<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
___
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
_________________
COMMISSION FILE NUMBER 0-19538
IMRS INC.
(Exact name of registrant as specified in its charter)
d/b/a Hyperion Software
DELAWARE 06-1326879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 LONG RIDGE ROAD, STAMFORD, CONNECTICUT 06902
(Address of principal executive offices, including zip code)
(203) 321-3500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
----- -----
As of January 31, 1995, there were 7,841,377 shares of the Registrant's
Common Stock, $.01 par value, outstanding.
================================================================================
<PAGE> 2
IMRS Inc. and Subsidiaries
Form 10-Q
CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet - December 31, 1994 and June 30, 1994 2
Condensed Consolidated Statement of Income - Three Months Ended
December 31, 1994 and 1993; Six Months Ended December 31, 1994 and 1993 3
Condensed Consolidated Statement of Cash Flows -
Six Months Ended December 31, 1994 and 1993 4
Notes to Condensed Consolidated Financial Statements - December 31, 1994 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<FN>
Hyperion, Financial Intelligence, Executive Forum, IMRS, Micro Control
and OnRequest are registered trademarks and Hyperion Financials, Hyperion
Enterprise, Hyperion Connect, Hyperion Reporting, Hyperion Forms, Hyperion
OnTrack, Hyperion Ledger, Hyperion Payable, Hyperion Admin, Hyperion Tools,
Hyperion Purchasing, Hyperion Receivables, Hyperion Assets and LedgerLink are
trademarks of Hyperion Software Corporation. FYPlan is a registered trademark
and FYControl is a trademark of Pillar Corporation, a wholly-owned
subsidiary of Hyperion Software Corporation. All other trademarks and
company names mentioned are the property of their respective owners.
For further information, refer to the IMRS Inc. annual report on Form 10-K for
the year ended June 30, 1994.
</TABLE>
<PAGE> 3
<TABLE>
IMRS Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(In thousands, except for share data)
<CAPTION>
DECEMBER 31, JUNE 30,
1994 1994
----------------------------
ASSETS (Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $41,089 $37,913
Accounts receivable-net of allowances of $1,700 and $1,640 25,681 33,830
Prepaid expenses and other current assets 2,434 1,704
Deferred income taxes 710 770
----------------------------
TOTAL CURRENT ASSETS 69,914 74,217
Property and equipment-at cost, less accumulated
depreciation and amortization of $10,799 and $8,607 14,243 10,265
Product development costs-at cost, less
accumulated amortization of $3,138 and $2,355 8,091 6,443
Goodwill and other intangible assets-at cost, less
accumulated amortization of $3,956 and $3,605 2,336 2,671
Deposits and other assets 2,686 1,119
----------------------------
Total assets $97,270 $94,715
============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 8,664 $ 7,917
Accrued employee compensation and benefits 5,171 8,727
Income taxes payable 423 1,229
Deferred revenue 21,180 21,055
Notes payable 410 460
----------------------------
TOTAL CURRENT LIABILITIES 35,848 39,388
Deferred income taxes 2,151 1,666
Stockholders' equity:
Preferred stock-$.01 par value; authorized-1,000,000 shares;
none issued
Common stock-$.01 par value; authorized-15,000,000 shares;
issued-9,944,300 and 9,791,155 shares 99 98
Additional paid-in capital 60,245 57,496
Retained earnings 12,402 9,536
Currency translation adjustments (442) (436)
Treasury stock, at cost-2,160,420 shares (13,033) (13,033)
----------------------------
TOTAL STOCKHOLDERS' EQUITY 59,271 53,661
----------------------------
Total liabilities and stockholders' equity $97,270 $94,715
============================
</TABLE>
Note: The balance sheet at June 30, 1994 has been derived from the combination
of the audited consolidated financial statements of IMRS Inc. at that
date and the audited financial statements of Pillar Corporation as of
September 30, 1994.
See accompanying notes.
2
<PAGE> 4
IMRS Inc. and Subsidiaries
Condensed Consolidated Statement of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
Three Months Ended Six Months Ended
December 31, December 31,
1994 1993 1994 1993
------------------ ----------------
<S> <C> <C> <C> <C>
REVENUES
Software licenses $16,080 $10,784 $29,671 $18,723
License renewals and services 13,975 9,489 26,712 18,575
----------------- ----------------
Total revenues 30,055 20,273 56,383 37,298
COSTS AND EXPENSES
Cost of revenues:
Software licenses 721 498 1,471 1,057
License renewals and services 8,341 5,400 15,995 10,467
Sales and marketing 9,763 6,782 18,099 12,574
Product development 4,799 2,500 9,135 5,221
General and administrative 2,422 3,029 4,854 5,105
Merger and integration 1,000 1,000
----------------- ----------------
27,046 18,209 50,554 34,424
----------------- ----------------
OPERATING INCOME 3,009 2,064 5,829 2,874
Interest income 405 181 754 350
Interest expense (33) (30) (61) (52)
----------------- ----------------
INCOME BEFORE INCOME TAXES 3,381 2,215 6,522 3,172
Provision for income taxes 1,370 920 2,640 1,320
----------------- ----------------
NET INCOME $ 2,011 $ 1,295 $ 3,882 $ 1,852
================= ================
EARNINGS PER SHARE
Primary $.23 $.16 $.45 $.23
Fully diluted $.23 $.16 $.45 $.22
AVERAGE NUMBER OF SHARES OUTSTANDING
Primary 8,620 8,308 8,551 8,199
Fully diluted 8,647 8,341 8,624 8,280
</TABLE>
See accompanying notes.
3
<PAGE> 5
IMRS Inc. and Subsidiaries
<TABLE>
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands)
<CAPTION>
Six Months Ended
December 31,
1994 1993
------------------
<S> <C> <C>
CASH PROVIDED BY OPERATING ACTIVITIES $11,655 $ 6,572
INVESTING ACTIVITIES
Leasehold improvements and purchases of furniture,
equipment and software (6,170) (2,821)
Product development costs (2,431) (1,774)
Deposits and other assets (1,530)
-----------------
Cash used by investing activities (10,131) (4,595)
FINANCING ACTIVITIES
Notes payable-proceeds (payments), net (50) 258
Exercise of stock options by employees/
sale of Common Stock 1,708 2,325
-----------------
Cash provided by financing activities 1,658 2,583
Effect of exchange rate changes (6) (28)
-----------------
INCREASE IN CASH AND CASH EQUIVALENTS 3,176 4,532
Cash and cash equivalents at beginning of period 37,913 24,520
-----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $41,089 $ 29,052
==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes $ 1,816 $2,076
Interest 35 42
</TABLE>
See accompanying notes.
4
<PAGE> 6
IMRS Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
December 31, 1994
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, consisting
only of normal recurring accruals, considered necessary for a fair presentation
have been included in the accompanying unaudited financial statements.
Operating results for the six-month period ended December 31, 1994 are not
necessarily indicative of the results that may be expected for the full year
ending June 30, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended June 30, 1994.
Earnings per share (EPS) are calculated by dividing net income by the weighted
average number of common and common equivalent shares outstanding during the
period after giving effect to the merger with Pillar Corporation (see Note B
below). For primary EPS, common equivalent shares are shares which would be
issuable upon the exercise of outstanding stock options, reduced by the number
of shares assumed to be purchased by the Company with the proceeds obtained
thereby at the average market price during the period. For the fully diluted
EPS calculation, shares are assumed to be purchased by the Company at the
higher of the average or period-end market price and, therefore, this
calculation may include additional equivalent shares.
B. ACQUISITIONS
On November 29, 1994, the Company issued 570,796 shares of its common stock
(including 73,485 shares underlying options and warrants assumed by IMRS) in
connection with the merger with Pillar Corporation. Pillar, based in California,
develops, markets and supports Microsoft Windows and Macintosh-based corporate
budgeting and planning products. The acquisition has been accounted for as a
pooling of interests. Accordingly, the financial statements have been restated
for all prior periods to include Pillar. Further, all common share and per share
data have been restated for prior periods.
<TABLE>
For the (pre-merger) periods indicated, revenues and net income of the Company
and Pillar are as follows, in thousands:
<CAPTION>
Three Months Ended Three Months Ended Six Months Ended
September 30, 1994 December 31, 1993 December 31, 1993
------------------ ------------------ -----------------
<S> <C> <C> <C>
REVENUES
IMRS $22,470 $19,236 $34,588
Pillar 3,858 1,037 2,710
------- ------- -------
$26,328 $20,273 $37,298
======= ======= =======
NET IMCOME
IMRS $ 1,225 $ 2,043 $ 2,853
Pillar 1,016 (1,322) (1,758)
adjustments(s) (370) 574 757
------- ------- -------
$ 1,871 $ 1,295 $ 1,852
======= ======= =======
<FN>
(a) To adjust the provision for income taxes to reflect on a combined company
basis, the annual effective tax rate.
</TABLE>
Pillar previously used the fiscal year ended September 30 for its financial
reporting. Pillar's operating results for the three and six-month periods ended
March 31, 1994 have been included in the accompanying statement of income for
the respective 1993 periods. The statement of income's comparative 1994 results
reflect the operations of IMRS and Pillar for the three and six-month periods
ended December 31, 1994. The balance sheet at June 30, 1994 has been derived
from the combination of the audited consolidated financial statements of IMRS
at that date and the audited financial statements of Pillar as of September 30,
1994. Accordingly, the duplication of Pillar's net income, for the three months
ended September 30, 1994, in retained earnings has been adjusted by a $1
million charge to retained earnings as of December 31, 1994.
In connection with the acquisition, the Company charged $1 million to operations
for nonrecurring merger and integration costs (principally professional fees)
incurred.
5
<PAGE> 7
IMRS Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
December 31, 1994
B. ACQUISITIONS (CONTINUED)
On January 20, 1995, the Company completed the purchase of an office facility in
Stamford, Connecticut, reported last September, for $11.4 million. The purchase
price was financed by the Connecticut Development Authority ("CDA," an agency
of the State of Connecticut) through a $9.5 million mortgage loan, with Company
funds used for the balance. In the interest of Connecticut-based jobs, the CDA
agreed to such financing over a 15-year period at LIBOR minus 2%, subject to,
among other things: (i) the creation of a specified number of new
Connecticut-based jobs, (ii) a 10-year residency in the state, and (iii) the
payment of the remaining unpaid principal at the end of year ten. Violations of
certain such covenants, if any, would result in additional interest charges
and/or a penalty payment.
6
<PAGE> 8
IMRS Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(Dollars in thousands)
OVERVIEW
- - -----------------------------------------------------------------------------
IMRS, incorporated in 1981, develops, markets and supports financial management
applications for enterprise client/server environments. IMRS software addresses
the diverse accounting, financial consolidation, management reporting,
budgeting and information access needs of large corporations worldwide. The
Company designs products specifically for network implementation, providing
fast, multi-user access to centrally controlled and secure corporate data. The
Company recently announced it will begin to transfer business using the name
Hyperion Software.
The Company derives revenues from licensing its software products and providing
related product installation, support and training services. Customers are
billed an initial fee for the software upon delivery and, subsequently, are
billed an annual license renewal fee, entitling them to routine support and
product updates. IMRS licenses its products throughout the world primarily
through a direct sales force. In certain territories outside of North America,
products are licensed through independent distributors, including major
accounting firms. The Company includes in revenues its net share of revenues
generated by distributors.
The Company operates with a minimal software licensing backlog. Therefore,
quarterly revenues and operating results are quite dependent on the volume and
timing of the signing of licensing agreement and product deliveries during the
quarter, which are difficult to forecast. The Company's future operating
results may fluctuate due to these and other factors, such as customer buying
patterns, the timing of new product introductions and product upgrade releases,
the Company's hiring plans, the scheduling of sales and marketing programs, and
new product development. The Company generally has realized lower revenues in
its first (September) and third (March) fiscal quarters than in the immediately
preceding quarters. The Company believes that these revenue fluctuations are
caused by customer buying patterns, including traditionally slow purchase
activity in the summer months and low purchase activity in the financial
reporting and consolidation market during the March quarter, as many potential
customers are busy with their year-end closing and financial reporting. Due to
the relatively fixed nature of certain costs, including personnel and facilities
expenses, the decline in revenues in the first and third fiscal quarters
typically results in lower profitability or may result in losses in these
quarters. Total revenues and net income were $30,055 and $2,011, respectively,
for the second quarter of fiscal 1995, and $26,328 and $1,871, respectively, for
the first quarter of fiscal 1995.
For further information, refer to the IMRS Inc. annual report on Form 10-K for
the year ended June 30, 1994.
7
<PAGE> 9
<TABLE>
IMRS Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
(Dollars in thousands)
<CAPTION>
RESULTS OF OPERATIONS
- - -------------------------------------------------------------------------------------------------
REVENUES
Second Quarter Ended Six Months Ended
December 31, 1994 CHANGE 1993 1994 CHANGE 1993
- - ------------------------------------- --------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
Software licenses $16,080 49.1% $10,784 $29,671 58.5% $18,723
Percentage of total revenues 53.5% 53.2% 52.6% 50.2%
- - ------------------------------------- --------------------------- --------------------------
License renewals and services $13,975 47.3% $ 9,489 $26,712 43.8% $18,575
Percentage of total revenues 46.5% 46.8% 47.4% 49.8%
- - ------------------------------------- --------------------------- --------------------------
</TABLE>
Software license revenues rose primarily as a result of an increase in
the number of licenses sold. Demand for the Company's Microsoft Windows-based
products continues to be strong. In the December 1994 quarter and six-month
period, Windows-based product licenses comprised more than 97% of the Company's
total software license revenues, up from approximately 85% for the corresponding
periods of 1993.
The increase in license renewal and service revenue is mainly attributable to
the year-to-year growth of the Company's installed customer base.
Revenues generated from markets outside the United States for the first half of
fiscal 1995 and 1994 were $16,025 and $8,735, or 28.4% and 23.4% of total
revenues, respectively.
<TABLE>
<CAPTION>
COST OF REVENUES
Second Quarter Ended Six Months Ended
December 31, 1994 CHANGE 1993 1994 CHANGE 1993
- - ------------------------------------- --------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Software licenses $ 721 44.8% $ 498 $ 1,471 39.2% $ 1,057
Gross profit percentage 95.5% 95.4% 95.0% 94.4%
- - ------------------------------------- --------------------------- -----------------------------
License renewals and services $8,341 54.5% $ 5,400 $ 15,995 52.8% $ 10,467
Gross profit percentage 40.3% 43.1% 40.1% 43.7%
- - ------------------------------------- --------------------------- -----------------------------
</TABLE>
Cost of software license revenues consists primarily of the cost of product
packaging and documentation materials, amortization of capitalized software
costs, amortization of certain intangible assets related to business
acquisitions, and royalty expenses. The increase in the cost of software
license revenues reflects principally the associated increase in the number of
software licenses sold.
The increase in the cost of license renewal and services revenues was due
primarily to additional staffing expense for both installation and ongoing
support services.
8
<PAGE> 10
IMRS Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
(Dollars in thousands)
<TABLE>
<CAPTION>
OPERATING EXPENSES
Second Quarter Ended Six Months Ended
December 31, 1994 CHANGE 1993 1994 CHANGE 1993
- - ------------------------------------- --------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Sales and marketing $9,763 44.0% $6,782 $18,099 43.9% $12,574
Percentage of total revenues 32.5% 33.5% 32.1% 33.7%
- - ------------------------------------- --------------------------- -----------------------------
Product development $4,799 92.0% $2,500 $ 9,135 75.0% $ 5,221
Percentage of total revenues 16.0% 12.3% 16.2% 14.0%
- - ------------------------------------- --------------------------- -----------------------------
General and administrative $2,422 20.0% $3,029 $ 4,854 4.9% $ 5,105
Percentage of total revenues 8.1% 14.9% 8.6% 13.7%
- - ------------------------------------- --------------------------- -----------------------------
</TABLE>
The increase in sales and marketing expenses is primarily due to a net
increase of sales-marketing personnel, greater overall marketing initiatives
and an increase in commission costs directly associated with the significant
increase in software license revenues.
The increase in product development expenses reflects additional personnel and
third-party development costs associated with expanded research and development
activities. In the first half of fiscal 1995 and 1994, the Company capitalized
$2,431 and $1,774 of software development costs, respectively, in accordance
with Statement of Financial Accounting Standards No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise Marketed." The
amounts capitalized by the Company in 1995 and 1994 primarily relate to the
Company's development of Microsoft Windows-based financial management and
accounting applications for client/server environments and represented 21.0%
and 25.4%, respectively, of total product development expenditures. Capitalized
software costs are amortized over the estimated useful life of the product, but
not more than four years.
The decrease in general and administrative expenses resulted primarily from a
decrease in the provision for doubtful accounts from the requirement of the
prior period.
On November 29, 1994, the Company issued 570,796 shares of its common stock
(including 73,485 shares underlying options and warrants assumed by IMRS) in
connection with the merger with Pillar Corporation. Pillar, based in
California, develops, markets and supports Microsoft Windows and Macintosh-based
corporate budgeting and planning products. Pillar generated revenues of
approximately $10,000 for its year ended September 30, 1994. The acquisition
has been accounted for as a pooling of interests. Accordingly, the financial
statements have been restated for all prior periods to include Pillar. Further,
all common share and per share data have been restated for prior periods. In
connection with the acquisition, the Company charged $1,000 to operations for
nonrecurring merger and integration costs incurred during its second quarter
ended December 31, 1994. For further details, see Note B of the accompanying
consolidated financial statements.
9
<PAGE> 11
IMRS Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
(Dollars in thousands)
INTEREST INCOME
Interest income increased due to a general rise in interest rates and the
increase in cash available for investment which resulted from operations.
PROVISION FOR INCOME TAXES
The Company's effective income tax rate decreased from approximately 42% to 41%,
reflecting tax benefits from the utilization of Pillar net operating loss
carryovers. The rate for the current period reflects the Company's expectations
for the full year ending June 30, 1995.
NET INCOME
As a result of the above factors, net income for the three and six-month periods
ended December 31, 1994 increased to $2,011 or by 55.3% from $1,295 and $3,882
or by 109.6% from $1,852, respectively, for the corresponding periods of 1993.
To date, the overall impact of inflation on the Company has not been material.
Effective July 1, 1994, the Company adopted the provisions of Financial
Accounting Standards Board Statement 115, "Accounting for Certain Investments
in Debt and Equity Securities." The adoption of this new statement had no
material effect on the Company's financial statements.
Accounting standards promulgated by, among others, the Financial Accounting
Standards Board change periodically. Changes in such standards may have a
negative impact on the Company's future financial results.
LIQUIDITY AND CAPITAL RESOURCES
- - ------------------------------------------------------------------------------
To date, the Company has financed its business principally through positive
cash flow from operations, long-term and short-term borrowings and sales of
its common stock. For fiscal years 1993 and 1994, and for the six months ended
December 31, 1994, the Company generated positive cash flow from operations of
$6,626, $19,707 and $11,655, respectively.
Cash used by investing activities amounted to $10,131 for the first half of
fiscal 1995, $6,170 for leasehold improvements and purchases of equipment and
software, $2,431 for product development costs and $1,530 for deposits and
other assets (primarily related to the purchase of an office facility).
10
<PAGE> 12
IMRS Inc. and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
(Dollars in thousands)
Financing activities in the first half of fiscal 1995, including stock options
exercised by employees and payment of short-term debt, generated cash of $1,658.
In connection with the stock options exercised by certain of its employees (for
a total of 153,145 common shares), the Company recognized (as a credit to
additional paid-in capital) an income tax benefit of $1,085 for the six months
ended December 31, 1994.
As of December 31, 1994, the Company had cash and cash equivalents of $41,089
and working capital of $34,066, no long-term debt, and its ratio of current
assets to current liabilities was 2.0 to 1. The Company has long-term credit
availability of $10,000 under a revolving credit facility. The Company
anticipates capital expenditures of approximately $30,000 for its 1995 fiscal
year, including $15,000 relating to the purchase of an office facility (of which
$9,500 was financed by an agency of the State of Connecticut, through a reduced
rate mortgage loan, on January 20, 1995) and $4,000 of capitalized product
development costs.
The Company believes that funds generated from operations, existing cash
balances and its available credit facility will be sufficient to finance the
Company's operations for at least the next two years.
11
<PAGE> 13
IMRS Inc. and Subsidiaries
Part II. Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At IMRS' Annual Meeting of Stockholders held on November 15, 1994, the
following proposals were adopted by the margins indicated:
1. To elect two members to the Board of Directors to serve for a three-year
term or until their successors are duly elected and qualified.
Number of Shares
For Withheld
-------------------
James A. Perakis 5,123,848 40,809
Gary G. Greenfield 5,123,848 40,809
2. To ratify the selection of the firm, Ernst & Young LLP, as the independent
auditors of the Company for the fiscal year ending June 30, 1995.
For 5,141,563
Against 1,339
Abstain 21,755
3. To approve an amendment to the Company's 1991 Non-Employee Director Stock
Option Plan.
For 3,693,284
Against 1,439,314
Abstain 32,059
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
10.25 Purchase and Sale Agreement dated January 20, 1995 between Hyperion Software Corporation
(formerly IMRS Operations, Inc.) and Combustion Engineering, Inc., regarding the purchase
of an office facility.
10.26 Promissary Note of Hyperion Software Corporation to the Connecticut Development Authority,
with related Loan Agreement dated January 20, 1995 between Hyperion Software Corporation,
IMRS Inc., and the Connecticut Development Authority, regarding the financing of an office
facility, and related Mortgage Deed dated January 20, 1995 between Hyperion Software
Corporation and the Connecticut Development Authority.
</TABLE>
On December 14, 1994, the Company filed a report on Form 8-K regarding
disclosures of Item 5 of the form.
12
<PAGE> 14
IMRS Inc. and Subsidiaries
Form 10-Q
for the three-month period ended December 31, 1994
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMRS Inc.
/s/ Lucy Rae Ricciardi 2/13/95
-------------------------------------------
Lucy Rae Ricciardi Date
Vice President - Finance
(principal financial and accounting officer)
/s/ James A. Perakis 2/13/95
-------------------------------------------
James A. Perakis Date
Chief Executive Officer
(authorized officer)
13
<PAGE> 1
Exhibit 10.25
-------------
PURCHASE AND SALE AGREEMENT
by and between
COMBUSTION ENGINEERING, INC.
(as "Seller")
and
IMRS OPERATIONS INC.,
d/b/a IMRS INC.
(as "Purchaser")
For Property Known As
900 Long Ridge Road
Stamford, Connecticut
Prepared by:
Winthrop, Stimson, Putnam & Roberts
Financial Centre
695 East Main Street
P. O. Box 6760
Stamford, Connecticut 06904-6760
Tel.: (203) 348-2300
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement") made as of this
_________ day of October, 1994 by and between COMBUSTION ENGINEERING, INC., a
Delaware corporation (hereinafter "Seller"), and IMRS OPERATIONS INC., a
Delaware corporation, d/b/a IMRS INC.(hereinafter "Purchaser").
W I T N E S S E T H:
For and in consideration of the mutual covenants and agreements
contained in this Agreement, Seller agrees to sell and convey to Purchaser, and
Purchaser agrees to purchase from Seller, subject to the terms and conditions
of this Agreement, all those certain plots, pieces or parcels of land situated
on Long Ridge Road, commonly known as 900 Long Ridge Road, in the City of
Stamford, County of Fairfield and State of Connecticut, more particularly
described in Exhibit A hereto, together with the buildings and improvements
thereon erected, and other interests of Seller relating thereto all as provided
for in this Agreement.
1
<PAGE> 2
Seller and Purchaser further agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following definitions shall
apply:
1.1 The "Agreement" shall mean this Purchase and Sale
Agreement together with all Exhibits attached hereto.
1.2 "Applicable Authorities" shall mean such governmental
agencies or authorities having jurisdiction over building, planning, zoning or
construction matters.
1.3 The "Buildings" shall be the buildings and structures
erected or situated upon the Land including without limitation all
improvements, fixtures, equipment and machinery attached to, located on,
appurtenant to or used in connection therewith.
1.4 "Building 1" shall mean that building located upon the
Property which is designated as Building 1 on Exhibit K.
1.5 "Building 2" shall mean that building located upon the
Property which is designated as Building 2 on Exhibit K.
1.6 "Business Day" shall mean any day which is not a
Saturday, Sunday or a State of Connecticut or Federal legal holiday.
1.7 The "Closing Date" shall be the date when title to the
Property is conveyed to Purchaser in accordance with the terms and conditions
of this Agreement.
1.8 The "Contracts" shall have the meaning set forth in
Section 1.15(e).
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1.9 The "Contract Period" shall have the meaning set forth in
Article 11.
1.10 "Escrow Agent" shall mean First American Title Insurance
Company.
1.11 The "Land" shall be those certain plots, pieces or
parcels of land more particularly described in Exhibit A hereto.
1.12 The term "Net Cost of Title Examination" is defined for
the purpose of this Agreement as the expense actually incurred by Purchaser for
title examination without the issuance of a policy, but in no event, however,
to exceed the net amount charged by a title company in Fairfield County, State
of Connecticut for title examination.
1.13 The "Permitted Encumbrances" shall be those
restrictions, covenants, agreements, easements, matters and things of record
affecting title to the Property designated as such on Exhibit C hereto.
1.14 The "Property" shall be the Land, Site Improvements,
Buildings and Seller's Other Interests.
1.15 The "Seller's Other Interests" shall be all of Seller's
interests in and to the Property, or appertaining thereto, together with all
the singular tenements, hereditaments and appurtenances thereunto belonging or
in anywise appertaining, including without limitation:
(a) All of the right, title and interest of Seller
in and to any easements, grants of right or other agreements affecting the
Property, or comprising the "Permitted
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Encumbrances", including any structures or improvements erected pursuant to
such easements, grants of right or other agreements, whether or not situate
upon the Land.
(b) All of the right, title and interest of Seller
in and to any personal property owned by Seller appurtenant or affixed to and
used in connection with the Property, including, without limitation, the
personal property described on Exhibit F-1, and expressly excluding those items
set forth on Exhibit F-2.
(c) All of the right, title and interest, if any, of
Seller in and to any land lying in the bed of any street, road or avenue opened
or proposed in front of or adjoining the Land to the center line thereof and
all right, title and interest of Seller in and to any award made or to be made
in lieu thereof and in and to any unpaid award for damages to said premises by
reason of change of grade of any street; and Seller shall execute and deliver
to Purchaser on closing of title or thereafter on demand all proper instruments
for the conveyance of such title and the assignment and collection of any such
award.
(d) All of the rights and interest of Seller in and to all
permits, licenses and approvals of whatsoever nature affecting the Property
including but not limited to, if assignable, cafeteria licenses and permits, as
Purchaser may designate by written notice to Seller on or before thirty (30)
days prior to Closing.
(e) All of the rights and interest of Seller in and
to such of the contracts relating to or affecting the use or
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operation of the Property (including without limitation the service,
maintenance, labor and similar agreements set forth in Exhibit B hereto) as
Purchaser designates by written notice to Seller on or before thirty (30) days
prior to the Closing Date, that Purchaser desires Seller to assign to it (such
designated contracts are herein called the "Contracts" and, subject to the
terms hereof, to the extent same are assignable, shall be assigned by Seller
pursuant to the assignment and assumption agreement attached hereto as Exhibit
L).
1.16 The "Site Improvements" shall be all of the parking
lots, driveway paving, access cuts, parking lot striping, parking lot lighting
and parking lot bumpers situate upon the Land, including all fixtures now or in
the future appurtenant to or used in connection with the Land.
2. PURCHASE PRICE AND DEFERRED PURCHASE PRICE
2.1 The purchase price (the "Purchase Price") for the
Property shall be Eleven Million Four Hundred Thousand and 00/100
($11,400,000.00) Dollars payable as follows:
(a) Five Hundred Seventy Thousand and 00/100 ($570,000.00)
Dollars (the "First Deposit") heretofore paid to Seller's attorney, which shall
be transferred to Escrow Agent immediately upon execution of this Agreement.
(b) Five Hundred Seventy Thousand and 00/100 ($570,000.00)
Dollars (the "Second Deposit") in cash or check, subject to collection, payable
to the order of Escrow Agent, upon the signing of this Agreement.
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(c) If the Extension Option (as defined in Article 13 below)
shall be exercised, simultaneously with such exercise of the Extension Option,
Purchaser shall deposit in cash or check, subject to collection, the sum of
One Million One Hundred Forty Thousand and 00/100 ($1,140,000.00) Dollars
(the "Additional Deposit which, collectively with the First Deposit and the
Second Deposit, shall sometimes be herein referred to as the "Deposit", the
term "Deposit" meaning only such of the First Deposit, Second Deposit and
Additional Deposit as have been paid to and collected by Escrow Agent).
(d) At Closing, Purchaser shall pay to Seller the "Balance of
the Purchase Price", which shall equal (i) the Purchase Price, minus (ii)
such of the total of the First Deposit, Second Deposit and Additional Deposit,
to the extent same have been paid to, collected, and are held by Escrow Agent.
The "Balance of the Purchase Price" shall be paid on the Closing Date to
Seller by Federal Funds or other immediate clearance funds. On the Closing
Date, Escrow Agent shall pay the Deposit to Seller by method of Federal Funds
or other immediate clearance funds.
3. MATTERS TO WHICH THE SALE IS SUBJECT
Seller shall assign and convey or cause to be assigned
and conveyed to Purchaser or its assigns title to the Property free and
clear of any and all mortgages, liens, leases, encumbrances and easements,
EXCEPT:
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3.1 All taxes, water meter and water charges and sewer rents,
accrued or unaccrued, fixed or not fixed, becoming due and payable after the
Closing Date;
3.2 Any restrictions, limitations, regulations,
ordinances, rules and statutes of any municipal, county, state or federal
governmental or municipal board, bureau, commission, body, and/or entity having
jurisdiction over the Property including without limitation, the planning,
zoning, building and wetlands laws, rules and regulations of the City of
Stamford, provided same permit the current use of the Property and same have
not been violated as of the Closing Date, or, if violated, same have become
legally non-conforming;
3.3 The Permitted Encumbrances respecting the Property as
shown on Exhibit C hereto.
4. OUTSTANDING INTEREST OR UNMARKETABLE TITLE
If Seller conveys the Property to Purchaser in accordance with
Article 3 and Purchaser is able to obtain, at Purchaser's cost, a policy of
title insurance issued by First American Title dated as of the Closing Date,
insuring fee title to the Property subject only to the Permitted Encumbrances
and including the affirmative endorsements set forth on Exhibit I, then Seller
shall have fully complied with its obligations respecting title to the
Property. Subject to the provisions of this Article, if Seller shall be unable
to convey the fee interest in the Property in accordance with the terms of this
Agreement (other than by reason of (i) Seller's refusal to close or willful
default, or (ii) objection to title caused by the
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voluntary acts or omission to act of Seller), Seller shall have the right to
terminate this Agreement, whereupon, subject to Article 24, the Deposit shall
be returned to Purchaser, and the sole obligation and liability of Seller shall
be to pay to Purchaser Purchaser's Net Cost of Title Examination, and upon such
payment being made, this Agreement shall be deemed canceled and the parties
hereto shall be released of all obligations and liabilities hereunder and
Purchaser shall have no rights of action against Seller or any other party
hereto, at law or in equity, for damages, specific performance or otherwise.
Notwithstanding the foregoing, Purchaser shall have the right to accept such
title as Seller can convey, in which event Seller shall make the deliveries
provided in this Agreement to Purchaser to the extent that Seller is able so to
do; PROVIDED, HOWEVER that if there shall be one or more liens or encumbrances
against the Property which can be discharged by the payment of a sum of money,
then Seller shall remove, discharge, bond, escrow or obtain affirmative title
insurance coverage reasonably satisfactory to Purchaser for such lien or
encumbrance (provided, however, that as to liens or encumbrances, other than
mortgage(s) and real estate taxes, which mortgages and real estate taxes Seller
shall be required to pay without limitation, Seller shall not be obligated to
pay an amount in excess of Two Hundred Thousand and 00/100 ($200,000.00)
Dollars in the aggregate relating thereto). Except as hereinabove provided,
Seller shall have no duty nor shall Seller be required to take any action,
institute any proceedings or incur any expense in order to remedy
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or remove any objections to title or otherwise to render title in accordance
with the terms of this Agreement, and if Seller shall elect not to take any
action, institute any proceeding or incur any expense to remedy or remove any
objection to title or otherwise render title in accordance with the terms of
this Agreement, then, for the purposes of this Article 4, Seller shall be
deemed unable to convey the Property in accordance with the terms of this
Agreement.
5. ADJUSTMENTS
5.1 ITEMS TO BE APPORTIONED BETWEEN THE PARTIES. The
following items of income and expense (the "Adjustments") relating to the
Property shall be apportioned between the parties as of midnight of the day
immediately preceding the Closing Date so that Seller shall be charged with and
have the benefit of such items accrued through the day immediately preceding
the Closing Date, and Purchaser shall be charged with or have the benefit of
such items from and after the Closing Date:
(a) Real estate taxes, personal property taxes (as to any
personal property included in this sale) and municipal improvement assessments,
if any, for the tax year which includes the Closing Date;
(b) Water and sewer charges and rents for the assessment
period which includes the Closing Date; but if any such charges shall be
payable on the basis of meter readings, then such charges shall be apportioned
as provided in Section 5.3;
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(c) Utilities, including, without limitation, telephone,
steam, electricity and gas, on the basis of the most recently issued bills
therefor, with a subsequent reapportionment of such utilities promptly after
issuance of bills for the same for the period which includes the Closing Date;
(d) Fuel, if any, at the last invoice price and based upon
the supplier's written statement measuring the same not more than three (3)
days prior to the Closing Date;
(e) Any charges, advance payments and deposits paid or
payable under the Contracts to the extent Purchaser has elected to have same
transferred and/or assigned; and
(f) Fees for transferable licenses and permits pertaining to
the Property, or any part thereof, or any other property included in this sale
to the extent Purchaser has elected to have same assigned.
Except as otherwise provided in this Agreement, the
Adjustments shall be made in accordance with the customs in respect to title
closing recommended by the Stamford/Darien Regional Bar Association, Inc.
The provisions of this Article 5 shall survive the Closing.
Any errors in calculations or apportionments shall be corrected or adjusted as
soon as practicable after the Closing.
5.2 TAX RATE. If the Closing shall occur before the tax rate
is fixed, the apportionment of real estate taxes shall be upon the basis of the
tax rate for the next preceding tax year applied to the latest assessed
valuation, subject to further and final adjustment when the tax rate is fixed
for the tax year in
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which the Closing takes place and subject to Seller's right to contest such
taxes as hereinafter provided in the Agreement. The provisions of this Section
shall survive the Closing.
5.3 WATER METER. If there are any water meters on the
Property, Seller shall furnish readings to a date not more than five (5) days
prior to the date of the Closing, and the unfixed meter charges and the unfixed
sewer rents, if any, based thereon for the intervening time shall be
apportioned on the basis of such last readings.
6. CASUALTY/CONDEMNATION
6.1 CASUALTY.
(a) If, on or prior to the date of the Closing, all or a
"material part" (as defined below) of the Property shall be damaged or
destroyed by fire or other casualty, then, in any such event, Purchaser may, at
its option, either (i) cancel this Agreement, whereupon, subject to Article 24,
the Deposit shall be returned to Purchaser, and the parties hereto shall be
released of all obligations and liabilities of whatsoever nature in connection
with this Agreement, or (ii) proceed to close the transactions contemplated by
this Agreement, in which event all of the provisions of Section 6.1(b)(i) and
Section 6.1(b)(ii) below shall apply.
(b) If, on or prior to the date of the Closing, less than a
material part of the Property shall be destroyed or damaged by fire or other
casualty Purchaser shall nevertheless close title to the Property pursuant to
all the terms and conditions of this Agreement, subject to the following:
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(i) Seller shall not (a) adjust and settle any insurance claims, or (b) enter
into any construction or other contract for the repair or restoration of the
Property in excess of Twenty-Five Thousand and 00/100 ($25,000.00) Dollars in
the aggregate, without Purchaser's prior written consent, which consent shall
not be unreasonably withheld or delayed, and (ii) at the Closing, Seller shall
(1) pay over to Purchaser the amount of any insurance proceeds, to the extent
collected by Seller in connection with such casualty, less the amount of the
actual expenses incurred by Seller in making repairs to the Property occasioned
by such casualty pursuant to any contract (provided that such contract was
reasonably approved by Purchaser as required by this Section), and (2) assign
to Purchaser all of Seller's right, title and interest in and to any insurance
proceeds that are uncollected at the time of the Closing and that may be paid
in respect of such casualty subject to the payment by Purchaser to Seller, upon
the receipt of any such proceeds, of the amount of the actual expenses incurred
by Seller in making repairs to the Property occasioned by such casualty
pursuant to any contract (provided that such contract was reasonably approved
by Purchaser as required by this Section), to the extent not previously
reimbursed to or retained by Seller. Seller shall reasonably cooperate with
Purchaser in the collection of such proceeds, which obligation shall survive
the Closing.
(c) For the purpose of this Section, the phrase "a material
part" of the Property shall mean that (i) the cost of repair or restoration is
estimated by a reputable contractor
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selected by Seller and reasonably satisfactory to Purchaser, to be in excess of
Two Hundred Fifty Thousand and 00/100 ($250,000.00) Dollars, or (ii) the length
of time required for the repair or restoration is estimated by a reputable
contractor selected by Seller and reasonably satisfactory to Purchaser, to be
in excess of two (2) months.
6.2 CONDEMNATION. If, prior to the Closing Date, all or any
"material part" (as defined below) of the Property is taken by eminent domain
or is the subject of a pending taking which has not been consummated
(collectively, a "Taking"), Purchaser shall have the right, within ten (10)
"Business Days" of receiving notice of such Taking, to terminate this Agreement
upon written notice to Seller. If this Agreement is terminated, as aforesaid,
the Deposit shall be returned to Purchaser, and this Agreement shall be deemed
canceled and the parties hereto shall have no further obligations or
liabilities of whatsoever nature in connection with this Agreement. For the
purpose of this Section 6.2, a "material part" means a substantial portion of
the Property or the access thereto such that the Property remaining after such
a taking cannot reasonably be used and operated as a commercial office park of
not less than 300,000 square feet of rentable office space in the aggregate and
not less than 35+ acres. If Purchaser does not elect to terminate this
Agreement as aforesaid, or if the Taking is of a "non-material part" (i.e.,
anything other than a "material part") of the Property, Purchaser shall
nevertheless close title to the Property and fully perform the terms and
conditions of this
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Agreement, and there shall be no abatement of the Purchase Price, and at the
Closing Seller shall (1) pay over to Purchaser the amount of any awards to the
extent collected by Seller in connection with such Taking, and (2) assign to
Purchaser all of Seller's right, title and interest in and to any awards that
are uncollected at the time of the Closing and that may be paid in respect of
such Taking. Seller shall reasonably cooperate with Purchaser in the
collection of such proceeds, which obligation shall survive the Closing.
7. SELLER'S WARRANTIES AND REPRESENTATIONS
To induce Purchaser to enter into this Agreement and to
purchase the Property from Seller, Seller makes the following representations,
all of which Seller represents are true as of the date hereof and shall be true
as of the Closing Date and shall be deemed remade as of that date:
7.1 Seller is the sole owner of the Property.
7.2 (a) Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware with full
power and authority to own and sell the Property and to take all actions
required of Seller by this Agreement and properly qualified to transact
business in Connecticut.
(b) The execution, delivery and performance of this
Agreement and consummation of the transaction hereby contemplated in accordance
with the terms of this Agreement will not violate the certificate of
incorporation or by-laws of Seller or any contract, agreement, commitment,
order, judgment or decree
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to which Seller is a party or by which it or the Property is bound, and no
consent of any other party is required.
(c) The party or parties executing this Agreement on
behalf of Seller have been duly authorized and are empowered to bind Seller to
this Agreement and to take all actions required by this Agreement. Seller has
the full right, power and authority to sell and convey the Property to
Purchaser as provided herein and to carry out its obligations hereunder.
(d) No action, suit or proceeding is pending or, to
the best of Seller's knowledge, threatened against Seller which would
materially affect Seller's ability to fully perform its obligations pursuant to
this Agreement.
7.3 Seller has received no notice of violation of any
applicable federal, state or local law and there are no pending or threatened
appeals, revocations or suspensions of any permits, approvals or consents
relating to the current use or proposed use of the Property.
7.4 The Property is not an "Establishment," as defined by
Connecticut General Statutes Section 22a-134, requiring the filing of a
negative declaration.
7.5 All personal property owned by Seller and located in or
upon the Property or used in connection with the operation and maintenance of
the Property which is included in this sale, and which is owned by Seller, on
the Closing Date, shall be free and clear of any conditional bills of sale,
chattel mortgages, security agreements, financing statements or other
encumbrances of any nature.
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7.6 There are no existing or pending litigation, claims,
condemnations or sales in lieu thereof with respect to any aspect of the
Property nor, to the knowledge of Seller, have any actions, suits, proceedings
or claims been threatened or asserted.
7.7 At the Closing, there will be no outstanding contracts or
agreements affecting the Property except the Contracts.
7.8 Exhibit G hereto correctly and completely sets forth all
insurance of Seller covering the Property or any portion thereof.
7.9 Seller is not a foreign entity subject to withholding
pursuant to I.R.C. Section 1445. Seller agrees to indemnify and hold Purchaser
harmless from any and all claims brought against Purchaser pursuant to I.R.C.
Section 1445 by reason of a breach by Seller of the foregoing representation,
which indemnification shall survive the Closing.
7.10 The buildings and improvements located upon the Property
are not in a flood zone as designated by the federal government.
7.11 Seller represents that there are no leased fixtures on
the Property, and the systems on the Property, including but not limited to the
furnace and heating system, plumbing and water pipes, water systems, sewer
system, electrical systems and air conditioning system are now in working order
and will be in the same condition at the Closing.
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All representations, warranties and covenants of Seller
contained in this Agreement or in any affidavit or other document delivered in
connection herewith shall, except as otherwise agreed, be true and correct at
Closing but shall not survive the Closing, except that the representations set
forth in Sections 7.2(d), 7.3, 7.5, 7.6 and 7.7 of this Agreement shall survive
the Closing for a period of six (6) months.
8. SELLER'S INSTRUMENTS AT CLOSING
8.1 Seller shall execute and deliver to Purchaser on the
Closing Date:
(a) a special covenant warranty deed in the form
attached hereto as Exhibit J; and
(b) a bill of sale for the personal property of
Seller, if any, being sold hereunder as part of the Purchase Price in the form
attached hereto as Exhibit H; and
(c) if applicable pursuant to Section 1.24(e), a
duly executed assignment and assumption agreement in the form attached hereto
as Exhibit L transferring and assigning to Purchaser the Contracts; and
(d) assignments or other instruments in recordable
form transferring and assigning to Purchaser Seller's Other Interests; and
(e) all such usual and customary affidavits of title
as may be reasonably required by Purchaser's title insurance company, including
an indemnification agreement, if required, in relation to the right of first
refusal, if necessary; and
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(f) a certificate of a duly authorized officer of Seller
stating that all representations and warranties made by Seller in this
Agreement are true as of the Closing Date as if made on such date; and
(g) duly executed real estate conveyance or transfer tax
forms for the Property. Seller shall at Closing by certified or bank check
pay all real estate transfer and conveyance taxes payable to the appropriate
state and/or local governmental and/or municipal authorities. Purchaser shall
bear the expense of recording the deed; and
(h) a duly executed affidavit as may be required pursuant
to Section 1445 of the Internal Revenue Code, it being understood and
agreed that Seller shall fully comply with all rules, regulations and
requirements promulgated, issued or mandated by the Internal Revenue Code or
the Secretary of the Treasury Department of the United States as to the
deduction and withholding of tax imposed on the disposition of any United
States real property interest by a foreign person; and
(i) the appropriate instruction letter regarding the
Deposit to the Escrow Agent, as required by Article 22, duly executed by
Seller; and
(j) copies of the certificates of occupancy for the
Buildings.
8.2 Seller shall deliver or cause to be delivered to
Purchaser on the Closing Date:
(a) appropriate resolutions and certificates
reasonably satisfactory to Purchaser;
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(b) to the extent Seller may have the same in its
possession, all assignable warranties, maintenance records and related material
with respect to the Property;
(c) all transferable permits and licenses with
respect to the Property and all certificates of occupancy or equivalent
governmental instruments required for the Property;
(d) to the extent same are in Seller's possession,
all operating documents, maintenance and other records necessary for the
continued operation of the Property exclusive of documents necessary to be
retained by Seller. As to any documents retained by Seller, Purchaser shall
have the right of reasonable access upon reasonable advance notice to examine
and make copies thereof, which rights shall survive the Closing;
(e) all existing keys, garage door openers, lock
combinations and alarm codes; and
(f) such other usual and customary documents,
instruments, and other material reasonably requested by Purchaser as may be
necessary to effect the transfer of title hereunder.
9. PURCHASER'S REPRESENTATIONS AND WARRANTIES
To induce Seller to enter into this Agreement, Purchaser
makes, to the best of Purchaser's knowledge and belief, the following
representations, all of which Purchaser represents are true as of the date
hereof.
9.1(a) Purchaser is a corporation duly organized and validly
existing and in good standing under the laws of the State of [Delaware] with
full power and authority to purchase the
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Property and to take all actions required of Purchaser by this Agreement.
(b) The execution, delivery and performance of this
Agreement and consummation of the transaction hereby contemplated in accordance
with the terms of this Agreement will not violate the By-laws of Purchaser or
any contract, agreement, commitment, order, judgment or decree to which
Purchaser is a party or by which it is bound, and no consent of any other party
is required.
(c) The party or parties executing this Agreement on
behalf of Purchaser have been duly authorized and are empowered to bind
Purchaser to this Agreement and to take all actions required of Purchaser by
this Agreement.
(d) No action, suit or proceeding is pending or, to
the best of Purchaser's knowledge, threatened against Purchaser which would
materially affect it's ability to fully perform its obligations pursuant to
this Agreement.
All representations, warranties and covenants of Purchaser
contained in this Agreement or in any affidavit or other document delivered in
connection herewith shall be true and correct at Closing but shall not survive
the Closing.
10. PURCHASER'S INSTRUMENTS AT CLOSING
10.1 Purchaser shall execute and deliver to Seller at Closing
the following:
(a) a certificate of a duly authorized officer of
Purchaser stating that all representations and warranties made by
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Purchaser in this Agreement are true as of the Closing Date as if made on such
date;
(b) if applicable pursuant to Section 1.24(e), a
duly executed assignment and assumption agreement in the form of Exhibit L; and
(c) the appropriate instruction letter to the Escrow
Agent as required by Article 22, duly executed by Purchaser.
10.2 Purchaser shall deliver or cause to be delivered to
Seller on the Closing Date:
(a) appropriate resolutions and certificates
reasonably satisfactory to Seller that the actions taken by Purchaser have been
duly authorized;
(b) the Purchase Price in the manner provided for in
Article 2 hereof; and
(c) such other usual and customary documents,
instruments, and other material necessary to effect the transfer of title
hereunder and reasonably requested by Seller.
10.3 The following shall be the "Additional Conditions to
Closing:
(i) Expiration of the time period set forth in
Article 24;
(ii) Purchaser shall have (i) obtained all required
governmental and municipal approvals, with the exception of a building
permit, or satisfied itself, in its reasonable discretion, that it is
entitled as of right, to construct a 40,000 square foot addition to
Building 2, and
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(ii) determined, on or before November 4, 1994, that such Building 2
can structurally support the addition. Seller shall, at no cost to
Seller, reasonably cooperate with Purchaser in the application process
and comply with all reasonable requests including, but not limited to,
the signing of application for any required approvals;
(iii) On or before October 21, 1994, Purchaser shall
have obtained written approval from the State of Connecticut
Development Authority (the "CDA") for financial assistance in
connection with the purchase of the Property acceptable to Purchaser;
on or before November 18, 1994, Purchaser shall be able to satisfy all
conditions in connection therewith, with a copy of such approval to be
delivered to Seller by such date, and
(iv) Purchaser shall have determined, on or before
November 4, 1994, in the exercise of reasonable discretion, that the
regulations, rules and laws of the City of Stamford and other
governments and their agencies as may be appropriate, permit the
construction of an additional 130,000 square feet (in addition to the
40,000 sq. ft. referred to above) of office space on the Property and
that the conditions at the Property will allow for such construction.
Purchaser may terminate this Agreement at any time after the
date hereof, within the time periods as applicable, in the event Purchaser
determines, in the exercise of reasonable discretion, that Purchaser is not
satisfied with respect to the
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items set forth in any of (i), (ii), (iii) or (iv) above and, subject to
Article 24, shall be entitled to the immediate return of the Deposit.
11. CONTRACT PERIOD
11.1 After execution of this Agreement and prior to Closing
(the "Contract Period"), Seller shall continue to operate the Property in the
same manner as it is currently being operated by Seller. During the Contract
Period, Seller is not permitted to enter into any lease agreement for all or
any part of the Property without the written consent of Purchaser.
11.2 Purchaser and its agents, employees, consultants and
contractors shall have the right to enter the Property at all reasonable times,
upon reasonable advance notice, to perform such tests, measurements and studies
as may be reasonably necessary to perform the testing contemplated by Article
24 and Section 10.3. Seller shall reasonably cooperate with Purchaser and
shall make Seller's personnel reasonably available to Purchaser to assist
Purchaser. If Purchaser exercises its rights hereunder, Purchaser shall comply
with the reasonable requirements of Seller, and shall hold Seller harmless, for
which the Deposit shall stand as partial security, for any liability, loss,
cost or expense of whatsoever nature caused directly by such testing,
measurement or study by Purchaser. Further, Purchaser shall repair any damage
caused directly by such testing, measurement or study and shall reasonably
restore the Property to its former condition and shall hold Seller harmless,
for which the Deposit shall stand as partial security, for any liability, loss,
cost or
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dexpense arising therefrom. The obligations of Purchaser pursuant to this
Section shall survive the termination of this Agreement.
11.3 During the Contract Period, Seller shall not without the
written consent of Purchaser enter into any management or service contracts or
any other agreements of any nature for the Property unless such contract(s)
shall be fully cancelable or terminable prior to the Closing Date.
11.4 Seller may make ordinary repairs during the Contract
Period but shall make no extraordinary repairs during such period without the
written consent of Purchaser. Extraordinary repairs for purposes of this
Agreement shall mean a repair the cost of which is more than One Hundred
Thousand and 00/100 ($100,000.00) Dollars. During the Contract Period Seller
shall make no expenditures for the Property which are capital in nature and
which require an expenditure in excess of One Hundred Thousand and 00/100
($100,000.00) Dollars, without the consent of Purchaser, which consent shall
not be unreasonably withheld or delayed.
11.5 During the Contract Period, Seller shall:
(a) Comply with all federal, state and municipal
laws, ordinances, regulations and orders relating to the Property;
(b) Comply with all the material terms, conditions
and provisions of any leases, liens, mortgages, agreements and other
contractual arrangements referred to herein and make all payments required to
be paid thereunder and suffer no default therein;
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<PAGE> 25
(c) Operate, manage and maintain the Property in the
same general manner as the same has been operated by Seller to the date hereof;
and
(d) Maintain in effect all insurance coverages
listed in Exhibit G hereto.
11.6 During the Contract Period, Seller shall not grant any
easement, license or other right or impose restriction affecting all or any
part of the Property without the express consent of Purchaser.
11.7 Upon reasonable prior notice, prior to closing Purchaser
shall have the right to perform a final inspection of the Property.
12. BROKERAGE
Purchaser and Seller represent and warrant to each other that
this Agreement was not brought about by a broker other than Cushman & Wakefield
of Connecticut, Inc. and Coldwell Banker Commercial (collectively the
"Brokers") and that no other broker or person other than the Brokers was in any
way instrumental or had any part in bringing about this transaction. Seller
shall pay the commission due the Brokers pursuant to a separate agreement.
Purchaser agrees that, should any claim be made for commissions by any other
broker or person other than the Brokers arising by, through or on account of
any act of Purchaser or Purchaser's representatives, or if by reason of,
through or on account of any act of Purchaser or Purchaser's representatives a
broker claims commissions or other compensation, Purchaser shall indemnify and
hold Seller harmless from and against any and all
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<PAGE> 26
claim, liability, cost or expense (including reasonable attorneys' fees) in
connection therewith. Seller agrees that should any claim be made for
commissions by any broker or person other than the Brokers arising by, through
or on account of any act of Seller or Seller's representatives, Seller shall
indemnify and hold Purchaser harmless from and against any and all claim,
liability, cost or expense (including reasonable attorneys' fees) in connection
therewith. The provisions of this Article shall survive delivery of the deed,
but the provisions hereof shall not be deemed or construed as a covenant for
the benefit of any third party.
13. CLOSING
(a) The closing of title to the Property (the "Closing")
shall take place on the date which is the later of (i) December 1, 1994, or
(ii) the fifth (5th) Business Day following the satisfaction of the "Additional
Conditions to Closing" set forth in Section 10.3 of this Agreement, but in no
event later than December 31, 1994 (the "Outside Closing Date"), at the
offices of Winthrop, Stimson, Putnam & Roberts, The Financial Centre, 695 East
Main Street, Stamford, Connecticut at 10:00 a.m. or at the offices of the
attorneys for the CDA, ON WHICH DATE, SUBJECT TO SECTION 13(b) OF THIS
AGREEMENT, TIME SHALL BE DEEMED TO BE OF THE ESSENCE. Provided that Purchaser
shall provide to Seller not less than fourteen (14) days prior written notice,
Purchaser shall have the right to waive satisfaction of the "Additional
Conditions to Closing" and to close on December 1, 1994.
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<PAGE> 27
(b) Notwithstanding Section 13(a) above, if Purchaser
delivers to Escrow Agent the Additional Deposit, Purchaser shall have the right
to extend the Outside Closing Date to January 31, 1995, ON WHICH DATE TIME
SHALL BE DEEMED TO BE OF THE ESSENCE.
14. NOTICES
All notices, requests and demands to be made hereunder to the
parties hereto shall be in writing (at the addresses set forth below) and shall
be given by any of the following means: (a) personal service (including,
without limitation, overnight delivery, courier or messenger services); (b)
electronic communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by registered or certified, first-class mail, postage
prepaid, return receipt requested), or (c) registered or certified, first-class
United States mail, postage prepaid, return receipt requested. Such addresses
may be changed by notice to the other parties given in the same manner as
provided above. Any notice, demand or request sent (x) pursuant to subsection
(a) shall be deemed received upon such personal service, (y) pursuant to
subsection (b) shall be deemed received one (1) day after dispatch by
electronic means, and (z) pursuant to subsection (c) shall be deemed received
five (5) days following deposit in the mail.
If to Seller: COMBUSTION ENGINEERING, INC.
900 Long Ridge Road
Stamford, Connecticut 06902
Attention: Andy P. Karlbergs
Telecopy: (203) 328-7855
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<PAGE> 28
With a copy to: Winthrop, Stimson, Putnam & Roberts
The Financial Centre
695 East Main Street
P. O. Box 6760
Stamford, Connecticut 06904-6760
Attention: Arthur W. Hooper, Jr.,
Esq.
Telecopy: (203) 965-8226
If to Purchaser: IMRS INC.
777 Long Ridge Road
Stamford, CT 06902
Attention: Lucy Rae Ricciardi
Telecopy: (203)322-3904
With a copies to: McCullough, Goldberger, Staudt
550 Mamaroneck Avenue
Harrison, NY 10528
Attention: Stephen Hicks, Esq.
Telecopy: (914)381-5349
15. DEFAULT
15.1 PURCHASER'S DEFAULT. If Purchaser shall be in default,
then Seller shall have the right to treat this Agreement as having been
breached by Purchaser ten (10) Business Days after receipt by Purchaser's
attorney of written notice of such default and the failure by Purchaser to cure
said default within said ten (10) day period, and Seller's sole remedy on
account of such breach shall be the right to terminate this Agreement by
written notice to Purchaser and Purchaser's attorney, and, upon such
termination, Purchaser shall forfeit all rights and claims with respect to the
Property pursuant to this Agreement and to the Deposit as liquidated damages,
except that the payment of the liquidated damages shall not limit Purchaser's
obligation to pay the full amount of the Post Termination Obligations (as
defined in Article 24), which obligations shall survive the termination
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<PAGE> 29
of this Agreement and shall be in addition to any other damages paid or to be
paid by Purchaser. Seller and Purchaser hereby agree that delivery of the
Deposit to Seller shall be deemed to be fair and adequate, but not excessive,
liquidated damages based upon the following considerations which Seller and
Purchaser agree would constitute damages to Seller for any default by Purchaser
but which are impossible to quantify, to wit: (i) the removal of the Property
from the real estate market together with the uncertainty of obtaining a new
purchaser at the same or greater purchase price; (ii) the expenses incurred by
Seller, including (but not by way of limitation) attorneys' fees, taxes,
mortgage interest, and other items incidental to the maintenance of the
Property until it is eventually sold, and (iii) all other expenses incurred by
Seller as a result of it's default. In the event of such termination,
Purchaser shall immediately return its executed copy of this Agreement to
Seller for cancellation. If this Agreement shall have been recorded by either
party, Purchaser shall at its expense deliver to Seller a quit claim deed
releasing its entire interest under this Agreement within five (5) days of
receipt of the aforesaid notice. Seller is hereby irrevocably appointed it's
attorney- in-fact for the purpose of executing a quit claim deed in accordance
with this Section.
15.2 SELLER'S DEFAULT. In the event that the sale of the
Property fails or Seller refuses to close or otherwise materially breaches or
is in default of its obligations and agreements pursuant to this Agreement, as
its sole remedy,
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<PAGE> 30
Purchaser may at its option (a) bring suit to specifically enforce this
Agreement to compel Seller to perform the terms and conditions of this
Agreement and to seek damages not to exceed One Hundred Fifty Thousand and
00/100 ($150,000.00) Dollars, or (b) in the alternative, terminate this
Agreement by written notice, whereupon Seller shall pay to Purchaser the sum of
One Hundred Fifty Thousand and 00/100 ($150,000.00) Dollars as liquidated
damages; upon such payment, Seller shall have no further obligation pursuant to
this Agreement.
16. "AS IS"
Purchaser has examined the Property and any other property to
be sold hereunder and is familiar with the physical condition thereof.
Purchaser agrees and represents that, subject to Article 24 hereof, Purchaser
is purchasing the Property and any other such property "As Is With All Faults"
and in their present condition, as of the date hereof, subject to reasonable
use, wear and tear between the date hereof and the Closing. In making and
executing this Agreement, Purchaser has not relied upon or been induced by any
statements or representations of any person (other than those, if any, set
forth expressly in this Agreement) in respect of the title to, or the physical
condition of, the Property or other property, or the income, expenses,
operation or any other matter or thing affecting or relating to the Property or
to this transaction, which might be pertinent in considering the making or the
execution of this Agreement. Seller has not made and does not make any
representation as to the physical condition, rents, leases, expenses,
operation,
30
<PAGE> 31
legality of occupancy or any other matter or thing affecting or relating to the
Property, except as herein specifically set forth, and Purchaser hereby
expressly acknowledges that no such representations have been made. Purchaser
has relied solely on such representations, if any, as are expressly made herein
and on such investigations, examinations and inspections as Purchaser has
chosen to make or has made.
17. ASSIGNMENT
Provided that Purchaser shall remain jointly and severally
liable for the performance of the terms and conditions of this Agreement and
provided Seller receives the full purchase price, this Agreement and
Purchaser's rights hereunder may be assigned by Purchaser, without the prior
written consent of Seller, to a joint venture or other entity in which
Purchaser holds an interest as shareholder or otherwise. Except for such an
assignment, no other assignment of this Agreement of Purchaser's rights
hereunder may be assigned in whole or in part.
18. COUNTERPARTS
This Agreement may be executed in counterparts. The
signatures of the parties who sign different counterparts of this Agreement or
any of the instruments executed to effectuate the purposes of this Agreement
shall have the same effect as if those parties had signed the same counterparts
of this Agreement or of any such instrument.
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<PAGE> 32
19. FRANCHISE TAXES AND MECHANICS LIENS
Unpaid franchise taxes of any corporation in the chain of
title and mechanics liens with respect to the Property shall not be an
objection to title provided that the title company insuring Purchaser
affirmatively insures Purchaser against the collection thereof from the
Property, and provided further that the title company omits such objection for
the CDA's mortgage policy.
20. FURTHER ASSURANCES
Purchaser and Seller each agree to execute and deliver to the
other such further documents or instruments as may be reasonable and necessary
in furtherance of the performance of the terms, covenants and conditions of
this Agreement. This Article shall survive the Closing.
21. MISCELLANEOUS
21.1 In connection with the sale of the Property pursuant
to this Agreement, Purchaser agrees to pay the fees and disbursements of the
title company for searches, surveys, title reports and title insurance.
Purchaser shall bear all costs in connection with the creation of any mortgage
on the Property. All expenses incurred by Purchaser on account of this
Agreement, including those listed in the preceding sentence, are hereby made
liens on the Property, but such liens shall not continue after default by
Purchaser under this Agreement. This Section shall survive the termination of
this Agreement.
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21.2 This Agreement shall be binding upon and shall inure
to the benefit of Seller and Purchaser and their respective successors and
assigns.
21.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut. This Agreement shall be
construed without regard to any presumption or other rule requiring
construction against the party causing this Agreement to be drafted. If any
words or phrases in this Agreement shall have been stricken out or otherwise
eliminated, whether or not any other words or phrases have been added, this
Agreement shall be construed as if the words or phrases so stricken out or
otherwise eliminated were never included in this Agreement and no implication
or inference shall be drawn from the fact that said words or phrases were so
stricken out or otherwise eliminated. All terms and words used in this
Agreement, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.
21.4 The headings of the several Sections contained in
this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope of this Agreement or the
intent of any provision thereof.
21.5 The invalidity or unenforceability of any provision
of this Agreement shall not affect or impair any other provision of this
Agreement.
21.6 This Agreement contains the entire agreement among
Seller and Purchaser and any and all prior understandings
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<PAGE> 34
and dealings heretofore had are merged herein and any agreement shall be
ineffective to change, modify or discharge this Agreement in whole or in part
unless such agreement is in writing and signed by Seller and Purchaser.
21.7 Prior to the Closing, neither Purchaser nor an assignee,
if permitted, shall cause this Agreement, a memorandum of this Agreement or any
assignment of this Agreement to be recorded or filed in any public record, and
any violation of this provision shall be a material default under this
Agreement, such memorandum or assignment being void and of no effect. In
addition to Seller's foregoing remedy for any violation of the provisions of
this Section, any assignee violating said provisions shall be personally liable
to Seller for any damages caused by or resulting from such violation.
21.8 This Agreement shall not be binding until signed and
unconditionally delivered by Purchaser and Seller.
21.9 The terms "herein", "hereof" and "hereunder" and similar
terms used in this contract each refer to this Agreement in its entirety and
not to the particular provision or section in which such term is used.
21.10 Seller and Purchaser agree that Purchaser's attorneys
(named in Article 14 of this Agreement) are hereby designated as the "real
estate broker", with respect to the transaction contemplated in this Agreement,
pursuant to proposed regulation 1.6045-4 of the United States Internal Revenue
Code.
21.11 Notwithstanding anything in this Agreement to the
contrary, it is understood and agreed that the documents
34
<PAGE> 35
attached hereto as Exhibits are substantially in the form to be executed and
delivered in accordance with this Agreement, and that the parties hereto shall
in good faith complete the Exhibits prior to execution and delivery.
22. ESCROW AGENT
22.1 Seller and Purchaser hereby designate First American
Title Insurance Company as "Escrow Agent" to receive and hold the Deposit
delivered herewith by Purchaser in accordance with Article 2 hereof, and Escrow
Agent agrees to act as such Escrow Agent subject to the provisions of this
Article 22.
22.2 At Closing, on receipt by Escrow Agent of a statement
executed by Seller and Purchaser, Escrow Agent shall pay over the Deposit to
Seller by method of cash or other immediate clearance funds and interest earned
on the Deposit to Purchaser.
22.3 On receipt by Escrow Agent of a statement ("Purchaser's
Statement") executed by Purchaser prior to, on or after the Closing Date that
title to the Property has not closed under this Agreement because of a default
by Seller under this Agreement or because of Seller's inability to convey title
to the Property in accordance with the provisions of this Agreement, or because
of a proper termination of this agreement pursuant to Article 6 or Section
10.3, Escrow Agent shall within five (5) days deliver a copy of said
Purchaser's Statement to Seller and return the Deposit to Purchaser on the
tenth (10th) Business Day after receipt by Escrow Agent of said Purchaser's
Statement, unless Escrow Agent, prior to such return, receives from Seller a
35
<PAGE> 36
statement contesting the accuracy of Purchaser's Statement and demanding
retention of the Deposit by Escrow Agent.
22.4 On receipt by Escrow Agent of a statement ("Seller's
Statement") executed by Seller prior to, on or after the Closing Date that
title to the Property has not closed under this Agreement because of a default
by Purchaser under this Agreement, Escrow Agent shall within five (5) days
deliver said Seller's Statement to Purchaser and Purchaser's attorney, and on
or after the tenth (10th) Business Day after receipt by Escrow Agent of such
Seller's Statement from Seller, Escrow Agent shall deliver the Deposit to
Seller, unless in either such case Escrow Agent prior to such delivery receives
from Purchaser or Purchaser's attorney a statement contesting the accuracy of
Seller's statement and demanding retention of the Deposit by Escrow Agent.
22.5 On receipt by Escrow Agent of a statement from Seller
under Sections 22.3 above, or from Purchaser or Purchaser's attorney under
Section 22.4 above, Escrow Agent shall retain the Deposit, and thereafter
deliver the same to either Seller or Purchaser as Seller or Purchaser may
direct by a statement executed by them both, provided Escrow Agent, at any time
after receiving such a statement to retain the Deposit, and with notice to
Seller and Purchaser, may pay over the Deposit to a court of competent
jurisdiction for such disposition as may be directed by such court.
22.6 Upon delivery of the Deposit to either Purchaser, Seller
or a court of competent jurisdiction under and pursuant to
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<PAGE> 37
the provisions of this Article 22, Escrow Agent shall be relieved of all
liability, responsibility or obligation with respect to or arising out of the
Deposit and any and all of its obligations arising therefrom.
22.7 The Escrow Agent shall not be liable for any error of
judgment or for any act done or omitted by it in good faith or for anything
which it may in good faith do or refrain from doing in connection herewith or
for any negligence other than its gross negligence or willful misconduct. The
Escrow Agent is authorized to act upon any document believed by it to be
genuine and to be signed by the proper party or parties (and may rely on any
signature believed to be genuine) and will incur no liability in so acting.
22.8 The Escrow Agent has executed this Agreement for the
sole purpose of agreeing to act as such in accordance with the terms of this
Agreement.
22.9 All Deposits shall be held by Escrow Agent in an
interest bearing account, and all interest shall be credited to Purchaser at
the closing or paid to Purchaser in the event this Agreement is terminated.
23. [INTENTIONALLY OMITTED].
24. STUDIES.
Through its agents, consultants, employees and contractors,
Purchaser shall have the right to conduct such environmental, geotechnical,
structural engineering and building inspections (the "Studies") as Purchaser
deems necessary during
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<PAGE> 38
the period from the date hereof to and including November 8, 1994 subject to
the restrictions set forth below. Purchaser agrees (i) to repair any physical
damage to the Property caused by any acts taken in connection with the Studies,
and (ii) to hold Seller harmless of and from any liability for injury to
persons or property in connection with the performance of the Studies and (iii)
to keep confidential the results of the Studies and not disclose same to any
third parties except (x) as permitted in writing by Seller, (y) when advised by
its counsel that such disclosure is required under any applicable law or
regulation or that there is a risk of common law liability or regulatory
enforcement action against Purchaser for failure to disclose, or (z) to the
CDA, its attorneys, or such other parties or agents of Purchaser performing
other work on behalf of Purchaser in relation to the Contracts (the obligations
set forth in clause (i), (ii) and (iii) shall be collectively referred to as
the "Post Termination Obligations"). If such Studies are not acceptable to
Purchaser, in its sole discretion, Purchaser may terminate this Agreement by
written notice to Seller given in accordance with the terms hereof on or before
5:00 p.m. on November 14, 1994. If Purchaser gives Seller notice of
termination, this Agreement shall be of no further force and effect and the
parties shall have no further obligation to each other, aside from Purchaser's
Post Termination Obligations, which shall survive the termination of this
Agreement, whereupon the Deposit shall be immediately returned to Purchaser by
Escrow Agent.
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<PAGE> 39
25. APPROVED ROOF REPAIRS
It is understood and agreed that as an accommodation to
Purchaser, Seller has agreed that Purchaser shall be permitted prior to the
Closing to enter upon the Property for the purpose of completing the Approved
Roof Repairs (as hereinafter defined). Purchaser shall perform the Approved
Roof Repairs subject to the following terms and conditions:
25.1 Prior to commencing any work, Purchaser shall
submit to Seller for Seller's review and approval (i) the scope of the roof
repair work, (ii) the estimated cost of such work, and (iii) the names of all
contractors and subcontractors to be performing work or any part thereof.
Seller shall promptly and reasonably review and approve same; once approved,
the work as approved shall be referred to as the "Approved Roof Repairs".
Purchaser shall not make any significant modification to the Approved Roof
Repairs without the prior reasonable written approval of Seller.
25.2 Once the Approved Roof Repairs are commenced in
whole or in part, whether or not this Agreement is terminated for any reason
other than a default by Seller, Purchaser shall complete (or cause to be
completed) the Approved Roof Repairs in a timely, efficient and good and
workmanlike manner in accordance with the plans and specifications as approved.
All such work shall be completed in full compliance with all applicable
governmental and municipal laws, rules and regulations, including without
limitation obtaining and fully complying with all permits and approvals
required for such work.
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<PAGE> 40
25.3 All the Approved Roof Repairs must be completed
in a lien free, good and workmanlike manner, and in a manner so as to minimize
the interference with Seller's use and operation of the Property. Purchaser
shall cooperate with all reasonable requests of Seller in order to avoid
interference with Seller's use and operation of the Property.
25.4 Purchaser shall pay in a timely fashion any and
all costs associated with the Approved Roof Repairs or any other work performed
on the Property and shall, upon request, deliver copies of all lien waivers,
invoices and proofs of payment with respect thereto.
25.5 Prior to commencing any work on the Property,
Purchaser agrees to obtain and pay for the following insurance coverages: (i)
an "all-risk" builders risk policy covering the full cost of the Approved Roof
Repairs, and (ii) general liability insurance with a combined single limit of
$5,000,000. All policies of insurance are to be maintained by recognized
carriers in form acceptable to Seller. All such policies shall name Seller as
an additional insured and shall provide that such insurance shall not be
canceled or materially changed without Seller's receipt of at least thirty (30)
days prior written notice. Prior to any subcontractors or contractors entering
the Property, Purchaser shall secure certificates of insurance evidencing
insurance in form and amount reasonably approved by Seller from all
subcontractors and contractors entering upon the Property to perform all or any
part of the work.
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25.6 Purchaser assumes all risk of, and
responsibility and liability for, and shall indemnify and hold Seller harmless
from, all loss, damage to personal property, personal injuries and/or death
which may be incurred or caused by Purchaser or any person, subcontractor,
contractor, employee or other party relating to the Approved Roof Repairs or
any work to be done on the Property or any entry upon the Property. Purchaser
agrees to indemnify and save Seller harmless from any and all loss, cost or
expense of whatsoever nature, including but not limited to reasonable legal
fees, costs or expenses resulting in whole or in part from said Approved Roof
Repairs or any such other work or any such entry upon the Property, and
Purchaser shall promptly satisfy, pay and discharge all judgments, fines and
other costs of whatsoever nature in connection therewith.
25.7 In addition to the foregoing indemnities,
Purchaser shall timely pay and hold Seller harmless from any and all loss, cost
or expense of whatsoever nature concerning the costs of or relating to the
Approved Roof Repairs or any other work performed by or on behalf of Purchaser
prior to Closing.
25.8 Whether or not this Agreement shall terminate
for any reason whatsoever, including but not limited to a default by Seller,
this Article 25 and in particular the indemnities set forth in Section 25.5,
Section 25.6 and Section 25.7 shall be applicable and shall survive the
termination and/or expiration of this Agreement.
[INTENTIONALLY LEFT BLANK TO END OF PAGE]
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IN WITNESS WHEREOF, Seller and Purchaser have executed this
Agreement as of the day and year first above written.
SELLER
ATTEST: COMBUSTION ENGINEERING, INC.
_________________________ By:_________________________
Name:
Its:
Duly Authorized
PURCHASER
IMRS OPERATIONS INC.,
d/b/a IMRS INC.
_________________________ By:__________________________
Name:
Its
Duly Authorized
42
<PAGE> 43
ESCROW AGENT
FIRST AMERICAN TITLE
INSURANCE COMPANY
By:_____________________________
Name:
Its
Duly Authorized
43
<PAGE> 44
EXHIBITS AND SCHEDULES TO THIS PURCHASE AND SALE AGREEMENT HAVE BEEN
INTENTIONALLY OMITTED FROM THIS FILING. SUCH SCHEDULES AND EXHIBITS WILL
BE PROVIDED SUPPLEMENTALLY UPON REQUEST TO IMRS INC.
<PAGE> 1
Exhibit 10.26
-------------
PROMISSORY NOTE
---------- ----
$9,500,000.00 Stamford, Connecticut
January 20, 1995
FOR VALUE RECEIVED, HYPERION SOFTWARE CORPORATION a Delaware
corporation having its principal office and place of business presently at 777
Long Ridge Road, Stamford, Connecticut 06902 (the "Maker"), promises to pay to
the order of the CONNECTICUT DEVELOPMENT AUTHORITY, a body politic and
corporate constituting a public instrumentality of the State of Connecticut
(the "Authority") at its principal office at 845 Brook Street, Rocky Hill,
Connecticut, or at such other place as the Authority may designate in writing,
without notice or offset, the principal sum of NINE MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($9,500,000.00), together with interest in arrears
thereon from the date hereof at the rates per annum hereafter set forth upon
the whole of said principal sum remaining from time to time unpaid. The entire
outstanding principal amount, with accrued interest thereon, will be due and
payable in full on February 1, 2005.
The outstanding principal balance hereof shall initially bear interest
at a rate per annum equal to LIBOR (as hereafter defined) as of January 1,
1995, minus two (2) percentage points. The interest rate shall be adjusted on
February 1, 1996 and on each February 1 thereafter (each an "Adjustment Date")
to equal LIBOR as of such Adjustment Date, minus two (2) percentage points.
Notwithstanding the foregoing and as more fully described in the Loan
Agreement, if by January 1, 2000, Maker does not employ 816 or more Employees
(as defined in the Loan Agreement) and the Authority has not exercised its
rights of acceleration as more fully described in the Loan Agreement, then
interest shall accrue from January 1, 2000 at a rate equal to: a) LIBOR minus
two (2) percentage points; plus (b) ((816-Y)/160) percentage points, rounded up
to the nearest one-eighth of a percentage point, where Y equals the number of
Employees (as defined in the Loan Agreement) as of January 1, 2000.
Interest only shall be due and payable on February 1, 1995. On the
first day of March, 1995, and on the first day of each month thereafter, until
adjusted in accordance with the terms hereof, equal monthly payments of
principal and interest will be due and payable hereunder in an amount which
would be sufficient to repay the original principal balance of this Note, with
interest accrued thereon, in full over a term ending on February 1, 2010, in
substantially equal payments. Upon each adjustment
<PAGE> 2
in the interest rate on an Adjustment Date, the amount of such monthly payment
shall be adjusted to equal that amount which would be sufficient to repay the
unpaid principal balance of this Note, with accrued interest thereon, in full
over a term ending on February 1, 2010, in substantially equal payments. Equal
monthly payments of principal and interest will be due and payable in such
adjusted amount on the first day of each month, commencing on the first day of
the month immediately following the month in which such Adjustment Date occurs,
until such amount is adjusted again in accordance with the terms hereof. In
any event, the entire outstanding principal amount, with accrued interest
thereon, will be due and payable in full on February 1, 2005.
For purposes hereof, LIBOR shall mean, as of any day, the one-year
London Interbank Offered Rate announced by the Wall Street Journal on such day
(or, if such day is not a business day, on the immediately preceding business
day); provided that, if for any reason the Wall Street Journal is not being
published at such time, the Authority shall designate another financial
publication in its reasonable discretion and "LIBOR" shall mean the one-year
London Interbank Offered Rate announced by such financial publication on such
day.
Maker agrees to pay all taxes (other than taxes based on the gross or
net income of the Authority or other holder of this Note) or duties levied or
assessed against the Authority or other holder of this Note on account of this
Note, or the loan agreement of even date hereof between Maker and the Authority
pursuant to which this Note is issued (the "Loan Agreement"), or any of the
Financing Documents (as such term is defined in the Loan Agreement), or upon
the collateral granted to the Authority thereunder. Maker further agrees to
pay all costs, expenses and attorneys' fees incurred by Authority in any
proceeding for the collection of the debt evidenced hereby after an event of
default, or in any action to enforce its rights in any collateral upon the
happening of an event of default, or in protecting or sustaining the lien of
any of the Financing Documents securing this Note when in the reasonable
discretion of the Authority such action is necessary, or in any litigation or
controversy arising from or connected with this Note.
There shall be an event of default: (i) if Maker defaults for ten (10)
days in making any payment of principal or interest on this Note, or defaults
in making any payment of taxes or any municipal assessment (provided that such
items need not be paid while being contested by Maker in good faith and by
appropriate legal proceedings so long as adequate book reserves have been
-2-
<PAGE> 3
established with respect thereto and Maker's title to, and its or his right to
use, its property is not materially and adversely affected thereby), any
insurance premiums, any lien or charge upon any real property or fixture, by
which this Note or any guaranty of this Note is secured, or any other payment
under this Note or the Loan Agreement or any Financing Document, as the same
become due, or (ii) if there occurs an Event of Default under the Loan
Agreement, or any other Financing Document, or (iii) if an order for relief is
sought by or against Maker under the Federal Bankruptcy Code or acts amendatory
thereof or supplemental thereto or under any statute either of the United
States or any state in connection with insolvency or reorganization or for the
appointment of a receiver or trustee for all or a portion of Maker's property,
and any such order for relief, receiver or trustee is not withdrawn, dismissed,
discharged, or removed within sixty (60) days, except for any order sought or
consented to by the Maker, in which case the event of default shall be
immediate, or (iv) if an assignment of Maker's property is made for the benefit
of creditors, or (v) if Maker declares in writing its inability to pay debts as
they come due, or (vi) if Maker liquidates or dissolves or is liquidated or
dissolved, or (vii) if the United States of America, the State of Connecticut
or any agency or subdivision thereof, imposes a tax (except a tax based on the
gross or net income of the holder of this Note), levy or assessment on or
concerning this Note, which Maker cannot lawfully or does not pay when due.
Upon the occurrence of an event of default, the entire principal sum with
accrued interest thereon due under this Note shall, at the option of Authority,
become due and payable (except that upon an event of default under (iii), (iv),
(v) or (vi) above such acceleration shall be automatic and immediate) and the
Authority may proceed to exercise any rights and remedies it has under this
Note, the Loan Agreement, or any other Financing Document, or at law, in equity
or otherwise. No failure to exercise such option shall be deemed to be a
waiver on the part of Authority of the right to exercise the same in the event
of any subsequent event of default.
Authority may collect a "late charge" not to exceed an amount equal to
five percent (5.00%) of any installment of interest or principal or both which
is not paid within ten (10) days of the date on which said payment is due.
Late charges shall be separately charged to and collected from Maker and shall
be due upon demand by Authority.
Maker shall have the right to prepay this Note in whole or in part
upon any payment date, without penalty. Any and all partial prepayments, after
application, at Authority's option, to other amounts then due the Authority
pursuant to this Note or the
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<PAGE> 4
Loan Agreement or any other Financing Document (as defined in the Loan
Agreement), shall be credited to unpaid principal installments in the inverse
order of their maturity or in such other manner as Authority in its discretion
shall deem proper. Notwithstanding the foregoing, in the event that Maker
elects to prepay this Note in whole or in part at any time prior to January 1,
2000, Maker shall pay a prepayment penalty equal to: ((A x 90) - (B - 316)) x
$1,500 where A equals the Note Year (as defined below) in which the prepayment
is made and B equals the number of Employees (as defined in the Loan Agreement)
as of the prepayment date. For purposes hereof, a Note Year shall be each
annual period commencing as of January 1, 1995. For example, the first Note
Year shall be the period from date hereof until December 31, 1995, and the
second Note Year shall be the period from January 1, 1996 until December 31,
1996.
As more fully described in Section 5.14 of the Loan Agreement, this
Note is, under certain circumstances, subject to prepayment in full and payment
of a penalty of five percent (5%) of the original principal amount hereof. As
more fully described in Section 5.16 of the Loan Agreement, this Note is, under
certain circumstances, subject to prepayment in part or in full and payment of
a penalty of additional interest as follows: As more fully described in the
Loan Agreement, if by January 1, 2000, the Maker does not employ 766 or more
Employees (as defined in the Loan Agreement) and the Authority has not
exercised its rights of acceleration as more fully described in the Loan
Agreement, Maker shall immediately pay to the Authority as additional interest
a sum equal to: a) 766 minus the number of Employees (as defined in the Loan
Agreement) as of January 1, 2000; multiplied by b) One Thousand Five Hundred
and 00/100 Dollars ($1,500.00).
Maker and each and every endorser, guarantor and surety of this Note
and all others who may become liable for all or any part of this obligation do
hereby waive diligence, demand, presentment for payment, protest, notice of
protest and notice of non- payment of this Note, and do hereby consent to any
number of renewals or extensions of the time of payment hereof, and agree that
any such renewals or extensions may be made without notice to any of said
parties and without affecting their liability herein and further consent to the
release of any part or parts or all of the security for the payment hereof and
to the release of any party or parties liable hereon, all without affecting the
liability of the other persons, firms or corporations liable for the payment of
this Note.
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<PAGE> 5
Upon the occurrence of an event of a default, at the option of the
Authority, the Authority may pay insurance premiums, taxes and assessments, and
any and all other expenses which may be reasonable or necessary to protect the
property, real or personal, securing this Note or to protect or sustain the
lien of any Financing Document. Any such payment made by the Authority
pursuant to said option and all expenditures incurred by the Authority under
this Note shall bear interest at the rate of ten percent (10%) per annum from
the date of payment by Authority and shall be payable on demand with interest
from the date of payment by Authority.
Maker agrees that the principal of this Note after maturity, upon an
event of default or after a judgment hereon, shall bear interest at the rate of
three percent (3.00%) per annum above the rate of interest which would
otherwise have been applicable for such period, from the date of maturity,
default or judgment, as applicable.
Any notice to Maker provided for in this Note shall be given by
mailing such notice by prepaid, first class mail addressed to the address set
forth above, Attention: Chief Financial Officer, or to such other address as
Maker may designate by notice to the Authority. Any notice to the Authority
shall be given by mailing such notice by prepaid, first class mail, return
receipt requested, or by personal delivery or by overnight delivery service at
the address stated in the first paragraph of this Note, or at such other person
or address as may have been designated by notice to Maker. Notice shall be
deemed given when received by Maker or the Authority.
MAKER ACKNOWLEDGES THAT THIS NOTE AND THE UNDERLYING TRANSACTIONS
GIVING RISE HERETO CONSTITUTE COMMERCIAL BUSINESS TRANSACTED WITHIN THE STATE
OF CONNECTICUT. IN THE EVENT OF ANY LEGAL ACTION BETWEEN MAKER AND AUTHORITY
HEREUNDER, MAKER HEREBY EXPRESSLY WAIVES ANY RIGHTS WITH REGARD TO NOTICE,
PRIOR HEARING AND ANY OTHER RIGHTS IT MAY HAVE UNDER THE CONNECTICUT GENERAL
STATUTES, CHAPTER 903a, AS NOW CONSTITUTED OR HEREAFTER AMENDED, OR OTHER
STATUTE OR STATUTES, STATE OR FEDERAL, AFFECTING PREJUDGMENT REMEDIES, AND THE
AUTHORITY MAY INVOKE ANY PREJUDGMENT REMEDY AVAILABLE TO IT, INCLUDING, BUT NOT
LIMITED TO, GARNISHMENT, ATTACHMENT, FOREIGN ATTACHMENT AND REPLEVIN, WITH
RESPECT TO ANY TANGIBLE OR INTANGIBLE PROPERTY (WHETHER REAL OR PERSONAL) OF
MAKER TO ENFORCE THE PROVISIONS OF THIS NOTE, WITHOUT GIVING MAKER ANY NOTICE
OR OPPORTUNITY FOR A HEARING.
Should this Note be signed by more than one maker, the references in
this Note to Maker in the singular shall include
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<PAGE> 6
the plural and all obligations herein contained shall be joint and several
obligations of each maker hereof.
The term the "Authority" as used in this Note shall include the
Authority and any subsequent holder or holders hereof.
This Note has been made, executed and delivered in the State of
Connecticut and shall be construed and enforced under and in accordance with
the laws of the State of Connecticut.
This Note is issued pursuant to the Loan Agreement, and all terms,
conditions and provisions thereof are deemed incorporated herein as if fully
set forth herein.
-6-
<PAGE> 7
IN WITNESS WHEREOF, Maker has hereunto set its hand this 20th
day of January, 1995.
HYPERION SOFTWARE CORPORATION
By:------------------------------------
Lucy Ricciardi
Its Vice President and
Chief Financial Officer
-7-
<PAGE> 8
LOAN AGREEMENT
---- ---------
THIS LOAN AGREEMENT is made and dated January 20, 1995, by and among
CONNECTICUT DEVELOPMENT AUTHORITY, a body corporate and politic constituting a
public instrumentality and political subdivision of the State of Connecticut,
with its principal office at 845 Brook Street, Rocky Hill, Connecticut 06067
(the "Authority"), HYPERION SOFTWARE CORPORATION, a Delaware corporation with
its principal office at 777 Long Ridge Road, Stamford, Connecticut (the
"Borrower"), and IMRS INC., a Delaware corporation with its principal office at
777 Long Ridge Road, Stamford, Connecticut (the "Guarantor").
WITNESSETH:
WHEREAS, pursuant to Connecticut General Statutes Section 32-23ii,
there has been created within the Authority the Connecticut Works Fund for the
purpose of providing financial assistance to economic development projects as
defined in the statute; and
WHEREAS, on September 21, 1994, the Authority approved a loan under
the Connecticut Works Fund to the Guarantor, in an amount not to exceed
$9,500,000.00 for a term not to exceed ten (10) years, for the purposes
described in the application for financial assistance submitted by the
Guarantor and on the terms and conditions set forth in the commitment letter
dated September 29, 1994 from the Authority to the Guarantor; and
WHEREAS, the commitment letter contemplated that the loan could be
made to another entity provided the Guarantor guaranteed the loan; and
WHEREAS, the Guarantor desires that the loan be made to the Borrower,
a wholly-owned subsidiary of the Guarantor; and
WHEREAS, the Authority, in reliance on the representations and
warranties of the Guarantor in its loan application and herein, is willing to
make the above-described loan to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
<PAGE> 9
SECTION 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
-----------
For purposes of this Agreement, the following words and terms shall
have the respective meanings set forth below or in the Section of this
Agreement referenced below:
"Adjustment Date" shall have the meaning set forth in Section 2.4
hereof.
"Agreement" means this Loan Agreement and any amendments or
supplements hereto.
"Authority" is defined in the first paragraph of this Agreement.
"Benefit Period" shall have the meaning provided in Section 5.14
hereof.
"Borrower" is defined in the first paragraph of this Agreement.
"Closing" is defined in Section 2.2.
"Closing Date" is defined in Section 2.2.
"Code" is the Uniform Commercial Code, as enacted and in effect in the
State of Connecticut.
"Collateral" means that portion of the Borrower's Property on which
the Authority has or shall have a Lien pursuant to the Mortgage, or any of the
other Financing Documents, and includes the Premises and any additional portion
or portions of the Borrower's Property on which the Authority hereafter is
given a Lien to secure any portion of the Secured Obligations.
"Collateral Assignment of Leases and Rentals" is defined in Section
2.7.
"Default" means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
"Environmental Certificate and Indemnity Agreement" means that certain
environmental certificate and indemnity agreement by the Borrower and the
Guarantor in favor of the Authority of even date.
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<PAGE> 10
"Environmental Laws" shall have the meaning provided in the
Environmental Certificate and Indemnity Agreement.
"Event of Default" is defined in Section 6.1.
"Financing Documents" means this Agreement, the Note, the Guaranty,
the Mortgage, the Collateral Assignment of Leases and Rentals, the
Environmental Certificate and Indemnity Agreement and all other documents or
agreements executed and/or delivered in connection with the Loan.
"Guarantor" is defined in the first paragraph of this Agreement.
"General Statutes" means the General Statutes of Connecticut, revision
of 1958, as amended.
"Guaranty" is defined in Section 2.7.
"Hazardous Materials" shall have the meaning provided in the
Environmental Certificate and Indemnity Agreement.
"Indemnified Claims" is defined in Section 5.3.
"Indemnitee" is defined in Section 5.3.
"LIBOR" shall mean, as of any day, the one-year London Interbank
Offered Rate announced by the Wall Street Journal on such day (or, if such day
is not a business day, on the immediately preceding business day); provided
that, if for any reason the Wall Street Journal is not published on a
particular day or no longer published, the Authority shall designate another
financial publication in its reasonable discretion and "LIBOR" shall mean the
one-year London Interbank Offered Rate announced by such financial publication
on such day.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of this Agreement, the Borrower and the
Guarantor shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale
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<PAGE> 11
agreement, financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes, and such retention or vesting shall constitute a Lien.
"Loan" means the loan in the original principal amount of
$9,500,000.00 made by the Authority to the Borrower pursuant to this Agreement.
"Loan Application" means the initial loan application by the Guarantor
to the Authority together with all amendments, supplements and modifications
thereto thereafter submitted by the Guarantor to the Authority, and including
all correspondence, exhibits, schedules, financial statements, cost estimates
and other documents furnished by or on behalf of the Guarantor with respect
thereto.
"Loan Authorization" means the commitment letter from the Authority to
the Guarantor dated September 29, 1994, and any amendments or supplements
thereto.
"Mortgage" is defined in Section 2.7.
"Note" is defined in Section 2.6.
"Permitted Encumbrances" means the encumbrances listed on Exhibit B
hereto.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, government, government agency or governmental
subdivision.
"Personal Property" means Property which is not real Property, and
includes without limitation accounts, chattel paper, documents, equipment,
fixtures, general intangibles, goods, instruments, inventory and motor
vehicles, as such terms are defined in the Code.
"Premises" means the real property, together with the improvements
thereon and appurtenances thereto, known as 900 Long Ridge Road, Stamford,
Connecticut, being more particularly described in Exhibit A hereto.
"Property" means any interest in any kind of property or asset,
whether real, personal, or mixed, whether tangible or intangible, and whether
now owned or hereafter acquired.
"Secured Obligations" means at any time,
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<PAGE> 12
(i) all obligations of the Borrower in respect of the
payment of the principal and interest on the Note and under this Agreement at
such time;
(ii) all obligations of the Borrower under each of the
Financing Documents at such time;
(iii) payment of any and all damages which the Authority
may suffer as a result of the breach by the Borrower or the Guarantor of any
obligation, covenant or undertaking under any of the Financing Documents;
(iv) any extensions, renewals or amendments to any of the
foregoing, and all other obligations of the Borrower to the Authority, however
created, acquired, arising or evidenced, whether direct or indirect, absolute
or contingent, now or hereafter existing, or due or to become due; and
(v) all costs of collection, including reasonable
attorneys' fees, incurred by the Authority to collect the foregoing and to
enforce, foreclose and realize its rights under the Financing Documents,
including the expenses referred to in Section 5.2.
1.2 INTERPRETATION
--------------
(a) References to a "Section" or "Sections" herein refer to this
Agreement unless otherwise stated.
(b) Words of the masculine gender mean and include correlative
words of the feminine and neuter genders and words importing the singular
number mean and include the plural number and vice versa.
(c) Any headings preceding the texts of the several Sections of
this Agreement, and any table of contents or list of exhibits appended to
copies hereof, shall be solely for convenience of reference and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
(d) All approvals, consents and acceptances required to be given
or made by any party hereunder shall be at the sole discretion of the party
whose approval, consent, or acceptance is required.
(e) All notices to be given hereunder shall be given in writing
within a reasonable time unless otherwise specifically provided.
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<PAGE> 13
(f) If a reference to a provision of the Connecticut General
Statutes appears in a Section intended to have effect after the date of this
Agreement, such reference shall be deemed to include successor statutes of
similar import.
(g) Where any provision of this Agreement refers to action to be
taken by any Person, or which any Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
(h) Each Exhibit referred to in this Agreement shall be considered
a part of this Agreement as if fully set forth herein.
(i) Whenever any accounting computation is required to be made for
any purpose hereunder, it shall be done in accordance with generally accepted
accounting principles as then in effect, unless the context clearly requires
otherwise.
SECTION 2
THE LOAN
2.1 LOAN
----
The Authority agrees to lend to the Borrower, and the Borrower agrees
to borrow from the Authority on the Closing Date, in accordance with and
subject to the terms and conditions of this Agreement, the sum of NINE MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($9,500,000.00).
2.2 THE CLOSING
-----------
The closing (the "Closing") of the Loan shall be conducted by the
Authority's special counsel, Shipman & Goodwin. The Closing shall be held on
such date as shall be mutually agreed to by the Borrower and the Authority, but
in no event later than April 15, 1995 (the "Closing Date"), at the offices of
Shipman & Goodwin, One American Row, Hartford, Connecticut. At the Closing the
Borrower will deliver to the Authority the Note, dated the Closing Date, in the
principal amount of $9,500,000.00, against payment by the Authority to the
Borrower of such amount.
2.3 TERM
----
The maturity date of the Loan is February 1, 2005. The Loan will be
paid in accordance with the terms of the Note and Section 2.4 hereof.
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<PAGE> 14
2.4 INTEREST AND PAYMENTS
---------------------
The outstanding principal balance of the Note shall bear interest at a
variable rate per annum determined as follows: The initial interest rate on the
Note shall equal LIBOR on January 1, 1995, minus two (2) percentage points.
The interest rate will be adjusted on February 1, 1996, and each February 1
thereafter (each an "Adjustment Date") to equal LIBOR as of such Adjustment
Date, minus two (2) percentage points. The interest rate is subject to change
pursuant to the provisions of Section 5.16.
Interest only shall be due and payable on February 1, 1995. On the
first day of each month commencing March 1, 1995, equal monthly payments of
principal and interest will be due and payable under the Note in accordance
with a schedule which will fully amortize the original principal balance of the
Note, with interest accrued thereon, over a term expiring on February 1, 2010;
provided, however, that upon each adjustment in the interest rate as provided
above such amortization schedule will be recalculated based on the new interest
rate to provide for equal monthly payments of principal and interest which
would fully amortize the principal balance of the Note, with accrued interest,
over a term expiring February 1, 2010.
In any event the Note will be due and payable in full on February 1,
2005.
2.5 LATE CHARGES
------------
The Authority may assess a late charge not to exceed an amount equal
to five percent (5%) of any scheduled payment on the Note which is not paid
within ten (10) days after the same is due in order to cover the extra expenses
involved in handling such delinquent payment. In addition, for any period
following the occurrence of an Event of Default and while such Event of Default
is continuing and after maturity, the Loan will bear interest at a rate three
percent (3%) above the rate of interest which would otherwise have been
applicable for such period.
2.6 NOTE
----
The Loan will be evidenced by the Borrower's promissory note due
February 1, 2005 (as may be amended or restated from time to time, the "Note"),
substantially in the form attached as Exhibit C hereto.
2.7 SECURITY
--------
The Loan will be secured by the following:
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<PAGE> 15
(a) Mortgage - a first mortgage in favor of the Authority on the
Premises substantially in the form attached as Exhibit D hereto (the
"Mortgage"), and a collateral assignment of leases and rentals with respect to
the Premises substantially in the form attached as Exhibit E hereto (the
"Collateral Assignment of Leases and Rentals"); and
(b) Guaranty - payment of the Secured Obligations will be
absolutely and unconditionally guaranteed by the Guarantor (the "Guaranty").
2.8 PREPAYMENT
----------
The principal balance of the Loan may be prepaid in whole or in part
without premium or penalty as of the due date of any scheduled monthly payment
of principal and interest. The Authority may require that any partial
prepayment be in the amount of $5,000.00 or a multiple thereof. Notwithstanding
the foregoing, in the event that the Borrower elects to prepay the Loan in
whole or in part at any time until January 1, 2000, the Borrower shall pay a
prepayment penalty equal to: ((A x 90) - (B - 316)) x $1,500 where A equals
the Loan Year (as defined below) in which the prepayment is made and B equals
the number of Employees (as defined in Section 5.16) as of the prepayment date.
For purposes hereof, a Loan Year shall be each annual period commencing as of
January 1, 1995. For example, the first Loan Year shall be the period from the
date hereof until December 31, 1995, and the second Loan Year shall be the
period from January 1, 1996 until December 31, 1996.
2.9 INTEREST AFTER JUDGMENT
-----------------------
If the Authority should obtain a judgment against the Borrower with
respect to the Secured Obligations, interest shall accrue on such judgment at
the interest rate provided for in the Note or as provided by statute, whichever
is greater at the time.
2.10 APPLICATION OF PAYMENTS
-----------------------
(a) So long as no Default has occurred and is continuing:
i) all payments shall be deemed applied in the following
order of priority: (i) to any amount not otherwise referred to in this Section
then due and payable under this Agreement or any other Financing Document, (ii)
to late charges, (iii) to accrued and unpaid interest, and finally (iv) to
principal. Any partial prepayments of principal shall be applied in inverse
order of maturity and shall not postpone the due date
- 8 -
<PAGE> 16
of any subsequent monthly installments or change the amount of such
installments; and
ii) amounts paid to the Authority pursuant to Sections
5.2 or 5.3 shall be applied consistent with the invoice, statement or demand
made for such payment.
(b) While a Default exists, all payments and other amounts
received by the Authority with respect to the Secured Obligations, whether
regular payment, prepayment or otherwise, including the proceeds of the sale or
other disposition of any Collateral, or of insurance with respect thereto, paid
to and retained by the Authority, may be applied by the Authority to pay the
Secured Obligations in such manner, order and amount as the Authority in its
sole discretion may determine, notwithstanding any characterization thereof by
the Borrower or the Guarantor or any entry with respect thereto on the books
and records of the Borrower or the Guarantor.
2.11 FAILURE TO MEET CONDITIONS
--------------------------
If at the Closing the Borrower fails to deliver the Note to the
Authority, or if any of the conditions specified in Section 3 have not been
fulfilled, the Authority may thereupon elect to be relieved of all further
obligations under this Agreement, but the Borrower and the Guarantor shall
remain liable for the costs and expenses set forth in Section 5.2 hereof.
SECTION 3
CONDITIONS OF CLOSING
The Authority's obligation to make the Loan at the Closing on the
Closing Date is subject to the following conditions precedent:
3.1 WARRANTIES AND REPRESENTATIONS TRUE; NO PROHIBITED ACTION
---------------------------------------------------------
(a) The warranties and representations of the Borrower and the
Guarantor contained in Section 4 shall be true in all respects on the Closing
Date with the same effect as though made on and as of that date.
(b) The Authority shall have received a certificate dated the
Closing Date and signed by the president or any vice president and the
secretary or any assistant secretary of the Guarantor, certifying that there
have not been any material, adverse changes to the information contained in the
Guarantor's loan application.
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<PAGE> 17
3.2 COMPLIANCE WITH THIS AGREEMENT
------------------------------
The Borrower and the Guarantor shall have performed and complied with
all agreements and conditions contained herein which are required to be
performed or complied with before or at the Closing.
3.3 OFFICER'S CERTIFICATES
----------------------
The Authority shall have received a certificate dated the Closing Date
and signed by the president or any vice president and the secretary or any
assistant secretary of the Borrower and the Guarantor, certifying as to the
Borrower's and the Guarantor's corporate approval of the execution, delivery
and performance of the Financing Documents, the officers of the Borrower and
the Guarantor and their specimen signatures, the articles of incorporation and
bylaws of the Borrower and the Guarantor and such other matters as the
Authority or its special counsel may require.
3.4 EXECUTION AND DELIVERY OF FINANCING DOCUMENTS
---------------------------------------------
The Borrower and the Guarantor shall have duly executed and delivered
to the Authority the Financing Documents, including this Agreement, the Note,
the Guaranty, the Mortgage, the Environmental Certificate and Indemnity
Agreement and the Collateral Assignment of Leases and Rentals.
3.5 PERFECTION AND PRIORITY OF MORTGAGE AND LIEN
--------------------------------------------
(a) The Borrower shall furnish to the Authority at the Closing, at
the Borrower's expense, a policy of title insurance (with copies of all
encumbrances referred to therein), in a form and issued by a title insurance
company acceptable to the Authority, insuring that the Mortgage is a valid Lien
with respect to the Premises, subject to no Lien except the Permitted
Encumbrances.
(b) The Borrower and the Guarantor shall execute and deliver to
the Authority at the Closing such other financing statements, certificates and
other documents as the Authority may reasonably request in order to give effect
to and perfect its security interest under the Mortgage and the other Financing
Documents.
3.6 OPINION OF COUNSEL
------------------
The Authority shall have received from counsel to the Borrower and the
Guarantor a closing opinion dated the Closing
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<PAGE> 18
Date in form and substance satisfactory to the Authority and its special
counsel.
3.7 APPRAISAL
---------
The Authority shall have received an appraisal of the Premises from an
appraiser acceptable to the Authority, performed as of a date acceptable to the
Authority, indicating a value of at least $11,000,000, and otherwise in form
and content satisfactory to the Authority.
3.8 CONSENTS
--------
The Authority shall have received in form satisfactory to it a written
consent from any party whose consent or approval is required in order for the
Borrower to enter into the Financing Documents.
3.9 SURVEY AND ZONING COMPLIANCE
----------------------------
The Borrower shall have furnished the Authority with a current Class
A-2 survey of the Premises, locating all improvements to the Premises in place,
prepared by a registered engineer or land surveyor acceptable to the Authority
and including an appropriate long-form certification addressed to the Authority
and the title insurer, together with either a certificate from the zoning
enforcement officer of the City of Stamford to the effect that the Premises are
in compliance with all local land use regulations, including those relating to
zoning, subdivisions and inland wetlands or an appropriate endorsement to the
title insurance policy relating to such matters.
3.10 INSURANCE
---------
The Borrower shall have furnished the Authority with a lender's
certificate of insurance and copies of the policies of insurance referred to
therein, establishing to the satisfaction of the Authority that the Borrower
has obtained property and liability insurance as required herein or in the
other Financing Documents.
3.11 ENVIRONMENTAL AUDIT
-------------------
The Authority shall have received an environmental audit of the
Premises in form and content satisfactory to the Authority. Said audit shall
be certified to the Authority by the environmental engineer. The Borrower
shall have completed, or agreed to complete within a reasonable time after
Closing, all remediation or other measures recommended by such audit.
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<PAGE> 19
3.12 GOOD STANDING CERTIFICATES; TAX CLEARANCE LETTERS
-------------------------------------------------
The Borrower and the Guarantor shall furnish the Authority with:
(a) current certificates of the Secretary of the State of Delaware
with respect to the corporate existence and good standing of the Borrower and
the Guarantor and current certificates from the Secretary of State of
Connecticut with respect to the qualification to transact a business and the
good standing of the Borrower and the Guarantor in Connecticut;
(b) a letter from the tax collector of the City of Stamford or
comparable evidence confirming that the Borrower is current in the payment of
all municipal real and personal property taxes assessed against it there; and
(c) a letter from the Department of Revenue Services of the State
of Connecticut confirming that the Borrower and the Guarantor have filed all
corporation business tax returns and sales and use tax returns required to the
date thereof and have paid the taxes shown as due thereon.
3.13 AFFIRMATIVE ACTION PLAN
-----------------------
The Borrower shall have filed with the Authority and the Authority
shall have approved an appropriate Affirmative Action Plan for the Borrower.
3.14 COMMITMENT FEE
--------------
Any balance owing with respect to the commitment fee due to the
Authority from the Borrower pursuant to the terms of the Loan Authorization
shall have been paid.
3.15 COMPLIANCE WITH LOAN AUTHORIZATION
----------------------------------
Except to the extent expressly modified by this Agreement, the
Borrower and the Guarantor shall have performed and complied with all
agreements and conditions contained in the Loan Authorization which are
required to be performed or complied with before or at the Closing.
3.16 PROCEEDINGS SATISFACTORY
------------------------
All proceedings taken in connection with the transactions contemplated
by this Agreement and all documents relating to the transactions contemplated
by this Agreement shall be satisfactory to the Authority and its special
counsel. The Authority shall
- 12 -
<PAGE> 20
have received such additional documents not inconsistent with the terms of this
Agreement as the Authority or its special counsel may reasonably request.
3.17 BUDGET CERTIFICATE
------------------
The Authority shall have received a project budget prepared by the
Borrower reasonably acceptable to the Authority showing incurred and projected
capital expenditures of approximately $18,000,000 (which amount shall include
the amount Borrower paid or will pay to the present owner of the Premises for
acquisition of the Premises) within three (3) years of the date of closing.
SECTION 4
WARRANTIES AND REPRESENTATIONS
OF THE BORROWER AND THE GUARANTOR
The Borrower and the Guarantor hereby represent and warrant as follows:
4.1 EXISTENCE AND AUTHORITY
-----------------------
(a) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware and is not in violation of any
provisions of its articles of incorporation or bylaws. The Borrower is duly
qualified to do business in all jurisdictions where the conduct of its business
or ownership of its Property requires such qualification, including, without
limitation, Connecticut.
(b) The execution, delivery and performance in accordance with
their terms of the Financing Documents are within the corporate powers of the
Borrower, have been duly authorized and approved by the Board of Directors of
the Borrower, and require no other approval or authorization.
(c) The Borrower has the power and authority, corporate and
otherwise, to own and operate its Property and to conduct its business as the
same is presently being conducted.
(d) The Guarantor is a corporation duly organized and validly
existing under the laws of the State of Delaware and is not in violation of any
provisions of its articles of incorporation or bylaws. The Guarantor is duly
qualified to do business in all jurisdictions where the conduct of its business
or ownership of its property requires such qualification.
- 13 -
<PAGE> 21
(e) The execution, delivery and performance in accordance with
their terms of the Financing Documents are within the corporate powers of the
Guarantor, have been duly authorized and approved by the Board of Directors of
the Guarantor, and require no other approval or authorization.
(f) The Guarantor has the power and authority, corporate and
otherwise, to own and operate its Property and to conduct its business as the
same is presently being conducted.
4.2 ENFORCEABILITY OF FINANCING DOCUMENTS; NO PROHIBITION OR CONSENT
----------------------------------------------------------------
(a) The Financing Documents have been duly executed and delivered by
the Borrower and the Guarantor and constitute legal, valid and binding
obligations of the Borrower and the Guarantor, enforceable in accordance with
their respective terms, except as enforcement of remedies may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally.
(b) Neither the execution, delivery and performance of the
Financing Documents, the consummation of the transactions contemplated thereby,
nor the fulfillment by the Borrower and the Guarantor of or compliance by the
Borrower and the Guarantor with the terms and conditions thereof is in
contravention of the Borrower's or Guarantor's articles of incorporation or
bylaws or any applicable law, regulation, order or judgment, or is prevented or
limited by or conflicts with or will result in a breach of or default under the
terms, conditions or provisions of any contractual or other restriction on the
Borrower or the Guarantor, evidence of its indebtedness, or agreement or
instrument of whatever nature to which the Borrower or the Guarantor is a party
or by which it or any of its Property is bound, or will result in the creation
of any other Lien against its Property.
(c) All necessary approvals, authorizations, consents, permits,
licenses and orders of all governmental entities having jurisdiction over
Borrower and/or the Guarantor, with respect to the transactions contemplated by
this Agreement or the other Financing Documents to which it is a party have
been obtained or will be obtained when required, and will be in full force and
effect when required, and no authorization, approval or consent of any other
Person is required therefor.
4.3 USE OF PROCEEDS
---------------
The proceeds of the Loan will be used by the Borrower only to finance
its acquisition of the Premises.
- 14 -
<PAGE> 22
4.4 PREMISES
--------
The Premises are subject only to Permitted Encumbrances and are not
subject to any other Lien.
4.5 PERSONAL PROPERTY
-----------------
The Borrower and the Guarantor have good and marketable title to the
Personal Property which they purport to own and which is used by them in the
conduct of their business.
4.6 PERFECTION AND PRIORITY OF LIENS
--------------------------------
The Mortgage and the Collateral Assignment of Leases and Rentals, when
recorded with the City Clerk of the City of Stamford, Connecticut, will create
a valid and direct lien on all of the Premises, subject only to Permitted
Encumbrances. No further action is necessary to perfect or make effective the
security interest in the Collateral of the Borrower intended to be created by
the Mortgage and the other Financing Documents.
4.7 COMPLIANCE WITH LAWS
--------------------
The Borrower and the Guarantor are in compliance with all applicable
federal, state and local laws, rules and regulations affecting it, its Property
or its business, including those relating to land use, including zoning,
subdivision and inland wetlands, health, occupational safety, and environmental
quality, including, without limitation, all Environmental Laws and the
Americans with Disabilities Act. Except in compliance with all Environmental
Laws, there are no Hazardous Materials at, upon, under or within the Premises.
4.8 NO LITIGATION
-------------
There are no actions, suits or proceedings pending (nor, to its
knowledge, any actions, suits or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to the Borrower or the
Guarantor or any of their Property in any court or before any arbitrator of any
kind or before or by any governmental body, which are reasonably likely, if
adversely determined, singly or in the aggregate, to have a materially adverse
effect on the business, assets, liabilities, financial condition, day to day
operations of the business or business prospects of Borrower or the Guarantor
or on their ability to perform their obligations hereunder or under the other
Financing Documents to which they are a party; and the Borrower
- 15 -
<PAGE> 23
and the Guarantor are not in default with respect to any order of any court,
arbitrator or governmental body.
- 16 -
<PAGE> 24
4.9 REGULATION U, ETC.
------------------
The Borrower and the Guarantor do not own or have any present
intention of acquiring any "margin stock" within the meaning of Regulation U
(12 CFR Part 221) of the Board of Governors of the Federal Reserve System
(herein called "margin stock"). None of the proceeds of the Loan will be used,
directly or indirectly, by the Borrower or the Guarantor for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry, any margin
stock or for any other purpose which might constitute the transactions
contemplated hereby a "purpose credit" within the meaning of said Regulation U,
or cause this Agreement to violate Regulation U, Regulation T, Regulation X, or
any other regulation of the Board of Governors of the Federal Reserve System or
the Securities Exchange Act of 1934.
4.10 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
-----------------------------------------------
The terms used in this subsection 4.10 of this Agreement shall have
the meanings assigned thereto in the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the Internal
Revenue Code of 1986, as amended (the "IRC"), and the term "Affiliated Company"
shall mean the Borrower, the Guarantor and all corporations, partnerships,
trades or businesses (whether or not incorporated) which constitute a
controlled group of corporations with the Borrower or the Guarantor, an
affiliated service group or other affiliated group, within the meaning of
Section 414(b), Section 414(c), Section 414(m) or Section 414(o), respectively,
of the IRC or Section 4001 of ERISA. Each employee benefit plan sponsored by
an Affiliated Company and, to the best of the Borrower's and the Guarantor's
knowledge, each multiemployer plan to which any Affiliated Company makes
contributions, is in material compliance with applicable provisions of ERISA
and the IRC. No Affiliated Company has incurred any material liability to the
Pension Benefit Guaranty Corporation ("PBGC") or any employee benefit plan on
account of (i) any failure to meet the contribution requirements of any such
plan, (ii) any failure to meet minimum funding requirements, (iii) the
occurrence of a prohibited transaction under ERISA or the IRC, (iv) termination
of a single employer plan, (v) partial or complete withdrawal from a
multiemployer plan, or (vi) the insolvency, reorganization or termination of
any multiemployer plan, and no event has occurred or conditions exist which
present a material risk that any Affiliated Company will incur any material
liability on account of any of the foregoing circumstances. The consummation
of the transactions contemplated by this Agreement will not result in any
prohibited transaction under ERISA or the IRC.
- 17 -
<PAGE> 25
4.11 TAXES
-----
All tax returns required to be filed by the Borrower and/or the
Guarantor in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges or levies upon the Borrower
and/or the Guarantor, or upon any of its Property, income or franchises which
are due and payable have been paid, or adequate reserves have been established.
The Borrower and the Guarantor know of no proposed additional tax assessment
against it, and the Borrower and the Guarantor have adequately provided or
reserved on its books for taxes for all open years and for its current fiscal
year.
4.12 FINANCIAL STATEMENTS; NO ADVERSE CHANGE
---------------------------------------
(a) The Borrower and the Guarantor have furnished to the Authority
its most recent financial statements. Such statements (including in each case
related schedules and notes) are complete and correct and present fairly, in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, the consolidated financial position of
Borrower as of such date and its or his results of operations, retained
earnings, changes in financial position and profit and loss for such period.
Except as disclosed or reflected in such balance sheets or statements, Borrower
and the Guarantor have not had any liabilities, contingent or otherwise, or
unrealized or anticipated losses of a nature required under applicable
accounting principles to be disclosed in a balance sheet or in the notes
thereto, which, in any case, would be material to it.
(b) Since the date of the most recent balance sheets delivered by
it to the Authority, there has been no material adverse change in the
Borrower's and/or the Guarantor's business, assets, liabilities, financial
condition or results of operations.
4.13 EVENT OF DEFAULT
----------------
No Event of Default has occurred or is continuing and the Borrower and
the Guarantor do not have any knowledge of any currently existing facts or
circumstances which, with the passage of time or the giving of notice, or both,
would constitute an Event of Default.
4.14 DISCLOSURE
----------
Neither this Agreement, any of the Financing Documents nor any
document, certificate or statement furnished by the Borrower or the Guarantor
or on their behalf to the Authority or their special counsel pursuant hereto or
required hereunder contains
- 18 -
<PAGE> 26
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained herein and therein not
misleading.
4.15 FRANCHISES, PERMITS AND OTHER RIGHTS
------------------------------------
The Borrower and the Guarantor have all material franchises, permits,
licenses and other similar authorizations necessary for the conduct of its
business as now being conducted by it and believes it can obtain any similar
authorization necessary for the conduct of its business as planned to be
conducted, and the Borrower and the Guarantor are not in violation, nor will
the transactions contemplated by this Agreement or the other Financing
Documents to which it is a party cause a violation, of the terms or provisions
of any such material franchise, permit, license or other similar authorization.
4.16 PRINCIPAL OFFICE
----------------
The Borrower's chief executive office and principal place of business
are at 777 Long Ridge Road, Stamford, Connecticut, and all of its books and
records are held at such location. The Guarantor's chief executive office and
principal place of business are at 777 Long Ridge Road, Stamford, Connecticut,
and all of its books and records are held at such location.
4.17 COMPLIANCE WITH LOAN DOCUMENTS
------------------------------
The Borrower and the Guarantor are in compliance with all of the terms
and conditions of each note, mortgage, security agreement, instrument and
agreement evidencing and/or securing indebtedness of the Borrower.
4.18 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
------------------------------------------------
All statements contained in any certificate, financial statement,
legal opinion or other instrument delivered by or on behalf of Borrower and/or
the Guarantor pursuant to or in connection with this Agreement shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made at and as of the date of
this Agreement, and at and as of the Closing Date. All representations and
warranties made under this Agreement shall survive the execution and delivery
hereof and shall not be deemed to have been waived by any investigation made or
not made by the Authority.
SECTION 5
COVENANTS OF THE BORROWER AND THE GUARANTOR
- 19 -
<PAGE> 27
The Borrower and the Guarantor covenant that on and after the Closing
Date, and for so long as any part of the Secured Obligations shall remain
outstanding:
- 20 -
<PAGE> 28
5.1 PAYMENT OF LOAN
---------------
The Borrower and the Guarantor will pay the Note and all other Secured
Obligations according to their terms and comply with each provision of this
Agreement and each provision of the other Financing Documents binding upon
them.
5.2 EXPENSES AND ADDITIONAL SECURED OBLIGATIONS
-------------------------------------------
(a) The Borrower and the Guarantor (promptly, and in any event within
thirty (30) days of receiving any invoice, statement or demand therefor) will
pay all of the out-of-pocket expenses of the Authority, including the
reasonable fees and disbursements of special counsel to the Authority, relating
to:
i) this Agreement and the transactions contemplated
hereby, including the Closing;
ii) perfecting, sustaining or defending the security
interest of the Authority in the Borrower's Property under the Mortgage and the
other Financing Documents;
iii) protecting, maintaining and preserving the Collateral
following an Event of Default, including the payment by the Authority as deemed
necessary by it in its sole discretion of insurance premiums, taxes, expenses
of maintenance and repair, and the fees and disbursements of custodians,
receivers, appraisers, liquidators and others retained with respect to the
Collateral; and
iv) collection of the Note and enforcement of the rights
of the Authority under the Financing Documents following an Event of Default,
including foreclosure of the Mortgage.
(b) The Borrower and the Guarantor shall pay the reasonable fees
and expenses of special counsel to the Authority in connection with the
preparation of the Financing Documents, or otherwise in anticipation of the
Loan, whether or not the Loan is made.
(c) Amounts due to the Authority from the Borrower and/or the
Guarantor under this Section 5.2 remaining unpaid thirty (30) days after the
Borrower and/or the Guarantor has received an invoice, statement or demand
therefor shall bear interest at the default rate provided for in the Note and
shall be considered an addition to the Secured Obligations secured by and
entitled to the benefit of the Mortgage and the other Financing Documents.
5.3 INDEMNIFICATION
---------------
- 21 -
<PAGE> 29
Whether or not the transactions contemplated hereby shall be
consummated, the Borrower and the Guarantor agree within ten (10) days of
demand of the Authority to pay, reimburse, indemnify, defend and hold the State
of Connecticut, the Authority, their
- 22 -
<PAGE> 30
respective directors, employees, representatives and agents (collectively
called the "Indemnitee") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, legal process,
suits, claims, costs, expenses and reasonable disbursements (including, without
limitation, the reasonable fees and disbursements of counsel) (collectively,
the "Indemnified Claims"), which may be imposed on, suffered or incurred by, or
asserted against any such Indemnitee, in any manner relating to or arising out
of the Premises, this Agreement or any of the other Financing Documents, the
transactions contemplated hereby or thereby, or the use or intended use of the
proceeds of the Loan, including, without limitation, any Indemnified Claims
relating to or arising out of any breach by the Borrower or the Guarantor of
any of its obligations hereunder or under any of the other Financing Documents;
provided that the Borrower and the Guarantor shall not have any obligation
hereunder with respect to Indemnified Claims to the extent caused solely by or
arising solely as a result of the Indemnitee's gross negligence or willful
misconduct. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower and the Guarantor agree
that it shall contribute the maximum portion they are permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Claims incurred by the Indemnitee or any of them. The provisions of this
Section 5.3 shall survive the payment in full of the principal of the Note,
interest thereon and all other amounts payable under this Agreement, the Note
and the other Financing Documents and termination of this Agreement.
5.4 EXISTENCE AND AUTHORITY
-----------------------
(a) The Borrower will preserve and maintain its existence in the
State of Delaware and its qualification in the State of Connecticut, and will
preserve and maintain its rights, franchises, licenses and privileges necessary
to the conduct of its business. The Borrower will not, without the Authority's
prior written consent in each instance, directly or indirectly, (A) liquidate
or dissolve itself (or suffer any liquidation or dissolution) or otherwise
wind-up; or (B) sell, lease, abandon, transfer or otherwise dispose of all or
any substantial part of its assets, Property or business; or (C) merge into or
consolidate with any other entity or permit any other entity to consolidate
with or merge into it; or (D) undergo any other form of reorganization or
change the nature of the business conducted by it. As to (B)(except the
Premises), (C) and (D) herein, the Authority agrees not to unreasonably
withhold its consent.
- 23 -
<PAGE> 31
(b) The Guarantor will preserve and maintain its existence in the
State of Delaware and will preserve and maintain its rights, franchises,
license and privileges necessary to the conduct of its business. The Guarantor
will not, without the Authority's
- 24 -
<PAGE> 32
prior written consent in each instance, directly or indirectly, (A) liquidate
or dissolve itself (or suffer any liquidation or dissolution) or otherwise
wind-up; or (B) sell, lease, abandon, transfer or otherwise dispose of all or
any substantial part of its assets, property or business; or (C) merge into or
consolidate with any other entity or permit any other entity to consolidate
with or merge into it; or (D) undergo any other form of reorganization or
change the nature of the business conducted by it. As to (B)(except the
Premises), (C) and (D) herein, the Authority agrees not to unreasonably
withhold its consent.
5.5 TAXES
-----
The Borrower and the Guarantor will promptly pay and discharge when
due and payable all taxes, assessments and governmental charges levied or
imposed upon them, their Property, or any part thereof, or upon their income or
profits, or any part thereof, as well as all lawful claims for labor, materials
and supplies, which, if unpaid, might by law become a Lien or charge upon their
Property, provided that such items need not be paid while being contested by
the Borrower or the Guarantor, as the case may be, in good faith and by
appropriate legal proceedings so long as adequate book reserves have been
established with respect thereto and the Borrower's and the Guarantor's title
to, and their right to use, their Property is not materially and adversely
affected thereby.
5.6 LIENS; PAYMENT OF DEBTS
-----------------------
(a) The Borrower and the Guarantor will not either directly or
indirectly, incur, create, assume or permit to exist any Lien on the Premises
or any other Collateral other than Permitted Encumbrances.
(b) The Borrower and the Guarantor shall pay all of their debts as
they become due, provided that Borrower and the Guarantor shall have a
reasonable period of time to pay any debts after such debts become due.
However, the debt(s) need not be paid while being contested by the Borrower and
the Guarantor in good faith and/or by appropriate legal proceedings so long as
adequate book reserves have been established with respect thereto and the
Borrower's and Guarantor's title to, and its right to use its Property is not
materially and adversely affected thereby.
5.7 MAINTENANCE OF PROPERTY AND INSURANCE
-------------------------------------
(a) The Borrower will maintain the Collateral in good condition as
provided in the Mortgage.
- 25 -
<PAGE> 33
(b) The Borrower will maintain, or cause to be maintained, in
effect all insurance required by the Mortgage.
- 26 -
<PAGE> 34
(c) On or before the Closing Date and concurrently with the
renewal of each insurance policy (but in no event less frequently than once
each calendar year beginning with the year 1995), the Borrower shall furnish to
the Authority a certificate of an authorized representative of the insurers
describing in reasonable detail the insurance then carried and maintained on
the Collateral and certifying that the insurance complies with the terms
hereof. The Borrower shall advise the Authority in writing promptly of any
default in the payment of any premium and of any other act or omission on the
part of the Borrower which might invalidate or render unenforceable, in whole
or in part, any insurance on the Collateral. The Borrower shall also advise
the Authority in writing at least thirty (30) days prior to the expiration or
termination date of any insurance carried and maintained on the Collateral
pursuant to this Section that such insurance has been renewed. In the event
that the Borrower shall fail to maintain insurance as herein provided, the
Authority may at its sole option provide such insurance and, in such event, the
Borrower shall, upon demand, promptly reimburse the Authority for the cost
thereof, and such costs shall be deemed Secured Obligations and entitled to the
benefits of the Lien of the Financing Documents.
5.8 COMPLIANCE WITH LAWS
--------------------
The Borrower and the Guarantor will comply with all applicable
federal, state and local laws and regulations affecting it, its Property and
its business, including those relating to land use, including zoning,
subdivision and inland wetlands, health, occupational safety, and environmental
quality, including, without limitation, all Environmental Laws and the
Americans with Disabilities Act. The Borrower and the Guarantor will not
introduce or store any Hazardous Materials at the Premises, except in
compliance with all applicable Environmental Laws.
5.9 FINANCIAL STATEMENTS
--------------------
(a) The Borrower and the Guarantor will at all times keep accurate and
complete records and books of account with respect to all of the Borrower's and
the Guarantor's business activities in which full and correct entries of all
its business transactions will be made, in accordance with sound accounting
practices and generally accepted accounting principles, such records and
accounts to be maintained at their offices at 777 Long Ridge Road, Stamford,
Connecticut.
(b) The Borrower and the Guarantor shall furnish to the Authority
(i) within ninety (90) days after the end of each fiscal year, the balance
sheet of the Borrower and the Guarantor
- 27 -
<PAGE> 35
as of the end of such fiscal year, and the related statements of earnings and
retained earnings and changes in financial position for the year then ended,
setting forth in each case in comparative form the corresponding figures for
the preceding fiscal year in reasonable detail, including all supporting
schedules and comments, all of which shall be prepared in accordance with
generally accepted accounting principles consistently maintained by the
Borrower and the Guarantor, and audited by independent public accountants of
recognized standing, selected by the Borrower; (ii) within ninety (90) days
after the end of each fiscal year, a statement from the independent public
accountants of the Borrower and the Guarantor indicating that, in the
preparation of such statements, said accountants have obtained no knowledge of
any default by the Borrower and/or the Guarantor in any obligation to the
Authority, or disclosing all defaults of which the accountants have obtained
knowledge; (iii) within sixty (60) days after the end of each of the first
three (3) fiscal quarters, quarterly compiled financial statements of the
Borrower and the Guarantor certified as true and complete by the Chief
Financial Officer of the Borrower and the Guarantor or a copy of SEC form 10-Q
signed by an officer of the Borrower and the Guarantor; and (iv) such other
financial information and statements relating to the Borrower and/or the
Guarantor as the Authority reasonably may request from time to time.
(c) The Borrower and the Guarantor shall permit, on reasonable
notice, representatives of the Authority, (i) to visit and inspect their
properties, whether in its possession or otherwise, (ii) to reasonably inspect
and make extracts from their books and records, whether in its possession or
otherwise, and (iii) to discuss with their principal officers and
representatives their affairs, finances and accounts.
5.10 PROTECTION OF FINANCING DOCUMENTS
---------------------------------
At Borrower's and Guarantor's own cost and expense, the Borrower and
the Guarantor shall cause to be promptly and duly taken, executed, acknowledged
or delivered all such further acts, conveyances, documents, filings,
recordations, registrations, security interests and assurances in order to
perfect and preserve the Authority's rights hereunder and under the Financing
Documents and in order to carry out effectively the intent and purpose of this
Agreement and the Loan Authorization, including, without limitation, all such
further filings, recordations and registrations to create, perfect, preserve
and maintain the priority of the security interests and related rights of the
Authority created by the Financing Documents. The Borrower and the Guarantor
shall on request furnish to the Authority an opinion of counsel satisfactory to
the Authority or other
- 28 -
<PAGE> 36
evidence satisfactory to the Authority of each such filing, recordation and
registration.
5.11 PLACE OF BUSINESS; NAME
-----------------------
Without thirty (30) days' prior written notice to the Authority, the
Borrower and the Guarantor shall not (A) move its chief executive office, its
principal place of business or the location of its books and records from 777
Long Ridge Road, Stamford, Connecticut, (B) change its name, or (C) move any of
the Collateral.
5.12 PERMITS AND LICENSES
--------------------
The Borrower and the Guarantor shall obtain and maintain in full force
and effect each approval, authorization, consent, notice, registration, filing
or other action with any governmental authority necessary in connection with
the transactions contemplated by this Agreement and the Financing Documents and
the operation of its business.
5.13 TRANSACTIONS WITH AFFILIATES
----------------------------
The Borrower and the Guarantor will not, directly or indirectly, enter
into any transaction with any affiliate of the Borrower and/or the Guarantor on
terms that are less favorable to the Borrower and/or the Guarantor than those
which might be obtained at the time from Persons who are not such an affiliate
without having obtained the consent of the Authority which consent shall not be
unreasonably withheld, delayed or conditioned.
5.14 RELOCATION
----------
The Borrower and the Guarantor hereby acknowledge and agree that this
Agreement has been entered into subject to the terms of Section 32-5a of the
Connecticut General Statutes, as amended by Public Act 93-218 and Public Act
93-360. Section 32-5a:
(a) provides that a business organization receiving financial
assistance from the Authority shall not relocate outside of the State of
Connecticut for (i) ten (10) years after receiving such assistance from the
Authority or (ii) during the term that any loan constituting such financial
assistance is outstanding, whichever is longer (such period being hereafter
referred to as the "Benefit Period"), unless the full amount of the assistance
is repaid to the Authority and a penalty equal to five percent (5%) of the
total assistance received is paid to the Authority; and
- 29 -
<PAGE> 37
(b) provides that if such business organization relocates within
the State of Connecticut during the Benefit Period, such business organization
shall offer employment at the new location to its employees from the original
location if such employment is available.
The Borrower and the Guarantor hereby covenant and agree that (a) if either or
both of them relocate outside of the State of Connecticut at any time during
the Benefit Period, the Borrower and the Guarantor shall immediately pay to the
Authority (i) all outstanding principal of the Note, accrued interest thereon
and all other amounts payable to the Authority under this Agreement, the Note
and other Financing Documents, if any, plus (ii) a penalty equal to five
percent (5%) of the original principal amount of the Loan (whether or not any
amount then remains outstanding under this Agreement, the Note or the other
Financing Documents); and (b) if either or both of them relocate within the
State of Connecticut during the Benefit Period, the Borrower shall offer
employment at the new location to its employees from the prior location, if
such employment is available. As used herein, the term "relocate" shall have
the meaning given such term by Connecticut General Statutes Section 32-5a, and
regulations related thereto, as the same may be amended from time to time. If
the Borrower decides to relocate within or outside of the State of Connecticut
at any time during the Benefit Period, the Borrower agrees to provide the
Authority with immediate written notice when such decision is made, together
with such other information concerning such relocation as the Authority may
request. The provisions of this Section 5.14 shall survive the payment in
full of the principal of the Note, interest thereon and all other amounts
payable under this Agreement, the Note and the other Financing Documents and
termination of this Agreement.
5.15 NOTICE OF ADVERSE CHANGE
------------------------
(a) DEFAULT UNDER THIS AGREEMENT. Within ten business (10) days
after becoming aware of the existence or occurrence of a Default under this
Agreement, the Borrower and the Guarantor shall provide the Authority with a
written notice identifying the Default and specifying the corrective action the
Borrower and the Guarantor are taking with respect thereto.
(b) OTHER DEFAULTS. Within ten (10) days after becoming aware
that the holder of any evidence of the Borrower's or the Guarantor's
indebtedness, other than the Authority, has given notice or has taken action
with respect to any default or claimed default under such evidence of
indebtedness, the Borrower and the Guarantor shall provide the Authority with a
written notice
- 30 -
<PAGE> 38
specifying the notice given or action taken by such holder, the nature of the
default or claimed default, and the corrective action the Borrower and the
Guarantor are taking with respect thereto.
(c) OTHER ADVERSE CHANGES. The Borrower and the Guarantor will
promptly, and in any event within ten (10) business days after becoming aware
thereof, notify the Authority in writing of any pending litigation, or other
material adverse changes in the Borrower's or the Guarantor's Property,
business or financial condition. The Borrower and the Guarantor will provide
the Authority with such additional information with respect to any such adverse
change as the Authority, in its judgment, may request.
- 31 -
<PAGE> 39
5.16 CREATION OF EMPLOYMENT
----------------------
The Borrower and the Authority agree that the Borrower employed 316
Employees as of August 8, 1994. The Borrower agrees that by January 1, 2000,
the Borrower shall employ 816 or more Employees. For the purposes hereof, an
"Employee" shall mean an employee of the Borrower who works thirty (30) or more
hours per week and works in Connecticut. "Works in Connecticut" shall mean
that the employee is paid out of Borrower's principal office in Stamford,
Connecticut. An employee of an affiliate of Borrower shall be an Employee
provided that: 1) the employee was employed by the affiliate prior to the
affiliation between the affiliate and the Borrower; 2) the employee was not
working in Connecticut prior to the affiliation between the affiliate and the
Borrower; 3) the employee works thirty (30) or more hours per week; 4) the
employee works in Connecticut after the affiliation between the affiliate and
the Borrower; and 5) the affiliation between the affiliate and the Borrower
occurs after August 8, 1994. For the purposes hereof, an "affiliate" shall be
a Person controlled by, in control of, or in common control with the Borrower.
An Employee shall not include an employee who was working in Connecticut prior
to being an employee of the Borrower and who becomes an employee of the
Borrower because the Borrower has acquired an interest in or the assets of
another entity or enters into an agreement regarding employment with another
entity.
The Borrower agrees to provide a copy of the State of Connecticut
Employee Quarterly Earnings Report, form UC-5a, to the Authority when Borrower
files such form with the State of Connecticut. The Borrower shall provide to
the Authority such additional information as the Authority may reasonably
request in order to verify the number of full-time employees working at the
Premises.
The Borrower covenants and agrees that if by January 1, 2000, the
Borrower does not employ 666 or more Employees, then upon demand of the
Authority, the Borrower shall immediately pay to the Authority all outstanding
principal of the Note, accrued interest thereon and all other amounts payable
to the Authority under this Agreement, the Note and other Financing documents,
if any.
The Borrower covenants and agrees that if by January 1, 2000, the
Borrower does not employ 816 or more Employees and the Authority has not
exercised its rights pursuant to the foregoing paragraph, then:
(a) The Borrower shall immediately pay to the Authority as
prepayment of principal under the Loan a sum equal to: a) 816
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<PAGE> 40
minus the number of Employees as of January 1, 2000; multiplied by b) Twenty
Thousand and 00/100 Dollars ($20,000.00);
(b) The Borrower shall immediately pay to the Authority as
additional interest a sum equal to: a) 766 minus the number of Employees as of
January 1, 2000; multiplied by b) One Thousand Five Hundred and 00/100 Dollars
($1,500.00), provided that Borrower shall have no obligation under this clause
(b) if the number of Employees as of January 1, 2000 is between 766 and 815;
(c) Notwithstanding the provisions of Section 2.4, the outstanding
principal balance of the Note shall bear interest from January 1, 2000 at a
rate equal to: a) LIBOR minus two (2) percentage points; plus (b) ((816-Y)/160)
percentage points, rounded up to the nearest one-eighth of a percentage point,
where Y equals the number of Employees as of January 1, 2000.
5.17 PRESS RELEASES AND OTHER INSTITUTIONAL INFORMATION
--------------------------------------------------
The Borrower and the Guarantor shall provide to the Authority a copy
of all financial press releases issued by the Borrower and/or the Guarantor.
SECTION 6
DEFAULT AND REMEDIES
6.1 EVENTS OF DEFAULT
-----------------
Each of the following is an Event of Default under this Agreement:
(a) the failure of the Borrower to make payment of any installment
of principal and/or interest under the Note within ten (10) days of when due;
(b) the failure of the Borrower or the Guarantor to pay any amount
due the Authority pursuant to Section 2.5, Section 5.2 or Section 5.3 or any
other Secured Obligations when due;
(c) the failure of the Borrower to keep in force any insurance
required by this Agreement or any of the other Financing Documents;
(d) the actual or threatened waste, removal or demolition of, or
material structural alteration to any significant part of the Collateral,
except as may be permitted in the Financing Documents;
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<PAGE> 41
(e) the inaccuracy in any material respect of any representation
made by or on behalf of the Borrower or the Guarantor in the Loan Application,
this Agreement or any of the other Financing Documents;
(f) the material breach by the Borrower or the Guarantor of any of
its warranties in Section 4 of this Agreement or in any of the other Financing
Documents;
(g) the failure of the Borrower or the Guarantor to observe or
perform any other covenant or agreement of the Borrower or the Guarantor in
this Agreement, including but not limited to Section 5, or in any of the other
Financing Documents within thirty (30) days of written notice of such failure
from the Authority;
(h) [Reserved]
(i) the failure of the Borrower or the Guarantor generally to pay
its debts after such debts become due, provided that Borrower and the Guarantor
shall have a reasonable period of time to pay any debts after such debts become
due. However, the debt(s) need not be paid while being contested by the
Borrower and the Guarantor in good faith and/or by appropriate legal
proceedings so long as adequate book reserves have been established with
respect thereto and the Borrower's and Guarantor's title to, and its right to
use its Property is not materially and adversely affected thereby;
(j) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Borrower or the Guarantor in an involuntary case
under the federal bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Borrower or the Guarantor or for any
substantial part of the Borrower's or the Guarantor's Property, or the issuance
of an order for the winding-up or liquidation of the affairs of the Borrower or
the Guarantor and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days; or upon the commencement by
the Borrower or the Guarantor of a voluntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or the consent by the Borrower or
the Guarantor to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Borrower or the Guarantor or for any substantial part of the
Property of the Borrower or the Guarantor or the making by the Borrower or the
Guarantor of any assignment for the benefit of
- 34 -
<PAGE> 42
creditors, or the taking of corporate action by the Borrower or the Guarantor
in furtherance of any of the foregoing;
(k) a final, unappealed or unbonded judgment shall be entered
against the Borrower or the Guarantor by any court for the payment of money
which is not satisfied within thirty (30) days after judgment and which,
together with all such other outstanding judgments against the Borrower or the
Guarantor exceeds $50,000 in the aggregate, or a tax Lien shall be filed, or a
warrant of attachment or execution or similar process shall be issued or
levied, against the Collateral, which together with other such tax Liens or
process against the Collateral, exceeds a value of $50,000 in the aggregate;
(l) this Agreement or any of the other Financing Documents shall
fail to be the legal, valid, binding, and enforceable obligation of the
Borrower or the Guarantor;
(m) the failure of the Guarantor to maintain in effect the
affirmative action plan previously approved by the Authority;
(n) there occurs an event of default beyond any applicable notice
and grace or cure period, if any, under any other Financing Document; or
(o) relocation (as defined in Section 5.14 hereof) of the Borrower
or the Guarantor (i) outside of Connecticut or (ii) within Connecticut without
offering employment to its employees from the prior location if such employment
is available.
(p) the failure of the Borrower to employ 666 or more Employees by
January 1, 2000.
6.2 REMEDIES UPON EVENT OF DEFAULT
------------------------------
In addition to, and not in limitation of, any other term of this
Agreement or any other right or remedy hereunder or in accordance with law or
equity, upon the occurrence of any Event of Default:
(a) the whole of the principal sum and accrued interest on the
Note, and all other Secured Obligations, shall, automatically with respect to
an Event of Default under Section 6.1(j) otherwise at the option of the
Authority, and without notice, demand or legal process of any kind, become and
be immediately due and payable;
(b) the Authority may proceed to enforce the performance or
observance of any obligations, agreements or covenants of the Borrower or the
Guarantor in this Agreement or any of the other
- 35 -
<PAGE> 43
Financing Documents, to collect the amounts then due and thereafter to become
due, and to foreclose the Mortgage or otherwise enforce and realize upon its
security interest in the Collateral; and
(c) in connection with any of the foregoing, the Authority may
from time to time exercise any rights and remedies and take any action
available to it at law or in equity, including pursuant to the Code, in
addition to and not in lieu of, any rights and remedies provided for in this
Agreement or in any of the other Financing Documents.
6.3 REINSTATEMENT
-------------
In the event that any Event of Default is waived in writing by the
Authority, then such Event of Default shall be annulled and the parties hereto
shall be restored to their former rights hereunder, but no such waiver shall
extend to any subsequent or other Event of Default or impair any other right of
the Authority.
6.4 MARSHALLING
-----------
The Authority shall not be compelled to release, or be prevented from
foreclosing or enforcing the Mortgage and/or the other Financing Documents upon
all or any part of the Collateral unless the entire Secured Obligations shall
be paid, and shall not be required to accept any part of the Collateral, as
distinguished from the whole, as payment of or upon the Secured Obligations or
to allow any apportionment of the Secured Obligations to or among any separate
parts of the Collateral.
6.5 PARTIAL RELEASE
---------------
The Authority, without notice, and without regard to the
consideration, if any, paid therefor, and notwithstanding the existence at that
time of any inferior Liens thereon, may release any part of the Collateral from
the security interest of the Mortgage and the other Financing Documents or any
Person primarily or contingently liable for the Secured Obligations, or may
agree to extend the time for payment thereof, without in any way affecting the
existence or priority of the security interest of the Mortgage and the other
Financing Documents upon any part of the Collateral or the liability of any
Person not expressly released.
6.6 NO WAIVER
---------
No delay or failure on the part of the Authority in the exercise of
any right or remedy under this Agreement or any of
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<PAGE> 44
the other Financing Documents shall operate as a waiver thereof, and no single
or partial exercise by the Authority of any such right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
6.7 REMEDIES CUMULATIVE
-------------------
The rights and remedies provided in this Agreement and the other
Financing Documents are cumulative, and the Authority may recover judgment
thereon, issue execution therefor, and resort to every other right or remedy
available at law or in equity, without first exhausting and without impairing
or affecting the security of or any right or remedy afforded by this Agreement
or any of the other Financing Documents, and no enumerated or special rights or
powers herein shall be construed to limit any grant of general rights or powers
or take away or limit any rights of the Authority under applicable law.
- 37 -
<PAGE> 45
6.8 WAIVER OF RIGHTS
----------------
THE BORROWER AND THE GUARANTOR ACKNOWLEDGE THAT THIS AGREEMENT AND THE
UNDERLYING TRANSACTIONS GIVING RISE HERETO CONSTITUTE COMMERCIAL BUSINESS
TRANSACTED WITHIN THE STATE OF CONNECTICUT. IN THE EVENT OF ANY LEGAL ACTION
BETWEEN THE BORROWER AND/OR THE GUARANTOR AND THE AUTHORITY HEREUNDER, THE
BORROWER AND THE GUARANTOR HEREBY EXPRESSLY WAIVE ANY RIGHTS WITH REGARD TO
NOTICE, PRIOR HEARING AND ANY OTHER RIGHTS THEY MAY HAVE UNDER THE CONNECTICUT
GENERAL STATUTES, CHAPTER 903a, AS NOW CONSTITUTED OR HEREAFTER AMENDED, OR
UNDER ANY OTHER STATE OR FEDERAL LAW OR CONSTITUTION WITH RESPECT TO
PREJUDGMENT REMEDIES, AND THE AUTHORITY MAY INVOKE ANY PREJUDGMENT REMEDY
AVAILABLE TO IT, INCLUDING, BUT NOT LIMITED TO, GARNISHMENT, ATTACHMENT,
FOREIGN ATTACHMENT AND REPLEVIN, WITH RESPECT TO ANY TANGIBLE OR INTANGIBLE
PROPERTY (WHETHER REAL OR PERSONAL) OF THE BORROWER OR THE GUARANTOR TO ENFORCE
THE PROVISIONS OF THIS AGREEMENT, WITHOUT GIVING THE BORROWER OR THE GUARANTOR
ANY NOTICE OR OPPORTUNITY FOR A HEARING.
SECTION 7
MISCELLANEOUS
7.1 GOVERNING LAWS
--------------
This Agreement and each of the other Financing Documents (unless any
such document expressly provides otherwise) shall be governed by and construed
in accordance with the laws of the State of Connecticut.
7.2 NOTICES
-------
Notices and other communications under this Agreement or any of the
other Financing Documents shall be deemed sufficiently given upon receipt by
Addressee. Delivery of the notices can be by personal delivery or by
registered or certified mail, postage prepaid, Return Receipt Requested or by
overnight delivery service addressed as follows:
(a) if to the Authority:
Connecticut Development Authority
845 Brook Street
Rocky Hill, CT 06067
Attention: Loan Administration
or to such other address as the Authority shall have furnished in writing to
the Borrower and the Guarantor, or
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<PAGE> 46
(b) if to the Borrower:
HYPERION SOFTWARE CORPORATION
777 Long Ridge Road
Stamford, CT 06902
Attention: Chief Financial Officer
or to such other address as the Borrower shall have furnished in writing to the
Authority, or:
(c) if to the Guarantor:
IMRS INC.
777 Long Ridge Road
Stamford, CT 06902
Attention: Chief Financial Officer
or to such other address as the Guarantor shall have furnished in writing to
the Authority.
7.3 AMENDMENT AND WAIVER
--------------------
(a) This Agreement and any of the other Financing Documents may be
amended, and the observance of any provision hereof or thereof may be waived,
but only by an appropriate instrument in writing signed, in the case of an
amendment, by the Authority and the Borrower and the Guarantor, and in the case
of a waiver, by the party against whom the waiver is to operate.
(b) No such amendment or waiver shall extend to or affect any
provision of this Agreement or any of the other Financing Documents, or any
Default or Event of Default, not expressly amended or waived.
7.4 DUPLICATE ORIGINALS
-------------------
This Agreement and each of the other Financing Documents may be signed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
7.5 SEVERABILITY
------------
If any provision of this Agreement or any of the other Financing
Documents or the application thereof to any Person or circumstance, shall to
any extent be invalid or unenforceable, the remainder of this Agreement or such
Financing Document, or the application of such provision to other Persons or
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<PAGE> 47
circumstances, shall not be affected thereby, and each provision shall be valid
and enforceable to the fullest extent permitted by law.
7.6 BINDING EFFECT
--------------
All of the provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, provided that the Borrower and the Guarantor may not
assign or transfer any of their rights, duties or obligations under this
Agreement or under the other Financing Documents without the prior written
consent of the Authority in each instance, which consent the Authority may
withhold in its sole and absolute discretion.
7.7 TERM OF THIS AGREEMENT
----------------------
This Agreement and the other Financing Documents shall continue in
full force and effect as long as any Secured Obligations remain outstanding.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HYPERION SOFTWARE CORPORATION
By:
----------------------------
Lucy Ricciardi
Its Vice President and
Chief Financial Officer
IMRS INC.
By:
---------------------------
Lucy Ricciardi
Its Vice President and
Chief Financial Officer
[Signatures continued on next page]
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<PAGE> 48
CONNECTICUT DEVELOPMENT AUTHORITY
By:
-----------------------------
- 41 -
<PAGE> 49
LIST OF EXHIBITS
---- -- --------
EXHIBIT A PREMISES
EXHIBIT B PERMITTED ENCUMBRANCES
EXHIBIT C NOTE
EXHIBIT D MORTGAGE
EXHIBIT E COLLATERAL ASSIGNMENT OF LEASES AND RENTALS
<PAGE> 50
EXHIBITS AND SCHEDULES TO THIS LOAN AGREEMENT HAVE BEEN INTENTIONALLY OMITTED
FROM THIS FILING. SUCH SCHEDULES AND EXHIBITS ARE WILL BE PROVIDED
SUPPLEMENTALLY UPON REQUEST TO IMRS INC.
<PAGE> 51
MORTGAGE DEED
-------------
TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETINGS:
KNOW YE THAT, HYPERION SOFTWARE CORPORATION, a Delaware corporation
with its principal place of business in the City of Stamford, County of
Fairfield and State of Connecticut (the "Mortgagor"), for the consideration of
One Dollar ($l.00) and other good and valuable consideration received to its
full satisfaction of CONNECTICUT DEVELOPMENT AUTHORITY, having an office in the
Town of Rocky Hill, County of Hartford and State of Connecticut (the
"Mortgagee"), does give, grant, bargain, sell and confirm unto the said
Mortgagee, its successors and assigns forever, a certain piece or parcel of
land, with the buildings and improvements now or hereafter placed thereon,
located in the City of Stamford, County of Fairfield, State of Connecticut and
being more particularly bounded and described in Exhibit A attached hereto, to
which reference may be had, together with:
a) all and singular the rights, mineral rights, easements,
tenements, hereditaments and appurtenances thereunto belonging or in anywise
appertaining, and the reversion or reversions, remainder or remainders, rents,
issues, profits and proceeds thereof or therefrom;
b) all right, title and interest of the Mortgagor, if any, in and
to all sidewalks, alleys, plazas, strips, gores and the land lying in the bed
of any street, road or avenue, opened or proposed, in front of or adjoining the
above-described premises;
c) all the buildings, structures and improvements now or
hereafter located or erected on the premises, and all fixtures of every kind
and nature whatsoever, now or hereafter located in or upon or affixed to the
premises, or any part thereof, and used or usable in connection with any
present or future operation of the premises and now owned or hereafter acquired
by Mortgagor, including without limitation all heating, lighting, incineration,
refrigerating, ventilating, air-conditioning, air-cooling, lifting, fire
extinguishing, plumbing, cleaning, communications and power equipment, fixtures
and apparatus; all gas, water and electrical fixtures and equipment; all
pollution control tanks, pumps, pipes, filters and equipment; and all
elevators, escalators, cranes, craneways, engines, motors, tanks, pumps,
screens, storm doors, storm windows, shades, awnings, floor coverings,
cabinets, partitions, conduits, ducts and compressors, it being agreed that all
such fixtures are a part of the premises and are declared to be a portion of
the security for the Secured Obligations (as defined herein) whether in single
units or
<PAGE> 52
centrally controlled, and whether physically attached to the premises or not);
and
d) any and all awards or payments, including interest thereon,
and the right to receive the same, which may be made with respect to the
premises as a result of (i) the exercise of the right of eminent domain, (ii)
the alteration of the grade of any street, or (iii) any other loss or injury to
or decrease in the value of the premises, to the extent of all amounts which
may be secured by this Mortgage at the date of receipt of any such award or
payment by the Mortgagee; and the Mortgagor agrees hereby to execute and
deliver, from time to time, such further instruments as may be requested by the
Mortgagee, to confirm such assignment to the Mortgagee of any such award or
payment (all of the foregoing being referred to herein as the "Premises").
TO HAVE AND TO HOLD the above-granted and bargained Premises, with the
appurtenances thereof, unto the said Mortgagee, its successors and assigns
forever, to its and their own proper use and behoof.
The Mortgagor, does for itself and its successors and assigns,
covenant with the said Mortgagee, its successors and assigns, that at and until
the ensealing of these presents it is well seized of the Premises as a good
indefeasible estate in fee simple; has good right to bargain and sell the same
in manner and form as above written; and that the same is free from all
encumbrances whatsoever, except for Permitted Encumbrances (as defined
hereinafter).
The Mortgagor does by these presents bind itself and its successors
and assigns forever to warrant and defend the above- granted and bargained
Premises to the said Mortgagee, its successors and assigns, against all claims
and demands whatsoever, except as aforesaid.
THE CONDITION OF THIS DEED is such that whereas Mortgagor is justly
indebted to Mortgagee in the aggregate principal sum of $9,500,000.00 as
evidenced by Mortgagor's term loan note of even date repayable as provided
therein (the "Note"), the terms of which Note are incorporated herein and a
copy of which Note is attached hereto as Exhibit B and made a part hereof,
together with:
(i) all obligations of the Mortgagor in respect of the
payment of the principal and interest on the Note and under the Loan
Agreement (as hereinafter defined);
(ii) all obligations of the Mortgagor under each of the
Financing Documents (as hereinafter defined);
-2-
<PAGE> 53
(iii) payment of any and all damages which the Mortgagee
may suffer as a result of the breach by the Mortgagor of any
obligation, covenant or undertaking under any of the Financing
Documents;
(iv) any extensions, renewals or amendments to any of the
foregoing, and all other obligations of the Mortgagor to the
Mortgagee, however created, acquired, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due; and
(v) all costs of collection, including reasonable
attorneys' fees, incurred by the Mortgagee to collect the foregoing
and to enforce, foreclose and realize its rights under the Financing
Documents, including the expenses referred to in Section 5.2 of the
Loan Agreement and Section 33 hereof (all of the foregoing together
with the Note being referred to herein as the "Secured Obligations").
FURTHERMORE, in order more fully to protect the security of this
Mortgage, the Mortgagor represents, warrants, covenants and agrees as follows:
1. DEFINITIONS. Wherever used in this Mortgage, unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided herein, the following terms shall have the meanings indicated:
a) "Event of Default" shall mean any occurrence or
circumstance which, pursuant to the terms of Section 26 hereof, accelerates or
would permit the Mortgagee to accelerate the maturity of the Secured
Obligations, whether or not the Mortgagee elects to do so;
b) "Financing Documents" shall have the meaning as set
forth in the Loan Agreement;
c) "Loan Agreement" shall mean the loan agreement of
even date by and between Mortgagee and Mortgagor pursuant to which the loan
secured by this Mortgage has been made, with amendments thereto, if any, a copy
of which is on file with Mortgagee;
d) "Mortgagee" shall mean Connecticut Development
Authority, its successors and assigns, or any subsequent holder or holders of
this Mortgage;
- 3 -
<PAGE> 54
e) "Mortgagor" shall mean Mortgagor and/or any
subsequent owner or owners of the Premises;
f) "Note" shall mean the promissory note secured by this
Mortgage, a copy of which Note is attached hereto as Exhibit B and made a part
hereof;
g) "Permitted Encumbrances" shall mean (i) taxes to the
City of Stamford not yet due and payable; (ii) any and all provisions of any
governmental regulation, municipal ordinance, or public or private law; and
(iii) those matters shown on Exhibit A attached hereto;
h) "Person" shall mean an individual, partnership
corporation, trust, unincorporated organization, government, government agency
or governmental subdivision;
i) "Premises" shall have the meaning set forth in the
recitals hereto; and
j) "Secured Obligations" shall have the meaning set
forth in the recitals hereto.
All capitalized terms not otherwise defined shall have the meanings as
set forth in the Loan Agreement. Pronouns of any gender shall include the
other genders, and either the singular or plural shall include the other.
2. CAPTIONS. The captions in this Mortgage are for convenience
only and shall not be used to interpret, modify, or affect in any way the
covenants and agreements herein contained.
3. COMPETENCE TO EXECUTE FINANCING DOCUMENTS. The Mortgagor is
competent, not under any disability, and has full power and authority to
execute and deliver the Financing Documents to the Mortgagee, and the execution
and delivery of the same is not in violation of and will not result in default
of any agreement or understanding the Mortgagor may have with any Person.
4. LEGAL TENDER AND JOINT AND SEVERAL LIABILITY. The Mortgagor
shall pay the Secured Obligations in lawful money of the United States at the
times and in the manner set forth in the Note and Loan Agreement, and if the
Mortgagor consists of more than one Person, such Grantors shall be jointly and
severally liable for the performance of all covenants and agreements herein
contained.
5. PROTECTION OF LIEN. The Mortgagor agrees to execute and
deliver to Mortgagee all documents (including Uniform
- 4 -
<PAGE> 55
Commercial Code financing statements) which Mortgagee deems necessary to
protect or perfect its lien and to save Mortgagee harmless from all reasonable
costs and expenses, including reasonable attorneys' fees, recording fees, and
costs of a title search, continuation of abstract and preparation of survey,
incurred by reason of any action, suit, proceeding, hearing, motion or
application before any court or administrative body in which Mortgagee may be a
party by reason hereof, including but not limited to, condemnation, bankruptcy
or administrative proceedings, as well as any other of the foregoing wherein
proof of claim is required to be filed or in which it becomes necessary, in
Mortgagee's sole opinion, to defend or uphold the terms and priority of this
Mortgage. All money paid or expended by Mortgagee in that regard, together
with interest thereon from the date of such payment at the default rate set
forth in the Note shall be Secured Obligations, and shall be immediately and
without notice due and payable to Mortgagee by Mortgagor.
6. REPAIRS. The Mortgagor shall maintain the Premises in good
condition and repair, shall not commit or suffer any waste of the Premises,
shall promptly repair, restore, replace or rebuild any part of the Premises now
or hereafter subject to the lien of this Mortgage which may be damaged or
destroyed by any casualty whatsoever or which may be effected by any proceeding
of the character referred to in Section 17 or Section 18; and the Mortgagor
shall complete and pay for, within a reasonable time, any structure at any time
in the process of construction or repair on the Premises.
7. DEMOLITION AND ALTERATION. The Mortgagor agrees that no
building or other property now or hereafter covered by the lien of this
Mortgage shall be removed, demolished, or materially altered, without the prior
written consent of the Mortgagee, except that the Mortgagor shall have the
right, without such consent, to remove and dispose of, free from the lien of
this Mortgage, such fixtures as from time to time may become worn out or
obsolete, provided that simultaneously with or prior to such removal any such
fixtures shall be replaced with other fixtures of a value at least equal to
that of the replaced fixtures and free from any lien, and by such removal and
replacement the Mortgagor shall be deemed to have subjected such fixtures to
the lien of this Mortgage. Notwithstanding the foregoing, the Mortgagee
consents, upon the conditions hereinafter set forth, to the improvements to be
made by the Mortgagor (the "Permitted Improvements") which are more
particularly described in plans set forth in Exhibit C copies of which have
been delivered to the Mortgagee (the "Plans and Specifications"). The
Mortgagee's consent is given subject to the Mortgagor's compliance with the
following conditions:
- 5 -
<PAGE> 56
(a) The Mortgagor will complete the Permitted Improvements, not
including the addition of a fourth floor, with diligence and continuity and
will substantially complete the same in accordance with the Plans and
Specifications on or before January 20, 1998, free and clear of liens or claims
for liens for materials supplied and/or labor or services performed in
connection with the completion of the Permitted Improvements.
(b) The Mortgagor will not revise the Plans and Specifications in
any material respect without the prior written consent of the Mortgagee, which
consent shall not be unreasonably withheld, delayed or conditioned.
(c) The Mortgagor will promptly comply with all laws, ordinances,
orders, rules and regulations of any governmental authority as to the
completion of the Permitted Improvements (including, without limitation,
obtaining all certificates of occupancy or certificates of like nature upon
completion). The Mortgagor shall in timely fashion apply for and diligently
pursue all permits, licenses and approvals necessary or appropriate for the
completion of the Permitted Improvements.
(d) The Mortgagor will correct any structural defect in the
Permitted Improvements which is necessary to maintain the Premises in
compliance with all laws.
(e) The Mortgagor will maintain the Premises in good repair and
safe condition at all times, taking into account the then present stage of
construction of the Permitted Improvements.
(f) As evidence of completion, the Mortgagor shall deliver a
certificate signed by an engineer stating that (i) the Permitted Improvements
have been substantially completed in accordance with the Plans and
Specifications and (ii) the payment of all labor, services, materials and
supplies used in such completion has been made or provided for.
(g) The Mortgagor shall provide to the Mortgagee upon its
reasonable request and at such times as such items should reasonably be
available to Mortgagor:
(i) the Plans and Specifications;
(ii) performance bonds and labor and material payment bonds
or comparable guaranties of completion reasonably acceptable
to the Mortgageee said bonds to be issued by companies and in
a form reasonably acceptable to the Mortgagee, naming
Mortgagee as an obligee or assignee along with the Mortgagor;
and
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(iii) building permits for the completion of the Permitted
Improvements, and all other federal, state and municipal
licenses, approvals and permits necessary or appropriate for
such completion, along with a certification from an engineer
that all such necessary or appropriate licenses, approvals and
permits have been obtained.
(h) The Mortgagor shall carry and maintain, at its expense, during
any period of construction on the Premises, builder's risk insurance, completed
value, non-reporting form with permission to complete and occupy and workers'
compensation coverage in form, amounts and with companies reasonably
satisfactory to the Mortgagee.
(i) The Mortgagor shall execute a Collateral Assignment of
Agreements in the form on Exhibit D attached hereto and and will obtain
continuation agreements from the architect and those contractors the Mortgagee
reasonably deems necessary.
The Mortgagee acknowledges that in addition to the Permitted
Improvements, the Mortgagor intends to construct additional buildings and
parking facilities on the Premises. The Mortgagee agrees that it will not
unreasonably withhold its consent to the construction of said additional
buildings and parking facilities, subject to the Mortgagor agreeing to
conditions substantially similar to those outlined above.
8. COMPLIANCE WITH LAWS. The Mortgagor shall comply with, or
cause to be complied with, all statutes, ordinances and requirements of any
governmental authority relating to the Premises and the use thereof, including
by way of illustration and not limitation, all laws, regulations and orders
relating to zoning, the subdivision of land, environmental protection, health
and occupational safety.
9. USE OF PREMISES. Unless required by applicable law or unless
the Mortgagee has otherwise agreed in writing, the Mortgagor shall not allow
changes in the nature of the occupancy for which the Premises were intended at
the time this Mortgage was executed. The Mortgagor shall not initiate or
acquiesce in a change in the zoning classification of the Premises without the
Mortgagee's written consent which consent shall not be unreasonably withheld;
and the Mortgagor shall not initiate, join in or consent to any change in any
private restrictive covenant, or private restrictions limiting or defining the
uses which may be made of the Premises or any part thereof, without the prior
written consent of the Mortgagee which consent shall not be unreasonably
withheld. Notwithstanding the foregoing, the
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Mortgagee consents to the Mortgagor's making zoning text amendments and other
changes to the zoning classification of the Premises required in order to
complete the Permitted Improvements.
10. INSPECTION. The Mortgagee and any Persons authorized by the
Mortgagee shall have the right to enter and inspect the Premises at all
reasonable times, without reasonable notice.
11. TRANSFER; OTHER LIENS AND ENCUMBRANCES. Without the prior
written consent of the Mortgagee, the Mortgagor shall not sell, lease,
mortgage, encumber, suffer change in title or ownership or otherwise transfer
all or any part of the Premises. The consent of the Mortgagee herein shall not
be unreasonably withheld, delayed or conditioned for: 1) leases entered into
by the Mortgagor for cafeteria services, car rentals, in house retail stores, a
travel agency, express mail delivery company or similar leases for such part of
the Premises that is not material and which leases are necessary or beneficial
for the operation of the business of the Mortgagor or for the benefit of the
Mortgagor's employees; and 2) leases to affiliates of the Mortgagor for such
part of the Premises that is not material. Notwithstanding the foregoing, the
Mortgagor may, no more than once, transfer the Premises to an affiliate of the
Mortgagor without having obtained Mortgagee's written consent, provided that
such transfer shall be subject to the Mortgagee's then-current procedures and
conditions for the assignment and assumption of mortgages, and the Mortgagor
and the transferee shall execute such documents as the Mortgagee may reasonably
require, and provided further that the Mortgagor shall not be released from his
obligations under the Loan Documents and said transferee shall assume and be
liable for all the obligations of the Mortgagor under the Loan Documents. In
addition, the Mortgagor may place a second mortgage on the Premises without
having obtained Mortgagee's written consent provided the proceeds of the loan
secured by the second mortgage are used solely for the construction of
additional buildings and parking facilities on the Premises. The Mortgagor
shall keep the Premises free from liens which are not Permitted Encumbrances.
If any prohibited lien is filed against the Premises, Mortgagor shall cause the
same to be removed and discharged of record within sixty (60) days after the
date of filing thereof. If such lien is not capable of removal within said
sixty (60) day period, Mortgagor shall have such additional time as may
reasonably be necessary for removing such lien provided Mortgagor is diligently
pursuing the removal and so long as adequate book reserves have been
established with respect thereto and the Mortgagor's title to, and its or his
right to use, its property is not materially and adversely affected thereby.
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12. LEASES. The Mortgagor shall at all times keep, perform and
observe all the covenants, agreements, terms, provisions, conditions and
limitations of each lease affecting the Premises (each a "Lease" and together
the "Leases") on its part to be kept, performed and observed and will do all
things necessary to prevent a default on its part thereunder. The Mortgagor
will assign to the Mortgagee all Leases affecting the Premises as shall not
have been assigned previously to the Mortgagee. Nothing in this Section shall
be deemed to constitute the consent of Mortgagee to any Lease of all or any
part of the Premises, and Mortgagor shall not enter into any Lease of all or
any part of the Premises without the prior written consent of Mortgagee. The
consent of the Mortgagee herein shall not be unreasonably withheld, delayed or
conditioned for: 1) leases entered into by the Mortgagor for cafeteria
services, car rentals, in house retail stores, a travel agency, express mail
delivery company or similar leases for such part of the Premises that is not
material and which leases are necessary or beneficial for the operation of the
business of the Mortgagor or for the benefit of the Mortgagor's employees; and
2) leases to affiliates of the Mortgagor for such part of the Premises that is
not material. In addition, the Mortgagor shall not, without the prior written
consent of the Mortgagee, directly or indirectly cancel, terminate or accept
any surrender of, or materially modify or amend, any Lease affecting the
Premises. Default on the part of the Mortgagor in any of the terms and
provisions of any of the Leases on said Premises shall constitute an Event of
Default.
13. RENTAL AND SECURITY. The Mortgagor shall not collect rent
more than thirty (30) days in advance of its due date under any and all Leases
for any part of the Premises, without the prior written consent of the
Mortgagee; and in the event such consent is given, the Mortgagor agrees to
deposit said rents with the Mortgagee. Any and all tenant's security deposits
in excess of an amount equal to one month's rent under any and all Leases for
any part of the Premises shall be deposited and pledged so that they cannot be
used by the Mortgagor without the prior written consent of the Mortgagee, and
in the event of foreclosure of this Mortgage, these deposits and any and all
other security deposits and advance rent payments shall be transferred to the
Mortgagee if title is acquired by the Mortgagee, or to the purchaser in the
event of a foreclosure sale.
14. RECEIVER. The Mortgagee in any action to foreclose this
Mortgage, or upon an Event of Default, shall be at liberty to apply for the
appointment of a receiver of the rents and profits of the Premises without
notice, and shall be entitled to the appointment of such a receiver as a matter
of right, without consideration of the value of the Premises as security for
the
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amounts due the Mortgagee, or the solvency of any Person or corporation liable
for the payment of such amounts.
15. RIGHT TO ENTER AND POSSESS. Upon an Event of Default,
Mortgagee may, at its option, following written notice, but without regard to
the adequacy of the security for the Secured Obligations, in person or by
agent, with or without bringing any action, suit or proceeding, enter upon and
take possession of the Premises, and have, hold, manage, lease and operate the
same on such terms, employing such management agents and for such period of
time as Mortgagee may deem proper; and may collect and receive all rents,
issues and profits of the Premises, including those past due, with full power
to make from time to time all alterations, renovations, repairs or replacements
thereto as it may deem proper and make, enforce, modify, and accept the
surrender of leases; fix or modify rents; do all things required of or
permitted to the lessor under the Leases; and do any acts which Mortgagee deems
proper to protect the security hereof until all the Secured Obligations are
paid in full, and either with or without taking possession of the Premises, in
its own name, sue for or otherwise collect and receive all rents, issues and
profits, including those past due and unpaid, and apply the same, less costs
and expenses of operation and collection, including reasonable attorneys' fees,
management agent's fees, and, if Mortgagee manages the Premises with its own
employees, an amount equal to the customary management agents' fees charged for
similar property in the area where the Premises are located, against the
Secured Obligations in such order as Mortgagee may determine. Mortgagee shall
not be accountable for more monies than it actually receives from the Premises;
nor shall it be liable for failure to collect rents for any reason whatsoever.
It is not the intention of the parties hereto that an entry by Mortgagee upon
the Premises under the terms of this instrument shall constitute Mortgagee a
"mortgagee in possession" in contemplation of law, except at the option of
Mortgagee. Mortgagor shall facilitate in all reasonable ways any action taken
by Mortgagee under this Section and Mortgagor shall, upon demand by Mortgagee,
execute a written notice to each lessee and occupant directing that rent and
all other charges be paid to Mortgagee.
16. LEASE RATIFICATION. The Mortgagor shall furnish the Mortgagee
at any time, upon demand, with a lease ratification and estoppel agreement as
to any Lease affecting the Premises, in form and substance satisfactory to the
Mortgagee, which shall be executed by the Mortgagor and by the lessee, and
which shall state, if such be the case, that the Lease is in full force and
effect and that there is no default thereunder, that the lessee is in
possession of the Premises, paying the full rental called for therein, that no
rental payments have been made in advance
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except as may have been approved by the Mortgagee, and stating the date of
commencement of the original Lease term.
17. EMINENT DOMAIN. In the event that the whole or any part of
the Premises shall be taken by eminent domain, or in the event of any
alteration of the grade of any street or highway, or of any other injury to or
decrease in value of the Premises, or the reacquisition of the whole or any
part of the Premises pursuant to the terms of any redevelopment plan or
agreement affecting the Premises or if any agreement shall be made between the
Mortgagor and any entity vested with the power of eminent domain, any and all
awards and payments on account thereof shall be deposited with the Mortgagee.
The Mortgagor shall give the Mortgagee immediate notice of the actual or
threatened commencement of any of the foregoing proceedings, and shall deliver
to the Mortgagee copies of all papers served in connection with any such
proceedings. The Mortgagee shall have the right to intervene and participate
in any proceedings for and in connection with any such taking, at the
Mortgagee's own cost, unless such intervention shall be prohibited by the court
having jurisdiction over such taking, in which event the Mortgagor shall
consult with the Mortgagee in connection with such proceedings; and the
Mortgagor shall not enter into any agreement with regard to the Premises or any
award or payment on account thereof unless the Mortgagee shall have consented
thereto in writing. The Mortgagor hereby irrevocably appoints the Mortgagee
its attorney-in-fact, coupled with an interest, and authorizes, directs and
empowers such attorney, at its option, on behalf of the Mortgagor, to adjust,
compromise or settle the claim for any such award or payment, to collect,
receive and retain the proceeds thereof, and to give proper receipts therefor.
The Mortgagor further agrees, on request, to make, execute, and deliver to the
Mortgagee any and all assignments and other instruments as the Mortgagee may
require to confirm or assign all such awards and payments to the Mortgagee free
and clear of any and all liens.
Notwithstanding any such taking, alteration of grade, other injury to
or decrease in value of the Premises, or reacquisition of title, or agreement,
the Mortgagor shall continue to make any and all payments required by the
Financing Documents. Any reduction in the principal sum resulting from the
application by the Mortgagee of such award or payment as hereinafter set forth
shall be deemed to take effect only on the date of such application. The
proceeds of any award or payment, after deducting the expenses of collection,
including, but not limited to, reasonable counsel fees and other costs and
disbursements incurred by the Mortgagee, may be applied by the Mortgagee, at
its option, toward payment of the Secured Obligations whether or not same shall
be then due or payable, or be paid over wholly or in part to the Mortgagor for
the purposes of altering or
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restoring any part of the Premises which may have been damaged as a result of
any such taking, alteration of grade, or other injury to the Premises, or for
any other purpose or object satisfactory to the Mortgagee, but the Mortgagee
shall not be obligated to see to the proper application of any amount paid over
to the Mortgagor, nor shall the amount so paid over to the Mortgagor be deemed
a payment on any Secured Obligations.
If prior to the receipt by the Mortgagee of such award or payment,
title to the Premises shall have vested in the Mortgagee by virtue of a
judgment of strict foreclosure or the Premises shall have been sold on
foreclosure of this Mortgage, the Mortgagee shall have the right to receive
said award or payment to the extent of the Secured Obligations remaining
unsatisfied after such strict foreclosure or sale of the Premises, with
interest thereon at the default rate set forth in the Note, whether or not a
deficiency judgment on this Mortgage shall have been sought or recovered or
denied, and to the extent of the reasonable counsel fees, costs and
disbursements incurred by the Mortgagee in connection with the collection of
such award or payment.
18. INSURANCE. The Mortgagor shall procure and keep in force such
insurance with respect to the Premises as the Mortgagee may from time to time
reasonably require, including but not limited to the following:
a) Hazard Insurance - The Mortgagor shall keep all
buildings and improvements now existing or hereafter erected on the Premises
insured against loss or damage by fire, flood, windstorm and other hazards,
casualties and contingencies, including all risks as are included within the
so-called "extended coverage" or "all risk" forms of policy, to their full
insurable value or in such other amounts and for such periods as may be
reasonably required by Mortgagee, and will pay promptly, when due, all premiums
on such insurance. All insurance shall be carried with companies approved by
Mortgagee, and all policies and renewals shall be delivered to Mortgagee,
marked "Paid", at least thirty (30) days before the expiration of the old
policies and shall have attached thereto the standard noncontributing mortgagee
clause entitling Mortgagee to collect all proceeds of such insurance, and other
endorsements required by Mortgagee, all in form acceptable to Mortgagee. In
the event of loss, Mortgagor shall give immediate notice by mail to Mortgagee.
Mortgagor hereby authorizes Mortgagee, at its option, to collect, adjust and
compromise any losses under such insurance and, after deducting reasonable
costs of collection, to apply the proceeds at its option as follows (1) as a
credit on the Secured Obligations; or (2) to restoring the buildings and
improvements, in which event Mortgagee shall not be obligated to see to the
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proper application thereof nor shall the amount so released or used be deemed a
payment on any Secured Obligations. Should any check in payment of such loss
name Mortgagor as payee or a joint payee, Mortgagor agrees to endorse such
check and to deliver it to Mortgagee forthwith, and further irrevocably
appoints Mortgagee its attorney-in-fact, coupled with an interest, to endorse
Mortgagor's name on any such check and to negotiate the same.
b) Liability Insurance - The Mortgagor agrees to carry
and maintain, at its expense, such liability insurance as may be required from
time to time by Mortgagee, in form, amounts and with companies satisfactory to
Mortgagee, but in no event less than the following: $5,000,000.00, commercial
general liability; $1,000,000.00, workers' compensation insurance;
$5,000,000.00, broad form property damage; and $5,000,000.00, automobile
liability. Certificates of such insurance, premiums prepaid and naming
Mortgagee as an additional insured, shall be deposited with Mortgagee and shall
contain provisions for thirty (30) days' notice to Mortgagee prior to any
cancellation thereof.
The Mortgagor further agrees that upon failure to maintain the
insurance as above stipulated, or to deliver renewal policies as aforesaid, or
to pay the premiums therefor, then Mortgagee may procure said insurance and/or
pay the premiums therefor, and all sums so expended shall immediately be paid
by Mortgagor to Mortgagee, and until so paid, shall be deemed part of the
Secured Obligations and shall bear interest at the default rate provided in the
Note.
19. TAXES. The Mortgagor shall pay within applicable grace
periods, if any, or when due if there are no grace periods, and prior to the
imposition of any penalty all taxes, assessments, water rates, sewer rents,
utility charges, and other charges and any liens prior to the lien of this
Mortgage now or hereafter assessed or liens on or levied against the Premises
or any part thereof, and in case of default in the payment thereof when the
same shall be due and payable, it shall be lawful for the Mortgagee, without
notice or demand, to pay the same or any of them; and the monies paid by the
Mortgagee in discharge of taxes, assessments, water rates, sewer rents, utility
charges, and other charges and prior liens shall be a lien on the Premises
added to the amount of the Secured Obligations and secured by this Mortgage,
payable on demand with interest at the default rate set forth in the Note, from
the time of payment of the same; and upon request of the Mortgagee, the
Mortgagor shall exhibit to the Mortgagee receipts for the payment of all items
specified in this Section prior to the date when the same shall become
delinquent. Without limiting the foregoing, in the case of any assessment for
local improvement for which an official bill has been issued by
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the appropriate authority and which may then or thereafter affect the Premises
and may be or become payable in installments, if the Mortgagor fails to make
payment of any such installment when due, the Mortgagee may demand that the
Mortgagor make immediate payment of the whole of such assessment, and if the
Mortgagor fails to make such payment, the Mortgagee, without notice or further
demand, may pay the same, and such amount shall be added to the Secured
Obligations and shall be payable as provided above in this Section. The
foregoing payments need not be paid while being contested by the Mortgagor in
good faith and by appropriate legal proceedings so long as adequate book
reserves have been established with respect thereto and the Mortgagor's title
to, and its right to use, its property is not materially and adversely affected
thereby.
20. PERFORMANCE BY MORTGAGEE. In the event of any default in the
performance of any of the Mortgagor's covenants or agreements herein, the
Mortgagee may, at its option, perform the same, and the cost thereof, with
interest at the default rate set forth in the Note secured hereby, shall
immediately be due from the Mortgagor to the Mortgagee and shall be deemed
Secured Obligations secured by this Mortgage.
21. RELIANCE ON DOCUMENT, ETC. The Mortgagee, in making any
payment herein authorized in the place and stead of the Mortgagor which (i)
relates to taxes, assessments, water rates, sewer use and rentals and other
governmental or municipal charges, fines, impositions or liens asserted against
the Premises, may do so according to any bill, statement or estimate procured
from the appropriate public office without inquiry into the accuracy thereof or
into the validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof; or (ii) relates to insurance premiums, may do so according to
any notice, bill, statement or estimate procured from the appropriate insurer
without inquiry into the accuracy or validity thereof; or (iii) relates to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or (iv) relates to the expense of repairs or replacement of any buildings,
improvements, or any other Premises, shall be the sole judge of the state of
repairs or replacement; or (v) otherwise relates to any other purpose not
specifically enumerated in this Section, may do so whenever, in its judgment
and discretion, such payment shall seem necessary or desirable to protect the
full security intended to be created by this Mortgage.
22. STATEMENT OF LIENS. Upon request by the Mortgagee, the
Mortgagor shall obtain from all Persons hereafter having or acquiring any
interest in or lien on the Premises or any fixtures thereon, a writing duly
acknowledged, and stating the nature and
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extent of such lien and that the same is subordinate to this Mortgage and no
offsets or defenses exist in favor thereof against this Mortgage or the Secured
Obligations, and deliver such writing to the Mortgagee. Nothing in this
Section shall be deemed to constitute the consent of Mortgagee to the creation
of any lien in all or any part of the Premises.
23. ESTOPPEL CERTIFICATE. The Mortgagor shall within ten (10)
days of a request from the Mortgagee furnish the Mortgagee with a written
statement duly acknowledged, setting forth the sums secured by this Mortgage
and any right of set-off, counterclaim or other defense which exists against
such sums and the obligations of this Mortgage.
24. SECURITY AGREEMENT. This Mortgage is intended to be a
security agreement and financing statement pursuant to the Uniform Commercial
Code for any of the fixtures specified above as part of the Premises which,
under applicable law, may be subject to a security interest pursuant to the
Uniform Commercial Code, and the Mortgagor hereby agrees to execute and deliver
such other financing statements covering said fixtures from time to time and in
such form as the Mortgagee may require to perfect a security interest with
respect to said fixtures. The Mortgagor shall pay all costs of filing such
statements and renewals and releases thereof and shall pay all costs and
expenses of any record searches for financing statements the Mortgagee may
reasonably require. Without the prior written consent of the Mortgagee, the
Mortgagor shall not create or suffer to be created pursuant to the Uniform
Commercial Code any other security interest in said fixtures, including
replacements and additions thereto and proceeds thereof. Upon an Event of
Default, the Mortgagee shall have the remedies of a secured party under the
Uniform Commercial Code and, at the Mortgagee's option, may also invoke the
remedies available at law and in equity as to such fixtures.
25. ADDITIONS. Promptly upon the request of the Mortgagee, the
Mortgagor shall subject to the lien of this Mortgage in a form acceptable to
Mortgagee and its attorney all additional strips, gores, or parcels of land
acquired by it which adjoin the Premises and all additional interests in and
easements, rights and appurtenances to said Premises and in and to said strips,
gores, and parcels, and execute and deliver to Mortgagee such mortgages and
security agreements and extensions thereof as Mortgagee may request, and
promptly pay Mortgagee's costs, including reasonable attorneys' fees, in
connection therewith.
26. DEFAULT. In addition to, and not in limitation of, any other
term of this Mortgage or any other right or remedy hereunder or in accordance
with law or equity, the whole of the
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Secured Obligations shall become due and payable forthwith, at the option of
the Mortgagee, upon the occurrence of any one or more of the following Events
of Default, and thereupon, or at any time during the existence of any such
Event of Default, Mortgagee may proceed to foreclose this Mortgage, anything
hereinbefore or in the Note contained to the contrary notwithstanding, and any
failure to exercise said option shall not constitute a waiver of the right to
exercise the same at any other time:
(a) default in the payment of any installment of
principal and/or interest due under the Note within ten (10) days of when due,
or of any other payment due under the terms of the Financing Documents after
any applicable grace, cure or notice periods;
(b) upon default in keeping in force any insurance
required herein, or default after notice and demand either in delivering the
policies of insurance to the Mortgagee or in reimbursing the Mortgagee for
premiums paid on such insurance as herein provided;
(c) upon failure to exhibit to the Mortgagee receipts or
other evidence showing payment of all taxes or other charges payable pursuant
to Section 19 hereof;
(d) upon the actual or threatened waste, removal or
demolition of, or material alteration to, any part of the Premises, except as
permitted herein;
(e) upon assignment by the Mortgagor of the whole or any
parts of the rents, income or profits arising from the Premises;
(f) upon default in the observance or performance of any
other covenant or agreement of the Mortgagor in this Mortgage within thirty
(30) days of written notice from Mortgagee of such default, provided that in
the event such default can not be cured within said thirty (30) day period, the
Mortgagor shall have a reasonable time to cure the default if the Mortgagor
commences such cure within said thirty (30) day period and diligently pursues
the same;
(g) if, without the Mortgagee's prior written consent,
there is any sale, taking, lease or encumbrance of all or any part of the
Premises, or any other transfer of legal or equitable title thereto or any
right of use or occupancy thereof, or any material change in the nature of the
use or occupancy thereof, except as expressly provided for in this Mortgage; or
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(h) the occurrence of an Event of Default (as defined in
the Loan Agreement).
27. MARSHALLING. The Mortgagee shall not be compelled to release,
or be prevented from foreclosing or enforcing this Mortgage upon all or any
part of the Premises unless the Secured Obligations shall be paid in full in
lawful money as aforesaid; and shall not be required to accept any part or
parts of the Premises, as distinguished from the entire whole thereof, as
payment of or upon the Secured Obligations to the extent of the value of such
part or parts; and shall not be compelled to accept or allow any apportionment
of the Secured Obligations to or among any separate parts of the Premises. In
case of a foreclosure sale, the Premises may be sold in one parcel and as an
entirety or in such parcels, manner or order as the Mortgagee in its sole
discretion may elect.
28. PARTIAL RELEASE. The Mortgagee, without notice, and without
regard to the consideration, if any, paid therefor, and notwithstanding the
existence at that time of any inferior liens thereon, may release any part of
the security described herein or any Person primarily or contingently liable
for the Secured Obligations or may agree to extend the time for payment thereof
without in any way affecting the priority of the lien of this Mortgage upon any
part of the security or the liability of any Person not expressly released.
29. NO WAIVER. In the event Mortgagee (a) releases, as aforesaid,
any part of the security described herein or any Person primarily or
contingently liable for the Secured Obligations, (b) grants an extension of
time of any payments of the Secured Obligations, (c) takes other or additional
security for the payment thereof, or (d) waives or fails to exercise any rights
granted herein or in the Financing Documents, said act or omission shall not
release Mortgagor or the maker or guarantors of the Financing Documents under
any covenants of the Financing Documents, nor preclude Mortgagee from
exercising any right, power or privilege herein granted or intended to be
granted in the event of the same or any other default then made or any
subsequent default.
30. COVENANTS RUN WITH LAND. All the covenants hereof shall run
with the land.
31. SEVERABILITY. If any term or provision of this Mortgage or
the application thereof to any Person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected
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thereby, and each term and provision of the Mortgage shall be valid and
enforceable to the fullest extent permitted by law.
32. NOTICE. Notices and other communications under this Mortgage
shall be deemed sufficiently given when personally delivered or when mailed by
registered or certified mail, return receipt requested, postage prepaid or by
overnight delivery service and received by the addressee and, addressed as
follows:
(a) if to the Mortgagee:
Connecticut Development Authority
845 Brook Street
Rocky Hill, CT 06106
Attention: Loan Administration
or to such other address as the Mortgagee shall have furnished in writing to
the Mortgagor, or
(b) if to the Mortgagor:
IMRS INC.
777 Long Ridge Road
Stamford, CT 06902
Attention: Chief Financial Officer
or to such other address as the Mortgagor shall have furnished in writing to
the Mortgagee.
33. FORECLOSURE EXPENSES. In case of foreclosure of this
Mortgage, to the extent permitted by law, a reasonable sum shall be allowed for
attorneys' fees of Mortgagee in any court proceeding, for stenographers' fees,
appraisers' fees, for all moneys expended for documentary evidence and for the
cost of the preparation and examination of a complete abstract of title and of
a title report for the purpose of such foreclosure, all such sums to be secured
by the lien hereunder; and, to the extent permitted by law, there shall be
included in any judgment or decree foreclosing this Mortgage and to be paid out
of the rents or the proceeds of any sale made in pursuance of any such judgment
or decree: (1) all costs and expenses of any such suit, and of advertising and
selling, including attorneys', appraisers' and stenographers' fees,
disbursements for documentary evidence and the cost of said abstract,
examination and report of title; (2) all moneys advanced by Mortgagee, if any,
for any purpose authorized in this Mortgage, with interest as herein provided;
(3) all the accrued interest remaining unpaid on the Secured Obligations; and
(4) all of the principal of the Secured
- 18 -
<PAGE> 69
Obligations remaining unpaid. The excess of the proceeds, if any, shall be
paid to Mortgagor on reasonable request, or as the court may direct.
34. PARTIAL PAYMENTS. The acceptance by Mortgagee of partial
payments hereunder shall not constitute a waiver of any default, but the option
to accelerate maturity and/or foreclose shall remain continuously in force.
35. SUBROGATION. Should the proceeds of the Secured Obligations,
in whole or in part, be used directly or indirectly to discharge, in whole or
in part, any prior lien upon the Premises, then the Mortgagee shall be
subrogated to any additional security held by the holder of such lien.
36. REMEDIES CUMULATIVE. The rights and remedies herein provided
are cumulative and the holder of the Financing Documents may recover judgment
thereon, issue execution therefor, and resort to every other right or remedy
available at law or in equity, without first exhausting and without affecting
or impairing the security or any right or remedy afforded by this Mortgage, and
no enumerated or special rights or powers herein shall be construed to limit
any grant of general rights or powers, or take away or limit any and all rights
of Mortgagee under the laws of the State of Connecticut.
37. INTEREST AFTER JUDGMENT. Should the Mortgagee herein obtain a
judgment because of a breach of any covenant contained in the within Mortgage,
or a judgment because of a default in payment under the Note which are a part
hereof, then interest shall accrue on said judgment at the default interest
rate set forth in the Note or as is provided by statute, whichever rate shall
be greater at that time.
38. LAW GOVERNING. This Mortgage shall be governed by and
construed in accordance with the laws of the State of Connecticut.
39. WAIVER OF RIGHTS. THE MORTGAGOR ACKNOWLEDGES THAT THIS
MORTGAGE AND THE UNDERLYING TRANSACTIONS GIVING RISE HERETO CONSTITUTE
COMMERCIAL BUSINESS TRANSACTED WITHIN THE STATE OF CONNECTICUT. IN THE EVENT OF
ANY LEGAL ACTION BETWEEN THE MORTGAGOR AND THE MORTGAGEE HEREUNDER, THE
MORTGAGOR HEREBY EXPRESSLY WAIVES ANY RIGHTS WITH REGARD TO NOTICE, PRIOR
HEARING AND ANY OTHER RIGHTS IT MAY HAVE UNDER THE CONNECTICUT GENERAL
STATUTES, CHAPTER 903a, AS NOW CONSTITUTED OR HEREAFTER AMENDED, OR UNDER ANY
OTHER STATE OR FEDERAL LAW OR CONSTITUTION WITH RESPECT TO PREJUDGMENT
REMEDIES, AND THE MORTGAGEE MAY INVOKE ANY PREJUDGMENT REMEDY AVAILABLE TO IT,
INCLUDING, BUT NOT LIMITED TO, GARNISHMENT, ATTACHMENT, FOREIGN ATTACHMENT AND
REPLEVIN,
- 19 -
<PAGE> 70
WITH RESPECT TO ANY TANGIBLE OR INTANGIBLE PROPERTY (WHETHER REAL OR PERSONAL)
OF THE MORTGAGOR TO ENFORCE THE PROVISIONS OF THIS AGREEMENT, WITHOUT GIVING
THE MORTGAGOR ANY NOTICE OR OPPORTUNITY FOR A HEARING. FURTHERMORE, TO THE
EXTENT PERMITTED BY LAW, MORTGAGOR HEREBY WAIVES THE BENEFITS OF ALL VALUATION,
APPRAISEMENT, HOMESTEAD EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS, NOW IN
FORCE OR WHICH MAY HEREAFTER BECOME LAW.
40. BINDING EFFECT. All the provisions herein shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Mortgagor and the Mortgagee.
41. TIME OF ESSENCE. Time is of the essence with respect to all
obligations to be performed by Mortgagor hereunder.
NOW THEREFORE, if the Note and the Secured Obligations shall be paid
according to their tenor, and if all agreements contained in the Financing
Documents and herein are fully kept and performed, then this deed shall be
void, otherwise to remain in full force and effect.
IN WITNESS WHEREOF, the Mortgagor has hereunto caused its name to be
set this 20th day of January, 1995.
Signed, sealed HYPERION SOFTWARE CORPORATION
in the presence of:
By:
- - -------------------------------- ---------------------------
Lucy Ricciardi
Its Vice President and
Chief Financial Officer
- - --------------------------------
STATE OF CONNECTICUT )
: ss. Stamford January 20, 1995
COUNTY OF FAIRFIELD )
Personally appeared Lucy Ricciardi, Vice President of HYPERION
SOFTWARE CORPORATION, as aforesaid, and acknowledged that she executed the
foregoing as her free act and deed as such Vice President and the free act and
deed of said HYPERION SOFTWARE CORPORATION, before me.
----------------------------------
Commissioner of the Superior Court
Notary Public
My commission expires:
- 20 -
<PAGE> 71
EXHIBITS AND SCHEDULES TO THIS MORTGAE DEED HAVE BEEN INTENTIONALLY OMITTED
FROM THIS FILING. SUCH SCHEDULES AND EXHIBITS ARE WILL BE PROVIDED
SUPPLEMENTALLY UPON REQUEST TO IMRS INC.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF IMRS INC. FOR THE QUARTER ENDED DECEMBER
31, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<CASH> 41,089
<SECURITIES> 0
<RECEIVABLES> 25,681
<ALLOWANCES> 1,700
<INVENTORY> 0
<CURRENT-ASSETS> 69,914
<PP&E> 14,243
<DEPRECIATION> 10,799
<TOTAL-ASSETS> 97,270
<CURRENT-LIABILITIES> 35,848
<BONDS> 0
<COMMON> 99
0
0
<OTHER-SE> 59,271
<TOTAL-LIABILITY-AND-EQUITY> 97,270
<SALES> 56,383
<TOTAL-REVENUES> 56,383
<CGS> 17,466
<TOTAL-COSTS> 50,554
<OTHER-EXPENSES> 33,088
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 61
<INCOME-PRETAX> 6,522
<INCOME-TAX> 2,640
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,882
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
