INDEX TO EXHIBITS
Exhibit No.
10(ai) Stock Pledge and Security Agreement dated January 8, 1998 by and
between Canal Capital Corporation, SY Trading Corporation and CCC
Lending Corporation.
10(aj) Note Exchange and Loan Agreement dated January 8, 1998 by and
between Canal Capital Corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Defined Benefit Trust, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Value
Partners, L.P., Edelman Value Fund, LTD, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Edelman and SES Trust.
10(ak) Collateral Agency Agreement dated January 8, 1998 by and between
Canal Capital Corporation, CCC Lending Corporation, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Edelman Value Partners, L.P., Edelman Value Fund,
LTD, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and SES Trust.
10(al) Assignment Agreement dated January 8, 1998 by and between Deltec
Asset Management Corporation, Hanseatic Corporation, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Edelman Value Partners, L.P., Edelman Value Fund,
LTD, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and SES Trust.
10(am) Assignment Agreement dated January 8, 1998 by and between
Guaranty Reassurance Company, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ Defined Benefit Trust, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Value
Partners, L.P., Edelman Value Fund, LTD, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Edelman and SES Trust.
10(an) Security Agreement dated January 8, 1998 by and between Canal
Capital Corporation, Canal Galleries Corporation, Canal Arts
Corporation and CCC Lending Corporation.
10(ao) $1,000,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Canal Capital Corporation.
INDEX TO EXHIBITS, CONTINUED
Exhibit No.
10(ap) $242,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust and Canal Capital
Corporation.
10(aq) $229,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Canal Capital Corporation.
10(ar) $186,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan and Canal Capital Corporation.
10(as) $143,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Canal Capital Corporation.
10(at) $350,000 Promissory Note dated January 8, 1998 by and between
Edelman Value Partners, L.P. and Canal Capital Corporation.
10)au) $550,000 Promissory Note dated January 8, 1998 by and between
Edelman Value Fund, LTD and Canal Capital Corporation.
10(av) $300,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Canal Capital Corporation.
10(aw) $200,000 Promissory Note dated January 8, 1998 by and between SES
Trust and Canal Capital Corporation.
10(ax) $500,000 Promissory Note dated January 8, 1998 by and between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Canal Capital Corporation.
22 Subsidiaries of the registrant.
STOCK PLEDGE AND SECURITY AGREEMENT
STOCK PLEDGE AGREEMENT dated as of January 8, 1998, among CANAL
CAPITAL CORPORATION and SY TRADING CORPORATION (together, the "Pledgor"),
the parties listed on the signature page hereto under the heading
Noteholders (together with their respective successors and assigns, the
"Pledgees") and CCC LENDING CORPORATION, as agent for the Pledgee (the
"Pledge Agent").
The parties hereto, intending to be legally bound, hereby agree
as follows:
0. Pledge of Securities and Grant of Security Interest. To
secure the obligations of the Pledgor (the "Obligations") under (i) a
certain loan of even date herewith made by Pledgor to the Pledgees in the
aggregate principal amount of $395,000 to finance the payment by the
Company of the notes previously issued to ▇▇▇▇▇ & Company Custodian f/b/o
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Individual Retirement Account and (ii) those certain
promissory notes of even date herewith made by Pledgor to the Pledgees in
the aggregate principal amount of $3,305,000 in replacement of notes
p r eviously issued to Deltec Asset Management Corporation, Guaranty
Reassurance Company and certain of the Noteholders (each of the notes in
(i) or (ii) individually called, a "Note" or collectively, the "Notes") and
(iii) this Agreement, the Pledgor hereby pledges to the Pledgees, and
grants to the Pledgees a continuing security interest in, the shares of
stock described on Schedule A hereto (the "Pledged Securities"). The
Pledgor is herewith delivering the Pledged Securities to the Pledge Agent
to be held in accordance with the terms of this Agreement. The Pledgor is
also delivering to the Pledge Agent fully executed blank stock powers,
which blank stock powers may be utilized by the Pledge Agent on behalf of
the Pledgee in the exercise of the Pledgee's rights as herein granted.
0. Representations, Warranties and Covenants of Pledgor. The
Pledgor represents and warrants that it is, and covenants and agrees that
at all times during the term of this Stock Pledge and Security Agreement it
will be, the legal and beneficial owner of the Pledged Securities, free and
clear of any lien, security interest, charge or other encumbrance except
for the security interest created hereby.
0. Pledge.
a. Upon receipt of written notice from the Pledgees and
the Pledgor, the Pledge Agent shall deliver the certificate evidencing the
Pledged Securities, together with the stock powers held by it to the
Pledgor. Further, if within 30 days of receipt of a notice from the
Pledgor (with a duplicate copy sent to the Pledgee) that the Notes have
been paid in full, the Pledge Agent shall not have received written
notification from one or more Pledgee to the contrary, the Pledge Agent
shall deliver the certificate evidencing the Pledged Securities together
with the stock power held by it, to the Pledgor.
a. In the event one or more Pledgees deem that an Event of
Default (as hereinafter defined) has occurred under either of the Notes,
the Pledgee shall provide written notice of such claimed default to the
Pledgor and send a duplicate copy of such notice to the Pledge Agent. In
the event that the Pledgor disputes the Pledgee's claimed default, it
shall, within 15 days of the Pledgee's notice, send a letter so stating to
the Pledgee, with a duplicate copy to the Pledge Agent. In the event of a
dispute between the Pledgor and the Pledgee as to whether an Event of
Default has occurred, the Pledge Agent will continue to hold the Pledged
Securities in accordance herewith and shall take further action only upon a
court order or a written consent signed by both the Pledgor and the
Pledgee.
a. In the event that the Pledgor does not dispute the
Pledgee's claimed default within 15 days of the Pledgee's notice, the
Pledge Agent shall have the right on behalf of and at the direction of the
Pledgee to sell the Pledged Securities.
a. The Pledge Agent shall have no duties or obligations
other than those specifically set forth in this Agreement. The Pledgor and
Pledgees each agrees jointly and severally to indemnify the Pledge Agent
and hold it harmless against any and all liabilities and expenses incurred
by it hereunder, whether or not such liabilities are a consequence of any
action by the Pledgor or Pledgees, except for liabilities incurred by the
Pledge Agent resulting from its own willful misconduct or gross negligence.
0. Default Defined; Remedies.
a. An Event of Default shall mean (1) the occurrence of an
event (and the lapse of all applicable cure periods) which would allow the
holder of the Note to declare the Note immediately due and payable and (2)
the breach of any representation, warranty or covenant of the Pledgor made
herein.
a. Unless and until there exists an Event of Default, the
Pledgor shall be entitled to exercise all voting and other consensual
rights pertaining to the Pledged Securities and shall be entitled to
receive and retain any cash dividends thereon and any cash distributions
made in respect thereof.
a. In the event the Pledge Agent sells the Pledged
Securities pursuant to Paragraph 3(c) the Pledge Agent on behalf of the
Pledgees shall have all of the rights of a secured party upon the
occurrence of a default under the Uniform Commercial Code then in effect in
the State of New York; and without limiting the generality of the
foregoing, upon the occurrence of a Default, the Pledgees shall have the
right at any time or times to direct the Pledge Agent to sell, resell,
assign and deliver, all in a commercially reasonable manner, the Pledged
Securities or any part thereof, in one or more parcels, at such price or
prices as shall be commercially reasonable, at public or private sale, at
any exchange or broker's board or elsewhere.
a. The proceeds of any such sale or sales, and any
proceeds the Pledge Agent receives in respect of any realization upon the
Pledged Securities, shall be received and applied: first, to the expenses
of the sale of the Pledged Securities or expenses incurred in enforcing the
t e rms of this Agreement (including, without limitation, reasonable
attorneys fees), second to the payment of the Obligations and, third, any
surplus thereafter remaining shall be paid to the Pledgor or to whosoever
may be lawfully entitled to receive the same.
0. Right to Substitute and Sell. Pledgor shall have the right
from time to time during the term of this Agreement to replace the Pledged
Securities with different collateral; provided that such substitute
collateral has a value equal or greater than $500,000. In addition, the
Pledgor shall have the right from time to time during the term of this
Agreement to direct the Pledge Agent to place an order to sell the Pledged
Securities at a specified price (if unable to sell at such price, the
Pledge Agent shall so notify the Pledgor); provided that the proceeds from
such sale shall be applied to the Notes in accordance with and if permitted
by the terms thereof. The Net Proceeds realized from the sale of the
Pledged Securities in accordance with Section 5 shall be distributed as
follows: (a) seventy percent (70%) shall be used to repay the outstanding
Notes, and (b) the remaining thirty percent (30%) shall be distributed to
the Pledgor or its designee. The Pledgor hereby acknowledges that the
Pledge Agent shall have no liability to the Pledgor with respect to the
conduct or failure to make any sale in accordance with paragraph 5, other
than resulting from Pledge Agent's wilful misconduct or from negligence.
0. Miscellaneous. This Stock Pledge and Security Agreement
(a) may only be modified by a written instrument which is executed by both
of the parties hereto; (b) shall be governed by the laws of the State of
New York applicable to contracts made and to be wholly performed therein;
(c) sets forth the entire agreement of the parties with respect to the
subject matter hereof; (d) may not be assigned by either party hereto
without the prior written consent of the other party, and (e) shall inure
to the benefit of, and be binding upon, each of the parties hereto and
their respective successors and assigns. All notices and/or other
communications relating to this Stock Pledge and Security Agreement shall
be in writing and deemed delivered as of the date delivered, if delivered
personally, or three (3) days after having been mailed, if mailed by
registered or certified mail, postage prepaid, return receipt requested, as
follows:
if to Pledgees, to:
CCC LENDING CORPORATION
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
EDELMAN VALUE PARTNERS L.P.
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
if to Pledgor, to:
Canal Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
if to Pledge Agent, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as either of such parties shall have designated by
like notice to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Stock
Pledge Agreement to be executed and delivered on the date first-above
written.
CANAL CAPITAL CORPORATION
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
SY TRADING CORPORATION
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
NOTEHOLDERS
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ DEFINED BENEFIT TRUST
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PENSION PLAN
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EDELMAN VALUE PARTNERS, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Management Company, Inc.,
General Partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EDELMAN VALUE FUND, LTD
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
c/o Bayand (Luxembourg) Admin.
▇▇ ▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
SES TRUST
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE A
125,000 shares of Common Stock of Datapoint Corporation
236,267 shares of Common Stock of Datapoint Corporation
CANAL CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated as of January 8, 1998
To each of the Persons named on Schedule I attached hereto (the "Holders")
Re: Note Exchange and Loan Agreement
Dear Sirs:
CANAL CAPITAL CORPORATION (the "Company"), a Delaware corporation,
agrees with each of the Holders as follows:
1. Background. (a) The parties acknowledge that certain of
the Holders have purchased, for full and fair consideration, the Company's
promissory note issued as of May 15, 1993 to Deltec Asset Management
Corporation in the original principal amount of $5,800,000 (the "Deltec
Note") and the Company's promissory note issued as of May 15, 1993 to
Guaranty Reassurance Company in the original principal amount of $3,000,000
(the GRC Note"; together with the Deltec Note, the "Old Notes"). The
Holders desire to exchange the Old Notes for new promissory notes of the
Company on the terms and conditions set forth herein, including without
limitation, the deferral of principal payments due under the Old Notes.
Terms that are not capitalized in the sections in which they first appear
are as defined in Section 11 below.
(b) In addition, the Company has requested that certain of
the Holders loan the Company $395,000 ( Refinancing Loan ) on the terms and
conditions of the new promissory notes referred to below in order to
refinance certain obligations that have become due and payable, and the
Holders have agreed to make such loan.
(c) The parties further acknowledge that certain of the
Holders own the Company s promissory notes issued as of September 15, 1995
in the original principal amount of $1,032,275 (the Original Notes ).
Such Holders desire to exchange the Original Notes for new promissory notes
of the Company on the terms and conditions set forth herein including,
without limitation, the deferral of principal payments due under the
Original Notes.
13
2. Amended and Restated Notes.
2.1. Authorization of Amended and Restated Notes. The Company
has authorized the issue of $3,700,000 aggregate principal amount of its
Amended and Restated Variable Rate Mortgage Notes due May 15, 2001 (the
"New Notes", such term to include any notes issued in substitution therefor
pursuant to Section 6), to be in the form of Exhibit A attached hereto and
to bear interest as provided in such Exhibit A. The New Notes are intended
to amend, restate, supersede and replace the Old Notes and the Original
Notes.
2.2. Exchange of Notes/Making of Loan. The Company hereby
issues and delivers the New Notes to each of the Holders in the principal
amounts set forth opposite each such Holder's name on Schedule I hereto.
The New Notes amend, restate, supersede and replace in their entirety the
Old Notes and the Original Notes. In exchange for the New Notes, the
Holders (i) hereby deliver and surrender to the Company the Old Notes and
the Original Notes, duly endorsed to the Company and to be canceled
immediately thereafter, and (ii) deliver to the Company $395,000 in payment
of the Refinancing Loan.
3. Representations and Warranties of the Company. As an
inducement for the Holders to enter into this Agreement, the Company
represents and warrants that:
3.1. Organization, Standing, etc. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted
and proposed to be conducted, to enter into this Agreement, to issue the
New Note and to carry out the terms hereof and thereof.
3.2. Qualification. The Company is duly qualified or licensed
as a foreign corporation authorized to do business in each jurisdiction
(other than the jurisdiction of its incorporation) where the nature of its
activities conducted or of the properties owned or leased by it requires
such qualification.
3.3. Authorization. The issuance and delivery by the Company of
the New Notes to the Holders has been duly authorized by all necessary
corporate action on the part of the Company.
14
3.4. Compliance with Other Instruments. The execution, delivery
and performance of this Agreement and the New Notes will not result in any
violation of or be in conflict with any term of the charter or by-laws of
the Company or any of its Subsidiaries or breach, conflict with any term
of, or result in a default under, any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to the
Company or any of its Subsidiaries, or result in the creation of (or impose
any obligation on the Company or any Subsidiary to create) any Lien upon
any of the properties or assets of the Company or any of its Subsidiaries
pursuant to any such term.
3.5. Title to Properties; Liens. The Company has good and
sufficient title to the Collateral, and none of such Collateral is subject
to any Lien, except Liens of the character permitted by Section 7.15. The
Mortgaged Property constitutes all real property of the Company and its
Subsidiaries which is not, as of the date hereof, encumbered by mortgages
or deeds of trust in favor of the holders of the Bank Indebtedness, with
the exception of the real property of the Company located in St. ▇▇▇▇,
Minnesota, known as the "Port ▇▇▇▇▇▇" property.
3.6. Governmental Consent. No consent, approval or
authorization of, or declaration or filing with, any governmental authority
on the part of the Company is required for the valid execution and delivery
by the Company of this Agreement and the valid offer, issue, sale and
delivery by the Company of the New Notes as contemplated hereby.
3.7. Solvency. Both immediately before and after giving effect
to the issuance and sale of the New Notes as contemplated hereby: (a) the
Company does not intend to incur, nor believes that it has incurred or will
incur, debts that will be beyond its ability to pay as they mature; (b) the
fair saleable value of the assets of the Company as a whole will exceed the
amount that will be required to pay the probable liabilities on its debts
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed
or contingent) as they mature; and (c) the Company is not incurring
obligations or making transfers under any evidence of indebtedness with the
intent to hinder, delay, or defraud any entity to which it is or will
become indebted.
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4. Representations and Warranties of the Holders.
4.1. Securities Act. Each Holder represents and warrants to the
Company that such Holder understands that the New Notes have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), and may not be sold except pursuant to an effective registration
statement or pursuant to an available exemption from such registration
requirements. Further, such Holder is receiving the New Notes for its own
account and not with a view to or for sale in violation of the Securities
Act. Information concerning the New Notes, the Company or any other matter
relevant to the decision of the Holders to exchange the Old Notes for the
New Notes has been made available to the Holders either in reports filed by
the Company under the Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise.
4.2. Ownership; Authority; No Liens. The Holders represent and
warrant to the Company that the Holders are the sole and undivided
beneficial owners of the Old Notes which they are delivering and
surrendering to the Company pursuant to Section 2.2, have the authority to
deliver and surrender such Old Notes pursuant to the terms hereof, and hold
such Old Notes free and clear of any liens, encumbrances or restrictions on
transfer. The Holders shall indemnify the Company for any loss or expense
which it may suffer or incur as a result of any breach of the Holders'
representations in the preceding sentence.
5. Prepayment of Amended and Restated Notes.
5.1. Optional Prepayment Without Premium. So long as the New
Notes shall be outstanding, the Company may, at its option, upon notice as
provided below, prepay the New Notes in an aggregate principal amount equal
to a multiple of $10,000 and greater than $100,000. Not less than five (5)
Business Days prior to the date proposed for any prepayment under this
Section 5.1, the Company will give written notice of such prepayment to
each Holder, specifying such date, the principal amount of each New Note
held by such Holder to be prepaid on such date and the amount of interest
on such principal amount accrued to such date. Each such notice of a
prepayment shall be accompanied by an Officers' Certificate specifying the
source or sources of the funds being used for such prepayment.
5.2. Prepayments to be Pro Rata. Notwithstanding anything in
this Article 5 to the contrary, the Company shall not at any time prepay
16
any New Note without prepaying all the New Notes on a pro rata basis at
such time.
6. Transfer and Substitution of Amended and Restated Notes.
6.1. Replacement Notes. If any Holder claims that a New Note
has been lost, destroyed or wrongfully taken, the Company shall issue a
replacement New Note. The Company may require that an indemnity bond be
posted to protect the Company from any loss that it may suffer if a New
Note is replaced, and may charge such Holder for its reasonable expenses,
including attorneys' fees, in replacing a New Note.
Every replacement New Note will be entitled to the benefits of
this Agreement.
6.2. Treasury Notes. In determining whether the Holders of the
required principal amount of New Notes have concurred in any direction,
waiver or consent, New Notes owned by the Company or any of its Affiliates
shall be disregarded.
7. Covenants of the Company.
7.1. Payment of Securities. The Company shall pay the principal
of and interest on the New Notes on the dates and in the manner provided in
the New Notes. The Company shall pay interest on overdue principal and on
overdue installments of interest at the rate set forth in the New Notes.
7.2. Maintenance of Office. The Company agrees not to change
its name, identity or corporate structure to such an extent that any
financing statement filed in connection with the Security Agreement would
become misleading, without giving at least thirty (30) days' prior written
notice thereof to the Holders.
7.3. Limitation on Dividends and Other Distributions. The
Company will not declare or pay any dividend or make any distribution on
its Capital Stock or to the holders of its Capital Stock (other than
dividends or distributions payable in its Capital Stock) or purchase,
redeem or otherwise acquire or retire for value, or permit any Subsidiary
to purchase, redeem or otherwise acquire or retire for value, any such
Capital Stock.
7.4. Limitation on Total Indebtedness. The Company may not
incur, create, assume or guarantee any additional Indebtedness (other than
17
Indebtedness which is an amendment, renewal, extension or refunding on
substantially the same terms of any existing Indebtedness), or enter into a
Capitalized Lease Obligation or any other lease not terminable within
twelve (12) months, provided, however, that the Company may enter into a
new lease of corporate office space on reasonable terms.
7.5. Limitation on Investments. The Company will not, and will
not permit any Subsidiary to, make any investment in any other Person
( including, without limitation, by way of stock purchase, capital
contribution, loan, advance, guaranty of indebtedness or creation or
assumption of any other liability), provided, however, that the Company may
purchase Investment Securities.
7.6. Prohibition Against Becoming an Investment Company. The
Company will not register as, or conduct its business or take any action
which shall cause it to become, or to be deemed to be, an "investment
company" as defined under the provisions of the Investment Company Act of
1940.
7.7. Corporate Existence. The Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence in accordance with its organizational documents and the
rights (charter and statutory) and franchises of the Company; provided,
however, that the Company shall not be required to preserve any such right
o r franchise if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not, and will not be, adverse
in any material respect to the Holders.
7.8. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might by law
become a Lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made;
and provided further, that except with respect to property constituting
18
Collateral, compliance with clauses (a) and (b) above shall not be required
so long as such nonpayment is, in the judgment of the Board of Directors,
desirable in the conduct of the Company's business and such nonpayment is
not disadvantageous in any material respect to the Holders.
7.9. Notice of Defaults. In the event that the Company or any
of its Subsidiaries receives written notice from any holder of Indebtedness
that the full amount of such Indebtedness has been declared due and payable
before its maturity because of an acceleration of such indebtedness or the
occurrence of any default under such Indebtedness, the Company will
promptly give written notice to the Holders of such declaration.
7.10. Maintenance of Properties. The Company will cause all
material properties owned by or leased to it or any Subsidiary and used or
useful in the conduct of its business or the business of any Subsidiary to
be maintained and kept in normal condition, repair and working order
(normal wear and tear excepted) and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterment and improvements thereof, all as in the judgment of the Company
may be necessary, so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided,
however, that the Company may not incur in any year capital expenditures
exceeding $100,000, except to the extent that any excess over such amount
is made in order to maintain the Company's real property in good working
order; and provided, further, that nothing in this Section shall prevent
the Company or any Subsidiary from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors or
of the Board of Directors, board of trustees or managing partners of the
Subsidiary concerned, or of an officer (or other agent employed by the
Company or of any of its Subsidiaries) of the Company or such Subsidiary
having managerial responsibility for any such property, desirable in the
conduct of the business of the Company or any Subsidiary, and if such
discontinuance or disposal is not disadvantageous in any material respect
to the Holders. The Company will operate all material properties owned by
or leased to it or any Subsidiary in compliance with all applicable
federal, state and local laws, ordinances, regulations, administrative or
judicial orders, including, without limitation, those pertaining to
hazardous or toxic materials and other environmental matters.
19
7.11. Compliance Certificate and Notices of Default.
(a) The Company shall deliver to each of the Holders within 90
days after the end of each fiscal year of the Company an Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default by the Company that occurred during such fiscal year. If they
do know of such Default or Event of Default, the certificate shall describe
the Default and its status. The first certificate to be delivered by the
Company pursuant to this Section 7.11 shall be for the fiscal year ending
October 31, 1997.
(b) The Company shall deliver to each of the Holders prompt
written notice of any Default or Event of Default under this Agreement by
the Company, describing the Default and its status.
7.12. Financial and Other Reports.
(a) The Company will prepare, for the first three quarters of
each fiscal year, quarterly financial statements substantially equivalent
to the financial statements required to be included in a report on Form 10-
Q under the Exchange Act. The Company will also prepare, on an annual
basis, complete audited consolidated financial statements including, but
not limited to, a balance sheet, a statement of income and cash flow and
all appropriate notes. All such financial statements will be prepared in
accordance with generally accepted accounting principles consistently
a p p lied, except for changes with which the Company's independent
accountants concur, and except that quarterly statements may be subject to
year-end adjustments. The Company will cause a copy of such financial
statements to be mailed to each of the Holders within 45 days after the
close of each of the first three quarters of each fiscal years and within
90 days after the close of each fiscal year. In addition, to the extent
that the Company files any other reports, information or documents with the
SEC, the Company shall send copies of such reports, information and other
documents to the Holders.
(b) The Company shall cause, within thirty (30) days after the
end of each calendar month, a monthly result of operations statement
detailing the financial and operational results of the Company and its
Subsidiaries for such month, in a form currently used by the Company, to be
mailed to each of the Holders.
7.13. Waiver of Stay, Extension or Usury Laws. The Company
20
covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law which would prohibit or forgive the Company from paying all or
any portion of the principal of and/or interest on the New Notes as
contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this
Agreement; and (to the extent it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Holders, but will suffer and permit the execution of every
such power as though no such law had been enacted.
7.14. Reference Bank. In the event that any Reference Bank
shall be unwilling or unable to act as such for the purpose of determining
LIBOR and Prime Rate on the New Notes, the Company shall promptly appoint
another leading domestic bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market to act as such in its
place.
7.15. Other Liens. Except for Permitted Encumbrances, the
Company will not grant or permit any Liens or other defects in title in or
upon the Collateral; provided, however, that the Company may grant or
permit such Liens or defects if the monetary value of the Collateral will
not be impaired by the existence of the Lien or other defect in title in
any material manner and the Company shall have delivered to each of the
Holders a copy of an Officers' Certificate to that effect.
7.16. Validity of Liens. The Company shall warrant, preserve
and defend the interest and title of the Holders to the Mortgages and the
Collateral described in the Security Agreement against the claims of all
persons and will continue to perform its obligations pursuant thereto.
7.17. Transactions with Affiliates. Neither the Company nor
any Subsidiary shall enter into or participate in any agreements or
transactions of any kind with any Affiliates of any of the Company or its
Subsidiaries unless such transactions or agreements (i) are in the ordinary
course of business, (ii) include only terms or provisions which are fair
and equitable to the Company, (iii) require no fees, charges or commissions
other than those which are reasonable and disclosed to the Collateral
Agents, (iv) are clearly and accurately disclosed in the Company's books
21
and records, and (v) involve terms no less favorable to the Company than
would the terms of a similar agreement or transaction with a Person other
than an Affiliate.
7.18. Minimum Net Worth. The Company shall not cause or
permit the Consolidated Net Worth of itself and its Subsidiaries at the end
of any calendar month to be less than 75% of the amount reflected in the
Company's most recent balance sheet.
7.19. Negative Pledge. In the event that any property of the
Company or any of its Subsidiaries which is currently encumbered by a Lien
in favor of the holders of any Bank Indebtedness is released from such
Lien, the Company and its Subsidiaries shall not, without the prior written
consent of the Holders, thereafter encumber, mortgage, pledge or otherwise
grant, suffer or permit any Lien on such property.
8. Default and Remedies.
8.1. Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on any New
Note when the same becomes due and payable and the default continues for
the later of (i) a period of 30 days and (ii) 10 days after written notice
to the Company;
(b) the Company defaults in the payment of the principal of any
New Note when the same becomes due and payable at maturity, upon redemption
or otherwise;
(c) the Company fails to observe or perform any of its other
covenants contained in the New Notes or this Agreement, and such failure to
observe or perform continues uncured for a period of 30 days after the
Company's receipt of a written notice from Holders of at least 25% in
principal amount of New Notes then outstanding that specifies the Default,
demands that it be remedied and states that such notice is a "Notice of
Default";
(d) any representation or warranty at any time made by the
Company herein or any material representation or warranty which is
contained in any certificate, document, written report or financial or
other statement shall prove to have been untrue, incorrect or breached in
any material respect on or as of the date on which such representation or
warranty was made;
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(e) there shall be a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed or under any mortgage,
indenture or other instrument under which there may be issued or by which
there may be secured or evidenced any indebtedness for money borrowed by
the Company or under any guaranty of payment by the Company of indebtedness
for money borrowed, whether such indebtedness or guaranty now exists or
shall hereafter be created, which default extends beyond any period of
grace provided with respect thereto and which default relates to (i) the
obligation to pay the principal of or interest on any such indebtedness or
guaranty or (ii) an obligation other than the obligation to pay the
principal of or interest on any such indebtedness and the effect of such
default is the cause, with the giving of notice if required, such
indebtedness to become due prior to its stated maturity; provided, however,
that no default under this clause (e) shall exist if all such defaults do
not relate to such indebtedness or such guaranties with an aggregate
principal amount in excess of $100,000;
(f) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors;
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company in an involuntary
case or proceeding,
(ii) appoints a Custodian of the Company or for all or
substantially all of its properties, or
(iii) orders the liquidation of the Company,
and in each case the order or decree remains unstayed and in effect for 45
days;
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(h) final judgments for the payment of money which in the
aggregate exceed $100,000 shall be rendered against the Company by a court
of competent jurisdiction and shall remain undischarged for a period
(during which execution shall not be effectively stayed or bonded) of 30
days after such judgment becomes final and nonappealable; or
(i) at any time after the date hereof, there shall be
transfers, either legally or beneficially, of more than 50% in the
aggregate of the issued and outstanding shares of common stock of the
Company.
The term "Bankruptcy Law" means Title 11 U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
8.2. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 8.1(f) or (g)) occurs and is continuing,
the Holders of at least 25% in principal amount of the New Notes then
outstanding may, by notice to the Company, declare all unpaid principal and
accrued interest to the date of acceleration on the New Notes then
outstanding (if not then due and payable) to be due and payable and upon
any such declaration, the same shall become and be immediately due and
payable. If an Event of Default specified in Section 8.1(f) or (g) occurs,
all unpaid principal and accrued interest on the New Notes then outstanding
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of any Holder. Upon payment of such
principal amount and interest all of the Company's obligations under the
New Notes and this Agreement shall terminate. The Holders of a majority in
principal amount of the New Notes then outstanding, by notice to the
Company, may rescind an acceleration and its consequences if (i) all
existing Events of Default, other than the non-payment of the principal of
the New Notes which has become due solely by such declaration of
acceleration, have been cured or waived within ninety (90) days after the
first occurrence of each such Event of Default, (ii) to the extent the
payment of such interest is lawful, interest on overdue installments of
interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid, and (iii) the recision would
not conflict with any judgment or decree of a court of competent
jurisdiction.
24
8.3. Other Remedies. If any Event of Default occurs and is
continuing, any Holder may pursue any available remedy by proceeding at law
or in equity to collect the payment of principal or interest on the New
Notes or to enforce the performance of any provision of the New Notes or
this Agreement.
A delay or omission by any Holder in exercising any right or
remedy accruing upon Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are
cumulative to the extent permitted by law.
8.4. Waiver of Past Defaults. Subject to Sections 8.5 and 9.1,
the Holders of a majority in principal amount of the New Notes then
outstanding, by notice to the Company, may waive an existing Default or
Event of Default and its consequences, except that waiver of a Default in
the payment of principal or interest on any New Note shall require the
consent of all the Holders. When a Default or Event of Default is waived,
it is cured and ceases.
8.5. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Agreement, the right of any Holder to receive
payment of principal and interest on the New Notes on or after the
respective due dates expressed in the New Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder; provided,
however, that a Holder may not institute such a suit if and to the extent
that the institution or prosecution thereof or the entry of judgment
therein would, under applicable law, result in the surrender, impairment,
waiver or loss of the Lien on the Collateral.
9. Amendments, Supplements and Waivers.
9.1. General. The Company, when authorized by a resolution of
its Board of Directors, and the Holders may amend or supplement this
Agreement, the New Notes, the Mortgages or the Security Agreement. Subject
to Section 8.5, the Holders of a majority in principal amount of the New
Notes then outstanding may waive compliance by the Company with any
provision of this Agreement or the New Notes. However, without the consent
of each Holder affected, an amendment, supplement or waiver, including a
waiver pursuant to Section 8.4, may not:
25
(a) reduce the amount of the New Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the rate or extend the time for payment of
interest on any New Note;
(c) reduce the principal of or extend the fixed maturity of
any New Note or alter the redemption provisions with respect
thereto;
(d) waive a Default in the payment of the principal of,
interest on or redemption payment with respect to any New Note;
(e) make any changes to Section 8.4, 8.5 or the third
sentence of this Section 9.1; or
(f) modify the provisions of Article 10 or Article 11
hereof in a manner adverse to the Holders.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure
by the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.
9.2. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing
consent by the Holder and every subsequent Holder of a New Note or portion
of a New Note that evidences the same debt as the consenting Holder's New
Note, even if notation of the consent is not made on any New Note.
However, any such Holder or subsequent Holder may revoke the consent as to
its New Note or portion of a New Note.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent
to such amendment, supplement or waiver or to revoke any consent previously
given, whether or not such persons continue to be Holders after such record
date.
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After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of
clause (a) through (f) of Section 9.1. In that case, the amendment,
supplement or waiver shall bind each Holder of a new Note who has consent
to it and every subsequent Holder of a New Note or portion of a New Note
that evidences the same debt as the consenting Holder's New Note.
10. Security Interest and Mortgage.
10.1. Continuation and Amendment.
(a) The Company's obligation to pay the principal amount of
and interest and Additional Interest on the New Notes (i) shall continue to
be subject to the security interest created by the Security Agreement and
the Mortgages and (ii) shall also be subject to the security interest
created by the Pledge Agreement, in an amount equal to at least 100% of the
aggregate principal amount of the New Notes outstanding at any time.
(b) The Security Interest and the Mortgages as now or
hereafter in effect shall be held for the equal and ratable benefit and
security of the New Notes without preference, priority or distinction of
any thereof over any other by any reason, or difference in time, of
issuance, sale or otherwise, and for the enforcement and payment of
principal and interest on the New Notes in accordance with their terms.
(c) The Company and/or one or more of its Subsidiaries has
executed and delivered, filed, or recorded and/or will and/or will cause
one or more of the Subsidiaries to execute and deliver, file and record,
all instruments and documents, and has done or will do or will cause to do
all such acts and other things as are necessary to amend the Security
Agreement and the Mortgages in order to maintain, perfect and protect the
security interests of the Holders in the Collateral and the Mortgaged
Properties.
10.2. Release of Collateral. The Collateral Agent (as
defined herein) shall from time to time at the request of the Company
execute and deliver any instruments necessary or appropriate to release all
or a part of the Collateral from the Security Interest, upon compliance by
the Company with the following:
(a) Receipt by the Collateral Agent of the Company's
written notice, at least five Business Days in advance of the
27
requested date for the delivery of the release instruments,
r e q uesting the Collateral Agent to execute one or more
specifically described release instruments, and certifying (A)
that no Event of Default or material Default under this Agreement
has occurred and is continuing and (B) that the conditions of
this Section 10.2 set forth below, have been fulfilled.
(b) No release of Collateral shall be effected unless
simultaneously or prior thereto the Company has paid to the
Holders, by federal funds wire transfer, 70% of the Net Proceeds
from the sale or other disposition of such Collateral.
10.3. Reliance on Opinion of Counsel. The Collateral Agent
shall, before taking any action under this Article 10, be entitled to
receive an Opinion of Counsel, stating the legal effect of such action, the
steps necessary to consummate the same and to perfect the priority of the
Collateral Agent (as agent for the Holders) with respect to a Lien and that
such action will not be in contravention of the provisions hereof or the
New Notes.
10.4. Purchaser May Rely. A purchaser in good faith of the
Collateral or any part thereof or interest therein which is purported to be
transferred, granted or released by the Collateral Agent as provided in
this Article 10 shall not be bound (a) to ascertain, and may rely on the
authority of the Collateral Agent to execute, transfer, grant or release,
(b) to inquire as to the satisfaction of any conditions precedent to the
exercise of such authority, or (c) to see to the application of the
purchase price therefor.
10.5. Payment of Expenses. On demand of the Collateral
Agent, the Company forthwith shall pay or satisfactorily provide for all
reasonable expenditures incurred by the Collateral Agent under this Article
10 and all such sums shall be secured thereby.
10.6. Authority of Collateral Agent. The Company may rely on
the directions of CCC Lending Corporation, a Delaware corporation, as
collateral agent with respect to the Collateral and the Mortgaged
Properties, without incurring liability therefor to the Holders, except to
the extent otherwise provided in the Collateral Agency Agreement dated the
date hereof.
28
11. Definitions.
11.1. "Affiliate" of any specified person means any other
person related by blood, marriage, employed by or employing, or directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct
the management and policies of such person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
11.2. "Agreement" shall mean this letter agreement.
11.3. "Artwork" means the collateral under the Security
Agreement.
11.4. "Bank Indebtedness" means the principal of and interest
on and other amounts due on or in connection with any Indebtedness of the
Company, outstanding on the date of this Agreement. Bank Indebtedness
shall not include (i) any Indebtedness of the Company which, by its terms
or the terms of the instrument creating or evidencing it, is subordinate in
right of payment to or pari passu with the New Notes or (ii) any
Indebtedness of the Company to a Subsidiary.
11.5. "Business Day" means a day, other than a Saturday or a
Sunday, on which banks are open for business in New York, New York.
11.6. "Capitalized Lease Obligations" means Indebtedness
represented by obligations under a lease that is required to be capitalized
for financial reporting purposes in accordance with generally accepted
accounting principles; the amount of such Indebtedness shall be the
capitalized amount of such obligations determined in accordance with such
principles.
11.7. "Capital Stock " means any and all shares, interest,
participations or other equivalents (however designated) of corporate
stock.
11.8. "Collateral" means Mortgaged Property, the Artwork and
the Securities.
11.9. "Collateral Agent" means CCC Lending Corporation, a
29
Delaware corporation.
11.10. "Company " means the party named as such in this
Agreement, until a successor replaces it pursuant to the Agreement, and
thereafter means the successor.
11.11. "Consolidated Net Worth" means, as of any date, total
stockholders' equity which under generally accepted accounting principles
would be included on a consolidated balance sheet of the Company and its
Subsidiaries, determined in accordance with generally accepted accounting
principles consistently applied, as of the end of the last period for which
a quarterly financial report is available, less all goodwill, trademarks,
trade names, patents, unamortized debt discount and expense and other like
intangibles that would be included on such balance sheet.
11.12. "Default" means any event which is, or after notice or
passage of time would be, an Event of Default.
11.13. "Indebtedness" means (i) any liability of any person
(a) for borrowed money, (b) evidenced by a note, debenture or similar
instrument (including a purchase money obligation) given in connection with
the acquisition of any property or assets (other than inventory or similar
p r o perty acquired in the ordinary course of business), including
securities, or (c) for the payment of money relating to a Capitalized Lease
Obligation; (ii) any liability of others described in the preceding clause
(i) which the person has guaranteed or which is otherwise its legal
liability; and (iii) any amendment, renewal, extension or refunding of any
liability of the types referred to in clauses (i) and (ii) above.
11.14. "Investment Securities" means (i) U.S. Government
Obligations, or (ii) securities, certificates of deposit or commercial
paper rated at least "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc. and at least
"A-1" by Standard and Poors Corporation.
11.15. "LIBOR" shall have the meaning provided in Exhibit A
annexed hereto.
11.16. "Lien" means any mortgage, liens, pledge, charge or
other security
interest or encumbrance of any kind or assignment thereof.
11.17. "Mortgages" means any one or all of the mortgages or
30
deeds of trust covering the Mortgaged Property, as assigned to the Holders,
substantially in the form annexed hereto as Exhibit C and constituting a
part hereof for all purposes, or such other form as may be required by
applicable state law or by local custom.
11.18. "Mortgaged Property" means property of the Company
described in or from time to time subject to the Mortgages.
11.19. "Net Proceeds" means, cash received by the Company or
any of its Subsidiaries with respect to any sale, transfer or disposition
of property after (a) reasonable provision for taxes incurred by the
Company or any of its Subsidiaries during the fiscal year in which such
sale, transfer or disposition occurred as a direct result thereof, (b)
payment of reasonable brokerage commissions and reasonable attorneys' fees
and expenses incurred as a result of such sale, transfer or disposition,
and (c) deduction of appropriate amounts to be provided by the Company and
its Subsidiaries as a reserve, in accordance with generally accepted
a c counting principles consistently applied, against any liabilities
associated with such asset and retained by the Company and its Subsidiaries
after such sale, transfer or disposition.
11.20. "Officers' Certificate" means a certificate signed by
two officers of the Company having authority to sign such certificates on
behalf of the Company.
11.21. "Opinion of Counsel" means a written opinion from legal
counsel, who may be an employee of or counsel to the Company, and who is
reasonably acceptable to the Holder.
11.22. "Permitted Encumbrances" means (i) liens for taxes,
assessments and other governmental charges not delinquent; (2) liens for
taxes, assessments and other governmental charges already delinquent which
are currently being contested in accordance with the provisions of the
Mortgages; (3) mechanics' and materialmen's liens not filed of record and
s i m i l ar charges not delinquent, incident to current permissible
construction and mechanics' and materialmen's liens incident to such
construction which are filed of record but which are being contested in
accordance with the provisions of the Mortgages; (4) mechanics', workmen's,
repairmen's, materialmen's, warehousemen's and carriers' liens and other
similar liens arising in the ordinary course of business for charges which
are not delinquent, or which are being contested in accordance with the
31
provisions of the Mortgages; (5) liens in respect of judgments or awards
with respect to which the Company shall in good faith currently be
prosecuting an appeal or proceedings for review in accordance with the
provisions of the Mortgages, and with respect to which the Company shall
have secured a stay of execution pending such appeal or proceedings for
review; provided, however, that the Company shall have set aside on its
books adequate reserves with respect thereto; (6) easements and rights of
way, leases, reservations or other rights of others in any property of the
Company for streets, roads, bridges, pipes, pipe lines, utilities,
railroad, electric transmission and distribution lines, telegraph and
telephone lines, flood rights, river control and development rights, sewage
and drainage rights, restrictions against pollution and zoning laws;
provided, however, that such easements, leases, reservations, rights,
restrictions and laws do not in the aggregate materially impair the
usefulness of such property for the purposes for which it is held by the
Company and do not materially impair the marketability or value of such
property as security for the New Notes; (7) leases or other occupancy
agreements existing at the date of affecting the Mortgaged Properties and
any leases or other occupancy agreements entered into by the Company or its
Affiliates which are commercially reasonable and in the ordinary course of
business; (8) the burdens of any law or governmental regulation or permit
requiring the Company to maintain certain facilities or perform certain
acts as a condition of its occupancy of or interference with any public
lands or any river or stream or navigable waters; and (9) whether or not
included in the foregoing clauses (1) through (8), all restrictions,
easements, rights-of-way, exceptions, reservations, conditions,
limitations, interests, covenants, agreements and other encumbrances do not
in the aggregate materially impair the value of such property as security
for the New Notes.
11.23. "Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
11.24. Pledge Agreement means the Stock Pledge and Security
Agreement dated as of January 8, 1998, among the Company and SY Trading
Corporation, as pledgors, and the Holders and CCC Lending Corporation, as
secured parties.
32
11.25. "Reference Bank" shall have the meaning provided in
Exhibit A annexed hereto.
11.26. "SEC" means the Securities and Exchange Commission.
11.27. "Security Agreement" means the Security Agreement,
d a ▇▇▇ as of January 8, 1998, among the Company, Canal Galleries
Corporation, and Canal Arts Corporation as debtors, the Holders, as secured
parties, and CCC Lending Corporation, as Collateral Agent respecting
collateral covered by (i) the Security Agreement dated as of May 15, 1993
among the Company and Canal Arts Corporation, as debtors, and Hanseatic
Corporation and Guaranty Reassurance Company as secured parties, as
assigned to the Holders and (ii) the Security Agreement dated as of March
31, 1995, between the Company, as debtor, and Cooperative Centrale
Raiffeisen - Boerenleenbank B.A., Rabobank Nederland , New York branch, as
secured party, as assigned to certain of the Holders.
11.28. "Security Interest" means the Liens on the Collateral
created by the Mortgages, the Security Agreement and the Pledge Agreement.
11.29. Securities means the collateral under the Pledge
Agreement consisting currently of 361,267 shares of Common Stock of
Datapoint Corporation.
11.30. "Subsidiary" means (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned by the
Company, by the Company and a Subsidiary of the Company or by a Subsidiary
of the Company or (ii) any other person (other than a corporation) in which
the Company, a Subsidiary of the Company directly or indirectly, at the
date of determination thereof, has at least a majority ownership interest.
11.31. "U.S. Government Obligations" means direct non-callable
obligations of, or non-callable obligations guaranteed by, the United
States of America or any person or agency controlled or supervised by or
acting as an instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America for the
payment of which guarantee or obligation the full faith and credit of the
United States or any person or agency controlled or supervised by or acting
as an instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States is pledged.
33
12. Miscellaneous.
12.1. Notices. Any notice or communication shall be given in
writing and delivered in person or mailed by first-class mail addressed if
to the Company, to the addresses set forth on the first page hereof, and if
to the Holders, at such addresses as appear on the signature pages to this
Agreement.
The Company or the Holders by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Failure to mail a notice or communication to a Holder or any
defect in any notice shall not affect the sufficiency of any notice with
respect to the other Holders.
12.2. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Agreement or in the Security
Agreement or the Mortgages shall include:
(a) a statement that the person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion or such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
12.3. Legal Holidays. A "Legal Holiday" is a Saturday,
Sunday or a day on which banking institutions in New York, New York are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening
period.
34
12.4. Governing Law. The laws of the State of New York shall
govern this Agreement without regard to principles of conflicts of law.
12.5. No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another indenture, loan or debt
agreement of Company or any of its Subsidiaries. Any such indenture, loan
or debt agreement may not be used to interpret this Agreement.
12.6. No Recourse Against Others. A director, officer,
employee or shareholder, as such, of the Company shall not have any
liability for any obligations of the Company under this Agreement or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting the New Notes waives and releases all
such liability.
12.7. Successors. All agreements of the Company in this
Agreement and the New Notes shall bind its successor.
12.8. Duplicate Originals. The parties may sign any number
of copies of this Agreement. Each signed copy shall be an original, but
all of them together represent that same agreement.
12.9. Severability. In case any provision of this Agreement
or in the New Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
35
SIGNATURES
IN WITNESS WHEREOF, the undersigned has caused this Agreement to
be duly executed, and its corporate seal to be hereunto affixed and
attested, all as of the date first written above.
CANAL CAPITAL CORPORATION
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
The foregoing Agreement is hereby
accepted by each of the Holders
as of the date hereof:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ DEFINED BENEFIT TRUST
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
36
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PENSION PLAN
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
th136 ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
37
EDELMAN VALUE PARTNERS, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Management Company, Inc.,
General Partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EDELMAN VALUE FUND, LTD
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
c/o Bayand (Luxembourg) Admin.
▇▇ ▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
SES TRUST
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
38
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
39
EXHIBIT A
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. $__________
CANAL CAPITAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ,
or ___ registered assigns at the address of
or at such other address as may be designated by the registered
holder hereof to the Company, the principal sum of
__________________________________________ Dollars on May 15, 2001 and to
pay interest thereon monthly on the 15th day of each month (each an
"Interest Payment Date"), in each year, commencing on January 15, 1998, at
the applicable rate per annum determined as a provided below, until the
principal hereof is paid or made available for payment.
13. For each Quarterly Period, this Note shall bear interest at
a variable rate per annum, equal to the greatest of (i) the Three Month
Treasury Rate with respect to such quarterly period plus 600 basis points,
(ii) LIBOR with respect to such Quarterly Period plus ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
(▇▇▇) 120% of the Ten Year Treasury Rate with respect to such Quarterly
Period plus 150 basis points, or (iv) Prime Rate with respect to such
quarterly period plus 350 basis points. If the Agent Bank cannot determine
LIBOR or Prime Rate, as the case may be, for at least five Business Days
during the Rate Determination Period for any Quarterly Period then this
Note will bear interest following such Quarterly Period at a rate per annum
equal to the greatest of the remaining variable rates with respect to such
Quarterly Period. Prior to the beginning of each Quarterly Period, the
Company must compute the interest rate for such Quarterly Period. The
Company must mail notice of the rate to each holder of a Note for each
Quarterly Period. Interest will be computed on the basis of a 360-day year
of twelve 30 -day months.
14. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $339,620 which had accrued with
respect to the Old Notes but had remained unpaid by the Company as of the
date of this Note shall also be considered Additional Interest hereunder
and shall continue to be due and payable to the holder hereof as provided
above.
15. The interest payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Note Exchange
Agreement, be paid to the person in whose name this Note is registered at
the close of business on the regular record date, which shall be the first
day of each month (whether or not a Business Day) next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the person in whose name this Note
is registered at the close of business on a special record date for the
payment of such defaulted interest to be fixed by the Company, notice of
which shall be given to Holders not less than 15 days prior to such special
record date. Payment of the principal of and interest on this Note will be
made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, by
check mailed to the address of the holder of this Note, as specified in the
first paragraph hereof.
16. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
17. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
2
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
18. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
19. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
20. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
21. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
22. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
3
23. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
24. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
25. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
4
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
o f ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
5
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
26. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
6
Gifts to Minors Act).
27. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
28. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By:_________________________
____________________________
7
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
8
SCHEDULE I
Name of Assignee Percentage
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 27.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust 6.54%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6.19%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 13.51%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan 5.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3.86%
Edelman Value Partners, L.P. 9.46%
Edelman Value Fund, LTD 14.86%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8.11%
SES Trust 5.41%
COLLATERAL AGENCY AGREEMENT, dated as of January 8, 1998, among
(1) the parties listed on the signature pages hereto under the heading
"Noteholders" (together with their respective successors and assigns, the
"Noteholders", and (2) CCC LENDING CORPORATION, a Delaware corporation
9
(together with its successors and assigns, collectively, the "Collateral
Agent").
BACKGROUND
The Noteholders are purchasing, for full and fair consideration,
the promissory note issued by Canal Capital Corporation, a Delaware
corporation (the "Company"), as of May 15, 1993 to Deltec Asset Management
Corporation, in the original principal amount of $5,800,000 (the "Deltec
Note") and the Company's promissory note issued as of May 15, 1993 to
G u aranty Reassurance Company, in the original principal amount of
$3,000,000 (the "GRC Note"; together with the Deltec Note, the "Old
Notes").
The Old Notes are secured by certain collateral and mortgages
which are being assigned to the Noteholders.
Pursuant to that certain Note Exchange and Loan Agreement dated
as of the date hereof between the Company and the Noteholders (the "Note
Exchange Agreement"), the Noteholders are exchanging the Old Notes and
making an additional loan to the Company in exchange for new promissory
notes of the Company on the terms and conditions set forth therein,
including without limitation, the deferral of principal payments due under
the Old Notes.
In connection with the Note Exchange Agreement, (i) the Company
will amend certain Mortgages and a Security Agreement (as such terms are
defined in the Note Exchange Agreement; herein, such terms are collectively
referred to, together with the Pledge Agreement defined below, as the
"Collateral Documents"), to secure the obligations incurred by the Company
u n d e r the Note Exchange Agreement and the Collateral Documents
(collectively, the "Obligations"), and (ii) the Company will enter into a
certain Pledge Agreement ( Pledge Agreement ) to further secure the
Obligations.
The Noteholders desire to provide for their respective rights and
interests in respect of the Collateral (as defined below) and to make
certain other commitments and undertakings in connection with the Note
Exchange Agreement, the Collateral Documents, the Obligations and the
rights of the Noteholders under such agreements.
N O W THEREFORE, in consideration of the mutual agreements
contained herein, the parties hereto hereby agree as follows:
10
ARTICLE XXIX
DEFINITIONS
Section 29.1. Definitions of Terms Used in Note Exchange
Agreement. All capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Note Exchange Agreement.
Section 29.2. Definitions of Certain Terms. As used herein,
the following terms shall have the meanings set forth below:
"Actionable Default" shall mean any Event of Default under and as
defined in the Note Exchange Agreement and/or the Collateral Documents.
"Collateral" shall mean all the assets of the Company or its
Subsidiaries in which the Collateral Agent has been granted a Lien pursuant
to the Collateral Documents.
"Insolvency or Liquidation Proceeding" means (i) any insolvency
or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding, relative to the Company
or to any of the assets of the Company, or (ii) any liquidation,
dissolution, or winding up of the Company.
"Notice of Actionable Default" shall mean a notice by or on
behalf of the Required Creditors delivered to the Collateral Agent, stating
that an Actionable Default has occurred. A Notice of Actionable Default
shall be deemed to have been given when the notice referred to in the
preceding sentence has actually been received by the Collateral Agent and
to have been rescinded when the Collateral Agent has actually received from
the Required Creditors a notice withdrawing such notice. A Notice of
Actionable Default shall be deemed to be outstanding at all times after
such notice has been given until such time, if any, as such notice has been
rescinded.
"Required Creditors" shall mean, at any time, Noteholders
holding, collectively, New Notes representing more than 25% of the
outstanding principal balance of the New Notes.
Section 29.3. Terms Generally. The definitions in Section 1.2
shall apply equally to both the singular and plural forms and of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.
11
ARTICLE XXX
ACTS OF REQUIRED CREDITORS;
AMOUNT OF OBLIGATIONS
Section 30.1. Acts of Required Creditors. Any request, demand,
authorization, direction, notice, consent, waiver or other action permitted
or required by this Agreement to be given or taken by the Required
Creditors may be and, at the request of the Collateral Agent, shall be,
embodied in and evidenced by one or more written instruments satisfactory
in form to the Collateral Agent and signed by or on behalf of such persons
and, except as otherwise expressly provided in any such instrument, any
such action shall become effective when such instrument or instruments
shall have been delivered to the Collateral Agent. The instrument or
instruments evidencing any action (and the action embodied therein and
evidenced thereby) are sometimes referred to herein as an "Act" of the
persons signing such instrument or instruments.
Section 30.2. Determination of Amounts of Outstanding Principal
Balance. Whenever the Collateral Agent is required to determine the
outstanding principal balance of the Notes or the existence of any
Actionable Default for any purposes of this Agreement, it shall be entitled
to make such determination on the basis of one or more certificates of the
Noteholders; provided, however, that if notwithstanding the request of the
Collateral Agent, the Noteholders shall fail or refuse promptly to certify
as to the outstanding principal balance of the New Notes or the existence
of an Actionable Default, the Collateral Agent shall be entitled to
determine such existence or amount by such method as the Collateral Agent
may, in its sole discretion, determine, including by reliance upon a
certificate of the Company. The Collateral Agent may rely conclusively,
and shall be fully protected in so relying, on any determination made by it
in accordance with the provisions of the preceding sentence (or as
otherwise directed by a court of competent jurisdiction) and shall have no
liability to the Company, any Noteholder or any other person as a result of
such determination. Upon any request of the Collateral Agent, the Company
will, and by countersigning this Agreement the Company agrees to, furnish a
certificate to the Collateral Agent as to the outstanding principal balance
of the New Notes or as to the existence of any Actionable Default.
ARTICLE XXXI
DUTIES OF COLLATERAL AGENT
Section 31.1. Notices to Authorized Representative and
Noteholders. The Collateral Agent shall promptly furnish to each
Noteholder:
(i) a copy of each of Notice of Actionable Default received by
the Collateral Agent;
12
(ii) a copy of each certificate received by the
Collateral Agent rescinding a Notice of Actionable Default;
(iii) written notice, and a reasonably detailed
description, of any additional Collateral in which the
Collateral Agent has been granted a Lien;
(iv) written notice of their receipt, and the amount,
of any proceeds received by the Collateral Agent upon the
disposition of any Collateral;
(v) written notice of the aggregate amount distributed to the
Noteholders in connection with any distribution hereunder; and
(vi) written notice of any release by the Collateral Agent
of any Collateral, together with any consents received
by the Collateral Agent from Noteholders to permit such
release.
Section 31.2. A c t i ons Under Collateral Documents. The
Collateral Agent shall not be obligated to take any action under this
Agreement or any of the Collateral Documents except for the performance of
such duties as are specifically set forth herein or therein. Subject to
the provisions of Article V, the Collateral Agent shall take any action
under or with respect to the Collateral Documents or this Agreement which
is requested by the Required Creditors and which is not inconsistent with
or contrary to the provisions of this Agreement or the Collateral
Documents. The Collateral Agent may amend or waive any provision of any
Collateral Document without the approval of the Required Creditors so long
as such amendment or waiver does not adversely affect in any material
respect the interests of any Noteholder. At any time when a Notice of
Actionable Default shall have been given and shall be outstanding, the
Collateral Agent shall, subject in all cases to the provisions of Article
V, exercise or refrain from exercising all such rights, powers and remedies
as shall be available to it under the Collateral Documents or any of them
in accordance with any written instructions received from the Required
Creditors. Absent written instruction from the Required Creditors at a
time when a Notice of Actionable Default shall be outstanding, the
Collateral Agent may take, but shall have no obligation to take, any and
all such actions under the Collateral Documents or any of them or otherwise
as it shall deem to be in the best interest of the Noteholders; provided,
however, that in the absence of written instructions (which may relate to
the exercise of specific remedies or to the exercise of remedies in
general) from the Required Creditors the Collateral Agent shall not
exercise remedies available to it under any Collateral Documents with
respect to the Collateral or any part thereof.
13
ARTICLE XXXII
PROCEEDS RECEIVED UNDER COLLATERAL DOCUMENTS
Section 32.1. Collateral Account.
(a) The Collateral Agent shall establish and maintain an account
(the "Collateral Account") into which it shall (except as otherwise
explicitly provided in any Collateral Document) deposit all amounts
received by it in its capacity as Collateral Agent in respect of the
Collateral. All amounts deposited in such account shall be held by the
Collateral Agent subject to the terms hereof and of the Collateral
Documents. The Company shall have no rights with respect to, and the
Collateral Agent shall have exclusive dominion and control over, the
Collateral Account. All moneys received by the Collateral Agent with
respect to all or any part of the Collateral either (i) prior to the
occurrence of an Actionable Default, (ii) prior to the Collateral Agent's
receipt of a Notice of Actionable Default or (iii) after withdrawal of all
pending Notices of Actionable Default shall be delivered to the Company or
any other person entitled thereto in accordance with the Collateral
Documents, at such person's instruction.
(b) N o t w ithstanding the provisions of Section 4.2, the
Collateral Agent shall have the right at any time and from time to time
(prior to making any distributions described in Section 4.2) to apply any
amounts in the Collateral Account to the payment of the reasonable out-of-
pocket costs and expenses (including reasonable attorneys fees and
disbursements) incurred by the Collateral Agent in administering and
carrying out its obligations under this Agreement or any of the Collateral
Documents, in exercising or attempting to exercise any right or remedy
hereunder or thereunder or in taking possession of, protecting, preserving
or disposing of any item of Collateral, and all amounts against or for
which the Collateral Agent is to be indemnified or reimbursed hereunder
(excluding any such costs, expenses or amounts which have theretofore been
reimbursed) until all of such costs, expenses and amounts have been paid in
full; provided, however, that any such application shall be allocated pro
rata among the Noteholders. The Collateral Agent shall reimburse any
Noteholder prior to applying any amounts in the Collateral Account pursuant
to Section 4.2 for any and all amounts expended with respect to pay
indemnity provided in accordance with Section 5.3(e) to such Noteholder, by
application of funds in the account established hereunder in the same
manners provided in the provision the preceding sentence.
Section 32.2. Distribution of Amounts Deposited in Collateral
Accounts.
(a) All amounts deposited in the Collateral Account shall be
distributed in the following order of priority:
First, to the Noteholders pro rata in accordance with the
aggregate principal amounts of the Notes outstanding at such time held
14
by such holders, until the Obligations shall have been paid in full;
Second, the balance, if any, to the Company or such other person
or persons as shall be entitled thereto pursuant to the Collateral
Documents.
(b) Notwithstanding any provision of this Agreement or the
Collateral Documents, any sums and amounts received by any Noteholder
pursuant to this Section shall be applied as provided in the Notes, the
Note Exchange Agreement and the Collateral Documents.
Section 32.3. Time of Payment. All distributions under Section
4.2 of amounts deposited in the Collateral Account shall be made promptly
after the deposit of such amounts into the Collateral Account.
Section 32.4. Investment of Amounts in Account. Pending the
disbursement thereof pursuant to the terms of this Agreement, all amounts
in the account shall (to the extent the Collateral Agent deem practical) be
invested by the Collateral Agent in (a) marketable direct obligations of,
or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
United States of America), in each case maturing not later than the earlier
of the anticipated distribution date of such amounts and the date 180 days
from the date of acquisition thereof; (b) investments in commercial paper
maturing not later than the earlier of the anticipated distribution date of
such amounts and the date 180 days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit rating obtainable
from Standard & Poor's Corporation or from ▇▇▇▇▇'▇ Investors Service, Inc.;
or (c) investments in certificates of deposit, banker's acceptances and
time deposits maturing not later than the earlier of the anticipated
distribution date of such amounts and the date 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any office of any commercial
b a nk which has a combined capital and surplus of not less than
$500,000,000.
ARTICLE XXXIII
CONCERNING THE COLLATERAL AGENT
Section 33.1. Appointment of Collateral Agent. Each of the
Noteholders appoints the Collateral Agent to act as Collateral Agent
pursuant to the terms of the Collateral Documents and this Agreement, and
the Collateral Agent agrees to act as Collateral Agent for the Noteholders
pursuant to the terms of the Collateral Documents and this Agreement.
Section 33.2. Limitations of Responsibilities of Collateral
Agent. The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations
15
or warranties contained herein or in any Collateral Document, except for
those made by it herein. The Collateral Agent makes no representation as
to the value or condition of the Collateral or any part thereof, as to the
title of the Company to the Collateral, as to the security afforded by this
Agreement or any Collateral Document or, except as set forth in Article VI,
as to the validity, execution, enforceability, legality, or sufficiency of
this Agreement or any Collateral Documents, and the Collateral Agent shall
incur no liability or responsibility in respect of any such matters. The
Collateral Agent shall not be responsible for insuring the Collateral for
the payment of taxes, charges, assessments or liens upon the Collateral or
otherwise as to the maintenance of the Collateral, except as provided in
the immediately following sentence when the Collateral Agent has possession
of the Collateral. The Collateral Agent shall have no duty to the Company
or to the holders of the Secured Obligations as to any Collateral in its
possession or control or in the possession or control of any agent or
nominee of the Collateral Agent or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, except the duty to accord such of the Collateral as may be in its
possession substantially the same care as it accords its own assets and the
duty to account for monies received by it. The Collateral Agent shall not
be required to ascertain or inquire as to the performance by the Company of
any of the covenants or agreements contained herein or in any of the
Collateral Documents. Neither the Collateral Agent nor any officer, agent
or representative thereof shall be personally liable for any action taken
or omitted to be taken by any such person in connection with this Agreement
or any Collateral Document except for such person's own gross negligence or
wilful misconduct. Neither the Collateral Agent nor any officer, agent or
representative thereof shall be personally liable for any action taken by
any such person in accordance with any notice given by the Required
Creditors or the Noteholders, as the case may be, hereunder even if, at the
time such action is taken by any such person, the Required Creditors or
Noteholders, as the case may be, which gave the notice to take such action
are no longer the Required Creditors or all the Noteholders, as applicable,
and if the Collateral Agent has not received written notice of such fact.
The Collateral Agent may execute any of the powers granted under this
Agreement or any of the Collateral Documents and perform any duty hereunder
or thereunder either directly or by or through agents or attorneys-in-fact,
and shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it without gross negligence or wilful
misconduct.
Section 33.3. Reliance on Collateral Agent; Indemnity Against
Liabilities; etc.
(a) Whenever in the performance of its duties under this
Agreement the Collateral Agent shall deem it necessary or desirable that a
matter be proved or established with respect to the Company or other person
in connection with the taking, suffering or omitting of any action
hereunder by the Collateral Agent, such matter may be conclusively deemed
to be proved or established by a certificate executed by an officer of such
person, and the Collateral Agent shall have no liability with respect to
any action taken, suffered or omitted in reliance thereon.
(b) The Collateral Agent may consult with counsel and shall be
fully protected in taking any action hereunder in accordance with any
16
advice of such counsel. The Collateral Agent shall have the right but not
t h e obligation at any time to seek instructions concerning the
administration of this Agreement, the duties created hereunder or the
Collateral from any court of competent Jurisdiction.
(c) The Collateral Agent shall be fully protected in relying
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order or other paper or document which it
believes to be genuine and to have been signed or presented by the proper
party or parties. In the absence of its gross negligence or wilful
misconduct, the Collateral Agent may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificate or opinions furnished to the Collateral Agent in connection
with this Agreement.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of
any Actionable Default unless and until the Collateral Agent shall have
received a Notice of Actionable Default. The Collateral Agent shall have
no obligation whatsoever either prior to or after receiving such a notice
to inquire whether an Actionable Default has, in fact, occurred and shall
be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to them.
(e) If the Collateral Agent has been requested to take any
specific action pursuant to any provision of this Agreement, the Collateral
Agent shall not be under any obligation to exercise any of the rights or
powers vested in it by this Agreement in the manner so requested unless it
shall have been provided indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred by it in connection with
such request or direction.
Section 33.4. Resignation and Removal of the Collateral Agent.
The Collateral Agent may at any time, by giving 30 days' prior written
notice to the Company, and each Noteholder, resign and be discharged from
the responsibilities hereby created, such resignation to become effective
upon the earlier of (i) 30 days after the date of such notice or (ii) the
appointment of a successor by the Required Creditors and the acceptance of
such appointment be such successor. If no successor shall be appointed and
approved within 30 days after the date of any such resignation, the
Collateral Agent (notwithstanding the termination of all their other duties
and obligations hereunder by reason of such resignation) may apply to any
court of competent jurisdiction to appoint a successor to act until a
successor shall have been appointed by the Required Creditors as above
provided or may, on behalf of the Noteholders, appoint one or more
successor Collateral Agent. The Collateral Agent may be removed at any
time by the affirmative vote of the Required Creditors and, upon the
appointment of a successor by the Required Creditors and the acceptance of
such appointment by such successor, the Collateral Agent shall be
discharged from the responsibilities hereby created.
Section 33.5. Expenses and Indemnification by the Company. By
countersigning this Agreement, the Company agrees (i) to reimburse the
17
Collateral Agent, on demand, for any expenses incurred by the Collateral
Agent, including counsel fees and compensation of agents, arising out of,
in any way connected with, or as a result of, the execution or delivery of
this Agreement or any Collateral Document or any agreement or instrument
contemplated thereby or the performance by the parties thereto of their
respective obligations hereunder or in connection with the enforcement or
protection of the rights of the Collateral Agent or the Noteholders under
the Collateral Documents and (ii) to indemnify and hold harmless the
Collateral Agent and its affiliates, and each of their partners, trustees,
officers, employees and agents, on demand, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Collateral
Agent in its capacity as the Collateral Agent in any way relating to or
arising out of this Agreement or any Collateral Document or any action
taken or omitted by it under this Agreement or any Collateral Document;
provided that the Company shall not be liable to the Collateral Agent for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the gross negligence or wilful misconduct of the Collateral Agent or any of
its officers, employees or agents.
Section 33.6. Expenses and Indemnification by Credit Agreement
Creditors and Noteholders. Each Noteholder agrees (i) to reimburse the
Collateral Agent, on demand, in the amount of its pro rata share (based on
the amount of the Obligations held by it), for any expenses referred to in
Section 5.5 which shall not have been reimbursed by the Company or paid
from the proceeds of Collateral as provided herein and (ii) to indemnify
and hold harmless the Collateral Agent and its affiliates, and each of
their partners, trustees, officers, employees and agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements referred to in Section 5.5, to the extent the
same shall not have been reimbursed by the Company or paid from the
proceeds of Collateral as provided herein; provided that no Noteholder
shall be liable to the Collateral Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence
or wilful misconduct of the Collateral Agent or any of officers, employees
or agents.
ARTICLE XXXIV
REPRESENTATIONS AND WARRANTIES
The Collateral Agent, each of the Noteholders and the Company
represents and warrants to the other parties hereto that (a) the execution,
delivery and performance of this Agreement (i) has been duly authorized by
all requisite corporate, partnership or trust action on its part, as the
case may be, and (ii) will not contravene any provision of its governing
documents or any order of any court or other governmental authority having
applicability to it, and (b) this Agreement has been duly executed and
delivered by it and constitutes its legal, valid and binding obligation.
18
ARTICLE XXXV
INTERCREDITOR ARRANGEMENTS
Section 35.1. Security Interests. The Collateral Agent and
each of the Noteholders hereby agree that the Liens granted to the
Collateral Agent under the Collateral Documents shall be treated, as
between the Noteholders as having equal priority and shall at all times be
shared by the Noteholders as provided herein.
Section 35.2. Release of Collateral. The Noteholders and the
Collateral Agent agree as follows:
(a) Release Following Sale of Collateral. The Collateral Agent
shall release all Collateral from the Liens created by the Collateral
Documents, so long as such release is in connection with the sale of such
Collateral and at least seventy percent (70%) of the Net Proceeds from such
sale are used to pay the Obligations.
(b) Release at Direction of all Noteholders. Except under the
circumstances specified in the foregoing paragraph (a), the Collateral
Agent shall release Collateral from the Liens created by the Collateral
Documents only at the direction of all the Noteholders.
Section 35.3. Purchase of Collateral. Any Noteholder (or the
Collateral Agent on behalf of all the Noteholders with the consent and
direction of each of the Noteholders) may purchase Collateral at any public
sale of such Collateral pursuant to any of the Collateral Documents and may
make payment on account thereof by using any claim then due and payable to
such Noteholder (or all the Noteholders, in the case of a purchase by the
Collateral Agent) from the person which granted a security interest in such
Collateral as a credit against the purchase price.
Section 35.4. Sharing of Payments. If any Noteholder shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of any Obligation in excess
of its ratable share (determined by application of the provisions of this
Agreement, and the Note Exchange Agreement) of payments on account of
Obligations, such Noteholder shall, within 90 days after receipt of written
notice from one or more of the Noteholders and of adequate supporting
documentation and information, purchase from the other Noteholders such
participations in their Obligations as shall be necessary to cause such
purchasing Noteholder to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Noteholder, such purchase from
each Noteholder shall be rescinded and each such Noteholder shall promptly
repay to the purchasing Noteholder the purchase price to the extent of such
recovery together with an amount equal to such Noteholder's ratable share
(according to the proportion of (i) the amount of such Noteholder's
required repayment to (ii) the total amount so recovered from the
purchasing Noteholder) of any interest or other amount paid or payable by
19
the purchasing Noteholder in respect of the total amount so recovered. The
Company agrees that any Noteholder so purchasing a participation from
another Noteholder pursuant to this Section 7.5 may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Noteholder were the direct creditor of
the Company in the amount of such participation.
Section 35.5. Setoffs. If any Noteholder exercises any right
of setoff or similar right with respect to any assets (whether or not such
assets shall constitute Collateral) of the Company for payment of any
Obligations, the amounts so setoff shall constitute Collateral for purposes
of this Agreement and such Noteholder shall promptly cause such amounts to
be delivered to or put in the custody, possession or control of the
Collateral Agent for disposition or distribution in accordance with the
provisions of Sections 4.1 and 4.2. Until such time as the provisions of
the immediately preceding sentence have been complied with, such Noteholder
shall be deemed to hold such Collateral in trust for the parties hereto
entitled thereto hereunder.
Section 35.6. Further Assurances, etc. Each party hereto shall
execute and deliver such other documents and instruments, in form and
substance reasonably satisfactory to the other parties hereto, and shall
take such other action, in each case as any other party hereto may
reasonably have requested (at the cost and expense of the Company which, by
countersigning this Agreement, agrees to pay such costs and expenses), to
effectuate and carry out the provisions of this Agreement, including by
recording or filing in such places as the requesting party may deem
desirable this Agreement or such other documents or instruments.
ARTICLE XXXVI
APPROVAL BY THE COMPANY
By countersigning this Agreement, the Company, although not a
party hereto, acknowledges and consents to, and agrees to perform and be
bound by, the provisions hereof.
ARTICLE XXXVII
MISCELLANEOUS
Section 37.1. N o Individual Action. No holder of any
Obligations may require the Collateral Agent to take or refrain from taking
any action hereunder or under any of the Collateral Documents or with
respect to any of the Collateral except as and to the extent expressly set
forth in this Agreement.
Section 37.2. Successors and Assigns. This Agreement shall be
binding on and inure to the benefit of the Collateral Agent and each of the
20
Noteholders and their respective successors and assigns. Except as
specifically set forth above, this Agreement is not intended to confer any
benefit on, or create any obligation of a party hereto to, any third party,
including, without limitation, the Company.
Section 37.3. N o tices. Notices and other communications
provided for herein or in any Collateral Document shall be in writing and
shall be delivered by hand or overnight courier service, mailed or sent by
telex, graphic scanning or other telegraphic communications equipment of
the sending party, to each party at its address specified in the Note
Exchange Agreement. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telex, graphic scanning or other
telegraphic communications equipment of the sender, or on the date five
business days after dispatch by certified or registered mail if mailed, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.3 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.3.
Section 37.4. Termination. This Agreement shall terminate
automatically upon the indefeasible payment in full of the Obligations;
provided, however, that Sections 5.5 and 5.6 of this Agreement shall
survive, and remain operative and in full force and effect, regardless of
the termination of this Agreement.
Section 37.5. A p p licable Law. This agreement shall be
construed in accordance with and governed by the laws of the State of New
York.
Section 37.6. Waiver of Rights. Neither any failure nor any
delay on the part of any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, and a single or
partial exercise thereof shall not preclude any other or further exercise
or the exercise of any other right, power or privilege.
Section 37.7. Severability. In case one or more of the
provisions contained in this invalid, illegal or unenforceable in validity,
legality and enforceability provisions contained herein shall not in case
any one or Agreement should be any respect, the of the remaining any way be
affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provision.
Section 37.8. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but
all of which, when taken together, shall constitute but one instrument.
Section 37.9. Section Headings. The Article and Section
headings used herein are for convenience of reference only and are not to
21
affect the construction of or be taken into consideration in interpreting
this Agreement.
Section 37.10. Complete Agreement. This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior representations, negotiations,
writings, memoranda and agreements. To the extent any provision of this
Agreement conflicts with the Note Exchange Agreement or any other Note
Purchase Document, the provisions of this Agreement shall be controlling.
Nothing in this Agreement, expressed or implied, is intended to confer upon
any person, other than the parties hereto and their permitted successors
and assigns pursuant to Section 9.2 hereof, any rights or remedies under or
by reason of this Agreement,
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their duly authorized officers, all as of the day
and year first above written.
CCC LENDING CORPORATION
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
CANAL CAPITAL CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
22
NOTEHOLDERS
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ DEFINED BENEFIT TRUST
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
23
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PENSION PLAN
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
th
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
EDELMAN VALUE PARTNERS, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Management Company, Inc.,
General Partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
24
EDELMAN VALUE FUND, LTD
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
c/o Bayand (Luxembourg) Admin.
▇▇ ▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
SES TRUST
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
25
AGREEMENT
THIS AGREEMENT dated as of January 8, 1998 by and between DELTEC
A S SET MANAGEMENT CORPORATION ( Deltec ) and HANSEATIC CORPORATION
( Hanseatic ; and collectively, Assignors ), and each of the persons and
entities set forth on Schedule I hereto (the Assignees ).
W I T N E S S E T H:
WHEREAS, Deltec is the holder of a promissory note issued by
Canal Capital Corporation, a Delaware corporation (the Borrower ), as of
May 15, 1993 in the original principal amount of $5,800,000 (the Note ),
pursuant to and in accordance with the Note Exchange Agreement dated as of
May 15, 1993 among Assignors, the Borrower and Guaranty Reassurance Company
(the Note Agreement ); and
WHEREAS, the Borrower's obligations under the Note are secured by
c e rtain Collateral pursuant to the Security Agreement and certain
Mortgages, all as defined in the Note Agreement; and
WHEREAS, Assignors wish to assign to the Assignees all of
Assignors rights, title and interest in and to the Note, the Collateral
and the Mortgages, and under the Note Agreement and the Security Agreement,
for the consideration set forth herein.
26
NOW, THEREFORE, the parties hereby agree as follows:
a. Assignment and Assumption. Assignors hereby assign, sell,
transfer and convey to the Assignees all of Assignors rights, title and
interest in and to the Note, the Collateral and the Mortgages, and under
the Note Agreement and the Security Agreement. Each Assignee shall hold a
proportional interest in the Note, the Collateral and the Mortgages and
under the Security Agreement based on the percentage set forth opposite its
or his name on Schedule I hereto. Assignors are delivering the original
Note to the Assignees simultaneously herewith. The Assignees hereby agree
to assume any and all of Assignors obligations under the Note Agreement
and the Security Agreement that may arise after the date hereof.
b. Other Documentation. Simultaneously herewith, Assignors are
executing and delivering to the collateral agent of the Assignees, CCC
L e nding Corporation, for recording and filing with all applicable
authorities, assignments of the Mortgages listed on Schedule II hereto and
Forms UCC-3 with respect to the Collateral (the Security Documents ).
c. Further Assurances. At any time, and from time to time
after the date hereof, Assignors shall, without further consideration,
execute and deliver such additional agreements, instruments, documents or
certificates, and shall take such other action as shall reasonably be
requested by the Assignees in order better to transfer and convey to the
Assignees all of Assignors rights, title and interest in and to the
Collateral and the Mortgages. In the event that the Borrower makes any
payments to Assignors after the date hereof in respect of the Note,
Assignors shall promptly forward such payments to CCC Lending Corporation,
the collateral agent of the Assignees, at c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
d. Consideration. In consideration for Assignors undertakings
herein, including, without limitation, its making the assignments set forth
in this Agreement and executing and delivering the Security Documents, the
Assignees are paying to Deltec, by wire transfer to Deltec's account, the
sum of (a) $1,717,456.00, constituting the full principal amount remaining
under the Note, plus (b) $30,900.51, constituting interest accrued as of
the date hereof, plus (c) $28,930.10 constituting certain fees that are
accrued but unpaid with respect to the Note.
e. Representations and Warranties.
i. Each of the Assignors and the Assignees hereby
represents and warrants to the other that (i) it has all requisite power
and authority to enter into and to perform this Agreement; (ii) this
Agreement has been duly executed and delivered by it and constitutes its
legal, valid and binding agreement, enforceable against it in accordance
with its terms; (iii) such party's execution, delivery and performance of
this Agreement will not violate the applicable organizational documents of
27
such party; and (iv) such party's execution, delivery and performance of
this Agreement will not breach of, or constitute a default under, any other
agreement or instrument to which any Assignor or any Assignee, as the case
may be, is a party or by which its assets are bound.
ii. In addition, Assignors hereby jointly and severally
represent and warrant to the Assignees that (i) Assignors have not
assigned, sold, transferred, pledged, hypothecated or otherwise encumbered
Assignors rights under the Note or in and to the Collateral and the
Mortgages, (ii) Assignors have not agreed to do any of the foregoing with
any person or entity other than the Assignees and (iii) upon consummation
of the transactions contemplated hereby, the Assignees will own all of
Assignors' rights, title and interest in and to the Note, free and clear of
any and all liens, claims, charges, rights or other encumbrances.
iii. The representations and warranties set forth in this
Section 5 shall survive the consummation of the transactions contemplated
hereby.
f. Governing Law. This Agreement shall be construed and
enforced in accordance with laws of the State of New York, without
consideration of principles governing conflicts of law.
g. Entire Agreement. This Agreement, including the Security
Documents, contains a complete statement of all the arrangements between
the parties with respect to the subject matter thereof and supersedes any
previous arrangement or understanding between them relating to the subject-
matter hereof.
IN WITNESS WHEREOF, the Assignors and the Assignees have executed
and delivered this Agreement as of the date first above written.
Assignors:
DELTEC ASSET MANAGEMENT CORPORATION
By: /S/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
HANSEATIC CORPORATION
28
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Treasurer
Assignees:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ DEFINED BENEFIT TRUST
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trustee
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
29
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PENSION PLAN
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trustee
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EDELMAN VALUE PARTNERS, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Management Company, Inc.,
General Partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
EDELMAN VALUE FUND, LTD.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
30
SES TRUST
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
(THIS PAGE HAS BEEN LEFT BLANK)
31
SCHEDULE I
Name of Assignee Percentage
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 27.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust 6.54%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6.19%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 13.51%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan 5.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3.86%
Edelman Value Partners, L.P. 9.46%
Edelman Value Fund, LTD 14.86%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8.11%
SES Trust 5.41%
32
SCHEDULE II
Assignment of Mortgage - Minnesota (Schedule II-A attached)
Assignment of Mortgage - Iowa (Schedule II-B attached)
Assignment of Mortgage - South Dakota (Schedule II-C attached)
Schedule II-A
33
ASSIGNMENT OF MORTGAGE - MINNESOTA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, as grantor ( Grantor ) and the Assignor, in its capacity as
Trustee pursuant to that certain Indenture dated as of May 15, 1985, as
amended by a First Supplemental Indenture dated as of April 20, 1988, by
and between Grantor and Chemical Bank, said Mortgage being filed for record
in the Office of the Register of Deeds in and for the County of Dakota,
State of Minnesota on the 31st day of May, 1985, as Document Number 688807.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached to the Mortgage, portions of which have been released from time to
time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
Schedule II-A (cont d)
STATE OF )
) SS.
COUNTY OF )
34
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of Hanseatic Corporation, a New York corporation, on behalf of the
Corporation.
Notary Public
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of the Trust Company of the West, as investment advisor of Guaranty
Reassurance Corporation, a Florida corporation, on behalf of the
Corporation.
Notary Public
Schedule II-B
35
ASSIGNMENT OF MORTGAGE - IOWA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, as grantor ( Grantor ) and the Assignor, in its capacity as
Trustee pursuant to that certain Indenture dated as of May 15, 1985, as
amended by a First Supplemental Indenture dated as of April 20, 1988, by
and between Grantor and Chemical Bank, said Mortgage being filed for record
on the 31st day of May, 1985, on Roll 157, Image 1841 in the Office of the
County Recorder for Woodbury County, Iowa, as amended by that certain First
Amendment to Mortgage - Iowa dated as of May 15, 1993 and filed for record
December 28, 1995 on Roll 340, Image 832 in the Office of the County
Recorder for Woodbury County, Iowa.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached to the Mortgage, portions of which have been released from time to
time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
Schedule II-B (cont d)
STATE OF )
) SS.
36
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of Hanseatic Corporation, a New York corporation, on behalf of the
Corporation.
Notary Public
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of the Trust Company of the West, as investment advisor of Guaranty
Reassurance Corporation, a Florida corporation, on behalf of the
Corporation.
Notary Public
37
Schedule II-C
ASSIGNMENT OF MORTGAGE - SOUTH DAKOTA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, and Sioux Falls Stockyards Company, a South Dakota
corporation, together as grantor ( Grantor ) and the Assignor, in its
capacity as Trustee pursuant to that certain Indenture dated as of May 15,
1985, by and between Grantor and Chemical Bank, said Mortgage recorded on
May 29, 1985 at 11:10 o clock a.m. in Book 760 of Mortgages on Pages 838-
898 in the Office of the Minnehaha County, South Dakota Register of Deeds.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached herein as Exhibit A, portions of which have been released from
time to time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
CORPORATE SEAL CORPORATE SEAL
Schedule II-C (cont d)
38
STATE OF )
) SS.
COUNTY OF )
On this day of , in the year , before me
personally appeared , known to me to be the
of the corporation that is described in and that
executed the within instruments and acknowledged to me that such
corporation executed the same.
Notary Public -
My commission expires
STATE OF )
) SS.
COUNTY OF )
On this day of , in the year , before me
personally appeared , known to me to be the
of the corporation that is described in and that
executed the within instruments and acknowledged to me that such
corporation executed the same.
Notary Public -
My commission expires
39
AGREEMENT
THIS AGREEMENT dated as of January 8, 1998 by and between
GUARANTY REASSURANCE COMPANY ( Assignor ) and each of the persons and
entities set forth on Schedule I hereto (the Assignees ).
W I T N E S S E T H:
WHEREAS, Assignor is the holder of a promissory note issued by
Canal Capital Corporation, a Delaware corporation (the Borrower ), as of
May 15, 1993 in the original principal amount of $3,000,000 (the Note ),
pursuant to and in accordance with the Note Exchange Agreement dated as of
May 15, 1993 among Assignor, the Borrower and Hanseatic Corporation (the
Note Agreement ); and
WHEREAS, the Borrower's obligations under the Note are secured by
certain Collateral pursuant to the Security Agreement and certain
Mortgages, all as defined in the Note Agreement; and
40
WHEREAS, Assignors wish to assign to the Assignees all of
Assignors rights, title and interest in and to the Note, the Collateral
and the Mortgages, and under the Note Agreement and the Security Agreement,
for the consideration set forth herein.
NOW, THEREFORE, the parties hereby agree as follows:
h. Assignment and Assumption. Assignor hereby assigns, sells,
transfers and conveys to the Assignees all of Assignor s rights, title and
interest in and to the Note, the Collateral and the Mortgages, and under
the Note Agreement and the Security Agreement. Each Assignee shall hold a
proportional interest in the Note, the Collateral and the Mortgages and
under the Security Agreement based on the percentage set forth opposite its
or his name on Schedule I hereto. Assignor is delivering the original Note
to the Assignees simultaneously herewith. The Assignees hereby agree to
assume any and all of Assignor s obligations under the Note Agreement and
the Security Agreement that may arise after the date hereof.
i. Other Documentation. Simultaneously herewith, Assignor is
executing and delivering to the collateral agent of the Assignees, CCC
Lending Corporation, for recording and filing with all applicable
authorities, assignments of the Mortgages listed on Schedule II hereto and
Forms UCC-3 with respect to the Collateral (the Security Documents ).
j. Further Assurances. At any time, and from time to time
after the date hereof, Assignor shall, without further consideration,
execute and deliver such additional agreements, instruments, documents or
certificates, and shall take such other action as shall reasonably be
requested by the Assignees in order better to transfer and convey to the
Assignees all of Assignor s rights, title and interest in and to the
Collateral and the Mortgages. In the event that the Borrower makes any
payments to Assignor after the date hereof in respect of the Note, Assignor
shall promptly forward such payments to CCC Lending Corporation, the
collateral agent of the Assignees, at c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
k. Consideration. In consideration for Assignor s undertakings
herein, including, without limitation, its making the assignments set forth
in this Agreement and executing and delivering the Security Documents, the
Assignees are paying to Assignor, by wire transfer to Assignor s account,
the sum of (a) $887,544.00, constituting the full principal amount
remaining under the Note, plus (b) $15,989.49, constituting interest
accrued as of the date hereof, plus (c) $14,969.90 constituting certain
fees that are accrued but unpaid with respect to the Note.
l. Representations and Warranties.
i. Each of the Assignor and the Assignees hereby
41
represents and warrants to the other that (i) it has all requisite power
and authority to enter into and to perform this Agreement; (ii) this
Agreement has been duly executed and delivered by it and constitutes its
legal, valid and binding agreement, enforceable against it in accordance
with its terms; (iii) such party's execution, delivery and performance of
this Agreement will not violate the applicable organizational documents of
such party; and (iv) such party's execution, delivery and performance of
this Agreement will not breach of, or constitute a default under, any other
agreement or instrument to which the Assignor or any Assignee, as the case
may be, is a party or by which its assets are bound.
ii. In addition, Assignor hereby represents and warrants to
the Assignees that (i) Assignor has not assigned, sold, transferred,
pledged, hypothecated or otherwise encumbered Assignor's rights under the
Note or in and to the Collateral and the Mortgages, (ii) Assignor has not
agreed to do any of the foregoing with any person or entity other than the
Assignees and (iii) upon consummation of the transactions contemplated
hereby, the Assignees will own all of Assignor s rights, title and interest
in and to the Note, free and clear of any and all liens, claims, charges,
rights or other encumbrances.
iii. The representations and warranties set forth in this
Section 5 shall survive the consummation of the transactions contemplated
hereby.
m. Governing Law. This Agreement shall be construed and
enforced in accordance with laws of the State of New York, without
consideration of principles governing conflicts of law.
n. Entire Agreement. This Agreement, including the Security
Documents, contains a complete statement of all the arrangements between
the parties with respect to the subject matter thereof and supersedes any
previous arrangement or understanding between them relating to the subject-
matter hereof.
IN WITNESS WHEREOF, the Assignors and the Assignees have executed
and delivered this Agreement as of the date first above written.
Assignors:
GUARANTY REASSURANCE COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
42
Assignees:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ DEFINED BENEFIT TRUST
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trustee
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
43
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ PENSION PLAN
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trustee
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EDELMAN VALUE PARTNERS, L.P.
By: ▇. ▇. ▇▇▇▇▇▇▇ Management Company, Inc.,
General Partner
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
EDELMAN VALUE FUND, LTD.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
44
SES TRUST
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
SCHEDULE I
Name of Assignee Percentage
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 27.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Defined Benefit Trust 6.54%
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 6.19%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 13.51%
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Pension Plan 5.03%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3.86%
Edelman Value Partners, L.P. 9.46%
Edelman Value Fund, LTD 14.86%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8.11%
SES Trust 5.41%
45
46
SCHEDULE II
Assignment of Mortgage - Minnesota (Schedule II-A attached)
Assignment of Mortgage - Iowa (Schedule II-B attached)
Assignment of Mortgage - South Dakota (Schedule II-C attached)
Schedule II-A
47
ASSIGNMENT OF MORTGAGE - MINNESOTA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, as grantor ( Grantor ) and the Assignor, in its capacity as
Trustee pursuant to that certain Indenture dated as of May 15, 1985, as
amended by a First Supplemental Indenture dated as of April 20, 1988, by
and between Grantor and Chemical Bank, said Mortgage being filed for record
in the Office of the Register of Deeds in and for the County of Dakota,
State of Minnesota on the 31st day of May, 1985, as Document Number 688807.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached to the Mortgage, portions of which have been released from time to
time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
Schedule II-A (cont d)
STATE OF )
) SS.
COUNTY OF )
48
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of Hanseatic Corporation, a New York corporation, on behalf of the
Corporation.
Notary Public
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of the Trust Company of the West, as investment advisor of Guaranty
Reassurance Corporation, a Florida corporation, on behalf of the
Corporation.
Notary Public
Schedule II-B
49
ASSIGNMENT OF MORTGAGE - IOWA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, as grantor ( Grantor ) and the Assignor, in its capacity as
Trustee pursuant to that certain Indenture dated as of May 15, 1985, as
amended by a First Supplemental Indenture dated as of April 20, 1988, by
and between Grantor and Chemical Bank, said Mortgage being filed for record
on the 31st day of May, 1985, on Roll 157, Image 1841 in the Office of the
County Recorder for Woodbury County, Iowa, as amended by that certain First
Amendment to Mortgage - Iowa dated as of May 15, 1993 and filed for record
December 28, 1995 on Roll 340, Image 832 in the Office of the County
Recorder for Woodbury County, Iowa.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached to the Mortgage, portions of which have been released from time to
time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
Schedule II-B (cont d)
STATE OF )
) SS.
50
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of Hanseatic Corporation, a New York corporation, on behalf of the
Corporation.
Notary Public
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was duly acknowledged before me, a notary
public, by , the
of the Trust Company of the West, as investment advisor of Guaranty
Reassurance Corporation, a Florida corporation, on behalf of the
Corporation.
Notary Public
51
Schedule II-C
ASSIGNMENT OF MORTGAGE - SOUTH DAKOTA
As of January 8, 1998, for valuable consideration, Hanseatic
Corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ( Hanseatic ), and Guaranty Reassurance Company, having an
address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
collectively, as Collateral Agent pursuant to that certain Collateral
Agency Agreement dated as of May 15, 1993 (hereafter collectively
Assignor ), as successor in interest to Chemical Bank (formerly known as
Manufacturers Hanover Trust Company) by that First Amendment to Mortgage
dated May 15, 1993, does hereby sell, assign and transfer to CCC Lending
Corporation, a Delaware corporation, all of its right, title and interest
in that certain Mortgage, Assignment, Security Agreement and Financing
Statement dated as of May 15, 1985, made by United Stockyards Corporation
(which by name change became Canal Capital Corporation), a Delaware
corporation, and Sioux Falls Stockyards Company, a South Dakota
corporation, together as grantor ( Grantor ) and the Assignor, in its
capacity as Trustee pursuant to that certain Indenture dated as of May 15,
1985, by and between Grantor and Chemical Bank, said Mortgage recorded on
May 29, 1985 at 11:10 o clock a.m. in Book 760 of Mortgages on Pages 838-
898 in the Office of the Minnehaha County, South Dakota Register of Deeds.
This assignment is made without recourse or warranty.
The legal description of the property encumbered by the Mortgage is
attached herein as Exhibit A, portions of which have been released from
time to time.
Hanseatic Corporation Guaranty Reassurance Company
Collateral Agent Collateral Agent
By: Trust Company of the West
Its Investment Advisor
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:President Its:Managing Director
CORPORATE SEAL CORPORATE SEAL
Schedule II-C (cont d)
52
STATE OF )
) SS.
COUNTY OF )
On this day of , in the year , before me
personally appeared , known to me to be the
of the corporation that is described in and that
executed the within instruments and acknowledged to me that such
corporation executed the same.
Notary Public -
My commission expires
STATE OF )
) SS.
COUNTY OF )
On this day of , in the year , before me
personally appeared , known to me to be the
of the corporation that is described in and that
executed the within instruments and acknowledged to me that such
corporation executed the same.
Notary Public -
My commission expires
53
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of January 8, 1998, by and among
CANAL CAPITAL CORPORATION, formerly known as United Stockyards Corporation
("Canal Capital"), CANAL GALLERIES CORPORATION ( Canal Galleries ) and
CANAL ARTS CORPORATION ("Canal Arts"; together with Canal Capital and Canal
Galleries, collectively, "Debtor"), a Delaware corporation having an
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the parties
listed on Schedule I hereto ( Noteholders ) and CCC LENDING CORPORATION (
"Collateral Agent"), as collateral agent pursuant to that certain
Collateral Agency Agreement of even date herewith.
RECITALS
38. Canal Capital is a party to that certain Indenture (the
"Indenture") dated as of May 15, 1985, between United Stockyards
Corporation (the predecessor-in-interest to Canal Capital) and
Manufacturers Hanover Trust Company, as Trustee ("Trustee"), pursuant to
which Debtor issued its Variable Rate Mortgage Notes (the "MHTC Notes").
39. The indebtedness evidenced by the MHTC Notes (the
"Indebtedness") is secured by certain mortgages of Canal Capital's real
property, each dated as of May 15, 1985, from Canal Capital to Trustee (the
"MHTC Mortgages").
54
40. In connection with a modification of the Indebtedness
described in that certain Note Exchange Agreement dated as of May 15, 1993
(the "1993 Note Exchange Agreement"), the MHTC Notes were amended, restated
and replaced by Amended and Restated Notes (the "1993 Notes") from Canal
Capital to Hanseatic Corporation ( Hanseatic ) and Guaranty Reassurance
Company ( Guaranty ).
41. Canal Capital has issued and outstanding certain other
promissory notes, dated as of September 15, 1995, (the Other Notes ) due
to certain of the Noteholders, secured by certain other Mortgages on Canal
Capital s real property (the Other Mortgages ) and certain other
collateral.
42. In connection with a further modification of the
Indebtedness described in that certain Note Exchange and Loan Agreement of
even date herewith (the Note Exchange Agreement ), the 1993 Notes and the
Other Notes have been amended, restated and replaced by, and a further loan
has been made to Canal Capital to refinance certain existing indebtedness
pursuant to, certain Amended and Restated Notes (the Notes ) from Canal
Capital to the Noteholders (as defined in the Note Exchange Agreement).
43. The Notes are secured by (i) the MHTC Mortgages, which had
been assigned by Trustee to Hanseatic and Guaranty, (ii) by certain
additional mortgages from Canal Capital to Hanseatic and Guaranty
encumbering property of Canal Capital not encumbered by the MHTC Mortgages,
all of which have been assigned by Hanseatic and Guaranty to Collateral
Agent and (iii) by the Other Mortgages (all of the foregoing collectively
the "Mortgages").
44. In connection with the issuance of the Notes, Canal Capital
has pledged certain shares of stock pursuant to a Stock Pledge and Security
Agreement dated the date hereof ( Pledge Agreement ).
45. Canal Arts and Canal Galleries are wholly-owned
subsidiaries of Canal Capital, and are directly benefited by the
modification of the Indebtedness described above.
46. In connection with the 1993 Notes, Debtor agreed to grant to
Hanseatic and Guaranty a security interest in all of the property described
in Part I of Schedule A annexed hereto, together with any substitutions
therefor and proceeds therefrom (the "1993 Collateral") pursuant to a
Security Agreement dated as of May 15, 1993 which security interest has
been assigned to Collateral Agent in connection with the Note Exchange
Agreement.
47. In connection with the Other Notes, Debtor has agreed to
grant certain of the Noteholders a security interest in all of the property
described in Part II of Schedule A, together with any substitutions
therefor and proceeds therefrom (together with the 1993 Collateral, the
Collateral ).
55
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Collateral Agent and Debtor agree as follows:
47.1. As collateral security for the payment, performance and
discharge of the Obligations (as herein after defined), Debtor hereby
pledges, grants, assigns, transfers, and sets over to Collateral Agent and
grants to Collateral Agent a first priority lien on and security interest
in, all of Debtor's rights, title and interest in and to the Collateral,
whether heretofore or hereafter acquired. Debtor further grants to
Collateral Agent full power and authority, in the name of Debtor or
otherwise, to take any action which Collateral Agent may deem necessary or
advisable in connection with effectuating and perfecting the assignment
herein and lien and security interest created hereby, Debtor hereby
irrevocably constituting and appointing Collateral Agent, the true and
lawful attorney-in-fact of Debtor for such purposes, which appointment is
coupled with an interest. This appointment is unconditional and
irrevocable and continuing and these rights, powers and privileges shall be
exclusive in Collateral Agent, its successors and assigns, so long as any
of the Obligations remain unpaid or unperformed.
47.2. This Agreement constitutes a security agreement under
the New York Uniform Commercial Code (the "Code") with respect to the
Collateral for the purposes of Article 9 of the Code. This Agreement and
any photostatic copies hereof may, at the option of Collateral Agent, be
filed in the Department of State of the State of New York, the Office of
the City Register, New York County, and in such other filing offices as
Collateral Agent shall desire to give notice of the lien and security
interest created hereby, Debtor hereby irrevocably constituting and
appointing Collateral Agent the true and lawful attorney-in-fact of Debtor
for such purposes, which appointment is coupled with an interest and is
unconditional and irrevocable. Debtor hereby further authorizes Collateral
Agent to file financing and continuation statements with respect to the
Collateral without the signature of Debtor and, upon request of Collateral
Agent, Debtor shall promptly execute and file at Debtor's expense financing
and continuation statements, in form satisfactory to Collateral Agent to
further evidence and secure Collateral Agent's lien on and security
interest in the Collateral.
47.3. This Agreement is made for the purpose of securing the
following (collectively, the "Obligations"):
(a) The payment by Canal Capital of the principal sum, interest
and indebtedness evidenced by the Notes and any renewal, extension,
refinancing, substitution or reissuance thereof, and all other sums, with
interest thereon, becoming due and payable to or for the benefit of
Collateral Agent under the provisions of this Agreement, the Mortgages, the
Pledge Agreement or any other documents executed in connection with or
securing the Notes (collectively, the "Loan Documents").
56
(b) The performance and discharge of each and every obligation,
covenant and agreement of Debtor contained in this Agreement, the Notes,
the Mortgages, the Pledge Agreement or any other Loan Documents.
47.4. Debtor represents and warrants to Collateral Agent as
follows:
(a) The execution, delivery or performance of this Agreement by
Debtor will not require the consent or approval of, or the registration,
declaration or filing with, any person or entity, which have not been
obtained or completed, or violate or result in a breach of, or constitute a
default under, any applicable law or regulation or any other agreement to
which Debtor is bound. This Agreement has been duly executed by Debtor and
constitutes a valid, legal and binding obligation of Debtor enforceable
against the Debtor in accordance with its terms.
(b) Canal Arts is the sole owner of record, legal and beneficial
title to the Collateral, free and clear of all liens, claims, options,
charges, pledges and encumbrances, other than the liens and security
interest created pursuant to this Agreement.
(c) Debtor shall immediately notify Collateral Agent of any
actual or contemplated change in the principal place of business of Debtor,
of the establishment of any additional place of business of Debtor or of
any change of name of Debtor, and shall promptly, upon demand of Collateral
Agent, execute and file, at Debtor's expense all financing statements and
other documents and instruments requested by Collateral Agent so that any
such change in or other establishment of place of business or change of
name of Debtor shall not adversely affect the lien on or security interest
in the Collateral.
47.5. Debtor hereby covenants with Collateral Agent as
follows:
(a) Debtor will not, nor will it, consent, agree or commit
itself to, sell, assign, transfer, convey, pledge, delegate, grant any
option with respect to, grant a security interest in, or otherwise dispose
of or encumber in any other manner, or permit, agree or commit itself to
permit, any such sale, assignment, transfer, conveyance, pledge, grant,
delegation, disposition or encumbrance of, all or any portion of the
Collateral or any beneficial or other interest therein. In the event of
the sale, exchange or other disposition of the Collateral, or any portion
thereof or any interest therein, in violation of this Agreement (and no
such sale, exchange or other disposition is hereby authorized or consented
to), the lien and security interest of Collateral Agent shall nevertheless
continue in said Collateral (including, without limitation, all proceeds
therefrom). Notwithstanding said sale, exchange or other disposition; all
of said proceeds shall remain Collateral hereunder and shall be transferred
and paid over to Collateral Agent immediately following said sale,
exchange, or other disposition and shall be applied in accordance with the
provisions of Section 9 hereof; and the receipt by Collateral Agent of all
or any part of said proceeds shall not be deemed or construed to be an
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authorization or consent of Collateral Agent to such sale, exchange or
other disposition of said Collateral or a waiver of any breach resulting
therefrom of this Agreement.
(b) Debtor will furnish promptly to Collateral Agent such
information as shall reasonably be requested by Collateral Agent in
connection with the Collateral of the performance by Debtor of the
Obligations, or required for effectuating the rights and benefits of
Collateral Agent herein.
(c) From and after the date hereof, Debtor agrees to maintain
the Collateral in at least as good condition as it is on the date hereof.
Debtor will not move all or any portion of the Collateral from its present
locations, which locations are indicated on Schedule A annexed hereto. At
all times during the terms of this Security Agreement, Debtor will comply
with the terms of conditions of all applicable insurance policies
maintained hereunder; and Debtor will not taken any action, or suffer or
permit any action to be taken by any person or persons (other than
Collateral Agent and its officers and agents), which is in violation of any
provision thereof, including, without limitation, any provision relating to
the maintenance, storage or use of the Collateral, the protection of same,
the condition or use of the premises where same is located, or any other
provision which would affect the amount of recovery hereunder in the event
of any loss or damage to the Collateral.
(d) From and after the date hereof, Maker agrees to maintain
Fine Art All Risk insurance on the Collateral, with a deductible not in
excess of $5,000, at all times at least equal to the outstanding principal
amount of the Notes plus accrued but unpaid interest. Such insurance shall
be written only by insurance companies licensed to do business in New York
having an A.M. Best's rating of "A" or better. Debtor agrees to provide
Collateral Agent with a valid Certificate of Insurance in form and
substance reasonably satisfactory to Collateral Agent naming Collateral
Agent or its assignee as loss payee under the insurance policy, which
policy shall not be cancelable by the insurance company without at least 30
days' prior written notice to Collateral Agent and providing that
Collateral Agent shall be notified by the insurance company of the payment
or non-payment of the premiums in respect of the insurance policy. Debtor
agrees not to cancel any such insurance policy without at least 60 days'
prior written notice to Collateral Agent and obtaining a substitute
insurance policy that satisfies the terms provided herein. In the event of
an Event of Default, Debtor agrees to maintain insurance in accordance with
the provisions herein, regardless of whether Debtor or Collateral Agent is
in possession of the Collateral.
47.6. The occurrence of any one or more of the following
events shall constitute an "Event of Default" under this Agreement:
(a) Any default beyond applicable grace or cure periods, if any,
shall occur under the Notes, the Mortgages, the Pledge Agreement or any
other Loan Document; or
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(b) Debtor shall fail to perform any Obligation or fail to
observe any of the provisions contained in this Agreement or breach any
covenant or agreement made or given by Debtor herein; or
(c) Any representation or warranty made by or on behalf of
Debtor herein or otherwise in writing shall prove to have been false or
incorrect in any material respect; or
(d) Debtor shall file a voluntary petition seeking an order for
relief under Title 11 of the United States Code, or Debtor shall be
adjudicated a debtor, bankrupt or insolvent, or shall file any petition or
answer seeking, consenting to or acquiescing in any order for relief,
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future general
bankruptcy act or any other present or future applicable federal, state or
other statute or law (foreign or domestic), or shall file an answer
admitting or failing to deny the material allegations in a petition against
it for any such relief, or shall admit in writing its inability to pay its
debts as they mature, or shall make an assignment for the benefit of
creditors or shall seek or consent or acquiesce in the appointment of any
trustee, receiver, examiner, sequestrator, custodian or liquidator or
similar official of Debtor or of all or any portion of the Collateral; or
if, within sixty (60) days after the commencement of any proceeding against
Debtor, whether by the filing of a petition or otherwise, seeking any order
for relief, reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
federal bankruptcy act or any other present or future applicable federal,
state or other statute or law (foreign or domestic), such proceeding shall
not have been dismissed, or if, within sixty (60) days after the
appointment of any trustee, receiver or liquidator of Debtor or of all or
any part of the Collateral, without the consent or acquiescence of Debtor,
such appointment shall not have been vacated or otherwise discharged, or if
any execution or attachment shall be issued against Debtor or all or any
portion of the Collateral.
47.7. Upon the occurrence of an Event of Default, or at any
time thereafter, and in each and every such case, unless such Event of
Default shall have been remedied or waived by Collateral Agent by written
notice given in accordance with the provisions hereof, then all of the
Obligations shall become immediately due and payable without notice,
presentment or demand, each of which is hereby waived by Debtor, and
Collateral Agent shall be entitled to any and all rights, recourse and
remedies available to it at law, in equity or by statute, or pursuant to
this Agreement and any other Loan Document, including, without limitation,
all rights and remedies available to a secured party under the Code. In
furtherance, and not in limitation of the foregoing, Collateral Agent shall
have the following rights and remedies upon the occurrence of an Event of
Default:
(a) Collateral Agent may, without being required to give any
notice, demand or advertisement, except to the extent specifically set
forth herein, take possession of and sell all or any portion of the
Collateral at public or private sale in New York City or elsewhere, as
Collateral Agent shall determine, for cash, upon credit or for future
59
delivery and at such price or prices as Collateral Agent may deem
satisfactory, and, subject to compliance with applicable law, Collateral
Agent may be the purchaser of any or all of the Collateral sold. Upon any
such sale, Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold and Debtor, to the
extent permitted by applicable law, hereby specifically waives all rights
of redemption, stay or appraisal which it may have with respect to the
Collateral under any rule of law or statute now existing or hereafter
adopted. At any such sale Collateral Agent may, in its discretion,
restrict the prospective bidders or purchasers to persons who will
represent and warrant that they are acquiring the Collateral, or any
portion thereof, for their own account, for investment only and not with a
view toward the resale or distribution thereof and who will make such
further representations and warranties as Collateral Agent may, in its
discretion, deem necessary or desirable to assure Collateral Agent that
such prospective bidders or purchasers are, with respect to the applicable
Federal and state securities laws, regulations and rules, suitable bidders
or purchasers of such Collateral, which restrictions as to prospective
bidders or purchasers the parties agree are commercially reasonable. If
notice of sale of all or any portion of the Collateral hereunder is
required by law, the parties agree that written notice mailed to Debtor ten
(10) business days prior to the date of public sale of the Collateral or
ten (10) business days prior to the date after which a private sale or any
other disposition of the Collateral is intended to be made shall constitute
reasonable notice (all other notices, demands or advertisements of any kind
being hereby expressly waived), but notice given in any other reasonable
manner or at any other reasonable time shall be sufficient. Collateral
Agent shall not be obligated to make any sale or other disposition pursuant
to any notice thereof, and without notice or publication, adjourn any
public or private sale or other disposition or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
the sale or other disposition, and such sale or other disposition may be
made at any time or place to which the same may be so adjourned. In case
of any sale or other disposition of all or any part of the Collateral on
credit or for further delivery, the Collateral so sold or disposed of may
be retained by Collateral Agent until the selling price is paid by the
purchaser thereof, but Collateral Agent shall not incur any liability in
case of the failure of such purchaser to pay for the Collateral so sold or
disposed of, and, in case of any such failure, such Collateral may again be
sold or disposed of upon like notice and pursuant to the provisions hereof.
Collateral Agent shall have no duty as to the collection or protection of
the Collateral or any income thereon or as to the preservation of any
rights pertaining thereto.
(b) Collateral Agent, instead of exercising the power of sale
herein conferred upon it may, at its option, proceed by a suit or suits at
law or in equity to foreclose the security interest and sell all or any
portion of the Collateral under a judgment or decree of a court or courts
of competent jurisdiction, or may bring an action on any Obligation and
obtain and enforce a judgment thereon, with or without first or
simultaneously foreclosing, judicially or non-judicially, on the
Collateral.
(c) Collateral Agent, as attorney-in-fact, may, in the name and
stead of Debtor, make and execute all conveyances, agreement and transfers
of the Collateral sold pursuant to this Section 9 which Collateral Agent
60
shall deem advisable, and Debtor hereby ratifies and confirms all such acts
taken by Debtor as such attorney-in-fact. Notwithstanding the foregoing,
Debtor shall, if so requested by Collateral Agent, ratify and confirm any
sale or sales by executing and delivering to Collateral Agent, or to any
purchaser or purchasers of the Collateral sold, all such instruments as
may, in the reasonable judgment of Collateral Agent, be advisable for such
purpose.
(d) Debtor shall be liable for all costs and expenses
(including, without limitation, reasonable attorneys' fees, disbursements
and legal expenses) incurred by Collateral Agent in enforcing any of the
rights or remedies of Collateral Agent provided for in this Agreement, at
law, in equity or by statute, and the amount thereof shall be deemed part
of the Obligations and payment thereof shall be secured by the Collateral.
If the proceeds of the sale or other disposition of the Collateral are
insufficient to cover the costs and expenses (including, without
limitation, reasonable attorneys' fees, disbursements and legal expenses)
of such sale or other disposition and to pay in full the amount of the
Obligations, Debtor shall remain liable for any such deficiency.
(e) The proceeds of any sale or other disposition of all or any
portion of the Collateral under this Agreement shall be applied by
Collateral Agent in the following order of priority:
First, to the payment of all costs and expenses (including,
without limitation, reasonable attorneys' fees, disbursements and
legal expenses) of such sale or other disposition;
Second, to the payment of the amounts (other than principal and
interest) due and payable under the Notes, the Mortgages and the
other Obligations;
Third, to the payment of interest due on the Notes;
Fourth, to the payment of the principal of the Notes;
Fifth, subject to the provisions of Section 9-504(c) of the Code,
to the payment of any indebtedness, lien or encumbrance affecting
such Collateral which is subordinate to the lien created hereby;
and
Finally, the balance, if any, to Debtor or as a court of
competent jurisdiction may direct.
47.8. Debtor waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended,
collateral received or delivered or other action taken in reliance hereon
and all other notices of any description.
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47.9. Debtor, at its expense, will execute and deliver all
such instruments, agreements and other document, and take all such actions,
as Collateral Agent, from time to time, may reasonably request in order to
obtain the full benefits of this Agreement and the rights and powers herein
created. Debtor hereby constitutes and appoints Collateral Agent its true
and lawful attorney-in-fact, coupled with an interest, and in the name,
place and stead of Debtor, to execute and file any instrument, agreement or
other document required to be executed or filed by Debtor pursuant to this
Agreement (including, without limitation, any instrument assigning,
transferring or conveying all or any portion of the Collateral). This
appointment is unconditional and irrevocable and continuing and these
rights, power and privileges shall be exclusive in Collateral Agent, its
successors and assigns, so long as any of the Obligations remain
unsatisfied or any part of the indebtedness secured hereby shall remain
unpaid.
47.10. No delay or omission by Collateral Agent in insisting
upon the strict observance or performance of any provision of this
Agreement, or in exercising any right or remedy, shall be construed as a
waiver or relinquishment of such provision, nor shall it impair such right
or remedy.
47.11. This Agreement is given as security in addition to the
security of the other documents executed in connection herewith. All
rights and remedies herein conferred may be exercised whether or not any
proceedings of any nature are pending under any of such other documents.
Collateral Agent shall not be required to resort first to the security of
this Agreement or any of such other documents before resorting to the
security of the other such documents and Debtor may exercise the security
hereof or thereof concurrently or independently and in any order or
preference. The rights and remedies set forth herein are cumulative and in
addition to, and not in lieu of, any other rights and remedies to which
Collateral Agent may be entitled, whether under any such other document, at
law or in equity.
47.12. This Agreement shall terminate upon payment in full and
performance and discharge of all of the Obligations, Collateral Agent at
Debtor's expense, will execute and deliver such instruments as Debtor may
reasonably request to evidence such termination.
47.13. Except as otherwise specifically provided herein, all
notices, election, approvals, requests, demands and other communications
permitted or required to be made or given hereunder (collectively,
"notices") shall be in writing, signed by the party giving such notice and
shall be sufficiently given only when (x) sent by registered or certified
mail, postage prepaid, return receipt requested, to the party for which
such notice is intended at the address set forth below or at such other or
additional address as may be designated by notice given in conformity with
the terms of this Section 13, (y) delivered by hand, or tendered for
delivery by hand, at such address, or (z) sent to such address by way of a
recognized commercial overnight delivery service, and notices shall be
effectively given only if received at such address by, or tendered for
receipt to, a person who is or who reasonably appears to be authorized to
receive written communications on behalf of the party to which the notice
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is directed. The present notice addresses of the parties are as follows:
(i) for Collateral Agent: CCC Lending Corporation c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and (ii) for
Debtor: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
47.14. This Agreement shall be governed by and construed in
accordance with, the laws of the State of New York governing contracts made
and performed in the State of New York, without regard to principles of
conflicts of law.
47.15. This Agreement shall be binding upon Debtor, its
successors and assigns, and shall inure to the benefit of Collateral Agent,
their respective successors and assigns (including each subsequent holder
of the Notes, whether or not an express assignment to such holder of rights
under this Agreement shall have been made).
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IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed as of the 8th day of January, 1998.
CANAL ARTS CORPORATION, CANAL CAPITAL CORPORATION,
Debtor Debtor
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President - Finance Vice President - Finance
CANAL GALLERIES CORPORATION, CCC LENDING CORPORATION,
Debtor as Collateral Agent
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Vice President - Finance President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On this ___ day of January, 1998, before me personally appeared
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to me known, who being by me duly sworn, did depose and
say that he is the Vice President of each of Canal Capital Corporation,
Canal Galleries Corporation and Canal Arts Corporation, the corporations
described in and which executed the foregoing instrument, and he
acknowledged that he executed the same by order of the board of directors
of such corporation.
Notary Public
My commission expires on
STATE OF _____________ )
) SS.:
COUNTY OF ___________ )
On this ___ day of January, 1998, before me personally appeared
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, to me known, who being by me duly sworn, did depose and
say that he is President of CCC Lending Corporation, the corporation
described in and which executed the above instrument; and that he signed
his name thereto by order of the board of directors of said corporation.
Notary Public
My commission expires on
65
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of January 8, 1998, by and among
CANAL CAPITAL CORPORATION, formerly known as United Stockyards Corporation
("Canal Capital"), CANAL GALLERIES CORPORATION ( Canal Galleries ) and
CANAL ARTS CORPORATION ("Canal Arts"; together with Canal Capital and Canal
Galleries, collectively, "Debtor"), a Delaware corporation having an
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and the parties
listed on Schedule I hereto ( Noteholders ) and CCC LENDING CORPORATION (
"Collateral Agent"), as collateral agent pursuant to that certain
Collateral Agency Agreement of even date herewith.
RECITALS
48. Canal Capital is a party to that certain Indenture (the
"Indenture") dated as of May 15, 1985, between United Stockyards
Corporation (the predecessor-in-interest to Canal Capital) and
Manufacturers Hanover Trust Company, as Trustee ("Trustee"), pursuant to
which Debtor issued its Variable Rate Mortgage Notes (the "MHTC Notes").
49. The indebtedness evidenced by the MHTC Notes (the
"Indebtedness") is secured by certain mortgages of Canal Capital's real
property, each dated as of May 15, 1985, from Canal Capital to Trustee (the
"MHTC Mortgages").
50. In connection with a modification of the Indebtedness
described in that certain Note Exchange Agreement dated as of May 15, 1993
(the "1993 Note Exchange Agreement"), the MHTC Notes were amended, restated
and replaced by Amended and Restated Notes (the "1993 Notes") from Canal
Capital to Hanseatic Corporation ( Hanseatic ) and Guaranty Reassurance
Company ( Guaranty ).
51. Canal Capital has issued and outstanding certain other
promissory notes, dated as of September 15, 1995, (the Other Notes ) due
to certain of the Noteholders, secured by certain other Mortgages on Canal
Capital s real property (the Other Mortgages ) and certain other
collateral.
66
52. In connection with a further modification of the
Indebtedness described in that certain Note Exchange and Loan Agreement of
even date herewith (the Note Exchange Agreement ), the 1993 Notes and the
Other Notes have been amended, restated and replaced by, and a further loan
has been made to Canal Capital to refinance certain existing indebtedness
pursuant to, certain Amended and Restated Notes (the Notes ) from Canal
Capital to the Noteholders (as defined in the Note Exchange Agreement).
53. The Notes are secured by (i) the MHTC Mortgages, which had
been assigned by Trustee to Hanseatic and Guaranty, (ii) by certain
additional mortgages from Canal Capital to Hanseatic and Guaranty
encumbering property of Canal Capital not encumbered by the MHTC Mortgages,
all of which have been assigned by Hanseatic and Guaranty to Collateral
Agent and (iii) by the Other Mortgages (all of the foregoing collectively
the "Mortgages").
54. In connection with the issuance of the Notes, Canal Capital
has pledged certain shares of stock pursuant to a Stock Pledge and Security
Agreement dated the date hereof ( Pledge Agreement ).
55. Canal Arts and Canal Galleries are wholly-owned
subsidiaries of Canal Capital, and are directly benefited by the
modification of the Indebtedness described above.
56. In connection with the 1993 Notes, Debtor agreed to grant to
Hanseatic and Guaranty a security interest in all of the property described
in Part I of Schedule A annexed hereto, together with any substitutions
therefor and proceeds therefrom (the "1993 Collateral") pursuant to a
Security Agreement dated as of May 15, 1993 which security interest has
been assigned to Collateral Agent in connection with the Note Exchange
Agreement.
57. In connection with the Other Notes, Debtor has agreed to
grant certain of the Noteholders a security interest in all of the property
described in Part II of Schedule A, together with any substitutions
therefor and proceeds therefrom (together with the 1993 Collateral, the
Collateral ).
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Collateral Agent and Debtor agree as follows:
57.1. As collateral security for the payment, performance and
discharge of the Obligations (as herein after defined), Debtor hereby
pledges, grants, assigns, transfers, and sets over to Collateral Agent and
grants to Collateral Agent a first priority lien on and security interest
67
in, all of Debtor's rights, title and interest in and to the Collateral,
whether heretofore or hereafter acquired. Debtor further grants to
Collateral Agent full power and authority, in the name of Debtor or
otherwise, to take any action which Collateral Agent may deem necessary or
advisable in connection with effectuating and perfecting the assignment
herein and lien and security interest created hereby, Debtor hereby
irrevocably constituting and appointing Collateral Agent, the true and
lawful attorney-in-fact of Debtor for such purposes, which appointment is
coupled with an interest. This appointment is unconditional and
irrevocable and continuing and these rights, powers and privileges shall be
exclusive in Collateral Agent, its successors and assigns, so long as any
of the Obligations remain unpaid or unperformed.
57.2. This Agreement constitutes a security agreement under
the New York Uniform Commercial Code (the "Code") with respect to the
Collateral for the purposes of Article 9 of the Code. This Agreement and
any photostatic copies hereof may, at the option of Collateral Agent, be
filed in the Department of State of the State of New York, the Office of
the City Register, New York County, and in such other filing offices as
Collateral Agent shall desire to give notice of the lien and security
interest created hereby, Debtor hereby irrevocably constituting and
appointing Collateral Agent the true and lawful attorney-in-fact of Debtor
for such purposes, which appointment is coupled with an interest and is
unconditional and irrevocable. Debtor hereby further authorizes Collateral
Agent to file financing and continuation statements with respect to the
Collateral without the signature of Debtor and, upon request of Collateral
Agent, Debtor shall promptly execute and file at Debtor's expense financing
and continuation statements, in form satisfactory to Collateral Agent to
further evidence and secure Collateral Agent's lien on and security
interest in the Collateral.
57.3. This Agreement is made for the purpose of securing the
following (collectively, the "Obligations"):
(a) The payment by Canal Capital of the principal sum, interest
and indebtedness evidenced by the Notes and any renewal, extension,
refinancing, substitution or reissuance thereof, and all other sums, with
interest thereon, becoming due and payable to or for the benefit of
Collateral Agent under the provisions of this Agreement, the Mortgages, the
Pledge Agreement or any other documents executed in connection with or
securing the Notes (collectively, the "Loan Documents").
(b) The performance and discharge of each and every obligation,
covenant and agreement of Debtor contained in this Agreement, the Notes,
the Mortgages, the Pledge Agreement or any other Loan Documents.
57.4. Debtor represents and warrants to Collateral Agent as
follows:
(a) The execution, delivery or performance of this Agreement by
Debtor will not require the consent or approval of, or the registration,
declaration or filing with, any person or entity, which have not been
68
obtained or completed, or violate or result in a breach of, or constitute a
default under, any applicable law or regulation or any other agreement to
which Debtor is bound. This Agreement has been duly executed by Debtor and
constitutes a valid, legal and binding obligation of Debtor enforceable
against the Debtor in accordance with its terms.
(b) Canal Arts is the sole owner of record, legal and beneficial
title to the Collateral, free and clear of all liens, claims, options,
charges, pledges and encumbrances, other than the liens and security
interest created pursuant to this Agreement.
(c) Debtor shall immediately notify Collateral Agent of any
actual or contemplated change in the principal place of business of Debtor,
of the establishment of any additional place of business of Debtor or of
any change of name of Debtor, and shall promptly, upon demand of Collateral
Agent, execute and file, at Debtor's expense all financing statements and
other documents and instruments requested by Collateral Agent so that any
such change in or other establishment of place of business or change of
name of Debtor shall not adversely affect the lien on or security interest
in the Collateral.
57.5. Debtor hereby covenants with Collateral Agent as
follows:
(a) Debtor will not, nor will it, consent, agree or commit
itself to, sell, assign, transfer, convey, pledge, delegate, grant any
option with respect to, grant a security interest in, or otherwise dispose
of or encumber in any other manner, or permit, agree or commit itself to
permit, any such sale, assignment, transfer, conveyance, pledge, grant,
delegation, disposition or encumbrance of, all or any portion of the
Collateral or any beneficial or other interest therein. In the event of
the sale, exchange or other disposition of the Collateral, or any portion
thereof or any interest therein, in violation of this Agreement (and no
such sale, exchange or other disposition is hereby authorized or consented
to), the lien and security interest of Collateral Agent shall nevertheless
continue in said Collateral (including, without limitation, all proceeds
therefrom). Notwithstanding said sale, exchange or other disposition; all
of said proceeds shall remain Collateral hereunder and shall be transferred
and paid over to Collateral Agent immediately following said sale,
exchange, or other disposition and shall be applied in accordance with the
provisions of Section 9 hereof; and the receipt by Collateral Agent of all
or any part of said proceeds shall not be deemed or construed to be an
authorization or consent of Collateral Agent to such sale, exchange or
other disposition of said Collateral or a waiver of any breach resulting
therefrom of this Agreement.
(b) Debtor will furnish promptly to Collateral Agent such
information as shall reasonably be requested by Collateral Agent in
connection with the Collateral of the performance by Debtor of the
Obligations, or required for effectuating the rights and benefits of
Collateral Agent herein.
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(c) From and after the date hereof, Debtor agrees to maintain
the Collateral in at least as good condition as it is on the date hereof.
Debtor will not move all or any portion of the Collateral from its present
locations, which locations are indicated on Schedule A annexed hereto. At
all times during the terms of this Security Agreement, Debtor will comply
with the terms of conditions of all applicable insurance policies
maintained hereunder; and Debtor will not taken any action, or suffer or
permit any action to be taken by any person or persons (other than
Collateral Agent and its officers and agents), which is in violation of any
provision thereof, including, without limitation, any provision relating to
the maintenance, storage or use of the Collateral, the protection of same,
the condition or use of the premises where same is located, or any other
provision which would affect the amount of recovery hereunder in the event
of any loss or damage to the Collateral.
(d) From and after the date hereof, Maker agrees to maintain
Fine Art All Risk insurance on the Collateral, with a deductible not in
excess of $5,000, at all times at least equal to the outstanding principal
amount of the Notes plus accrued but unpaid interest. Such insurance shall
be written only by insurance companies licensed to do business in New York
having an A.M. Best's rating of "A" or better. Debtor agrees to provide
Collateral Agent with a valid Certificate of Insurance in form and
substance reasonably satisfactory to Collateral Agent naming Collateral
Agent or its assignee as loss payee under the insurance policy, which
policy shall not be cancelable by the insurance company without at least 30
days' prior written notice to Collateral Agent and providing that
Collateral Agent shall be notified by the insurance company of the payment
or non-payment of the premiums in respect of the insurance policy. Debtor
agrees not to cancel any such insurance policy without at least 60 days'
prior written notice to Collateral Agent and obtaining a substitute
insurance policy that satisfies the terms provided herein. In the event of
an Event of Default, Debtor agrees to maintain insurance in accordance with
the provisions herein, regardless of whether Debtor or Collateral Agent is
in possession of the Collateral.
57.6. The occurrence of any one or more of the following
events shall constitute an "Event of Default" under this Agreement:
(a) Any default beyond applicable grace or cure periods, if any,
shall occur under the Notes, the Mortgages, the Pledge Agreement or any
other Loan Document; or
(b) Debtor shall fail to perform any Obligation or fail to
observe any of the provisions contained in this Agreement or breach any
covenant or agreement made or given by Debtor herein; or
(c) Any representation or warranty made by or on behalf of
Debtor herein or otherwise in writing shall prove to have been false or
incorrect in any material respect; or
(d) Debtor shall file a voluntary petition seeking an order for
relief under Title 11 of the United States Code, or Debtor shall be
70
adjudicated a debtor, bankrupt or insolvent, or shall file any petition or
answer seeking, consenting to or acquiescing in any order for relief,
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future general
bankruptcy act or any other present or future applicable federal, state or
other statute or law (foreign or domestic), or shall file an answer
admitting or failing to deny the material allegations in a petition against
it for any such relief, or shall admit in writing its inability to pay its
debts as they mature, or shall make an assignment for the benefit of
creditors or shall seek or consent or acquiesce in the appointment of any
trustee, receiver, examiner, sequestrator, custodian or liquidator or
similar official of Debtor or of all or any portion of the Collateral; or
if, within sixty (60) days after the commencement of any proceeding against
Debtor, whether by the filing of a petition or otherwise, seeking any order
for relief, reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
federal bankruptcy act or any other present or future applicable federal,
state or other statute or law (foreign or domestic), such proceeding shall
not have been dismissed, or if, within sixty (60) days after the
appointment of any trustee, receiver or liquidator of Debtor or of all or
any part of the Collateral, without the consent or acquiescence of Debtor,
such appointment shall not have been vacated or otherwise discharged, or if
any execution or attachment shall be issued against Debtor or all or any
portion of the Collateral.
57.7. Upon the occurrence of an Event of Default, or at any
time thereafter, and in each and every such case, unless such Event of
Default shall have been remedied or waived by Collateral Agent by written
notice given in accordance with the provisions hereof, then all of the
Obligations shall become immediately due and payable without notice,
presentment or demand, each of which is hereby waived by Debtor, and
Collateral Agent shall be entitled to any and all rights, recourse and
remedies available to it at law, in equity or by statute, or pursuant to
this Agreement and any other Loan Document, including, without limitation,
all rights and remedies available to a secured party under the Code. In
furtherance, and not in limitation of the foregoing, Collateral Agent shall
have the following rights and remedies upon the occurrence of an Event of
Default:
(a) Collateral Agent may, without being required to give any
notice, demand or advertisement, except to the extent specifically set
forth herein, take possession of and sell all or any portion of the
Collateral at public or private sale in New York City or elsewhere, as
Collateral Agent shall determine, for cash, upon credit or for future
delivery and at such price or prices as Collateral Agent may deem
satisfactory, and, subject to compliance with applicable law, Collateral
Agent may be the purchaser of any or all of the Collateral sold. Upon any
such sale, Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold and Debtor, to the
extent permitted by applicable law, hereby specifically waives all rights
of redemption, stay or appraisal which it may have with respect to the
Collateral under any rule of law or statute now existing or hereafter
adopted. At any such sale Collateral Agent may, in its discretion,
restrict the prospective bidders or purchasers to persons who will
represent and warrant that they are acquiring the Collateral, or any
portion thereof, for their own account, for investment only and not with a
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view toward the resale or distribution thereof and who will make such
further representations and warranties as Collateral Agent may, in its
discretion, deem necessary or desirable to assure Collateral Agent that
such prospective bidders or purchasers are, with respect to the applicable
Federal and state securities laws, regulations and rules, suitable bidders
or purchasers of such Collateral, which restrictions as to prospective
bidders or purchasers the parties agree are commercially reasonable. If
notice of sale of all or any portion of the Collateral hereunder is
required by law, the parties agree that written notice mailed to Debtor ten
(10) business days prior to the date of public sale of the Collateral or
ten (10) business days prior to the date after which a private sale or any
other disposition of the Collateral is intended to be made shall constitute
reasonable notice (all other notices, demands or advertisements of any kind
being hereby expressly waived), but notice given in any other reasonable
manner or at any other reasonable time shall be sufficient. Collateral
Agent shall not be obligated to make any sale or other disposition pursuant
to any notice thereof, and without notice or publication, adjourn any
public or private sale or other disposition or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
the sale or other disposition, and such sale or other disposition may be
made at any time or place to which the same may be so adjourned. In case
of any sale or other disposition of all or any part of the Collateral on
credit or for further delivery, the Collateral so sold or disposed of may
be retained by Collateral Agent until the selling price is paid by the
purchaser thereof, but Collateral Agent shall not incur any liability in
case of the failure of such purchaser to pay for the Collateral so sold or
disposed of, and, in case of any such failure, such Collateral may again be
sold or disposed of upon like notice and pursuant to the provisions hereof.
Collateral Agent shall have no duty as to the collection or protection of
the Collateral or any income thereon or as to the preservation of any
rights pertaining thereto.
(b) Collateral Agent, instead of exercising the power of sale
herein conferred upon it may, at its option, proceed by a suit or suits at
law or in equity to foreclose the security interest and sell all or any
portion of the Collateral under a judgment or decree of a court or courts
of competent jurisdiction, or may bring an action on any Obligation and
obtain and enforce a judgment thereon, with or without first or
simultaneously foreclosing, judicially or non-judicially, on the
Collateral.
(c) Collateral Agent, as attorney-in-fact, may, in the name and
stead of Debtor, make and execute all conveyances, agreement and transfers
of the Collateral sold pursuant to this Section 9 which Collateral Agent
shall deem advisable, and Debtor hereby ratifies and confirms all such acts
taken by Debtor as such attorney-in-fact. Notwithstanding the foregoing,
Debtor shall, if so requested by Collateral Agent, ratify and confirm any
sale or sales by executing and delivering to Collateral Agent, or to any
purchaser or purchasers of the Collateral sold, all such instruments as
may, in the reasonable judgment of Collateral Agent, be advisable for such
purpose.
(d) Debtor shall be liable for all costs and expenses
(including, without limitation, reasonable attorneys' fees, disbursements
and legal expenses) incurred by Collateral Agent in enforcing any of the
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rights or remedies of Collateral Agent provided for in this Agreement, at
law, in equity or by statute, and the amount thereof shall be deemed part
of the Obligations and payment thereof shall be secured by the Collateral.
If the proceeds of the sale or other disposition of the Collateral are
insufficient to cover the costs and expenses (including, without
limitation, reasonable attorneys' fees, disbursements and legal expenses)
of such sale or other disposition and to pay in full the amount of the
Obligations, Debtor shall remain liable for any such deficiency.
(e) The proceeds of any sale or other disposition of all or any
portion of the Collateral under this Agreement shall be applied by
Collateral Agent in the following order of priority:
First, to the payment of all costs and expenses (including,
without limitation, reasonable attorneys' fees, disbursements and
legal expenses) of such sale or other disposition;
Second, to the payment of the amounts (other than principal and
interest) due and payable under the Notes, the Mortgages and the
other Obligations;
Third, to the payment of interest due on the Notes;
Fourth, to the payment of the principal of the Notes;
Fifth, subject to the provisions of Section 9-504(c) of the Code,
to the payment of any indebtedness, lien or encumbrance affecting
such Collateral which is subordinate to the lien created hereby;
and
Finally, the balance, if any, to Debtor or as a court of
competent jurisdiction may direct.
57.8. Debtor waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended,
collateral received or delivered or other action taken in reliance hereon
and all other notices of any description.
57.9. Debtor, at its expense, will execute and deliver all
such instruments, agreements and other document, and take all such actions,
as Collateral Agent, from time to time, may reasonably request in order to
obtain the full benefits of this Agreement and the rights and powers herein
created. Debtor hereby constitutes and appoints Collateral Agent its true
and lawful attorney-in-fact, coupled with an interest, and in the name,
place and stead of Debtor, to execute and file any instrument, agreement or
other document required to be executed or filed by Debtor pursuant to this
Agreement (including, without limitation, any instrument assigning,
transferring or conveying all or any portion of the Collateral). This
appointment is unconditional and irrevocable and continuing and these
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rights, power and privileges shall be exclusive in Collateral Agent, its
successors and assigns, so long as any of the Obligations remain
unsatisfied or any part of the indebtedness secured hereby shall remain
unpaid.
57.10. No delay or omission by Collateral Agent in insisting
upon the strict observance or performance of any provision of this
Agreement, or in exercising any right or remedy, shall be construed as a
waiver or relinquishment of such provision, nor shall it impair such right
or remedy.
57.11. This Agreement is given as security in addition to the
security of the other documents executed in connection herewith. All
rights and remedies herein conferred may be exercised whether or not any
proceedings of any nature are pending under any of such other documents.
Collateral Agent shall not be required to resort first to the security of
this Agreement or any of such other documents before resorting to the
security of the other such documents and Debtor may exercise the security
hereof or thereof concurrently or independently and in any order or
preference. The rights and remedies set forth herein are cumulative and in
addition to, and not in lieu of, any other rights and remedies to which
Collateral Agent may be entitled, whether under any such other document, at
law or in equity.
57.12. This Agreement shall terminate upon payment in full and
performance and discharge of all of the Obligations, Collateral Agent at
Debtor's expense, will execute and deliver such instruments as Debtor may
reasonably request to evidence such termination.
57.13. Except as otherwise specifically provided herein, all
notices, election, approvals, requests, demands and other communications
permitted or required to be made or given hereunder (collectively,
"notices") shall be in writing, signed by the party giving such notice and
shall be sufficiently given only when (x) sent by registered or certified
mail, postage prepaid, return receipt requested, to the party for which
such notice is intended at the address set forth below or at such other or
additional address as may be designated by notice given in conformity with
the terms of this Section 13, (y) delivered by hand, or tendered for
delivery by hand, at such address, or (z) sent to such address by way of a
recognized commercial overnight delivery service, and notices shall be
effectively given only if received at such address by, or tendered for
receipt to, a person who is or who reasonably appears to be authorized to
receive written communications on behalf of the party to which the notice
is directed. The present notice addresses of the parties are as follows:
(i) for Collateral Agent: CCC Lending Corporation c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and (ii) for
Debtor: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
57.14. This Agreement shall be governed by and construed in
accordance with, the laws of the State of New York governing contracts made
and performed in the State of New York, without regard to principles of
conflicts of law.
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57.15. This Agreement shall be binding upon Debtor, its
successors and assigns, and shall inure to the benefit of Collateral Agent,
their respective successors and assigns (including each subsequent holder
of the Notes, whether or not an express assignment to such holder of rights
under this Agreement shall have been made).
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IN WITNESS WHEREOF, Debtor has caused this Agreement to be duly
executed as of the 8th day of January, 1998.
CANAL ARTS CORPORATION, CANAL CAPITAL CORPORATION,
Debtor Debtor
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President - Finance Vice President - Finance
CANAL GALLERIES CORPORATION, CCC LENDING CORPORATION,
Debtor as Collateral Agent
By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Vice President - Finance President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On this ___ day of January, 1998, before me personally appeared
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to me known, who being by me duly sworn, did depose and
say that he is the Vice President of each of Canal Capital Corporation,
Canal Galleries Corporation and Canal Arts Corporation, the corporations
described in and which executed the foregoing instrument, and he
acknowledged that he executed the same by order of the board of directors
of such corporation.
Notary Public
My commission expires on
STATE OF _____________ )
) SS.:
COUNTY OF ___________ )
On this ___ day of January, 1998, before me personally appeared
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, to me known, who being by me duly sworn, did depose and
say that he is President of CCC Lending Corporation, the corporation
described in and which executed the above instrument; and that he signed
his name thereto by order of the board of directors of said corporation.
Notary Public
My commission expires on
77
Schedule A
Part I
Property:
St. ▇▇▇▇, Minnesota - Represents approximately a 60% interest in the
property which totals 75 acres. Includes 30 acres leased to the stockyard
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operator and a two story (48,000 sq. ft.) Exchange Building.
Sioux Falls, South Dakota - The property totals 37 acres. Includes 31
acres leased to the stockyard operator and an additional 4 acres leased on
a long-term basis to a rail car repair company and a commercial bank. The
remaining two acres are available for sale or development.
Sioux City, Iowa - The property totals 64 acres. Includes 24 acres leased
to the stockyard operator. An additional 24 acres are leased to third
parties including a lumber yard, feed and grain supplier, railcar repair
company and various other commercial businesses. The balance of 14 acres
is available for sale or development.
Art:
Contemporary art - includes 64 paintings by three artists primarily ▇▇▇▇▇
▇▇▇▇▇▇▇.
Investments:
236,000 shares of Common Stock of Datapoint Corporation.
Schedule A (cont d)
79
Part II
Property:
St. ▇▇▇▇, Minnesota - Represents approximately a 40% interest in the
property which totals 75 acres. Includes various third party leases
including a lumber yard, service station and truck wash and a fast food
restaurant.
Omaha, Nebraska - The property totals 85 acres. Canal has entered into an
agreement to sell approximately 55 acres to the city of Omaha in mid 1998.
The remaining 30 acres are leased on a long-term basis to a railcar repair
company.
St. ▇▇▇▇▇▇, Missouri - The property totals 137 acres. The stockyard
operator leases 37 acres and the Exchange Building. The remaining 100
acres are available for sale or development.
Fargo, North Dakota - The property totals 81 acres. A meat packing
facility leases 17 acres on a long-term basis. The balance of 64 acres
including a two story Exchange Building are available for sale or
development.
Art:
Antiquities - Includes 53 pieces of antiquity from ancient Mediterranean
cultures.
Investments:
125,000 shares of Common Stock of Datapoint Corporation.
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 1 $1,000,000
CANAL CAPITAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, or his registered assigns at his address of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as may be
designated by the registered holder hereof to the Company, the principal
sum of One Million Dollars on May 15, 2001 and to pay interest thereon
monthly on the 15th day of each month (each an "Interest Payment Date"), in
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each year, commencing on January 15, 1998, at the applicable rate per annum
determined as a provided below, until the principal hereof is paid or made
available for payment.
58. For each Quarterly Period, this Note shall bear interest at
a variable rate per annum, equal to the greatest of (i) the Three Month
Treasury Rate with respect to such quarterly period plus 600 basis points,
(ii) LIBOR with respect to such Quarterly Period plus ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
(▇▇▇) 120% of the Ten Year Treasury Rate with respect to such Quarterly
Period plus 150 basis points, or (iv) Prime Rate with respect to such
quarterly period plus 350 basis points. If the Agent Bank cannot determine
LIBOR or Prime Rate, as the case may be, for at least five Business Days
during the Rate Determination Period for any Quarterly Period then this
Note will bear interest following such Quarterly Period at a rate per annum
equal to the greatest of the remaining variable rates with respect to such
Quarterly Period. Prior to the beginning of each Quarterly Period, the
Company must compute the interest rate for such Quarterly Period. The
Company must mail notice of the rate to each holder of a Note for each
Quarterly Period. Interest will be computed on the basis of a 360-day year
of twelve 30 -day months.
59. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $91,799.29 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
60. The interest payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Note Exchange
Agreement, be paid to the person in whose name this Note is registered at
the close of business on the regular record date, which shall be the first
day of each month (whether or not a Business Day) next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the person in whose name this Note
is registered at the close of business on a special record date for the
payment of such defaulted interest to be fixed by the Company, notice of
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which shall be given to Holders not less than 15 days prior to such special
record date. Payment of the principal of and interest on this Note will be
made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, by
check mailed to the address of the holder of this Note, as specified in the
first paragraph hereof.
61. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
62. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
63. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
64. Persons Deemed Owners.
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The registered Holder of a Note may be treated as the owner of it
for all purposes.
65. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
66. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
67. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
68. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
69. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
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in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
70. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
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United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
85
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
71. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
72. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
86
73. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
87
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 2 $242,000
88
CANAL CAPITAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DEFINED BENEFIT TRUST, or its registered assigns at the address of c/o
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other address as may be designated by the registered holder
hereof to the Company, the principal sum of Two Hundred Forty-two Thousand
Dollars on May 15, 2001 and to pay interest thereon monthly on the 15th day
of each month (each an "Interest Payment Date"), in each year, commencing
on January 15, 1998, at the applicable rate per annum determined as a
provided below, until the principal hereof is paid or made available for
payment.
74. For each Quarterly Period, this Note shall bear interest at
a variable rate per annum, equal to the greatest of (i) the Three Month
Treasury Rate with respect to such quarterly period plus 600 basis points,
(ii) LIBOR with respect to such Quarterly Period plus ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
(▇▇▇) 120% of the Ten Year Treasury Rate with respect to such Quarterly
Period plus 150 basis points, or (iv) Prime Rate with respect to such
quarterly period plus 350 basis points. If the Agent Bank cannot determine
LIBOR or Prime Rate, as the case may be, for at least five Business Days
during the Rate Determination Period for any Quarterly Period then this
Note will bear interest following such Quarterly Period at a rate per annum
equal to the greatest of the remaining variable rates with respect to such
Quarterly Period. Prior to the beginning of each Quarterly Period, the
Company must compute the interest rate for such Quarterly Period. The
Company must mail notice of the rate to each holder of a Note for each
Quarterly Period. Interest will be computed on the basis of a 360-day year
of twelve 30 -day months.
75. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $22,211.15 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
76. The interest payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Note Exchange
89
Agreement, be paid to the person in whose name this Note is registered at
the close of business on the regular record date, which shall be the first
day of each month (whether or not a Business Day) next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the person in whose name this Note
is registered at the close of business on a special record date for the
payment of such defaulted interest to be fixed by the Company, notice of
which shall be given to Holders not less than 15 days prior to such special
record date. Payment of the principal of and interest on this Note will be
made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, by
check mailed to the address of the holder of this Note, as specified in the
first paragraph hereof.
77. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
78. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
90
79. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
80. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
81. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
82. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
83. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
84. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
91
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
85. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
86. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
92
Three Month Discount Rate (%) x 365
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
93
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
87. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
88. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
94
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
89. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
95
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 3 $229,000
96
CANAL CAPITAL CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
or her registered assigns at the address of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as may be designated by
the registered holder hereof to the Company, the principal sum of Two
Hundred Twenty-nine Thousand Dollars on May 15, 2001 and to pay interest
thereon monthly on the 15th day of each month (each an "Interest Payment
Date"), in each year, commencing on January 15, 1998, at the applicable
rate per annum determined as a provided below, until the principal hereof
is paid or made available for payment.
90. For each Quarterly Period, this Note shall bear interest at
a variable rate per annum, equal to the greatest of (i) the Three Month
Treasury Rate with respect to such quarterly period plus 600 basis points,
(ii) LIBOR with respect to such Quarterly Period plus ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
(▇▇▇) 120% of the Ten Year Treasury Rate with respect to such Quarterly
Period plus 150 basis points, or (iv) Prime Rate with respect to such
quarterly period plus 350 basis points. If the Agent Bank cannot determine
LIBOR or Prime Rate, as the case may be, for at least five Business Days
during the Rate Determination Period for any Quarterly Period then this
Note will bear interest following such Quarterly Period at a rate per annum
equal to the greatest of the remaining variable rates with respect to such
Quarterly Period. Prior to the beginning of each Quarterly Period, the
Company must compute the interest rate for such Quarterly Period. The
Company must mail notice of the rate to each holder of a Note for each
Quarterly Period. Interest will be computed on the basis of a 360-day year
of twelve 30 -day months.
91. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $21,022.48 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
92. The interest payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Note Exchange
Agreement, be paid to the person in whose name this Note is registered at
97
the close of business on the regular record date, which shall be the first
day of each month (whether or not a Business Day) next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the
extent lawful), will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the person in whose name this Note
is registered at the close of business on a special record date for the
payment of such defaulted interest to be fixed by the Company, notice of
which shall be given to Holders not less than 15 days prior to such special
record date. Payment of the principal of and interest on this Note will be
made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, by
check mailed to the address of the holder of this Note, as specified in the
first paragraph hereof.
93. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
94. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
95. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
98
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
96. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
97. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
98. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
99. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
100. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
99
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
101. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
102. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
100
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
101
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
103. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
104. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
102
105. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
103
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 5 $186,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PENSION PLAN, or its registered assigns at the address of c/o ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other
address as may be designated by the registered holder hereof to the
Company, the principal sum of One Hundred Eighty-six Thousand Dollars on
May 15, 2001 and to pay interest thereon monthly on the 15th day of each
month (each an "Interest Payment Date"), in each year, commencing on
January 15, 1998, at the applicable rate per annum determined as a provided
below, until the principal hereof is paid or made available for payment.
106. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
107. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $17,082.89 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
108. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
105
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
109. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
110. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
111. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
106
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
112. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
113. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
114. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
115. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
116. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
107
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
117. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
118. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
108
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
109
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
119. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
120. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
110
121. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By:/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
111
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 6 $143,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
or his registered assigns at the address of ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇,
▇▇▇. ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other address as may be
designated by the registered holder hereof to the Company, the principal
sum of One Hundred Forty-three Thousand Dollars on May 15, 2001 and to pay
interest thereon monthly on the 15th day of each month (each an "Interest
Payment Date"), in each year, commencing on January 15, 1998, at the
applicable rate per annum determined as a provided below, until the
principal hereof is paid or made available for payment.
122. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
123. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $13,109.33 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
124. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
113
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
125. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
126. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
127. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
114
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
128. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
129. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
130. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
131. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
132. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
115
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
133. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
134. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
116
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
117
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
135. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
136. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
118
137. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By:/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
119
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 7 $350,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to EDELMAN VALUE
PARTNERS, L.P., or its registered assigns at the address of c/o ▇.▇.
▇▇▇▇▇▇▇ Management Company, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other address as may be designated by the registered
holder hereof to the Company, the principal sum of Three Hundred Fifty
Thousand Dollars on May 15, 2001 and to pay interest thereon monthly on the
15th day of each month (each an "Interest Payment Date"), in each year,
commencing on January 15, 1998, at the applicable rate per annum determined
as a provided below, until the principal hereof is paid or made available
for payment.
138. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
139. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $32,128.05 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
140. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
121
Exchange Agreement, be paid to the person in whose name this Note is
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
141. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
142. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
143. Denominations, Transfer, Exchange.
122
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
144. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
145. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
146. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
147. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
148. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
123
Notes to be due and payable immediately in accordance with Section 7.2 of
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
149. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
150. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
124
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
125
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
151. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
152. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
126
153. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
127
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 8 $550,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to EDELMAN VALUE
FUND, LTD, or its registered assigns at the address of c/o Bayand
(Luxembourg) Admin., ▇▇ ▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇▇▇, ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, or at such
other address as may be designated by the registered holder hereof to the
Company, the principal sum of Five Hundred Fifty Thousand Dollars on May
15, 2001 and to pay interest thereon monthly on the 15th day of each month
(each an "Interest Payment Date"), in each year, commencing on January 15,
1998, at the applicable rate per annum determined as a provided below,
until the principal hereof is paid or made available for payment.
154. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
155. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $50,467.53 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
156. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
129
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
157. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
158. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
159. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
130
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
160. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
161. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
162. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
163. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
164. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
131
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
165. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
166. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
132
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
133
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
167. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
168. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
134
169. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
135
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 9 $300,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or her registered assigns at the address of ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, or at such other address as
may be designated by the registered holder hereof to the Company, the
principal sum of Three Hundred Thousand Dollars on May 15, 2001 and to pay
interest thereon monthly on the 15th day of each month (each an "Interest
Payment Date"), in each year, commencing on January 15, 1998, at the
applicable rate per annum determined as a provided below, until the
principal hereof is paid or made available for payment.
170. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
171. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $27,543.18 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
172. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
137
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
173. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
174. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
175. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
138
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
176. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
177. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
178. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
179. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
180. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
139
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
181. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
182. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
140
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
141
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
183. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
184. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
142
185. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
143
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 10 $200,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to SES TRUST, or its
registered assigns at the address of c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as may
be designated by the registered holder hereof to the Company, the principal
sum of Two Hundred Thousand Dollars on May 15, 2001 and to pay interest
thereon monthly on the 15th day of each month (each an "Interest Payment
Date"), in each year, commencing on January 15, 1998, at the applicable
rate per annum determined as a provided below, until the principal hereof
is paid or made available for payment.
186. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
187. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $18,373.44 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
188. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
145
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
189. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
190. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
191. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
146
denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
192. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
193. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
194. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
195. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
196. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
147
the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
197. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
198. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
148
360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
149
sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
199. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
200. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
150
201. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By:/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
151
ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
Amended and Restated Variable Rate Mortgage Note Due May 15, 2001.
No. 4 $500,000
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company") for value received, hereby promises to pay to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
or his registered assigns at the address of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other address as may be designated by the
registered holder hereof to the Company, the principal sum of Five Hundred
Thousand Dollars on May 15, 2001 and to pay interest thereon monthly on the
15th day of each month (each an "Interest Payment Date"), in each year,
commencing on January 15, 1998, at the applicable rate per annum determined
as a provided below, until the principal hereof is paid or made available
for payment.
202. For each Quarterly Period, this Note shall bear
interest at a variable rate per annum, equal to the greatest of (i) the
Three Month Treasury Rate with respect to such quarterly period plus 600
basis points, (ii) LIBOR with respect to such Quarterly Period plus ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) 120% of the Ten Year Treasury Rate with respect to such
Quarterly Period plus 150 basis points, or (iv) Prime Rate with respect to
such quarterly period plus 350 basis points. If the Agent Bank cannot
determine LIBOR or Prime Rate, as the case may be, for at least five
Business Days during the Rate Determination Period for any Quarterly Period
then this Note will bear interest following such Quarterly Period at a rate
per annum equal to the greatest of the remaining variable rates with
respect to such Quarterly Period. Prior to the beginning of each Quarterly
Period, the Company must compute the interest rate for such Quarterly
Period. The Company must mail notice of the rate to each holder of a Note
for each Quarterly Period. Interest will be computed on the basis of a
360-day year of twelve 30 -day months.
203. (a) For each Quarterly Period, this Note shall bear
interest, in addition to the interest provided in Section 1 (the
"Additional Interest"), at a rate per annum equal to 4.0%. The rate per
annum of Additional Interest for any Quarterly Period shall be limited to
the rate which, when added to the interest rate established pursuant to
Section 1, does not exceed a rate of 15% per annum.
(b) Additional Interest shall accrue quarterly and be added
to the principal amount of this Note for the purpose of calculating the
amount of Additional Interest to be accrued. The aggregate accrued amount
of Additional Interest shall be payable on May 15, 2001 or upon the earlier
retirement of this Note. The obligation to pay Additional Interest shall
be entitled to the benefits of the security interest granted pursuant to
the Security Agreement and the Pledge Agreement.
(c) Additional Interest of $45,882.66 which had accrued
with respect to the Old Notes but had remained unpaid by the Company as of
the date of this Note shall also be considered Additional Interest
hereunder and shall continue to be due and payable to the holder hereof as
provided above.
204. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Note
Exchange Agreement, be paid to the person in whose name this Note is
153
registered at the close of business on the regular record date, which shall
be the first day of each month (whether or not a Business Day) next
preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for, and any interest payable on such defaulted
interest (to the extent lawful), will forthwith cease to be payable to the
Holder on such regular record date and shall be paid to the person in whose
name this Note is registered at the close of business on a special record
date for the payment of such defaulted interest to be fixed by the Company,
notice of which shall be given to Holders not less than 15 days prior to
such special record date. Payment of the principal of and interest on this
Note will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, by check mailed to the address of the holder of this Note, as
specified in the first paragraph hereof.
205. Note Exchange Agreement; Limitations.
This Note is one of a duly authorized issue of Notes of the
Company (which
term includes any successor corporation under the Note Exchange Agreement
hereinafter
referred to) designated as its Variable Rate Mortgage Notes due May 15,
2001 (the "Notes"), in the aggregate principal amount of $3,700,000 issued
pursuant to that certain Note Exchange and Loan Agreement, dated as of
January 8, 1998 (the "Note Exchange Agreement"), among the Company and the
Holders. This is one of the New Notes described in the Note Exchange
Agreement. The terms of this Note include those stated in the Note
Exchange Agreement. Reference is hereby made to the Note Exchange
Agreement and all amendments and supplements thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company and the Holder and of the terms upon which the Notes are,
and are to be, delivered.
206. Security.
This Note is secured by (i) a security interest in the Artwork,
(ii) the Mortgages and (iii) a security interest in the Securities, in an
amount equal to at least 100% of the aggregate principal amount of this
Note outstanding at any time and accrued Additional Interest. The Note
Exchange Agreement imposes certain limits on the payment of dividends and
other distributions on the Company's capital stock, the ability of the
Company to incur additional indebtedness and the amount and type of
permitted investments by the Company. It also obligates the Company to
conduct its business so as to avoid becoming an investment company within
the meaning of the Investment Company Act of 1940. Once a year the Company
must report to the Holder with respect to its compliance with such
limitations.
207. Denominations, Transfer, Exchange.
The Notes are issuable only in registered form without coupons in
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denominations of $1,000 and any integral multiple thereof. The Holder may
transfer or exchange Notes in accordance with the Note Exchange Agreement.
The Company may require the Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay taxes and fees
required by law or permitted by the Note Exchange Agreement.
208. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
209. Discharge Prior to Redemption or Maturity.
The Note Exchange Agreement will be discharged and canceled
except for certain Sections thereof, subject to the terms of the Note
Exchange Agreement, upon the payment of the Notes, or, following the date
on which the Company has given notice to the Holder of the repayment of the
Notes upon the irrevocable deposit with the Holder of funds or U.S.
Government Obligations sufficient for such payment.
210. Amendment and Waiver.
The Note Exchange Agreement contains provisions permitting the
Holders to waive compliance by the Company with certain provisions of the
Note Exchange Agreement and certain past defaults under the Note Exchange
Agreement and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all
Future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
211. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the New Notes and the Note Exchange Agreement, the
predecessor corporation will be released from those obligations.
212. Defaults and Remedies.
An Event of Default is: default for 30 days in payment of
interest on the Notes; default in payment of principal on them; failure by
the Company for 30 days after notice to it to comply with any of its other
agreements in the Note Exchange Agreement or the Notes; acceleration or
default under other Indebtedness of the Company aggregating at least
$100,000; the existence of certain unsatisfied judgments aggregating at
least $100,000; and certain events of bankruptcy or insolvency. If an
Event of Default occurs and is continuing, the Holder may declare all the
Notes to be due and payable immediately in accordance with Section 7.2 of
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the Note Exchange Agreement. The Holders may not enforce the Note Exchange
Agreement or the Notes except as provided in the Note Exchange Agreement.
213. No Recourse against Others.
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company
under the Notes or the Note Exchange Agreement or for any claim based on,
in respect of or by reason of, such obligations or their creation. The
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the New
Notes.
214. Definitions.
All terms used in this Note which are defined in the Note
Exchange Agreement shall have the meanings assigned to them in the Note
Exchange Agreement.
"Three Month Discount Rate" means, with respect to any Quarterly
Period, the arithmetic average of the weekly average per annum secondary
market discount rates for three-month United States Treasury obligations
for the three calendar weeks constituting the Rate Determination Period
with respect to such Quarterly Period (x) as published by the Federal
Reserve Board (i) in its Statistical Release H.15 (519), "Selected Interest
Rates," which weekly per annum secondary market discount rates presently
are set forth in such Statistical Release under the caption "U.S.
Government Securities -- Treasury Bills -- Secondary Market -- 3 Month," or
(ii) if said Statistical Release H.15 (519) is not then published, in any
release comparable to Statistical Release H.15(519), or (y) if the Federal
Reserve Board shall not then be publishing a comparable release, as
published in any official publication or release of any other United States
Government department or agency. However, if the Three Month Discount Rate
cannot be determined as provided above, then the Three Month Discount Rate
shall mean the arithmetic average of the average per annum secondary market
discount rates, based on the asked prices, for each business day during the
Rate Determination Period of all of the issues of non-interest bearing
United States Treasury obligations with a maturity of not less than 80 nor
more than 100 days from such business day (1) as published in The Wall
Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices as quoted by each of three
United States Government securities dealers of recognized national standing
selected by the Company.
"Three Month Treasury Rate" means, with respect to any Quarterly
Period, the result of the following calculation regarding the Three Month
Discount Rate for such Quarterly Period, rounded to the nearest basis
point:
Three Month Discount Rate (%) x 365
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360 - (91 x.01 x Three Month Discount Rate (%))
"Ten Year Treasury Rate" means, with respect to any date, the
arithmetic average (rounded to the nearest basis point) of the weekly
average per annum yield to maturity values adjusted to constant maturities
of ten years for the three calendar weeks constituting the Rate
Determination Period for the Quarterly Period in which such date occurs as
read from the yield curves of the most actively traded marketable United
States Treasury fixed interest rate securities (x) constructed daily by the
United States Treasury Department (i) as published by the Federal Reserve
Board in its Statistical Release H.15 (519), "Selected Interest Rates,"
which weekly average yield to maturity values presently are set forth in
such statistical release under the caption "U.S. Government Securities --
Treasury Constant Maturities -- 10 Year", or (ii) if said Statistical
Release H.15(519) is not then published, as published by the Federal
Reserve Board in any release comparable to its Statistical Release H.15
(519), or (iii) if the Federal Reserve Board shall not then be publishing a
comparable release, as published in any official publication or release of
any other United States Government department or agency, or (y) if the
United States Treasury Department shall not then be constructing such yield
curves, as constructed by the Federal Reserve Board or any other United
States Government department or agency and published as set forth in (x)
above. However, if the Ten Year Treasury Rate cannot be determined as
provided above, then the Ten Year Treasury Rate shall mean the arithmetic
average (rounded to the nearest basis point) of the per annum yields to
maturity for each business day during the Rate Determination Period of all
of the issues of actively traded marketable United States Treasury fixed
interest rate securities with a maturity of not less then 117 months nor
more than 123 months from such business day (excluding all such securities
which can be surrendered at the option of the holder at face value in
payment of any federal estate tax, which provide tax benefits to the holder
or which were issued at a substantial discount) (1) as published in The
Wall Street Journal, or (2) if The Wall Street Journal shall cease such
publication, based on average asked prices (or yields) as quoted by each of
three United States Government securities dealers of recognized national
standing selected by the Company.
"LIBOR" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of LIBOR for each
business day in the Rate Determination Period for such Quarterly Period, as
determined by Bankers Trust Company or its successor as the agent bank (the
"Agent Bank") of the Company in accordance with the following provisions.
On each business day during the Rate Determination Period with respect to
such Quarterly Period, the Agent Bank will request the principal London
office of each of Bankers Trust Company, Citibank, N.A. and Chemical Bank
(the "Reference Banks", which term shall include any successor Reference
Bank or Reference Banks appointed by the Company as provided in the Note
Exchange Agreement) to provide the Agent Bank with its offered quotation
for three-month United States dollar deposits to leading banks in the
London interbank market at approximately 11:00 A.M. (London time). LIBOR,
for each such business day, shall be the arithmetic average (rounded to the
nearest basis point) of such offered quotations of the Reference Banks for
such business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such offered quotations, LIBOR
for that day shall be determined in accordance with the two preceding
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sentences on the basis of the offered quotations of those Reference Banks
providing such quotations. If on any business day during a Rate
Determination Period fewer than two of the Reference Banks provide the
Agent Bank with such an offered quotation, the Agent Bank shall not
determine LIBOR for that day.
"Prime Rate" means, with respect to any Quarterly Period, the
arithmetic average (rounded to the nearest basis point) of Prime Rate for
each business day in the Rate Determination Period for such Quarterly
Period, as determined by the Agent Bank in accordance with the following
provisions. On each business day during the Rate Determination Period with
respect to such Quarterly Period, the Agent Bank will request the principal
New York office of each of the Reference Banks to provide the Agent Bank
with the rate announced by such Reference Bank as its prime commercial
lending rate per annum at approximately 11 A.M. (New York time). Prime
Rate, for each such business day, shall be arithmetic average (rounded to
the nearest basis point) of such rates of the Reference Banks for such
business day as determined by the Agent Bank. If on any business day
during a Rate Determination Period at least two but fewer than all the
Reference Banks provide the Agent Bank with such rates, Prime Rate for that
day shall be determined in accordance with the two preceding sentences on
the basis of the rates of those Reference Banks providing such rates. If
on any business day during a Rate Determination Period fewer than two of
the Reference Banks provide the Agent bank with such rates, the Agent Bank
shall not determine Prime Rate for that day.
"Quarterly Period" means the period from each November 15 through
the next February 14, from each February 15 through the next May 14, from
each May 15 through the next August 14, or from each August 15 through the
next November 14, as the case may be.
"Rate Determination Period" means, with respect to any Quarterly
Period, the three calendar weeks ending on the last Friday that is more
than 15 days prior to the first day of such Quarterly Period.
215. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or any assignee, such as: TEN COM (= tenant in common), TEN ENT (= tenants
by the entire entities), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
216. Copies of Note Exchange Agreement.
The Company will furnish to any Noteholder of record upon written
request without charge a copy of the Note Exchange Agreement. Requests may
be made to: Canal
Capital Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer.
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217. Amendment and Restatement.
The New Notes, including this Note, amend, supersede and replace
the Old Notes, and are delivered in substitution for, but not in payment
of, the Old Notes.
IN WITNESS WHEREOF, CANAL CAPITAL CORPORATION has caused this
instrument to be executed in its corporate name by the signature of its
Vice President.
Dated: As of January 8, 1998
CANAL CAPITAL CORPORATION
Attest: By: /S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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ASSIGNMENT FORM
If you the holder want to assign this Variable Rate Mortgage
Note, fill in the form below and have your signature guaranteed:
I or we assign and transfer this Variable Rate Mortgage Note to:
(Print or Type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ________________________, agent to transfer this
Variable Rate Mortgage Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _____________________________ Signed:
_____________________________
_____________________________
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee
CANAL CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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SUBSIDIARIES IDENTIFICATION #
SY Trading Corp. ▇▇-▇▇▇▇▇▇▇
Omaha Livestock Market, Inc. ▇▇-▇▇▇▇▇▇▇
Union Stockyards Co. of Fargo ▇▇-▇▇▇▇▇▇▇
Sioux Falls Stockyards Company ▇▇-▇▇▇▇▇▇▇
Wheeling Industrial Corporation ▇▇-▇▇▇▇▇▇▇
Canal Galleries Corporation ▇▇-▇▇▇▇▇▇▇
Canal Arts Corporation ▇▇-▇▇▇▇▇▇▇
DIVISIONS
Canal Capital Corporation (parent) ▇▇-▇▇▇▇▇▇▇
St. ▇▇▇▇▇▇ Stockyards
St. ▇▇▇▇ Union Stockyards
Sioux City Stockyards
Note: All subsidiaries are 100% owned
161
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