execution and delivery to the Lender of the Note and the Security
Documents, and shall continue in full force and effect so long as the Note and
any other Indebtedness of the Borrower to the Lender is outstanding and unpaid.
8.02. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party; and all covenants, promises and agreements in this
Agreement contained, by or in behalf of the Borrower shall inure to the benefit
of the respective successors and assigns of the Lender, provided that the
Borrower may not transfer or assign any of its respective rights hereunder
without the prior written consent of the Lender.
8.03. LENDER'S EXPENSES/FEES/ANNUAL RENEWAL FEES. The Borrower will
reimburse the Lender upon demand for all out-of-pocket costs, charges and
expenses of the Lender (including reasonable fees and disbursements of counsel
to the Lender) in connection with (i) the preparation, execution and delivery of
this Agreement, the Note, the Security Documents and any other agreements
hereunder, (ii) any amendments, modifications, consents, or waivers in respect
thereof, (iii any enforcement thereof and (iv) any enforcement of the Lender's
rights with respect to, or the administration, supervision, preservation,
protection of, or realization upon, any property securing the Note and/or this
Agreement. Further, pursuant to this Section and simultaneous with the execution
hereof, Borrower shall tender Lender in cash or certified funds One Thousand
Dollars ($1,000.00) pursuant to the terms of the commitment letter between the
Borrower and Lender, and an annual renewal fee on January 1st of each year
during the term hereof of Two Hundred Fifty Dollars ($250.00).
8.04. GOVERNING LAW. This Agreement, the Note and the Security Documents
(unless otherwise specified therein) shall be construed in accordance with and
governed by the internal laws (and not the law of conflicts) of the State of
Rhode Island.
8.05. NO WAIVER. No modification or waiver of any provision of this
Agreement or the Note nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing, and then
such waiver or consent shall be effective only in the specific instance, and for
the
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purpose, for which given. No notice to, or demand on, the Borrower, in any case,
shall entitle the Borrower to any other or future notice or demand in the same,
similar or other circumstances. Neither any failure nor delay on the part of the
Lender in exercising any right, power or privilege hereunder, or under the Note,
or any other instrument given as security therefor, shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
future exercise, or the exercise of any other right, power or privilege.
8.06. CAPTIONS. The captions and other headings contained in this Agreement
are for reference only and shall not affect the meaning or interpretation of
this Agreement.
8.07. NOTICES. All communications provided for hereunder shall be in
writing, sent by U.S. Mail, postage prepaid, to the respective parties at the
addresses set forth below:
If to the Lender: Fleet National Bank
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx,
Vice President
With a copy to: Xxxxxxx X. Xxxxxxx, Esquire
Roberts, Carroll, Xxxxxxxxx &
Xxxxxx Incorporated
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
If to the Borrower: Hanover Capital Partners, Ltd.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx,
President
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With a copy to: Xxxxxxx X. Xxx, Xx., Esq.
Xxxxx Xxxxxx-Xxxxx &
Xxxxxxxxx, P.C.
Reservoir Place
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Each party by notice duly given in accordance herewith may specify a different
address for the purposes hereof.
8.08. MAXIMUM PAYMENTS. Notwithstanding any other terms or conditions
hereof, in no event shall the amount paid or agreed to be paid to the Lender
hereunder exceed the maximum permissible under applicable law. If, for any
reason, fulfillment of any obligation of Borrower shall involve the exceeding of
such maximum, then such obligation, automatically and without action or notice
by Lender, shall be reduced to such maximum valid amount and any amount received
by Lender in excess thereof shall be applied to the reduction of principal
outstanding and not to interest.
8.09. JURISDICTION. The Borrower, to the extent that it may lawfully do so,
hereby consents to the jurisdiction of the courts of the State of Rhode Island
and the United States District Court for the District of Rhode Island as well as
to the jurisdiction of all courts from which an appeal may be taken from such
courts, for the purpose of any suit, action or other proceeding arising out of
any of its obligations arising hereunder or with respect to the transactions
contemplated hereby, and expressly waives any and all objections it may have as
to venue in any of such courts.
8.10. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
8.11. GENDER. Words of the masculine gender shall mean and include
correlative words of the feminine and neuter genders and words importing the
singular number shall mean and include the plural number and vice versa.
8.12. ARM'S-LENGTH TRANSACTION. The Borrower recognizes, stipulates and
agrees that the Lender's actions and relationships with the parties hereto,
including,
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but not limited to, those relationships created or referenced by or in this
Agreement, the Note and the Security Documents, have been and constitute arm's-
length commercial transactions and that such actions and relationships shall at
all times in the future continue to constitute arm's-length commercial
transactions and that the Lender or the Lender's attorneys shall not at any time
act, be obligated to act, or otherwise be construed or interpreted as acting as
or being the agent, attorney, partner, employee or fiduciary of any such
parties.
8.13. NEGOTIATIONS. The Borrower stipulates and agrees that neither the
Lender nor any other party has exerted or attempted to induce, through threats
or otherwise, the execution or delivery of this Agreement, the Note or the
Security Documents. Without in any way limiting the foregoing, the Borrower
stipulates and agrees that at all times during the course of the negotiations
surrounding the execution and delivery of this Agreement, the Note and the
Security Documents, it has, to the extent deemed necessary or advisable in its
sole discretion, been advised and assisted by competent counsel of its own
choosing, that counsel has been present and actively participated in the
negotiations surrounding this Agreement, the Note and the Security Documents,
and that it has been fully advised by counsel of its choosing of the effect of
each term, condition, provision and stipulation contained herein and therein.
8.14. NO OFFER. Neither the negotiations to date nor the preparation of
this Agreement, the Note or the Security Documents shall be deemed an offer by
any of the parties to the other. No such instrument, document or agreement shall
be deemed binding on any party until such party has executed and delivered the
same in writing.
8.15. AGREEMENTS RELATING TO CONSIDERATION. The Borrower hereby
acknowledges and agrees that the covenants and agreements of the Lender under
this Agreement constitute full and fair consideration for the obligations,
covenants and agreements of the Borrower under this Agreement and that, by
virtue of such consideration, the Borrower has received reasonably equivalent
value in exchange for the covenants and agreements hereunder and thereunder.
8.16. NO JOINT VENTURE. Notwithstanding anything to the contrary contained
herein, in the Note and/or in the Security Documents, the Lender, by entering
into this Agreement with the Borrower, will not be deemed a partner or joint
venturer with the Borrower and the Borrower agrees to hold the Lender harmless
from any damages and expenses resulting from such construction of the
relationship of the parties or any exertion thereof.
8.17. INTEGRATION. This Agreement and the Security Documents contain the
entire agreement between the parties relating to the subject matter hereof and
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thereof and supercede all oral statements and prior writings with respect
thereto.
8.18. JURY WAIVER. Each party to this Agreement hereby expressly WAIVES ANY
RIGHT TO TRIAL BY JURY of any claim, demand, action or cause of action (a)
arising under this Agreement or any other instrument, document or agreement
executed or delivered in connection herewith, (b) in any way connected with or
incidental to the dealings of the parties hereto or any of them with respect to
this Agreement or any other instrument, document or agreement executed or
delivered in connection herewith, or the transactions related hereto or thereto,
in each case whether now existing or hereafter arising and whether sounding in
contract or tort or otherwise; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY A COURT
TRIAL WITHOUT A JURY AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed all as of the day and year first above written.
WITNESS: Hanover Capital Partners, Ltd.
/s/ ????????????? By: /s/ Xxxx X. Xxxxxxxx
---------------------------- ------------------------------
Title President
Fleet National Bank
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
Vice President
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SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT ("Agreement"), dated as of December 10th, 1996
("Date of Agreement"), is entered into by and between FLEET NATIONAL BANK, a
national banking association ("Secured Party"), the office of which is located
at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 ("Secured Perry's
Address") , and HANOVER CAPITAL PARTNERS, LTD. ("Debtor"), with an office
located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Debtor's Address").
In consideration of any loans made or to be made by Secured Party to Debtor
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "Collateral" means:
1.1 (a) Receivables, Inventory and Equipment (all as
hereinafter defined);
1.1(b) All ledger sheets, files, records, documents and
instruments (including, without limitation, computer programs, tapes and related
electronic data processing software) evidencing an interest in or relating to
the other Collateral;
1.1(c) All instruments, documents, securities, cash,
property and the proceeds of any of the foregoing, now owned or hereafter
acquired by Debtor or in which Debtor now has or may hereafter acquire an
interest, which now or hereafter are at any time in possession or control of
Secured Party or in transit by mail or carrier to or from Secured Party or in
the possession of any third party acting on behalf of Secured Party, without
regard to whether Secured Party received the same in pledge, for safekeeping, as
agent for collection or transmission or otherwise or whether Secured Party had
conditionally released the same; and
1.1(d) Any and all municipal, state or federal licenses and
permits on which Debtor now is or may hereafter be named or in which Debtor now
has or may hereafter have an interest.
1.2 "Equipment" means all machinery and equipment and
furniture and fixtures of Debtor including automotive equipment now owned or
hereafter acquired by Debtor, and used or acquired
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for use in the business of Debtor, together with all accessions thereto and all
substitutions and replacements thereof and parts therefor; all cash and non-cash
proceeds.
1.3 "Event of Default" means the occurrence of an Event of
Default under this Agreement, a loan agreement of even date herewith between
Debtor and the Secured Party, as the same may be amended and/or restated from
time to time ("Loan Agreement") and all of those documents executed in
connection therewith (collectively, the "Documents").
1.4 "Inventory" means all goods, merchandise and other
personal property now owned or hereafter acquired by Debtor which are held for
sale or lease, or are furnished or to be furnished under any contract of service
or are raw materials, work-in-process, supplies or materials used or consumed in
Debtor's business, and all products thereof, and all substitutions,
replacements, additions or accessions therefor and thereto; all cash or non-cash
proceeds of all of the foregoing, including insurance proceeds.
1.5 "Obligations" means all indebtedness, obligations and
liabilities of Debtor to Secured Party of every kind and description, direct or
indirect, secured or unsecured, joint or several, absolute or contingent, due or
to become due, whether for payment or performance, now existing or hereafter
arising, regardless of how the same arise or by what instrument, agreement or
book account they may be evidenced, or whether evidenced by any instrument,
agreement or book account including, without limitation, those referenced in the
Loan Agreement and/or the Documents, all loans (including any loan by renewal,
modification or extension), all indebtedness, all undertakings to take or
refrain from taking any action, all indebtedness, liabilities or obligations
owing from Debtor to others which Secured Party may have obtained by purchase,
negotiation, discount, assignment or otherwise, and all interest, taxes, fees,
charges, expenses and attorneys' fees chargeable to Debtor or incurred by
Secured Party under this Agreement, or any other document or instrument
delivered in connection herewith.
1.6 "Receivables" means all accounts, contract rights
(excluding non-assignable governmental contracts arising in connection with the
business of Debtor), instruments, documents, chattel paper, general intangibles
(including, without limitation, choses in action, tax refunds, insurance
proceeds and the name and any trade names of Debtor); any other obligations or
indebtedness owed to Debtor from whatever source arising; all rights of Debtor
to receive any payments in money or kind; all guarantees of Receivables and
security therefor; all cash or non-cash proceeds of all of the foregoing; all of
the right, title and interest of Debtor in and with respect to the goods,
services or other property which gave rise to or which secure any of the
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Receivables and insurance policies and proceeds relating thereto, and all of the
rights of Debtor as an unpaid seller of goods or services, including, without
limitation, the rights of stoppage in transit, replevin, reclamation and resale,
and all of the foregoing, whether now existing or hereafter created or acquired.
To the extent not defined in this Section 1, unless the context otherwise
requires, all other terms contained in this Agreement shall have the meanings
attributed to them by Article 9 of the Uniform Commercial Code in force in the
State of Rhode Island on the Date of Agreement, to the extent the same are used
or defined therein.
2. REPRESENTATIONS AND WARRANTIES
------------------------------
Debtor represents and warrants to Secured Party, and such
representations and warranties shall survive and shall be deemed to be
continuing representations and warranties so long as any Obligations shall
remain outstanding, as follows:
2.1 Debtor is in good standing and is duly qualified under the laws of
those jurisdictions where the conduct of its business or the ownership of its
properties requires qualification; Debtor has the power and authority to own the
Collateral, to enter into and perform this Agreement and any other document or
instrument delivered in connection herewith and to incur the Obligations.
2.2 Debtor utilizes no trade names in the conduct of its business,
except as set forth in Section 10 of this Agreement; has not acquired any
business, or changed the location of its chief place of business or main office
or the location of its records with respect to Receivables or the location of
any returns of the Inventory; or changed the location of any of the Inventory;
or changed the location of the Equipment; except as set forth in Section 10
hereof.
2.3 The execution and performance of this Agreement and any other
document or instrument delivered in connection herewith will not result in the
creation or imposition of any lien or encumbrance upon any of the Collateral
(immediately, with the passage of time, or with the giving of notice and the
passage of time), except in favor of Secured Party pursuant hereto.
2.4 This Agreement and any document or instrument delivered in
connection herewith and the transactions contemplated hereby or thereby have
been duly authorized, and/or executed and delivered, as appropriate; and this
Agreement and such other documents and instruments constitute valid and legally
binding obligations of Debtor and are enforceable against Debtor in accordance
with their respective terms.
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2.5 Debtor is the owner of the Collateral free and clear of all
security interests, encumbrances or liens, except liens which arise by operation
of law with respect to obligations of Debtor which are not yet due and payable
and except as may be specifically set forth in Section 10 hereof; and Debtor
will defend the Collateral against all claims and demands of all persons at any
time claiming an interest therein.
2.6 Debtor has filed all federal, state and local tax returns and
other reports it is required to file and has paid or made adequate provision
for payment of all such taxes, assessments and other governmental charges.
2.7 No representation, warranty or statement by Debtor contained
herein or in any certificate or other document furnished or to be furnished by
Debtor pursuant hereto contains or at the time of delivery shall contain any
untrue statement of material fact, or omits, or shall omit at the time of
delivery, to state a material fact necessary to make it not misleading.
3. FURTHER SPECIFIC REPRESENTATIONS, WARRANTIES AND COVENANTS
----------------------------------------------------------
Debtor hereby further represents and warrants to and covenants with
Secured Party, as follows:
3.1 With respect to Inventory:
3.1.1 All Inventory is in possession of Debtor at Debtor's
Address and/or all of Debtor's job sites, either existing or hereafter arising,
and all records of Debtor pertaining thereto are kept at Debtor's Address,
except as set forth in Section 10 hereof, and Debtor shall notify Secured Party
in writing no later than thirty (30) days prior to any change of any location
where the Inventory is or may be kept.
3.1.2 Debtor shall not sell, lease or otherwise transfer any
interest in the Inventory except that Debtor may, until an Event of Default
occurs, hold, process, sell, use or consume Inventory in the ordinary course of
Debtor's business, excluding, however, any sale or transfer made in partial or
total satisfaction of a debt.
3.1.3 Debtor shall keep current stock, cost and sales
records of the Inventory, accurately itemizing and describing the types and
quantities of Inventory, and the cost and selling price thereof and all books,
records and documents relating to the Inventory are and will be genuine,
complete and correct.
3.1.4 None of the Inventory is, or at any time or times
hereafter will be, stored with a bailee (including, without
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27
limitation, a public warehouseman) without the prior written consent of Secured
Party.
3.1.5 Debtor shall, at Secured Party's request, deliver to
Secured Party any and all evidence of ownership of, certificates of title to, or
other documents evidencing any interest in any and all of the Inventory.
3.2 With respect to Equipment:
3.2.1 The Equipment is in the possession of Debtor at
Debtor's Address or at the location(s) set forth in Section 10 hereof and that
said location(s), if not owned by Debtor, are leased by Debtor as set forth in
Section 10; if Equipment is or shall be affixed to any real estate, including
any buildings owned or leased by Debtor or used by Debtor in the operation of
its business, Debtor shall provide Secured Party with disclaimers and waivers
necessary to make the security interest in the Equipment valid against Debtor
and other persons holding an interest in such real estate.
3.2.2 Debtor shall keep and maintain all Equipment in good
operating condition and repair, make all necessary repairs thereto and
replacement of parts thereof so that the value and operating efficiency thereof
shall at all times be maintained and preserved; and Debtor shall keep complete
and accurate books and records with respect to the Equipment, including
maintenance records.
3.2.3 Debtor shall not, without the prior written consent of
Secured Party, sell, offer to sell, lease or in any other manner dispose of any
Equipment in excess of Ten Thousand Dollars ($10,000.00).
3.2.4 Debtor shall notify Secured Party in writing no later
than thirty (30) days prior to any change of any location where the Equipment is
or may be kept.
3.2.5 Debtor owns no motor vehicle except as disclosed in
Section 10 and each such motor vehicle is registered in the jurisdiction in
which it is required to be registered.
3.3 With respect to Receivables:
3.3.1 The location of the Debtor's main office where the
person directly responsible for the Receivables ("Main Office") may be found is
Debtor's Address. Debtor has no other places of business except as set forth in
Section 10 hereof. All records pertaining to the Receivables (including computer
records) and all returns of Inventory are kept at Debtor's Address, except as
set forth in Section 10 hereof; and Debtor will notify Secured Party, no later
than thirty (30) days prior
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to any change in address of the Main Office or chief place of business of Debtor
or of the change of the location where records pertaining to Receivables or
returns of Inventory are kept.
3.3.2 All books, records and documents relating to any of
the Receivables (including computer records) are and will be genuine and in all
respects what they purport to be and the amount of each of the Receivables shown
on the books and records of Debtor is and will be the correct amount actually
owing or to be owing at maturity of such of the Receivables.
3.3.3 Until Secured Party directs otherwise, Debtor shall
collect the Receivables, subject to the direction and control of Secured Party
at all times. Any proceeds of Receivables collected by Debtor shall not be
commingled with other funds of Debtor and shall, upon the request of Secured
Party, be immediately delivered to Secured Party in the form received, except
for necessary endorsements to permit collection; Secured Party may, in its sole
discretion, allow Debtor to use such funds to such extent and for such periods,
if any, as Secured Party elects.
3.3.4 Debtor shall notify Secured Party if any Receivables
arise out of contracts with the United States or any department, agency or
instrumentality thereof, and Debtor shall execute any instruments and take any
steps to perfect the assignment of the rights of Debtor to Secured Party as
required under the Federal Assignment of Claims Act or any similar act or
regulation.
3.3.5 Debtor shall provide Secured Party, at its request,
from time to time with: confirmatory assignment schedules; copies of all
invoices relating to the Receivables, evidence of shipment or delivery of
Inventory; and such further information and/or schedules as Secured Party may
reasonably require, all in a form satisfactory to Secured Party.
4. GRANT OF SECURITY INTEREST
--------------------------
To secure the payment and performance of the Obligations, Debtor
hereby pledges, assigns and transfers to Secured Party, and grants to Secured
Party, a valid first lien of record and a first continuing security interest in
and to all of the Collateral.
5. GENERAL COVENANTS
-----------------
Debtor covenants and agrees that so long as any Obligations remain
outstanding Debtor shall:
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5.1 Not mortgage, pledge, grant or permit to exist a security interest
in, or lien or encumbrance upon, any of the collateral except in favor of
Secured Party;
5.2 Permit Secured Party, through its authorized attorneys,
accountants and representatives, to inspect and examine the Collateral and the
books, accounts, records, ledgers and assets of every kind and description of
Debtor with respect thereto at all reasonable times;
5.3 Promptly notify Secured Party of any condition or event which
constitutes, or would constitute with the passage of time or giving of notice or
both, an Event of Default under this Agreement, and promptly inform Secured
Party of any events or change in the financial condition of Debtor occurring
since the date of the last financial statements of Debtor delivered to Secured
Party, which individually or cumulatively when viewed in light of prior
financial statements, may result in a material adverse change in the financial
condition of Debtor;
5.4 Remain in good standing in the jurisdiction qualified to do
business and in those jurisdictions where Debtor is required to be qualified;
5.5 If Debtor shall now or hereafter maintain an employee benefit plan
covered by Section 4021(a) of the Employee Retirement Income Security Act of
1974 (hereinafter referred to as "ERISA") relating to plan termination
insurance, promptly: (a) notify Secured Party of the filing of notice with the
Pension Benefit Guaranty Corporation (hereinafter referred to as the "PBGC")
pursuant to Section 4041 of ERISA that the plan is to be terminated; and (b)
notify Secured Party of the institution of proceedings by the PBGC under Section
4042 of ERISA;
5.6 Pay or deposit promptly when due all sales, use, excise, personal
property, income, withholding, corporate, franchise and other taxes, assessments
and governmental charges upon or relating to its ownership or use of any of the
Collateral and submit to Secured Party proof satisfactory to Secured Party that
such payments and/or deposits have been made;
5.7 At any time and from time to time upon request of Secured Party,
execute and deliver to Secured Party, in form and substance satisfactory to
Secured Party, such documents as Secured Party shall deem reasonably necessary
or reasonably desirable to perfect or maintain perfected the security interest
of Secured Party in the Collateral or which may be necessary to comply with the
provisions of the law of the State of Rhode Island or the law of any other
jurisdiction in which Debtor may then be conducting business or in which any of
the Collateral may be located; and
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30
5.8 Maintain casualty insurance coverage on the Collateral in such
amounts and of such types as may be reasonably requested by Secured Party, and
in any event, as are ordinarily carried by similar businesses; and, in the case
of all policies insuring property in which Secured Party shall have a security
interest of any kind whatsoever, all such insurance policies shall provide that
the proceeds thereof shall be payable to Debtor and Secured Party, as their
respective interests may appear. Debtor has a right of free choice of agent and
insurer through or by which such insurance is to be placed, subject only to the
requirements that insurer be authorized to do business in each state where the
Collateral is located and have a licensed resident agent therein and that such
insurer's financial condition is reasonably satisfactory to Secured Party. All
said policies or certificates thereof, including all endorsements thereof and
those required hereunder, shall be deposited with Secured Party; and such
policies shall contain provisions that no such insurance may be canceled or
decreased without thirty (30) days prior written notice to Secured Party; and,
in the event of acquisition of additional insurable Collateral, Debtor shall
cause such insurance coverage to be increased or amended in such manner and to
such extent as prudent business judgment would dictate. If Debtor shall at any
time or times hereafter fail to obtain and/or maintain any of the policies of
insurance required herein, or fail to pay any premium in whole or in part
relating to any such policies, Secured Party may, but shall not be obligated to,
obtain and/or cause to be maintained insurance coverage with respect to the
Collateral, including, at Secured Party's option, the coverage provided by all
or any of the policies of Debtor and pay all or any part of the premium
therefor, without waiving any Event of Default by Debtor, and any sums so
disbursed by Secured Party shall be additional obligations of Debtor to Secured
Party payable on demand. Secured Party shall have the right to settle and
compromise any and all claims under any of the policies required to be
maintained by Debtor hereunder and Debtor hereby appoints Secured Party as its
attorney-in-fact, with power to demand, receive and receipt for all monies
payable thereunder, to execute in the name of Debtor or Secured Party or both
any proof of loss, notice, draft or other instruments in connection with such
policies or any loss thereunder and generally to do and perform any and all acts
as Debtor, but for this appointment, might or could perform.
6. EVENT OF DEFAULT AND ACCELERATION
---------------------------------
If any Event of Default shall occur hereunder or under the Loan
Agreement or the Documents or both, then or at any time thereafter, the Secured
Party may, at the Secured Party's sole discretion, declare all Obligations to be
due and payable in full, without notice, protest, presentment or demand, all of
which are hereby expressly waived by Debtor.
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7. RIGHTS AND REMEDIES
-------------------
Secured Party shall have, by way of example and not of limitation, all
of the rights and remedies enumerated herein after the occurrence of an Event of
Default:
7.1 Secured Party, and any officer or agent of Secured Party is hereby
constituted and appointed as true and lawful attorney-in-fact of Debtor with
power: (i) to notify or require Debtor to notify any and all account debtors or
parties against which Debtor has a claim that the Receivables have been assigned
to Secured Party and/or that Secured Party has a security interest therein and
that all payments should be made to Secured Party; (ii) to endorse the name of
Debtor upon any instruments of payment (including payments made under any policy
of insurance) that may come into possession of Secured Party in full or part
payment of any amount owing to Secured Party; (iii) to sign and endorse the name
of Debtor upon any invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipt, drafts against account debtors or other obligors and to sign
and endorse the name of Debtor on any assignments, verifications and notices in
connection with Receivables, and any instrument or document relating thereto or
to rights of Debtor therein; (iv) to notify the post office authorities to
change the address for delivery of mail of Debtor to an address designated by
Secured Party and to receive, open and dispose of all mail addressed to Debtor;
(v) to send requests for verification to account debtors or other obligors; and
(vi) to sell, assign, xxx for, collect or compromise payment of all or any part
of the Collateral in the name of Debtor or in its own name, or make any other
disposition of Collateral, or any part thereof, which disposition may be for
cash, credit or any combination thereof, and Secured Party may purchase all or
any part of the Collateral at public or, if permitted by law, private sale, and
in lieu of actual payment of such purchase price, may set-off the amount of such
price against the Obligations; granting to Secured Party, as the
attorney-in-fact of Debtor, full power of substitution and full power to do any
and all things necessary to be done in and about the premises as fully and
effectually as Debtor might or could do but for this appointment, and hereby
ratifying all that said attorney-in-fact shall lawfully do or cause to be done
by virtue hereof. Neither Secured Party nor its agents shall be liable for any
acts or omissions or for any error of judgment or mistake of fact or law in its
capacity as such attorney-in-fact. This power of attorney is coupled with an
interest and shall be irrevocable so long as any Obligations shall remain
outstanding.
7.2 Secured Party shall have the right to enter and/or remain upon the
premises of Debtor, without any obligation to pay rent to Debtor or others, or
any other place or places where any of the Collateral is located and kept and:
(a) remove Collateral therefrom to the premises of Secured Party or agent of
Secured
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Party, for such time as Secured Party may desire, in order to maintain, collect,
sell and/or liquidate the Collateral; or (b) use such premises, together with
materials, supplies, books and records of Debtor, to maintain possession and/or
the condition of the Collateral, and to prepare the Collateral for selling,
liquidating or collecting. Secured Party may require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties.
7.3 Secured Party shall have the right to set-off, without notice to
Debtor, any and all deposits or other sums at any time or times credited by or
due from Secured Party to Debtor, whether in a special account or other account
or represented by a certificate of deposit (whether or not matured) which
deposits and other sums shall at all times constitute additional security for
the Obligations.
7.4 Secured Party shall have, in addition to any other rights and
remedies contained in this Agreement, and any other agreements, guarantees,
notes, instruments and documents heretofore, now or at any time or times
hereafter executed by Debtor and delivered to Secured Party, all of the rights
and remedies of a secured party under the Uniform Commercial Code in force in
the State of Rhode Island, all of which rights and remedies shall be cumulative,
and none exclusive, to the extent permitted by law.
7.5 Any notice required to be given by Secured Party of a sale or
other disposition or other intended action by Secured Party with respect to any
of the Collateral, or otherwise, made in accordance with the terms of this
Agreement at least five (5) days prior to such proposed action, shall constitute
fair and reasonable notice to Debtor of any such action. In the event that any
of the Collateral is used in conjunction with any real estate, the sale of the
Collateral in conjunction with and as one parcel with any such real estate shall
be deemed to be a commercially reasonable manner of sale. The net proceeds
realized by Secured Party upon any such sale or other disposition, after
deduction of the expenses of retaking, holding, preparing for sale, selling or
the like and reasonable attorneys' fees and any other expenses incurred by
Secured Party, shall be applied toward satisfaction of the Obligations
hereunder. Secured Party shall account to Debtor for any surplus realized upon
such sale or other disposition and Debtor shall remain liable for any
deficiency. The commencement of any action, legal or equitable, shall not affect
the security interest of Secured Party in the Collateral until the Obligations
hereunder or any judgment therefor are fully paid.
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8. GENERAL PROVISIONS
------------------
8.1 The failure of Secured Party at any time or times hereafter to
require strict performance by Debtor of any of the provisions, warranties, terms
and conditions contained in this Agreement or in any other agreement, guaranty,
note, instrument or document now or at any time or times hereafter executed by
Debtor and delivered to Secured Party shall not waive, affect or diminish any
right of Secured Party at any time or times hereafter to demand strict
performance thereof; and, no rights of Secured Party hereunder shall be deemed
to have been waived by any act or knowledge of Secured Party, its agents,
officers or employees, unless such waiver is contained in an instrument in
writing signed by an officer of Secured Party and directed to Debtor specifying
such waiver. No waiver by Secured Party of any of its rights shall operate as a
waiver of any other of its rights or any of its rights on a future occasion.
8.2 Any demand or notice required or permitted to be given hereunder
shall be deemed effective when deposited in the United States mail, and sent by
certified mail, return receipt requested, postage prepaid, addressed to Secured
Party at Secured Party's Address or to Debtor at Debtor's Address, as
applicable, or to such other address as may be provided by the party to be
notified, on five (5) days prior written notice to the other party.
8.3 This Agreement contains the entire understanding between the
parties hereto with respect to the transactions contemplated herein and such
understanding shall not be modified except in writing signed by or on behalf of
the parties hereto. The Debtor acknowledges that each of them approves the terms
herein, and further acknowledges that they have each executed this Agreement
voluntarily, freely and without duress.
8.4 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law;
should any portion of this Agreement be declared invalid for any reason in any
jurisdiction, such declaration shall have no effect upon the remaining portions
of this Agreement. Furthermore, the entirety of this Agreement shall continue in
full force and effect in all other jurisdictions and said remaining portions of
this Agreement shall continue in full force and effect in the subject
jurisdiction as if this Agreement had been executed with the invalid portions
thereof deleted.
8.5 In the event Secured Party seeks to take possession of any or all
of the Collateral by court process, Debtor hereby irrevocably waives any bonds
and any surety or security relating thereto required by any statute, court rule
or otherwise as an incident to such possession, and waives any
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34
demand for possession prior to the commencement of any suit or action to recover
with respect thereto.
8.6 The provisions of this Agreement shall be binding upon and shall
inure to the benefit of the heirs, administrators, successors and assigns of
Secured Party and Debtor, provided, however, Debtor may not assign any of its
rights or delegate any of its obligations hereunder without the prior written
consent of Secured Party.
8.7 This Agreement is and shall be deemed to be a contract entered
into and made pursuant to the laws of the State of Rhode Island and shall in all
respects be governed, construed, applied and enforced in accordance with the
laws of said state; and any cause of action arising between the parties, whether
under this Agreement or otherwise, shall be brought only in a court having
jurisdiction and venue at Secured Party's Address (the term "Secured Party"
shall include the Secured Party's successors, endorsees and assigns); DEBTOR
CONSENTS TO AND CONFERS PERSONAL JURISDICTION OVER DEBTOR BY SUCH COURT OR
COURTS AND AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON DEBTOR BY MAILING A
COPY OF THE SUMMONS TO DEBTOR AT DEBTOR'S ADDRESS; AND IN ANY ACTION HEREUNDER
DEBTOR WAIVES THE RIGHT TO DEMAND A TRIAL BY JURY.
8.8 If, prior hereto and/or at any time or times hereafter, Secured
Party shall employ counsel in connection with the execution and consummation of
the transactions contemplated by this Agreement or to commence, defend or
intervene, file a petition, complaint, answer, motion or other pleadings, or to
take any other action in or with respect to any suit or proceeding (bankruptcy
or otherwise) relating to this Agreement, the Collateral or any other agreement,
guaranty, note, instrument or document heretofore, now or at any time or times
hereafter executed by Debtor and delivered to Secured Party, or to protect,
collect, lease, sell, take possession of or liquidate any of the Collateral, or
to attempt to enforce or to enforce any security interest in any of the
Collateral, or to enforce any rights of Secured Party hereunder, whether before
or after the occurrence of any Event of Default, or to collect any of the
Obligations, then in any of such events, all of the reasonable attorneys' fees
arising from such services, and any expenses, costs and charges relating
thereto, shall be part of the Obligations, payable on demand and secured by the
Collateral.
8.9 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
8.10 Each reference herein to Secured Party shall be deemed to include
its successors and assigns, and each reference
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to Debtor and any pronouns referring thereto as used herein shall be construed
in the masculine, feminine, neuter, singular or plural, as the context may
require, and shall be deemed to include the legal representatives, successors
and assigns of Debtor, all of whom shall be bound by the provisions hereof.
8.11 The section headings herein are included for convenience only and
shall not be deemed to be a part of this Agreement.
9. ASSIGNMENT BY SECURED PARTY
---------------------------
Secured Party may, from time to time, without notice to the Debtor,
sell, assign, transfer or otherwise dispose of all or any part of the
Obligations and/or the Collateral therefor. In such event, each and every
immediate and successive purchaser, assignee, transferee or holder of all or any
part of the Obligations and/or the Collateral shall have the right to enforce
this Agreement, by legal action or otherwise, for its own benefit as fully as if
such purchaser, assignee, transferee or holder were herein by name specifically
given such rights. Secured Party shall have an unimpaired right to enforce this
Agreement for its benefit with respect to that portion of the Obligations
Secured Party has not sold, assigned, transferred or otherwise disposed of.
10. ADDITIONAL INFORMATION
----------------------
Information, if any, required to be set forth herein by paragraphs
2.2, 2.5, 3.1.1, 3.2.1, 3.2.6 and/or 3.3.1 hereof, as applicable, shall be
inserted in the following spaces:
2.2 (Debtor's trade names, prior names, predecessor in merger,
businesses acquired and/or other locations):
2.5 (Debtor's other security interests, encumbrances and liens):
A. Term Note payable to Xxxxxx Xxxxxxxxx in the amount of
$42,560.13, due December 31, 1996.
B. Demand Note payable to ABH-1 in the amount of $94,636.00.
3.1.1 (Location of Inventory or records with respect
thereto, other than at Debtor's Address):
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
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3.2.1 (Address of other places of business of Debtor
and of the location of Equipment other than at Debtor's Address and owner and
description of all leased premises):
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
3.2.6 (Motor Vehicles):
NONE
3.3.1 (Address of other place(s) of business of Debtor and place(s)
where records (including computer records) with respect to Receivables or
returns of Inventory are kept other than Debtor's Address):
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the Debtor and the Secured Party have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
WITNESS: Hanover Capital Partners, Ltd.
/s/ ????????????? By: /s/ Xxxx X. Xxxxxxxx
---------------------------- ------------------------------
Its: President
WITNESS: Fleet National Bank
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------- ------------------------------
Xxxxxxx X. Xxxxxxx
Its: Vice President
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STATE OF NJ
COUNTY OF Middlesex
In Edison, on the 10th day of December, 1996, before me personally
appeared Xxxx Xxxxxxxx, President of Hanover Capital Partners, Ltd., to me
known and known by me to be the person executing the foregoing instrument, and
he/she acknowledged said instrument by him/her executed to be his/her free act
and deed in said capacity and the free act and deed of Hanover Capital Partners,
Ltd.
[STAMP: Xxxxx X. Xxxxxx
Notary Public, State of NJ
My Commission Expires 11/22/99]
/s/ Xxxxx Xxxxxx
------------------------------
Notary Public
My commission expires: 11/22/99
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, on the 10th day of December, 1996, before me personally
appeared Xxxxxxx X. Xxxxxxx, Vice President of Fleet National Bank, to me known
and known by me to be the person executing the foregoing instrument, and he
acknowledged said instrument by him executed to be his free act and deed in said
capacity and the free act and deed of Fleet National Bank.
/s/ Xxxxxxxx X. Xxxxxxxx
------------------------------
Notary Public
My commission expires:
--------
[STAMP: Xxxxxxxx X. Xxxxxxxx
Notary Public
My Commission Expires
June 26, 1997]
