EXHIBIT 4.05(a)
COMMERCIAL REVOLVING LOAN, TERM LOAN
AND SECURITY AGREEMENT
WITH
MARINE MANAGEMENT SYSTEMS, INC.
The Commercial Revolving Loan, Term Loan and Security Agreement dated as of
June 4, 1993 by and between MARINE MANAGEMENT SYSTEMS, INC., an Ohio corporation
authorized to do business in the State of Connecticut, having an address of 000
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (hereinafter "Company"), and
PEOPLE'S BANK, a Connecticut Banking corporation with an address at 000 Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 referred to herein as (the "Bank").
ARTICLE I
WHEREAS, the Company has requested the Bank to make a Revolving Loan in the
amount of $150,000.00 (the "Revolving Loan"), and a term loan in the amount of
$450,000.00 (the "Term Loan") to the Company; and
WHEREAS, the Bank has agreed to make the Revolving Loan and the Term Loan
to the Company subject to the condition precedent, among others, that the
Company enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Company and the Bank do each hereby respectively covenant and agree with and
represent to each other as follows:
Section 1.01. Accounting Terms; Definitions. Unless otherwise defined, all
accounting terms shall be construed, and all computations or classifications of
assets and liabilities and of income and expenses shall be made or determined,
on a consolidated basis in accordance with generally accepted accounting
principles as consistently applied. As used herein, in the Notes, or in any
certificate, document or report delivered pursuant to this Agreement or any
other Financing Agreement, the following terms shall have the following
meanings:
(a) "Acceptable Receivables" means a Receivable or Receivables due not
more than ninety (90) days from the date set forth on the original invoice
evidencing such Receivable, arising from the performance of services by the
Company in the ordinary Course of its business, which conforms to the
warranties set forth in Section 6.01 hereof, and which:
(i) is a Receivable upon which the Company's right to receive
payment is absolute and not contingent upon the fulfillment of any
condition whatsoever;
(ii) does not arise from a Provision of Services to an affiliate,
parent, or subsidiary of the Company;
(iii) does not arise from the exchange or barter of any services;
(iv) does not arise from a contract containing a prohibition
against assigning or granting a security interest therein;
(v) is not a Receivable of a Receivable Debtor which has
suspended business, made a general assignment for the benefit of
creditors, committed any act of insolvency, filed or have had filed
against it any petition against the Receivable Debtor under any
bankruptcy law or any law or laws for the relief of debtors;
(vi) is not the Receivable of a Receivable Debtor which shall
have objected, in any material respect, to the quality or quantity of
the services of the Company, or shall have rejected, or refused to
accept such services; and
(vii) is not a Receivable which is, in the Bank's reasonable
judgment, the Receivable of a Receivable Debtor which is an undue
credit risk or otherwise unacceptable to the Bank in its sole
discretion.
(b) "Agreement" shall mean this Commercial Revolving Loan, Term Loan
and Security Agreement as the same may from time to time be amended,
supplemented or otherwise modified.
(c) "Bank" shall mean People's Bank, a Connecticut banking
corporation.
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(d) "Borrowing Base" means an amount equal to the lesser of: (i) ONE
HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($150,000.00), or (ii) Seventy
percent (70%) of the net balance due on Acceptable Receivables.
(e) "Business Day" shall mean any day other than a day on which
commercial banks in Connecticut are required or permitted by law to close.
(f) "Collateral" means the property of the Company described in
Section 9.01 hereof.
(g) "Dollar" and the sign "$" shall mean lawful money of the United
States of America.
(h) "Event of Default" shall have the meaning assigned in Section
10.01 hereof.
(i) "Financing Agreement" or "Financing Agreements" shall mean this
Agreement, the Notes, the Guaranties, the Guarantor Mortgages and any other
agreements or documents executed in connection herewith or related hereto,
together with any amendments, supplements or modifications hereto or
thereto.
(j) "Fixed Assets" means equipment and other assets of the Company
which, by generally accepted accounting principles must be treated as fixed
assets in financial statements of the Company.
(k) "Guarantor" shall have the definition assigned in Section 7.01
(f).
(l) "Guaranty" shall have the definition assigned in "Section 7.01 (f)
hereof.
(m) "Inventory" shall have the definition assigned in Section 9.01 (e)
hereof.
(n) "Loan" shall mean either the Revolving Loan or the Term Loan, and
"Loans" shall mean the Revolving Loan and the Term Loan.
(o) "Mortgage" or "Mortgages" shall have the definition assigned in
Section 7.01 (g) hereof.
(p) "Note" shall mean the Revolving Loan Note or the Term Note, and
"Notes" shall mean the Revolving Loan Note and the Term Note.
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(q) "Obligations" means and includes all loans, advances, interest,
indebtedness, liabilities, obligations, guaranties, covenants and duties at
any time owing by the Company to the Bank of every kind and description,
whether or not evidenced by any note or other instrument, whether or not
for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising,
including, but not limited to, the indebtedness, liabilities and
obligations arising under this Agreement and the other Financing
Agreements, and all reasonable costs, expenses, fees, charges, expenses and
attorneys', paralegals' and professional fees incurred in connection with
any of the foregoing, or in any way connected with, involving or related to
the preservation, enforcement, protection or defense of this Agreement, the
Notes, the other Financing Agreements, any related agreement, document or
instrument, the Collateral and the rights and remedies hereunder or
thereunder.
(r) "Prime Rate" shall mean the interest rate announced by the Bank
from time to time as its Prime Rate. The Prime Rate may not necessarily be
the Bank's lowest or most favorable rate.
(s) "Receivables" shall have the meaning assigned in section 9.01 (a)
hereof.
(t) "Receivable Debtor" and "Receivable Debtors" means the person or
entity or persons or entities obligated to the Company upon the
Receivables.
(u) "Revolving Loan" shall have the meaning assigned in Section 2.01
(a) hereof.
(v) "Revolving Loan Account" and "Revolving Loan Accounts" shall have
the meanings assigned in Section 2.03 hereof.
(w) "Revolving Loan Note" shall have the meaning assigned in section
2.03 hereof.
(x) "Term Loan" and "Term Note" shall have the meaning assigned in
section 3.01 hereof.
ARTICLE II
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REVOLVING LOANS
Section 2.01. Amounts.
(a) Subject to the terms and conditions contained in this Agreement,
the Bank agrees to make loans (the "Revolving Loans" and, individually a
"Revolving Loan") to the Company from time to time until demand has been
made by the Bank or until terminated as provided in Section 14.01(a) hereof
in principal amounts not exceeding at any one time outstanding the
Borrowing Base, it being agreed and understood that at no time shall the
maximum aggregate principal amount of the Revolving Loans made by the Bank
exceed the Borrowing Base.
Section 2.02. ALL OBLIGATIONS OF THE COMPANY ARISING UNDER THE REVOLVING
LOANS SHALL BE PAID BY THE COMPANY IN FULL UPON DEMAND BY THE BANK,
NOTWITHSTANDING THE BANK'S RIGHTS UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AS
SET FORTH BELOW AND WHETHER OR NOT SUCH EVENT OF DEFAULT HAS OCCURRED.
Section 2.03. Procedure for Advances, Notices of Borrowing, Notes, Etc.
Within the limits of the Borrowing Base and subject to the terms and conditions
contained in Section 7.02, so long as demand has not been made by the Bank and
the Company is in compliance with all of the terms and conditions of this
Agreement and no Event of Default has occurred and no condition exists which
would constitute an Event of Default but for the giving of notice or passage of
time, or both, the Company may borrow, repay and re-borrow Revolving Loans.
Requests for Revolving Loan advances may be made in compliance with the Bank's
existing cash management procedures. The Revolving Loan shall be evidenced by a
promissory note payable to the Bank substantially in the form of, and in the
amount of, $150,000.00, as set forth in Exhibit A attached hereto ("Revolving
Note"). Insofar as the Company may request and the Bank shall make Revolving
Loans hereunder, the Bank shall enter such advances as debits on a revolving
loan account maintained by the Company with the Bank ("Revolving Loan Account").
The Bank shall also record in its Revolving Loan Account, in accordance with
customary accounting procedures, all other charges, expenses and other liens
properly chargeable to the Company; all payments made by the Company on account
of indebtedness evidenced by the Revolving Loan Account; all proceeds of
collateral which are finally paid to the Bank in its own office in cash or
solvent credits; and other appropriate debits and credits. The Revolving Loan
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Account shall reflect the amount of the Company's indebtedness to the Bank from
time to time by reason of the Revolving Loans made by the Bank and other
appropriate charges hereunder. On a monthly basis, the Bank shall render a
statement for the Revolving Loan account, which statement shall be considered
correct and accepted by the Company and conclusively binding upon the Company.
The Bank shall have the right at its option, to debit the Revolving Loan Account
for any principal due under the Term Note and, on the 4th day of each and every
month commencing July 4, 1993, for all interest charges on the Loans for the
previous month if not otherwise paid by the Company.
Section 2.04. Bank Discretion. Nothing herein shall be construed to require
the Bank to make Revolving Loans, it being agreed that all loans and advances
shall be at the Bank's sole discretion and shall not establish a pattern or
custom binding upon the Bank.
Section 2.05. Use of Proceeds. The Company represents that the proceeds of
the (i) Term Loan shall be used by it to satisfy Company's indebtedness to
Shawmut Bank and the remainder, if any, shall be used for working capital; and
(ii) Revolving Loans shall be used for working capital purposes and trading
assets and subject to the terms of Section 7.02.
ARTICLE III
TERM LOAN
Section 3.01. Amounts. Subject to the terms and conditions contained in
this Agreement, the Bank agrees to make to the Company contemporaneously
herewith a five (5) year term loan (the "Term Loan") as evidenced by a
promissory note payable to the Bank substantially in the form of, and in the
amount of $450,000.00 (the "Term Note") and as set forth on Exhibit B.
ARTICLE IV
INTEREST, PREPAYMENTS, AND COMMITMENT FEES
Section 4.01. Interest.
(a) (i) Revolving Loans. Each Revolving Loan shall bear interest (from
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the date made through and including the date of payment in full) at a
floating rate per annum equal to one and one-half percentage points (1.5%)
above the Prime Rate.
(ii) Term Loan. The Term Loan shall bear interest at a per annum
floating rate equal to one and one-half percentage points (1.5%) above
the Prime Rate.
(b) Default Interest. Notwithstanding the foregoing, interest on all
Loans, at any time after the occurrence of an Event of Default, shall
accrue, from the date of such Event of Default, so long as an Event of
Default continues, at a rate per annum equal to Three (3.0%) percentage
points above the rate otherwise in effect under the Notes from time to
time. Notwithstanding anything contrary herein, Bank shall have no
obligation to reinstate the Loans after an Event of Default.
(c) Calculation. Interest on the Loans shall be calculated on the
basis of a 360 day year and the actual number of days elapsed, and shall
change effective immediately upon any change in the Prime Rate, without
notice or demand to or upon the Company.
(d) Payment of Interest. Interest on the Loans shall be payable
monthly in arrears beginning on July 4, 1993 and continuing on the 4th day
of each and every month thereafter without notice or demand so long as any
of the Obligations remains outstanding.
(e) Lawful Interest. It being the intent of the parties that the rate
of interest and all other charges to the Company be lawful, if for any
reason the payment of a portion of interest fees or charges as required by
this Agreement would exceed the limit established by applicable law which a
commercial lender such as the Bank may charge to a commercial borrower such
as the Company, then the obligation to pay interest or charges shall
automatically be reduced to such limit and, if any amounts in excess of
such limits shall have been paid, then such amounts shall be applied to the
unpaid principal amount of the Obligations of the Company to the Bank or
refunded so that under no circumstances shall interest or charges required
hereunder exceed the maximum rate allowed by law, as aforesaid.
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Section 4.02. Prepayments. The Company may, at its option, prepay without
premium or penalty the Revolving Loan and/or the Term Loan in whole or in part
on the following conditions: (i) the Company shall pay all accrued interest on
the principal being paid to the date of the prepayment, and (ii) in the case of
prepayments in full, all fees, charges, costs, expenses and other amounts then
due under the Loan or Loans being prepaid, shall be applied in the inverse order
of maturity.
ARTICLE V
YIELD PROTECTION
Section 5.01. Increased Costs. In the event that applicable law, treaty or
regulation or directive from any government, governmental agency or regulatory
authority, or any change therein or in the interpretation or application
thereof, or compliance by the Bank with any request or directive (whether or not
having the force of law) from any central bank or government, governmental
agency or regulatory authority, shall:
(a) subject the Bank to any tax of any kind whatsoever with respect to
this Agreement or any of the Loans (except taxes on the overall net income
of the Bank) or change the basis of taxation of payments to the Bank of
principal, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of the Bank);
(b) impose, modify or hold applicable any reserve, special deposit or
similar requirements against assets held by, or deposits in or for the
account of, advances or loans by, or other credit extended by, any office
of the Bank, including (without limitation) pursuant to Regulations of the
Board of Governors of the Federal Reserve System; or
(c) impose on the Bank any other condition with respect to this
Agreement, any Note or any of the Loans hereunder; and the result of any of
the foregoing is to increase the cost to the Bank of making, renewing or
maintaining its Loans (or any part thereof) by an amount that the Bank
reasonably deems to be material or to reduce the amount of any payment
(whether of principal, interest or otherwise) in respect of any of the
Loans by an amount that the Bank reasonably deems to be material, then, in
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any case, the Company shall promptly pay the Bank, upon its demand, such
additional amount as will compensate the Bank for such additional costs or
such reduction as the case may be (collectively the "Additional Costs").
The Bank shall certify the amount of such Additional Costs to the Company,
and such certification, absent manifest error, shall be deemed conclusive.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties. The Company represents and
warrants to the Bank that:
(a) Good Standing and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has all requisite corporate power and authority
to own and operate its properties and to carry on its business as presently
conducted and is qualified to do business in the State of Connecticut and
all jurisdictions in which it conducts its business.
(b) Corporate Authority. The Company has full power and authority to
enter into this Financing Agreement, to make the borrowing contemplated
herein, to execute and deliver the Notes and to incur the obligations
provided for herein, all of which have been duly authorized by all
necessary and proper corporate action. No other consent or approval or the
taking of any other action in respect of shareholders or of any public
authority is required as a condition to the validity or enforceability of
this Agreement, the Notes, or any other instrument delivered in connection
herewith or therewith.
(c) Binding Agreements. This Agreement constitutes, and the Notes, and
any of the other Financing Agreements executed and/or delivered in
connection herewith or therewith, when issued and delivered pursuant hereto
for value received shall constitute, the valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforcement may be limited by principles of equity,
bankruptcy, insolvency, or other laws affecting the enforcement of
creditors' rights generally.
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(d) Litigation. There are no actions, suits or proceedings pending
against the Company or the Guarantors before any court or administrative
agency, nor are any actions, suits or proceedings threatened, which, either
in any case or in the aggregate, would materially and adversely affect the
financial condition, assets or operations of the Company or the Guarantors,
nor are there any such actions, suits or proceedings which question the
validity of this Agreement, the Notes, any of the other Financing
Agreements, or any action to be taken in connection with the transactions
contemplated hereby or thereby.
(e) No Conflicting Law or Agreements. The execution, delivery and
performance by the Company and Guarantors of this Agreement, the Notes and
the other Agreements: (i) do not violate any provision of the Certificate
of Incorporation or By-laws of the Company, (ii) do not violate any order,
decree or judgment, or any provision of any statute, rule or regulation,
(iii) do not violate or conflict with, result in a breach of or constitute
(with notice or lapse of time, or both) a default under any shareholder
agreement, stock preference agreement, mortgage, indenture or contract to
which the Company is a party, or by which any of its respective properties
are bound, and (iv) do not result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any property or
assets of the Company or Guarantors except for the liens granted hereunder.
(f) Taxes. With respect to all taxable periods of the Company, the
Company has filed all tax returns which are required to be filed and all
federal, state, municipal, franchise and other taxes shown on such filed
returns have been paid or are being diligently contested by appropriate
proceedings and have been reserved against, as required by generally
accepted accounting principles, consistently applied.
(g) Financial Statements. The Company has heretofore delivered to the
Bank financial statements of the Company as of December 31, 1992, and the
related statements of income, retained earnings and sources and uses of
funds for the fiscal year or period then ended. Such statement is complete
and correct in all material respects and fairly presents the consolidated
financial condition of the Company as of the date and for the periods
referred to and has been prepared in accordance with generally accepted
accounting principles consistently applied by the Company throughout the
periods involved. There are no liabilities, direct or indirect, fixed or
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contingent, of the Company as of the date of said balance sheet which are
not reflected in such statements or in the notes thereto, other than
liabilities or obligations not material in amount which are not required to
be reflected in corporate balance sheet prepared in accordance with
generally accepted accounting principles. Company shall deliver an audited
financial statement for the year ending December 31, 1992 post closing,
which statement shall show no material adverse change in the financial
condition of the Company from that shown on the financial statement.
(h) Adverse Developments. Since December 31, 1992 there has been no
material adverse change in the financial condition, business, operations,
affairs or prospects of the Company when taken as a whole or of the
Guarantors or in any of the properties or assets of the Company when taken
as a whole or of the Guarantors.
(i) Existence of Assets and Title Thereto. The Company and Guarantors
have good and marketable title to their respective properties and assets,
including the properties and assets reflected in the financial statements
referred to above. Such properties and assets are not subject to any
mortgage, pledge, lien, lease, encumbrance or charge except those permitted
under the terms of this Agreement or as set forth in Exhibit C as to the
Collateral and Exhibit D as to the Mortgages.
(j) Regulations G, T, U and X. The proceeds of the borrowing hereunder
are not being used and will not be used, directly or indirectly, for the
purposes of purchasing or carrying any margin stock in contravention, or
which would cause the Bank to be in violation, of Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System.
(k) Compliance. The Company is not in default with respect to any
order, writ, injunction or decree of any court or of any federal, state,
municipal or other governmental department, commission, board, bureau,
agency, authority or Official, or in violation of any law, statute, rule or
regulation to which it or its properties is or are subject, where such
default or violation would materially and adversely affect the financial
condition of the Company when taken as a whole. The Company represents that
it has not received notice of any such default from any party. The Company
or Guarantors are not in default in the payment or performance of any of
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its obligations to any third parties or in the performance of any mortgage,
indenture, lease, contract or other agreement to which it is a party or by
which any of its assets or properties are bound.
(l) Leases. The Company enjoys quiet and undisturbed possession under
all leases under which it is operating, and all of such leases are valid
and subsisting and not in default.
(m) Deferred Compensation Arrangements. The Company has neither
entered into employment contracts or deferred compensation plans, incentive
compensation plans, executive compensation plans, arrangements or
commitments not required to be disclosed pursuant to Section 6.01 (m)
hereof (other than normal policies regarding holidays, vacations and salary
continuation during short periods of illness).
(n) Office. The chief executive office and principal place of business
of the Company, and the office where its records concerning Collateral are
kept, is at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx.
(o) Places of Business. The Company has no other place of business and
locates no Collateral, specifically including books and records, at any
location other than 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx. The Company
shall locate a full and complete set of its books and records in its
offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx.
(p) Contingent Liabilities. Neither the Company nor the Guarantors are
a party to any suretyship, guarantyship, or other similar type agreement;
nor has it offered its endorsement to any individual, concern, corporation
or other entity or acted or failed to act in any manner which would in any
way create a contingent liability that does not appear in the financial
statements referred to hereinbefore, except for a Letter of Credit issued
by Shawmut Bank, formerly known as Connecticut National Bank, for the
benefit of the National Shipping Company of Saudi Arabia in the amount of
Twenty-Six Thousand ($26,000.00) Dollars, which Letter of Credit shall
expire on January 1, 1994, and the personal guaranties of office equipment
leases.
(q) Contracts. No contract, governmental or otherwise, to which the
Company is a party, is subject to renegotiation of any material terms, nor
is the Company in default of any material contract.
(r) Unions and Pensions. The Company is not a party to any collective
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bargaining, union or pension plan agreement except as set forth herein. The
union contracts, if any, are in full force and effect and are not currently
subject to renegotiation. The Company is in full compliance with the terms
and conditions of all such union contracts and knows of no threatened work
stoppage by any union members.
(s) Licenses. The Company has all licenses, permits and other
permissions required by any government, agency or subdivision thereof, or
from any licensing entity necessary for the conduct of its business, all of
which the Company represents to be in good standing and in full force and
effect.
(t) Collateral. The Company is and shall continue to be the sole owner
of the collateral free and clear of all liens, encumbrances, security
interests and claims except the liens granted to the Bank hereunder and as
set forth on Exhibit C, and with respect to the mortgages of Guarantors
except as specifically set forth in Exhibit D; the Company is fully
authorized to sell, transfer, pledge and/or grant a security interest in
each and every item of the Collateral to the Bank; all documents and
agreements related to the Collateral shall be true and correct and in all
respects what they purport to be; all signatures and endorsements that
appear thereon shall be genuine and all signatories and endorsers shall
have full capacity to contract; none of the transactions underlying or
giving rise to the Collateral shall violate any applicable state or federal
laws or regulations; all documents relating to the Collateral shall be
legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms; and the Company agrees to
defend the Collateral against the claims of all persons other than the
Bank.
(u) Receivables. (i) Each Receivable is or, at the time it comes into
existence, will be a true and correct statement of: (A) the bona fide
indebtedness of each Receivable Debtor; and (B) the amount of the account
for services performed for and accepted by, such Receivable Debtor, net of
any charges, adjustments, discounts or other reductions whatsoever; and
(ii) At the time of each borrowing hereunder, there are and, to the best of
the Company's knowledge after due investigation, will be no defenses,
counterclaims, discounts or setoffs that may be asserted against Acceptable
Receivables.
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(v) Financial Information. All financial information including, but
not limited to, information relating to the Receivables, submitted by the
Company to the Bank, whether previously or in the future, is and will be
true and correct in all material respects, and is and will be complete
insofar as may be necessary to give the Bank a true and accurate knowledge
or the subject matter.
(w) Parent, Affiliate or Subsidiary Corporations. The Company has no
parent corporation and has no affiliate or subsidiary corporations.
(x) The Company acknowledges that it is legally and validly indebted
to the Bank as of this date by virtue of the Term Note and the Revolving
Loan Note, plus interest accrued and accruing thereon; and costs and
expenses of collection, if any, including without limitation, attorney's
fees, and that it has no defense, counterclaim or offset with respect to
any of the foregoing;
(y) The Company further acknowledges that all indebtedness,
liabilities and obligations of the Company to the Bank, whenever and
however arising, are and continue to be secured by, among other things, a
blanket first lien security interest except as set forth in Exhibit C in
all of the Company's accounts, accounts receivable, equipment, general
intangibles, and all other Collateral.
(z) ERISA. The Company shall be in full compliance with all terms of
the Employment Retirement Security Act ("ERISA") or similar laws.
ARTICLE VII
REVOLVING LOAN CONDITIONS OF LENDING
Section 7.01. Conditions of the Initial Loan. Subject to the terms of
Section 7.02 hereof, the obligation of the Bank to make the first Revolving Loan
under this Financing Agreement is subject to the fulfillment of the following
conditions precedent at the time of the execution of this Financing Agreement:
(a) Notes. The Bank shall have received a duly executed Term Note, and
Revolving Note drawn to its order;
(b) Evidence of Corporate Action. The Bank shall have received
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certified copies of all corporate action in form and substance satisfactory
to the Bank taken by the Company to authorize the execution, delivery and
performance of this Agreement, the Notes, and the other Financing
Agreements to which it is a party, and the borrowing to be made hereunder,
together with true copies of the Company's Certificate of Incorporation and
By-laws and such other papers as the Bank or its counsel may reasonably
require;
(c) Opinion of Counsel. The Bank shall have received favorable written
opinion of Xxxxx X'Xxxxxx, counsel for the Company and the Guarantors and
accompanied by such supporting documents as the Bank or its counsel may
reasonably require.
(d) Guaranty. The Bank shall have received the duly executed guaranty
(the "Guaranty") from Xxxxxx X. Story, Xxxx X. Story, Xxxxxx X. Xxxxx and
Xxxxxx X. Xxxxx (the "Guarantors") pursuant to which they shall have
unconditionally guaranteed the payment and performance of all liabilities
and obligations of the Company to the Bank. The Guaranty shall be in form,
scope and substance satisfactory to the Bank.
(e) Mortgages. As additional security under this Financing Agreement,
Guarantors shall have granted to the Bank duly executed mortgages each
securing the sum of Two Hundred Twenty-Five Thousand ($225,000.00) Dollars
on real property owned by "Guarantors Xxxxx" located at 00 Xxxxx Xxx Xxxxx,
Xxxxxx, Xxxxxxxxxxx ("Weston Property"), and on real property owned by
"Guarantors Story" located at 00 Xxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx
("Darien Property"), which shall be in form, scope and substance
satisfactory to the Bank (collectively, the "Mortgages"), and subject only
to those encumbrances specifically set forth on the Mortgage title
insurance policies referred to in Section 7.01 (h) hereto, as the case may
be, which are acceptable to the Bank. Upon written notice to and consent of
Bank, Bank may permit Guarantors to substitute collateral for the Mortgages
securing the Guaranties.
(f) Mortgage Title Insurance. The Bank shall have received mortgagee
title insurance policies from an ALTA Insurance Company in form, scope and
substance satisfactory to the Bank and its counsel, which shall insure the
Bank's valid third mortgage on the Weston Property and which shall insure
Bank's valid third mortgage on the Darien Property.
(g) Hazard, Liability and Flood Insurance. Guarantors shall provide
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Bank with Certificates of Hazard and Liability Insurance and flood
insurance, if required, for the Weston Property and the Darien Property
naming Bank as a loss payee thereunder.
(h) UCC-l Financing Statements. The Bank shall have received from the
Company, duly executed UCC-l financing statements and such other documents
as the Bank deem necessary or proper to perfect the security interest in
the Collateral, all of which shall be in form, scope and substance
satisfactory to the Bank and its counsel.
(i) Checking Account and Depository Account. Company shall have
established its primary checking account with Bank under the conditions in
Section 11.01 herein. In the event of default, Bank in its discretion may
require other depository accounts ("Depository Account") such as a
"Lockbox" account.
(j) Further Documents. The Bank shall have received such further
documents, instruments and agreements as the Bank may reasonably request,
including without limitation, insurance policies and certificates
evidencing adequate insurance and coverage on the Company's assets which
insurance policies will name the Bank as loss payee, mortgagee or
additional insured, as the case may be, all in form and substance
satisfactory to the Bank and its counsel.
Section 7.02. Conditions of Additional Revolving Loans. In addition to the
conditions in Section 7.01, the Bank shall make no further Revolving Loans
unless the following conditions shall exist or have been satisfied by the
Company at the time any further Revolving Loan is requested.
(a) Essence of Demand, Termination or Default. The Bank shall not have
demanded payment of, nor shall the Bank nor the Company have terminated,
the Revolving Loans, nor shall an Event of Default have occurred but for
the giving of notice or the passage of time.
(b) Compliance Certificates. Requests for advances under the line may
be made via facsimile transmission, courier, hand delivery or U.S. Mail by
Xxxxxx X. Story or Xxxxxx X. Xxxxx. Borrower waives liability for
unauthorized advances. On the date of each Revolving Loan hereunder and
after giving effect, at Bank's request the Company shall have delivered to
the Bank a certificate executed by its President or Executive Vice
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President which shall state, among other things, that: (i) the Company has
complied, and is then in compliance, with all the terms, covenants and
conditions of this Agreement and the other Financing Agreements which are
binding upon it; (ii) there exists no Event of Default as defined in this
Agreement and no event which, but for the giving of notice or passage of
time or both, would constitute such an Event of Default; and (iii) the
representations and warranties contained herein and in the other Agreements
are true and correct with the same effect as though such representations
and warranties had been made at the time of each Revolving Loan.
Additionally, within ten (10) business days of the close of each month,
such officer shall submit a similar certificate to the Bank certifying to
all of the foregoing and, without limiting the generality of the foregoing,
certifying particularly that the Company is in full compliance with the
financial covenants set forth in Article VIII hereof or indicating the
extent of such non-compliance.
(c) Borrowing Base. The indebtedness of the Company by virtue of the
making of any Revolving Loan shall not exceed the amount of the Bank's
commitment, individually, or the amount permitted by the Borrowing Base, in
the aggregate. The Company shall not request any Revolving Loan if the
effect of such Revolving Loan shall be to cause the balance of all
Revolving Loans to exceed the Borrowing Base. If at any time the balance of
all Revolving Loans exceeds the Borrowing Base, the Company shall
immediately pay to the Bank the amount necessary to reduce the balance of
all Revolving Loans to an amount not to exceed the Borrowing Base.
(d) Annual Cleanup. The outstanding balance on the Revolving Loan
shall be paid to zero for a period of thirty (30) consecutive days
annually.
ARTICLE VIII
COVENANTS
A. Affirmative Covenants.
The Company covenants and agrees that from the date hereof until payment
and performance in full of all Obligations, and until the termination of this
Agreement, unless the Bank otherwise consents in writing, the Company shall:
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Section 8.01. Financial Statements. Deliver to the Bank (a) within sixty
(60) days after the close of each quarter of each fiscal year of the Company, a
management prepared balance sheet and income statement for that portion of the
fiscal year-to-date then ended, and certified by the President of the Company as
being accurate; (b) within one hundred twenty (120) days after the close of each
fiscal year of Company, financial statements including a balance sheet as of the
close of such fiscal year and statements of income and retained earnings and
source and application of funds for the year then ended, prepared in conformity
with generally accepted accounting principles, applied on a basis consistent
with that of the preceding year or containing disclosure of the effect on
financial position or results of operations of any change in the application of
accounting principles during the year prepared on an audit basis by an
independent certified public accounting firm acceptable to Bank, in accordance
with generally accepted accounting principles, and also accompanied by a written
statement from such accountants stating that they have reviewed such financial
statements and the Financial Covenants set forth in Article VIII hereof and have
found no evidence of an Event of Default having occurred or of an event which
with passage of time and/or giving of notice would constitute an Event of
Default having occurred; (c) together with the statements referred to in
sub-paragraphs (a) and (b) above, a written statement from the President of the
Company certifying that there exists no Event of Default by the Company in the
performance of any of its obligations to the Bank under any of the Financing
Agreements; and (d) within one hundred twenty (120) days after the close of each
calendar year, the annual personal financial statements and tax returns of
Guarantors. Promptly upon the Bank's written request, such other information
about the financial condition and operations of Company or Guarantors, as the
Bank may, from time to time, reasonably request; and promptly upon becoming
aware of any Event of Default, or any occurrence which with the giving of notice
and/or the passage of time would constitute an Event of Default, notice thereof
in writing.
Section 8.02. Certificate of Aging/Certificate of Borrowing Base. Deliver
to the Bank on a monthly basis no later than the fifteenth (15th) day following
months end, a certificate in form and content acceptable to the Bank, setting
forth the amount of the Receivables, Acceptable Receivables of the Company and
an aging report by customer of all Receivables of the Company, and adding with
each request for advance on the Revolving Loan a certificate in form and content
acceptable to Bank, setting forth the Borrowing Base. A Certificate of Borrowing
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Base is attached as Exhibit E. Borrowers determination of Acceptable Receivables
is not binding on Bank.
Section 8.03. Insurance and Endorsements. (a) Keep its properties insured
against fire and other hazards (so-called "All Risk" coverage) in amounts and
with companies satisfactory to the Bank to the same extent and covering such
risks as is customary in the same or a similar business; maintain public
liability including without limitation, against claims for personal injuries or
death; and maintain all worker's compensation, employment or similar insurance
as may be required by applicable law; (b) All insurance shall contain such
terms, be in such form, and be for such periods reasonably satisfactory to the
Bank, and be written by such carriers duly licensed by the appropriate states
where any Collateral is located and reasonably satisfactory to the Bank. Without
limiting the generality of the foregoing, such insurance must provide that it
may not be canceled without thirty (30) days prior written notice to Bank or
such lesser time as insurer in the ordinary course of its business provides.
Bank to be endorsed as loss payee with a long form Loss Payable Clause, in form
and substance acceptable to the Bank on all such insurance. In the event of
failure to provide and maintain insurance as herein provided, the Bank may, at
its option, provide such insurance and charge the amount thereof to its
Revolving Loans. The Company shall furnish to the Bank certificates or other
satisfactory evidence of compliance with the foregoing insurance provisions. The
Company hereby irrevocably appoints the Bank as its attorney-in-fact, coupled
with an interest, to receive payments of the insurance and execute and endorse
all documents, checks and drafts in connection with payment of the insurance.
Any proceeds received by the Bank shall be applied to the Obligations in such
order and manner as the Bank shall determine in its sole discretion, or shall be
remitted to the Company, in either event at the Bank's sole discretion.
Notwithstanding the foregoing, prior to Bank's application of such proceeds it
shall discuss application of the proceeds with the Company.
Section 8.04. Tax and Other Liens. Comply with all statutes and government
regulations and pay all taxes, assessments, governmental charges or levies, or
claims for labor, supplies, rent and other obligations made against it or its
property which, if unpaid, might become a lien or charge against the Company or
its properties, except for these items described in Exhibits B and C and
liabilities being contested in good faith and against which, if requested by the
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Bank, the Company shall set up reserves in amounts and in form reasonably
satisfactory to the Bank.
Section 8.05. Place of Business. Maintain its chief place of business and
chief executive offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, unless
the Company shall have given the Bank thirty (30) days prior written notice of
any change in such places of business.
Section 8.06. Inspections. Allow the Bank by or through any of its
officers, attorneys, or personnel designated by them, for the purpose of
ascertaining whether or not each and every provision hereof and of any related
agreement, instrument and document, is being performed, to enter the offices of
the Company to examine or inspect any of the properties, books and records or
extracts therefrom, to make copies of such books and records or extracts
therefrom, and to discuss the affairs, finances and accounts thereof with the
Company all at such reasonable times, upon reasonable notice and as often as the
Bank or any representative of the Bank may reasonably request. The Bank shall be
entitled to conduct periodic field examination of Company's premises, Collateral
and books and records.
Section 8.07. Litigation. Promptly advise the Bank of the commencement or
threat of litigation, including arbitration proceedings and any proceedings
before any governmental agency but excluding product liability claims fully
covered by insurance (collectively, "Litigation"), which is instituted against
the Company and is reasonably likely to have a materially adverse effect upon
the condition, financial, operating or otherwise, of the Company.
Section 8.08. Maintenance of Existence. Maintain its corporate existence
and comply with all valid and applicable statutes, rules and regulations, and
maintain its properties in good repair, working order and operating condition.
The Company shall immediately notify the Bank of any event causing material loss
in the value of its assets.
Section 8.09. Notice of Certain Events. Give prompt written notice to the
Bank of:
(a) every occasion that the Collateral is subject to or has sustained
permanent or substantial damage in excess of $5,000.00 together with such
remedial action that Company proposes to take or has taken in response
thereto;
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(b) any material dispute that may arise between the Company and any
governmental regulatory body or law enforcement agency;
(c) any labor controversy resulting or likely to result in a strike or
work stoppage against the Company;
(d) any proposal by any public authority to acquire the assets or
business of the Company;
(e) the location of any Collateral other than at the Company's place
of business disclosed in this Agreement other than Collateral in transit in
the ordinary course of the Company's business;
(f) any proposed or actual change of the name, identity or corporate
structure of the Company, including without limitation, the termination of
employment of a Guarantor with the Company for any reason whatsoever;
(g) any circumstance or event by virtue of which or in connection with
which the Company may have or may incur any liability, expense or
responsibility under any environmental law or regulation;
(h) any other matter which has resulted or is reasonably likely to
result in a material adverse change in the financial condition or
operations of the Company; and
(i) any information received by the Company with respect to
Receivables that may materially affect the value thereof or the rights and
remedies of the Bank with respect thereto.
Section 8.10. Defaults. Upon the occurrence of any Event of Default or of
any event which, but for giving of notice or passage of time or both, would
constitute an Event of Default, give prompt written notice of such occurrence to
the Bank signed by the president of the Company describing such occurrence and
the steps, if any, being taken to cure the Event of Default.
Section 8.11. Receivable Duties. The Company has complied and will continue
to comply with any and all federal, state and local laws affecting its business,
including, but not limited to, payment of all federal and state taxes with
respect to the sales by the Company and disclosures in connection therewith. The
Company agrees to indemnify the Bank against and hold the Bank harmless from,
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all claims, actions and losses, including reasonable attorney's fees and costs
incurred by such Bank arising from any contention, whether well founded or
otherwise, that there has been a failure to comply with such laws.
Section 8.12. Collateral Duties. Do whatever the Bank may request from time
to time by way of obtaining, executing, delivering and filing financing
statements, assignments, landlord's or mortgagee's waivers, and other notices
and amendments and renewals thereof, and the Company will take any and all steps
and observe such formalities as the Bank may request, in order to create and
maintain a valid and enforceable lien upon, pledge of, and first priority
security interest in intangible collateral and a valid lien in all other
Collateral. The Bank is authorized to file financing statements without the
signature of the Company and to execute and file such financing statements on
behalf of the Company as specified by the Uniform Commercial Code to perfect or
maintain its security interest in all of the Collateral. All reasonable charges,
expenses and fees the Bank may incur in filing any of the foregoing, together
with reasonable costs and expenses of any lien search required by the Bank, and
any taxes relating thereto, shall be charged to the balance of the Revolving
Loans and added to the Obligations.
Section 8.13. Audit and Appraisals by Bank; Fees. Permit the Bank to audit
the books and records of the Company and to conduct or cause to be conducted
appraisals of the Company's assets at such times, upon reasonable notice, and in
such manner and detail as the Bank deems reasonable. Without limiting the
generality of the foregoing, the Bank shall be allowed to verify the Receivables
of the Company and to confirm with Receivable Debtors the validity and amount of
Receivables. The Company shall promptly pay to the Bank reasonable audit fees
per man per day and any out of pocket expenses incurred in connection with any
such audit. In addition, the Company shall promptly pay or reimburse the Bank
for the costs of any such investigations, as described in Section 8.06 herein,
conducted by or for the Bank. The Bank may charge any such audit fees and
out-of-pocket expenses to the Company's Revolving Loan Account. Company agrees
to pay the expense of one audit annually and in the event of default, such other
audits as Bank in its discretion shall require. Company shall bear the
reasonable expense of such audit and appraisals.
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Section 8.14. Receivables Aging. Not less than once each month as more
particularly set forth in Section 8.01 hereof, the Company shall submit to the
Bank an aging of its Receivables, all in form and substance acceptable to the
Bank.
B. Negative Covenants.
The Company covenants and agrees that from the date hereof until payment
and performance in full of all Obligations, and until the termination of this
Financing Agreement, unless the Bank otherwise consents in writing, which
consent shall not be unreasonably withheld, the Company shall not:
Section 8.15. Encumbrances. Incur or permit to exist any lien, mortgage,
charge or other encumbrance against any of its properties or assets, whether now
owned or hereafter acquired, except: (a) liens required or expressly permitted
by this Agreement; (b) pledges or deposits in connection with or to secure
worker's compensation, unemployment or liability insurance; (c) tax liens which
are being contested in good faith and in compliance with this Agreement.
Section 8.16. Limitation on Indebtedness. Create, incur and guarantee any
indebtedness or obligation for borrowed money from, or issue or sell any of its
obligations to any lender without the express written consent of Bank except for
trade debt incurred in the ordinary course of business.
Section 8.17. Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable upon the obligations of any person, firm or corporation,
or enter into any purchase or option agreement or other arrangement having
substantially the same effect as such a guarantee, except by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
Section 8.18. Consolidation or Merger. Merge into or consolidate with or
into any corporation.
Section 8.19. Loans, Advances, Investments. Use the proceeds of any Loans,
either directly or indirectly, to make or permit to exist any loans or advances
to, or purchase any stock, other securities or evidences of indebtedness of, or
make or permit to exist any investment (including without limitation the
acquisition of stock of a corporation), or acquire any interest whatsoever in,
any other person.
Section 8.20. Acquisition of Stock of the Company; Dividends. Purchase,
acquire, redeem or retire, or make any commitment to purchase, acquire, redeem
or retire any of the capital stock of the Company, whether now or hereafter
outstanding, or declare or pay any dividend, or make any distribution to any of
its stockholders.
Section 8.21. Sale and Lease of Assets. Sell, lease or otherwise dispose of
any of its assets, unless the Company shall have replaced or substituted any
such assets with like assets of equal or greater value.
Section 8.22. Name Changes. Change its corporate name or conduct its
business under any trade name or style other than as set forth in this
Agreement.
Section 8.23. Capital Expenditures. In any fiscal year, may not make any
expenditure for any asset which would be a Fixed Asset, or any expenditures for
any leases, including but without limitation capitalized or conditional sales
contract in the excess of $25,000.00 per annum in the aggregate, without written
consent of the Bank. For the purpose of this covenant, the entire amount paid
over the life of any capitalized lease or conditional sales contract shall be
deemed to be paid in the first year of such lease or sales contract.
Section 8.24. Prohibited Transfers. Transfer, in any manner, either
directly or indirectly, any cash, property, or other assets to any of its
affiliates, other than those made in the ordinary course of business and for
fair consideration on terms no less favorable than if such transfer has been an
arms-length transaction between the Company and an unaffiliated entity.
Section 8.25. No Management/Ownership Change. Suffer any change in its
management or ownership which the Bank deems, in its sole discretion, to be a
material change.
Section 8.26. Leasebacks. Lease any real estate or other capital asset from
any lessor who shall have acquired such property from the Company.
Section 8.27. No Violation. The Company shall not (i) take any action or
(ii) fail to take any action which would invalidate or limit the coverage of the
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Certificate of Guarantee.
C. Financial Covenants.
The Company agrees and covenants that from the date hereof until the
payment and performance in full of all Obligations, and until the termination of
this Agreement, the Company shall not, on a consolidated basis:
Section 8.28. Net Worth. Permit ratio of unsubordinated liabilities to net
worth plus subordinated liabilities to exceed 3.25:1. Net Worth shall be defined
as book net worth plus loans subordinated to Lender's debt.
Section 8.29. Leverage Ratio. Permit minimum cash flow on an annual basis
to be less than 1.20 times the scheduled principal and interest payments. The
annual period to determine minimum cash flow shall commence January 1 and end on
December 31, in each year. Cash flow shall mean profit less taxes plus interest
expense plus depreciation and amortization.
Section 8.30. Officer and Shareholder Loans/Advances. Make any loans or
advances to any officer, employee, shareholder or director of Company without
the express written consent of Bank.
Section 8.31. Dividends. Declare or pay dividends to its shareholders
without Bank's prior review and written consent.
Section 8.32. Working Capital. Net Working Capital shall not fall below
zero. For purposes herein, net Working Capital shall mean current assets minus
current liabilities.
ARTICLE IX
COLLATERAL
Section 9.01. Grant. To secure the prompt payment and performance of each
and all of the Obligations, the Company pledges, assigns, transfers and grants
to the Bank, a continuing, lien and security interest in the following property
of the Company (herein called the "Collateral") :
(a) All accounts, bank accounts, accounts receivable, contracts,
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contract rights, general intangibles related to or arising from any
account, notes, documents, chattel paper, instruments, acceptances, drafts
or other forms of obligations and receivables of the Company arising from
the rendition of services by Company in the ordinary course of its business
or otherwise (all of, the foregoing being herein collectively called
"Receivables" or "Accounts"), whether or not the same are listed on any
schedules, assignments or reports furnished to Bank from time to time, and
whether such Accounts are now existing or are created at any time
hereafter;
(b) All documents, instruments, documents of title, patents,
trademarks or licenses, general intangibles, policies and certificates of
insurance, guaranties, securities, chattel paper, deposits, tax returns,
proceeds of insurance, cash, liens or other property, which are now or may
hereinafter be in the possession of the Company or as to which the Company
may now or hereafter control possession by documents of title or otherwise;
(c) All books, records, customer lists, ledgers, evidence, invoices,
and all other evidences of the Company's business records, including all
cabinets, drawers, etc. that may hold the same; computer records; lists,
software, programs, wherever located all whether now existing or hereafter
arising or acquired;
(d) All general intangibles, including without limitation; tax
refunds, proceeds of insurance, tradenames, trademarks, applications
therefor, that the Company now owns, has the right to use or may hereafter
own or acquire the right to use;
(e) All inventory, equipment, appliances, and furniture and fixtures,
now existing or hereafter arising, wherever located, and all contracts,
contract rights and chattel paper arising out of any lease of any of the
foregoing;
(f) All other collateral in which the Company may hereafter grant to
the Bank a security interest; and
(g) All renewals, substitutions, replacements, additions, accessions,
proceeds, and products of any and all of the foregoing.
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ARTICLE X
EVENT OF DEFAULT
Section 10.01. Events of Default. Without limiting the demand nature of
the Revolving Loans, which at all times shall be payable on DEMAND, any and all
obligations including, without limitation, the Obligations arising pursuant to
or in connection with the Revolving Loans and the Term Loan, shall, at the
option of the Bank and notwithstanding any time or credit allowed by any note or
agreement, become immediately due and payable without notice if any one or more
of the following events (herein called "Events of Default" and individually, an
"Event of Default") shall occur: (a) failure of the Company to pay principal,
interest or any other sum due hereunder or under the Notes when due and payable,
and upon the expiration of any applicable grace period; (b) failure to pay or
perform when due any other Obligation arising under this Agreement, the Notes or
the other Financing Agreements, by any guarantor or surety for any Obligation of
the Company to the Bank, and upon the expiration of any applicable grace period;
(c) any event of default under any other agreement under which the Company or
any Guarantors are a party or by which the Company or any of its properties may
be bound; (d) breach of any covenant or agreement contained in, or failure by
the Company to perform any act, duty or obligation as required by, this
Agreement specifically including, without limitation, breach of any Financial
Covenants set forth in Article VIII hereof, upon the expiration of any
applicable grace period; (e) the making by the Company of any misrepresentation
of a material fact to the Bank; (f) except as permitted in Sections 8.15 and
8.24 hereof, the sale of other disposition or encumbrance of any of the
Collateral, or the filing, making or issuance of any levy, seizure, attachment,
judgment or injunction upon or against the Company, the Collateral, or any other
property or assets of the Company which remains in existence for more than 45
days; (g) insolvency of the Company or any guarantor for any Obligation of the
Company to the Bank, or business failure, appointment of a receiver or
custodian, or assignment for the benefit of creditors or the commencement of any
proceedings under any bankruptcy or insolvency law by or against the Company or
any guarantor for any Obligation of the Company to the Bank; (h) calling of a
meeting or creditors, appointment of a committee of creditors or liquidating
banks, or offering of a composition extension to creditors by, for or of the
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Company or any of its subsidiaries; (i) failure on the part of the Company to
keep the Collateral insured against loss by fire or otherwise for the full
insurable value thereof with companies and for coverages (including Bank's Long
Form Loss Payable Endorsement) acceptable to the Bank making the loss, if any,
payable to the Bank; (j) the loss, revocation or failure to renew any license
and/or permit now held or hereafter acquired by the Company which materially
affects the ability of the Company to continue its operations as presently
conducted; (k) occurrence of a default or event of default under any other
agreements between the Bank and the Company and/or the Bank and any Guarantor,
upon the expiration of any applicable grace period; (1) the declaration of an
event of default by any other lender to or creditor of the Company, or any
Guarantors, which is not cured within the applicable grace period; or (m) if
there shall be any material adverse changes from the present condition or
affairs (financial or otherwise) of the Company or any of the Guarantors of the
Obligations of the Company, that in the reasonable opinion of the Bank impairs
its security or increases its risk. Upon the happening of any one or more of the
foregoing Events of Default, any requirement upon the Bank to make further
Revolving Loans hereunder shall, at the option of the Bank, terminate. The
Company expressly waives any presentment, demand, protest, notice of protest or
other notice of any kind. The Bank may proceed to enforce the rights of the Bank
whether by suit in equity or by action at law, whether for specific performance
of any covenant or agreement contained in this agreement, the Notes or the other
Financing Agreements, or in aid of the exercise of any power granted in either
this Agreement or the Notes or any other relief whatsoever appropriate to the
enforcement of such rights, or proceed to enforce any legal or equitable right
which the Bank may have by reason of the occurrence of any Event of Default
hereunder.
ARTICLE XI
COLLECTION OF RECEIVABLES
Section 11.01. Deposits. Until the Bank exercises its rights to collect the
Receivables as provided for in this Agreement, the Company shall continue direct
collection of all Receivables whether or not such Receivables are deemed to be
Acceptable Receivables. Upon the occurrence of any Event of Default, all
collections and other proceeds of Receivables the Company receives shall be
received in trust for the Bank and the Company shall: keep all such collections
-28-
separate and apart from all of their other funds and property; identify such
collections and proceeds as the property of the Bank; and deposit immediately
such collections in an Account established at Bank in the identical form
received. The Company shall not change or transfer the Depository Account
without the Bank's prior consent.
Section 11.02. Schedule. All collections of Receivables shall be set forth
on a schedule in form and substance satisfactory to the Bank. In the event the
Bank exercises its right to collect the Receivables as set forth in Section
11.01 above, collections of Receivables shall be credited to the Obligations of
the Company on the day of actual receipt by the Bank; provided, however, that
all credits shall be conditional credits subject to collection and that returned
items, at the Bank's option may be charged to the Company; and further provided
that for purposes of the computation of interest, items shall not be deemed to
be collected until such items are collected in accordance with the normal custom
of the Bank.
ARTICLE XII
ADJUSTMENTS
Section 12.01. Procedures. Until the Bank exercises its rights to collect
the Receivables as provided for in this Agreement, the Company may continue its
present policies for adjustments, but shall promptly notify the Bank of any
material credits, adjustments or disputes arising about the services represented
by Receivables. In any event, the Company will immediately pay the Bank from its
own funds (and not from the proceeds of Receivables), for application to the
Revolving Loans, an amount equal to any credit or adjustment made to any
Acceptable Receivables; provided, however, that so long as the Company is not in
default hereunder, such payment need not be made if the Company shall have,
after making such credit or adjustment, sufficient Acceptable Receivables to
maintain the aggregate outstanding balance of the Revolving Loans under the
Borrowing Base.
ARTICLE XIII
RIGHTS AND REMEDIES OF BANK
Section 13.01. Remedies of Bank. Upon the Company's failure to pay or
demand any or all of the Revolving Loans, or upon the occurrence of any Event of
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Default, the Bank shall have in any jurisdiction where enforcement hereof is
sought, in addition to all other rights and remedies which the Bank may have
under law and equity, the following rights and remedies, all of which may be
exercised with or without further demand or notice to the Company and without a
prior judicial or administrative hearing or notice, which notice and hearing are
expressly waived: to enforce or foreclose the liens and security interests
created under this Agreement or under any other agreement relating to Collateral
by any available judicial procedure or without judicial process; to enter any
premises where any Collateral may be located for the purpose of taking
possession or removing the same; to sell, assign, or otherwise dispose of
Collateral or any part thereof, either at public or private sale, for cash, on
credit or otherwise, with or without representations or warranties, and upon
such terms as shall be acceptable to the Bank, all at Bank's sole option and as
the Bank in its sole discretion may deem advisable; to bid or become purchaser
at any such sale if public; and, at the option of the Bank, to apply or be
credited with the amount of all or any part of the Obligations owing to the Bank
against the purchase price bid by the Bank at any such sale.
Section 13.02. Specific Powers. The Bank may at any time, after the
occurrence of an Event of Default, at the Bank's sole discretion: (i) give
notice of assignment to any Receivable Debtor; (ii) collect Receivables directly
and charge, or cause to be charged, the collection costs and expenses to the
Bank's Revolving Loan Account; (iii) collect receivables submitted by the
Company to the Bank for collection and charge, or cause to be charged, the
reasonable collection costs and expenses to the Bank's Revolving Loan Account;
(iv) settle or adjust disputes and claims directly with Receivable Debtors for
amounts and upon terms which the Bank considers advisable, and credit, or cause
to be credited, the Bank's Revolving Loan Account with the net amounts received
in payment of Receivables; (v) exercise all other rights granted in this
Agreement and the other Financing Agreements; (vi) receive, open and dispose of
all mail addressed to the Company and notify the Post Office authorities to
change the address for delivery of the Company's mail to an address designated
by the Bank; (vii) endorse the name of the Company on any checks or other
evidence of payment that may come into possession of the Bank and on any
invoice, or other document; (viii) in the name of the Company or otherwise,
demand, xxx for, collect and give acquittance for any and all monies due or to
become due on Receivables; (ix) compromise, prosecute or defend any action,
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claim or proceeding concerning receivables; and (x) do any and all things
necessary and proper to carry out the purposes contemplated in this Agreement,
other Financing Agreements and any other agreement between the parties. In the
event that the Bank takes any such action before the occurrence of an Event of
Default, such action shall be taken in good faith. Neither the Bank nor any
person acting as its attorney hereunder shall be liable for any acts or
omissions or for any error of judgment or mistake of fact or law, except for bad
faith, gross negligence and willful misconduct. The Company agrees that the
powers granted hereunder, being coupled with an interest, shall be irrevocable
so long as any Obligation remains unsatisfied. Notwithstanding the foregoing, it
is understood that the Bank is under no duty to take any of the foregoing
actions and that after having made demand upon the Receivable Debtors for
payment, the Bank shall have no further duty as to the collection or protection
of Receivables or any income therefrom and no further duty to preserve any
rights pertaining thereto, other than the safe custody thereof.
Section 13.03. Duties After Default. The Company will, at the Bank's
request, assemble all tangible Collateral and make it available to the Bank at
places which the Bank may reasonably select, whether at the premises of the
Company or elsewhere and will make available to the Bank all premises and
facilities of the Company for the purpose of the Bank taking possession of
Collateral. The net cash proceeds resulting from the collection, liquidation,
sale, or other disposition of Collateral shall be applied first to the expenses
(including all reasonable attorney's and professional fees) of retaking,
holding, processing and preparing for sale, selling, collecting, liquidating and
the like and then to the satisfaction of all Obligations, application as to
particular Obligations or against principal or interest to be at the Bank's sole
discretion. The Company shall be liable to the Bank and shall pay to the Bank on
demand any deficiency which may remain after such sale, disposition, collection
or liquidation of Collateral.
Section 13.04. Cumulative Remedies. The enumeration of the Bank's rights
and remedies set forth in this Article is not intended to be exhaustive and the
exercise by the Bank of any right or remedy shall not preclude the exercise of
any other rights or remedies, all of which shall be cumulative and shall be in
addition to any other right or remedy given hereunder or under any other
agreement between the parties or which may now or hereafter exist in law or at
equity or by suit or otherwise. No delay or failure to take action on the part
-31-
of the Bank in exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude other or further exercise thereof or the exercise of
any other right, power or privilege or shall be construed to be a waiver of any
event of default. No course of dealing between the Company and either the Bank
or their employees shall be effective to change, modify or discharge any
provision of this Agreement or to constitute a waiver of any default.
ARTICLE XIV
Section 14.01. Term and Termination. (a) Revolving Loan. Unless sooner
terminated by a demand by the Bank or as a result of the occurrence of an Event
of Default, the obligation of the Bank to make Revolving Loans shall terminate
on June 4, 1994 (the "Term"). The Bank and the Company may extend the Term for
one or more renewal terms which shall consist of periods of time to be
determined by the Bank but in any way not to exceed one year each (each being a
"Renewal Term") by executing a written agreement to do so prior to the end of
the Term (or prior to the end of a Renewal Term, if applicable). At the end of
the Term hereof (or at the end of a Renewal Term, if applicable), and in the
event Company has not received notice from Bank confirming renewal of the term
then in that event, the Company shall pay the entire balance of the Revolving
Loans. Further, upon termination of the Revolving Loans, all of the rights,
interest and remedies of the Bank and Obligations of the Company shall survive
and the Company shall have no right to receive, and the Bank shall have no
obligation to make, any further Revolving Loans.
(b) Term Loans. Unless payment is accelerated as a result of occurrence of
an Event of Default or demand by the Bank of the Revolving Loans, the Term Loan
shall be repaid over a period of five (5) years as set forth in the Term Note.
ARTICLE XV
Section 15.01. Expenses. Whether or not the transactions herein
contemplated shall be consummated, the Company agrees to pay all reasonable
out-of-pocket expenses (including reasonable fees and expenses of the Bank's
counsel) of the Bank incurred in connection with the preparation of this
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Agreement, the Notes, the other Financing Agreements and any amendments or
supplements hereto and thereto, and all expense (including reasonable fees and
expenses of the Bank's counsel and the Four Thousand Five Hundred and 00/100
($4,500.00) Dollar commitment fee for the Term Loan) incidental to the
collection of monies due hereunder or under the Notes or the other Financing
Agreements and/or the enforcement of the rights (including the protection
thereof) of the Bank under any provisions of this Agreement and the Notes and
the other Financing Agreements.
ARTICLE XVI
MISCELLANEOUS
Section 16.01. Set-off. The Company hereby gives the Bank a lien and right
of setoff for all its liabilities to such Bank upon and against all its
deposits, credits, collateral and property now or hereafter in the possession or
control of such Bank or in transit to it. The Bank may, upon the occurrence of
any Event of Default or upon the occurrence of any event or condition which
would constitute such an Event of Default but for the requirement that notice be
given or time elapse or both, apply or set off the same, or any part thereof, to
any liability of the Company to such Bank, even though unmatured.
Section 16.02. Covenants to Survive, Binding Agreement. All covenants,
agreements, warranties and representations made herein, in the Notes, in the
other Financing Agreements, and in all certificates or other documents of the
Company shall survive the advances of money made by the Bank to the Company
hereunder and the delivery of the Notes, and the other Financing Agreements and
all such covenants, agreements, warranties and representations shall be binding
upon and inure to the benefit of the Bank, and its successors and assigns.
Section 16.03. Cross-Collateralization. All collateral which the Bank may
at any time acquire on behalf of the Bank from the Company or from any other
source in connection with Obligations arising under this Agreement and the other
Financing Agreements shall constitute collateral for each and every Obligation,
without apportionment or designation as to particular Obligations and that all
Obligations, however and whenever incurred, shall be secured by all Collateral
however and whenever acquired, and the Bank shall have the right, in its sole
-33-
discretion, to determine the order in which the Bank's rights in or remedies
against any Collateral are to be exercised and which type of Collateral or which
portions of Collateral are to be proceeded against and the order of application
of proceeds of Collateral as against particular Obligations.
Section 16.04. Amendments and Waivers. Neither this Agreement, the Notes,
the other Financing Agreements, nor any term, covenant or condition hereof or
thereof may be changed, waived, discharged, modified or terminated except by a
writing executed by the parties hereto or thereto. No failure on the part of
Bank to exercise, and no delay in exercising, any right, remedy or power
hereunder or under the Notes or the other Financing Agreements shall preclude
any other or future exercise thereof, or the exercise of any other right, remedy
or power.
Section 16.05. Notices. All notices, requests, consents, demands and other
communications hereunder shall be in writing and shall be mailed by first class
mail to the respective parties to this Agreement as follows:
(a) If to the Company:
MARINE MANAGEMENT SYSTEMS, INC.
c/o Xxxxxx X. Story
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
cc: Attorney Xxxxx X. X'Xxxxxx
Diserio, Martin, X'Xxxxxx, et al.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
(b) if to the Bank:
Xxxxxxx X. Xxxxxxxx
Assistant Vice President
PEOPLE'S BANK
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Section 16.06. Transfer of Bank's Interest. The Company hereby agrees that
the Bank, in its sole discretion, may freely sell, assign or otherwise transfer
-34-
participation, portions, co-lender interests or other interests in all or any
portion of the indebtedness, liabilities or obligations arising in connection
with or in any way related to the financing transactions of which this Agreement
is a part. In the event of any such transfer, the transferee may, in the Bank' s
sole discretion, have and enforce all the rights, remedies and privileges of the
Bank. The Company consents to the release by the Bank to any potential
transferee (so long as such transferee is a financial institution) of any and
all information (including, without limitation, financial information)
pertaining to the Company as the Bank, in its sole discretion, may deem
appropriate. If such transferee so participates with the Bank in making loans or
advances hereunder or under any other agreement between the Bank and the
Company, the Company hereby grants to such transferee and such transferee shall
have and is hereby given a continuing lien and security interest in any money,
securities or other property of the Company in the custody or possession of such
transferee, including the right of set off under circumstances consistent with
this Agreement, to the extent of such transferee's participation in the
Obligations of the Company to the Bank.
Section 16.07. Succession. This Agreement shall bind the respective
successors and assigns of the Company and inure to the benefit of the Bank and
its respective successors and assigns. The Company acknowledges that in the
event of such assignment, any such Assignee shall be able to pursue all of its
remedies available to it under the Agreement as an assignee of Bank.
Section 16.07. Prejudgment Remedy Waiver; Waivers. The COMPANY ACKNOWLEDGES
THAT THE LOANS EVIDENCED HEREBY ARE COMMERCIAL TRANSACTIONS AND WAIVES ITS RIGHT
TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR
AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT
REMEDY WHICH THE BANK MAY DESIRE TO USE, AND FURTHER WAIVES DILIGENCE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF ANY
RENEWALS OR EXTENSIONS. INCLUDING WITHOUT LIMITATION, TORT CLAIMS. THE COMPANY
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND
ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS.
Section 16.08. Jury Waiver. THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY
COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH
OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A
-35-
PART AND/OR THE ENFORCEMENT OF ANY OF THE BANK'S RIGHTS, INCLUDING WITHOUT
LIMITATION, TORT CLAIMS. THE COMPANY ACKNOWLEDGES THAT IT MAKES THIS WAIVER
KNOWINGLY, WILLINGLY AND VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF
THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEY.
Section 16.09. Section Headings, Severability, Entire Agreement. Section
and subsection headings have been inserted herein for convenience only and shall
not be construed as part of this Agreement. Every provision of this Agreement,
the Notes and the other Financing Agreements is intended to be severable; if
provision of this Agreement, the Notes, Financing Agreements, or any other
document delivered in connection herewith shall be invalid, illegal or
unenforceable for any reason whatsoever, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not in any
way be affected or impaired thereby. All exhibits and schedules to this
Agreement shall be annexed hereto and shall be deemed to be part of this
Agreement. This Agreement, the other Financing Agreements, and the Exhibits and
Schedules attached hereto and thereto embody the entire agreement and
understanding between the Company and the Bank and supersede all prior
agreements and understandings relating to the subject matter hereof unless
otherwise specifically reaffirmed and restated herein.
Section 16.10. Governing Law. This Agreement and the other financing
agreements, and all transactions, assignments and transfers hereunder and
thereunder, and all the rights of the parties, shall be governed as to validity,
construction, enforcement and in all other respects by the laws of the State of
Connecticut. The Company agrees that the Superior Court for the Judicial
District of New Haven or the United States District Court for the District of
Connecticut at New Haven shall have jurisdiction to hear and determine any
claims or disputes pertaining to the financing transactions of which this
Agreement is a part and/or to any matter arising or in any way related to this
Agreement or any other agreement between the Bank and the Company expressly
submits and consents in advance to such jurisdiction in any action or
proceeding.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first written above.
-36-
WITNESSED: MARINE MANAGEMENT SYSTEMS,
INC.
/s/ [Illegible] BY: /s/ Xxxxxx X. Story
--------------------------- ----------------------------
XXXXXX X. STORY
Its President
/s/ Xxxxx X'Xxxxxx Duly Authorized
---------------------------
WITNESSED: PEOPLE'S BANK
/s/ [Illegible] BY: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------- ----------------------------
XXXXXXX X. XXXXXXXX
Its Asst.Vice President
Duly Authorized
/s/ [Illegible]
---------------------------
STATE OF CONNECTICUT)
) ss. Stamford June 4, 1993
COUNTY OF FAIRFIELD )
Personally appeared XXXXXX X. STORY, known to me to be the President of
Marine Management Systems, Inc., and as such signer and sealer of the foregoing
instrument, acknowledged the same to be his free act and deed as such President,
and the free act and deed of said corporation before me.
/s/ Xxxxx X'Xxxxxx
----------------------------
Commissioner of the Superior
Court
Notary Public
-37-
STATE OF CONNECTICUT)
) ss. Stamford June 4, 1993
COUNTY OF FAIRFIELD )
Personally appeared XXXXXXX X. XXXXXXXX, known to me to be the Assistant
Vice President of PEOPLE'S BANK and that he as such officer, signer and sealer
of the foregoing instrument, acknowledged the execution of the same to be his
free act and deed individually and as such officer, and the free act and deed of
said corporation.
In Witness Whereof, I hereunto set my hand.
/s/ Xxxx A/ Xxxxxxxxxxx
----------------------------
Commissioner of the Superior
Court
Notary Public
-38-
EXHIBIT A
TERM PROMISSORY NOTE
$450,000.00 June 4, 1993
For value received, the undersigned MARINE MANAGEMENT SYSTEMS, INC., an
Ohio Corporation authorized to do business in the State of Connecticut,
(hereinafter "Maker") with a business address at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, does hereby promise to pay PEOPLE'S BANK, a Connecticut Banking
Corporation, or order, ("Lender") at its office at 000 Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, or at such other place as the holder hereof, (including Lender,
hereinafter referred to as "Holder") may designate, the sum of FOUR HUNDRED AND
FIFTY THOUSAND AND 00/100 ($450,000.00) DOLLARS, together with interest on the
unpaid balance of this Note beginning as of the date hereof, before or after
maturity or judgment (subject to the default rate set forth below), at the rate
of one and one-half percentage points (1.50%) percent per annum above the
Holder's Prime Rate (defined below) on a floating basis, which rate shall be
computed and payable monthly in arrears on the basis of a Three Hundred Sixty
(360) day year and actual days elapsed, together with all taxes levied or
assessed on this Note or the debt evidenced hereby against the Holder (excluding
taxes on the net income of the Holder, and together with all reasonable costs,
expenses and attorneys' and other professional fees incurred in any action to
collect this Note or to enforce, protect, preserve, defend or sustain or
foreclose the lien of any mortgage, security agreement or other agreement or in
any litigation or controversy arising from or connected with said mortgage,
security agreement or other agreement or this Note. The term "Prime Rate" as
used herein shall mean the interest rate which Lender announces from time to
time as its Prime Rate. The Prime Rate may not be Lender's lowest or most
favorable rate. Any change in the interest rate because of a change in the Prime
Rate shall become effective immediately, without notice or demand.
Interest shall be due and payable monthly in arrears on the first day of
each and every month commencing on July 4, 1993 and continuing until the
obligations evidenced by this Note are fully and finally paid. Principal shall
be due and payable in: (1) Fifty-nine (59) equal monthly installments of FIVE
THOUSAND EIGHT HUNDRED AND THIRTY-THREE 33/100 ($5,833.33) DOLLARS plus
interest, commencing on July 4, 1993 and continuing on the first day of each
every month thereafter through and including May 4, 1998; and (ii) one final
payment of all outstanding principal together with outstanding interest thereon
on June 4, 1998. Notwithstanding the foregoing, Maker shall make such other
payments on account of principal as may be necessary to insure that the
outstanding principal balance shall not exceed the Funding Formula as more fully
described in the Commercial Revolving Loan, Term Loan and Security Agreement
("CRLTLSA") of even date herewith which is incorporated herein by reference
thereto. Such payments of principal as may be required to insure compliance with
the funding formula, shall not reduce the monthly payments of principal as set
forth in this note, but shall reduce the term accordingly.
Maker agrees that: (i) if any installment of principal or interest or any
other sum due hereunder is not paid within ten (10) days of the date such
payment is due and payable; or (ii) if any demand indebtedness of Maker to
Holder is not paid on demand; or (iii) if any installment of interest or other
sums due under that certain Promissory Note of even date herewith in the
original principal amount of $150,000.00 ("Revolving Note") is not paid when due
and payable; (iv) If Maker or any endorser hereof or any guarantor or surety of
any obligation of Maker hereunder shall suffer or permit the filing by or
against it of any petition for adjudication, arrangement, reorganization or the
like under any bankruptcy or insolvency law, make an assignment for the benefit
of creditors or suffer or permit the appointment of a receiver for any part of
its property and in the case of an involuntary petition which is not released or
dismissed within thirty (30) days; or (v) if Maker shall be in default under the
CRLTLSA, the Revolving Note, or under any other security agreement or any other
agreement securing this Note, or in the payment of performance of any other
obligation to Holder or any material obligation of any other person; then, upon
the happening of any such event, an event of default shall have occurred
hereunder and the entire indebtedness with accrued interest thereon due under
this Note shall, at the option of the Holder, become immediately due and payable
without notice. Failure to exercise such option shall not constitute a waiver of
the right to exercise the same in the event of any subsequent default. Maker
shall have a thirty (30) day grace period to cure a default except for a default
in payment of installments of principal and/or interest due hereunder pursuant
to (i), (ii) and (iv) hereinabove set forth. Notwithstanding the foregoing, the
30 day period herein provided shall not be in addition to other grace periods
set forth in the Loan documents and the CRLTLSA, which Loan documents and
CRLTLSA at all times shall control. Upon the occurrence of such an event of
default, the interest rate on this Note shall automatically increase without
notice to a floating per annum rate equal to three percentage points (3.0%)
above the interest rate otherwise in effect hereunder at the time of such
default.
In the event of Maker's failure to pay any installment of principal,
interest and/or any other sum due hereunder or under the CRLTLSA (collectively
the "Sum") for more than ten (10) days from the date it is due and payable,
without in any way affecting Holder's right to make demand hereunder or to
declare an event of default to have occurred, Holder may collect a late charge
equal to five (5.0%) percent of the sum due to cure the extra expense involved
in handling such delinquent payment. The minimum late charge shall be $50.00.
Maker may prepay this Note in whole or in part at any time without penalty.
Notwithstanding any provisions of this Note, it is the understanding and
agreement of the Maker and Holder (and any guarantors of Maker's liabilities)
that the maximum rate of interest to be paid by Maker (or guarantors of Maker's
liabilities) to the Holder shall not exceed the highest or the maximum rate of
interest permissible to be charged by a commercial lender such as Lender to a
commercial borrower such as Maker under the laws of the State of Connecticut.
Any amount paid in excess of such rate shall be considered to have been payments
in reduction of principal.
Maker, and each and all guarantors of this Note hereby give the Holder a
lien and right of setoff after default for all Maker's liabilities upon and
against all the deposits, credits, collateral and property of Maker and
guarantors, now or hereafter in the possession or control of the Holder or in
transit to it. Holder may, upon the occurrence of an event of default hereunder,
apply or setoff the same, or any part thereof, to any liability of the Maker,
even though unmatured.
Notwithstanding the foregoing, if the proceeds from an insurance policy is
paid to the Holder pursuant to the mortgage or any security or other agreement
securing this Note, the Holder, at its option, may apply all or part of such
proceeds to the outstanding principal balance of this Note, interest thereon and
other obligations of Maker hereunder or otherwise in such order as Holder, in
its sole discretion, deems proper.
Failure by the Holder to insist upon the strict performance by Maker of any
terms and provisions herein shall not deemed to be a waiver of any terms and
provisions herein, and the Holder shall retain the right thereafter to insist
upon strict performance by the Maker of any and all terms and provisions of this
Note or any document securing the repayment of this Note.
THE MAKER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT, ACTION
OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO
THE FINANCING TRANSACTIONS OF WHICH THIS NOTE IS A PART AND/OR THE ENFORCEMENT
OF ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS. THE MAKER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY
AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH
ITS ATTORNEYS.
MAKER AND EACH AND ALL GUARANTORS OF THIS NOTE ACKNOWLEDGE THAT THE LOAN
EVIDENCED BY THE NOTE IS A COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS TO
NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR AS
OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT
REMEDY WHICH HOLDER MAY DESIRE TO USE, AND further, waive diligence, demand,
presentment for payment, notice of nonpayment, protest and notice of protest,
and notice of any renewals or extensions of this Note, and all guarantors agree
that the time for payment of this Note may be extended at Holder's sole
discretion, without impairing their liability thereon, and further consent to
the release of all or any part of the security for the payment hereof, at the
discretion of Holder, or the release of any party liable for this obligation
without affecting the liability of the other parties hereto. THE MAKER
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
This Note shall be governed by and construed in accordance with the laws of
the State of Connecticut.
MARINE MANAGEMENT SYSTEMS, INC.
BY:____________________________
XXXXXX X. STORY
Its President
Duly Authorized
EXHIBIT B
REVOLVING LOAN NOTE
$150,000.00 June 4, 1993
ON DEMAND, for value received, the undersigned MARINE MANAGEMENT SYSTEMS,
INC., an Ohio Corporation authorized to do business in the State of Connecticut,
(hereinafter "Maker") with a business address at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, does hereby promise to pay PEOPLE'S BANK, a Connecticut Banking
Corporation, or order, ("Lender") at its office at 000 Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, or at such other place as the holder hereof, (including Lender,
hereinafter referred to as "Holder") may designate, the sum of ONE HUNDRED FIFTY
THOUSAND AND 00/100 ($150,000.00) DOLLARS, together with interest on the unpaid
balance of this Note beginning as of the date hereof, before or after maturity
or judgment (subject to the default rate set forth below), at the rate of one
and one-half (1.50%) percent per annum above the Holder's Prime Rate (defined
below) on a floating basis, which rate shall be computed and payable monthly in
arrears on the basis of a Three Hundred Sixty (360) day year and actual days
elapsed, together with all taxes levied or assessed on this Note or the debt
evidenced hereby against the Holder (excluding taxes on the net income of the
Holder, and together with all reasonable costs, expenses and attorneys' and
other professional fees incurred in any action to collect this Note or to
enforce, protect, preserve, defend or sustain or foreclose the lien of any
mortgage, security agreement or other agreement or in any litigation or
controversy arising from or connected with said mortgage, security agreement or
other agreement or this Note. The term "Prime Rate" as used herein shall mean
the interest rate which Lender announces from time to time as its Prime Rate.
The Prime Rate may not be Lender's lowest or most favorable rate. Any change in
the interest rate because of a change in the Prime Rate shall become effective
immediately, without notice or demand.
The principal amount of this Note shall be advanced, at the discretion of
Holder, pursuant to a Commercial Revolving Loan, Term Loan and Security
Agreement (the "CRLTLSA") among Maker and Lender dated of even date herewith and
is subject in all respects to the terms and conditions of said CRLTLSA,
including without limitation, the repayment terms and the termination date set
forth in the CRLTLSA. Advances and payments on this Note may be evidenced by
borrowing certificates, a grid (if any) attached to this Note or similar
certificates or documents, or by an internal ledger account of Holder which
shall set forth, among other things, the principal amount of any advances and
payments therefor.
Maker shall pay interest, principal and all other sums due hereunder ON
DEMAND, and if demand is not sooner made, interest shall be due and payable
monthly in arrears on the 4th day of each and every month commencing on July 4,
1993 and continuing until the obligations evidenced by this Note are fully and
finally paid. Holder may, in its sole discretion, charge any amounts due
hereunder to Maker's revolving loan account maintained with the Holder pursuant
to the CRLTLSA.
Without in any way limiting the demand nature of the indebtedness due
hereunder, which shall at all times be payable ON DEMAND, Maker agrees that: (i)
if any installment of interest or any other sum due hereunder is not paid within
ten (10) days of the date such payment is due and payable; or (ii) if any
indebtedness evidenced by this Note is not paid on demand; or (iii) if Maker or
Holder shall terminate the revolving Loan facility made pursuant to the CRLTLSA;
or (iv) if any installment of principal or interest or any other sums due under
that certain Promissory Note of even date herewith from Maker to Holder in the
original principal amount of $450,000.00 (the "Term Note") is not paid when due
and payable; (v) If Maker or any endorser hereof or any guarantor or surety of
any obligation of Maker hereunder shall suffer or permit the filing by or
against it of any petition for adjudication, arrangement, reorganization or the
like under any bankruptcy or insolvency law, make an assignment for the benefit
of creditors or suffer or permit the appointment of a receiver for any part of
its property; or (vi) If Maker shall be in default under the CRLTLSA, the Term
Note, or under any security agreement or any other agreement securing this Note,
or in the payment or performance of any other obligation to any other person;
then, upon the happening of any such event, an event of default shall have
occurred hereunder and the entire indebtedness with accrued interest thereon due
under this Note shall, at the option of the Holder, become immediately due and
payable without notice. Failure to exercise such option shall not constitute a
waiver of the right to exercise the same in the event of any subsequent default.
Maker shall have a thirty (30) day grace period to cure a default except for a
default in payment of installments of principal and/or interest due hereunder
pursuant to (i), (ii) and (iv) hereinabove set forth. Notwithstanding the
foregoing, the 30 day period herein provided shall not be in addition to other
grace periods set forth in the Loan documents and the CRLTLSA, which Loan
documents and CRLTLSA at all times shall control. Upon the occurrence of such an
event of default, the interest rate on this Note shall automatically increase
without notice to a floating per annum rate equal to three percentage points
(3.0%) above the interest rate otherwise in effect hereunder from time to time.
In the event of Maker's failure to pay any installment of interest and/or
any other sum due hereunder or under the CRLTLSA for more than ten (10) days
from the date it is due and payable, without in any way affecting Holder's right
to make demand hereunder or to declare an event of default to have occurred, a
late charge equal to five (5.0%) percent of such late payment shall be assessed
against Maker and shall be due and payable immediately.
Notwithstanding any provisions of this Note, it is the understanding and
agreement of the Maker and Holder (and any guarantor of Maker's liabilities)
that the maximum rate of interest to be paid by Maker (or guarantor of Maker's
liabilities) to the Holder shall not exceed the highest or the maximum rate of
interest permissible to be charged by a commercial lender such as Lender to a
commercial borrower such as Maker under the laws of the State of Connecticut.
Any amount paid in excess of such rate shall be considered to have been payments
in reduction of principal.
Maker, and each guarantor of this Note hereby give the Holder a lien and
right of setoff after default for all Maker's liabilities upon and against all
the deposits, credits, collateral and property of Maker and guarantor, now or
hereafter in the possession or control of the Holder or in transit to it. Holder
may, upon the occurrence of an event of default hereunder, apply or setoff the
same, or any part thereof, to any liability of the Maker, even though unmatured.
Notwithstanding the foregoing, if the proceeds from an insurance policy
award is paid to the Holder pursuant to the mortgage or any security or other
agreement securing this Note, the Holder, at its option, may apply all or part
of such proceeds to the outstanding principal balance of this Note, interest
thereon and other obligations of Maker or otherwise in such order as Holder, in
its sole discretion, deems proper.
Failure by the Holder to insist upon the strict performance by Maker of any
terms and provisions herein shall not deemed to be a waiver of any terms and
provisions herein, and the Holder shall retain the right thereafter to insist
upon strict performance by the Maker of any and all terms and provisions of this
Note or any document securing the repayment of this Note.
THE MAKER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT, ACTION
OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO
THE FINANCING TRANSACTIONS OF WHICH THIS NOTE IS A PART AND/OR THE ENFORCEMENT
OF ANY OF THE HOLDER'S RIGHTS AND REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT
CLAIMS.
MAKER AND EACH AND ALL GUARANTORS OF THIS NOTE ACKNOWLEDGE THAT THE LOAN
EVIDENCED BY THE NOTE IS A COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS TO
NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, OR AS
OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT
REMEDY WHICH HOLDER MAY DESIRE TO USE, AND further, waive diligence, demand,
presentment for payment, notice of nonpayment, protest and notice of protest,
and notice of any renewals or extensions of this Note, and all guarantors agree
that the time for payment of this Note may be extended at Holder's sole
discretion, without impairing their liability thereon, and further consent to
the release of all or any part of the security for the payment hereof, at the
discretion of Holder, or the release of any party liable for this obligation
without affecting the liability of the other parties hereto. THE MAKER
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.
This Note shall be governed by the laws of the State of Connecticut.
MARINE MANAGEMENT SYSTEMS, INC.
BY:__________________________
XXXXXX X. STORY
Its President
Duly Authorized
EXHIBIT C
1. File No. 816237
ZENITH DATA SYSTEMS CORPORATION
Xxxxxxx Xxxx
Xx. Xxxxxx, XX 00000
All inventory of goods and merchandise bearing
tradename/trademark "Zenith Data Systems".
2. File No. 888632
BONBARDIER CAPITAL INC.
Seven Xxxxxxxxxx Xxxxxx
X. X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
All inventory financed or floor-planned by Secured Party.
3. File No. 898092/909531
JPW CREDIT CORP.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Assigned to: PITNEY XXXXX CREDIT CORPORATION
000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Leased equipment.
4. File No. 0998437
ACTIVE CAPITAL CORP.
0 Xxxxxxxxxx Xxxx.
Xxxxx 0, Xxxxx 0
Xxxxxxxx, XX 00000
Specific Listed Equipment
5. File No. 0988821
LEASCO
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Assigned to: FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION
00 Xxxxx 0xx Xxxxxx
Xxxxxxxx, XX 00000
Specifically listed equipment.
EXHIBIT D
AS TO BRIAR OAK DRIVE, WESTON, CONNECTICUT
A first Mortgage from Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx to Fairfield
County Savings Bank in the original principal amount of $100,000.00 dated
October 1, 1976 and recorded in Book 104 at Page 594 in the Weston Land Records.
A second Mortgage from Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxx to PBT Mortgage
Corporation in the original principal amount of $155,000.00 dated September 28,
1990 and recorded October 5, 1990 in Book 184 at Page 637 of the Weston Land
Records. Said mortgage was subordinated to the lien of the Connecticut National
Bank mortgage recorded in Book 156 at Page 509 by Subordination Agreement dated
September 25, 1990 and recorded in Book 184 at Page 635 of the Weston Land
Records.
AS TO BRUSH ISLAND ROAD, DARIEN, CONNECTICUT
A first Mortgage from Xxxx X. Story to People's Savings Bank-Bridgeport
(now People's Bank) in the original amount of $75,000.00 dated July 1, 1974 and
recorded in Book 345 at Page 73 in the Darien Land Records.
A second Mortgage from Xxxx X. Story and Xxxxxx X. Story to Xxxxxxx Xxxxx
Equity Management, Inc. in the original principal amount of $250,000.00 dated
January 21, 1985 and recorded in Book 507 at Page 38 in the Darien Land Records.
