<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: March 31, 1997
----------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For transition period from to
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Commission File No.: 0-22936
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Crown NorthCorp, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 22-3172740
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1251 Dublin Road, Columbus, Ohio 43215
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(Address of principal executive offices) (Zip Code)
(614) 488-1169
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes _X_ No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS.
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
As of April 30, 1997, the issuer had 9,776,703 shares of its common stock,
par value $.01 per share, outstanding.
Transitional Small Business Disclosure Format (check one).
Yes ___ No _X_
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CROWN NORTHCORP, INC.
FORM 10-QSB
QUARTERLY PERIOD ENDED MARCH 31, 1997
INDEX
<TABLE>
<CAPTION>
PART I. PAGES
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<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet as of March 31, 1997... I-1
Condensed Consolidated Statements of Operations for the
three months ended March 31, 1997 and 1996.................. I-2
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 1997 and 1996.................. I-3 to I-4
Notes to Consolidated Financial Statements-
March 31, 1997 and 1996..................................... I-5 to I-7
Item 2. Management's Discussion and Analysis or Plan of
Operation................................................... I-7 to I-12
PART II.
Item 1. Legal Proceedings........................................... II-1
Item 2. Changes in Securities....................................... II-1
Item 3. Defaults Upon Senior Securities............................. II-1
Item 4. Submission of Matters to a Vote of Security Holders......... II-1
Item 5. Other Information........................................... II-1
Item 6. Exhibits and Reports on Form 8-K............................ II-1
(a) Exhibits .......................................... II-1 to II-3
(b) Reports on Form 8-K................................ II-3
Signature........................................................... II-4
Exhibit Index....................................................... II-5 to II-7
</TABLE>
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CROWN NORTHCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
ASSETS UNAUDITED
---------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 737,940
Trade accounts receivable-net of allowance of $20,000 976,573
Income tax refund receivable 1,317,479
Prepaid expenses and other 93,157
-----------
Total current assets 3,125,149
-----------
PROPERTY AND EQUIPMENT-Net 1,989,150
RESTRICTED CASH 5,080,732
GOODWILL - net of accumulated amortization of $280,488 582,293
OTHER ASSETS 1,311,201
-----------
TOTAL $12,088,525
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term obligations $ 1,269,590
Accounts payable and accrued expenses 776,319
-----------
Total current liabilities 2,045,909
-----------
LONG-TERM OBLIGATIONS:
Notes and bonds payable 3,618,675
Loan loss reserve 1,621,484
-----------
Total long term obligations 5,240,159
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SERIES B REDEEMABLE PREFERRED STOCK 2,000,000
SHAREHOLDERS' EQUITY:
Common Stock 98,270
Convertible Preferred Stock:
Series A (liquidation preference- $450,000 plus unpaid dividends) 5
Series C (liquidation preference- $500,000) 5
Additional paid-in capital 4,237,689
Retained earnings (accumulated deficit) (1,516,775)
Treasury stock, at cost (16,737)
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Total shareholders' equity 2,802,457
-----------
TOTAL $12,088,525
===========
</TABLE>
See notes to consolidated financial statements
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CROWN NORTHCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNAUDITED
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1997 1996
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<S> <C> <C>
REVENUES:
Management fees $ 1,188,048 $1,742,527
Disposition and bonus fees 174,139 780,036
Incentive fees and other 317,524 1,217,976
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Total revenues 1,679,711 3,740,539
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OPERATING AND ADMINISTRATIVE EXPENSES:
Personnel 1,730,671 2,775,503
Occupancy, insurance and other 627,749 747,903
Amortization and depreciation 118,960 341,150
----------- ----------
Total operating and administrative expenses 2,477,380 3,864,556
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LOSS FROM OPERATIONS (797,669) (124,017)
OTHER EXPENSES (INCOME):
Employment contract settlement and other 206,563 (14,768)
Interest 78,170 27,167
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Total other expenses 284,733 12,399
----------- ----------
LOSS BEFORE INCOME TAXES (1,082,402) (136,416)
INCOME TAX BENEFIT (182,563) (31,366)
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NET LOSS $ (899,839) $ (105,050)
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LOSS PER SHARE $ (0.10) $ (0.01)
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WEIGHTED AVERAGE SHARES OUTSTANDING 9,054,481 8,199,779
=========== ==========
</TABLE>
See notes to consolidated financial statements
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CROWN NORTHCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
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UNAUDITED
---------
1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (899,839) $ (105,050)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization and depreciation 118,960 341,150
Other - net (39,965) 24,907
Change in operating assets and liabilities - net of effects from acquisition
of subsidiaries:
Accounts receivable 275,420 2,664,578
Prepaid expenses and other assets (45,518) 47,291
Accounts payable and accrued expenses 129,093 (2,413,628)
----------- -----------
Net cash provided (used) by operating activities (461,849) 559,248
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (49,735) (125,988)
Corporate acquisitions 274,431
Distributions to minority interest (326,599)
Other (241,991) (151,000)
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Net cash provided by (used) in investing activities (17,295) (603,587)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock-net 954,569
Proceeds from notes payable 1,700,000 1,500,000
Principal payments on notes and bonds payable (1,971,173) (980,000)
Other (53,392) (16,308)
----------- -----------
Net cash provided by financing activities 630,004 503,692
----------- -----------
NET INCREASE IN CASH DURING THE QUARTER 150,860 459,353
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE QUARTER 587,080 275,538
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF THE QUARTER $ 737,940 $ 734,891
=========== ===========
</TABLE>
See notes to consolidated financial statements
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CROWN NORTHCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNAUDITED
---------
1997 1996
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<S> <C> <C>
SUPPLEMENTAL INFORMATION
Cash paid for interest $ 69,729 $ 62,759
========== ==========
Cash paid for income taxes $ - $1,546,422
========== ==========
NONCASH INVESTING AND FINANCING ACTIVITIES:
CORPORATE ACQUISITIONS:
Accounts receivable - trade $ 16,983
Restricted cash 1,358,735
Other assets 591,137
Loan loss reserve (360,000)
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Net assets acquired, net of acquired cash $1,606,855
Amount financed - debt 1,881,286
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Net cash (acquired in) paid for corporate acquisitions $ (274,431)
==========
</TABLE>
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CROWN NORTHCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
(UNAUDITED)
1. General and Basis of Presentation
The accompanying unaudited consolidated financial statements of Crown
NorthCorp, Inc., and subsidiaries (the "Company") reflect all material
adjustments consisting of only normal recurring adjustments which, in
the opinion of management, are necessary for a fair presentation of
results for the interim periods. Certain information and footnote
disclosures required under generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission ("SEC"), although the
Company believes that the disclosures are adequate to make the
information presented not misleading. These financial statements
should be read in conjunction with the year-end financial statements
and notes thereto included in the Company's Form 10-KSB for the year
ended December 31, 1996.
The results for the periods indicated are unaudited, but reflect all
adjustments (consisting only of normal recurring accruals) which
management considers necessary for a fair presentation of operating
results.
The consolidated financial statements of the Company include the
accounts of Crown NorthCorp, Inc. and its majority owned subsidiaries.
2. Acquisitions
In January 1997, the Company acquired the stock of
Reinlein/Lieser/McGee Holding Corporation and R/L/M Employee Benefit
Corporation (collectively "R/L/M") for approximately $1,129,000. Two
hundred thousand dollars of this amount has been placed in escrow and
is recoverable by the Company if subsequent R/L/M losses exceed a
stipulated amount. The acquisition was accounted for using the
purchase method of accounting, and the excess purchase price over net
identifiable assets acquired, approximately $240,000, was allocated to
goodwill and will be amortized over ten years. The acquisition was
financed primarily through two bank loans which call for scheduled
monthly payments of principal and interest through February 1, 2002.
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3. Property & Equipment
Property and equipment consists of the following at March 31, 1997:
<TABLE>
<S> <C>
Land $ 271,845
Building and improvements 1,132,473
Furniture and equipment 1,846,048
----------
Total property and equipment $3,150,366
Less accumulated depreciation 1,161,216
----------
Property and equipment - net $1,989,150
==========
</TABLE>
4. Stockholders' Equity
In March 1997, the Company entered into a stock purchase agreement
(the "SPA") with Harbert Equity Fund I, L.L.C. ("Harbert
Fund")providing for a significant minority ownership interest in the
Company of up to approximately 30% of the common stock of the Company,
par value $.01 per share (the "Common Stock"). Under the terms of the
SPA, the Company sold one million shares of Common Stock to the
Harbert Fund for a price of $1 million dollars. During the twelve
months following the initial investment, the Harbert Fund may invest
up to $2 million to assist with strategic acquisitions, with an
additional $2 million earmarked for investment in subordinate tranches
of commercial mortgage backed securitizations. In any of these
additional investments, the Harbert Fund would receive Common Stock at
a rate of one share for each $1.05 investment.
5. Income Tax Benefit
The income tax benefit of $182,563 primarily reflects the change in
book estimates relating to the tax refund receivable for 1996. As the
Company expects to have in 1997 a net operating loss carry forward
available for income tax reporting purposes, no tax benefit provision
was made for the net loss at March 31, 1997.
6. Employment Contract Settlement
The employment contract settlement of $206,563 reflects a
non-recurring charge for the lump-sum, final settlement of incentive
compensation payments otherwise due over time to a former employee.
7. Contingencies
The Company has certain contingent liabilities resulting from
litigation and claims incident to the ordinary course of business.
Management believes that the probable resolution of such contingencies
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will not materially affect the financial position or results of
operations of the Company.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
GENERAL
The Company derives its primary revenues from financial services provided under
contracts or agreements to provide primary and special loan servicing, asset
management and disposition, asset securitization and land management contracts
or agreements for clients or partners. Under these arrangements, the Company
manages and disposes of real estate and loan assets, services individual loans
and loan portfolios, manages tax-exempt bond financings, coordinates the
development of real estate, administers receiverships and manages various
corporate and partnership interests throughout the United States. Recently, the
Company has expanded its services to include the origination of mortgage loans.
The Company has utilized strategic acquisitions and alliances as the primary
means of expanding and diversifying its core businesses and developing and
entering new businesses. Management continues to pursue such acquisitions and
alliances.
FORWARD LOOKING STATEMENTS
Statements in this report, to the extent they are not based on historical
events, constitute "forward-looking statements" within the meaning of Section
21E of the Exchange Act. Forward-looking statements include, without
limitation, statements regarding the outlook for future operations, forecasts
of future costs and expenditures, evaluation of market conditions, the outcome
of legal proceedings, the adequacy of reserves, or other business plans.
Investors are cautioned that forward-looking statements are subject to an
inherent risk that actual results may vary materially from those described
herein. Factors that may result in such variance, in addition to those
accompanying the forward-looking statements, include changes in interest rates,
prices, and other economic conditions; actions by competitors; natural
phenomena; actions by government authorities; uncertainties associated with
legal proceedings; technological development; future decisions by management in
response to changing conditions; and misjudgments in the course of preparing
forward-looking statements.
BUSINESS OUTLOOK
Prior to 1996, the Company derived most of its revenues from public-sector
contracts, primarily with the Federal Deposit Insurance Corporation ("FDIC")
and the Resolution Trust Corporation ("RTC"). Business from these agencies
declined substantially in recent years as issues related to the massive
failures of banks and thrifts were resolved and, during 1996, the Company
concluded work under its remaining FDIC and RTC contracts. Only matters of
retainage with respect to certain of the contracts remain open. While revenues
from public-sector contracts were approximately 60% of total revenues during
the first quarter of 1996, the public-sector assets under
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management, as a percentage of the gross contract value of all assets under
management, was 7.5% at March 31, 1996. The Company does not believe that
public-sector contracts will be a primary source of revenue in the foreseeable
future. Therefore, as public-sector contracts have expired or reduced in size,
management has reduced staff, consolidated offices and otherwise restructured
operations to more competitively pursue other opportunities. During the first
quarter of 1997, the Company continued the restructuring of its operations by
consolidating and realigning several management positions to place itself in a
better competitive position in the markets in which it operates.
Currently, the Company operates under contracts with various clients including
investment banking firms, partnerships and the Federal Home Loan Mortgage
Corporation. At March 31, 1997, the assets under management pursuant to these
contracts had an aggregate gross contract value of $1,176 million, as compared
to $882 million of assets under management at March 31, 1996. Assets are added
to most of these contracts by addenda, each with its own compensation
structure. During the first quarter of 1997, assets with an aggregate book
value of $55 million were added to the contract with Freddie Mac to provide
loss mitigation and loan workout services. Management believes that, to operate
profitably, the Company must continue to significantly expand and develop the
revenues it derives from these contracts and arrangements.
While the gross contract value of assets under management has increased, the
Company's revenues for the first quarter of 1997 declined from the same period
in 1996. The private-sector contracts provide for generally lower ongoing
management fees than did the expired public-sector contracts. While these
present contracts offer greater opportunities for additional, incentive-based
compensation at the end of an engagement, the lower ongoing fees have been a
material factor in the decline in the Company's revenue. Management is
concentrating the Company's financial and human resources efforts to increase
the Company's revenues through the expansion of its core asset management,
disposition and servicing businesses and the development of new, related
businesses.
The Company's principal investment banking client has advised the Company that
it intends to place into a securitized transaction substantially all of the
assets it has under the Company's management. Such a transaction may cause the
Company's management fees to further decline. There can be no assurance that
such a transaction will occur or at what time, if at all.
The Company continues to pursue strategic acquisitions of entities and
portfolios to expand its core servicing and asset management and disposition
businesses and to continue to develop its loan origination capability.
Management continues to pursue the acquisition of asset servicing rights, which
acquisitions the Company can generally accomplish at relatively modest
incremental costs. The Eastern Realty Company acquisition in October 1996
brought to the Company additional capabilities in asset management, real estate
development and structured financings. The Company has also begun,
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through the acquisitions of Merchants Mortgage Company in December 1996 and
R/L/M in January 1997, new loan servicing and mortgage banking relationships
with the Federal National Mortgage Association. The Company intends to
aggressively pursue commercial loan originations through a redeployment of
staff and through acquisitions and correspondent relationships. In Europe, the
Company continues to pursue opportunities to acquire overseas asset portfolios
and operating entities. Management anticipates that additional acquisition
opportunities will arise as a result of ongoing consolidations in the
industries in which the Company operates.
Until the Company can expand its revenue base, management anticipates that
operating losses will continue, albeit at a lesser rate than during 1996.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1996
Total revenues decreased $2.0 million to $1.7 million for the first quarter of
1997 from $3.7 million for the first quarter of 1996. As previously discussed,
the decrease in revenue is caused by the expiration of public-sector contracts
and the replacement with lower-fee, private-sector contracts in 1997. For the
first quarter of 1997, the Company had generally no public-sector contract
revenue, compared to approximately $2.0 million for the comparable period of
1996. Management expects public-sector contract revenue to not be a material
percentage of the Company's total revenue in the foreseeable future.
Management fees are recorded as services required under the contract are
performed, and are based on a percentage applied to the aggregate value of the
assets managed, as assigned in the contracts, or on original base monthly
amounts, as defined in the contracts. Management fee revenues decreased
$554,479 to $1,188,048 for the first quarter of 1997 from $1,742,527 for the
first quarter of 1996. The decrease in generally all components of management
fee revenues for the first quarter of 1997 versus the first quarter of 1996
reflects the expiration of public-sector contracts at the end of 1995. Although
the gross contract value of private-sector contracts increased, the contracts
are at generally lower fees than those in the public sector.
Disposition and bonus fees, less retainages, are recorded as revenue when the
disposition of an asset has been consummated and the gross proceeds from the
disposition have been received by the asset owner. Disposition fees are
generally based on a percentage of the proceeds of an asset disposition, as
defined by the contracts, or a fixed amount per disposition. Bonus fees are
earned and recorded if cumulative net proceeds exceed contract thresholds
within a specified period of time. Disposition and bonus fee revenues decreased
$605,897 to $174,139 for the first quarter of 1997 from $780,036 for the first
quarter of 1996. The expiration of RTC contracts and the reduction in
disposition activity of FDIC contracts primarily resulted in the decrease in
1997.
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Contracts provide for incentive fees if the Company achieves in excess of
thresholds established in the contracts. Other revenues consist of fees for
accounting, asset management and consulting services, interest income and
equity in earnings of partnerships and joint ventures. Incentive fee and other
revenues decreased $900,452 to $317,524 for the first quarter of 1997 from
$1,217,976 for the first quarter of 1996. As with management and other fees,
the decrease was primarily due to certain public-sector contract thresholds
being settled in 1996, while the incentive levels on the more recent
private-sector contracts generally will not be realized until their completion.
Personnel expenses include salaries, related payroll taxes and benefits, travel
and living expenses, and professional development expenses. Personnel expenses
decreased $1,044,832, or 38%, to $1,730,671 for the first quarter of 1997 from
$2,775,503 for the first quarter of 1996. The decreases were primarily caused
by operational restructuring as a result of the expiration of the Company's
public-sector contracts and the disposition of the Company's controlling
interest in CSW Associates, Inc. ("CSW") in July 1996. Because of these
factors, staffing was reduced significantly from 1996, with resultant decreases
in salaries, payroll taxes and benefits expenses.
Occupancy, insurance and other expenses decreased $120,164 or 16%, to $627,749
for the first quarter of 1997 from $747,903 for the first quarter of 1996. In
July 1996, with the disposition of CSW, the Company closed its Miami, Florida
office. Other occupancy, insurance and other expense components, including
equipment leases and other services, were restructured to reduce overall
expenses.
Amortization and depreciation expenses reflect the amortization of the excess
of cost over net assets of companies acquired through the Company's acquisition
program and the depreciation of the Company's fixed assets. Amortization and
depreciation decreased $222,190 to $118,960 for the first quarter of 1997 from
$341,150 for the first quarter of 1996. The decrease in amortization and
depreciation expenses for the first quarter of 1997 primarily reflects the
impact of writing off approximately $1,226,000 of unamortized goodwill of
consolidated subsidiaries during 1996.
The employment contract settlement of $206,563 in the first quarter of 1997
reflects a non-recurring charge representing the lump-sum, final settlement of
incentive compensation payments otherwise due over time to a former employee.
Interest expense increased $51,003 to $78,170 for the first quarter of 1997
from $27,167 for the first quarter of 1996, from debt incurred for the R/L/M
acquisition.
The income tax benefit of $182,563 primarily reflects the change in book
estimates relating to the tax refund receivable for 1996. As the Company
expects to have in 1997 a net operating loss carry forward available for income
tax reporting purposes, no tax benefit provision has been made for the
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net loss as of March 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
Cash and cash equivalents increased $150,860 to $737,940 at March 31, 1997 from
$587,080 at December 31, 1996. The Company had aggregate bank credit facilities
of $875,000, of which $750,000 was outstanding at March 31, 1997.
In April 1997, the Company repaid bank borrowings of $950,000 outstanding at
March 31, 1997 with a portion of the funds from the collection of the federal
tax refund due the Company for the year ending December 31, 1996. Also, in
April 1997, the Company obtained a new bank letter of credit to secure its
obligations under a Six Month Adjustable Rate Industrial Revenue Bond for a
building which serves as the Company's headquarters. The Company is in
compliance with all covenants of the letter of credit.
In March 1997, the Company entered into the SPA with the Harbert Fund providing
for a significant minority ownership interest in the Company of up to
approximately 30% of the Common Stock. Under the terms of this agreement, the
Company sold one million shares of Common Stock to the Harbert Fund for a price
of $1 million dollars. During the twelve months following the initial
investment, the Harbert Fund may invest up to $2 million to assist with
strategic acquisitions, with an additional $2 million earmarked for investment
in subordinate tranches of commercial mortgage backed securitizations. In any
of these additions investments, the Harbert Fund would receive Common Stock at
a purchase price of $1.05 per share.
The Company expects to fund current operations with cash provided by operations
and from proceeds provided from private investment capital infusions.
Management anticipates that its cash flows will improve during the year with
the receipt of contract retainage from the FDIC, as successor to the RTC.
Retainage will be primarily used to retire short-term debt. Additionally, while
the Company continues its efforts to reduce operating expenses, it will be
necessary to develop new sources of revenue to eliminate operating deficits,
alternative funding sources to fund those deficits or additional plans to
manage revenue losses. If the Company cannot expand its revenue base or secure
new means of financing its operations, its working capital position and ability
to operate will deteriorate significantly.
The Company is actively seeking credit facilities to expand existing facilities
and to fund acquisitions. The Company expects to fund strategic acquisitions of
entities and asset portfolios by cash provided from debt or equity financing.
HISTORICAL CASH FLOWS
Cash flows from operating activities changed to a use of cash of $461,849 for
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the first quarter of 1997 from a source of funds of $559,248 for the first
quarter of 1996. The change was primarily caused by the increased net loss
incurred in the first quarter of 1997 resulting from the expiration of
public-sector contracts and related reduction in contract revenues. The cash
used by operating activities as a result of the greater net loss was partially
offset by the net change in working capital components. Working capital
component changes for the quarter generally reflect the realization of contract
receivables and increases in current liabilities.
Cash flows used in investing activities decreased to $17,295 for the first
quarter of 1997, from $603,587 for the first quarter of 1996. The change was
primarily caused by the elimination of distributions to minority interest
holders due to the sale of CSW, an increase in cash acquired from corporate
acquisitions and a reduction in property and equipment purchases.
Cash flows from financing activities increased to $630,004 for the first
quarter of 1997 from $503,692 for the first quarter of 1996. The increase was
attributable to proceeds from the issuance of Common Stock to the Harbert Fund,
which was partially offset by net principal repayments on the Company's debt.
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<PAGE> 15
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities
Effective March 7, 1997, pursuant to the SPA entered into with the Harbert
Fund, the Company issued 1,000,000 shares of Common Stock in exchange for $1
million cash. The Common Stock was sold to the Harbert Fund without
registration pursuant to exemptions contained in Section 4(2) of the Securities
Act and Rule 506 thereunder based on the accreditation of the purchaser and the
size of the offering, among other things.
Item 3. - Defaults Upon Senior Securities
None
Item 4. - Submission of Matters to a Vote of Security Holders
None
Item 5. - Other Information
Effective April 22, 1997, Harold E. Cooke joined the Company as President and
Chief Operating Officer. Mr. Cooke comes to the Company from the investment
banking firm of Donaldson, Lufkin & Jenrette Securities Corporation, where he
was senior vice president in its Real Estate Group.
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Numbers
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<S> <C>
10.46 Stock Purchase Agreement dated December 31, 1996 by and among
Crown NorthCorp, Inc., CNC/DUS Newco, Inc. and National City
Corporation.
10.47 Amendment to Stock Purchase Agreement dated January 9, 1997 by and
among Crown NorthCorp, Inc., CNC/DUS Newco, Inc. and National City
Corporation.
</TABLE>
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<TABLE>
<S> <C>
10.48 Stock Purchase Agreement dated May 22, 1996 by and among Crown
NorthCorp, Inc., CNC/DUS Newco, Inc., Reinlein/Lieser/McGee
Holding Corporation, R/L/M Employee Benefit Corporation, Karl H.
Reinlein, George F. Lieser and John R. McGee.
10.49 Amendment to Stock Purchase Agreement dated January 9, 1997 by and
among Crown NorthCorp, Inc., CNC/DUS Newco, Inc.,
Reinlein/Lieser/McGee Holding Corporation, R/L/M Employee Benefit
Corporation, Karl H. Reinlein, George F. Lieser and John R. McGee.
10.50 Promissory note, dated January 10, 1997, by the Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus.
10.51 Cash security agreement, dated January 10, 1997, by the Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus.
10.52 Promissory note, dated January 10, 1997, by the Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus.
10.53 Non-cash collateral security agreement, dated January 10, 1997,
by the Crown NorthCorp, Inc. in favor of The Fifth Third Bank of
Columbus.
10.54 Letter of credit demand note, dated January 10, 1997, by Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus.
10.55 LC Security Agreement, dated January 10, 1997, by Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus.
10.56 Registration Rights Agreement, dated December 30, 1996, between
Crown NorthCorp, Inc. and Asdale Limited.
10.57 Stock Purchase Agreement dated March 7, 1997 by and between
Harbert Equity Fund I, L.L.C. and Crown NorthCorp, Inc.
10.58 Escrow Agreement dated March 7, 1997 by and among Harbert Equity
Fund I, L.L.C., AmSouth Bank of Alabama and Crown NorthCorp, Inc.
10.59 Voting Agreement dated March 7, 1997 by and among Ronald E. Roark,
Tucker Holding Company, Ltd. and Harbert Equity Fund I, L.L.C.
10.60 Registration Rights Agreement dated March 7, 1997 by and between
Harbert Equity Fund I, L.L.C. and Crown NorthCorp, Inc.
10.61 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc. in
favor of The Fifth Third Bank of Columbus.
</TABLE>
II-2
<PAGE> 17
<TABLE>
<S> <C>
10.62 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc.
in favor of The Fifth Third Bank of Columbus.
10.63 Security Agreement dated March 27, 1997 by Crown NorthCorp, Inc.
in favor of The Fifth Third Bank of Columbus.
10.64 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc. in
favor of The Fifth Third Bank of Columbus.
10.65 Collateral assignment of 1996 federal income tax refund by Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus.
</TABLE>
(b) Reports on Form 8-K
On January 24, 1997, the Company filed a Current Report on Form 8-K
reporting on the acquisition of Merchants Mortgage Corporation and
Reinlein/Lieser/McGee and on the issuance of common stock to Asdale
Limited.
On March 25, 1997, the Company filed an amendment to a Current Report on
Form 8-K/A filing the financial statements required by Regulation S-B with
respect to the acquisition of Merchants Mortgage Corporation.
II-3
<PAGE> 18
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CROWN NORTHCORP, INC.
Dated: May __, 1997 By: /s/ Richard A. Brock
-----------------------
Richard A. Brock
Senior Vice President, Treasurer and
Chief Financial Officer
By: /s/ Ray L. Druseikis
-----------------------
Ray L. Druseikis
Controller and Chief Accounting
Officer
II-4
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<S> <C>
10.46 Stock Purchase Agreement dated December 31, 1996 by and among
Crown NorthCorp, Inc., CNC/DUS Newco, Inc. and National City
Corporation. (1)
10.47 Amendment to Stock Purchase Agreement dated January 9, 1997 by and
among Crown NorthCorp, Inc., CNC/DUS Newco, Inc. and National City
Corporation. (2)
10.48 Stock Purchase Agreement dated May 22, 1996 by and among Crown
NorthCorp, Inc., CNC/DUS Newco, Inc., Reinlein/Lieser/McGee
Holding Corporation, R/L/M Employee Benefit Corporation, Karl H.
Reinlein, George F. Lieser and John R. McGee. (3)
10.49 Amendment to Stock Purchase Agreement dated January 9, 1997 by and
among Crown NorthCorp, Inc., CNC/DUS Newco, Inc.,
Reinlein/Lieser/McGee Holding Corporation, R/L/M Employee Benefit
Corporation, Karl H. Reinlein, George F. Lieser and John R. McGee. (4)
10.50 Promissory note, dated January 10, 1997, by the Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus. (5)
10.51 Cash security agreement, dated January 10, 1997, by the Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus. (6)
10.52 Promissory note, dated January 10, 1997, by the Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus. (7)
10.53 Non-cash collateral security agreement, dated January 10, 1997,
by the Crown NorthCorp, Inc. in favor of The Fifth Third Bank of
Columbus. (8)
10.54 Letter of credit demand note, dated January 10, 1997, by Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus. (9)
10.55 LC Security Agreement, dated January 10, 1997, by Crown NorthCorp,
Inc. in favor of The Fifth Third Bank of Columbus. (10)
10.56 Registration Rights Agreement, dated December 30, 1996, between
Crown NorthCorp, Inc. and Asdale Limited. (11)
10.57 Stock Purchase Agreement dated March 7, 1997 by and between
Harbert Equity Fund I, L.L.C. and Crown NorthCorp, Inc. (12)
10.58 Escrow Agreement dated March 7, 1997 by and among Harbert Equity
Fund I, L.L.C., AmSouth Bank of Alabama and Crown NorthCorp, Inc. (12)
</TABLE>
II-5
<PAGE> 20
<TABLE>
<S> <C>
10.59 Voting Agreement dated March 7, 1997 by and among Ronald E. Roark,
Tucker Holding Company, Ltd. and Harbert Equity Fund I, L.L.C. (12)
10.60 Registration Rights Agreement dated March 7, 1997 by and between
Harbert Equity Fund I, L.L.C. and Crown NorthCorp, Inc. (12)
10.61 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc. in
favor of The Fifth Third Bank of Columbus.(12)
10.62 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc.
in favor of The Fifth Third Bank of Columbus. (12)
10.63 Security Agreement dated March 27, 1997 by Crown NorthCorp, Inc.
in favor of The Fifth Third Bank of Columbus. (12)
10.64 Promissory note dated March 27, 1997 by Crown NorthCorp, Inc. in
favor of The Fifth Third Bank of Columbus. (12)
10.65 Collateral assignment of 1996 federal income tax refund by Crown
NorthCorp, Inc. in favor of The Fifth Third Bank of Columbus. (12)
</TABLE>
- ----------------------
<TABLE>
<S> <C>
(1) Incorporated by reference to Exhibit 1 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(2) Incorporated by reference to Exhibit 2 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(3) Incorporated by reference to Exhibit 3 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(4) Incorporated by reference to Exhibit 4 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(5) Incorporated by reference to Exhibit 5 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
</TABLE>
II-6
<PAGE> 21
<TABLE>
<S> <C>
(6) Incorporated by reference to Exhibit 6 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(7) Incorporated by reference to Exhibit 7 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(8) Incorporated by reference to Exhibit 8 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(9) Incorporated by reference to Exhibit 9 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(10) Incorporated by reference to Exhibit 10 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(11) Incorporated by reference to Exhibit 11 to the Company's
current Report on Form 8-K dated December 30, 1996 (Commission
File No. 0-22936).
(12) Filed herewith.
</TABLE>
II-7
<PAGE> 1
STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 7, 1997
BETWEEN AND AMONG
HARBERT EQUITY FUND I, L.L.C.,
PURCHASER,
AND
CROWN NORTHCORP, INC.,
SELLER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - THE FIRST PURCHASE AND SALE................................................................ 1
SECTION 1.1. Terms of the First Purchase and Sale................................................ 1
SECTION 1.2. The First Closing................................................................... 1
SECTION 1.3. Conditions to the Obligation of the Purchaser to Consummate
the Transactions to be Consummated Hereunder at the First Closing................... 2
SECTION 1.4. Conditions to the Obligation of the Seller to Consummate the
Transactions to be Consummated Hereunder at the First Closing....................... 3
ARTICLE II - THE SECOND PURCHASES AND SALES............................................................ 5
SECTION 2.1. Terms of the Second Purchases and Sales............................................. 5
SECTION 2.2. The Second Closings................................................................. 6
SECTION 2.3. Conditions to the Obligation of the Purchaser to Consummate the
Transactions to be Consummated Hereunder at a Second Closing........................ 7
SECTION 2.4. Conditions to the Obligation of the Seller to Consummate the
Transactions to be Consummated Hereunder at a Second Closing........................ 8
SECTION 2.5. Option to Purchase.................................................................. 10
ARTICLE III - THE THIRD PURCHASE AND SALE.............................................................. 11
SECTION 3.1. Terms of the Third Purchase and Sale................................................ 11
SECTION 3.2. The Third Closing................................................................... 11
SECTION 3.3. Conditions to the Obligation of the Purchaser to Consummate the
Transactions to be Consummated Hereunder at the Third Closing....................... 12
SECTION 3.4. Conditions to the Obligation of the Seller to Consummate the
Transactions to be Consummated Hereunder at the Third Closing....................... 13
SECTION 3.5. Option to Purchase.................................................................. 15
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE SELLER.............................................. 16
SECTION 4.1. First Closing Representations and Warranties........................................ 16
SECTION 4.2. Second Closing, Third Closing and Option Representations and
Warranties.......................................................................... 26
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................ 28
SECTION 5.1. Organization........................................................................ 28
SECTION 5.2. Authority to Buy.................................................................... 28
SECTION 5.3. Non-Distributive Intent............................................................. 28
SECTION 5.4. Investment Company.................................................................. 29
SECTION 5.5. Compliance with Laws................................................................ 29
SECTION 5.6. Broker Fees......................................................................... 29
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VI - COVENANTS OF THE SELLER................................................................... 29
SECTION 6.1. Furnish Future Information.......................................................... 29
SECTION 6.2. Board Representation................................................................ 30
SECTION 6.3. Corporate Governance................................................................ 31
SECTION 6.4. Reasonable Best Efforts............................................................. 31
SECTION 6.5. Reservation of Authorized Shares.................................................... 31
SECTION 6.6. Anti-Dilution....................................................................... 31
ARTICLE VII - COVENANTS OF THE PURCHASER............................................................... 32
SECTION 7.1. Compliance with Securities Laws..................................................... 32
SECTION 7.2. Director Filings.................................................................... 32
SECTION 7.3. Change of Residence and Principal Executive Office.................................. 32
ARTICLE VIII - REPURCHASE RIGHTS OF THE SELLER......................................................... 32
ARTICLE IX - INDEMNIFICATION........................................................................... 34
SECTION 9.1. Indemnification by the Seller....................................................... 34
SECTION 9.2. Indemnification by the Purchaser.................................................... 34
SECTION 9.3. Method of Asserting Claims.......................................................... 35
SECTION 9.4. Payment............................................................................. 36
SECTION 9.5. Arbitration......................................................................... 37
SECTION 9.6. Other Rights and Remedies Not Affected.............................................. 37
ARTICLE X - MISCELLANEOUS.............................................................................. 38
SECTION 10.1. Further Actions..................................................................... 38
SECTION 10.2. Availability of Equitable Remedies.................................................. 38
SECTION 10.3. Survival............................................................................ 38
SECTION 10.4. Modification........................................................................ 38
SECTION 10.5. Notices............................................................................. 38
SECTION 10.6. Waiver.............................................................................. 39
SECTION 10.7. Binding Effect...................................................................... 40
SECTION 10.8. No Third Party Beneficiaries........................................................ 40
SECTION 10.9. Separability........................................................................ 40
SECTION 10.10.Headings............................................................................ 40
SECTION 10.11.Counterparts; Governing Law......................................................... 40
SECTION 10.12.Assignments......................................................................... 40
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C>
EXHIBIT A - Seller's Officer's Certificate - First Closing
(Section 1.3(a))
EXHIBIT B - Opinion of Seller's Counsel
(Sections 1.3(b); 2.3(b); 3.3(b))
EXHIBIT C - Purchaser's Officer's Certificate - First Closing
(Section 1.4(a))
EXHIBIT D - Opinion of Purchaser's Counsel
(Sections 1.4(b); 2.4(b); 3.4(b))
EXHIBIT E - Escrow Agreement
(Section 2.1(a))
EXHIBIT F - Acquisition Criteria
(Section 2.3(a))
EXHIBIT G - Seller's Officer's Certificate - Second Closing
(Section 2.3(b))
EXHIBIT H - Purchaser's Officer's Certificate - Second Closing
(Section 2.4(a))
EXHIBIT I - Fund Criteria
(Section 3.3(a))
EXHIBIT J - Seller's Officer's Certificate - Third Closing
(Section 3.3(b))
EXHIBIT K - Purchaser's Officer's Certificate - Third Closing
(Section 3.4(a))
EXHIBIT L - Voting Agreement
(Sections 1.3(h); 1.4(b))
Schedule 4.1(a) Subsidiaries
Schedule 4.1(b) Capitalization
Schedule 4.1(e) Litigation
Schedule 4.1(f) Properties
Schedule 4.1(g) Contracts
Schedule 4.1(h) ERISA
Schedule 4.1(j) Consents
Schedule 4.1(k) Intellectual Property
Schedule 4.1(l) Insurance
Schedule 4.1(m) Related Party Transactions
</TABLE>
(iii)
<PAGE> 5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 7,
1997, is between and among HARBERT EQUITY FUND I, L.L.C., a Georgia limited
liability company with offices at One Riverchase Parkway South, Birmingham,
Alabama 35244 (the "Purchaser"), and CROWN NORTHCORP, INC., a Delaware
corporation with offices at 1251 Dublin Road, Columbus, Ohio 43215 (the
"Seller").
WITNESSETH:
WHEREAS, the Purchaser desires to purchase from the Seller, and the
Seller desires to sell to the Purchaser, certain shares of the Common Stock,
par value $.01 per share, of the Seller (the "Seller Common Stock") on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the adequacy, sufficiency, and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE FIRST PURCHASE AND SALE
SECTION 1.1. TERMS OF THE FIRST PURCHASE AND SALE. On the basis of the
representations and warranties set forth in Section 4.1 and Article V, and
subject to the terms and conditions set forth herein:
(a) The Seller shall issue at the First Closing (as hereinafter
defined) to the Purchaser a certificate registered in the name of the Purchaser
for 1,000,000 shares (the "First Closing Shares") of Seller Common Stock.
(b) As consideration for the First Closing Shares, the Purchaser shall
deliver at the First Closing to the Seller $1,000,000 in cash, by certified
check, or by wire transfer of immediately available funds to an account
designated in writing by the Seller.
SECTION 1.2. THE FIRST CLOSING. The closing of the transactions
contemplated by Section 1.1 (the "First Closing") shall take place at the
offices of Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree Street, N.E.,
Atlanta, Georgia 30303, at 11:00 A.M., local time, on March 7, 1997 (the "First
Closing Date"). The First Closing may occur at such different place, such
different time, or such different date or a combination thereof as the
Purchaser and the Seller agree in writing.
<PAGE> 6
SECTION 1.3. CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO
CONSUMMATE THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT THE FIRST CLOSING.
The obligations of the Purchaser to consummate the transactions to be
consummated hereunder at the First Closing are subject to the following
conditions (unless waived by the Purchaser in its discretion):
(a) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Seller contained in Section 4.1 of this
Agreement shall be true and correct as of the First Closing; as of the First
Closing the Seller shall have performed and complied with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by the Seller at or before such time by this Agreement; and the Purchaser
shall have received a certificate executed by the Chairman of the Board and
Chief Executive Officer of the Seller, dated the First Closing Date, to that
effect, substantially in the form of Exhibit A.
(b) OPINION OF COUNSEL. The Seller shall have delivered to the
Purchaser on the First Closing Date the favorable opinions of each of Powell,
Goldstein, Frazer & Murphy LLP, counsel to the Seller and Stephen W. Brown,
Secretary of the Seller, each dated as of such date, collectively addressing
the matters set forth in Exhibit B and each in the form agreed upon by the
Purchaser and the Seller, each acting reasonably and in good faith.
(c) OTHER CLOSING DOCUMENTS. The Seller shall have delivered to the
Purchaser on or prior to the First Closing such other documents as the
Purchaser may reasonably request in order to enable the Purchaser to determine
whether the conditions to its obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
(d) LEGAL ACTION. A third party shall not have instituted or
threatened any legal proceeding relating to, or seeking to prohibit or
otherwise challenge the consummation of, the transactions contemplated by this
Agreement or any of the other agreements, instruments, and other documents
executed or to be executed and delivered pursuant hereto or in connection
therewith (collectively, and including this Agreement, the "Operative
Documents"), or to obtain substantial damages with respect thereto.
(e) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents, by any federal, state, local,
or other governmental authority or by any court or other tribunal, including
the entry of a preliminary or permanent injunction, which, in the reasonable
judgment of the Purchaser, (i) makes any of the transactions contemplated by
this Agreement illegal, (ii) results in a material delay in the ability of the
Purchaser to consummate any of the transactions contemplated by this Agreement,
(iii) imposes material limitations on the ability of the Purchaser, other than
those imposed by the Voting Agreement (as hereinafter defined) effectively to
exercise full rights of ownership of the First Closing Shares including the
right
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<PAGE> 7
to vote the First Closing Shares on all matters properly presented to the
stockholders of the Seller except as contemplated by the Voting Agreement, or
(iv) otherwise prohibits, restricts, or materially delays consummation of any
of the transactions contemplated by this Agreement.
(f) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be necessary for the Seller to
legally issue the First Closing Shares to the Purchaser under the state
securities laws of such state.
(g) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained at or
prior to the First Closing all consents, if any, required for the consummation
of the transactions to be consummated hereunder at the First Closing from any
party to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Seller or any of its consolidated subsidiaries or
consolidated affiliates (each, a "Subsidiary", and collectively, the
"Subsidiaries") is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
(h) VOTING AGREEMENT. Ronald E. Roark and Tucker Holding Company, Ltd.
shall have executed and delivered to the Purchaser the Voting Agreement in the
form of Exhibit L (the "Voting Agreement").
SECTION 1.4. CONDITIONS TO THE OBLIGATION OF THE SELLER TO CONSUMMATE
THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT THE FIRST CLOSING. The
obligations of the Seller to consummate the transactions to be consummated
hereunder at the First Closing are subject to the following conditions (unless
waived by the Seller in its discretion):
(a) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Purchaser contained in Article V of this
Agreement shall be true and correct as of the First Closing; as of the First
Closing the Purchaser shall have performed and complied with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by the Purchaser at or before such time by this Agreement; and the Seller
shall have received a certificate executed by the President or any Vice
President of Harbert Management Corporation, an Alabama corporation (the
"Manager"), the Manager of the Purchaser, dated the date of the First Closing,
to that effect, substantially in the form of Exhibit C.
(b) OPINION OF COUNSEL. The Purchaser shall have delivered to the
Seller on the date of the First Closing the favorable opinion of each of
Kilpatrick Stockton LLP, counsel to the Purchaser, and Patricia Mandt, General
Counsel of Harbert Management Corporation, each dated as of such date,
collectively addressing the matters set forth in Exhibit D and each
-3-
<PAGE> 8
in the form agreed upon by the Seller and the Purchaser, each acting reasonably
and in good faith.
(c) OTHER CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Seller at or prior to the First Closing such other documents, including,
without limitation, an Investors Questionnaire, as the Seller may reasonably
request in order to enable the Seller to determine whether the conditions to
its obligations under this Agreement have been met and otherwise to carry out
the provisions of this Agreement.
(d) LEGAL ACTION. A third party shall not have instituted or
threatened any legal proceeding relating to, or seeking to prohibit or
otherwise challenge the consummation of, the transactions contemplated by the
Operative Documents or in connection therewith, or to obtain substantial
damages with respect thereto.
(e) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents, by any federal, state, local,
or other governmental authority or by any court or other tribunal, including
the entry of a preliminary or permanent injunction, which, in the reasonable
judgment of the Seller, (i) makes any of the transactions contemplated by this
Agreement illegal, (ii) results in a material delay in the ability of the
Seller to consummate any of the transactions contemplated by this Agreement, or
(iii) otherwise prohibits, restricts, or materially delays consummation of any
of the transactions contemplated by this Agreement.
(f) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be necessary for the Seller to
legally issue the First Closing Shares to the Purchaser under the state
securities laws of such state.
(g) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained on or
prior to the First Closing all consents required for the consummation of the
transactions to be consummated hereunder at the First Closing from any party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Seller or any Subsidiary is a party, or to which any
of them or any of their respective businesses, properties, or assets are
subject.
(h) FAIRNESS OPINION. The Board of Directors of the Seller shall have
obtained the favorable opinion of Delta Financial Group, Inc. as to the
fairness, from a financial point of view, of the transactions contemplated
hereby to the stockholders of the Seller, which opinion shall be in form and
substance satisfactory to the Board of Directors of the Seller (the "Fairness
Opinion").
-4-
<PAGE> 9
(i) VOTING AGREEMENT. The Purchaser shall have executed and delivered
the Voting Agreement to each of Ronald E. Roark and Tucker Holding Company,
Ltd.
ARTICLE II
THE SECOND PURCHASES AND SALES
SECTION 2.1. TERMS OF THE SECOND PURCHASES AND SALES. On the basis of
the representations and warranties set forth in Section 4.1 and Article V as
qualified and revised from time to time as provided herein and subject to the
terms and conditions set forth herein:
(a) On the date hereof, the Purchaser, the Seller, and AmSouth Bank of
Alabama, as escrow agent (the "Escrow Agent"), have executed and delivered an
Escrow Agreement in the form attached as Exhibit E (the "Escrow Agreement")
providing for the creation of an escrow fund (the "Escrow Fund"). During the
period commencing on the First Closing Date and terminating at 5:00 p.m.,
Eastern Standard Time, on the first anniversary thereof (the "Second Closing
Period"), the Seller shall be entitled to deliver to the Purchaser a written
notice of a proposed Third Party Acquisition (as defined in Section 2.3(a)) at
any time after the conditions precedent to such Third Party Acquisition set
forth in Section 2.3(a) have been satisfied, which notice shall summarize the
proposed terms of such Third Party Acquisition, including without limitation
the amount of the purchase consideration relating thereto approved by the
Seller's Board of Directors (the "Acquisition Price"). Any Third Party
Acquisition with respect to which such notice has been delivered to the
Purchaser is referred to herein as a "Noticed Third Party Acquisition." Within
three business days after the date of such notice, the Purchaser shall deposit
into the Escrow Fund a sum equal to the related Acquisition Price (each, a
"Deposit," and the date that such Deposit is made being referred to herein as
the related "Deposit Date"). Notwithstanding any provision of this Agreement
to the contrary, the aggregate Deposits required to be made into the Escrow
Fund by the Purchaser hereunder, minus all Deposits released and paid to the
Purchaser pursuant to Section 2.1(c), shall not exceed $2,000,000. From time to
time during the Second Closing Period and for such period thereafter during
which any Noticed Third Party Acquisition is pending, the Seller shall promptly
inform the Purchaser in writing of any and all material developments pertaining
to the negotiation, consummation, and termination of all Noticed Third Party
Acquisitions; provided, however, that the Seller shall not hereby be required
to violate any applicable law.
(b) From time to time during the Second Closing Period, if the Seller
enters into a contract (each, an "Acquisition Agreement") providing for the
consummation of a Noticed Third Party Acquisition, the Seller shall promptly
deliver to the Purchaser a written notice of such occurrence (an "Acquisition
Notice") summarizing the material terms of such Acquisition Agreement and
accompanied by a true and correct copy of such Acquisition Agreement (the date
of each such notice being referred to herein as a "Second Closing Notice
Date"). Provided that all of the conditions precedent set forth in Section 2.3
and 2.4 have been
-5-
<PAGE> 10
satisfied or waived as to the related Third Party Acquisition as of the date
that such Third Party Acquisition is to be consummated (a "Second Closing
Date"), as early as practicable on the related Second Closing Date the Seller
shall deliver a certificate (a "Seller Release Certificate") to the Escrow
Agent and to the Purchaser, in compliance with paragraphs 4(a) and (c) of the
Escrow Agreement, instructing the Escrow Agent to release and pay to the
Seller, as early as is practicable on such Second Closing Date, a portion of
the Escrow Fund (each, a "Second Closing Payment") equal to the lesser of (i)
the amount then in the Escrow Fund, and (ii) the cash consideration to be paid
by the Purchaser or any of its Subsidiaries to the seller(s) in such Third
Party Acquisition, and the Seller, one or more of its Subsidiaries, or both (as
applicable) shall utilize such Second Closing Payment to pay such cash
consideration to such seller(s). As consideration therefor, the Seller shall
promptly issue to the Purchaser on such Second Closing Date the number of
shares of Seller Common Stock equal to the quotient obtained by dividing the
related Second Closing Payment by $1.05, and shall promptly deliver to the
Purchaser a certificate for such shares registered in the name of the
Purchaser. The consummation of the transactions contemplated by this Section
2.1(b) with respect to any Third Party Acquisition as well as the consummation
of the transactions contemplated by Section 2.5 shall each constitute a "Second
Closing" for purposes of this Agreement except as set forth in Section 2.5(a),
and all shares of Seller Common Stock issued in connection with Second Closings
as of any date are referred to herein as the "Second Closing Shares."
(c) Notwithstanding any provision of this Agreement to the contrary,
(i) if the Seller or a Subsidiary fails to consummate a Noticed Third Party
Acquisition within 60 days after the related Deposit Date, or if the
Acquisition Agreement relating to such Noticed Third Party Acquisition is
earlier terminated, the Purchaser will have the right to issue to the Escrow
Agent a certificate, in compliance with paragraphs 4(b) and (c) of the Escrow
Agreement, instructing the Escrow Agent to release and pay to the Purchaser the
related Deposit, together with all accrued interest thereon, and (ii) on the
later of (x) the expiration of the Second Closing Period, or (y) the date that
is 60 days after the Deposit Date pertaining to a Noticed Third Party
Acquisition which has not been consummated and has not been terminated on or
prior to the end of such 60 day period (the later of such dates being referred
to herein as the "Second Closing Expiration Date"), the Purchaser will have the
right to issue to the Escrow Agent a certificate, in compliance with paragraphs
4(b) and (c) of the Escrow Agreement, instructing the Escrow Agent to release
and pay to the Purchaser any and all amounts (if any) then remaining in the
Escrow Fund, together with all accrued interest thereon.
SECTION 2.2. THE SECOND CLOSINGS. All Second Closings shall take place
at the offices of Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree Street,
N.E., Atlanta, Georgia 30303, at 9:00 A.M., local time on the related Second
Closing Date. Any Second Closing may occur at such different place, such
different time, or such different date or a combination thereof as the
Purchaser and the Seller agree in writing.
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SECTION 2.3. CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO
CONSUMMATE THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT A SECOND CLOSING.
The obligations of the Purchaser to consummate the transactions to be
consummated hereunder at a Second Closing are subject to the following
conditions (unless waived by the Purchaser in its sole discretion):
(a) ACQUISITION. During the Second Closing Period and with respect to
the related Second Closing, (i) the Seller, in regular consultation with the
Purchaser, shall have identified the related acquisition (each, a "Third Party
Acquisition") to be made by the Seller, one or more Subsidiaries, or both, as
the case may be, that satisfies all of the criteria set forth in Exhibit F (the
"Second Closing Criteria"), and (ii) the Board of Directors of the Seller shall
have approved such Third Party Acquisition.
(b) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Seller contained in Section 4.1 of this
Agreement, as qualified and revised pursuant to the related Seller Disclosure
Schedule (as hereinafter defined), shall be true and correct as of such Second
Closing; as of such Second Closing the Seller shall have performed and complied
with all covenants and agreements and satisfied all conditions required to be
performed and complied with by the Seller at or before such time by this
Agreement; and the Purchaser shall have received a certificate executed by the
Chief Executive Officer, the President, or any Vice President of the Seller,
dated as of the related Second Closing Date, to that effect, substantially in
the form of Exhibit G.
(c) OPINION OF COUNSEL. The Seller shall have delivered to the
Purchaser on the related Second Closing Date the favorable opinions of each of
Powell, Goldstein, Frazer & Murphy LLP, counsel to the Seller, and Stephen W.
Brown, Secretary of the Seller, each dated as of such date, collectively
addressing the matters set forth in Exhibit B and each in the form agreed upon
by the Purchaser and the Seller, each acting reasonably and in good faith.
(d) OTHER CLOSING DOCUMENTS. The Seller shall have delivered to the
Purchaser on or prior to the related Second Closing Date such other documents
as the Purchaser may reasonably request in order to enable the Purchaser to
determine whether the conditions to its obligations under this Agreement have
been met and otherwise to carry out the provisions of this Agreement.
(e) LEGAL ACTION. An unaffiliated third party shall not have
instituted or threatened any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions
contemplated by this Agreement or any of the other Operative Documents, or to
obtain substantial damages with respect thereto.
(f) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents by,
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any federal, state, local, or other governmental authority or by any court or
other tribunal, including the entry of a preliminary or permanent injunction,
which, in the reasonable judgment of the Purchaser, (i) makes any of the
transactions contemplated by this Agreement illegal, (ii) results in a material
delay in the ability of the Purchaser to consummate any of the transactions
contemplated by this Agreement, (iii) imposes material limitations, other than
those imposed by the Voting Agreement, on the ability of the Purchaser
effectively to exercise full rights of ownership of the Seller Common Stock to
be issued to the Purchaser at such Second Closing, including the right to vote
such Seller Common Stock on all matters properly presented to the stockholders
of the Seller except as contemplated by the Voting Agreement, or (iv) otherwise
prohibits, restricts, or materially delays consummation of any of the
transactions contemplated by this Agreement.
(g) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be necessary for the Seller to
legally issue the Seller Common Stock to be issued to the Purchaser at such
Second Closing under the state securities laws of such state.
(h) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained on or
prior to the related Second Closing Date all consents, if any, required for the
consummation of the transactions to be consummated hereunder at such Second
Closing from any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to which the Seller or any Subsidiary is a party,
or to which any of them or any of their respective businesses, properties, or
assets are subject.
(i) NO MATERIAL ADVERSE EFFECT. The Seller Disclosure Schedule
relating to such Second Closing (i) shall not reflect the occurrence of an
event that had a Material Adverse Effect (as hereinafter defined) between the
First Closing and such Second Closing, and (ii) shall not reflect the
occurrence of any event that could reasonably be expected to have a Material
Adverse Effect. As used herein, "Material Adverse Effect" means a material
adverse effect upon the business, financial condition, or results of operations
of the Seller and the Subsidiaries, considered as a whole.
(j) NO MATERIAL BREACH. There shall not have been any material breach
of any of the representations and warranties made by the Seller pursuant to
Sections 4.1 or 4.2 in connection with any previous Closing.
SECTION 2.4. CONDITIONS TO THE OBLIGATION OF THE SELLER TO CONSUMMATE
THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT A SECOND CLOSING. The
obligations of the Seller to consummate the transactions to be consummated
hereunder at a Second Closing are subject to the following conditions (unless
waived by the Seller in its discretion):
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(a) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Purchaser contained in this Agreement, as
qualified and revised pursuant to the related Purchaser Disclosure Schedule (as
hereinafter defined), shall be true and correct as of such Second Closing; as
of such Second Closing the Purchaser shall have performed and complied with all
covenants and agreements and satisfied all conditions required to be performed
and complied with by the Purchaser at or before such time by this Agreement;
and the Seller shall have received a certificate executed by the President or
Vice President of the Manager or other governing Person (as hereinafter
defined) of the Purchaser, dated the Second Closing Date, to that effect, among
other things, substantially in the form of Exhibit H.
(b) OPINION OF COUNSEL. The Purchaser shall have delivered to the
Seller on the Second Closing Date the favorable opinion of each of Kilpatrick
Stockton LLP, counsel to the Purchaser, and Alabama counsel to the Manager or
other governing Person of the Purchaser, each dated as of such date,
collectively addressing the matters set forth in Exhibit D and each in the form
agreed upon by the Seller and the Purchaser, each acting reasonably and in good
faith.
(c) OTHER CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Seller on or prior to the related Second Closing Date such other documents as
the Seller may reasonably request, including, without limitation, an Investors
Questionnaire, in order to enable the Seller to determine whether the
conditions to its obligations under this Agreement have been met and otherwise
to carry out the provisions of this Agreement.
(d) LEGAL ACTION. There shall not have been instituted or threatened
by any Person other than the Seller or its affiliates any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by the Operative Documents or in connection
therewith, or to obtain substantial damages with respect thereto.
(e) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents by any federal, state, local, or
other governmental authority or by any court or other tribunal, including the
entry of a preliminary or permanent injunction, which, in the reasonable
judgment of the Seller, (i) makes any of the transactions contemplated by this
Agreement illegal, (ii) results in a material delay in the ability of the
Seller to consummate any of the transactions contemplated by this Agreement, or
(iii) otherwise prohibits, restricts, or materially delays consummation of any
of the transactions contemplated by this Agreement.
(f) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be
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necessary for the Seller to legally issue the Seller Common Stock to be issued
to the Purchaser at such Second Closing under the state securities laws of such
state.
(g) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained on or
prior to the related Second Closing Date all consents required for the
consummation of the transactions to be consummated at such Second Closing from
any party to any contract, agreement, instrument, lease, license, arrangement,
or understanding to which the Seller or any Subsidiary is a party, or to which
any of them or any of their respective businesses, properties, or assets are
subject.
(h) FAIRNESS OPINION NOT WITHDRAWN. Subject to the Seller's compliance
with Section 6.4, the Fairness Opinion shall not have been withdrawn.
SECTION 2.5. OPTION TO PURCHASE.
(a) GRANT OF OPTION. For a period (the "Second Closing Option Period")
commencing on the date hereof and terminating ten business days after the date
that the Second Closing Period terminates, the Purchaser will have the right
and option (the "Second Closing Option"), but not the obligation, to purchase a
number of shares (the "Second Closing Option Shares") of Seller Common Stock
equal to 1,904,762 less the aggregate number of shares of Seller Common Stock
purchased by the Purchaser in Second Closings as of the Second Option Closing
Date (as defined in paragraph (c) below), for a purchase price of $1.05 per
share (the "Second Closing Option Price").
(b) EXERCISE OF OPTION. The Purchaser may exercise the Second Closing
Option at any time during the Second Closing Option Period by delivery of
written notice thereof to the Seller. The delivery of such notice shall suspend
(i) any and all obligations of the Purchaser to effect Deposits pursuant to
Section 2.1, and (ii) the Seller's rights and obligations pursuant to Section
2.1 with respect to Third Party Acquisitions that are not Noticed Third Party
Acquisitions and with respect to which a Deposit has not been effected as of
the date of such notice (including, without limitation, the right to issue any
related Seller Release Certificate); and upon the closing of the Second Closing
Option all of such obligations shall terminate and shall have no further force
or effect.
(c) CLOSING. The closing of the Second Closing Option shall take place
at the offices of Kilpatrick Stockton LLP, 1100 Peachtree Street, N.E.,
Atlanta, Georgia 30309, at 11:00 a.m. local time, on the 30th day after the
exercise thereof in compliance with the terms hereof (the "Second Option
Closing Date"). At such closing, (i) the Seller shall issue to the Purchaser a
certificate registered in the name of the Purchaser for the Second Closing
Option Shares (which number and kind of shares shall be equitably and
proportionately adjusted for stock splits, stock dividends, and other changes
to the Seller Common Stock that are approved or implemented on or prior to the
Second Option Closing Date), and (ii) as consideration for
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the Second Closing Option Shares, the Purchaser shall deliver to the Seller the
Second Closing Option Price by certified check or by wire transfer of
immediately available funds to an account previously designated in writing by
the Seller, provided that any and all amounts (if any) then remaining in the
Escrow Fund, together with all accrued interest applicable thereto, shall be
released by the Escrow Agent to the Seller on the Second Option Closing Date
and credited to the Purchaser's account at the closing toward the Second
Closing Option Option Price, and the Purchaser will cause such release to be
effected by issuing to the Escrow Agent a certificate, in compliance with
Paragraphs 4(b) and (c) of the Escrow Agreement, instructing the Escrow Agent
to effect such release. Notwithstanding any provision of this Agreement to the
contrary, the closing of the Second Closing Option shall constitute a "Second
Closing" for all purposes of this Agreement other than Section 2.5(a), and the
respective obligations of the Seller and Purchaser to consummate the Second
Closing Option shall be subject to prior satisfaction (or waiver) of the
conditions set forth in Section 2.3, 2.4, and 4.2 of this Agreement, and to
Article VIII (if applicable), except that the condition precedent set forth in
Section 2.3(a) need not be satisfied by the Seller.
ARTICLE III
THE THIRD PURCHASE AND SALE
SECTION 3.1. TERMS OF THE THIRD PURCHASE AND SALE. On the basis of the
representations and warranties set forth in Section 4.1 and Article V, as
qualified and revised from time to time as provided herein, and subject to the
terms and conditions set forth herein:
(a) The Seller shall issue at the Third Closing (as hereinafter
defined) to the Purchaser a certificate registered in the name of the Purchaser
for 1,904,762 shares (the "Third Closing Shares"; each of the First Closing
Shares, the Second Closing Shares, and the Third Closing Shares are
collectively referred to herein as the "Shares") of the Seller Common Stock
(which number and kind of shares shall be equitably and proportionately
adjusted for stock splits, stock dividends, and other previous changes to the
Seller Common Stock that are approved or implemented on or prior to the date of
the Third Closing).
(b) As consideration for the Third Closing Shares, the Purchaser shall
deliver at the Third Closing to the Seller $2,000,000 in cash, by certified
check, or by wire transfer of immediately available funds to an account
previously designated in writing by the Seller.
SECTION 3.2. THE THIRD CLOSING. The closing of the transactions
contemplated by Section 3.1 (such closing, as well as the consummation of the
transactions contemplated by Section 3.5, shall each constitute a "Third
Closing;" each of the First Closing, the Second Closings, and the Third Closing
are generically referred to herein as a "Closing") shall take place at the
offices of Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree Street, N.E.,
Atlanta, Georgia 30303, at 11:00 A.M., local time, on the fifth business day
after the date
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that each of the conditions precedent to the transactions to be consummated
hereunder at the Second Closing set forth in Section 3.3(a), Section 3.3(g),
and Section 3.4(f) have been satisfied. The Third Closing may occur at such
different place, such different time, or such different date or a combination
thereof as the Purchaser and the Seller agree in writing.
SECTION 3.3. CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO
CONSUMMATE THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT THE THIRD CLOSING.
The obligations of the Purchaser to consummate the transactions to be
consummated hereunder at the Third Closing are subject to the following
conditions (unless waived by the Purchaser in its discretion):
(a) CREATION OF FUND OR INVESTMENT. Within one calendar year after the
date that the First Closing actually occurs, the Board of Directors of the
Seller and the Purchaser, in their discretion, shall have (i) approved the
creation of a fund that satisfies the criteria set forth in Exhibit I, and (ii)
determined that such fund satisfies such criteria.
(b) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Seller contained in Section 4.1 of this
Agreement, as qualified and revised pursuant to the Seller Disclosure Schedule
applicable to the Third Closing, shall be true and correct as of the Third
Closing; as of the Third Closing the Seller shall have performed and complied
with all covenants and agreements and satisfied all conditions required to be
performed and complied with by the Seller at or before such time by this
Agreement; and the Purchaser shall have received a certificate executed by the
Chief Executive Officer, President, or any Vice President of the Seller, dated
the date of the Third Closing, to that effect, substantially in the form of
Exhibit J.
(c) OPINION OF COUNSEL. The Seller shall have delivered to the
Purchaser on the date of the Third Closing the favorable opinions of each of
Powell, Goldstein, Frazer & Murphy LLP, counsel to the Seller, and Stephen W.
Brown, Secretary of the Seller, each dated as of such date, collectively
addressing the matters set forth in Exhibit B and each in the form agreed upon
by the Purchaser and the Seller, each acting reasonably and in good faith.
(d) CLOSING DOCUMENTS. The Seller shall have delivered to the
Purchaser at or prior to the Third Closing such other documents as the
Purchaser may reasonably request in order to enable the Purchaser to determine
whether the conditions to its obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
(e) LEGAL ACTION. An unaffiliated third party shall not have
instituted or threatened any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions
contemplated by this Agreement or any of the other Operative Documents, or to
obtain substantial damages with respect thereto.
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<PAGE> 17
(f) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents, by any federal, state, local,
or other governmental authority or by any court or other tribunal, including
the entry of a preliminary or permanent injunction, which, in the reasonable
judgment of the Purchaser, (i) makes any of the transactions contemplated by
this Agreement illegal, (ii) results in a material delay in the ability of the
Purchaser to consummate any of the transactions contemplated by this Agreement,
(iii) imposes material limitations, other than those imposed by the Voting
Agreement, on the ability of the Purchaser effectively to exercise full rights
of ownership of the Third Closing Shares, including the right to vote the Third
Closing Shares on all matters properly presented to the stockholders of the
Seller except as contemplated by the Voting Agreement, or (iv) otherwise
prohibits, restricts, or materially delays consummation of any of the
transactions contemplated by this Agreement.
(g) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be necessary for the Seller to
legally issue the Third Closing Shares to the Purchaser under the state
securities laws of such state.
(h) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained on or
prior to the Third Closing all consents, if any, required for the consummation
of the transactions to be consummated hereunder at the Third Closing from any
party to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Seller or any Subsidiary is a party, or to which any
of them or any of their respective businesses, properties, or assets are
subject.
(i) NO MATERIAL ADVERSE EFFECT. The Seller Disclosure Schedule
relating to the Third Closing (i) shall not reflect the occurrence of an event
that had a Material Adverse Effect between the First Closing and the Third
Closing, and (ii) shall not reflect any transaction or occurrence that could
reasonably be expected to have a Material Adverse Effect.
(j) NO MATERIAL BREACH. There shall not have been any material breach
of any of the representations or warranties made by the Seller pursuant to
Sections 4.1 or 4.2 in connection with any previous Closing.
SECTION 3.4. CONDITIONS TO THE OBLIGATION OF THE SELLER TO CONSUMMATE
THE TRANSACTIONS TO BE CONSUMMATED HEREUNDER AT THE THIRD CLOSING. The
obligations of the Seller to consummate the transactions to be consummated
hereunder at the Third Closing are subject to the following conditions (unless
waived by the Seller in its discretion):
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(a) ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of the Purchaser contained in this Agreement (as
qualified and revised pursuant to the Purchaser Disclosure Schedule applicable
to the Third Closing) shall be true and correct as of the Third Closing; as of
the Third Closing the Purchaser shall have performed and complied with all
covenants and agreements and satisfied all conditions required to be performed
and complied with by the Purchaser at or before such time by this Agreement;
and the Seller shall have received a certificate executed by the President or
Vice President of the Manager or other governing Person of the Purchaser, dated
the date of the Third Closing, to that effect, among other things,
substantially in the form of Exhibit K.
(b) OPINION OF COUNSEL. The Purchaser shall have delivered to the
Seller on the date of the Third Closing the favorable opinion of each of
Kilpatrick Stockton LLP, counsel to the Purchaser, and Alabama counsel to the
Manager or other governing Person of the Purchaser, each dated as of such date,
collectively addressing the matters set forth in Exhibit D and each in the form
agreed upon by the Seller and the Purchaser, each acting reasonably and in good
faith.
(c) OTHER CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Seller on or prior to the Third Closing such other documents, including,
without limitation, an Investors Questionnaire, as the Seller may reasonably
request in order to enable the Seller to determine whether the conditions to
its obligations under this Agreement have been met and otherwise to carry out
the provisions of this Agreement.
(d) LEGAL ACTION. There shall not have been instituted or threatened
any legal proceeding relating to, or seeking to prohibit or otherwise challenge
the consummation of, the transactions contemplated by the Operative Documents
or in connection therewith, or to obtain substantial damages with respect
thereto.
(e) NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, or decree proposed, promulgated,
enacted, entered, enforced, or deemed applicable to the transactions
contemplated by any of the Operative Documents, by any federal, state, local,
or other governmental authority or by any court or other tribunal, including
the entry of a preliminary or permanent injunction, which, in the reasonable
judgment of the Seller, (i) makes any of the transactions contemplated by this
Agreement illegal, (ii) results in a delay in the ability of the Seller to
consummate any of the transactions contemplated by this Agreement, or (iii)
otherwise prohibits, restricts, or delays consummation of any of the
transactions contemplated by this Agreement.
(f) "BLUE-SKY" LAW COMPLIANCE. The Seller shall have received such
consents, approvals, registrations, qualifications, and other authorizations
from the state securities authorities having jurisdiction over the state in
which the Purchaser then resides as shall be
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necessary for the Seller to legally issue the Third Closing Shares to the
Purchaser under the state securities laws of such state.
(g) CONTRACTUAL CONSENTS NEEDED. The Seller shall have obtained on or
prior to the Third Closing all consents, if any, required for the consummation
of the transactions to be consummated hereunder at the Third Closing from any
party to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Seller or any Subsidiary is a party, or to which any
of them or any of their respective businesses, properties, or assets are
subject.
(h) FAIRNESS OPINION NOT WITHDRAWN. Subject to the Seller's compliance
with Section 6.4, the Fairness Opinion shall not have been withdrawn.
SECTION 3.5. OPTION TO PURCHASE.
(a) GRANT OF OPTION. For a period (the "Third Closing Option Period")
commencing on the date hereof and terminating ten business days after the first
anniversary of the First Closing Date, the Purchaser will have the right and
option (the "Third Closing Option" and, together with the Second Closing
Option, generically an "Option"), but not the obligation, to purchase the Third
Closing Shares for a total purchase price of $2,000,000 ($1.05 per share),
exercisable only if the Purchaser has not previously purchased the Third
Closing Shares pursuant to Section 3.1.
(b) EXERCISE OF OPTION. The Purchaser may exercise the Third Closing
Option at any time during the Third Closing Option Period by delivery of
written notice thereof to the Seller.
(c) CLOSING. The closing of Third Closing Option shall take place at
the offices of Kilpatrick Stockton LLP, 1100 Peachtree Street, N.E., Atlanta,
Georgia 30309, at 11:00 a.m. local time, on the 30th day after the exercise
thereof in compliance with the terms hereof (the "Third Option Closing Date";
each of the Second Option Closing Date and the Third Option Closing Date being
generically referred to herein as an "Option Closing Date"). At such closing,
(i) the Seller shall issue to the Purchaser a certificate registered in the
name of the Purchaser for the Third Closing Option Shares (which number and
kind of shares shall be equitably and proportionately adjusted for stock
splits, stock dividends, and other changes to the Seller Common Stock that are
approved or implemented on or prior to the Third Option Closing Date), and (ii)
as consideration for the Third Closing Option Shares, the Purchaser shall
deliver to the Seller $2,000,000 by certified check, or by wire transfer of
immediately available funds to an account previously designated in writing by
the Seller. The closing of the Third Closing Option shall constitute the
"Third Closing" for purposes of this Agreement, and the respective obligations
of the Seller and Purchaser to consummate the Third Closing Option shall be
subject to prior satisfaction (or waiver) of the conditions set forth in
Section
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3.3, 3.4 and 4.2 of this Agreement, and to Article VIII (if applicable), except
that the conditions precedent set forth in Section 3.3(a) need not be satisfied
by the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 4.1. FIRST CLOSING REPRESENTATIONS AND WARRANTIES. The Seller
represents and warrants to the Purchaser as of the First Closing as follows:
(a) ORGANIZATION AND QUALIFICATION. The Seller owns, either directly
or through one or more wholly-owned subsidiaries, all the outstanding shares of
capital stock of the Subsidiaries. All of the Subsidiaries are listed on
Schedule 4.1(a). Other than the Subsidiaries, neither the Seller nor any
Subsidiary has a consolidated subsidiary or consolidated affiliate corporation
or owns any material interest in any other person, firm or entity ("Person")
except as set forth on Schedule 4.1(a). Schedule 4.1(a) also correctly sets
forth as to the Seller and as to each Subsidiary its place of incorporation or
organization, principal place of business, jurisdictions in which it is
qualified to do business, and the business which it currently conducts; and as
to each Subsidiary its authorized capitalization (if applicable), its shares of
capital stock or other equity interests outstanding, and the record and
beneficial owner of those shares. Each of Seller and each of the Subsidiaries
is a corporation, limited partnership, or limited liability company duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or organization, with all requisite power and
authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its properties and
assets and to carry on the business in which it is now engaged, in each case
except for such consents, authorizations, approvals, orders, licenses,
certificates, permits, declarations, and filings, the absence of which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Each of the Seller and each of the Subsidiaries is
duly qualified to transact the business in which it is engaged and is in good
standing as a foreign corporation in every jurisdiction in which its ownership,
leasing, licensing, or use of property or assets or the conduct of its business
makes such qualification necessary, except where the absence of such
qualification or good standing could not reasonably be expected to have a
Material Adverse Effect.
(b) CAPITALIZATION. The authorized capital stock of the Seller
consists of (i) 30,000,000 shares of Seller Common Stock, of which 8,776,723
shares are outstanding as of the date hereof (excluding the First Closing
Shares), and (ii) 1,000,000 shares of Preferred Stock, par value $.01 per share
("Preferred Stock"), of which (A) 450 shares of Series A Convertible Preferred
Stock, par value $.01 per share, (B) 2,000 shares of Series B Preferred Stock,
par value $.01 per share, and (C) 500 shares of Series C Convertible Preferred
Stock,
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par value $.01 per share, are outstanding as of the date hereof. Each of such
outstanding shares of Seller Common Stock and each outstanding share of each
outstanding series of Preferred Stock is duly authorized, validly issued, fully
paid, and nonassessable, and was not issued in violation of any applicable law
or of any preemptive right of stockholders. All persons who, to the Knowledge
of the Seller (as hereinafter defined), own of record or beneficially five
percent or more of any class or series of capital stock of the Seller are set
forth on Schedule 4.1(b). Except for this Agreement and as set forth on
Schedule 4.1(b), there is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of, any
share of capital stock of the Seller or of any Subsidiary or any security or
other instrument convertible into, exercisable for, or exchangeable for capital
stock of the Seller or of any Subsidiary. Except as set forth on Schedule
4.1(b), there is outstanding no security or other instrument convertible into
or exchangeable for capital stock of the Seller or of any Subsidiary. As used
herein, "Knowledge of the Seller" means the actual knowledge of any one or more
of Ronald E. Roark, Stephen W. Brown, or Richard Brock, assuming that each
possesses the actual knowledge that an officer or director with their
responsibilities would possess after reasonable inquiry into the applicable
matter.
(c) FINANCIAL CONDITION. The Seller has delivered to the Purchaser
true and correct copies of the following: audited consolidated balance sheets
of the Seller as of December 31, 1995 and December 31, 1994; the unaudited
consolidated balance sheet of the Seller as of December 31, 1996 (the
"Unaudited Balance Sheet"); audited consolidated statements of income,
consolidated statements of retained earnings, and consolidated statements of
cash flows of the Seller for the years ended December 31, 1995 and December 31,
1994; and the unaudited consolidated statement of income, consolidated
statement of retained earnings, and consolidated statement of cash flows of the
Seller for the year ended December 31, 1996 (collectively the "Financial
Statements"). Each such consolidated balance sheet presents fairly the
financial condition, assets, liabilities, and stockholders' equity of the
Seller and its consolidated subsidiaries as of its date; each such consolidated
statement of income and consolidated statement of retained earnings presents
fairly the results of operations of the Seller and its consolidated
subsidiaries for the period indicated; and each such consolidated statement of
cash flows presents fairly the information purported to be shown therein, in
each case subject in the case of such unaudited consolidated balance sheet,
consolidated statement of income, consolidated statement of retained earnings,
and consolidated balance sheet to changes resulting from year-end audit
adjustments. The financial statements referred to in this Section 4.1(c) have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved except as
otherwise permitted by GAAP or, with respect to financial statement footnotes,
the rules and regulations of the Securities and Exchange Commission (the
"Commission") and are in accordance with the books and records of the Seller
and its consolidated subsidiaries. Since December 31, 1996 (the "Reference
Date"):
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<PAGE> 22
(i) There has at no time been a material adverse change in the
business, financial condition, or results of operations of the Seller and its
consolidated subsidiaries, considered as a whole (including, without
limitation, any adverse change in the rating of the Seller as a special
servicer by any nationally recognized rating agency);
(ii) Except as required or permitted by the terms of any outstanding
series of Preferred Stock, neither the Seller nor any Subsidiary has
authorized, declared, paid, or effected any dividend or liquidating or other
distribution in respect of its capital stock or other outstanding equity
interests or any direct or indirect redemption, purchase, or other acquisition
of any stock of the Seller or any equity interest of any Subsidiary;
(iii) The operations and business of the Seller and each Subsidiary
have been conducted in all respects only in the ordinary course; and
(iv) Neither the Seller nor any Subsidiary has suffered an
extraordinary loss (whether or not covered by insurance) or waived any right of
material value.
(d) TAX AND OTHER LIABILITIES. Neither the Seller nor any Subsidiary
has any liability of any nature, whether accrued, absolute, known, unknown,
contingent or otherwise, including without limitation liabilities for federal,
state, local, or foreign taxes and penalties, interest, and additions to tax
("Taxes") and liabilities to customers or suppliers, other than the following:
(i) Liabilities for which full provision has been made on the
Unaudited Balance Sheet; and
(ii) Other liabilities arising since the Reference Date and prior to
the First Closing in the ordinary course of business which are not inconsistent
with the representations and warranties of the Seller set forth in Section 4.1.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Unaudited Balance Sheet are sufficient for all
accrued and unpaid Taxes of the Seller and the Subsidiaries, whether or not due
and payable and whether or not disputed, under tax laws, as in effect on the
Unaudited Balance Sheet Date, for the period ended on such date and for all
fiscal periods prior thereto. Each of Seller and each of the Subsidiaries has
filed all federal, state, local, and foreign tax returns required to be filed
by it; has delivered to the Purchaser a true and correct copy of each such
return which was filed in the past three years; has paid (or has established on
the Unaudited Balance Sheet a reserve for) all Taxes, assessments, and other
governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable, in each
case as of the Reference Date; and has delivered to the Purchaser a true and
correct copy of any report as to adjustments received by it from any taxing
authority during the past three years and a statement as to any litigation,
governmental or other proceeding (formal or informal), or investigation
pending, threatened,
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<PAGE> 23
or in prospect with respect to any such report or the subject matter of such
report. Except as set forth in Schedule 4.1(d), neither the Seller nor any
Subsidiary is a party to any contract or commitment to guarantee the payment or
performance of any liability or other obligation by any other Person, or
pursuant to which the Seller or any Subsidiary is or may become liable for the
indebtedness or other obligations of any other Person. Except as set forth on
Section 4.1(d), Seller is not a party to any currently effective tax sharing
agreement or arrangement or a control person for tax purposes of any Person
other than the Subsidiaries.
(e) LITIGATION AND CLAIMS. Except as set forth on Schedule 4.1(e),
there is no litigation, arbitration, claim, governmental or other proceeding
(formal or informal), or investigation pending or, to the Knowledge of the
Seller, threatened or in prospect (or any basis therefor to the Knowledge of
the Seller) with respect to the Seller, any Subsidiary, or any of their
respective businesses, properties, or assets. None of the matters disclosed on
Schedule 4.1(e) could reasonably be expected to have a Material Adverse Effect.
Neither the Seller nor any Subsidiary is affected by any current or threatened
strike or other labor disturbance nor to the Knowledge of the Seller is any
union attempting to represent any employee of the Seller or of any Subsidiary
as collective bargaining agent. Neither the Seller nor any Subsidiary is in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, or decree, which violation or default could reasonably be expected to
have a Material Adverse Effect; nor to the Knowledge of the Seller is the
Seller or any Subsidiary required to take any action in order to avoid such
violation or default.
(f) PROPERTIES. (i) Each of the Seller and each of the Subsidiaries
has good and marketable title in fee simple absolute to all real properties and
good title to all other properties and assets used in its business or owned by
it (except such real and other properties and assets as are held pursuant to
leases or licenses described in Schedule 4.1(f)), free and clear of all liens,
mortgages, security interests, pledges, charges, and encumbrances (except such
as are listed on Schedule 4.1(f)).
(ii) Set forth on Schedule 4.1(f) is a true, correct, and complete
list of all real and other properties and assets owned by the Seller and the
Subsidiaries or leased or licensed by the Seller or by any Subsidiary from or
to a third party, including with respect to such properties and assets owned by
the Seller or by any Subsidiary a statement of cost, book value and (except for
land) reserve for depreciation of each item for tax purposes, and net book
value of each item for financial reporting purposes, and, with respect to such
properties and assets leased or licensed by the Seller or by any Subsidiary, a
description of such lease or license. All such real and other properties and
assets owned by the Seller or by any Subsidiary are reflected on the Last
Balance Sheet (except for acquisitions subsequent to the Last Balance Sheet
Date). All real and other tangible properties and assets owned, leased, or
licensed by the Seller or by any Subsidiary are in good and usable condition
(ordinary wear and tear excepted), except for such properties and assets as are
obsolete.
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<PAGE> 24
(iii) The real and other properties and assets owned by the Seller and
each Subsidiary or leased or licensed by the Seller or such Subsidiary from a
third party constitute all such properties and assets which are necessary to
the business of the Seller or such Subsidiary as currently conducted.
(iv) The current use, occupancy and operation of the real properties
owned by the Seller or any Subsidiary (the "Real Properties"), and all aspects
of the improvements thereon and thereto (the "Real Properties Improvements"),
are in compliance in all material respects with all material applicable
federal, state and local laws and regulations and with all private restrictive
covenants of record, and to the Knowledge of the Seller there is not any
proposed change therein that would affect any of the Real Properties or its
use, occupancy or operation. All Real Property Improvements are located within
the lot lines (and within the mandatory setbacks from such lot lines
established by applicable law or otherwise) and not over areas subject to
easements or rights of way. All Real Property Improvements are in good
condition and repair, suited for the operation of the business of the Seller or
the relevant Subsidiary.
(g) CONTRACTS AND OTHER INSTRUMENTS. Schedule 4.1(g) accurately and
completely sets forth the information required to be contained therein
regarding all contracts, agreements, instruments, leases, licenses,
arrangements, or understandings with respect to the Seller and each Subsidiary,
identifying whether the matter disclosed therein relates to the Seller or to a
Subsidiary named therein. The Seller has furnished to the Purchaser (i) the
certificate of incorporation (or other charter or organizational document) and
by-laws (or other governing document) of the Seller and each Subsidiary and all
amendments thereto, as currently in effect, and (ii) the following: (a) true
and correct copies of all contracts, agreements, and instruments referred to in
Schedule 4.1(g); and (ii) true and correct copies of all leases and licenses
referred to in Schedule 4.1(g). Neither the Seller, any Subsidiary, nor (to the
Knowledge of the Seller) any other party to any such contract, agreement,
instrument, lease, or license is now or expects in the future to be in
violation or breach of, or in default with respect to complying with, any
material term thereof; each such contract, agreement, instrument, lease, or
license that is material to the business of the Seller is in full force and
effect and is the legal, valid, and binding obligation of the parties thereto
and (subject to applicable bankruptcy, insolvency, and other laws affecting the
enforceability of creditors' rights generally) is enforceable as to them in
accordance with its terms; and each such contract, agreement, instrument, lease
or license that is not material to the business of the Seller is, to the
Knowledge of the Seller, in full force and effect and is the legal, valid, and
binding obligation of the parties thereto and (subject to applicable
bankruptcy, insolvency, and other laws affecting the enforceability of
creditors' rights generally) is enforceable as to them in accordance with its
terms. Each such financing or other arrangement or understanding is to the
Knowledge of the Seller a valid and continuing arrangement or understanding;
neither the Seller, any Subsidiary, nor any other party to any such arrangement
or understanding has given notice of termination or to the Knowledge of the
Seller taken any action inconsistent with the continuance of such arrangement
or understanding; and the execution, delivery, and
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<PAGE> 25
performance of this Agreement will not prejudice any such arrangement or
understanding in any way. Each of the Seller and each of the Subsidiaries
enjoys peaceful and undisturbed possession under all leases and licenses under
which it is operating. Neither the Seller nor any Subsidiary is in violation or
breach of, or in default with respect to, any term of its certificate of
incorporation (or other charter or organizational document) or by-laws (or
other governing document). Neither the Seller nor any Subsidiary is a member of
a customer or user organization or of a trade association.
(h) EMPLOYEES. (i) Except as set forth on Schedule 4.1(h), neither the
Seller nor any Subsidiary has, or contributes to, any pension, profit-sharing,
option, other incentive plan, or any other type of Employee Benefit Plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), or has any obligation to or customary arrangement with
employees for bonuses, incentive compensation, vacations, severance pay,
insurance, or other benefits. The Seller has furnished to the Purchaser: (A)
true and correct copies of all documents evidencing plans, obligations, or
arrangements referred to in Schedule 4.1(h) (or true and correct written
summaries of such plans, obligations, or arrangements to the extent not
evidenced by documents) and true and correct copies of all documents evidencing
trusts, summary plan descriptions, and any other summaries or descriptions
relating to any such plans; and (B) the two most recent annual reports (Form
5500's), if any, including all schedules thereto and the most recent annual and
periodic accounting of related plan assets with respect to each Employee
Benefit Plan.
(ii) All Accrued Liabilities (for contributions or otherwise) (as
defined in this Section 4.1(h)(ii)) of the Seller or any Subsidiary as of the
First Closing Date to each Employee Benefit Plan and with respect to each
obligation to or customary arrangement with employees for bonuses, incentive
compensation, vacations, severance pay, insurance, or other benefits have been
paid or accrued for all periods ending prior to the date of the First Closing
and no payment to any Employee Benefit Plan or with respect to any such
obligation or arrangement since the Last Balance Sheet Date has been
disproportionately large compared to prior payments. For purposes of the
preceding sentence, "Accrued Liabilities" shall include a pro rata contribution
to each Employee Benefit Plan or with respect to each such obligation or
arrangement for that portion of a plan year or other applicable period which
commences prior to and ends after the First Closing Date, and Accrued
Liabilities for any portion of a plan year or other applicable period shall be
determined by multiplying the liability for the entire such year or period by a
fraction, the numerator of which is the number of days preceding the date of
the First Closing in such year or period and the denominator of which is the
number of days in such year or period, as the case may be.
(iii) There has been no violation of the reporting and disclosure
requirements imposed either under ERISA or the Internal Revenue Code of 1986,
as amended, or its predecessor statute (the "Code") for which a penalty has
been or may be imposed with respect to any Employee Benefit Plan of the Seller
or of any Subsidiary and which could reasonably be
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<PAGE> 26
expected to have a Material Adverse Effect. No Employee Benefit Plan or related
trust of the Seller or any Subsidiary has any material liability of any nature,
accrued or contingent, including without limitation liabilities for Taxes
(other than for routine payments to be made in due course to participants and
beneficiaries, except as set forth in Schedule 4.1(h)) which liabilities could
reasonably be expected to have a Material Adverse Effect. There has been no
violation by any Employee Benefit Plan of the Seller or any Subsidiary which is
a group health plan within the meaning of Section 162(i)(3) of the Code with
the applicable requirements of Section 162(k) of the Code. Other than the
health care continuation requirements of Section 162(k) of the Code, neither
the Seller nor any Subsidiary has any obligation to provide post-retirement
medical benefits or life insurance coverage to any current or former employees.
There is no litigation, arbitration, claim, governmental or other proceeding
(formal or informal), or investigation pending, threatened, or in prospect (or
any basis therefor to the Knowledge of the Seller) with respect to any Employee
Benefit Plan or related trust or with respect to any fiduciary, administrator,
or sponsor (in its capacity as such) of any Employee Benefit Plan, which could
reasonably be expected to have a Material Adverse Effect. No Employee Benefit
Plan or related trust and no such obligation or arrangement is in material
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, or decree, which violation or default could reasonably be expected to
have a Material Adverse Effect nor to the Knowledge of the Seller is the
Seller, any Subsidiary, any Employee Benefit Plan, or any related trust
required to take any action in order to avoid violation or default. No event
has occurred or is threatened or about to occur which would constitute a
prohibited transaction under Section 406 of ERISA and which could reasonably be
expected to have a Material Adverse Effect.
(iv) Each Pension Plan maintained for the employees of the Seller or
of any Subsidiary has been qualified, from its inception, under Section 401(a)
of the Code and any related trust has been an exempt trust for such period
under Section 501 of the Code. Each Pension Plan has been operated in
accordance with its terms, except where the failure to so operate could not
reasonably be expected to have a Material Adverse Effect. No investigation or
review by the Internal Revenue Service is currently pending or (to the
Knowledge of the Seller) is contemplated in which the Internal Revenue Service
has asserted or may assert that any Pension Plan is not qualified under Section
401(a) of the Code or that any related trust is not exempt under Section 501 of
the Code. No assessment of any federal taxes has been made or (to the Knowledge
of the Seller) is contemplated against the Seller, any Subsidiary, or any
related trust of any Pension Plan and nothing has occurred which would result
in the assessment of unrelated business taxable income under the Code. Form
5500's have been timely filed with respect to all Pension Plans.
(v) Neither the Seller nor any Subsidiary currently contributes to or
since December 31, 1994 has effectuated either a complete or partial withdrawal
from any multi employer Pension Plan within the meaning of Section 3(37) of
ERISA or sponsored or otherwise maintained a Pension Plan subject to Title IV
of ERISA.
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<PAGE> 27
(vi) Schedule 4.1(f) contains a true and correct statement of the
names, relationship with the Seller or any Subsidiary, current rates of
compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensation now or hereafter payable), and aggregate compensation
for the fiscal year ended December 31, 1996 of each director, officer, or other
employee of the Seller or of any Subsidiary whose aggregate compensation for
the fiscal year ended December 31, 1996 exceeded $75,000 or whose aggregate
compensation currently exceeds the rate of $75,000 per annum. Since February 1,
1997, neither the Seller nor any Subsidiary has changed the rate of
compensation of any of its directors, officers, or employees, nor has any
Employee Benefit Plan or program been instituted or amended to increase
benefits thereunder.
(i) QUESTIONABLE PAYMENTS. Neither the Seller, any Subsidiary, nor any
director, officer, employee, or other person associated with the Seller or any
Subsidiary when acting on behalf of the Seller or any Subsidiary, has, directly
or indirectly: used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees
or to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; made any false or fictitious entry on the books or
records of the Seller or any Subsidiary; made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment; given any favor or gift
which is not deductible for federal income tax purposes; or made any bribe,
kickback, or other payment of a similar or comparable nature, whether lawful or
not, to any person or entity, private or public, regardless of form, whether in
money, property, or services, to obtain favorable treatment in securing
business or to obtain special concessions, or to pay for favorable treatment
for business secured or for special concessions already obtained.
(j) AUTHORITY TO SELL. The Seller has all requisite power and
authority to execute, deliver, and perform this Agreement and each of the
Operative Documents to which the Seller is a party. All necessary corporate
proceedings of the Seller have been duly taken to authorize the execution,
delivery, and performance of this Agreement and each of the Operative Documents
to which the Seller is a party by the Seller. Each of this Agreement and each
of the Operative Documents to which the Seller is a party has been duly
authorized, executed, and delivered by the Seller, constitutes the legal,
valid, and binding obligation of the Seller, and is enforceable against it in
accordance with its terms. Except as set forth on Schedule 4.1(j), no consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by the Seller or any
Subsidiary for the execution, delivery, or performance of this Agreement or any
of the other Operative Documents to which the Seller is a party by the Seller.
No consent of any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to which the Seller or any Subsidiary is a party,
or to which it or any of their respective businesses, properties, or assets are
subject, is
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<PAGE> 28
required for the execution, delivery, or performance of this Agreement or any
of the other Operative Documents to which the Seller is a party (except such
consents referred to in Schedule 4.1(j)); and the execution, delivery, and
performance of this Agreement and each of the Operative Documents to which the
Seller is a party will not (if the consents referred to in Schedule 4.1(j) are
obtained prior to the First Closing) violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under, entitle any party to
rights and privileges that such party was not receiving or entitled to receive
immediately before this Agreement or any of the Operative Documents (if now
executed) were executed under, or create any obligation on the part of the
Seller or any Subsidiary that it was not paying or obligated to pay immediately
before this Agreement or any of the Operative Documents (if now executed) were
executed under, any term of any such contract, agreement, instrument, lease,
license, arrangement, or understanding, or violate or result in a breach of any
term of the certificate of incorporation (or other charter or organizational
document) or by-laws (or other governing document) of the Seller or any
Subsidiary, or (if each of the conditions precedent set forth herein or in a
schedule hereto are satisfied) violate, result in a breach of, or conflict with
any law, rule, regulation, order, judgment, or decree binding on the Seller or
any Subsidiary or to which it or any of its respective businesses, properties,
or assets are subject. Upon their issuance pursuant hereto, the First Closing
Shares will be validly authorized, validly issued, fully paid, and
nonassessable and will not have been issued in violation of any preemptive
right of stock holders, and the Purchaser will have good title to the First
Closing Shares, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts other than
as set forth in the Operative Documents. Assuming the accuracy of the
representations and warranties made by the Purchaser pursuant to Article V, the
issuance of the First Closing Shares to the Purchaser hereunder will be exempt
from registration under the Securities Act and will comply with the state
securities laws of the State of Alabama.
(k) INTELLECTUAL PROPERTY RIGHTS. Neither the Seller nor any
Subsidiary owns any patents, patent applications and registrations, trademarks,
trademark applications and registrations, copyright applications and
registrations, trade names or industrial designs. The Seller and the
Subsidiaries license computer software as listed on Schedule 4.1(k), and to the
Knowledge of the Seller neither the Seller nor any of the Subsidiaries is in
violation of any of such licenses. The Seller and the Subsidiaries own computer
software as listed on Schedule 4.1(k), and the conduct of the business of the
Seller and the Subsidiaries and the use of such software does not infringe
upon, and neither the Seller nor any Subsidiary has received any notice,
complaint, threat, or claim alleging infringement of, any patent, trademark,
trade name, copyright, industrial design, trade secret, or any other
intellectual property right or proprietary right of any Person.
(l) INSURANCE. The Seller and the Subsidiaries are the respective
owners of the insurance policies set forth on Schedule 4.1(l), which policies
provide adequate coverage to insure the assets, properties, and businesses of
the Seller and the Subsidiaries against such
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<PAGE> 29
risks and in such amounts as are prudent and customary for companies similar to
the Seller and the Subsidiaries, and all of such policies are in full force and
effect.
(m) RELATED PARTY TRANSACTIONS. Except as set forth on Schedule
4.1(m), neither the Seller nor any Subsidiary is directly a party to any oral
or written contract, agreement, lease, or arrangement with, or commitment to,
any Related Party (as defined below). Except as set forth on Schedule 4.1(m),
no Related Party directly or indirectly owns or controls any assets or
properties used in the business of the Seller or any Subsidiary, and no Related
Party, directly or indirectly, engages in or has any significant interest in
any business which is a competitor, customer, or supplier of the Seller or any
Subsidiary. As used herein, the term "Related Party" means, collectively, (A)
any Person which, to the Knowledge of the Seller, owns 5% or more of any class
of the outstanding securities of the Seller or any Subsidiary, (B) any
director, officer, or employee of the Seller or any Subsidiary, or (C) any
Person in which any director or officer of the Seller or any Subsidiary or any
Person referred to in clause (A) above is a partner or member, or holds a 5% or
more equity interest.
(n) ENVIRONMENTAL CONDITIONS. To the Knowledge of the Seller:
(i) There is no existing or pending Environmental Law (as
hereinafter defined) with a future compliance date that will require
operational changes, business practice modifications, or capital expenditures
at any Real Property or Real Property Improvements;
(ii) All hazardous substances and solid waste on, in, or
under any Real Property or Real Property Improvements, wherever located, have
been properly removed and disposed of, and no past or current disposal,
discharge, spill, or other release of, or treatment, transportation, or other
handling of hazardous materials or solid waste on, in or under any Real
Property or Real Property Improvements, will subject the Seller or any
Subsidiary to corrective or compliance action or any other liability; and
(iii) There are no currently pending or overtly threatened
legal action or administrative proceedings or orders, judgments, decrees, or
rulings against or involving the Seller or any Subsidiary relating to any
alleged past or ongoing violation of any Environmental Law, nor is the Seller
or any Subsidiary subject to any liability for any such past or ongoing
violation.
As used herein, "Environmental Law" means any federal, state, local,
or municipal statute, rule, regulation, or ordinance ("Law") relating to
health, safety, or the environment, including, without limitation, any Law
relating to the manufacture, generation, processing, distribution, application,
use, treatment, transport or handling, storage of, or emissions, discharges,
releases, or threatened releases into the environment of, pollutants,
contaminants, hazardous substances, petroleum products, chemicals or industrial
waste, other solids, liquids, gases, or wastes, heat, light, noise, radiation,
electro-magnetic fields and other forms of
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<PAGE> 30
matter and energy of every kind and nature and the proper containment and
disposal of the same.
(o) DISCLOSURE. Neither this Agreement or any of the Operative
Documents, nor any other written document, description, certificate, or
statement furnished to the Purchaser by or on behalf of the Seller pursuant
hereto or thereto, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact, necessary to make the
statements contained herein and therein not misleading in light of the
circumstances under which they have been or will be made.
(p) BROKERAGE FEES. Neither the Seller nor any Subsidiary has created
any liability of any Person for any brokerage or finders fee in connection with
the transactions contemplated by this Agreement.
SECTION 4.2. SECOND CLOSING, THIRD CLOSING AND OPTION REPRESENTATIONS
AND WARRANTIES.
(a) Not later than three (3) business days before each Closing (other
than the First Closing), the Seller shall deliver to the Purchaser a written
document (a "Seller Disclosure Schedule") containing such qualifications and
other revisions to its representations and warranties set forth in Section 4.1
(excluding the representations and warranties set forth in the first three
sentences of Section 4.1(j)) and to the schedules attached hereto and
referenced in Section 4.1 (such representations and warranties and such
schedules being collectively referred to herein as the "Original Schedules") as
may be necessary to make the representations and warranties made by the Seller
in Section 4.1 true and correct, as of the date of such delivery, and
specifying the representations and warranties so qualified or revised. The
Seller shall have the right to so deliver a revised Seller Disclosure Schedule
to the Purchaser prior to each Closing prior to the consummation of the
transactions relating thereto (provided that the revisions reflected therein
shall be limited solely to those which occurred or of which the Seller first
became aware after the delivery of the Seller Disclosure Schedule that it
revises), which shall then be deemed to be substituted in lieu of the
previously delivered Seller Disclosure Schedule that it revises. Each Seller
Disclosure Schedule delivered to the Purchaser hereunder shall cumulatively
contain all qualifications and revisions to the Original Schedules, regardless
of whether such qualifications and revisions, or any of them, were included in
any previously delivered Seller Disclosure Schedule. If the Seller fails to
prepare and deliver any Seller Disclosure Schedule as provided above, then the
Seller shall be deemed to have irrevocably adopted the Original Schedules as
such Seller Disclosure Schedule; provided, however, that if one or more
Closings (other than the First Closing, but including Option Closings) have
then previously been consummated, the Seller shall be deemed to have
irrevocably adopted the Seller Disclosure Schedule duly delivered by the Seller
in connection with the then most recently consummated Closing or Option
Closing, as the case may be.
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(b) At each Closing, the Seller shall be deemed to represent, warrant
and covenant to the Purchaser that the representations and warranties made by
the Seller in Section 4.1 with respect to the First Closing are, subject only
to the qualifications and other revisions set forth in the Seller Disclosure
Schedule applicable to such Closing, true and correct as of the date of such
Closing. For the foregoing purposes, (i) the term "Financial Statements" (when
used in this Agreement) shall be deemed to refer to all financial statements of
the Seller theretofore furnished to the Purchaser pursuant to Section 6.1, in
addition to all those described in the Original Schedules, (ii) the term
"Reference Date" (whenever used in this Agreement) shall be deemed to refer to
the date specified therein or, if more recent, to the date of the most recent
unaudited balance sheet of the Seller furnished to the Purchaser pursuant to
Section 6.1, (iii) the terms "First Closing" and "First Closing Date", wherever
used in Section 4.1, shall be deemed to refer to related Second Closing or
Second Closing Date, respectively, or the Third Closing or the Third Closing
Date, respectively, and (iv) the term "First Closing Shares," whenever used in
Section 4.1, shall be deemed to refer to the Seller Common Stock to be
delivered at the related Second Closing or the Third Closing Shares, as the
case may be.
(c) Not later than three (3) business days before each Closing (other
than the First Closing), the Purchaser shall deliver to the Seller a written
document (a "Purchaser Disclosure Schedule") containing such qualifications and
other revisions to the representations and warranties set forth in Article V
(excluding the representations, warranties, and covenants made by the Purchaser
in Sections 5.2 and 5.3) as may be necessary to make the representations and
warranties made by the Purchaser in Article V true and correct, as of the date
of such delivery, and specifying the representations and warranties so
qualified or revised. The Purchaser shall have the right to so deliver a
revised Purchaser Disclosure Schedule to the Seller prior to each Closing prior
to the consummation of the transactions relating thereto (provided that the
revisions reflected therein shall be limited solely to those which occurred or
of which the Purchaser first became aware after the delivery of the Purchaser
Disclosure Schedule that it revises), which shall then be deemed to be
substituted in lieu of the previously delivered Purchaser Disclosure Schedule
that it revises. Each Purchaser Disclosure Schedule delivered to the Seller
hereunder shall cumulatively contain all such qualifications and revisions to
Article V, regardless of whether such qualifications and revisions, or any of
them, were included in any previously delivered Purchaser Disclosure Schedule.
If the Purchaser fails to prepare and deliver any Purchaser Disclosure Schedule
as provided above, then the Purchaser shall be deemed to have irrevocably
adopted Article V as such Purchaser Disclosure Schedule; provided, however,
that if one or more Closings (other than the First Closing) have then
previously been consummated, the Purchaser shall be deemed to have irrevocably
adopted the Purchaser Disclosure Schedule duly delivered by the Purchaser in
connection with the then most recently consummated Closing or Option Closing,
as the case may be. In addition to the other conditions precedent provided
herein, the obligation of the Seller to consummate any Closing shall be
conditioned on the contents of the related Purchaser Disclosure Schedule
pertaining thereto not disclosing any occurrence that is
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reasonably likely to have a material adverse effect upon the legality or the
enforceability of any Operative Document against the Purchaser.
(d) At each Closing, the Purchaser shall be deemed to represent,
warrant and covenant to the Seller that the representations and warranties made
by the Purchaser in Article V with respect to the First Closing are, subject
only to the qualifications and other revisions set forth in the Purchaser
Disclosure Schedule applicable to such Closing, true and correct as of the date
of such Closing. For such purposes, the term "First Closing" wherever used in
Article V, shall be deemed to refer to the related Second Closing or the Third
Closing, as appropriate, and the term "First Closing Shares," whenever used in
Article V, shall be deemed to refer to the Seller Common Stock to be delivered
at the related Second Closing or the Third Closing Shares, as the case may be.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as of each of the
Closings as follows:
SECTION 5.1. ORGANIZATION. The Purchaser is a limited liability
company duly organized, validly existing, and in good standing under the laws
of the State of Georgia, with all requisite power and authority to own, lease,
license, and use its properties and assets and to carry on the business in
which it is now engaged and to own securities issued by the Company as herein
contemplated. Each of the Purchaser, the Manager, and each member of the
Purchaser that is an affiliate of the Manager is either duly organized, validly
existing, and in good standing in the State of Alabama or is duly qualified to
do business and is in good standing in the State of Alabama, as the case may
be.
SECTION 5.2. AUTHORITY TO BUY. The Purchaser has all requisite power
and authority to execute, deliver, and perform this Agreement and each of the
other Operative Documents to which it is or is to be a party. All necessary
proceedings of the Purchaser have been duly taken to authorize the execution,
delivery, and performance of this Agreement and each of the other Operative
Documents to which the Purchaser is or is to be a party by the Purchaser. This
Agreement and each of the Operative Documents to which the Purchaser is a party
has been duly authorized, executed, and delivered by the Purchaser, is the
legal, valid, and binding obligation of the Purchaser, and is enforceable
against the Purchaser in accordance with its terms.
SECTION 5.3. NON-DISTRIBUTIVE INTENT. The Purchaser is an "accredited
investor" (as defined in Rule 501(a) under the Securities Act of 1933, as
amended (the "Securities Act")). The Purchaser is acquiring the securities to
be acquired by it at such
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Closing for its own account (and not for the account of others) for investment
and not with a view to the resale or other distribution thereof. The Purchaser
will not sell or otherwise dispose of such securities (whether pursuant to a
liquidating dividend or otherwise) without registration under the Securities
Act or an exemption therefrom, and the certificate or certificates representing
such securities may contain a legend to the foregoing effect and all legends
necessary or desirable, in the judgment of the Purchaser, pursuant to any
applicable state securities law, rule, or regulation. By virtue of its
position, the Purchaser has access to the kind of financial and other
information about the Seller as would be contained in a registration statement
filed under the Securities Act. The Purchaser understands that it may not sell
or otherwise dispose of such Shares in the absence of either a registration
statement under the Securities Act or an exemption from the registration
provisions of the Securities Act.
SECTION 5.4. INVESTMENT COMPANY. The Purchaser is not subject to
regulation as an investment company under the Investment Company Act of 1940,
as amended.
SECTION 5.5. COMPLIANCE WITH LAWS. The Purchaser is in compliance in
all material respects with all applicable federal and state securities laws,
rules, and regulations, including, without limitation, the Exchange Act and the
Investment Advisors Act of 1940, as amended.
SECTION 5.6. BROKER FEES. Neither the Purchaser nor any of its
subsidiaries or parents has created any liability of any Person for any
brokerage or finders fee in connection with the transactions contemplated by
this Agreement.
ARTICLE VI
COVENANTS OF THE SELLER
The Seller covenants to the Purchaser as follows:
SECTION 6.1. FURNISH FUTURE INFORMATION. After the First Closing, the
Seller shall deliver to the Purchaser the following so long as the Purchaser
owns any of the Shares:
(a) within 45 days after the end of each of the first three quarterly
fiscal periods in each fiscal year of the Seller, a consolidated balance sheet
of the Seller and its consolidated subsidiaries as at the end of such period,
and a consolidated statement of income, consolidated statement of retained
earnings, and consolidated statement of cash flows of Seller and its
consolidated subsidiaries for such period, in each case prepared from the books
and records of the Seller and its consolidated subsidiaries in accordance with
GAAP consistently applied throughout the periods involved except as permitted
by GAAP or, with respect to financial statement footnotes, by the applicable
rules and regulations of the Commission , setting forth in each case in
comparative form the figures for the corresponding period of the previous
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fiscal year, all in reasonable detail, subject to changes resulting from
year-end audit adjustments;
(b) within 90 days after the end of each fiscal year of the Seller, a
consolidated balance sheet of the Seller and its consolidated subsidiaries as
at the end of such year, and a consolidated statement of income, consolidated
statement of retained earnings, and consolidated statement of cash flows of the
Seller and its consolidated subsidiaries for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, such consolidated financial statements to be audited by and
to be accompanied by an opinion of the Seller's independent certified public
accountants of recognized national standing, which opinion shall state that
such consolidated financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied and that the
audit by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;
(c) promptly upon their becoming available, copies of all financial
statements, reports, notices, and proxy statements sent by the Seller to its
stockholders, all regular and periodic reports filed by the Seller with any
securities exchange or with the Commission, and all press releases; and
(d) with reasonable promptness, such other material and public or
nonmaterial information and data with respect to the Seller or any of its
Subsidiaries as from time to time may be requested by the Purchaser.
SECTION 6.2. BOARD REPRESENTATION. Effective as of the First Closing
Date, the Board of Directors of the Seller will appoint Michael D. Luce and
Raymond A. Harbert to the Board of Directors of the Seller, each to fill an
existing vacancy on the Seller's Board of Directors until the next Annual
Meeting of the Stockholders of the Seller or until their earlier resignation,
retirement, or death. Until the first to occur of (i) the passage of five
calendar years after the First Closing Date, (ii) the date (if any) on which
the Purchaser and all Persons controlling, controlled by, or under common
control with the Purchaser no longer collectively own at least five percent of
the outstanding Seller Common Stock, and (iii) the occurrence of a Purchaser
Breach (as hereinafter defined) (the "Corporate Governance Period"), the Seller
shall nominate two individuals designated by the Purchaser for election to the
Seller's Board of Directors; provided, however, that notwithstanding the
foregoing, the Purchaser agrees that the Board of Directors of the Seller shall
not be required to so nominate any individual designated by the Purchaser (a)
with respect to whom disclosure would have to be made in any report or proxy
material required to be filed with the Commission pursuant to the Exchange Act
that was subject, directly or indirectly, to the disclosure requirements of
either Item 401(f) of Regulation S-K, Item 401(d) of Regulation S-B, or any
successor provision of any of the foregoing, in compliance with Item 401(f) of
Regulation S-K, Item 401(d) of Regulation S-B,
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or any successor provision of any of the foregoing, or (b) who does not agree
in writing to such nomination and to serve as a Director of the Seller if
elected as such by the stockholders of the Seller. In addition, during the
Corporate Governance Period, the Seller will appoint one designee of the
Purchaser to the Advisory Committee to the Seller's Board of Directors;
provided, however, that notwithstanding the foregoing, the Purchaser agrees
that the Seller shall not be required to so appoint any individual designated
by the Purchaser with respect to whom, if a Director of the Seller, disclosure
would have to be made in any report or proxy material required to be filed with
the Commission pursuant to the Exchange Act that was subject, directly or
indirectly, to the disclosure requirements of either Item 401(f) of Regulation
S-K, Item 401(d) of Regulation S-B, or any successor provision of any of the
foregoing, in compliance with Item 401(f) of Regulation S-K, Item 401(d) of
Regulation S-B, or any successor provision of any of the foregoing.
Notwithstanding any provision of this Agreement to the contrary, however, in
the event that neither a Second Closing nor a Third Closing occurs hereunder,
then the Seller shall only be required pursuant to this Section 6.2 to nominate
one such individual designated by the Purchaser for election to the Seller's
Board of Directors for the remainder, if any, of the Corporate Governance
Period.
SECTION 6.3. CORPORATE GOVERNANCE. As soon as practicable after the
First Closing Date and throughout the Corporate Governance Period, the Board of
Directors of the Seller will create, appoint, and maintain a Compensation and
Employee Benefit Plan Committee of the Board of Directors that will be
comprised exclusively of Directors of the Seller who are not officers of the
Seller. The Seller agrees that, during the Corporate Governance Period, such
Compensation and Employee Benefit Plan Committee shall have the right to
approve, by majority vote, the compensation of the Chief Executive Officer and
the Chief Operating Officer of the Seller and to approve or disapprove, by
majority vote, all material transactions between the Seller and one or more of
its employees or affiliates. During the Corporate Governance Period, the Seller
agrees to continue to appoint one Director of the Seller nominated by the
Purchaser to such Compensation and Employee Benefit Plan Committee.
SECTION 6.4. REASONABLE BEST EFFORTS. Each of the Seller and the
Purchaser agrees to cooperate and to use its reasonable best efforts to cause
the conditions precedent to all Closings to be satisfied in a timely manner
except for Section 3.3(a), with respect to which the parties agree to act in
good faith. Without limiting the generality of the foregoing, the Seller shall
use its reasonable best efforts to obtain the Fairness Opinion and, in the
event of the termination or revocation of the Fairness Opinion, to obtain a
substitute fairness opinion as soon as reasonably practicable.
SECTION 6.5. RESERVATION OF AUTHORIZED SHARES. From the date hereof
through the last to occur of the Closings hereunder, the Seller shall
continuously hold in reserve sufficient shares of Seller Common Stock to
consummate each of the Closings contemplated hereunder.
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SECTION 6.6. ANTI-DILUTION. From the date hereof through the date that
is five business days after any Closing could occur hereunder, if at any time
the Seller issues or sells (a "Dilution Event") any shares of Seller Common
Stock or any other class of voting common stock issued by the Seller for per
share consideration of less than the average per share consideration
theretofore paid by the Purchaser for Seller Common Stock hereunder (such
consideration, from time to time, being referred to herein as the "Dilution
Share Price"), or if applicable, the Dilution Share Price then deemed to have
been paid by the Purchaser for Seller Common Stock hereunder, in each case
other than with respect to an employee stock option plan for employees of the
Seller and its subsidiaries or pursuant to obligations, contracts, or other
arrangements existing on the date hereof, then simultaneously with such
Dilution Event the Seller shall issue to the Purchaser, without additional
consideration payable therefor, the number of additional shares of Seller
Common Stock that the Purchaser would have received in connection with Closings
consummated on or before the date of the Dilution Event ("Previous Closings")
had the purchase price per share of Seller Common Stock payable by the
Purchaser at such Previous Closings been equal to the Dilution Share Price, and
shall issue and deliver to the Purchaser a certificate registered in the name
of the Purchaser for such additional shares (whereupon, for purposes of the
subsequent application of this Section 6.6, the purchase price paid by the
Purchaser for shares at Previous Closings will be deemed to be such Dilution
Share Price until the occurrence of another Dilution Event, if any).
Notwithstanding anything to the contrary herein, the purchase price payable by
the Purchaser at all Closings subsequent to any Dilution Event shall be equal
to the then-current Dilution Share Price.
ARTICLE VII
COVENANTS OF THE PURCHASER
The Purchaser covenants to the Seller as follows:
SECTION 7.1. COMPLIANCE WITH SECURITIES LAWS. The Purchaser agrees to
make all filings required to be made by it under the Exchange Act with respect
to its holdings of securities issued by the Seller on a timely basis.
SECTION 7.2. DIRECTOR FILINGS. The Purchaser agrees to cause its
nominees for election as Directors of the Seller to file all filings required
to be made by it under the Exchange Act with respect to their holdings of
securities issued by the Seller on a timely basis.
SECTION 7.3. CHANGE OF RESIDENCE AND PRINCIPAL EXECUTIVE OFFICE. The
Purchaser agrees to promptly notify the Seller of any change in the state of
its residence or any change in the state that its principal executive office is
located or any change in its Manager.
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ARTICLE VIII
REPURCHASE RIGHTS OF THE SELLER
Upon and for a period of ninety days after the occurrence of a
Purchaser Breach (as hereinafter defined), the Seller shall have the right (but
not the obligation), upon ten business day's prior written notice to the
Purchaser, to elect to repurchase the securities heretofore purchased by the
Purchaser hereunder, as adjusted for subsequent changes in such securities, at
a price equal to the price actually paid by the Purchaser for such securities.
The closing of such repurchase shall take place at the offices of Powell,
Goldstein, Frazer & Murphy LLP, 191 Peachtree Street, N.E., Atlanta, Georgia
30309-4130, at 11:00 A.M., local time, on the tenth business day after such
notice is sent to the Purchaser by the Seller. Such closing may occur at such
different place, such different time, or such different date or a combination
thereof as the Purchaser and the Seller may agree in writing. At such closing:
(a) The Purchaser shall deliver to the Seller certificates for such
securities, duly endorsed for transfer to the Seller, with signatures
guaranteed by a commercial bank located in Birmingham, Alabama, and with all
applicable stamp taxes paid; and
(b) As consideration for such securities, the Seller shall deliver at
such closing to the Purchaser a sum equal to the purchase price for such
securities, in cash, by certified check, or by wire transfer of immediately
available funds to an account designated in writing by the Purchaser.
As used herein, "Purchaser Breach" shall mean either:
(i) each of the applicable conditions precedent to the Purchaser's
obligation to consummate the transactions to be consummated hereunder at a
Second Closing set forth in Sections 2.3(a) (if applicable), (b), (d), (e),
(f), (g), (h), (i), and (j) are satisfied, assuming that the Purchaser's
representations and warranties, and covenants set forth in Sections 5.3 and 5.4
are then true and satisfied, but the Second Closing does not otherwise occur
due to either:
(A) the failure to satisfy a condition precedent to the
Seller's obligation to consummate the transactions to be consummated hereunder
at the Second Closing pursuant to Sections 2.4(a) or (c); or
(B) the Purchaser's breach or anticipatory breach of its
obligation to pay consideration for securities issued by the Seller under
circumstances where the Seller could satisfy the condition precedent set forth
in Section 2.3(c) were such payment so made;
OR
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(ii) each of the applicable conditions precedent to the Purchaser's
obligation to consummate the transactions to be consummated hereunder at the
Third Closing set forth in Sections 3.3(a) (if applicable), (b), (d), (e), (f),
(g), (h), (i), and (j) are satisfied, assuming that the Purchaser's
representation and warranty set forth in Sections 5.3 and 5.4 are then true,
but the Third Closing does not otherwise occur due to either:
(A) the failure to satisfy a condition precedent to the
Seller's obligation to consummate the transactions to be consummated hereunder
at the Third Closing pursuant to Sections 3.4 (a) or (c); or
(B) the Purchaser's breach or anticipatory breach of its
obligation to pay consideration for securities issued by the Seller under
circumstances where the Seller could satisfy the conditions precedent set forth
in Section 3.3(c) were the related payment so made.
The parties agree that the provisions of this Article VIII are a
bargained-for exchange, negotiated at arm's-length in advance of any event that
could cause the provisions of this Article VIII to be utilized. Accordingly,
the Purchaser hereby irrevocably waives any rights or remedies that it may
have, under the Securities Act or otherwise, relating in any manner to any
disclosure, or the absence thereof, made to the Purchaser by the Seller
relating to the affairs of the Seller in connection with the purchase and sale
of securities contemplated by this Article VIII.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1. INDEMNIFICATION BY THE SELLER. The Seller hereby agrees
to defend, indemnify and hold harmless the Purchaser, its affiliates,
subsidiaries, and parent entities, and their respective past, current, and
future officers, directors, employees, counsel, agents, and equity holders, and
each person, if any, who controls, controlled, or will control any of them
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act (the "Purchaser Indemnitees"), from and against any and all
losses, liabilities, damages, costs and expenses whatsoever (including but not
limited to reasonable attorneys' fees of one counsel and any and all expenses
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any claims
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with any material misrepresentation or breach of any warranty made by the
Seller contained in any Operative Document. The foregoing agreement to
indemnify shall be in addition to any liability the Seller may otherwise have,
including without limitation liabilities arising out of any Operative Document.
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SECTION 9.2. INDEMNIFICATION BY THE PURCHASER. The Purchaser hereby
agrees to defend, indemnify and hold harmless the Seller, its subsidiaries and
affiliates, and their respective past, current, and future officers, directors,
employees, counsel, agents, and equity holders, and each person, if any, who
controls, controlled, or will control any of them within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act (the "Seller
Indemnitees"), from and against any and all losses, liabilities, damages, costs
and expenses whatsoever (including but not limited to reasonable attorneys'
fees of one counsel and any and all expenses whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any claims whatsoever, and any and all
amounts paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with any material
misrepresentation or breach of any warranty made by the Purchaser contained in
any Operative Document. The foregoing agreement to indemnify shall be in
addition to any liability the Purchaser may otherwise have, including without
limitation liabilities arising out of any Operative Document.
SECTION 9.3. METHOD OF ASSERTING CLAIMS. In the event that any claim
or demand for which the Seller could be liable to a Purchaser Indemnitee
hereunder is asserted or sought to be collected from a Purchaser Indemnitee by
a third party, the Purchaser Indemnitee shall promptly notify the Seller in
writing of such claim or demand, specifying the nature of such claim or demand
and the amount or estimated amount thereof to the extent then feasible, which
estimate shall not be conclusive of the final amount of such claim and demand
(the "Claim Notice"). The Seller shall have 20 days from the date that such
Claim Notice is made hereunder (the "Notice Period") to notify the Purchaser
Indemnitee in writing (A) whether or not it disputes its liability to the
Purchaser Indemnitee hereunder with respect to such claim or demand, and (B)
notwithstanding any such dispute, whether or not it desires, at its sole cost
and expense, to defend the Purchaser Indemnitee against such claim or demand.
(a) If the Seller disputes its liability with respect to such claim or
demand or the amount thereof (whether or not the Seller desires to defend the
Purchaser Indemnitee against such claim or demand as provided in subsections
(b) and (c) below), such dispute shall be resolved in compliance with Section
9.5. Pending the resolution of any dispute by the Seller of its liability with
respect to any claim or demand, such claim or demand shall not be settled
without the prior written consent of the Purchaser Indemnitee.
(b) In the event that the Seller notifies the Purchaser Indemnitee
within the Notice Period that it desires to defend the Purchaser Indemnitee
against such claim or demand then, except as hereinafter provided, the Seller
shall have the right to defend the Purchaser Indemnitee by appropriate
proceedings, which proceedings shall be promptly settled or prosecuted by it to
a final conclusion in such a manner as to avoid any risk of the Purchaser
Indemnitee becoming subject to liability for any other matter; provided,
however, that the Seller shall not, without the prior written consent of the
Purchaser Indemnitee, consent to the entry of any judgment against the
Purchaser Indemnitee or enter into any settlement or
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compromise which does not include, as an unconditional term thereof, the giving
by the claimant or plaintiff to the Purchaser Indemnitee of a release, in form
and substance satisfactory to the Purchaser Indemnitee, from all liability or
obligations in respect of such claim or litigation. If the Purchaser Indemnitee
desires to participate in, but not control, any such defense or settlement, it
may do so at its sole cost and expense through counsel of its choice. If, in
the reasonable opinion of the Purchaser Indemnitee, any such claim or demand or
the litigation or resolution of any such claim or demand involves an issue or
matter which could have a material adverse effect on the business, operations,
assets, properties, or prospects of the Purchaser Indemnitee, then the
Purchaser Indemnitee shall have the right to control the defense or settlement
of any such claim or demand and its reasonable costs and expenses shall be
included as part of the indemnification obligation of the Seller hereunder;
provided, however, that the Purchaser Indemnitee shall not settle any such
claim or demand without the prior written consent of the Seller, which consent
shall not be unreasonably delayed or withheld. If the Purchaser Indemnitee
should elect to exercise such right, the Seller shall have the right to
participate in, but not control, the defense or settlement of such claim or
demand at its sole cost and expense.
(c) (i) If the Seller elects not to defend the Purchaser Indemnitee
against such claim or demand, whether by not giving the Purchaser Indemnitee
timely notice as provided above or otherwise, then the amount of any such claim
or demand, or, if the same may be defended by the Seller or by the Purchaser
Indemnitee (but the Purchaser Indemnitee shall not have any obligation to
defend any such claim or demand), then that portion thereof as to which such
defense is unsuccessful, in each case shall be conclusively deemed to be a
liability of the Seller hereunder unless the Seller has disputed its liability
to the Purchaser Indemnitee as provided in subsection (a) above, in which case
such dispute shall be resolved as provided in Section 9.5.
(ii) In the event that a Purchaser Indemnitee should have a
claim or demand against the Seller that does not involve a claim or demand
being asserted or sought to be collected from it by a third party, the
Purchaser Indemnitee shall promptly send a Claim Notice with respect to such
claim to the Seller. If the Seller disputes its liability with respect to such
claim or demand, such dispute shall be resolved in accordance with Section 9.5;
if the Seller does not notify the Purchaser Indemnitee within the Notice Period
that it disputes such claim, the amount of such claim shall be conclusively
deemed a liability of the Seller hereunder.
(d) All claims for indemnification by a Seller Indemnitee hereunder
shall be asserted and resolved utilizing the procedures set forth above,
substituting in the appropriate place "Seller Indemnitee" for "Purchaser
Indemnitee" and variations thereof and "Purchaser" for "Seller."
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SECTION 9.4. PAYMENT. Upon the determination of the liability under
Section 9.1, 9.2, or 9.3, the appropriate party shall pay to the other, as the
case may be, within 10 days after such determination, the amount of any claim
for indemnification made hereunder. In the event that the indemnified party is
not paid in full for any such claim pursuant to the foregoing provisions
promptly after the other party's obligation to indemnify has been determined in
accordance herewith, it shall have the right, notwithstanding any other rights
that it may have against any other person or entity, to setoff the unpaid
amount of any such claim against any amounts owed by it under any of the
Operative Documents. Upon the payment in full of any claim, either by setoff or
otherwise, the entity making payment shall be subrogated to the rights of the
indemnified party against any person or entity with respect to the subject
matter of such claim.
SECTION 9.5. ARBITRATION.
(a) Subject to Sections 9.5(b) and 9.6, all disputes under this
Article IX shall be settled by arbitration in Atlanta, Georgia before a single
arbitrator pursuant to the rules of the American Arbitration Association (the
"Rules"). Arbitration may be commenced at any time by any party hereto giving
written notice to each other party to a dispute that such dispute has been
referred to arbitration under this Section 9.5. The arbitrator shall be
selected by the agreement of the Seller and the Purchaser, but if they do not
so agree within 20 days after the date of the notice referred to above, the
selection shall be made pursuant to the Rules from the panel of arbitrators
maintained by the Association. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto; provided, however, that any
such award shall be accompanied by a written opinion of the arbitrator giving
the reasons for the award. This provision shall be specifically enforceable by
the parties and the decision of the arbitrator in accordance herewith shall be
final and binding, and there shall be no right of appeal therefrom. Each party
shall pay its own expense of arbitration and the expenses of the arbitrator
shall be equally shared; provided, however, that if in the opinion of the
arbitrator any party to the arbitration has raised a frivolous claim, defense,
or objection, then the arbitrator may assess, as a part of his award, all or
any part of the arbitration expenses of the other party (including reasonable
attorneys' fees) against the party raising such frivolous claim, defense, or
objection.
(b) Subject to Section 10.11, to the extent that arbitration may not
be legally permitted hereunder or the parties to any dispute hereunder may not
at the time of such dispute mutually agree to submit such dispute to
arbitration, any party may commence a civil action in a court of appropriate
jurisdiction to resolve disputes hereunder. None of the provisions of this
Section 9.5 shall prevent the parties from settling any dispute by mutual
agreement at any time.
SECTION 9.6. OTHER RIGHTS AND REMEDIES NOT AFFECTED. The
indemnification rights of the parties hereunder are independent of and in
addition to such rights and remedies
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<PAGE> 42
as the parties may have at law or in equity or otherwise for any
misrepresentation, breach of warranty, or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including without
limitation the right to seek specific performance, rescission, or restitution,
none of which rights or remedies shall be affected or diminished hereby.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. FURTHER ACTIONS. At any time and from time to time, each
party agrees, at its or his expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
SECTION 10.2. AVAILABILITY OF EQUITABLE REMEDIES. Since a breach of
the provisions of this Agreement may not adequately be compensated by money
damages, any party shall be entitled, in addition to any other right or remedy
available to it, to an injunction restraining such breach or a threatened
breach and to specific performance of any such provision of this Agreement, and
in either case no bond or other security shall be required in connection
therewith, and the parties hereby consent to the issuance of such an injunction
and to the ordering of specific performance.
SECTION 10.3. SURVIVAL. The covenants, agreements, representations,
and warranties contained in or made pursuant to this Agreement shall survive
the First Closing and any delivery of any purchase price by the Purchaser,
irrespective of any investigation made by or on behalf of any party, as
follows:
(a) the representations and warranties of the Seller relating to
Taxes, ERISA, the Foreign Corrupt Practices Act, and environmental laws, rules
and regulations shall survive until the expiration of the applicable statute of
limitation;
(b) all other representations and warranties contained herein shall
survive the Closing when made for a period of two (2) calendar years after such
Closing; and
(c) all other provisions of the Operative Documents shall survive
until the expiration of the applicable statute of limitations.
SECTION 10.4. MODIFICATION. This Agreement and the Exhibits and
Schedules hereto and the other Operative Documents set forth the entire
understanding of the parties with respect to the subject matter hereof,
supersede all existing agreements among them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party
(except as otherwise provided in Section 10.5).
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<PAGE> 43
SECTION 10.5. NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested (in which case it shall be deemed to
be given five days after mailing) or by Federal Express, Express Mail, or
similar overnight delivery or courier service (in which case it will be deemed
to be given upon actual receipt by the recipient) or delivered (in person or by
telecopy, telex, or similar telecommunications equipment) against receipt to
the party to whom it is to be given at the address of such party set forth
below (or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 10.5):
If to the Purchaser:
Harbert Equity Fund I, L.L.C.
One Riverchase Parkway South
Birmingham, Alabama 35244
Attn: Mr. Michael Luce
Fax: 205-987-5505
With a copy to:
Kilpatrick Stockton LLP
1100 Peachtree Street, N.E.
Atlanta, Georgia 30309-4530
Attn: Joel B. Piassick, Esq.
Fax: 404-815-6555
If to the Seller:
Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Attn: Mr. Ronald E. Roark
Stephen W. Brown, Esq.
Fax: 614-488-9780
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<PAGE> 44
With a copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Jonathan R. Shils, Esq.
Fax: 404-572-6999
SECTION 10.6. WAIVER. Any waiver by any party of a breach of any term
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of that term or of any breach of any other term of this Agreement.
The failure of a party to insist upon strict adherence to any term of this
Agreement on one or more occasions will not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement. Any waiver must be in writing.
SECTION 10.7. BINDING EFFECT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the Seller, the Purchaser, and
their respective successors and assigns, and shall inure to the benefit of each
Purchaser Indemnitee, Seller Indemnitee, and their respective successors and
assigns (if not a natural person) and his assigns, heirs, and personal
representatives (if a natural person).
SECTION 10.8. NO THIRD PARTY BENEFICIARIES. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement (except as provided in Section 10.7).
SECTION 10.9. SEPARABILITY. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
SECTION 10.10. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
SECTION 10.11. COUNTERPARTS; GOVERNING LAW. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to conflict of laws. Except as
contemplated by Section 9.5(a), any action, suit, or proceeding arising out of,
based on, or in connection with this Agreement or the transactions contemplated
hereby may be brought only in a United States District Court located in the
State of Georgia
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<PAGE> 45
and each party covenants and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such action, suit, or proceeding, any claim that
it is not subject personally to the jurisdiction of such court, that its
property is exempt or immune from attachment or execution, that the action,
suit, or proceeding is brought in an inconvenient forum, that the venue of the
action, suit, or proceeding is improper, or that this Agreement or the subject
matter hereof may not be enforced in or by such court.
SECTION 10.12. ASSIGNMENTS. This Agreement may be assigned by
operation of law without the consent of any party hereto. This Agreement may
not otherwise be assigned by any party hereto without the prior written consent
of the other party hereto, which consent shall not be unreasonably delayed or
withheld.
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<PAGE> 46
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
[SEAL]
By: /s/
---------------------------------
Name: Michael D. Luce
Title: Executive Vice President & CFO
CROWN NORTHCORP, INC.
[SEAL]
By: /s/
---------------------------------
Name: Ronald E. Roark
Title: Chairman and CEO
-42-
<PAGE> 47
EXHIBIT A
SELLER'S OFFICER'S CERTIFICATE - FIRST CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of February __, 1997, between and among Harbert Equity Fund I, L.L.C.
and Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the Chairman of the Board and Chief Executive
Officer of CROWN NORTHCORP, INC., a Delaware corporation (the "Seller"), DOES
HEREBY CERTIFY, in the name and on behalf of the Company, as follows:
1. All representations and warranties of the Seller contained in Section 4.1 of
the Stock Purchase Agreement are true and correct as of the date hereof.
2. As of the date hereof, the Seller has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Seller at or before the date hereof by the Stock
Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of March __, 1997.
CROWN NORTHCORP, INC.
By:
--------------------------------
Ronald E. Roark
Chairman of the Board and
Chief Executive Officer
<PAGE> 48
EXHIBIT B
OPINION OF SELLER'S COUNSEL
<PAGE> 49
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
ATTORNEYS AT LAW
<TABLE>
<S> <C> <C>
Sixteenth Floor www.pgfm.com Sixth Floor
191 Peachtree Street, N.E. PLEASE RESPOND: Atlanta Address 1001 Pennsylvania Avenue, N.W.
Atlanta, Georgia 30303 Washington, D.C. 20004
404 572-6600 202 347 0066
Facsimile 404 572-6999 Facsimile 202 624-7222
</TABLE>
March 7, 1997
Harbert Equity Fund I, L.L.C.
Ones Riverchase Parkway South
Birmingham, Alabama 35244
Ladies and Gentlemen:
We have acted as counsel to Crown NorthCorp, Inc., a Delaware
Corporation (the "Company"), in connection with the negotiation, execution, and
delivery of that certain Stock Purchase Agreement, dated as of the date hereof,
between and among the Company and Harbert Equity Fund I, L.L.C. (the "Stock
Purchase Agreement"). This opinion is being furnished to you pursuant to
Section 1.3(b) of the Purchase Agreement.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal
Opinion Committee of the Corporate and Banking Law Section of the State Bar of
Georgia, which Interpretive Standards are attached hereto as Exhibit A and are
incorporated in this opinion letter by reference. Capitalized terms used in
this opinion letter and not otherwise defined herein shall have the meanings
ascribed to such terms in the Interpretive Standards and in the Stock Purchase
Agreement, as applicable.
In rendering the opinions hereinafter expressed, we have examined
originals, or documents certified or otherwise identified to our satisfaction,
of the following documents:
(i) the Stock Purchase Agreement, and all exhibits and schedules
thereto;
(ii) the Escrow Agreement, dated as of even date herewith, between the
Company, the Purchaser, and AmSouth Bank of Alabama (the "Escrow Agreement");
(iii) the Registration Rights Agreement, dated as of even date
herewith, between and among the Company and the Purchaser (the "Registration
Rights Agreement"; the Stock Purchase Agreement, the Escrow Agreement, and the
Registration Rights Agreement are referred to herein as the "Operative
Documents");
(iv) a stock certificate representing the First Closing Shares in the
name of the Purchaser;
<PAGE> 50
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
Harbert Equity Fund I, L.L.C.
March 7, 1997
Page 2
(v) a copy of the Restated Certificate of Incorporation of the
Company, and of all amendments thereto, each certified by the Secretary of
State of the State of Delaware on February 28, 1997 (the "Certified Charter");
(vi) a copy of the By-Laws of the Company, certified by the Secretary
of the Company as being in effect at all times since March 1, 1997;
(vii) A good standing certificate with respect to the Company, issued
by the Secretary of State of the State of Delaware on February 28, 1997 (the
"Delaware Good Standing Certificate");
(viii) A good standing certificate with respect to the Company, issued
by the Secretary of State of the State of Ohio on March 3, 1997 (the "Ohio Good
Standing Certificate "; the Delaware Good Standing Certificate and the Ohio
Good Standing Certificate are collectively referred to herein as the "Good
Standing Certificates");
(ix) Unanimous written consents, each dated March 6, 1997, executed by
each of the incumbent directors of the Company; and
(x) The opinion, dated the date hereof, of Delta Financial Group, Inc.
as to the fairness, from a financial point of view, of the transactions
contemplated by the Operative Documents to the Company and its stockholders.
In addition, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records of the
Company and such certificates of officers of the Company, and have made such
investigations of law, as we have deemed necessary or advisable as a basis for
the opinions hereinafter expressed. In rendering this opinion, we have assumed
the genuineness of all signatures (other than the signatures of the Company),
the authenticity of all documents submitted to us as original documents, the
conformity to original documents of all documents submitted to us as certified,
conformed, or photostatic copies, and the authenticity of the originals of such
documents. With respect to documents executed by parties other than the
Company, we have also assumed the due authorization, execution, and delivery of
each of such documents by each of the parties thereto other than the Company
and that those parties had the power, capacity, and authority to enter into,
execute, deliver, and perform their respective obligations under such
documents.
We have also assumed, with your permission, that the Company has been
duly incorporated in the State of Delaware. As to certain facts material to
this opinion, we have relied without independent investigation upon the
representations and warranties made by the Purchaser and the Company contained
in the Operative Documents and upon a certificate of the Secretary Of the
Company. The opinion expressed in paragraph 1 below is based solely upon our
review of
<PAGE> 51
POWELL GOLDSTEIN, FRAZER & MURPHY LLP
Harbert Equity Fund I, L.L.C.
March 7, 1997
Page 3
the Good Standing Certificates, and we have not made any independent inquiry as
to whether the Company has paid its license, occupational, or franchise taxes
when due.
The opinions set forth below are limited to the laws of the State of
Georgia, the General Corporation Law of the State of Delaware, and the federal
laws of the United States of America other than the federal securities laws,
rules, and regulations. We are not members of the bar of the State of Delaware,
and express no opinion herein with respect to any other laws of the State of
Delaware. We also express no opinion herein with respect to any state
securities laws. With your permission and notwithstanding that the Operative
Documents provide that they are to be governed by the laws of the State of
Delaware, we have assumed that the internal laws of the State of Georgia will
govern each of the Operative Documents and that its provisions will be
construed, interpreted, and enforced in accordance with the internal laws of
the State of Georgia.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware.
2. The Company has the corporate power and authority to execute and
deliver each of the Operative Documents, and to perform its respective
obligations thereunder.
3. The Company has duly authorized its execution and delivery of each
Operative Document and the performance of its respective obligations
thereunder.
4. The Company has duly executed and delivered each of the Operative
Documents, and such Operative Documents constitute the legal, valid, and
binding obligation of the Company, enforceable against the Company in
accordance with their respective terms.
The opinion set forth in paragraph 4 above is subject to the further
qualification that we express no opinion herein with respect to the
enforceability or effect of provisions of the Operative Documents requiring
future negotiations or agreements of the parties.
This opinion is provided to you for your exclusive use solely in
connection with the transactions contemplated by the Operative Documents, and
may not be relied upon by any other person for any other purpose without our
prior written consent. This opinion is given as of the date hereof. We
specifically disclaim any responsibility to update or supplement this opinion
to reflect any event or state of facts which may hereafter come to our
attention or any changes in statutes or regulations or any court decision which
may hereafter occur.
Very truly yours,
/s/
---------------------------------------
Powell, Goldstein, Frazer & Murphy, LLP
<PAGE> 52
EXHIBIT C
PURCHASER'S OFFICER'S CERTIFICATE - FIRST CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of March __, 1997, between and among Harbert Equity Fund I, L.L.P. and
Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the ____________ of HARBERT MANAGEMENT
CORPORATION, an Alabama corporation that is the Manager of HARBERT EQUITY FUND
I, L.L.C., a Georgia limited liability company (the "Purchaser"), DOES HEREBY
CERTIFY, in the name and on behalf of the Purchaser, as follows:
1. As of the date hereof, all representations and warranties of the Purchaser
contained in Article V of the Stock Purchase Agreement are true and correct
with respect to the First Closing and the First Closing Shares as of the date
hereof.
2. As of the date hereof, the Purchaser has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Purchaser at or before the date hereof by the Stock
Purchase Agreement.
3. The Purchaser is an "accredited investor," as defined in Rule 501(a) under
the Securities Act, because it is an entity in which all of the owners are
"accredited investors."
4. The Purchaser is purchasing the First Closing Shares for its own account,
for investment purposes only, and without a view toward the resale or
distribution thereof.
5. The Purchaser's chief executive office and principal place of business is
located in the State of Alabama.
6. The Seller has made available to the Purchaser a reasonable time before the
First Closing the opportunity to ask questions of and receive answers
concerning the Seller and the terms and conditions of the transaction to be
consummated at the First Closing.
<PAGE> 53
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of March __, 1997.
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By:
----------------------------------
Name:
Title:
-2-
<PAGE> 54
EXHIBIT D
OPINION OF PURCHASER'S COUNSEL
<PAGE> 55
ATTORNEYS AT LAW
KILPATRICK STOCKTON LLP Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
E-MAIL: [email protected]
March 7, 1997 Direct Dial: 404.815.6527
Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Gentlemen:
We have acted as counsel for Harbert Equity Fund I, L.L.C., a Georgia
limited liability company ("Purchaser"), and Harbert Management Corporation, an
Alabama corporation ("Manager"), in connection with the purchase of certain
shares of the Common Stock of Crown NorthCorp, Inc., a Delaware corporation
("Seller"), and certain related transactions, pursuant to: (i) that certain
Stock Purchase Agreement (the "Purchase Agreement"), between and among
Purchaser and Seller; (ii) that certain Escrow Agreement (the "Escrow
Agreement"), between and among Purchaser, Seller and AmSouth Bank of Alabama,
as "Escrow Agent"; (iii) that certain Registration Rights Agreement (the
"Rights Agreement"), between and among Purchaser and Seller; and (iv) that
certain Voting Agreement (the "Voting Agreement"), between and among Purchaser,
Ronald E. Roark and Tucker Holding Company, Ltd., an Ohio limited liability
company (the Purchase Agreement, the Escrow Agreement, the Rights Agreement and
the Voting Agreement, collectively, the "Transaction Documents"). Each of the
Transaction Documents is dated as of March 7, 1997.
This opinion is given pursuant to Section 1.4(b) of the Purchase
Agreement. Capitalized terms used herein have the same meanings assigned to
them in the Purchase Agreement unless otherwise defined herein.
The opinions expressed in this letter are limited by, and expressed in
accordance with, the January 1, 1992 edition of the Interpretive Standards
applicable to Legal Opinions to Third Parties in Corporate Transactions adopted
by the Legal Opinion Committee of the Corporate and Banking Section of the
State Bar of Georgia, which Interpretive Standards are incorporated herein by
reference.
In connection with our opinions herein, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of each of the
Transaction Documents and the exhibits and schedules thereto, certain corporate
records of Purchaser and Manager, agreements and other
ATLANTA . AUGUSTA . BRUSSELS . CHARLOTTE . LONDON . RALEIGH
WASHINGTON . WINSTON-SALEM
<PAGE> 56
KILPATRICK STOCKTON LLP
Crown NorthCorp, Inc.
March 7, 1997
instruments, certificates of officers of Purchaser and Manager, certificates of
public officials, and other documents which we have deemed necessary as a basis
for the opinions hereinafter expressed, including the opinion, of even date
herewith, of Patricia T. Mandt, Esq., Vice President and General Counsel of
Manager and attached hereto as Exhibit "A" (the "Alabama Opinion"). In
rendering this opinion, we have assumed the genuineness of signatures (other
than those on behalf of Purchaser or Manager), the conformity to original
documents of all documents submitted to us as photostatic or certified copies
and the authenticity of the originals of such latter documents and, regarding
documents executed by parties other than Purchaser or Manager, that those
parties had the power, capacity and authority to enter into, execute, deliver
and perform all obligations under such documents, and the due authorization by
all requisite action with respect to the execution, delivery and performance of
such documents (other than by Purchaser or Manager). Whenever this opinion
refers to matters within our "knowledge," "known to us" or which we "know,"
such reference is limited to facts within our actual knowledge after an inquiry
of the attorneys and the legal assistants of this firm who have provided legal
services to Purchaser or Manager within the past two years. We have made no
other inquiry or investigation as to factual matters. As to certain facts
material to this opinion, we have relied without independent investigation upon
representations made by Purchaser contained in the Transaction Documents.
The opinions set forth below are limited to the laws of the State of
Georgia, and the federal laws of the United States of America. We are not
members of the state bar of Delaware, and we are not experts on the laws of
such state. With your permission and notwithstanding that the Transactions
Documents provide that they are to be governed by the internal laws of the
State of Delaware, we have assumed that the internal laws of the State of
Georgia will govern each of the Transaction Documents and that its provisions
will be construed, interpreted and enforced in accordance with the internal
laws of the State of Georgia.
Based upon the foregoing, we are of the opinion that:
1. Purchaser is a limited liability company duly organized and validly
existing under the laws of the State of Georgia. Our opinion in this paragraph
is based solely upon a Certificate of Existence with respect to Purchaser,
issued by the Secretary of State of Georgia on March 6, 1997, a copy of which
is attached hereto as Exhibit B, and we have not made any independent inquiry
as to whether Purchaser has paid its license, occupational or franchise taxes
or annual fees when due.
2. Purchaser has the power as a limited liability company to execute
and deliver each of the Transaction Documents to which it is a party, and to
perform all of its respective obligations thereunder.
<PAGE> 57
KILPATRICK STOCKTON LLP
Crown NorthCorp, Inc.
March 7, 1997
3. Purchaser has duly authorized the execution and delivery of each
Transaction Document to which it is a party and all performance of its
respective obligations thereunder. Manager has duly authorized the execution
and delivery of the Transaction Documents in Manager's capacity as sole manager
of Purchaser. Our opinion in the immediately preceding sentence is based solely
on the Alabama Opinion, upon which we have relied without further inquiry or
investigation.
4. Purchaser (acting through Manager) has duly and validly executed
and delivered each of the Transaction Documents to which it is a party, and,
subject to the following sentence, such Transaction Documents constitute the
valid and legally binding obligations of Purchaser and, if Purchaser were now
to perform all of its obligations under the Transaction Documents (regardless
of the time for performance specified in the Transaction Documents), are
enforceable against Purchaser in accordance with their respective terms.
Notwithstanding the foregoing, we express no opinion herein with respect to the
possible effect or unenforceability of provisions requiring future negotiations
or agreement of the parties.
5. Based upon the limitations and qualifications set forth above, we
confirm to you that Purchaser is registered as a foreign limited liability
company in the state of Alabama. The foregoing statement is based solely upon a
certificate provided by the Secretary of State of Alabama with respect to
Purchaser, dated March 6, 1997, a copy of which is attached hereto as Exhibit
C, and is limited to the meaning ascribed to such certificates by the
applicable state agency.
This opinion is provided to you for your exclusive use solely in
connection with the transactions contemplated by the Transaction Documents, and
may not be relied upon by any other person or for any other purpose without our
prior written consent.
[Remainder of Page Intentionally Blank]
<PAGE> 58
KILPATRICK STOCKTON LLP
Crown NorthCorp, Inc.
March 7, 1997
This opinion is given as of the date hereof. We specifically disclaim
any responsibility to update or supplement this opinion to reflect any event or
state of facts which may hereafter come to our attention or any changes in
statutes or regulations or any court decision which may hereafter occur.
Very truly yours,
KILPATRICK STOCKTON LLP
By: /s/
---------------------------
Joel B. Piassick, a Partner
<PAGE> 59
EXHIBIT E
ESCROW AGREEMENT
-2-
<PAGE> 60
ESCROW AGREEMENT
THIS AGREEMENT is made as of the 7th day of March 1997, by and among
HARBERT EQUITY FUND I, L.L.C., a Georgia limited liability company
("PURCHASER"), AMSOUTH BANK OF ALABAMA, an Alabama banking corporation ("ESCROW
AGENT"), and CROWN NORTHCORP, INC., a Delaware Corporation ("SELLER").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller have entered into that certain Stock
Purchase Agreement of even date herewith providing for the purchase by
Purchaser of certain shares of common stock of Seller and other related
transactions (the "PURCHASE AGREEMENT"); and
WHEREAS, SECTION 2.1 of the Purchase Agreement requires that this
Escrow Agreement be executed and delivered by Purchaser, Seller and Escrow
Agent in order to facilitate the consummation of certain Third-Party
Acquisitions; and
WHEREAS, Seller and Purchaser desire Escrow Agent to invest, manage
and disburse the funds deposited with it as provided herein;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The parties hereby appoint and
designate Escrow Agent as the "Escrow Agent" for purposes of the Purchase
Agreement and for the purposes set forth herein, and Escrow Agent hereby
accepts such appointment.
2. DEPOSITS OF ESCROW FUND. From time to time, Purchaser may deposit
funds with Escrow Agent in accordance with Section 2.1(a) of the Purchase
Agreement (the aggregate funds so deposited and held by Escrow Agent from time
to time being referred to herein as the "Escrow Fund"). Escrow Agent agrees to
hold and distribute the Escrow Fund as provided herein.
3. INVESTMENT OF THE ESCROW FUND. Escrow Agent shall manage the Escrow
Fund under the terms of this Agreement and shall from time to time invest and
reinvest the funds held in the Escrow Fund, as and when instructed by Purchaser
in writing, in any one or more of the following:
(a) obligations of the United States of America;
(b) general obligations of any State of the United States of
America;
(c) general obligations of any political subdivision of a State of
the United
<PAGE> 61
States of America, if such obligations are rated by at least
two recognized rating services as at least "AA";
(d) certificates of deposit of Escrow Agent and any national bank
or banks insured by the Federal Deposit Insurance Corporation
with a net worth in excess of $100,000,000;
(e) obligations of state or municipal public housing authorities
chartered by the United States of America and guaranteed by the
United States of America;
(f) demand interest bearing accounts of Escrow Agent; and
(g) money market funds of Escrow Agent which invest in any of the
preceding (a) through (f).
If no instructions are received from Purchaser as provided above, Escrow Agent
shall invest the Escrow Fund in money market funds of the type described in the
preceding CLAUSE (g). Subject to PARAGRAPH 6 below, any and all income and
interest realized from the investments of the Escrow Fund made by Escrow Agent
pursuant hereto shall be added to and become part of the Escrow Fund.
4. RELEASES FROM ESCROW FUND.
(a) Upon receipt by Escrow Agent of a written certificate expressly
issued by Seller in accordance with SECTION 2.1(b) of the Purchase Agreement
(and executed by an authorized officer of Seller), Escrow Agent shall release
and pay to Seller the portion of the Escrow Fund specified therein on the date
and in the manner specified therein. Simultaneously with the delivery of such
certificate to Escrow Agent by Seller, Seller shall deliver a copy of such
certificate to Purchaser.
(b) Upon receipt by Escrow Agent of a written certificate expressly
issued by Purchaser in accordance with SECTION 2.1(c) or SECTION 2.5(c) of the
Purchase Agreement (and executed by an authorized officer of the Manager of
Purchaser), Escrow Agent shall release and pay to Purchaser any and all amounts
(if any) then remaining in the Escrow Fund, or such lesser portion of the
Escrow Fund specified in such certificate, including all accrued interest
applicable thereto, on the date and manner specified therein. Simultaneously
with the delivery of such certificate to Escrow Agent by Purchaser, Purchaser
shall deliver a copy of such certificate to Seller.
(c) Each certificate issued to Escrow Agent by Seller or Purchaser
under this PARAGRAPH 4 shall contain an express representation to the effect
that Seller or Purchaser (as applicable) has the right to issue such
certificate under the terms of the Purchase Agreement.
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<PAGE> 62
5. ESCROW AGENT.
(a) Escrow Agent shall not be liable to any Person (as defined below)
for any damages, losses, or expenses incurred as a result of any act or
omission of Escrow Agent, unless such damages, losses, or expenses are caused
by Escrow Agent's willful misconduct or gross negligence. Without limiting the
foregoing, Escrow Agent shall not incur any such liability with respect to (i)
any action taken or omitted in good faith upon the advice of counsel for Escrow
Agent given with respect to any question relating to the duties and
responsibilities of Escrow Agent under this Agreement, or (ii) any action taken
or omitted in reliance upon any instrument, including any certificate, written
notice or instruction provided for herein, not only as to its due execution by
an authorized person and as to the validity and effectiveness of such
instrument, but also as to the truth and accuracy of any information contained
therein that Escrow Agent shall in good faith believe to be genuine, to have
been signed by a proper person or persons and to conform to the provisions of
this Agreement. For purposes of this Agreement, "Person" means any individual,
partnership, joint venture, corporation, limited liability company, trust,
unincorporated organization, joint-stock company, bank, association or other
entity.
(b) In the event of a dispute between or among any of the parties
hereto sufficient in the discretion of Escrow Agent to justify its doing so,
Escrow Agent shall be entitled to tender the Escrow Fund into the registry or
custody of the United States District Court for the Northern District of
Georgia, Atlanta Division, to initiate such legal proceedings as it deems
appropriate, and thereupon to be discharged from all further duties and
liabilities under this Agreement. Any such legal action may be brought in any
such court as Escrow Agent shall determine to have jurisdiction over the Escrow
Fund. The filing of any such legal proceedings shall not deprive Escrow Agent
of its compensation hereunder earned prior to such actions.
(c) If all or any part of the Escrow Fund is attached, garnished or
levied upon, or the delivery thereof shall be stayed or enjoined by the order
of a court of competent jurisdiction, or any other order, judgment or decree
affecting the Escrow Fund is made or entered by a court of competent
jurisdiction, Escrow Agent is hereby expressly authorized to obey and comply
with all final writs, orders, judgments or decrees so entered or issued by any
such court, and if Escrow Agent obeys or complies with any such writ, order,
judgment or decree, it shall not be liable to any of the parties hereto or to
any other person by reason of such compliance.
(d) If at any time any attempt should be made to modify this Agreement
in a manner that would increase the duties and responsibilities of Escrow
Agent, or in any manner that Escrow Agent shall reasonably deem undesirable, or
at any other time, Escrow Agent may resign by notifying the other parties
hereto. From the date upon which such notice is received by Purchaser and
Seller until the earlier of (i) the acceptance by a successor escrow agent as
shall be appointed (A) by mutual agreement of such parties, or (B) in the event
the parties are unable to agree within 20 days following their receipt of such
notice, by the senior active Judge of the United States District Court for the
Northern District of Georgia, Atlanta Division, upon application by either
Purchaser or Seller, or (ii) 60 days following the date upon which notice was
mailed, Escrow
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<PAGE> 63
Agent's sole obligation hereunder shall be to perform its duties hereunder in
accordance with the terms of this Agreement prior to any attempted modification
hereof.
6. ESCROW AGENT'S FEES. The total fee payable to Escrow Agent for its
services and obligations hereunder shall be $1,000.00, and shall be paid to
Escrow Agent in equal proportions by Seller and Purchaser. Escrow Agent agrees
that no fee shall be due and payable hereunder unless and until the Escrow Fund
has been deposited by Purchaser as provided in PARAGRAPH 2.
7. NOTICES.
(a) All notices, demands, certificates or other communications
required or permitted to be given or made hereunder shall be in writing and
delivered personally or sent by pre-paid, first class, certified or registered
mail, return receipt requested, or by facsimile transmission to the intended
recipient thereof at its address, or facsimile number set out below. Any such
notice, demand or communication shall be deemed to have been duly given
immediately (if given or made by personal delivery or confirmed facsimile), or
three days after mailing (if given or made by letter addressed to a location
within the country in which it is posted) or seven days after mailing (if made
or given by letter addressed to a location outside the country in which it is
posted), and in proving same it shall be sufficient to show that the envelope
containing the same was duly addressed, stamped and posted, or that receipt of
a facsimile or hand delivery was confirmed by the recipient. The addresses and
facsimile numbers of the parties for purposes of this Agreement are:
i) If to Purchaser: Harbert Equity Fund I, L.L.C.
One Riverchase Parkway South
Birmingham, Alabama 35244
Facsimile No. (205) 987-5505
Attention: Mr. Michael Luce
With a copy to: Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Facsimile No. (404) 815-6555
Attention: Joel B. Piassick, Esq.
ii) If to Seller: Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Facsimile No. (614) 488-9780
Attention: Mr. Ronald E. Roark
Stephen W. Brown, Esq.
- 4 -
<PAGE> 64
With a copy to: Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Facsimile No. (404) 572-6999
Attention: Jonathan R. Shils, Esq.
iii) If to Escrow Agent: AmSouth Bank of Alabama
1901 6th Ave. North, Suite 730
Birmingham, Alabama 35203
Facsimile No. (205) 581-7661
Attention: Ms. Renee Ragland
(b) Any party may change the address to which notices, requests,
demands or other communications to such parties shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided
herein.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, executors, administrators, beneficiaries, transferees,
successors and assigns.
9. AMENDMENTS. This Agreement may be amended at any time or from time
to time in a writing executed by the party to be charged.
10. EFFECT ON AGREEMENT. The provisions of this Agreement are not
amended to alter, modify, negate or replace any provisions of the Purchase
Agreement that may be in conflict with the provisions hereof.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
12. GOVERNING LAW. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia, without regard to principles of conflicts of laws.
13. PARTIAL INVALIDITY AND SEVERABILITY. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid
or unenforceable by a court of competent jurisdiction, it is the intention of
the parties that the remaining terms hereof, or part thereof, shall constitute
their agreement with respect to the subject matter hereof and all
- 5 -
<PAGE> 65
such remaining terms, or parts thereof, shall remain in full force and effect.
To the extent legally permissible, any illegal, invalid or unenforceable
provision of this Agreement shall be replaced by a valid provision which will
implement the commercial purpose of the illegal, invalid or unenforceable
provision.
14. WAIVER. Any term or condition of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, but only if
such waiver is evidenced by a writing signed by such party. No failure on the
part of any party hereto to exercise, and no delay in exercising any right,
power or remedy created hereunder, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy by any such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. No waiver by any party hereto to any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
15. HEADINGS. The headings of particular provisions of this Agreement
are inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
16. NUMBER AND GENDER. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
17. TIME OF PERFORMANCE. Time is of the essence.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and this Agreement contains the sole and entire agreement among the parties
with respect to the matters covered hereby.
[Signatures on following page]
- 6 -
<PAGE> 66
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first hereinabove set forth.
PURCHASER:
HARBERT EQUITY FUND I, L.L.C.
By Harbert Management Corporation, its Manager
By: /s/
------------------------------
David A. Boutwell
Vice President
(CORPORATE SEAL)
ESCROW AGENT:
AMSOUTH BANK OF ALABAMA
By: /s/
------------------------------
Name: Renee Ragland
Title: Corporate Trust Officer
(CORPORATE SEAL)
SELLER:
CROWN NORTHCORP, INC.
By: /s/
------------------------------
Name: Stephen W. Brown
Title: Secretary
(CORPORATE SEAL)
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<PAGE> 67
EXHIBIT F
ACQUISITION CRITERIA
<PAGE> 68
EXHIBIT F
1. Nature of Revenue: Recurrent fee income from servicing, management, or
other agreed sources.
2. Term: Sufficient to repay capital invested plus any related
leverage.
3. Return: Aggregate of $2.5 million per year in pre-tax cash flow
after expenses.
<PAGE> 69
EXHIBIT G
SELLER'S OFFICER'S CERTIFICATE - SECOND CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of February __, 1997, between and among Harbert Equity Fund I, L.L.C.
and Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the _________________________ of CROWN
NORTHCORP, INC., a Delaware corporation (the "Seller"), DOES HEREBY CERTIFY, in
the name and on behalf of the Company, as follows:
1. All representations and warranties of the Seller contained in Section 4.1 of
the Stock Purchase Agreement, as qualified and revised by the attached Seller
Disclosure Schedule, are true and correct as of the date hereof.
2. As of the date hereof, the Seller has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Seller at or before the date hereof by the Stock
Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of _____________ __, 199_.
CROWN NORTHCORP, INC.
By:_____________________________
Name:
Title:
<PAGE> 70
EXHIBIT H
PURCHASER'S OFFICER'S CERTIFICATE - SECOND CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of February __, 1997, between and among Harbert Equity Fund I, L.L.C.
and Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the ____________ of HARBERT MANAGEMENT
CORPORATION, an Alabama corporation that is the Manager of HARBERT EQUITY FUND
I, L.L.C., a Georgia limited liability company (the "Purchaser"), DOES HEREBY
CERTIFY, in the name and on behalf of the Purchaser, as follows:
1. As of the date hereof, all representations and warranties of the Purchaser
contained in Article V of the Stock Purchase Agreement, as qualified and
revised by the attached Purchaser Disclosure Schedule, are true and correct
with respect to the related Second Closing and the related Second Closing
Shares as of the date hereof.
2. As of the date hereof, the Purchaser has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Purchaser at or before the date hereof by the Stock
Purchase Agreement.
3. The Purchaser is an "accredited investor," as defined in Rule 501(a) under
the Securities Act, because it is an entity in which all of the owners are
"accredited investors."
4. The Purchaser is purchasing the Second Closing Shares for its own account,
for investment purposes only, and without a view toward the resale or
distribution thereof.
5. The Purchaser's chief executive office and principal place of business is
located in the State of Alabama.
6. The Seller has made available to the Purchaser a reasonable time before the
First Closing the opportunity to ask questions of and receive answers
concerning the Seller and the terms and conditions of the transaction to be
consummated at the related Second Closing.
<PAGE> 71
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of _____________ __, 199_.
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By:
----------------------------------
Name:
Title:
<PAGE> 72
EXHIBIT I
FUND CRITERIA
<PAGE> 73
EXHIBIT I
FUND CRITERIA
o Affiliates of Harbert Management Corporation and Crown NorthCorp would
form an investment advisory company under a mutually acceptable entity
operating under Harbert Management Corporation's registered investment
advisor and broker/dealer licenses. The appropriate Harbert affiliate
would receive income through an investment advisory contract. The advisor
would source, evaluate and manage a portfolio of "B" piece commercial
mortgage backed securities ("CMBS"). Crown NorthCorp would serve as
servicer of the portfolio.
o A limited partnership would be formed for the purpose of investing in
tranches of CMBS rated BB to unrated. Harbert and Crown would solicit
subscriptions to a call fund, which is anticipated to be a $50-100
million fund. The fund is anticipated to be marketed primarily to
non-taxable pension fund investor.
o The call fund would be available for investment in CMBS at the discretion
of the advisor within certain agreed investment parameters. It is
anticipated that the fund would be open for approximately two years and
then have a remaining life of approximately five to seven years.
o Harbert's affiliate and Crown would enter into appropriate management and
servicing contract, respectively, with the limited partnership. Fees and
incentive compensation would be at standard industry rates.
<PAGE> 74
EXHIBIT J
SELLER'S OFFICER'S CERTIFICATE - THIRD CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of February __, 1997, between and among Harbert Equity Fund I, L.L.C.
and Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the _________________________ of CROWN
NORTHCORP, INC., a Delaware corporation (the "Seller"), DOES HEREBY CERTIFY, in
the name and on behalf of the Company, as follows:
1. All representations and warranties of the Seller contained in Section 4.1 of
the Stock Purchase Agreement, as qualified and revised by the attached Seller
Disclosure Schedule, are true and correct as of the date hereof.
2. As of the date hereof, the Seller has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Seller at or before the date hereof by the Stock
Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of _____________ __, 199_.
CROWN NORTHCORP, INC.
By:
------------------------------
Name:
Title:
<PAGE> 75
EXHIBIT K
PURCHASER'S OFFICER'S CERTIFICATE - THIRD CLOSING
Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in that certain Stock Purchase Agreement,
dated as of February __, 1997, between and among Harbert Equity Fund I, L.L.C.
and Crown NorthCorp, Inc. (the "Stock Purchase Agreement").
The undersigned, being the ____________ of HARBERT MANAGEMENT
CORPORATION, an Alabama corporation that is the Manager of HARBERT EQUITY FUND
I, L.L.C., a Georgia limited liability company (the "Purchaser"), DOES HEREBY
CERTIFY, in the name and on behalf of the Purchaser, as follows:
1. As of the date hereof, all representations and warranties of the Purchaser
contained in Article V of the Stock Purchase Agreement, as qualified and
revised by the attached Purchaser Disclosure Schedule, are true and correct
with respect to the Third Closing and the Third Closing Shares as of the date
hereof.
2. As of the date hereof, the Purchaser has performed and complied with all
covenants and agreements, and satisfied all conditions required to be performed
and complied with, by the Purchaser at or before the date hereof by the Stock
Purchase Agreement.
3. The Purchaser is an "accredited investor," as defined in Rule 501(a) under
the Securities Act, because it is an entity in which all of the owners are
"accredited investors."
4. The Purchaser is purchasing the Third Closing Shares for its own account,
for investment purposes only, and without a view toward the resale or
distribution thereof.
5. The Purchaser's chief executive office and principal place of business is
located in the State of Alabama.
6. The Seller has made available to the Purchaser a reasonable time before the
Third Closing the opportunity to ask questions of and receive answers
concerning the Seller and the terms and conditions of the transaction to be
consummated at the Third Closing.
<PAGE> 76
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, in the
name and on behalf of the Company, as of _____________ __, 199_.
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By: _____________________________
Name:
Title:
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<PAGE> 77
EXHIBIT L
FORM OF VOTING AGREEMENT
<PAGE> 78
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement"), dated as of March 7, 1997,
is between and among RONALD E. ROARK, an individual with an office at 1251
Dublin Road, Columbus, Ohio 43215 ("Roark"), TUCKER HOLDING COMPANY, LTD., an
Ohio limited liability company with an office at 1251 Dublin Road, Columbus,
Ohio 43215 ("Tucker"), and HARBERT EQUITY FUND I, L.L.C., a Georgia limited
liability company with an office at One Riverchase Parkway South, Birmingham,
Alabama 35244 ("Harbert").
W I T N E S S E T H :
WHEREAS, Roark and Tucker (collectively, the "Tucker Parties")
beneficially own shares of the Common Stock, par value $.01 per share (the
"Stock"), of Crown NorthCorp, Inc., a Delaware corporation (the "Company"); and
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Harbert has acquired shares of the Stock pursuant to that certain
Stock Purchase Agreement, dated as of even date herewith, between and among
Harbert and the Company (the "Stock Purchase Agreement"); and
WHEREAS, Harbert desires that each of the Tucker Parties agrees to
vote its shares in accordance with the provisions of this Agreement to more
fully effectuate certain provisions of the Stock Purchase Agreement whereby
Harbert is entitled to nominate one or more persons for election as a director
of the Company for a certain period; and
WHEREAS, the Tucker Parties desire that Harbert and its affiliates
agrees to vote their shares in accordance with the provisions of this Agreement
for the continued election of Ronald E. Roark as a director of the Company for
such period;
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the adequacy, sufficiency, and receipt of
which are hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein but not
otherwise defined herein shall have the meaning ascribed thereto in the Stock
Purchase Agreement.
SECTION 2. VOTING AGREEMENT OF THE TUCKER PARTIES. During the
Corporate Governance Period, each of the Tucker Parties, severally and not
jointly, agrees:
(a) To vote all shares of securities issued by the Company
and entitled to vote in the election of directors ("Voting
Securities") beneficially owned by him or it for the election as
a director of the Company of such
<PAGE> 79
nominees for election as a director of the Company as Harbert is
entitled to designate for nomination as such pursuant to the
Stock Purchase Agreement;
(b) To cause (x) each of the members of Roark's immediate
family, (y) each entity controlled by any Tucker Party, and (z)
each trust of which Roark is a grantor (collectively, the "Roark
Affiliates"), to vote all Voting Securities beneficially owned
by him, her, or it for the election as a director of the Company
of such nominees for election as a director of the Company as
Harbert is entitled to designate for nomination as such pursuant
to the Stock Purchase Agreement;
(c) In the event a director of the Company so designated
for nomination by Harbert ceases to be a director of the Company
for any reason before his or her term as such expires, to vote
all shares of Voting Securities beneficially owned by him, her,
or it in favor of another individual designated for nomination
by Harbert for election as a director of the Company to the
extent Harbert is then entitled to designate such other
individual for nomination for election as a director of the
Company pursuant to the Stock Purchase Agreement; and
(d) In the event a director of the Company so designated
for nomination by Harbert ceases to be a director of the Company
for any reason before his or her term expires, to cause each of
the Roark Affiliates to vote all shares of Voting Securities
owned by him, her or it in favor of another individual
designated for nomination by Harbert for election as a director
of the Company to the extent Harbert is then entitled to
designate such other individual for nomination for election as a
director of the Company pursuant to the Stock Purchase
Agreement.
Notwithstanding the foregoing, however, to the extent that the Tucker
Parties and Roark Affiliates collectively do not possess the sole power to vote
or direct the voting of any such Voting Securities from time to time (the
shares as to which the Tucker Parties and Roark Affiliates do not so possess
such voting power being referred to herein as "Non-Exclusive Tucker Shares"),
they shall be obligated to use their reasonable best efforts to cause such
Non-Exclusive Tucker Shares to be voted in compliance with the foregoing.
SECTION 3. VOTING AGREEMENT OF HARBERT. Until the earlier of (i) the
expiration of the Corporate Governance Period, and (ii) the occurrence of a
Seller Breach (as defined in the Registration Rights Agreement, dated as of the
date hereof, between and among the Company and Harbert), Harbert agrees:
(a) To vote all shares of Voting Securities beneficially
owned by it for the election of Roark as a director of the
Company;
<PAGE> 80
(b) To cause each Person controlling it, controlled by it,
or under common control with it (collectively, the "Harbert
Affiliates") to vote all shares of Voting Securities
beneficially owned by him, her, or it for the election of Roark
as a director of the Company;
(c) In the event that Roark ceases to be a director of the
Company for any reason before his term as such expires, to vote
all shares of Voting Securities beneficially owned by it in
favor of another individual nominated by Roark or, in the event
of Roark's death or incapacity, his heirs, legatees, executors,
successors, guardians, legal representatives, or administrators,
as the case may be, beneficially owning at least 50% of the
Voting Securities beneficially owned by Roark immediately prior
to his death or incapacity, for election as a director of the
Company; and
(d) In the event that Roark ceases to be a director of the
Company for any reason before his term as such expires, to cause
each of the Harbert Affiliates to vote all shares of Voting
Securities beneficially owned by him, her, or it in favor of
another individual nominated by Roark or, in the event of
Roark's death or incapacity, his heirs, legatees, executors,
successors, guardians, legal representatives, or administrators,
as the case may be, beneficially owning at least 50% of the
Voting Securities beneficially owned by Roark immediately prior
to his death or incapacity, for election as a director of the
Company.
Notwithstanding the foregoing, however, to the extent that Harbert and
the Harbert Affiliates collectively do not possess the sole power to vote or
direct the voting of any such Voting Securities from time to time (the shares
as to which they do not so possess such voting power being referred to herein
as "Non-Exclusive Harbert Shares"), then Harbert shall be obligated to use its
reasonable best efforts to cause such Non-Exclusive Harbert Shares to be voted
in compliance with the foregoing.
SECTION 4. TERMINATION. This Agreement shall terminate upon the
expiration of the Corporate Governance Period in accordance with the Stock
Purchase Agreement.
SECTION 5. LEGENDS. The Tucker Parties and Harbert will, and the
Tucker Parties will cause the Roark Affiliates to, and Harbert will cause the
Harbert Affiliates to, deliver certificates representing Voting Securities
beneficially owned by them to the Company for imprinting with the following
legend (which legend shall be removed, with respect to any of such Voting
Securities, upon the earlier of (i) the sale, assignment, or other transfer of
such Voting Securities to a Person not subject to the purview of this
Agreement, and (ii) the expiration of this Agreement), in each case on or
before the date that is the last to occur of (x) 30 days from the date of this
Agreement, and (y) their acquisition of beneficial ownership of such Voting
Securities:
<PAGE> 81
"The voting securities represented by this certificate are subject to
restrictions on voting, as provided in a Voting Agreement, dated as of
March 7, 1997, between and among Harbert Equity Fund I, L.L.C., Tucker
Holding Company, Ltd., and Ronald E. Roark, a copy of which is on file
with the Secretary of the Company."
Notwithstanding the foregoing, however, Harbert shall be obligated to
utilize its reasonable best efforts to cause the beneficial owners of the
Non-Exclusive Harbert Shares to comply with this Section 5, and the Tucker
Parties shall be obligated to utilize their respective reasonable best efforts
to cause the beneficial owners of the Non-Exclusive Tucker Shares to comply
with this Section 5.
SECTION 6. SECRETARY TO RETAIN COPY. A copy of this Agreement shall be
filed with the Secretary of the Company.
SECTION 7. STOCK CHANGES. The provisions of this Agreement shall be
deemed to apply equally to any share of Stock or other securities distributed
in respect of shares of Stock.
SECTION 8. FURTHER ACTIONS. At any time and from time to time each
party agrees, at its or his expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
SECTION 9. AVAILABILITY OF EQUITABLE REMEDIES. Since a breach of the
provisions of this Agreement could not adequately be compensated by money
damages, any party shall be entitled, in addition to any other right or remedy
available to him, to an injunction restraining such breach or a threatened
breach and to specific performance of any such provision of this Agreement, and
in either case no bond or other security shall be required in connection
therewith, and the parties hereby consent to such injunction and to the
ordering of specific performance.
SECTION 10. MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements among them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
SECTION 11. NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement or at such other address as the other parties hereto
shall have been notified in writing pursuant hereto. Except as otherwise
specifically provided in this Agreement, any notice given by certified mail
shall be deemed given at the time of certification thereof except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof.
<PAGE> 82
SECTION 12. WAIVER. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision
of this Agreement. The failure of a party to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing.
SECTION 13. BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and the respective
successors and assigns of the corporate parties hereto and the respective
assigns, heirs, and personal representatives of the individual parties hereto.
SECTION 14. NO THIRD PARTY BENEFICIARIES. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
SECTION 15. SEPARABILITY. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
SECTION 16. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
SECTION 17. PRONOUNS. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal pronoun, as
the context requires.
SECTION 18. COUNTERPARTS; GOVERNING LAW. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflict of law
principles thereof.
SECTION 19. REPRESENTATIONS AND WARRANTIES OF TUCKER. Tucker hereby
represents and warrants to Harbert that:
(i) It is a limited liability company duly organized,
validly existing, and in good standing under the laws of the
State of Ohio, with full
<PAGE> 83
limited liability company power and authority to conduct its
business as currently conducted; and
(ii) Assuming the due authorization, execution, and
delivery of this Agreement by the other parties hereto, this
Agreement constitutes its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, or other laws affecting creditors'
rights generally and by the availability of equitable remedies.
<PAGE> 84
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
TUCKER HOLDING COMPANY, LTD.
By: /s/
-------------------------------
Name: Ronald E. Roark
Title: Managing Member
-----------------------------------
RONALD. E. ROARK
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By: /s/
-------------------------------
Name: Michael D. Luce
Title: Executive Vice President & CFO
<PAGE> 85
SCHEDULE 4.1(a)
SUBSIDIARIES
<PAGE> 86
Schedule 4.1 (a)
Organization and Qualification
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Principal
Entity Jurisdiction/ Foreign Place of Business Authorized Outstanding
Name Ownership Qualifications Business Activity Capitalization Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Crown Delaware OH, GA, 1251 Dublin Rd. Financial services, 30,000,000 8,776,723
NorthCorp, corporation TX, NJ, Columbus, Ohio specializing in loan shares shares
Inc. VA, FL, 43215 servicing, asset common of common
MO, DC management, loss 1,000,000 2,950 shares
mitigation, loan shares of preferred
origination, portfolio preferred (in three
acquisition and classes)
due diligence,
portfolio and property
management.
- -----------------------------------------------------------------------------------------------------------------------------------
Crown Revenue Ohio None 1251 Dublin Rd. Following the 750 shares 90 shares
Services, Inc. corporation Columbus, Ohio completion of common common
wholly owned by 43215 asset management
Crown NorthCorp, contracts with the RTC,
Inc. CRS has virtually
no current business
activities.
- -----------------------------------------------------------------------------------------------------------------------------------
CNC Holding Delaware None 1251 Dublin Rd. Holding company for 1,000 1,000
Corp. corporation Columbus, Ohio lower-tier shares shares
wholly owned by 43215 subsidiaries. common common
Crown NorthCorp,
Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Prime Tempus, Texas None 800 Brazos Street Provides liquidation 1,000,000 1,000,000
Inc. corporation Suite 1030 and recovery services shares shares
wholly owned by Austin, Texas for insurance common common
Crown NorthCorp, 78701 receiverships as
Inc. well as asset
searches.
- -----------------------------------------------------------------------------------------------------------------------------------
Crown Revenue Ohio joint None 1251 Dublin Rd. The venture was formed N/A N/A
Services Joint venture 75% Columbus, Ohio to administer certain
Venture I owned by Crown 43215 contracts with the
Revenue Services, Resolution Trust
Inc., and 25% Corporation, which
owned by an work has now concluded.
unaffiliated
party.
- -----------------------------------------------------------------------------------------------------------------------------------
Crown Ohio None 1251 Dublin Rd. Serves as managing 850 shares 850 shares
Properties, corporation Columbus, Ohio general partner of common common
Inc. wholly owned 43215 CRS Bond Portfolio,
by Crown L.P. and CRS Bond
Revenue Services, Portfolio II, L.P.,
Inc. both of which are
Delaware limited
partnerships.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 87
Schedule 4.1 (a)
Organization and Qualification
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Principal
Entity Jurisdiction/ Foreign Place of Business Authorized Outstanding
Name Ownership Qualifications Business Activity Capitalization Stock
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Crown NorthCorp Danish None Soflevej 12 Formed to DKK 500,000 DKK 500,000
Euro A/S corporation 2900 Hellerup pursue business
wholly owned Denmark opportunities
by CNC in Europe.
Holding Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Eastern Realty Virginia None 1568 Springhill Rd. Asset and 1,000 shares 200 shares
Corporation corporation Suite 222 land common
wholly owned McLean, Virginia management
by CNC 22102
Holding Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Eastern Virginia None 1568 Springhill Rd. Asset and 1,000 shares 100 shares
Baltimore, corporation Suite 222 land common
Inc. wholly owned McLean, Virginia management
by CNC 22102
Holding Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Eastern Virginia None 1568 Springhill Rd. Asset and All membership All
Realty, limited Suite 222 land interests membership
LLC liability McLean, Virginia management authorized and interests
company with 22102 outstanding authorized
CNC Holding and
Corp. owning outstanding
99% of the
membership
interests and
Crown Revenue
Services, Inc.
owning 1%
of the
membership
interests.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 88
EASTERN REALTY CORPORATION (ERC)
<TABLE>
<C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
: : : : :
: : : : :
- ------------------ -------------------- -------------------- ----------------- -------------------
Eastern-MACO, Inc. Eastern-PROVIDENCE, Athena Portfolio Eastern-COMAC, Inc.
United Collections Inc. Investors, L.P.
ERC: 30% GP ERC: 94.25% ERC: 100%
Jay Rollins: 5.75% ERC: 100% ERC: 4.44% LP
- ------------------ -------------------- -------------------- ----------------- -------------------
: : : :
: : : :
- ------------------ -------------------- -------------------- -------------------
Potomac Mid-Atlantic Providence Land
United Collections, Partners, L.P. Partners, L.P. COMAC West, L.P.
L.P. Eastern-PROVIDENCE,
United Collections: Eastern-MACO, Inc. Inc.: Eastern-COMAC, Inc.
50% GP 4.0% GP 4.46% GP 1.0% GP
- ------------------ -------------------- -------------------- -------------------
: :
: :
-------------------- -------------------
Potomac-MACO, L.P.
Comac Land, L.P.
Potomac Mid-Atlantic
Partners: Comac West, L.P.:
25% GP 40% GP
-------------------- -------------------
</TABLE>
1
<PAGE> 89
EASTERN BALTIMORE, INC.
:
:
-----------------------------------------------
: :
: :
- -------------------------- --------------------------
Eastern Model Home, L.L.C. Baltimore Portfolio
Partners, L.P.
Eastern Baltimore, Inc.:
Eastern Baltimore, Inc.:
1% Member 1% GP
- -------------------------- --------------------------
EASTERN REALTY, L.L.C. (ERLLC)
:
:
:
:
------------------------------
Eastern Model Home, L.L.C.
ERLLC: 99% Member
------------------------------
:
:
:
:
------------------------------
Kingsview Patriot I, L.L.C.
Eastern Model Home,
L.L.C.: 50% Member
------------------------------
1
<PAGE> 90
- -------------------------------------------------------------------------------
OWNERSHIP STRUCTURE FOR UNITED COLLECTIONS (JDC PORTFOLIO)
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C> <C>
-----------------------
--------------------------- UNITED COLLECTIONS L.P. --------------------------
: :
: ----------------------- :
: :
: :
------------------- ------------------------------
UNITED COLLECTIONS RESOLUTION TRUST CORPORATION
General Partner 50% Limited Partner 50%
------------------- -----------------------------
:
:
:
:
-------------------------------------------------
: :
: :
: :
: :
- -------------------------- -------------------------------
EASTERN REALTY CORPORATION GEL WORLDWIDE COLLECTIONS, INC.
General Partner (30%) General Partner (70%)
- -------------------------- -------------------------------
</TABLE>
<PAGE> 91
- -------------------------------------------------------------------------------
OWNERSHIP STRUCTURE FOR POTOMAC MACO, L.P. (MACO)
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C> <C>
- --------------------
Eastern Realty Corp.
-------------------- ---------------------------------- ------------ ------------------
- -------------------- :
Management : Potomac Mill-Maxtix Partners, L.P. Potomac MACO Resolution
Agreement :-------- a Delaware LP ---- Limited ------ Trust Corporation
- -------------------- : (25% GP) Partnership (7 1/4% LP
:
LaSalle Entity ------------------- ----------------------------------- ------------ ------------------
:
- -------------------- :
:
:
:
:
:
-----------------------------------------------------------------------------------------------------
: : : :
: : : :
- ------------------ ------------------- ---------------- ----------------
Eastern-MACO, Inc. Steinhardt Entities Curlycu Entities LaSalle Entities
(4% GP) (46.75% GP/LP) (46.75% GP/LP) (2.5% GP)
- ------------------ ------------------- ----------------- ----------------
</TABLE>
<PAGE> 92
- -------------------------------------------------------------------------------
OWNERSHIP STRUCTURE FOR PROVIDENCE LAND PARTNERS, L.P.
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C>
-------------------------- -------------------
Eastern Realty Corporation ------- Providence
Management Agreement Land Partners L.P.
-------------------------- --------------------
:
:
:
-------------------------------------------------------------------------------------------------------------
: : : :
: : : :
: : : :
- ------------------------ ------------------------------- ------------------------ -----------------
Provo (Delaware)
Eastern-Providence, Inc. Gordon & Helen Smith Foundation Providence Investors LLC L.P. (Steinhardt)
General Partner - 4.46% Limited Partner - 5.25% Limited Partner - 4.05% Limited Partner -
86.24%
- ------------------------ ------------------------------- ------------------------ ------------------
</TABLE>
<PAGE> 93
- -------------------------------------------------------------------------------
OWNERSHIP STRUCTURE FOR COMAC
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C> <C>
- --------------
Advisory (and Loan
Eastern Realty Servicing) Agreement
Corporation --------------------
: ------------------------- --------------- ------------------
- -------------- :
Loan Advisory : COMAC West Partners, L.P. Resolution
Agreement :---- a Delaware LP --- COMAC Land, LP -------------- Trust Corporation
- -------------- : (48% GP) (61% LP)
: -------------------------- --------------- -----------------
Bunser Entity -------------------- :
Management :
- -------------- Agreement :
:
: --------------------------------
:
: Nomica Asset Capital Corporation
: ---------------------------------------- Lender to COMAC West, LP (paid
: off) and Class B Limited Partner
:
:
: ---------------------------------
:
:
:
------------------------------------------------------------------------------------------------------------------
: : : : :
: : : : :
: : : : :
- ------------------- -------------------- ---------------- ------------------ ---------------
The Gordon V.
Eastern-COMAC, Inc. Steinhaardt Entities Curlycu Entities and Helen C. Smith Ranner Entities
(1% GP) (40.75% LP) (81.75% LP) Foundation (2.5% GP)
(9% LP)
- ------------------- -------------------- ---------------- ------------------ ---------------
</TABLE>
<PAGE> 94
- -------------------------------------------------------------------------------
OWNERSHIP STRUCTURE FOR BANK OF BALTIMORE PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C> <C>
--------------
-------------------------------- ----------------------
Eastern Realty Management Financing Loan
Corporation ----------------------- Baltimore Fostertie Partners, LP -------------------- Heller Financial, Inc.
Agreement Agreement
-------------- -------------------------------- ----------------------
:
:
:
:
:
:
:
:
------------------------------------------------------------------------------------------------------
: : : :
: : : :
- ----------------------- ---------------------------- ---------------- ------------------------
Eastern-BALTIMORE, Inc. Gordon V. and Helen C. Smith Carlyle Entities Baltimore Investors, LLC
(.5% GP, 5% LLP) Foundation (1.0% LP) (43.75% LP) (3.0% LP)
- ----------------------- ---------------------------- ---------------- ------------------------
</TABLE>
<PAGE> 95
OWNERSHIP STRUCTURE FOR KINGSVIEW PATRIOT I, L.L.C.
- ----------------------- -----------------------
Eastern-Baltimore, Inc. ------------------ Eastern Realty, L.L.C.
1% Member : 99% Member
:
- ----------------------- : ------------------------
:
:
:
:
:
:
:
--------------------------
Eastern Model Home, L.L.C.
50% Member
--------------------------
:
:
:
:
-------------------------- --------------------
Gordon V. & Helen C.
Kingsview Patriot I, L.L.C. ----- Smith Foundation
50% Member
--------------------------- --------------------
<PAGE> 96
09-MAY-97
- -------------------------------------------------------------------------------
POTOMAC MACO SUBENTITY OWNERSHIP
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C>
- -------------------- -------------------- -----------------------------
Potomac Mid-Atlantic Potomac MACO Resolution Trust Corporation
Partners, L.P. -------------------------------------------- Limited Partnership -------- (75% LP)
A Delaware LP
(25% GP) --------------------- ----------------------------
:
- -------------------- :
: :
: ---------------------------- :
: :
: Potomac Frederick LLC :
: Potomac Mid-Atlantic :
---------------- Partners, LP (1.01%, ------------------------
Managing Member)
Potomac MACO LP (89.99%)
----------------------------
:
:
:
- ---------------- ----------------------------
Hanover Capital Potomac Country Club LLC
Realty ------ (Joint Venture) Potomac
Frederick LLC (90%)
- ---------------- Hanover Capital Realty (10%)
----------------------------
</TABLE>
<PAGE> 97
MACO III/EASTERN REALTY CORPORATION 09-MAY-97
- -------------------------------------------------------------------------------
POTOMAC MACO SUBENTITY OWNERSHIP
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C> <C>
- ----------------------------------- --------------------- -----------------------
Potomac Mid-Atlantic Partners, L.P. Potomac MACO Resolution Trust
a Delaware LP ---------------------------------- Limited Partnership ----- Corporation (75% LP)
(25% GP)
-------------------- -----------------------
- ----------------------------------- :
: :
: ---------------------------------- :
: :
: Potomac Marwood LLC :
: Potomac Mid-Atlantic Partners, LP :
-------------------- (1.01% Managing Member) ---------
Potomac MACO LP (89.99%)
-----------------------------------
</TABLE>
<PAGE> 98
MACO III/EASTERN REALTY CORPORATION 09-MAY-97
- -------------------------------------------------------------------------------
POTOMAC MACO SUBENTITY OWNERSHIP
- -------------------------------------------------------------------------------
<TABLE>
<C> <C> <C>
- ----------------------------------- --------------------- -----------------------
Potomac Mid-Atlantic Partners, L.P. Potomac MACAO Resolution Trust
a Delaware LP ---------------------------------- Limited Partnership ---------- Corporation (75% LP)
(25% GP)
-------------------- -----------------------
- ----------------------------------- :
:
:
:
:
:
---------------------------------
------------------------
Potomac Pines LLC (Joint Venture)
Harbor Village I, L.L.C. ---------------------------- Harbor Village I, LLC (16.67%)
Potomac MACO LP (83.33%)
------------------------
----------------------------------
</TABLE>
<PAGE> 99
SCHEDULE 4.1(b)
CAPITALIZATION
<PAGE> 100
SCHEDULE 4.1(b)
CAPITALIZATION
Set forth below are the classes of the capital stock of Crown NorthCorp, Inc.,
the number of shares of each class outstanding as of January 31, 1997 and the
known holders of 5% or more of each class.
Common Stock, par value $.01 per share; 8,776,723 shares outstanding
Known holders of 5% or more of the class
Holder No. of Shares Held
------ ------------------
Tucker Holding Company, Ltd. 4,207,500
Asdale Limited 976,524
The Gordon V. and Helen C.
Smith Foundation 538,677
Series A Convertible Preferred Stock, par value $.01 per share; 450 shares
outstanding
Known holders of 5% or more of the class
Holder No. of Shares Held
------ ------------------
Miller and Smith Holding, Inc. 207.72
Gordon V. Smith 112.61
Jay N. Rollins 68.77
Series B Preferred Stock, par value $.01 per share; 2,000 shares outstanding
Known holders of 5% or more of the class
National City Corporation owns all of the 2,000 outstanding shares
Series C Convertible Preferred Stock, par value $.01 per share; 500 shares
outstanding
Known holders of 5% or more of the class
National City Corporation owns all of the 500 outstanding shares
Attached is a table setting forth the commitments, plans and arrangements to
issue any share of capital stock of Crown NorthCorp, Inc. or of any Subsidiary
or any security or other instrument convertible into, exercisable for, or
exchangeable for capital stock of Crown NorthCorp, Inc. or of any Subsidiary.
<PAGE> 101
FULLY DILUTED OWNERSHIP OF CROWN COMMON STOCK
<TABLE>
<CAPTION>
==============================================
RIGHTS
============================================== ====================================================
MAXIMUM SHARES
NUMBER OF NUMBER OF OF CROWN COMMON
======================== PREFERRED NUMBER OF STOCK STOCK IF ALL EXERCISE PRICE EXPIRATION
HOLDER SHARES WARRANTS OPTIONS RIGHTS EXERCISED PER SHARE DATE
======================== ============================================== ====================================================
<S> <C> <C> <C> <C> <C> <C>
- ------------------------ ---------------------------------------------- ----------------------------------------------------
OUTSIDE DIRECTORS 100,000 per Outside
Director(1) 200,000 (2) (1) 2005
- ------------------------ ---------------------------------------------- ----------------------------------------------------
EASTERN SELLERS 450 (Series A) 560,137.5 (3) (3)
- ------------------------ ---------------------------------------------- ----------------------------------------------------
NATIONAL CITY
CORPORATION 500 (Series C) 333,335 $1.50 12/31/2002
- ------------------------ ---------------------------------------------- ----------------------------------------------------
EASTERN SELLERS 149,300 149,300 $0.75 10/01/99
- ------------------------ ---------------------------------------------- ----------------------------------------------------
JAY ROLLINS 125,000 125,000 $1.00 12/31/98 (4)
- ------------------------ ---------------------------------------------- ----------------------------------------------------
CAPITOL ASSOCIATES 39682.54 39,682.54 $0.63 02/15/98
- ------------------------ ---------------------------------------------- ----------------------------------------------------
UNDERHILL INVESTMENT
CORPORATION 75,000 75,000 $0.75 10/01/2001
- ------------------------ ---------------------------------------------- ----------------------------------------------------
RICHARD A. BROCK 15,000 15,000 $0.63 12/15/2001
- ------------------------ ---------------------------------------------- ----------------------------------------------------
STOCK-BASED
COMPENSATION PLANS 30,000 (5)
- ------------------------ ---------------------------------------------- ----------------------------------------------------
</TABLE>
(1) None vested at this time; options would partially vest this year if share
price on 12/31/97 (as defined in the plan) was $2.50.
(2) 600,000 shares authorized and allocated to the plan.
<TABLE>
<CAPTION>
(3) MANDATORY CONVERSION OPTIONAL CONVERSION
-------------------- -------------------
Price Expiration Price Expiration
----- ---------- ----- ----------
<S> <C> <C> <C>
$1.75 10/01/98 $1.00 10/01/98
$2.50 10/01/2001 $1.25 10/01/2001
Market 10/01/2001
</TABLE>
(4) This date is subject to final negotiation and documentation.
(5) This represents the maximum amount of shares contemplated for such plans.
No such plans have yet been created and no employee has any vested or unvested
right in such plans.
<PAGE> 102
SCHEDULE 4.1(d)
TAX AND OTHER LIABILITIES
NONE
<PAGE> 103
SCHEDULE 4.1(e)
LITIGATION AND CLAIMS
Joseph C. Karol, et al, v. Resolution Trust Corpoation, as Receiver for
Spindletop Savings Association, F.A., et al.
Earl Harbin, d/b/a ERH Beltway Realty v. Crown NorthCorp, Inc.
Rose Mary Baehny v. Property Asset Management, Inc., et al.
Hushiang John Golestani et al. v. General Motors Corporation, et al.
<PAGE> 104
SCHEDULE 4.1(f)
PROPERTIES
(i) The Seller and each of its Subsidiaries has good and marketable title in
fee simple absolute to all real properties and good title to all other
properties and assets used in its business or owned by it, free and clear of
all liens, mortgages, security interests, pledges, charges and encumbrances
except:
(a) The Seller has granted The Huntington National Bank security
interests in the property described on the attached Exhibit "A" to secure the
repayment of credit facilities.
(b) The Seller has granted to The Fifth Third Bank of Columbus a first
security interest in the property described on the attached Exhibit "B" and a
second security interest in the property described on the attached Exhibit "A"
to secure the repayment of credit facilities.
(ii) See attached
(iii) See attached
<PAGE> 105
EXHIBIT "A"
ALL OF CROWN'S BUSINESS ASSETS, INCLUDING WITHOUT LIMITATION, ALL OF
CROWN'S RIGHT, TITLE AND INTEREST IN THE FOLLOWING:
All of Crown's machinery, equipment, tools, furniture, furnishings and
fixtures including, but not limited to, all manufacturing, fabricating,
processing, transporting; and packaging equipment, power systems, heating,
cooling and ventilating systems, lighting and communications systems, electric,
gas and water distribution systems, food service systems, fire prevention,
alarm and security systems, laundry systems and computing and data processing
systems, excepting Crown's leasehold interest in any of the above
("Equipment"); all of Debtor's inventory, including, but not limited to, parts,
supplies, raw materials, work in process, finished goods, materials used or
consumed in Crown's business, repossessed and resumed goods (hereinafter the
"Inventory"); all of Debtor's accounts, accounts receivable, contract rights,
guaranties of accounts, accounts receivable and contract rights and security
therefor, chattel paper, income tax refunds, instruments, negotiable documents,
notes, drafts, acceptances and other forms of obligations and receivables
arising from or in connection with the operation of Crown's business including,
but not limited to, those arising from or in connection with Crown's sale,
lease or other disposition of the Inventory (hereinafter the "Receivables");
and all books, records, ledger cards, computer programs and other documents or
property at any time evidencing or relating to the Receivables; all of Crown's
general intangibles, trade names, trademarks, trade secrets, goodwill, patents,
patent applications, copyrights, deposit accounts, licenses and franchises; and
any and all deposits or other sums at any time credited by or due from HNB to
Crown, any all policies, certificates of insurance, securities, goods, accounts
receivable, choses in action, cash, property and the proceeds thereof owned by
Crown or in which Crown has an interest, which now or hereafter are at any time
in the possession or control of HNB or in transit by mail or carrier to or from
HNB, or in the possession of any third party acting in HNB's behalf, without
regard to whether HNB received the same in pledge for safekeeping, as agent for
collection or transmission or otherwise, or whether HNB has conditionally
released the same (all of the foregoing items and types of property hereinafter
the "Collateral"); whether Crown's interest in the Collateral as owner,
co-owner, lessee, consignee, secured party or otherwise be now owned or
existing, or hereafter arising or acquired, and wherever located, together with
all substitutions, replacements, additions and accession therefor or thereto,
all replacement and repair parts therefor, all documents including, but not
limited to, negotiable documents, documents of title, warehouse receipts,
storage receipts, dock receipts, dock warrants, express bill, freight bills,
airbills, bills of lading and other documents relating thereto, all products
thereof and all cash and non-cash proceeds thereof including, but not limited
to, notes, drafts, checks, instruments, insurance proceeds, indemnity proceeds,
warranty and guaranty proceeds and proceeds arising in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental body, authority, bureau or agency
(or any person acting under color of governmental authority).
<PAGE> 106
<TABLE>
<CAPTION>
NORTHCORP REALTY ASSOC., INC. 40 yrs. starting 12/94 25
1251 DUBLIN ROAD. BUILDING PRELIMINARY-FOR DEPRECIATION ONLY 1=Dec. 1994
03/31/97
#1951 #1971 1996 12/31/96 NET
LIFE MONTHLY START DEPREC. ACCUM. BOOK VALUE
DATE ITEM ADDED COST (mo's.) DEPREC. DEPREC. EXPENSE DEPREC. 12/31/96
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/94 Purchase of Building-
Bond Payable-adj.
for land 1,153,155.00 480 2,402.41 12/01/94 2,402.41 60,626.54 1,092,528.46
Bond Escrow Account (175,000.00) 480 (364.58) 12/01/94 (364.58) (9,114.58) (165,885.42)
Legal Fees 15,000.00 480 31.25 12/01/94 31.25 781.25 14,218.75
Appraisal 3,000.00 480 6.25 12/01/94 6.25 156.25 2,843.75
Survey 1,500.00 480 3.13 12/01/94 3.13 78.13 1,421.88
Deposit on Bldg
Acquisition 25,000.00 480 52.08 12/01/94 52.08 1,302.08 23,697.92
11/30/94 Porter, Wright, Morris
& Arthur-legal bill 8,500.00 480 17.71 12/01/94 17.71 442.71 8,057.29
12/31/94 Arccon Interests -
work on bldg. 76,340.02 480 159.04 12/01/94 159.04 3,976.04 72,363.98
------------ ---------------------------------------------------------------
Balance @ 12/31/94 1,107,495.02 2,307.28 2,307.28 58,248.42 1,049,246.60
01/30/95 Arccon Interests -
work on bldg. 21,067.68 480 43.89 02/01/95 43.89 1,009.49 20,058.19
05/31/95 Arccon Interests -
work on bldg.-Pd.
by CRS 3,909.86 480 8.15 06/01/95 8.15 154.77 3,755.09
---------------------------------------------------------------------------------------
24,977.54 52.04 52.04 1,164.26 23,813.28
---------------------------------------------------------------------------------------
03/31/97 Balance 1,132,472.56 2,359.32 2,359.32 59,412.67 1,073,059.89
=======================================================================================
<CAPTION>
3
1=Jan. 1997
1997 03/31/97 NET
DEPREC. ACCUM. BOOK VALUE
DATE ITEM ADDED EXPENSE DEPREC. 03/31/97
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
10/31/94 Purchase of Building-
Bond Payable-adj.
for land 2,402.41 67,833.80 1,085,321.20
Bond Escrow Account (364.58) (10,208.33) (164,791.67)
Legal Fees 31.25 875.00 14,125.00
Appraisal 6.25 175.00 2,825.00
Survey 3.13 87.50 1,412.50
Deposit on Bldg
Acquisition 52.08 1,458.33 23,541.67
11/30/94 Porter, Wright, Morris
& Arthur-legal bill 17.71 495.83 8,004.17
12/31/94 Arccon Interests -
work on bldg. 159.04 4,453.17 71,886.85
---------------------------------------------
Balance @ 12/31/94 2,307.29 65,170.30 1,042,324.72
01/30/95 Arccon Interests -
work on bldg. 43.89 1,141.17 19,926.51
05/31/95 Arccon Interests -
work on bldg.-Pd.
by CRS 8.15 179.20 3,730.66
---------------------------------------------
52.04 1,320.37 23,657.17
---------------------------------------------
03/31/97 Balance 2,359.33 66,490.67 1,065,981.89
=============================================
</TABLE>
<PAGE> 107
SERVFEE1.WK4 ANNUALIZED SERVICING FEE SCHEDULE 01/03/97
MERCHANTS MORTGAGE PORTFOLIO - ADJUSTED FOR PAYOFFS
<TABLE>
<CAPTION>
PRIN BALANCE SERV FEE ANNUALIZED PayoffAdjmnt
<S> <C> <C> <C> <C> <C>
EDGWOOD $141,628 0.2500% $354
FALL CREEK $1,775,468 0.1000% $1,775
JACKSON PARK $1,249,357 0.1250% $1,562
WINDSOR PARK $2,965,741 0.1250% $3,707 $11,553
CROSS LAKES $7,044,022 0.2500% $17,610
DRAKE MANOR $641,554 0.2500% $1,604
CLOVERLEAF $1,280,396 0.2500% $3,201
CAMBRIDGE PLACE $2,737,634 0.1000% $2,738
BROADRIPPLE $1,550,722 0.2500% $3,877 $12,082
SUNCREST $3,340,824 0.1000% $3,341
BRAEBURN $10,660,203 0.2500% $26,651
SILVERTREE $2,839,793 0.5000% $14,199
WINDSONG $2,276,010 0.5000% $11,380
NORTHERNVIEW $1,802,973 0.5000% $9,015 $28,094
ENGLISH VILL $4,803,238 0.2500% $12,008 $37,422
WINTHROP NORTH $936,083 0.3750% $3,510
WINTHROP SOUTH $1,560,139 0.3750% $5,851
WINTHROP BRYAN $483,643 0.3750% $1,814
WINTHROP DEFIANC $1,189,606 0.3750% $4,461
WINTHROP FINDLAY $1,794,161 0.3750% $6,728
PARK GREENWOOD $4,005,858 0.2500% $10,015
EMERSON VILLAGE $7,255,465 0.2500% $18,139 $56,527
SOLON CLUB $3,993,359 0.3750% $14,975
MANN VILLAGE $4,938,072 0.2500% $12,345
LONVALE GARDENS $5,578,020 0.2500% $13,945
LANDMARK $4,551,509 0.2500% $11,379 $35,460
ALPINE VILLAGE $2,182,699 0.2500% $5,457
HERITAGE VILLAGE $3,024,817 0.2500% $7,562
WESTOWN $3,134,632 0.2500% $7,837
GEORGETOWN $4,886,243 0.2500% $12,216 $38,068
BUCKRIDGE $2,416,944 0.2500% $6,042 $18,830
WHITEHALL $1,449,529 0.2500% $3,624
BROOKHAVEN $7,678,381 0.2500% $19,196
BRISTOL SQUARE $5,228,953 0.2500% $13,072
CAMBRIDGE $1,822,714 0.2500% $4,557 $14,201
HIDDEN ACRES $2,869,950 0.2500% $7,175
BEVERLY HILL $3,026,888 0.2500% $7,567
BRIDGEDALE TERR $1,085,112 0.3750% $4,069
ENCLAVE $8,862,412 0.2500% $22,156
WEDGEWOOD $2,042,209 0.3750% $7,658 $23,866
THOMPSON VILLAGE $5,051,904 0.2500% $12,630
PORT CROSSING $3,093,362 0.2500% $7,733
BARRINGTON SQU $4,099,831 0.2500% $10,250
CARNABY VIL $4,747,955 0.2500% $11,870
ROUND BARN $3,455,864 0.1000% $3,456
WESTVIEW $986,242 0.1875% $1,849
FOUNTAIN PARK $17,794,105 0.6250% $111,213
DOERCHESTER $7,227,791 0.2500% $18,069
------- ----------
TOTAL FEE $521,440 $276,102
PURCHASE PRICE $1,625,000 $1,348,898
----------
MULTIPLIER 3.12
</TABLE>
<PAGE> 108
REINLEIN/LIESER/MCGEE - D.U.S. LOAN PORTFOLIO - 11/01/96 SUMMARY
<TABLE>
<CAPTION>
-----------
SEGMENT "A" Debt Service Coverage of 1.15 or greater for 1996 calendar year
- -----------------------------------------------------------------------------------------------------------------------------------
PERCENT LOAN (1)
PROPERTY NAME CITY STATE NO. OF UNITS DSC RATIO ADJUSTED DSCR OCCUPIED YEAR BUILT AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AUTUMNWOOD APARTMENTS BIRMINGHAM AL 205 1.30 99% 1967 $5,443,957
BEERCROSS APARTMENTS LUFKIN TX 168 1.72 92% 1986 $2,672,044
COACH/CARRIAGE HOUSE APTS. CHELMSFORD MA 149 1.15 96% 1968 $5,347,850
ADAMS STATION APARTMENTS ALBANY NY 166 1.18 95% 1988 $6,613,659
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL SEGMENT "A" 688 $20,077,510
-----------
<CAPTION>
-----------
SEGMENT "B" Debt Service Coverage of less than 1.15 for 1995 calendar year
- -----------------------------------------------------------------------------------------------------------------------------------
PERCENT LOAN (1)
PROPERTY NAME CITY STATE NO. OF UNITS DSC RATIO ADJUSTED DSCR OCCUPIED YEAR BUILT AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BROOKSIDE APARTMENTS SACRAMENTO CA 92 1.01 92% 1989 $4,683,253
BELL STATION APARTMENTS MONTGOMERY AL 152 1.10 90% 1988 $5,073,052
BURTON PLACE APARTMENTS ONTARIO CA 36 0.96 88% 1989 $1,806,203
RIVERVIEW APARTMENTS (2) GRAFTON MA 80 1.00 96% 1989 $4,402,654
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL SEGMENT "B" 360 $15,965,162
-----------
<CAPTION>
-----------
SEGMENT "C" Non-DUS Loans
- -----------------------------------------------------------------------------------------------------------------------------------
PERCENT LOAN (1)
PROPERTY NAME CITY STATE NO. OF UNITS DSC RATIO ADJUSTED DSCR OCCUPIED YEAR BUILT AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WESTDALE HILL APTS. (4) HURST/EULESS TX 2139 1.16 Unknown 1969 $40,000,000
(F/K/A SOMERSET VILLAGE) $32,500,000
-----------
-----------
CURRENT BALANCE $40,000,000
-----------
TOTALS: $76,042,672
LESS: PROPERTY SITE INSPECTION CREDIT
TOTAL PRICE
<CAPTION>
-----------
SEGMENT "A" Debt Service Coverage of 1.15 or greater for 1996 calendar year
- ----------------------------------------------------------------------------------------------------------------------------------
ACHIEVEMENT MATURITY YEARS TO ANNUAL TOTAL PURCHASE
PROPERTY NAME CITY STATE ESCROW LOAN/UNIT DATE MATURITY SERVICING SERVICING PRICE (3)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AUTUMNWOOD APARTMENTS BIRMINGHAM AL $41,749 $26,556 Jul-97 0.66 $13,610 $8,983 $4,492
DEERCROSS APARTMENTS LUFKIN TX $0 $15,905 Sep-00 3.83 $6,680 $25,584 $12,792
COACH/CARRIAGE HOUSE APTS. CHELMSFORD MA $0 $35,892 Aug-97 0.75 $13,370 $10,028 $5,014
ADAMS STATION APARTMENTS ALBANY NY $0 $39,841 Jan-04 7.17 $41,335 $296,372 $148,186
- ----------------------------------------------------------------------------------------------------------------------------------
$74,995 $340,967 $170,484
------- --------
<CAPTION>
-----------
SEGMENT "B" Debt Service Coverage of less than 1.15 for 1995 calendar year
- ----------------------------------------------------------------------------------------------------------------------------------
ACHIEVEMENT MATURITY YEARS TO ANNUAL TOTAL PURCHASE
PROPERTY NAME CITY STATE ESCROW LOAN/UNIT DATE MATURITY SERVICING SERVICING PRICE (3)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BROOKSIDE APARTMENTS SACRAMENTO CA $420,000 $50,905 Feb-00 3.25 $11,708 $38,051 $0
BELL STATION APARTMENTS MONTGOMERY AL $388,000 $33,375 Apr-00 3.42 $12,683 $43,376 $0
BURTON PLACE APARTMENTS ONTARIO CA $0 $50,172 Jan-04 7.17 $11,289 $80,942 $0
RIVERVIEW APARTMENTS (2) GRAFTON MA $0 $55,033 May-03 6.50 $4,403 $28,620 $0
- ----------------------------------------------------------------------------------------------------------------------------------
$40,083 $190,989 $0
------- --------
<CAPTION>
-----------
SEGMENT "C" Non-DUS Loans
- ----------------------------------------------------------------------------------------------------------------------------------
ACHIEVEMENT MATURITY YEARS TO ANNUAL TOTAL PURCHASE
PROPERTY NAME CITY STATE ESCROW LOAN/UNIT DATE MATURITY SERVICING SERVICING PRICE (3)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WESTDALE HILL APTS. (4) HURST/EULESS TX $7,500,000 $18,700 Jul-25 0.66 $30,000 $20,000 $0
(F/K/A SOMERSET VILLAGE) $0 $15,194 28 $24,375 $682,500 $146,250
------- --------
--------
$702,500 $146,250
--------
TOTALS: $316,734
LESS: PROPERTY SITE INSPECTION CREDIT ($13,500)
--------
TOTAL PRICE $303,234
--------
</TABLE>
(1) "LOAN AMOUNT" REFLECTS UNPAID PRINCIPAL BALANCE OF LOAN AFTER RECEIPT OF
MORTGAGE PAYMENT DUE 11/01/96
(2) RECENTLY COMPLETED STREAMLINE REFINANCE INCLUDES $250,000 PERSONAL
GUARANTEE.
(3) PRICE FOR SERVICING EQUALS 50% OF "TOTAL SERVICING" OR A MAXIMUM OF FOUR
TIMES "ANNUAL SERVICING"
(4) IN ADDITION TO SERVICING REVENUE, LOAN INCLUDES $1,403,933 (BALANCE OF
ORIGINAL $6 MILLION REHAB ESCROW) WITH MONTHLY ADMIN. FEE EQUAL TO 1% OF AVG.
OUTSTANDING BALANCE.
(5) "ANNUAL SERVICING" AND "TOTAL SERVICING" REFLECTS THE SERVICING INCOME WHEN
TAKING INTO CONSIDERATION A REQUIRED PRINCIPLE REDUCTION ON 7/1/97 OF
$7,500,000.
<PAGE> 109
<TABLE>
<CAPTION>
EQUIPMENT LEASES JAN. 30, 1997
NAME/DESCRIPTION OF EQUIPMENT/LOCATION LEASE TERMS MO. PAYMENT 1996
----------- ----------- ----
<S> <C> <C> <C> <C>
CROWN REVENUE SERVICE:
COPIERS
XEROX 1090 SN M08-046756 (COLUMBUS) trf to SANWA 4/1/96 48 Months 1/1/93 to 12/31/96 1,449.60 4,348.80
GESTETNER 2470 SN 255J2538 (COLUMBUS) trf to SANWA 4/1/96 60 Months 6/15/94 to 6/15/99 1,029.00 3,087.00
GESTETNER 2460 SN (COLUMBUS) trf to SANWA 4/1/96 60 Months 12/15/94 to 12/15/99 1,290.00 3,870.00
TOTAL: $3,768.60 $11,305.80
VEHICLES
JAGUAR CREDIT CORP. 94 JAGUAR XJ6 (COLUMBUS) 24 Months 5/23/94 to 5/23/96 581.32 2,906.60
HUNTINGTON NAT'L BANK 94 CHRYSLER LHS (COLUMBUS) 36 Months 8/13/94 to 7/13/97 489.38 5,872.56
TOTAL: $1,070.70 $8,779.16
CAPITAL LEASES:
TELEPHONES
LIBERTY NATIONAL COMDIAL TELEPHONES (COLUMBUS) 36 Months 8/25/93 to 8/25/96 733.65 5,869.20
TOTAL: $733.65 $5,869.20
TOTALS PER CROWN $5,572.95 $25,954.16
NORTHCORP:
COPIERS
XEROX 5053 SN 2Y5-118293 (DALLAS) trf to SANWA 4/1/96 36 Months 7/1/93 to 6/30/96 735.46 4,412.76
XEROX 5053 SN 2Y5-118351 (DALLAS) trf to SANWA 4/1/96 36 Months 7/1/93 to 6/30/96 735.46 4,412.76
XEROX 5053 SN 2Y5-115454 (ATLANTA) trf to SANWA 4/1/96 36 Months 7/1/93 to 6/30/96 735.46 4,412.76
XEROX 5388 SN 3ET-000979 (HOBOKEN) trf to SANWA 4/1/96 36 Months 8/1/93 to 7/30/96 2,326.68 16,286.76
XEROX 5100 SN 52K-302081 (DALLAS) trf to SANWA 4/1/96 36 Months 8/1/93 to 7/30/96 1,371.28 8,227.68
SANWA 3062 Sharp Hoboken 36 months 4/01/96 to 4/01/99 917.46 8,257.14
SANWA 3062 Sharp Atlanta 36 months 4/01/96 to 4/01/99 917.46 8,257.14
SANWA 3062 Sharp Dallas 36 months 4/01/96 to 4/01/99 917.47 8,257.23
SANWA 2060 Sharp with stapler Dallas 36 months 4/01/96 to 4/01/99 917.47 8,257.23
SANWA Kodak IS85 Columbus 36 months 4/01/96 to 4/01/99 1,908.70 17,178.30
SANWA 2060 Sharp with stapler Columbus 36 months 4/01/96 to 4/01/99 1,908.70 17,178.30
SANWA 2027 Sharp Columbus 36 months 4/01/96 to 4/01/99 1,908.69 17,178.21
TOTAL: $15,300.29 $122,316.27
FAX MACHINES
CANON FAX L775 SN UB141028 (DALLAS) 36 Months 10/5/93 to 10/5/96 305.57 3,055.70
CANON FAX L775 SN UB141028 (DALLAS) 36 Months 10/5/93 to 10/5/96 305.57 3,055.70
TOTAL: $611.14 $6,111.40
PITNEY BOWES MAIL MACHINE
MAIL MACHINES, SCALES, METERS (COL, DALLAS, HOBOKEN) 36 Months 12/1/94 to 12/1/97 3,714.99 44,579.88
METER & SCALES (ATLANTA) 12 Months 9/5/95 to 9/5/96 107.33 965.97
TOTAL: $3,822.32 $45,545.85
LOAN SERVICING SYSTEM
Sun Data - McCracken System 36 months 03/01/96-03/01/99 5,280.00 52,800.00
TOTAL: $5,280.00 $52,800.00
BUILDINGS
DALLAS BUILDING LEASE 60 Months 1/1/95 to 12/31/99 9,745.78 116,949.36
ATLANTA BUILDING LEASE 36 Months 3/1/95 to 2/28/98 4,600.00 57,500.00
HOBOKEN BUILDING LEASE 60 Months 11/1/94 to 10/31/99 10,099.68 111,167.54
<CAPTION>
1997 1998 1999 2000 2001 TOTAL
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
*** *** *** *** *** 4,348.80
0.00 0.00 0.00 *** *** 3,687.00
0.00 0.00 0.00 *** *** 3,870.00
$0.00 $0.00 $0.00 $0.00 $0.00 $11,305.80
*** *** *** *** *** 2,906.60
3,425.66 *** *** *** *** 9,298.22
0.00
$3,425.66 $0.00 $0.00 $0.00 $0.00 $12,204.82
*** *** *** *** *** $5,869.20
$0.00 $0.00 $0.00 $0.00 $0.00 $5,869.20
$3,425.66 $0.00 $0.00 $0.00 $0.00 $29,379.82
*** *** *** *** *** $4,412.76
*** *** *** *** *** $4,412.76
*** *** *** *** *** $4,412.76
*** *** *** *** *** $16,286.76
*** *** *** *** *** $8,227.68
11,009.52 11,009.52 2,752.38 0.00 0.00 $33,028.56
11,009.52 11,009.52 2,752.38 0.00 0.00 $33,028.56
11,009.64 11,009.64 2,752.41 0.00 0.00 $33,028.92
11,009.64 11,009.64 2,752.41 0.00 0.00 $33,028.92
22,904.40 22,904.40 5,726.10 0.00 0.00 $68,713.20
22,904.40 22,904.40 5,726.10 0.00 0.00 $68,713.20
22,904.28 22,904.28 5,726.07 0.00 0.00 $68,712.84
$112,751.40 $112,751.40 $28,187.85 $0.00 $0.00 $376,006.92
*** *** *** *** *** $3,055.70
*** *** *** *** *** $3,055.70
$0.00 $0.00 $0.00 $0.00 $0.00 $6,111.40
40,864.89 *** *** *** *** $65,444.77
*** *** *** *** *** $965.97
$40,864.89 $0.00 $0.00 $0.00 $0.00 $86,410.74
63,360.00 63,360.00 10,560.00 0.00 0.00 $190,080.00
$63,360.00 $63,360.00 $10,560.00 $0.00 $0.00 $190,080.00
116,949.36 116,949.36 116,949.36 0.00 0.00 467,797.44
60,360.00 10,140.00 *** *** *** 128,000.00
121,196.16 121,196.16 100,996.80 0.00 0.00 454,556.66
</TABLE>
<PAGE> 110
<TABLE>
<CAPTION>
EQUIPMENT LEASES JAN. 30, 1997
NAME/DESCRIPTION OF EQUIPMENT/LOCATION LEASE TERMS MO. PAYMENT 1996
----------- ----------- ----
<S> <C> <C> <C> <C>
WASHINGTON, DC BUILDING LEASE **See Note 3,500.00 62,158.38
TOTAL: $27,945.46 $347,775.28
TOTALS PER NORTHCORP $52,959.21 $574,548.80
CSW ASSOCIATES:
COPIERS
MITA 6090 (MIAMI) 36 Months 12/95 to 12/98 $859.00 $6,013.00
MITA 8090 (MIAMI) 36 Months 12/95 to 12/98 $859.00 $6,013.00
LEASES EXPIRED IN 1995 $0.00 ***
TOTAL: $1,718.00 $12,026.00
PITNEY BOWES MAIL MACHINE
MAIL MACHINES, SCALES, METERS (MIAMI) 36 Months 12/95 to 12/98 $1,395.90 $9,247.83
(4 MOS. @ $1221.41, 8 MOS. @ $1395.90)
TOTAL: $1,395.90 $9,247.83
BUILDINGS
MIAMI BUILDING LEASE 60 Months 9/8/95 to 9/7/00 12,010.92 84,076.44
TOTAL: $12,010.92 $84,076.44
TOTALS PER CSW ASSOCIATES: $15,124.82 $105,350.27
PRIME TEMPUS:
BUILDINGS
AUSTIN BUILDING LEASE 48 Months 5/1/93 to 4/30/97 2,878.75 34,545.00
TOTAL: $2,878.75 $34,545.00
EQUIPMENT
EQUIPMENT LEASES Jemmie feels it started in '91 fo 60 months. $181.86 2,182.32
TOTAL $181.86 $2,182.32
TOTAL PER PRIME TEMPUS $3,060.61 $36,727.32
EASTERN
BUILDINGS
BUILDING LEASE -Miller Smith **Oct. 1, 1996 to Sept. 30, 1997 2,739.00 8,217.00
TOTAL: $2,739.00 $8,217.00
EQUIPMENT
Copelco - Milolta Copier 36 Months 10/94-09/97 $179.00 537.00
TOTAL $179.00 $537.00
TOTAL EASTERN $2,918.00 $8,754.00
TOTAL PER CROWN NORTHCORP $79,635.59 $751,334.55
<CAPTION>
1997 1998 1999 2000 2001 TOTAL
---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
*** *** *** *** *** 62,158.38
$298,505.52 $248,285.52 $217,946.16 $0.00 $0.00 $1,112,512.48
$515,481.81 $424,396.92 $256,694.01 $0.00 $0.00 $1,771,121.54
*** *** *** *** *** 6,013.00
*** *** *** *** *** 6,013.00
*** *** *** *** *** 0.00
$0.00 $0.00 $0.00 $0.00 $0.00 $12,026.00
$0.00 $0.00 $0.00 $0.00 $0.00 9,247.83
$0.00 $0.00 $0.00 $0.00 $0.00 $9,247.83
0.00 0.00 0.00 0.00 0.00 84,076.44
$0.00 $0.00 $0.00 $0.00 $0.00 $84,076.44
$0.00 $0.00 $0.00 $0.00 $0.00 $106,350.27
11,515.00 *** *** *** *** 46,060.00
$11,515.00 $0.00 $0.00 $0.00 $0.00 $46,060.00
*** *** *** *** *** 2,182.32
$0.00 $0.00 $0.00 $0.00 $0.00 $2,182.32
$11,515.00 $0.00 $0.00 $0.00 $0.00 $48,242.32
32,856.00 41,073.00
$32,856.00 $0.00 $0.00 $0.00 $0.00 $41,073.00
1,611.00 0.00 0.00 0.00 0.00 2,148.00
$1,611.00 $0.00 $0.00 $0.00 $0.00 $2,148.00
$34,467.00 $0.00 $0.00 $0.00 $0.00 $43,221.00
$564,889.47 $424,396.92 $256,694.01 $0.00 $0.00 $1,997,314.95
</TABLE>
** - Jan-Oct - rent was on NorthCorp's books. Oct-Dec. - rent was on Eastern's
books still waiting to locate a copy of the lease.
*** - N/A
<PAGE> 111
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: Crown
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-400 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
---------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr Basis Beg A/Depr Curr Depr End A/Depr
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A/C# 100 FURNITURE/FIXTURES/EQUIP
- ----------------------------------------------
01-Jul-91 M FURNITURE AND EQUIPMENT M*200 7.00 6444.58 0.00 6444.58 5006.31 547.91 5554.22
01-Jul-92 M OFFICE FURNITURE MA200 7.00 3584.93 3584.93 0.00 3584.93 0.00 3584.93
01-Oct-92 D M COMPUTER EQUIPMENT M*200 5.00 54726.35 3915.00 50811.35 44299.94 2085.28 46385.22
01-Oct-92 D M COMPUTER EQUIPMENT MA200 5.00 2500.00 2500.00 0.00 2500.00 0.00 2500.00
01-Jan-93 D M COMPUTER EQUIPMENT MA200 5.00 10430.00 10430.00 0.00 10430.00 0.00 10430.00
01-Mar-93 D M COMPUTER EQUIPMENT MA200 5.00 2735.25 2735.25 0.00 2735.25 0.00 2735.25
01-Aug-93 D M COMPUTER EQUIPMENT MA200 5.00 21458.00 4335.00 17123.00 16526.60 739.71 17266.31
01-Sep-93 D M COMPUTER EQUIPMENT MA200 5.00 13030.00 0.00 13030.00 9277.60 562.86 9840.46
01-Oct-93 D M COMPUTER EQUIPMENT MA200 5.00 23229.76 0.00 23229.76 16539.90 1003.48 17543.38
21-Jan-94 M FAX MACHINE MA200 5.00 2921.47 2921.47 0.00 2921.47 0.00 2921.47
18-Feb-94 M HP LASERJET 4 & TRAY MA200 5.00 1648.61 1648.61 0.00 1648.61 0.00 1648.61
22-Feb-94 M GATEWAY 486DX & 4MB RAM UPGRADE MA200 5.00 1790.00 1790.00 0.00 1790.00 0.00 1790.00
01-Apr-94 M R.E. SOFTWARE & PORTFOLIO MA200 5.00 4635.00 1140.00 3495.00 2538.00 838.80 3376.80
08-Sep-94 M CAR PHONE - ROARK MA200 5.00 749.95 0.00 749.95 322.18 171.11 493.29
07-Oct-94 M COMPUTER DRIVE MA200 5.00 2528.00 0.00 2528.00 1086.80 576.48 1663.28
07-Oct-94 M COMPUTER DRIVE MA200 5.00 1347.00 0.00 1347.00 579.00 307.20 886.20
18-Oct-94 M MICRON COMPUTERS MA200 5.00 7490.00 0.00 7490.00 3221.00 1707.60 4928.60
21-Oct-94 M PHONE-CAVELL MA200 5.00 327.77 0.00 327.77 140.71 74.82 215.53
27-Oct-94 M FILE SERVER & NETWORK UPGRADE MA200 5.00 9462.50 0.00 9462.50 4068.80 2157.48 6226.28
31-Oct-94 M COMPUTER,SOFTWARE,MEM,MODEM MA200 5.00 3996.28 0.00 3996.28 1718.51 911.11 2629.62
31-Oct-94 M 30% DOWNPAYMENT-FURNITURE @1251 DMA200 7.00 9615.65 0.00 9615.65 2992.33 1892.38 4884.71
31-Oct-94 M EXISTING FURNITURE @1251 DUBLIN RMA200 7.00 3418.00 0.00 3418.00 1063.71 672.65 1736.36
31-Oct-94 M VOICEMAIL MA200 7.00 9515.91 0.00 9515.91 2961.69 1872.63 4834.32
01-Nov-94 M COMPUTER & SOFTWARE MA200 5.00 1768.00 0.00 1768.00 760.00 403.20 1163.20
08-Nov-94 M FILE SERVER & NETWORK UPGRADE MA200 5.00 10550.69 0.00 10550.69 4537.08 2405.44 6942.52
11-Nov-94 M KEYBOARD,SWITCHED & CABLES MA200 5.00 697.00 0.00 697.00 299.80 158.88 458.68
29-Nov-94 M CABLING MA200 5.00 18462.89 0.00 18462.89 7938.96 4209.57 12148.53
30-Nov-94 M MODULAR UNITS MA200 7.00 9800.00 0.00 9800.00 3050.00 1928.57 4978.57
01-Dec-94 M FURNITURE MA200 7.00 19406.11 0.00 19406.11 6039.60 3819.00 9858.60
02-Dec-94 M MODULAR UNITS MA200 7.00 21507.29 0.00 21507.29 6693.51 4232.51 10926.02
13-Dec-94 D M LOU CASTELLI'S CHAIR MA200 7.00 898.88 0.00 898.88 279.68 110.57 390.25
13-Dec-94 M CABLING MA200 5.00 13782.40 0.00 13782.40 5926.36 3142.42 9068.78
13-Dec-94 M CABLING MA200 5.00 3058.29 0.00 3058.29 1315.12 697.27 2012.39
13-Dec-94 M CABLING MA200 5.00 1522.69 0.00 1522.69 654.68 347.20 1001.88
16-Dec-94 M COMPUTER HARDWARE MA200 5.00 932.00 0.00 932.00 401.00 212.40 613.40
21-Dec-94 M COMPUTER ROOM WORKBENCH MA200 5.00 565.00 0.00 565.00 242.80 128.88 371.68
22-Dec-94 M FURNITURE DOWNPAYMENT MA200 7.00 2200.00 0.00 2200.00 685.00 432.86 1117.86
22-Dec-94 M VOICEMAIL MA200 7.00 9515.92 0.00 9515.92 2961.69 1872.64 4834.33
27-Dec-94 M RECEPTION AREA FURNITURE MA200 7.00 2619.58 0.00 2619.58 815.59 515.43 1331.02
29-Dec-94 M SPEAKER PHONES & PHONE MA200 7.00 1600.00 0.00 1600.00 497.86 314.90 812.76
01-Jan-95 ARCHITECTURAL SERVICES FOR 1251 DMA200 7.00 850.00 0.00 850.00 121.43 208.16 329.59
11-Jan-95 DEPOSIT ON FURNITURE ON 2/22/95 MA200 7.00 1500.00 0.00 1500.00 214.29 367.35 581.64
12-Jan-95 HP JET DIRECT EX ENET MA200 7.00 343.39 0.00 343.39 49.06 84.09 133.15
20-Jan-95 OFFICE FURNITURE MA200 7.00 5836.25 0.00 5836.25 833.75 1429.29 2263.04
23-Jan-95 1ST FLOOR MINI BLINDS MA200 7.00 611.24 0.00 611.24 87.32 149.69 237.01
27-Jan-95 ARCHITECTURAL SERVICES FOR 1251 DMA200 7.00 2000.00 0.00 2000.00 285.71 489.80 775.51
01-Feb-95 CABLING WORK FOR 1ST FLOOR MA200 7.00 951.75 0.00 951.75 135.96 233.08 369.04
01-Feb-95 FURNITURE MA200 7.00 13550.81 0.00 13550.81 1935.83 3318.57 5254.40
22-Feb-95 OFFICE FURNITURE MA200 7.00 4014.18 0.00 4014.18 573.45 983.07 1556.52
07-Mar-95 ARTWORK MA200 7.00 1484.37 0.00 1484.37 212.05 363.52 575.57
15-Mar-95 DOWN PAYMENT ON FURNITURE MA200 7.00 2800.00 0.00 2800.00 400.00 685.71 1085.71
27-Apr-95 BALANCE OF FURNITURE FOR ABOVE (3MA200 7.00 5034.14 0.00 5034.14 719.16 1232.85 1952.01
27-Apr-95 3 CREDENZAS MA200 7.00 1750.90 0.00 1750.90 250.13 428.79 678.92
27-Apr-95 PAPER SHREDDER MA200 7.00 1728.02 0.00 1728.02 246.86 423.19 670.05
23-May-95 IBEKO E-KOMBO BINDING MACHINE MA200 7.00 631.58 0.00 631.58 90.23 154.67 244.90
23-May-95 7 5-DRAWER FILING CABINETS MA200 7.00 2539.84 0.00 2539.84 362.83 622.00 984.83
01-Sep-95 CONFERENCE SPEAKER PHONE-LAKEVIEWMA200 7.00 1604.00 0.00 1604.00 229.14 392.82 621.96
31-Dec-96 A 50% Deposit on Ti card MA200 5.00 2918.17 0.00 2918.17 0.00 583.63 583.63
31-Dec-96 A Proxima Projector & Case - Used MA200 5.00 4230.00 0.00 4230.00 0.00 846.00 846.00
Totals for ASSET A/C: 100 370850.39 35000.26 335850.13 187799.27 241848.79
Less: Disposed Assets (Curr Depr: 4501.90) 129008.24 23915.25 105092.99 102588.97 107090.87
--------- -------- --------- --------- ---------
Net Totals for ASSET A/C: 100 (59 assets) 241842.15 11085.01 230757.14 85210.30 54049.52 134757.92
========= ======== ========= ========= =========
- ----------------------------------------------
A/C# 200 COMPUTERS/COMPUTER EQUIP
- ----------------------------------------------
01-Feb-95 ADC INFO TECH MA200 5.00 6660.00 0.00 6660.00 1332.00 2131.20 3463.20
01-Mar-95 SAMSUNG 4MBX970NS SIMM MA200 5.00 166.48 0.00 166.48 33.30 53.27 86.57
01-Mar-95 SMC 10BT 16 BIT BOARD MA200 5.00 744.64 0.00 744.64 148.93 238.28 387.21
08-Mar-95 WINBOOK XP-NOTEBOOK COMPUTER MA200 5.00 2642.69 0.00 2642.69 528.54 845.66 1374.20
24-Mar-95 2 LAN REMOTE ROUTERS W/COMPRESSIOMA200 5.00 4653.00 0.00 4653.00 930.60 1488.96 2419.56
</TABLE>
<PAGE> 112
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: Crown
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-400 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
---------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr Basis Beg A/Depr Curr Depr End A/Depr
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
28-Mar-95 MICRON COMPUTER ATO MODEL BOM MA200 5.00 1668.00 0.00 1668.00 333.60 533.76 867.36
01-Apr-95 MICRON COMPUTER ATO MODEL BOM MA200 5.00 1599.00 0.00 1599.00 319.80 511.68 831.48
14-Apr-95 32 RAM FOR FILESERVER MA200 5.00 1692.00 0.00 1692.00 338.40 541.44 879.84
14-Apr-95 5 MOTOROLA T-1 CSU/DSU, 3 SURGE PMA200 5.00 6456.04 0.00 6456.04 1291.21 2065.93 3357.14
20-Apr-95 4GB DISK DRIVE MA200 5.00 1817.00 0.00 1817.00 363.40 581.44 944.84
26-Apr-95 ANDERSON'S OHIO LAW ON DISK MA200 5.00 1226.44 0.00 1226.44 245.29 392.46 637.75
05-May-95 2-ACER 486VLB W/ZIF 25 MA200 5.00 2327.90 0.00 2327.90 465.58 744.93 1210.51
26-May-95 ACER 486VLB DX4 W/ZIF 25 MA200 5.00 1176.22 0.00 1176.22 235.24 376.39 611.63
30-Jun-95 SOFTRACK V2 3@100, 1@250 MA200 5.00 3789.00 0.00 3789.00 757.80 1212.48 1970.28
30-Jun-95 AERIAL 8 DEVICE TOWER, 7 CD ROM'SMA200 5.00 3584.88 0.00 3584.88 716.98 1147.16 1864.14
30-Jun-95 WINBOOK NOTEBOOK MA200 5.00 2748.44 0.00 2748.44 549.69 879.50 1429.19
30-Jun-95 ESI-8710X DOMESTIC ADV XBASE SERVMA200 5.00 3151.25 0.00 3151.25 630.25 1008.40 1638.65
31-Jul-95 MS MAIL SERVER SOFTWARE MA200 5.00 2158.50 0.00 2158.50 431.70 690.72 1122.42
31-Jul-95 ACER 486VLB DX4 W/ZIF 25 MA200 5.00 1396.59 0.00 1396.59 279.32 446.91 726.23
31-Jul-95 PLATINUM SOFTWARE UPGRADE MA200 5.00 3501.11 0.00 3501.11 700.22 1120.36 1820.58
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 ACER 486VLB DX4 W/ZIF25 @$1165.00MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
01-Aug-95 MICRON COMPUTER ATO MODEL BOM MA200 5.00 1668.00 0.00 1668.00 333.60 533.76 867.36
01-Aug-95 MICRON COMPUTER ATO MODEL BOM MA200 5.00 1668.00 0.00 1668.00 333.60 533.76 867.36
01-Aug-95 NOVELL LANALYZER FOR WIN V MA200 5.00 1005.59 0.00 1005.59 201.12 321.79 522.91
12-Sep-95 3 - 8MB 72PIN 2X32 70NS SIMM MA200 5.00 814.00 0.00 814.00 162.80 260.48 423.28
13-Sep-95 PCA 2.0 WIN 3.5 CROSSGRADE DIR. MA200 5.00 1322.54 0.00 1322.54 264.51 423.21 687.72
18-Sep-95 AMD 486DX4/100 MHZ 3.3V MA200 5.00 8155.00 0.00 8155.00 1631.00 2609.60 4240.60
01-Oct-95 4 MICRON COMPUTERS ATO MODEL BOM MA200 5.00 6455.00 0.00 6455.00 1291.00 2065.60 3356.60
02-Oct-95 LAN 2 NAN MPR REMOTE MA200 5.00 2115.00 0.00 2115.00 423.00 676.80 1099.80
12-Oct-95 3 - HOT SWAP DISK, TOWER, TRAYS, MA200 5.00 5865.94 0.00 5865.94 1173.19 1877.10 3050.29
01-Nov-95 PENTIUM 75 COMPUTER MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
07-Nov-95 4-HP LASERDIRECT MA200 5.00 1342.87 0.00 1342.87 268.57 429.72 698.29
01-Dec-95 4-486 DX2-66 PCI SYSTEMS MA200 5.00 6622.48 0.00 6622.48 1324.50 2119.19 3443.69
01-Dec-95 486 DX2-66 PCI SYSTEM MA200 5.00 1636.02 0.00 1636.02 327.20 523.53 850.73
01-Dec-95 SCINET CD MANAGER, 100 USER MA200 5.00 905.00 0.00 905.00 181.00 289.60 470.60
01-Dec-95 486 DX2-66 PCI SYSTEM MA200 5.00 1636.02 0.00 1636.02 327.20 523.53 850.73
04-Dec-95 REPAIRS TO TAPE DRIVE MA200 5.00 325.00 0.00 325.00 65.00 104.00 169.00
11-Dec-95 TAPE BACK-UP SYSTEMS MA200 5.00 11329.20 0.00 11329.20 2265.84 3625.34 5891.18
12-Dec-95 APC SMART-UPS MA200 5.00 1121.40 0.00 1121.40 224.28 358.85 583.13
27-Dec-95 FILE SERVER COMPLETE W/16MG DISK MA200 5.00 28393.97 0.00 28393.97 5678.79 9086.07 14764.86
29-Dec-95 6 MODEMS MA200 5.00 1195.40 0.00 1195.40 239.08 382.53 621.61
01-Feb-96 A WinBook XP5 & carrying Case MA200 5.00 3476.94 0.00 3476.94 0.00 695.39 695.39
01-Mar-96 A WinBook XP5 & Carrying Case MA200 5.00 4221.31 0.00 4221.31 0.00 844.26 844.26
01-Mar-96 A CSW Computers MA200 5.00 1324.39 0.00 1324.39 0.00 264.88 264.88
01-Mar-96 A Pentium 75 MA200 5.00 1340.91 0.00 1340.91 0.00 268.18 268.18
01-Apr-96 A 100-199 User License of NetshieldMA200 5.00 5000.00 0.00 5000.00 0.00 1000.00 1000.00
01-Apr-96 A 4 WinBook XP5 & Carrying Case MA200 5.00 12677.06 0.00 12677.06 0.00 2535.41 2535.41
01-May-96 A Clientel Software MA200 5.00 6536.25 0.00 6536.25 0.00 1307.25 1307.25
Totals for ASSET A/C: 200 (56 assets) 182962.47 0.00 182962.47 29677.13 54398.76 84075.89
- ---------------------------------------------- ========= ==== ========= ======== ======== ========
A/C# 400 PROP UNDER CAPITAL LEASES
- ----------------------------------------------
01-Jul-92 M CAPITAL LEASES M*200 5.00 75351.49 0.00 75351.49 61517.00 8513.53 70030.53
01-Jul-92 M CAPITAL LEASES M*200 5.00 80363.95 2500.00 77863.95 69790.38 4968.35 77258.73
01-Jul-93 M TELEPHONE SYSTEM MA200 5.00 21027.50 0.00 21027.50 14972.00 2422.20 17394.20
Totals for ASSET A/C: 400 (3 assets) 176742.94 2500.00 174242.94 146279.38 15904.08 164683.46
========= ======= ========= ========= ======== =========
Grand Totals for all accounts: 730555.80 37500.26 693055.54 366255.78 490608.14
Less: Disposed assets (Curr Depr: 4501.90) 129008.24 23915.25 105092.99 102588.97 107090.87
--------- -------- --------- --------- ---------
Net Totals for all accounts: (118 assets) 601547.56 13585.01 587962.55 263666.81 124352.36 383517.27
========= ======== ========= ========= ========= =========
</TABLE>
Codes that may appear next to date acquired: A-Addition, D-Disposal,
T-Traded, M-Mid Quarter Applied
<PAGE> 113
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: CSW
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-200 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
---------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A/C# 100 FURNITURE/FIXTURES/EQUIP
- ---------------------------------------------------
28-Feb-91D CELLULAR ONE - MOBILE PHONE MA200 5.0 475.94 0.00 475.94 432.17 8.75 440.92
28-Feb-91D SERMI - MOBILE PHONE MA200 5.0 159.00 0.00 159.00 144.43 2.91 147.34
15-Mar-91D ANTIQUES & FRAMED WORK M*200 7.0 1166.00 0.00 1166.00 932.75 116.63 1049.38
15-Jan-92D FAX MACHINE MA200 5.0 842.70 0.00 842.70 746.35 19.27 765.62
29-May-92D US LEASING INTERNATIONAL - RENEWAL M*200 7.0 346.41 0.00 346.41 237.70 27.18 264.88
09-Dec-92D FAX MODEM M*200 5.0 280.19 0.00 280.19 232.08 24.06 256.14
12-Feb-93D AMERICAN BUSINESS INTERIORS0NY FURN. M*200 7.0 9426.48 0.00 9426.48 5186.67 706.64 5893.31
12-Feb-93D AMERICAN BUSINESS INTERIORS-NY FURN. M*200 7.0 8864.67 0.00 8864.67 4877.54 664.52 5542.06
12-Feb-93D AMERICAN BUSINESS INTERIORS-NY FURN. M*200 7.0 2881.98 0.00 2881.98 1585.73 216.04 1801.77
22-Mar-93D SKYTECH - CELLULAR PHONE M*200 7.0 173.06 0.00 173.06 95.14 12.99 108.13
13-May-93D FRAMED ARTWORK M*200 7.0 361.16 0.00 361.16 198.68 27.08 225.76
23-Aug-93D FURNITURE MA200 7.0 3288.24 0.00 3288.24 1809.13 211.30 2020.43
30-Sep-93D FAX MACHINE MA200 7.0 378.01 0.00 378.01 208.29 24.25 232.54
20-Dec-93D QUALITY OFFICE FURNITURE - 18TH FLOOR MA200 7.0 11993.75 0.00 11993.75 6599.08 770.67 7369.75
31-Dec-93D REALCOM-PHONE SYSTEM CARD-18TH M*200 5.0 1917.00 0.00 1917.00 935.24 245.44 1180.68
28-Feb-94D ADAPTO-SHELVING-18TH MA200 7.0 2925.25 0.00 2925.25 1083.19 263.15 1346.34
28-Feb-94D QUALITY OFFICE FURNITURE-18TH MA200 7.0 3981.25 0.00 3981.25 1474.30 358.14 1832.44
28-Feb-94D REALCOM-TELEPHONE EQUIP.-18TH M*200 5.0 7486.95 0.00 7486.95 3653.39 958.39 4611.78
31-Mar-94D QUALITY OFFICE FURNITURE-18TH M*200 5.0 1095.00 0.00 1095.00 451.00 161.00 612.00
30-Apr-94D DECORA-4 FILE CABINETS MA200 7.0 1687.52 0.00 1687.52 624.78 151.82 776.60
22-May-95D QUALITY OFFICE FURNITURE-DESKS MA200 7.0 1698.62 0.00 1698.62 346.38 193.18 539.56
11-Oct-95D TIMS-DOWN PAYMENT ON PHONE SYSTEM (1/2) MA200 7.0 17968.51 0.00 17968.51 1069.55 3017.67 4087.22
12-Oct-95D DAVCOM-DATA & VOICE CABLING SYSTEM MA200 7.0 12212.15 0.00 12212.15 726.91 2050.94 2777.85
17-Oct-95D THOMAS W. RUFF - 30% D.P. ON FURNITURE MA200 7.0 1255.00 0.00 1255.00 74.70 210.77 285.47
20-Oct-95D SAXON BUSINESS SYSTEMS MA200 7.0 2667.83 0.00 2667.83 158.80 448.04 606.84
19-Nov-95D THOMAS W. RUFF - 4 EXECUTIVE TILT CHAIRS MA200 7.0 856.40 0.00 856.40 20.39 149.29 169.68
19-Nov-95D THOMAS W. RUFF - 2 WINGBACK GUEST CHAIRS MA200 7.0 651.00 0.00 651.00 15.50 113.48 128.98
19-Nov-95D THOMAS W. RUFF - 2 LOVESEATS MA200 7.0 1043.00 0.00 1043.00 24.83 181.82 206.65
19-Nov-95D THOMAS W. RUFF - 2 END TABLES MA200 7.0 376.60 0.00 376.60 8.97 65.65 74.62
20-Nov-95D DAVCOM-DATA & VOICE CABLING SYTSEM (1/2) MA200 7.0 15615.55 0.00 15615.55 371.80 2722.10 3093.90
30-Nov-95D RECYCLED SYSTEMS-8 WORKSTATIONS MA200 7.0 10040.96 0.00 10040.96 239.07 1750.34 1989.41
30-Nov-95D TIMS-FINAL PMT ON PHONE SYSTEM (1/2) MA200 7.0 17968.51 0.00 17968.51 427.82 3132.27 3560.09
--------- ---- --------- -------- -------- --------
Totals for ASSET A/C: 100 142084.69 0.00 142084.69 34992.36 53998.14
Less: Disposed Assets (Curr Depr: 19005.78) 142084.69 0.00 142084.69 34992.36 53998.14
--------- ---- --------- -------- --------
Net Totals for ASSET A/C: 100 (32 assets) 0.00 0.00 0.00 0.00 19005.78 0.00
========= ==== ========= ======== ======== ========
- ----------------------------------------------------
A/C# 200 COMPUTERS/COMPUTER EQUIP
- ----------------------------------------------------
20-Mar-91D SKYLINE SOFTWARE & INSTALLATION MA200 5.0 5603.30 0.00 5603.30 5086.26 103.41 5189.67
24-Apr-91D NETWORK FILE SERVER MA200 5.0 6076.19 0.00 6076.19 5516.04 112.03 5628.07
19-Jun-91D SKYLINE - CUSTOMIZATION OF A/P M*200 7.0 842.70 0.00 842.70 673.59 84.56 758.15
21-Oct-91D HARD DISK, TAPE BACK UPS, UPS MA200 5.0 5295.76 0.00 5295.76 4990.88 60.98 5051.86
25-Nov-91D NOVELL UPGRADE-FROM 2.15 TO 2.2 MA200 5.0 460.00 0.00 460.00 433.61 5.28 438.89
25-Nov-91D SOFTWARE-TOP PRIORITY, CALANDAR PLUS MA200 5.0 105.89 0.00 105.89 99.82 1.21 101.03
25-Nov-91D SKYLINE WORKSHOP TRAINING MA200 5.0 470.00 0.00 470.00 443.03 5.39 448.42
30-Dec-91D EPSON CQ2500 PRINTER M*200 7.0 500.00 0.00 500.00 387.14 28.22 415.36
07-Feb-92D SKYLINE - ONE YEAR TELEPHONE SUPPORT MA200 5.0 447.50 0.00 447.50 396.25 10.25 406.50
16-Mar-92D SOFTWARE M*200 7.0 129.60 0.00 129.60 89.89 9.93 99.82
29-May-92D SOFTWARE M*200 7.0 54.95 0.00 54.95 37.70 4.31 42.01
22-Jun-92D SOFTWARE M*200 7.0 105.95 0.00 105.95 73.14 8.20 81.34
13-Jul-92D SKYLINE - BATCHMAKER HISTORY INTERFACE M*200 5.0 1908.00 0.00 1908.00 1578.60 164.70 1743.30
18-Aug-92D SKYLINE - BATCHMAKER HISTORY INTERFACE M*200 5.0 1060.00 0.00 1060.00 876.85 91.58 968.43
18-Aug-92D NOVELL 3.11 LANSPOOL M*200 5.0 11752.63 0.00 11752.63 9722.01 1015.31 10737.32
14-Oct-92D SOFTWARE - BORLAND M*200 7.0 668.68 0.00 668.68 454.39 35.72 490.11
30-Apr-93D DISKOMP M*200 5.0 4387.85 0.00 4387.85 3124.11 631.87 3755.98
30-Apr-93D MAGIC BOX M*200 5.0 1968.95 0.00 1968.95 1401.88 283.54 1685.42
30-Apr-93D COMP USA M*200 5.0 1791.12 0.00 1791.12 1275.27 257.93 1533.20
30-Apr-93D MAGIC BOX M*200 5.0 202.35 0.00 202.35 144.08 29.14 173.22
30-Apr-93D MAGIC BOX M*200 5.0 7757.46 0.00 7757.46 5523.24 1117.11 6640.35
30-Apr-93D MAGIC BOX M*200 5.0 4520.41 0.00 4520.41 3218.50 650.96 3869.46
30-Apr-93D MAGIC BOX M*200 5.0 1320.60 0.00 1320.60 940.26 190.17 1130.43
02-Jun-93D MAGIC BOX - MONOCHROME MONITOR M*200 5.0 101.18 0.00 101.18 71.68 14.75 86.43
01-Sep-93D QUICKEN SOFTWARE M*200 5.0 34.95 0.00 34.95 24.22 2.68 26.90
01-Sep-93D SOFTA GROUP M*200 5.0 925.00 0.00 925.00 640.93 71.02 711.95
01-Sep-93D SOFTWARE M*200 5.0 78.09 0.00 78.09 54.12 5.99 60.11
01-Sep-93D SOFTWARE M*200 5.0 26.62 0.00 26.62 18.45 2.04 20.49
01-Sep-93D SOFTWARE - DATAPERFECT,WORDPERFECT UPGRADM*200 5.0 292.82 0.00 292.82 202.89 22.48 225.37
01-Sep-93D SOFTWARE M*200 5.0 1584.70 0.00 1584.70 1098.02 121.67 1219.69
01-Sep-93D SOFTWARE M*200 5.0 1054.70 0.00 1054.70 730.79 80.98 811.77
01-Sep-93D SOFTWARE M*200 5.0 301.97 0.00 301.97 209.24 23.18 232.42
31-Dec-93D MAGIC BOX-FILE SERVER UPGRADE M*200 5.0 4326.56 0.00 4326.56 2111.16 553.85 2665.01
31-Dec-93D CABLE RUNS/CONNECTIONS-18TH FLOOR M*200 5.0 4000.92 0.00 4000.92 1952.34 512.15 2464.49
31-Jan-94D BROAD MARKETING-10 COMPUTERS-18TH M*200 5.0 12726.75 0.00 12726.75 6210.43 1629.08 7839.51
28-Feb-94D HP LASERJET 4SI PRINTER & SOFTWARE MA200 7.0 3243.93 0.00 3243.93 1464.56 254.20 1718.76
28-Feb-94D MAGIC BOX - FUTURUS TEAM UPGRADE MA200 7.0 2018.18 0.00 2018.18 911.46 158.10 1069.56
</TABLE>
<PAGE> 114
<TABLE>
<CAPTION>
includes Section 179
---------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
31-Mar-94D BROAD MARKETING-3 COMPUTERS-18TH M*200 5.0 3818.03 0.00 3818.03 1863.46 488.64 2352.10
31-Mar-94D FUTURUS CORP-FUTURUS TEAM UPGRADE M*200 5.0 460.75 0.00 460.75 224.75 59.00 283.75
31-May-94D MAGIC BOX-FILE SERVER UPGRADE M*200 5.0 5494.87 0.00 5494.87 2681.52 703.34 3384.86
24-Jan-95D LEASE TECH - COMPUTER EQUIPMENT MA200 5.0 2277.00 1712.00 565.00 1870.60 81.28 1951.88
14-Mar-95D LEASE TECH - COMPUTER EQUIPMENT MA200 5.0 2500.00 0.00 2500.00 700.00 360.00 1060.00
20-Apr-95D US CONNECT - NETWORK UPGRADE MA200 5.0 15788.69 15788.69 0.00 15788.69 0.00 15788.69
22-Dec-95D DINERS-SOUND ADVICE-IBM APTIVA COMPUTER MA200 5.0 2874.43 0.00 2874.43 95.82 694.65 790.47
29-Dec-95D PERIFITECH-TAPE BACKUP SYSTEM MA200 5.0 4217.77 0.00 4217.77 140.59 1019.30 1159.89
01-Feb-96D ADC INFORMATION TECHNOLOGIES MA200 5.0 3384.00 0.00 3384.00 0.00 0.00 0.00
07-Feb-96D CDW COMPUTERS MA200 5.0 1130.88 0.00 1130.88 0.00 0.00 0.00
01-Mar-96D PERIFITEC-MIAMI SERVER MA200 5.0 22909.83 0.00 22909.83 0.00 0.00 0.00
19-Mar-96D COMPUTER PLANET, INC. MA200 5.0 6540.00 0.00 6540.00 0.00 0.00 0.00
01-Apr-96D STAND-ALONE PC SN#81557 MA200 5.0 2515.00 0.00 2515.00 0.00 0.00 0.00
01-May-96D 15 PENTIUM WORKSTATIONS-UPGRADES MA200 5.0 18420.00 0.00 18420.00 0.00 0.00 0.00
01-Jul-96D 9 PENTIUM WORKSTATIONS-UPGRADES MA200 5.0 11106.00 0.00 11106.00 0.00 0.00 0.00
01-Jul-96D 5 PENTIUM WORKSTATIONS-UPGRADES MA200 5.0 6170.00 0.00 6170.00 0.00 0.00 0.00
01-Jul-96D PENTIUM WORKSTATION-UPGRADE MA200 5.0 1234.00 0.00 1234.00 0.00 0.00 0.00
01-Jul-96D PENTIUM WORKSTATION-UPGRADE MA200 5.0 1234.00 0.00 1234.00 0.00 0.00 0.00
01-Jul-96D PENTIUM WORKSTATION-UPGRADE MA200 5.0 1234.00 0.00 1234.00 0.00 0.00 0.00
01-Jul-96D PENTIUM WORKSTATION-UPGRADE MA200 5.0 1234.00 0.00 1234.00 0.00 0.00 0.00
01-Jul-96D SOFTRACK SOFTWARE-ON TECHNOLOGY MA200 5.0 1195.00 0.00 1195.00 0.00 0.00 0.00
--------- -------- --------- -------- -------- --------
Totals for ASSET A/C: 200 203884.51 17500.69 186383.82 85552.26 97312.44
Less: Disposed Assets (Curr Depr: 11760.18) 203884.51 17500.69 186383.82 85552.26 97312.44
--------- -------- --------- -------- --------
Net Totals for ASSET A/C: 200 (58 assets) 0.00 0.00 0.00 0.00 11760.18 0.00
========= ======== ========= ======== ======== ========
Grand Totals for all accounts: 345969.20 17500.69 328468.51 120544.62 151310.58
Less: Disposed assets (Curr Depr: 30765.96) 345969.20 17500.69 328468.51 120544.62 151310.58
--------- -------- --------- --------- ---------
Net Totals for all accounts: (90 assets) 0.00 0.00 0.00 0.00 30765.96 0.00
========= ======== ========= ========= ======== =========
</TABLE>
Codes that may appear next to date acquired: A-Addition, T-Traded, M-Mid
Quarter Applied
<PAGE> 115
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: Tempus
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-200 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
----------------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beginning A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
A/C# 100 FURNITURE/FIXTURES/EQUIP
- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-Mar-93 PANASONIC KXE708 TYPEWRITER M*200 5.0000 55.00 55.00 0.00 55.00 0.00 55.00
01-Mar-93 AT&T MERLIN SYSTEM MA200 5.0000 250.00 250.00 0.00 250.00 0.00 250.00
01-Mar-93D BLACK ARM CHAIR M*200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Mar-93 BLACK LEGAL 4 DR FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 BLACK LEGAL 4 DR FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 BLACK LEGAL 4 DR FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 BLACK LEGAL 4 DR FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93D BLACK TOP CREDENZA M*200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93D BLACK TOP DESK M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 BLOND 2-DOOR CREDENZA M*200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93 BLOND 2-DOOR CREDENZA M*200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93D BLOND COMPUTER DESK M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 BLOND COMPUTER TABLE M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 BLOND DBL PED DESK M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 BLOND DESK LEFT RETURN M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93 BLOND SIDE TABLE M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 BLUE SIDE CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 BLUE SIDE CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 BOOKSHELF/5 SHELF LT OAK M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 BRASS 2 BULB LAMP M*200 5.0000 8.00 8.00 0.00 8.00 0.00 8.00
01-Mar-93 BUFF SWIVEL ARM CHAIR M*200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Mar-93 BURGUNDY SWIVEL ARM CHAIR M*200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Mar-93 CABINET W/WORK TOP M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93D CANNON 350 FAX M*200 5.0000 75.00 75.00 0.00 75.00 0.00 75.00
01-Mar-93 COMPUTER TABLE W/DRAWER M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 CRANBERRY SCREEN M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 DURER PRINT/FRAME M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D EARLY AMERICAN CREDENZA M*200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93D EARLY AMERICAN EXECUTIVE DESK M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 FOLDING TABLE 3' M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 FOLDING TABLE 5' M*200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Mar-93 GRAPHICS PRINT/FRAME M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY 2 DOOR STORAGE CABINET M*200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 GREY STENO CHAIR M*200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D GREY SWIVEL ARM CHAIR M*200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Mar-93 LGL 2DR BUFF LTL FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 2 DR CREAM LTL FILE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 2 DR CREAM LTL FILE MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93D LGL 3 DR PUTTY FILES HON MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 3 DR PUTTY FILES HON MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 4 DR BUFF FILES A-H MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 4 DR BUFF FILES A-H MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 4 DR BUFF FILES A-H MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LGL 4 DR PUTTY FILES HON MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 LIBRARY TABLE MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 LIVE CORN PLANT POTTED MA200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93D MICROFICHE VIEWER MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 NAVY CREDENZA MA200 5.0000 15.00 15.00 0.00 15.00 0.00 15.00
01-Mar-93 NAVY EXECUTIVE DESK MA200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93D OAK DBL PED DESK MA200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93D OATMEAL SIDE CHAIR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D OATMEAL SIDE CHAIR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 OATMEAL SIDE CHAIR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 OATMEAL SIDE CHAIR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D PANASONIC KXE400 TYPEWRITER MA200 5.0000 45.00 45.00 0.00 45.00 0.00 45.00
01-Mar-93 PR PICASSO PRINTS MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 PR TIBURON PINK/GREEN PRINTS MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93D PUTTY METAL PRINTER STAND MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D ROUND GOLD TABLE MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 SET OF 3 BLUR-GREY PLANT STANDMA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D SHARP CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 SHELF UNIT W/CASTERS MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93D SONY BM810T TRANSCRIBER MA200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 STEED BLUE/RED OIL MA200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 TI CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 TI CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 TI CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 TI CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 TI CALCULATOR MA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
01-Mar-93 TIE BUSINESSCOM SYSTEM 20 MA200 5.0000 30.00 30.00 0.00 30.00 0.00 30.00
01-Mar-93 TYPEWRITER STAND/DBL DROP LEAFMA200 5.0000 5.00 5.00 0.00 5.00 0.00 5.00
</TABLE>
<PAGE> 116
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: Tempus
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-200 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
----------------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beginning A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-Mar-93 WALNUT DESK W/RT RETURN MA200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93 WALNUT TYPING TABLE MA200 5.0000 7.00 7.00 0.00 7.00 0.00 7.00
01-Apr-93 LANIER COPIER M*200 5.0000 4496.00 0.00 4496.00 3813.98 389.73 4203.71
01-May-93 ALMOND REFRIGERATOR MA200 5.0000 181.00 181.00 0.00 181.00 0.00 181.00
01-May-93D BLUE/CHROME ARM CHAIR MA200 5.0000 7.90 7.90 0.00 7.90 0.00 7.90
01-May-93D BLUE/CHROME ARM CHAIR MA200 5.0000 7.90 7.90 0.00 7.90 0.00 7.90
01-May-93D BLUE/CHROME ARM CHAIR MA200 5.0000 7.90 7.90 0.00 7.90 0.00 7.90
01-May-93D BLUE/CHROME ARM CHAIR MA200 5.0000 7.90 7.90 0.00 7.90 0.00 7.90
01-May-93 BOOKSHELF/3 SHELF MA200 5.0000 36.73 36.73 0.00 36.73 0.00 36.73
01-May-93 GREY SWIVEL ARM CHAIR M*200 5.0000 48.60 48.60 0.00 48.60 0.00 48.60
01-May-93 LANIER CARD KEY UNIT M*200 5.0000 332.64 332.64 0.00 332.64 0.00 332.64
01-May-93D LGL BLACK 5 DR FILE M*200 5.0000 40.00 40.00 0.00 40.00 0.00 40.00
01-May-93 NARROW FOLDING TABLE MA200 5.0000 22.60 22.60 0.00 22.60 0.00 22.60
01-May-93D PLUM SQUARE CAFE TABLE MA200 5.0000 45.34 45.34 0.00 45.34 0.00 45.34
01-May-93 TABLE-ADJUSTABLE MA200 5.0000 5.60 5.60 0.00 5.60 0.00 5.60
01-May-93 TAN ROOM DIVIDER M*200 5.0000 5.60 5.60 0.00 5.60 0.00 5.60
01-Jul-93 MICROWAVE OVEN MA200 5.0000 77.50 77.50 0.00 77.50 0.00 77.50
01-Aug-93 PHONE SETS (7) MA200 5.0000 1200.00 1200.00 0.00 1200.00 0.00 1200.00
01-Sep-93 BROWN SIDE CHAIR MA200 5.0000 54.00 54.00 0.00 54.00 0.00 54.00
01-Sep-93 BROWN SIDE CHAIR MA200 5.0000 54.00 54.00 0.00 54.00 0.00 54.00
01-Sep-93 KEYBOARD DRAWER MA200 5.0000 32.39 32.39 0.00 32.39 0.00 32.39
01-Sep-93 KEYBOARD DRAWER MA200 5.0000 32.39 32.39 0.00 32.39 0.00 32.39
01-Sep-93 MONITOR ARM MA200 5.0000 53.85 53.85 0.00 53.85 0.00 53.85
01-Sep-93D OAK CRT STAND SMALL MA200 5.0000 54.00 54.00 0.00 54.00 0.00 54.00
01-Sep-93 OAK CRT STAND LARGE MA200 5.0000 113.40 113.40 0.00 113.40 0.00 113.40
01-Sep-93 WALNUT EXECUTIVE DESK MA200 5.0000 210.60 210.60 0.00 210.60 0.00 210.60
01-Sep-93 WHITE CREDENZA MA200 5.0000 195.92 195.92 0.00 195.92 0.00 195.92
01-Sep-93 WHITE DESK MA200 5.0000 207.77 207.77 0.00 207.77 0.00 207.77
01-Jan-94 LANIER COPIER-UPGRADE MA200 5.0000 4244.71 0.00 4244.71 2105.43 855.71 2961.14
01-Aug-94D TAN 2 DOOR STORAGE CABINET MA200 5.0000 50.00 0.00 50.00 26.38 4.72 31.10
01-Sep-94 BROTHER FAX 620 MA200 5.0000 324.23 0.00 324.23 172.63 60.64 233.27
01-Sep-94 IBCO BINDER MA200 5.0000 216.21 0.00 216.21 114.81 40.56 155.37
01-Feb-95 6 WHITE CONFERENCE SIDE CHAIRSMA200 7.0000 614.58 0.00 614.58 166.82 127.93 294.75
01-Feb-95 CONFERENCE TABLE MA200 7.0000 616.62 0.00 616.62 167.37 128.36 295.73
01-Jun-96 NEC 461 FAX MA200 5.0000 482.24 0.00 482.24 0.00 96.45 96.45
Totals for ASSET A/C: 100 15235.12 4190.53 11044.59 10757.95 12462.05
Less: Disposed Assets (Curr Depr: 4.72) 519.94 469.94 50.00 496.32 501.04
--------- -------- --------- ---------- ---------
Net Totals for ASSET A/C: 100 (111 assets) 14715.18 3720.59 10994.59 10261.63 1704.10 11961.01
========= ======== ========= ========== ======= =========
- -----------------------------------------
A/C# 200 COMPUTERS/COMPUTER EQUIP
- -----------------------------------------
01-Mar-93 1.2 MB FLOPPY DRIVE M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 ACCPAC SOFTWARE M*200 5.0000 75.00 75.00 0.00 75.00 0.00 75.00
01-Mar-93 ASA 386SX PC/MM/LF M*200 5.0000 50.00 50.00 0.00 50.00 0.00 50.00
01-Mar-93 ASA 386SX PC/MM/LF M*200 5.0000 50.00 50.00 0.00 50.00 0.00 50.00
01-Mar-93 ASA PC/MM/LF M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93D AXIS 386/25 - NO HD/MM/LF M*200 5.0000 300.00 300.00 0.00 300.00 0.00 300.00
01-Mar-93 COMPUTER SOFTWARE M*200 5.0000 80.00 80.00 0.00 80.00 0.00 80.00
01-Mar-93D DTK TECH 1200 PC/CM/BF M*200 5.0000 75.00 75.00 0.00 75.00 0.00 75.00
01-Mar-93 DTK TECH 1200 PC/MM/LF M*200 5.0000 75.00 75.00 0.00 75.00 0.00 75.00
01-Mar-93 EXTERNAL MODEL W/CABLE M*200 5.0000 10.00 10.00 0.00 10.00 0.00 10.00
01-Mar-93 NETWARE 286 SOFTWARE M*200 5.0000 100.00 100.00 0.00 100.00 0.00 100.00
01-Mar-93 PANASONIC KPX1080I PRINTER M*200 5.0000 20.00 20.00 0.00 20.00 0.00 20.00
01-Mar-93 PANASONIC KPX1191 PRINTER M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93 PANASONIC KPX1191 PRINTER M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93 PANASONIC KPX1595 PRINTER M*200 5.0000 30.00 30.00 0.00 30.00 0.00 30.00
01-Mar-93 PANASONIC KXP1191 PRINTER M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93 PANASONIC KXP1191 PRINTER M*200 5.0000 25.00 25.00 0.00 25.00 0.00 25.00
01-Mar-93D POWER SUPPLY M*200 5.0000 60.00 60.00 0.00 60.00 0.00 60.00
01-Mar-93 T1200YE LAPTOP/SF M*200 5.0000 70.00 70.00 0.00 70.00 0.00 70.00
01-Mar-93 WP5.1/LOTUS SOFTWARE/INSTALL M*200 5.0000 50.00 50.00 0.00 50.00 0.00 50.00
01-Apr-93 HPIII LASER PRINTER MA200 5.0000 2511.42 2511.42 0.00 2511.42 0.00 2511.42
01-May-93 HARD DRIVES, MEMORY CHIPS MA200 5.0000 1180.32 1180.32 0.00 1180.32 0.00 1180.32
01-Jun-93 PC386DX/CM/BF MA200 5.0000 679.52 679.52 0.00 679.52 0.00 679.52
01-Jun-93 PC ANYWHERE (2) M*200 5.0000 313.20 0.00 313.20 147.10 94.91 242.01
01-Jun-93 REBUILD 2 PC'S MA200 5.0000 152.92 152.92 0.00 152.92 0.00 152.92
01-Jun-93 SERIAL MODEM CABLES (2) M*200 5.0000 16.20 0.00 16.20 7.59 4.92 12.51
01-Jun-93 VOLTAGE ADAPTOR M*200 5.0000 19.44 0.00 19.44 9.15 5.88 15.03
01-Oct-93 ARCNET CARDS (2) M*200 5.0000 162.00 162.00 0.00 162.00 0.00 162.00
01-Nov-93 ARCNET CARD M*200 5.0000 81.00 81.00 0.00 81.00 0.00 81.00
01-Nov-93 ARCNET HUB M*200 5.0000 523.80 523.80 0.00 523.80 0.00 523.80
01-Jan-94 ACT SOFTWARE MA200 5.0000 302.02 0.00 302.02 149.44 61.03 210.47
01-Feb-94 386 FILE SERVER/CM MA200 5.0000 2646.00 0.00 2646.00 1324.14 528.74 1852.88
01-Feb-94 LOTUS 2.4 MA200 5.0000 128.00 0.00 128.00 61.73 26.51 88.24
01-Feb-94 NOVELL 3.12 MA200 5.0000 1107.92 0.00 1107.92 537.79 228.05 765.84
01-Jan-95 3.5" DISK DRIVE MA200 5.0000 55.03 0.00 55.03 17.61 14.97 32.58
</TABLE>
<PAGE> 117
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: Tempus
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-200 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
----------------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beginning A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01-Jan-95 G/L TOOLKIT (ACCPAC) MA200 5.0000 334.81 0.00 334.81 107.14 91.07 198.21
01-Jan-95 HPIII MEMORY BOARD MA200 5.0000 188.67 0.00 188.67 60.37 51.32 111.69
01-Jan-95 INTERNAL MODEL MA200 5.0000 129.59 0.00 129.59 41.47 35.25 76.72
01-Feb-95 COLORADO TAPE BACKUP MA200 5.0000 193.32 0.00 193.32 61.86 52.58 114.44
01-May-95 NETSHIELD VIRUSCAN MA200 5.0000 272.00 0.00 272.00 87.04 73.98 161.02
15-Jan-96 APC-SMART UPS MA200 5.0000 419.70 0.00 419.70 0.00 83.94 83.94
--------- -------- -------- --------- -------- ---------
Totals for ASSET A/C: 200 12606.88 6480.98 6125.90 9093.41 10446.56
Less: Disposed Assets (Curr Depr: 0.00) 435.00 435.00 0.00 435.00 435.00
--------- -------- -------- --------- ---------
Net Totals for ASSET A/C: 200 (41 assets) 12171.88 6045.98 6125.90 8658.41 1353.15 10011.56
========= ======== ======== ========= ======== =========
Grand Totals for all accounts: 27842.00 10671.51 17170.49 19851.36 22908.61
Less: Disposed assets (Curr Depr: 4.72) 954.94 904.94 50.00 931.32 936.04
--------- -------- -------- --------- ---------
Net Totals for all accounts: (152 assets) 26887.06 9766.57 17120.49 18920.04 3057.25 21972.57
========= ======== ======== ========= ======== =========
</TABLE>
Codes that may appear next to date acquired: A-Addition, D-Disposal,
T-Traded, M-Mid Quarter Applied
<PAGE> 118
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
A/C# 100 FURNITURE/FIXTURES/EQUIP
- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
13-Feb-90M CONFERENCE TABLE & RECEPTION DESK M*200 5.00 650.00 0.00 650.00 650.00 0.00 650.00
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 172.88 0.00 172.88 172.88 0.00 172.88
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 170.87 0.00 170.87 170.87 0.00 170.87
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
15-Mar-90M DEPOSIT/BALANCE ON CHAIRS M*200 5.00 194.64 0.00 194.64 194.64 0.00 194.64
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
16-Mar-90M 4 EXEC DESKS & CRED/2 JR. DESKS & CRED. M*200 5.00 550.00 0.00 550.00 550.00 0.00 550.00
02-Apr-90M RICOH COPIER #5070 M*200 5.00 2726.58 0.00 2726.58 2726.58 0.00 2726.58
05-Apr-90M RECEPTION SOFA M*200 5.00 431.25 0.00 431.25 431.25 0.00 431.25
05-Apr-90M RECEPTION CHAIRS M*200 5.00 431.24 0.00 431.24 431.24 0.00 431.24
05-Apr-90M RECEPTION CHAIRS M*200 5.00 431.24 0.00 431.24 431.24 0.00 431.24
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
06-Apr-90M 10 CONFERENCE ROOM CHAIRS M*200 5.00 208.44 0.00 208.44 208.44 0.00 208.44
20-Apr-90M REFRIGERATOR M*200 5.00 653.27 0.00 653.27 653.27 0.00 653.27
26-Apr-90M FAX MACHINE M*200 5.00 915.21 0.00 915.21 915.21 0.00 915.21
01-May-90M 3 OFFICE CHAIRS M*200 5.00 202.68 0.00 202.68 202.68 0.00 202.68
01-May-90M 3 OFFICE CHAIRS M*200 5.00 202.68 0.00 202.68 202.68 0.00 202.68
01-May-90M 3 OFFICE CHAIRS M*200 5.00 202.68 0.00 202.68 202.68 0.00 202.68
15-May-90M TELEPHONES M*200 5.00 653.40 0.00 653.40 653.40 0.00 653.40
06-Jul-90M TOSHIBA 65105 10 BTM PHONE & JACKS M*200 5.00 535.75 0.00 535.75 535.75 0.00 535.75
26-Jul-90M 3 SECRETARIAL DESKS M*200 5.00 418.51 0.00 418.51 418.51 0.00 418.51
26-Jul-90M 3 SECRETARIAL DESKS M*200 5.00 418.52 0.00 418.52 418.52 0.00 418.52
26-Jul-90M 3 SECRETARIAL DESKS M*200 5.00 418.51 0.00 418.51 418.51 0.00 418.51
27-Aug-90M 4 TOSHIBA EKT65105 PHONES/1 TOSHIBA PEKU M*200 5.00 2088.14 0.00 2088.14 2088.14 0.00 2088.14
12-Sep-90M 1 OAK CREDENZA/DESK M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 8 2-DRAWER FILING CABINETS/3 4-DRAWER/1 LEGM*200 5.00 75.00 0.00 75.00 75.00 0.00 75.00
12-Sep-90M 1 OAK CREDENZA/DESK M*200 5.00 200.00 0.00 200.00 200.00 0.00 200.00
12-Sep-90M 8 2-DRAWER FILING CABINETS/3 4-DRAWER/1 LEGM*200 5.00 75.00 0.00 75.00 75.00 0.00 75.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 2 DRAWER LATERAL FILE CABINET M*200 5.00 50.00 0.00 50.00 50.00 0.00 50.00
12-Sep-90M 1 OAK DESK M*200 5.00 150.00 0.00 150.00 150.00 0.00 150.00
12-Sep-90M 1 WALNUT CREDENZA & DESK M*200 5.00 150.00 0.00 150.00 150.00 0.00 150.00
12-Sep-90M 1 WALNUT SECRETARIAL DESK M*200 5.00 50.00 0.00 50.00 50.00 0.00 50.00
12-Sep-90M 1 DARK BROWN LEATHER EXEC CHAIR M*200 5.00 75.00 0.00 75.00 75.00 0.00 75.00
12-Sep-90M 1 WALNUT CREDENZA/DESK/ENDTABLE M*200 5.00 25.00 0.00 25.00 25.00 0.00 25.00
12-Sep-90M 1 LAMP TABLE M*200 5.00 55.00 0.00 55.00 55.00 0.00 55.00
12-Sep-90M 1 WALNUT CREDENZA/DESK/ENDTABLE M*200 5.00 50.00 0.00 50.00 50.00 0.00 50.00
12-Sep-90M 14 PLANTERS M*200 5.00 70.00 0.00 70.00 70.00 0.00 70.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/SWIVEL BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 1 WALNUT CREDENZA/DESK/ENDTABLE M*200 5.00 125.00 0.00 125.00 125.00 0.00 125.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 4 COMPUTER WORKSTATIONS M*200 5.00 150.00 0.00 150.00 150.00 0.00 150.00
12-Sep-90M 2 GREEN OAK GUEST CHAIRS M*200 5.00 50.00 0.00 50.00 50.00 0.00 50.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 1 WALNUT CREDENZA & DESK M*200 5.00 150.00 0.00 150.00 150.00 0.00 150.00
12-Sep-90M 1 BOOKCASE W/8 SHELVES M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
12-Sep-90M 2 GREEN OAK GUEST CHAIRS M*200 5.00 50.00 0.00 50.00 50.00 0.00 50.00
12-Sep-90M 8 TEAL SWIVEL CHAIRS/BRONZE BASE M*200 5.00 100.00 0.00 100.00 100.00 0.00 100.00
17-Oct-90M INSTALL MITEL SX200 PHONE SYSTEM M*200 5.00 2745.45 0.00 2745.45 2745.45 0.00 2745.45
06-Nov-90M PHONE INSTALLATION M*200 5.00 1250.29 0.00 1250.29 1250.29 0.00 1250.29
19-Dec-90M 10 MITEL SUSPERSETS & INSTALLATION-50% M*200 5.00 116.57 0.00 116.57 116.57 0.00 116.57
15-Jan-91M TELEVISION-PANASONIC M*200 5.00 87.50 0.00 87.50 82.27 5.23 87.50
15-Jan-91M CART (2) M*200 5.00 60.00 0.00 60.00 56.42 3.58 60.00
</TABLE>
<PAGE> 119
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.21 0.00 233.21 219.28 13.93 233.21
15-Jan-91M VCR - RCA MODEL VJT255 M*200 5.00 112.50 0.00 112.50 105.78 6.72 112.50
15-Jan-91M CALCULATORS (13) M*200 5.00 38.48 0.00 38.48 38.48 0.00 38.48
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M DESKS EXECUTIVE (8) M*200 5.00 328.13 0.00 328.13 308.53 19.60 328.13
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M DESKS EXECUTIVE (8) M*200 5.00 328.13 0.00 328.13 308.53 19.60 328.13
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 5 DRAWER (6) M*200 5.00 156.25 0.00 156.25 146.92 9.33 156.25
15-Jan-91M MICROWAVE OVEN-LITTON M*200 5.00 85.00 0.00 85.00 79.92 5.08 85.00
15-Jan-91M CLOCK - WALL GE M*200 5.00 20.00 0.00 20.00 20.00 0.00 20.00
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M BULLETIN BOARD (2) M*200 5.00 16.25 0.00 16.25 16.25 0.00 16.25
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M BULLETIN BOARD (2) M*200 5.00 16.25 0.00 16.25 16.25 0.00 16.25
15-Jan-91M CHAIRS - CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M CART (2) M*200 5.00 60.00 0.00 60.00 56.42 3.58 60.00
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M CABINET 3 DRAWER M*200 5.00 45.00 0.00 45.00 45.00 0.00 45.00
15-Jan-91M LADDER 3 RUNG (1) M*200 5.00 27.50 0.00 27.50 27.50 0.00 27.50
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
</TABLE>
<PAGE> 120
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.06 0.00 86.06 80.92 5.14 86.06
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
15-Jan-91M CREDENZAS (8) M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M CREDENZAS (8) M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.42 0.00 13.42 13.42 0.00 13.42
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M CHAIRS-BREAKROOM M*200 5.00 13.44 0.00 13.44 13.44 0.00 13.44
15-Jan-91M TABLES-DINING ROOM (2) M*200 5.00 46.25 0.00 46.25 46.25 0.00 46.25
15-Jan-91M TABLES-DINING ROOM (2) M*200 5.00 46.25 0.00 46.25 46.25 0.00 46.25
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.21 0.00 233.21 219.28 13.93 233.21
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.21 0.00 233.21 219.28 13.93 233.21
15-Jan-91M PRINTER-CITIZEN M*200 5.00 217.50 0.00 217.50 204.51 12.99 217.50
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M FILE CABINETS 4 DRAWER (6) M*200 5.00 156.25 0.00 156.25 146.92 9.33 156.25
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLES (16) M*200 5.00 54.65 0.00 54.65 51.39 3.26 54.65
15-Jan-91M PRINTER-EPSON FX100 M*200 5.00 155.00 0.00 155.00 145.74 9.26 155.00
15-Jan-91M COMPUTER IBM 5151 M*200 5.00 527.50 0.00 527.50 496.00 31.50 527.50
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M PRINTER OKIDATA M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M DESKS EXECUTIVE (8) M*200 5.00 328.13 0.00 328.13 308.53 19.60 328.13
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.24 0.00 233.24 219.31 13.93 233.24
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.21 0.00 233.21 219.28 13.93 233.21
15-Jan-91M DESKS SECRETARIAL (7) M*200 5.00 233.21 0.00 233.21 219.28 13.93 233.21
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
</TABLE>
<PAGE> 121
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CHAIRS (117) M*200 5.00 70.69 0.00 70.69 66.47 4.22 70.69
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M CALCULATORS (13) M*200 5.00 38.46 0.00 38.46 38.46 0.00 38.46
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M FILE CABINETS 2 DRAWER (37) M*200 5.00 125.00 0.00 125.00 117.53 7.47 125.00
15-Jan-91M DESKS EXECUTIVE (8) M*200 5.00 328.13 0.00 328.13 308.53 19.60 328.13
15-Jan-91M DESKS EXECUTIVE (8) M*200 5.00 328.09 0.00 328.09 308.50 19.59 328.09
15-Jan-91M TABLE-CONFERENCE ROOM M*200 5.00 297.50 0.00 297.50 279.73 17.77 297.50
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M TYPEWRITERS (13) M*200 5.00 250.00 0.00 250.00 235.07 14.93 250.00
15-Jan-91M FIRST AID KIT M*200 5.00 85.00 0.00 85.00 79.92 5.08 85.00
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M PROJECTOR/VIEWER,CAROUSEL,OVERHEAD M*200 5.00 310.00 0.00 310.00 291.49 18.51 310.00
15-Jan-91M SHELVING (4) M*200 5.00 105.00 0.00 105.00 98.73 6.27 105.00
15-Jan-91M WORKSTATIONS/PARTITIONS M*200 5.00 18831.40 0.00 18831.40 17706.74 1124.66 18831.40
15-Jan-91M TELEPHONE SYSTEM MITEL MODEL SX200 M*200 5.00 4750.00 0.00 4750.00 4466.32 283.68 4750.00
15-Jan-91M COMPUTER-COMPAC DESK PRO 286 M*200 5.00 625.00 0.00 625.00 587.67 37.33 625.00
15-Jan-91M CREDENZAS (8) M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M CREDENZAS (8) M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M CREDENZAS (8) M*200 5.00 200.00 0.00 200.00 188.06 11.94 200.00
15-Jan-91M FILE CABINETS 5 DRAWER (6) M*200 5.00 156.25 0.00 156.25 146.92 9.33 156.25
15-Jan-91M FILE CABINETS 5 DRAWER (6) M*200 5.00 156.25 0.00 156.25 146.92 9.33 156.25
15-Jan-91M TABLES (16) M*200 5.00 54.69 0.00 54.69 51.42 3.27 54.69
15-Jan-91M TABLE-MAIL ROOM M*200 5.00 107.50 0.00 107.50 101.08 6.42 107.50
15-Jan-91M FILE CABINETS 4 DRAWER (21) M*200 5.00 310.24 0.00 310.24 291.71 18.53 310.24
15-Jan-91M CHAIRS-CONFERENCE ROOM (12) M*200 5.00 86.04 0.00 86.04 80.90 5.14 86.04
30-Jan-91M SHELVES FOR FILE ROOM M*200 5.00 12584.16 0.00 12584.16 11745.16 839.00 12584.16
28-Feb-91M FAX MACHINE-ATLANTA M*200 5.00 920.08 0.00 920.08 874.16 45.92 920.08
28-Feb-91M OFFICE FURNITURE ATLANTA M*200 5.00 4020.50 0.00 4020.50 3714.20 306.30 4020.50
01-Mar-91M REFRIGERATOR-ATLANTA M*200 5.00 600.00 0.00 600.00 560.00 40.00 600.00
18-Mar-91M OFFICE FURNITURE-ALBUQUERQUE M*200 5.00 10671.23 0.00 10671.23 9959.90 711.33 10671.23
29-Mar-91M FILE CABINETS-ATLANTA M*200 5.00 945.00 0.00 945.00 881.97 63.03 945.00
29-Mar-91M FILE CABINETS-ALB M*200 5.00 883.32 0.00 883.32 824.40 58.92 883.32
04-Apr-91M WORKSTATIONS M*200 5.00 10924.85 0.00 10924.85 8888.43 2036.42 10924.85
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.04 0.00 147.04 122.98 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M FILING CABINETS-4 2DRW/13 4DRW M*200 5.00 147.06 0.00 147.06 123.00 24.06 147.06
07-May-91M BREAKROOM CHAIR M*200 5.00 25.00 0.00 25.00 20.91 4.09 25.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M CALCULATORS (12) M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
07-May-91M PHONE SYSTEM-1/2 M*200 5.00 4075.65 0.00 4075.65 3408.83 666.82 4075.65
07-May-91M TRASHCANS-15 M*200 5.00 30.00 0.00 30.00 25.09 4.91 30.00
</TABLE>
<PAGE> 122
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
07-May-91M BREAKROOM TABLES-4 M*200 5.00 85.00 0.00 85.00 71.09 13.91 85.00
07-May-91M BREAKROOM TABLES-4 M*200 5.00 85.00 0.00 85.00 71.09 13.91 85.00
07-May-91M BREAKROOM TABLES-4 M*200 5.00 85.00 0.00 85.00 71.09 13.91 85.00
07-May-91M BREAKROOM TABLES-4 M*200 5.00 85.00 0.00 85.00 71.09 13.91 85.00
07-May-91M BREAKROOM CHAIR M*200 5.00 25.00 0.00 25.00 20.91 4.09 25.00
07-May-91M FIRESAFE CABINET M*200 5.00 500.00 0.00 500.00 418.19 81.81 500.00
07-May-91M BREAKROOM CHAIR M*200 5.00 25.00 0.00 25.00 20.91 4.09 25.00
07-May-91M BREAKROOM CHAIR M*200 5.00 25.00 0.00 25.00 20.91 4.09 25.00
17-May-91M FURNITURE FROM UNIV-HOUSTON (MODULARS) M*200 5.00 16427.11 0.00 16427.11 13738.54 2688.57 16427.11
31-May-91M WORKSTATIONS/DALLAS M*200 5.00 15042.30 0.00 15042.30 12580.87 2461.43 15042.30
11-Jul-91M WORKSTATIONS/DALLAS M*200 5.00 14850.82 0.00 14850.82 11423.97 3426.85 14850.82
12-Jul-91M FILES/RECORD ROOM-DALLAS M*200 5.00 8837.08 0.00 8837.08 6797.35 2039.73 8837.08
12-Jul-91M SHREDDER & STAND M*200 5.00 2192.01 0.00 2192.01 1686.19 505.82 2192.01
01-Aug-91M TWO FAX MACHINES M*200 5.00 676.57 0.00 676.57 559.62 116.95 676.57
01-Aug-91M FILE BOXES, LABELS M*200 5.00 11791.31 0.00 11791.31 8692.07 3099.24 11791.31
01-Aug-91M TWO FAX MACHINES M*200 5.00 676.56 0.00 676.56 559.62 116.94 676.56
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.78 0.00 122.78 94.43 28.35 122.78
16-Aug-91M 5 LATERAL FILE CAB/1 FIREPROOF M*200 5.00 199.72 0.00 199.72 153.60 46.12 199.72
16-Aug-91M 5 LATERAL FILE CAB/1 FIREPROOF M*200 5.00 199.72 0.00 199.72 153.60 46.12 199.72
16-Aug-91M 5 LATERAL FILE CAB/1 FIREPROOF M*200 5.00 199.72 0.00 199.72 153.60 46.12 199.72
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 1500.00 0.00 1500.00 1153.63 346.37 1500.00
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 8' CONF. TABLE & 8 CHAIRS M*200 5.00 122.77 0.00 122.77 94.42 28.35 122.77
16-Aug-91M 5 LATERAL FILE CAB/1 FIREPROOF M*200 5.00 199.73 0.00 199.73 153.61 46.12 199.73
03-Sep-91M FILE SHELVING-HOUSTON M*200 5.00 3122.47 0.00 3122.47 2401.81 720.66 3122.47
06-Sep-91M DICTAPHONES-5 M*200 5.00 2180.14 0.00 2180.14 1728.25 451.89 2180.14
04-Oct-91M BOOKCASE M*200 5.00 70.37 0.00 70.37 70.37 0.00 70.37
04-Oct-91M 4 5-DRAWER LATERAL FILES M*200 5.00 209.46 0.00 209.46 209.46 0.00 209.46
04-Oct-91M 4 5-DRAWER LATERAL FILES M*200 5.00 209.46 0.00 209.46 209.46 0.00 209.46
04-Oct-91M 4 5-DRAWER LATERAL FILES M*200 5.00 209.46 0.00 209.46 209.46 0.00 209.46
07-Oct-91M RECONFIGURATION-LABOR M*200 5.00 1.56 0.00 1.56 1.56 0.00 1.56
30-Oct-91M 2 DICTAMITE MACHINES M*200 5.00 1512.54 0.00 1512.54 1132.13 380.41 1512.54
19-Nov-91M MAIL BINS & SHELVES-DALLAS M*200 5.00 1813.19 0.00 1813.19 1305.87 507.32 1813.19
09-Jan-92M UPGRADE TELEPHONE SYSTEM M*200 5.00 5000.00 0.00 5000.00 3265.59 1541.70 4807.29
10-Jan-92M NINE WORKSTATIONS M*200 5.00 11203.88 0.00 11203.88 7394.46 3386.15 10780.61
15-Jan-92M TWO FAX MACHINES M*200 5.00 973.17 0.00 973.17 719.61 225.39 945.00
15-Jan-92M TWO FAX MACHINES M*200 5.00 973.17 0.00 973.17 719.61 225.39 945.00
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.94 0.00 405.94 265.15 125.15 390.30
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.94 0.00 405.94 265.15 125.15 390.30
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.94 0.00 405.94 265.15 125.15 390.30
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.93 0.00 405.93 265.14 125.15 390.29
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.94 0.00 405.94 280.58 111.43 392.01
29-Jan-92M 6 5-DRAWER LATERAL FILES M*200 5.00 405.94 0.00 405.94 265.15 125.15 390.30
05-Feb-92M TELEPHONE SYSTEM M*200 5.00 21904.33 0.00 21904.33 14315.11 6745.97 21061.08
26-Feb-92M TELEPHONE SYSTEM M*200 5.00 4596.61 0.00 4596.61 2976.98 1439.67 4416.65
06-Mar-92M NINE FILES FOR ATLANTA M*200 5.00 1653.75 0.00 1653.75 1070.95 518.04 1588.99
12-Mar-92M 6 DESKS M*200 5.00 192.30 0.00 192.30 124.52 60.25 184.77
12-Mar-92M 6 DESKS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 6 DESKS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 6 DESKS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 5 CREDENZAS M*200 5.00 192.30 0.00 192.30 124.52 60.25 184.77
12-Mar-92M 5 CREDENZAS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 5 CREDENZAS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 5 CREDENZAS M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
12-Mar-92M 3 FIREPROOF VERTICAL FILES M*200 5.00 694.96 0.00 694.96 450.03 217.72 667.75
12-Mar-92M 3 FIREPROOF VERTICAL FILES M*200 5.00 694.97 0.00 694.97 450.04 217.72 667.76
12-Mar-92M 3 FIREPROOF VERTICAL FILES M*200 5.00 694.97 0.00 694.97 450.04 217.72 667.76
12-Mar-92M UPGRADE TELEPHONE SYSTEM M*200 5.00 7726.09 0.00 7726.09 5003.39 2420.18 7423.57
12-Mar-92M 2 ROUND TABLES-47" DIAMETER M*200 5.00 192.31 0.00 192.31 124.53 60.25 184.78
01-May-92M TWO DESKS M*200 5.00 514.19 0.00 514.19 309.86 148.60 458.46
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
01-May-92M ELEVEN CHAIRS M*200 5.00 112.87 0.00 112.87 68.02 32.62 100.64
08-May-92M SHELVING-FILE ROOM M*200 5.00 1660.66 0.00 1660.66 1000.88 479.84 1480.72
20-May-92M FAX MACHINE M*200 5.00 886.10 0.00 886.10 607.16 202.87 810.03
21-May-92M COMPUTER ROOM EQUIPMENT M*200 5.00 816.96 0.00 816.96 492.14 236.23 728.37
29-May-92M INSTALL LINES,PHONES,EXTS. M*200 5.00 668.59 0.00 668.59 402.60 193.45 596.05
30-Jun-92M THREE LATERAL FILES M*200 5.00 225.00 0.00 225.00 164.92 43.69 208.61
30-Jun-92M THREE LATERAL FILES M*200 5.00 225.00 0.00 225.00 164.92 43.69 208.61
30-Jun-92M FILE ROOM SHELVES M*200 5.00 546.66 0.00 546.66 400.69 106.16 506.85
30-Jun-92M 2 TWO DRAWER LATERAL FILE M*200 5.00 140.73 0.00 140.73 103.14 27.34 130.48
31-Jul-92M PAPER SHREDDER M*200 5.00 433.00 0.00 433.00 313.17 73.74 386.91
29-Sep-92M FILE ROOM SHELVING M*200 5.00 1732.05 0.00 1732.05 1252.73 294.97 1547.70
29-Sep-92M ICE MACHINE M*200 5.00 1839.16 0.00 1839.16 1330.20 313.21 1643.41
</TABLE>
<PAGE> 123
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
28-Oct-92M GUEST CHAIR-2 M*200 5.00 81.64 0.00 81.64 59.05 12.05 71.10
28-Oct-92M GUEST CHAIR-2 M*200 5.00 81.64 0.00 81.64 59.05 12.05 71.10
28-Oct-92M STENO CHAIR-4 M*200 5.00 61.52 0.00 61.52 44.50 9.08 53.58
28-Oct-92M STENO CHAIR-4 M*200 5.00 61.52 0.00 61.52 44.50 9.08 53.58
28-Oct-92M STENO CHAIR-4 M*200 5.00 61.52 0.00 61.52 44.50 9.08 53.58
28-Oct-92M STENO CHAIR-4 M*200 5.00 61.52 0.00 61.52 44.50 9.08 53.58
28-Oct-92M JR EXEC CHAIR M*200 5.00 143.84 0.00 143.84 104.04 21.23 125.27
27-Jan-93M SHELVES FOR FILE ROOM M*200 5.00 704.60 0.00 704.60 436.30 126.26 562.56
19-Apr-93M PLAIN PAPER FAX M*200 5.00 2484.34 0.00 2484.34 1679.42 338.91 2018.33
29-Apr-93M 4 DRAWER VERTICAL FIREPROOF CABINET-FDIC M*200 5.00 582.94 0.00 582.94 360.96 93.47 454.43
29-Apr-93M 4 DRAWER VERTICAL FIREPROOF CABINET-FDIC M*200 5.00 582.93 0.00 582.93 360.95 93.47 454.42
29-Apr-93M 4 DRAWER VERTICAL FIREPROOF CABINET-FDIC M*200 5.00 582.93 0.00 582.93 360.95 93.47 454.42
29-Apr-93M FAX MACHINE-ATLANTA M*200 5.00 1011.00 0.00 1011.00 683.44 137.92 821.36
29-Apr-93M 4 DRAWER LATERAL FILE-PHOENIX M*200 5.00 157.91 0.00 157.91 97.78 25.32 123.10
29-Apr-93M 4 DRAWER LATERAL FILE-PHOENIX M*200 5.00 157.92 0.00 157.92 97.79 25.32 123.11
30-Jun-93M MICROFILM READER M*200 5.00 3986.75 0.00 3986.75 2468.64 639.20 3107.84
28-Feb-94M 2 FILE CABINETS-LEHMAN/FIRST BOSTON MA200 5.00 953.97 0.00 953.97 524.68 171.72 696.40
28-Feb-94M 2 FILE CABINETS-LEGAL MA200 5.00 302.40 0.00 302.40 166.32 54.43 220.75
28-Feb-94M 2 FILE CABINETS-LEGAL MA200 5.00 302.40 0.00 302.40 166.32 54.43 220.75
28-Jul-94M TABLE & CHAIRS-NEW JERSEY MA200 5.00 635.81 0.00 635.81 295.18 136.25 431.43
31-Jul-94M XEROX-NEW JERSEY MA200 5.00 0.01 0.00 0.01 0.01 0.00 0.01
31-Jul-94M XEROX-ATLANTA MA200 5.00 0.01 0.00 0.01 0.01 0.00 0.01
02-Aug-94M FAX MACHINE-WASHINGTON MA200 5.00 723.61 0.00 723.61 335.94 155.07 491.01
02-Aug-94M DICTAPHONE-WASHINGTON MA200 5.00 211.05 0.00 211.05 97.98 45.23 143.21
02-Aug-94M BINDER MACHINE-WASHINGTON MA200 5.00 226.12 0.00 226.12 104.98 48.46 153.44
22-Aug-94M FAX MACHINE (PLAIN PAPER) ATLANTA MA200 5.00 749.40 0.00 749.40 347.92 160.59 508.51
31-Oct-94M TELEPHONE INSTALLATION & MAINT. MA200 5.00 7193.11 0.00 7193.11 3031.32 1664.72 4696.04
31-Oct-94M - MA200 5.00 8013.20 0.00 8013.20 3376.92 1854.51 5231.43
30-Nov-94M - MA200 5.00 10905.72 0.00 10905.72 4595.89 2523.93 7119.82
30-Nov-94M - MA200 5.00 1937.86 0.00 1937.86 816.65 448.48 1265.13
30-Nov-94M - MA200 5.00 468.33 0.00 468.33 197.36 108.39 305.75
31-Dec-94M - MA200 5.00 1966.80 0.00 1966.80 828.85 455.18 1284.03
31-Dec-94M - MA200 5.00 960.00 0.00 960.00 404.56 222.18 626.74
31-Dec-94M - MA200 5.00 19406.09 0.00 19406.09 8178.12 4491.19 12669.31
31-Dec-94M - MA200 5.00 5946.98 0.00 5946.98 2506.18 1376.32 3882.50
01-Jan-95 2 486 PCI MAGNUM SERIES COMPUTER MA200 7.00 3272.04 0.00 3272.04 467.43 801.32 1268.75
01-Jan-95 BOAT TOP CONFERENCE TABLE MA200 7.00 1328.52 0.00 1328.52 189.79 325.35 515.14
01-Jan-95 ASSORTED OFFICE FURNITURE FOR NEW SPACE MA200 7.00 14155.51 0.00 14155.51 2022.22 3466.65 5488.87
01-Jan-95 ASSORTED OFFICE FURNITURE FOR NEW SPACE MA200 7.00 265.54 0.00 265.54 37.93 65.03 102.96
01-Jan-95 1 ROUND TABLE, 5 STACKER CHAIRS MA200 7.00 736.30 0.00 736.30 105.19 180.32 285.51
01-Jan-95 2 486 PCI MAGNUM SERIES COMPUTERS MA200 7.00 3272.04 0.00 3272.04 467.43 801.32 1268.75
04-Jan-95 RECEPTION AREA FURNITURE FOR NEW SPACE MA200 7.00 2477.14 0.00 2477.14 353.88 606.65 960.53
18-Jan-95 PARTIAL PAYMENT ON CABLING FOR NEW OFFICE SMA200 7.00 8325.78 0.00 8325.78 1189.40 2038.97 3228.37
18-Jan-95 FINAL PMT ON CABLING FOR NEW OFFICE SPACE MA200 7.00 9887.59 0.00 9887.59 1412.51 2421.45 3833.96
20-Jan-95 3 FIREPROOF FILE CABINETS MA200 7.00 1341.84 0.00 1341.84 191.69 328.61 520.30
23-Jan-95 BALANCE OF CONDIAL SYSTEM INSTALLATION MA200 7.00 6068.12 0.00 6068.12 866.87 1486.07 2352.94
24-Jan-95 BALANCE OF VOICE & DATA CABLING MA200 7.00 3917.51 0.00 3917.51 559.64 959.39 1519.03
24-Jan-95 CHANGE JACK LOCATIONS - 3 ROOMS MA200 7.00 552.02 0.00 552.02 78.86 135.19 214.05
01-Feb-95 3-LOTUS 123, 3-WP, 2-MS OFFICE MA200 7.00 2080.00 0.00 2080.00 297.14 509.39 806.53
01-Feb-95 3-LOTUS 123, 3-WP MA200 7.00 924.89 0.00 924.89 132.13 226.50 358.63
13-Feb-95 DOWN PMT ON COMMUNICATION SYS (VOICE & DATAMA200 7.00 5547.75 0.00 5547.75 792.54 1358.63 2151.17
24-Feb-95 ARTWORK MA200 7.00 1243.67 0.00 1243.67 177.67 304.57 482.24
24-Feb-95 INSTALLATION OF VOICE MAIL SYSTEM MA200 7.00 10700.51 0.00 10700.51 1528.64 2620.53 4149.17
24-Feb-95 ARTWORK MA200 7.00 1243.67 0.00 1243.67 177.67 304.57 482.24
01-Mar-95 INSTALLATION OF PAGING SYSTEM MA200 7.00 2639.19 0.00 2639.19 377.03 646.33 1023.36
03-Mar-95 30% DOWN PMT ON FURNITURE-DELIVERED 4/95 MA200 7.00 6609.24 0.00 6609.24 944.18 1618.59 2562.77
14-Mar-95 COMMUNICATION SYSTEM/ATLANTA (VOICE & DATA MA200 7.00 3356.21 0.00 3356.21 479.46 821.93 1301.39
14-Mar-95 AT&T PARTNER II R4.0 PHONE SYSTEM MA200 7.00 14031.72 0.00 14031.72 2004.53 3436.34 5440.87
15-Mar-95 ADM STEEL SHELVES MA200 7.00 1125.74 0.00 1125.74 160.82 275.69 436.51
24-Mar-95 T-MOLD WORKSURFACE FOR CUBE MA200 7.00 272.29 0.00 272.29 38.90 66.68 105.58
01-May-95 2 SEAT SETTEE-CORDOVAN WALNUT MA200 7.00 516.86 0.00 516.86 73.84 126.58 200.42
01-May-95 2 GUEST CHAIRS-CORDOVAN WALNUT MA200 7.00 644.15 0.00 644.15 92.02 157.75 249.77
01-May-95 END TABLE-CORDOVAN WALNUT MA200 7.00 177.05 0.00 177.05 25.29 43.36 68.65
01-May-95 COCKTAIL TABLE-CORDOVAN WALNUT MA200 7.00 200.19 0.00 200.19 28.60 49.03 77.63
01-May-95 BOAT CONFERENCE TABLE-8' 2-PIECE-CORD. WALNMA200 7.00 768.11 0.00 768.11 109.73 188.11 297.84
01-May-95 HPL PANEL BASE FOR CONF. TABLE MA200 7.00 232.20 0.00 232.20 33.17 56.87 90.04
01-May-95 8-GUEST CONFERENCE CHAIRS MA200 7.00 1444.80 0.00 1444.80 206.40 353.83 560.23
01-May-95 5-DOUBLE PEDESTAL DESKS MA200 7.00 2019.47 0.00 2019.47 288.50 494.56 783.06
01-May-95 5-KNEESPACE CREDENZAS 21X66 IN. MA200 7.00 1931.65 0.00 1931.65 275.95 473.06 749.01
01-May-95 5-EXECUTIVE SWIVEL TILT DESK CHAIRS MA200 7.00 1056.16 0.00 1056.16 150.88 258.65 409.53
01-May-95 10-GUEST CHAIRS 23W X 22.5 MA200 7.00 1454.18 0.00 1454.18 207.74 356.13 563.87
01-May-95 3-EXECUTIVE SWIVEL TILT DESK CHAIRS MA200 7.00 633.70 0.00 633.70 90.53 155.19 245.72
01-May-95 6-GUEST CHAIRS 23W X 22.5 MA200 7.00 872.51 0.00 872.51 124.64 213.68 338.32
01-May-95 DOUBLE PEDESTAL DESK 30 X 66 MA200 7.00 403.89 0.00 403.89 57.70 98.91 156.61
01-May-95 2-KNEESPACE CREDENZAS 21 X 66 MA200 7.00 772.66 0.00 772.66 110.38 189.22 299.60
01-May-95 4-GUEST SIDE CHAIRS 23W X 22.5 MA200 7.00 581.67 0.00 581.67 83.10 142.45 225.55
01-May-95 SHIPPING ON ABOVE THOMAS RUFF FURNITURE ITEMA200 7.00 105.07 0.00 105.07 15.01 25.73 40.74
01-May-95 10-36" STEELCASE LATERAL FILES W/LOCKS MA200 7.00 4703.47 0.00 4703.47 671.92 1151.87 1823.79
05-May-95 WOODBURY SERIES RECEPTION "L" DESK W/LEFT RMA200 7.00 2594.64 0.00 2594.64 370.66 635.42 1006.08
15-May-95 FAX MODEL #9640 MA200 7.00 2587.20 0.00 2587.20 369.60 633.60 1003.20
30-Jun-95 2-HAWORTH WORKSTATIONS MA200 7.00 2897.55 0.00 2897.55 413.94 709.60 1123.54
01-Jul-96A Balance on T1 card MA200 7.00 2918.19 0.00 2918.19 0.00 416.88 416.88
</TABLE>
<PAGE> 124
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Totals for ASSET A/C: 100 (494 assets) 485223.11 0.00 485223.11 280834.33 94556.67 375391.00
- -------------------------------------------------------
A/C# 200 COMPUTERS/COMPUTER EQUIP.
- -------------------------------------------------------
04-May-90M MACINTOSH SE M*200 5.00 3234.60 0.00 3234.60 3234.60 0.00 3234.60
04-May-90DM MACINTOSH SE M*200 5.00 2789.64 0.00 2789.64 2789.64 0.00 2789.64
07-Aug-90M 1 COMPUTERS M*200 5.00 2657.88 0.00 2657.88 2657.88 0.00 2657.88
07-Aug-90DM 2 COMPUTERS M*200 5.00 5315.76 0.00 5315.76 5315.76 0.00 5315.76
01-Oct-90M 2 COMPUTERS M*200 5.00 9367.36 0.00 9367.36 9367.36 0.00 9367.36
01-Oct-90DM 14 COMPUTERS M*200 5.00 47142.76 0.00 47142.76 47142.76 0.00 47142.76
24-Oct-90DM COMPUTERS M*200 5.00 1142.53 0.00 1142.53 1142.53 0.00 1142.53
30-Oct-90M 2 LASER PRINTERS M*200 5.00 4264.79 0.00 4264.79 4264.79 0.00 4264.79
30-Oct-90M LASER PRINTER M*200 5.00 1840.25 0.00 1840.25 1840.25 0.00 1840.25
06-Nov-90M 3 COMPUTERS M*200 5.00 5837.67 0.00 5837.67 5837.67 0.00 5837.67
06-Nov-90M COMPUTER EQUIPMENT M*200 5.00 1386.55 0.00 1386.55 1386.55 0.00 1386.55
06-Nov-90M NETWORKING HUBS M*200 5.00 995.68 0.00 995.68 995.68 0.00 995.68
06-Nov-90DM 2 COMPUTERS M*200 5.00 3891.78 0.00 3891.78 3891.78 0.00 3891.78
14-Nov-90M COMPUTER INSTALLATION M*200 5.00 1299.00 0.00 1299.00 1299.00 0.00 1299.00
14-Nov-90M COMPUTER EQUIPMENT M*200 5.00 6534.51 0.00 6534.51 6534.51 0.00 6534.51
04-Dec-90M COMPUTER SYSTEMS M*200 5.00 2152.01 0.00 2152.01 2152.01 0.00 2152.01
10-Dec-90M 2 HP III PRINTERS M*200 5.00 1761.12 0.00 1761.12 1761.12 0.00 1761.12
11-Dec-90M COMPUTERS & CABLING M*200 5.00 6089.17 0.00 6089.17 6089.17 0.00 6089.17
14-Dec-90M 2 LASER PRINTERS M*200 5.00 3590.00 0.00 3590.00 3590.00 0.00 3590.00
18-Dec-90M COMPUTER EQUIPMENT M*200 5.00 3405.55 0.00 3405.55 3405.55 0.00 3405.55
18-Dec-90M 6 COMPUTERS M*200 5.00 12746.02 0.00 12746.02 12746.02 0.00 12746.02
18-Dec-90DM 10 COMPUTERS M*200 5.00 21243.40 0.00 21243.40 21243.40 0.00 21243.40
03-Jan-91M 2REPORT WRITER & LOTUS M*200 5.00 70.16 0.00 70.16 70.16 0.00 70.16
08-Jan-91M COMPUTER EQUIPMENT M*200 5.00 9101.26 0.00 9101.26 8823.17 278.09 9101.26
08-Jan-91DM 6 COMPUTERS M*200 5.00 9712.18 0.00 9712.18 9415.43 111.28 9526.71
31-Jan-91M COMPUTER EQUIPMENT M*200 5.00 9592.85 0.00 9592.85 9273.01 319.84 9592.85
01-Mar-91M ACTIVE HUBS & ARCNET CARDS M*200 5.00 1680.04 0.00 1680.04 1624.04 56.00 1680.04
04-Mar-91M 386 NOVELL LICENSE M*200 5.00 5261.05 0.00 5261.05 5085.51 175.54 5261.05
04-Mar-91M LM 615 PRINTER M*200 5.00 5629.00 0.00 5629.00 5441.37 187.63 5629.00
05-Mar-91M R&R REPORT WRITER M*200 5.00 815.07 0.00 815.07 787.97 27.10 815.07
05-Mar-91M 8 COMPUTERS M*200 5.00 12322.09 0.00 12322.09 11911.35 410.74 12322.09
05-Mar-91M 5C LOTUS & WORDPERFECT M*200 5.00 3242.15 0.00 3242.15 3134.04 108.11 3242.15
05-Mar-91M LM615 PRINTER M*200 5.00 7222.25 0.00 7222.25 6981.50 240.75 7222.25
12-Mar-91M ENSAVE VAST 2.2 M*200 5.00 5715.60 0.00 5715.60 5525.10 190.50 5715.60
13-Mar-91M SIMM MEMORY MODULES M*200 5.00 194.85 0.00 194.85 188.39 6.46 194.85
18-Mar-91M FILE SERVER M*200 5.00 7677.08 0.00 7677.08 7421.24 255.84 7677.08
20-Mar-91M COMPUTER EQUIPMENT M*200 5.00 12822.21 0.00 12822.21 12394.83 427.38 12822.21
22-Mar-91M ADVANCE SYSTEMS M*200 5.00 417.85 0.00 417.85 403.97 13.88 417.85
26-Mar-91M COMPUTER EQUIPMENT M*200 5.00 750.08 0.00 750.08 716.72 33.36 750.08
26-Mar-91DM 2 COMPUTERS M*200 5.00 3440.72 0.00 3440.72 3287.71 57.38 3345.09
30-Apr-91M COMPUTER PLUS M*200 5.00 2092.85 0.00 2092.85 1921.43 171.42 2092.85
30-Jun-91M SERIAL BOARD FOR PRINTER M*200 5.00 812.50 0.00 812.50 746.03 66.47 812.50
30-Jun-91M COMPUTERS PLUS M*200 5.00 1647.26 0.00 1647.26 1467.57 179.69 1647.26
11-Jul-91M BARCODE SYSTEM/FILE ROOM M*200 5.00 4870.60 0.00 4870.60 4308.63 561.97 4870.60
12-Jul-91M COMPUTER EQUIPMENT & CONSULTING M*200 5.00 24.90 0.00 24.90 21.07 3.83 24.90
16-Jul-91M COMPUTER EQUIPMENT M*200 5.00 1650.81 0.00 1650.81 1460.44 190.37 1650.81
16-Jul-91DM 1 COMPUTER M*200 5.00 2327.38 0.00 2327.38 2058.98 100.65 2159.63
01-Aug-91M FILE SERVER M*200 5.00 991.57 0.00 991.57 877.24 114.33 991.57
07-Aug-91M COMPUTER EQUIPMENT & CONSULTING M*200 5.00 975.60 0.00 975.60 863.08 112.52 975.60
13-Aug-91M 3 ACTIVE HUBS M*200 5.00 1082.50 0.00 1082.50 957.42 125.08 1082.50
14-Aug-91M 15 ARCNET CARDS M*200 5.00 4557.33 0.00 4557.33 4031.67 525.66 4557.33
14-Aug-91M 10 COMPUTERS M*200 5.00 18802.94 0.00 18802.94 16633.26 2169.68 18802.94
14-Aug-91DM 2 COMPUTERS M*200 5.00 3760.00 0.00 3760.00 3326.03 162.74 3488.77
14-Aug-91DM 3 COMPUTERS M*200 5.00 5640.99 0.00 5640.99 4990.07 244.10 5234.17
04-Sep-91M COMPUTER M*200 5.00 1880.30 0.00 1880.30 1663.45 216.85 1880.30
06-Sep-91M LASER PRINTER - ABQ M*200 5.00 1638.01 0.00 1638.01 1449.28 188.73 1638.01
19-Sep-91M 2 LASER PRINTERS M*200 5.00 5087.75 0.00 5037.75 4470.03 567.72 5037.75
31-Oct-91M 1 COMPUTER M*200 5.00 1451.09 0.00 1451.09 1247.92 203.16 1451.08
31-Oct-91DM 1 COMPUTER M*200 5.00 1451.09 0.00 1451.09 1247.93 76.19 1324.12
06-Nov-91M COMPUTERS PLUS, INC. M*200 5.00 2836.15 0.00 2836.15 2439.11 397.04 2836.15
15-Nov-91M COMPUTERS M*200 5.00 1451.09 0.00 1451.09 1247.92 203.17 1451.09
19-Nov-91M DIRECT COMPUTER SUPERSTORES M*200 5.00 1277.35 0.00 1277.35 1098.44 178.91 1277.35
03-Dec-91M COMPUTERS PLUS M*200 5.00 3582.92 0.00 3582.92 3081.37 501.55 3582.92
18-Dec-91M DELL COMPUTER M*200 5.00 11411.71 0.00 11411.71 9814.01 1597.70 11411.71
18-Dec-91M NOVELL NETWARE M*200 5.00 4581.14 0.00 4581.14 3939.84 641.30 4581.14
19-Dec-91M PRINTER M*200 5.00 2370.68 0.00 2370.68 2038.96 331.72 2370.68
31-Dec-91M Ethernet Cards M*200 5.00 3967.52 0.00 3967.52 3412.36 555.16 3967.52
31-Dec-91M 2 12 HG HUBS M*200 5.00 1385.60 0.00 1385.60 1191.60 194.00 1385.60
19-Jan-92M 2 LASER PRINTERS M*200 5.00 3572.26 0.00 3572.26 2795.84 690.15 3485.99
19-Jan-92M 4 COMPUTERS M*200 5.00 5795.68 0.00 5795.68 4536.29 1119.46 5655.75
19-Jan-92DM 6 COMPUTERS M*200 5.00 8693.58 0.00 8693.58 6804.49 629.70 7434.19
26-Feb-92M COMPUADD M*200 5.00 1199.44 0.00 1199.44 925.35 243.64 1168.99
26-Feb-92M LASER PRINTER M*200 5.00 2477.84 0.00 2477.84 1912.09 502.89 2414.98
26-Feb-92M COMPUTER M*200 5.00 1736.33 0.00 1736.33 1339.68 352.58 1692.26
04-Mar-92M NETWORK CARDS M*200 5.00 4844.90 0.00 4844.90 3685.12 1030.92 4716.04
04-Mar-92M 3 COMPUTERS M*200 5.00 2711.67 0.00 2711.67 2062.81 576.76 2639.57
12-May-92M PRINTER, BACKUP TAPES M*200 5.00 1406.17 0.00 1406.17 1021.38 279.85 1301.23
12-May-92M UPGRADES/ENHANCEMENTS M*200 5.00 3901.33 0.00 3901.33 2833.37 776.70 3610.07
</TABLE>
<PAGE> 125
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12-May-92M MODEM/FILLER M*200 5.00 1470.04 0.00 1470.04 1067.37 292.85 1360.22
12-May-92M A1600 PRINTER M*200 5.00 1786.13 0.00 1786.13 1297.32 355.50 1652.82
12-May-92M ETHERNET BOARD M*200 5.00 173.20 0.00 173.20 125.89 34.41 160.30
30-Jun-92M GREAT PLAINS SOFTWARE CORP. - GA M*200 5.00 3924.06 0.00 3924.06 3187.99 535.32 3723.31
30-Jun-92M REPLACE MONITOR M*200 5.00 454.74 0.00 454.74 369.44 62.04 431.48
30-Jun-92M LASER JET III PRINTER M*200 5.00 1652.70 0.00 1652.70 1342.69 225.46 1568.15
30-Jun-92M 386 SYSTEM BOARD M*200 5.00 399.99 0.00 399.99 324.96 54.57 379.53
30-Jun-92M MODEM M*200 5.00 703.63 0.00 703.63 571.64 95.99 667.63
31-Jul-92M ETHERNET CARDS M*200 5.00 1060.85 0.00 1060.85 854.63 126.90 981.53
31-Jul-92M EPSON PRINTER M*200 5.00 372.38 0.00 372.38 300.00 44.54 344.54
31-Jul-92M 3 COMPUTERS M*200 5.00 5796.79 0.00 5796.79 4669.89 693.48 5363.37
22-Sep-92M DEDICATED CIRCUIT FOR REOMS M*200 5.00 3707.56 0.00 3707.56 2986.82 443.53 3430.35
29-Dec-92M HARD DRIVE FOR FILE SERVER M*200 5.00 2664.03 0.00 2664.03 2146.14 276.21 2422.35
29-Dec-92M FAX MODEM M*200 5.00 280.37 0.00 280.37 225.87 29.07 254.94
29-Dec-92M CORPORATE FIXED ASSET SOFTWARE M*200 5.00 795.00 0.00 795.00 640.45 82.43 722.88
18-Jan-93M ETHERNET HUB M*200 5.00 676.56 0.00 676.56 418.94 121.23 540.17
27-Jan-93M 450M PC ACQUISITIONS M*200 5.00 4235.82 0.00 4235.82 2863.42 645.84 3509.26
27-Jan-93M TURBO PLUS MODEM - ACQUISITIONS M*200 5.00 313.93 0.00 313.93 212.21 47.87 260.08
27-Jan-93M DESK JET 550C PRINTER M*200 5.00 741.51 0.00 741.51 501.26 113.06 614.32
09-Feb-93M WORD PERFECT 5.1/WINDOWS M*200 5.00 296.61 0.00 296.61 200.51 45.22 245.73
09-Feb-93M FICS COMMERCIAL LOAN SERVICING SYSTEM M*200 5.00 24626.87 0.00 24626.87 16647.77 3754.87 20402.64
24-Feb-93M NETWARE V3.11 M*200 5.00 2165.00 0.00 2165.00 1463.54 330.10 1793.64
25-Feb-93M GREAT PLAINS SOFTWARE M*200 5.00 3875.35 0.00 3875.35 2619.74 590.88 3210.62
26-Feb-93M PROGRAMMING HISTORY FILES M*200 5.00 4330.00 0.00 4330.00 2927.08 660.20 3587.28
24-Mar-93M UNIVERSAL POWER SUPPLY M*200 5.00 503.36 0.00 503.36 340.27 76.75 417.02
24-Mar-93M 5.0 GIG TRU M*200 5.00 5625.75 0.00 5625.75 3803.01 857.76 4660.77
31-Mar-93M 3 ETHERNET HUBS & 30 CARDS M*200 5.00 5250.13 0.00 5250.13 3549.08 800.49 4349.57
31-Mar-93M FICS UPGRADE M*200 5.00 7577.50 0.00 7577.50 5122.39 1155.35 6277.74
31-Mar-93M LASERJET 4 PRINTER M*200 5.00 1488.44 0.00 1488.44 1006.18 226.95 1233.13
27-Apr-93M LINE CONDITIONERS FOR FILE SERVERS M*200 5.00 482.64 0.00 482.64 326.26 65.84 392.10
27-Apr-93M SOFTWARE @ EDIT 1.55 M*200 5.00 354.00 0.00 354.00 239.30 48.29 287.59
29-Apr-93M LASERJET PRINTER 4SI M*200 5.00 3246.42 0.00 3246.42 2194.58 442.88 2637.46
29-Apr-93M NETWORK SOFTWARE M*200 5.00 612.70 0.00 612.70 414.18 83.59 497.77
29-Apr-93M COMPUTER M*200 5.00 2595.84 0.00 2595.84 1754.78 354.13 2108.91
29-Apr-93M COMPUTER M*200 5.00 2595.84 0.00 2595.84 1754.78 354.13 2108.91
29-Apr-93M COMPUTER M*200 5.00 2595.84 0.00 2595.84 1754.78 354.13 2108.91
29-Apr-93M COMPUTER M*200 5.00 2595.84 0.00 2595.84 1754.78 354.13 2108.91
29-Apr-93M COMPUTER M*200 5.00 2595.84 0.00 2595.84 1754.78 354.13 2108.91
29-Apr-93M MEMORY UPGRADE M*200 5.00 1759.06 0.00 1759.06 1189.13 239.97 1429.10
30-Apr-93M ETHERNET CARDS M*200 5.00 189.44 0.00 189.44 128.06 25.84 153.90
21-May-93M ACCION ETHERNET CARDS M*200 5.00 644.09 0.00 644.09 435.41 87.87 523.28
25-May-93M NETWARE UPGRADE M*200 5.00 3685.91 0.00 3685.91 2491.68 502.83 2994.51
25-May-93M LASERJET PRINTER 4SI M*200 5.00 3342.76 0.00 3342.76 2259.71 456.02 2715.73
28-May-93M LICENSE UPGRADE-LOTUS 3.4A M*200 5.00 6427.89 0.00 6427.89 4345.25 876.90 5222.15
28-May-93M MS FOXPRO V2.5 DOS M*200 5.00 644.77 0.00 644.77 435.87 87.96 523.83
28-May-93M 486 COMPUTER M*200 5.00 2451.33 0.00 2451.33 1657.10 334.41 1991.51
28-May-93M 486 COMPUTER M*200 5.00 2451.33 0.00 2451.33 1657.10 334.41 1991.51
28-May-93M 486 COMPUTER M*200 5.00 2451.33 0.00 2451.33 1657.10 334.41 1991.51
28-May-93M 486 COMPUTER M*200 5.00 2451.33 0.00 2451.33 1657.10 334.41 1991.51
28-May-93M LOTUS M*200 5.00 624.65 0.00 624.65 422.26 85.22 507.48
30-Jun-93M AST 486 SX25 M*200 5.00 1526.33 0.00 1526.33 1031.80 208.22 1240.02
30-Jun-93M MEMORY M*200 5.00 535.84 0.00 535.84 362.23 73.10 435.33
30-Jun-93M MEMORY M*200 5.00 1407.24 0.00 1407.24 951.29 191.98 1143.27
30-Jun-93M MEMORY M*200 5.00 535.84 0.00 535.84 362.23 73.10 435.33
30-Jun-93M MEMORY M*200 5.00 535.84 0.00 535.84 362.23 73.10 435.33
30-Jun-93M HARVARD GRAPHICS M*200 5.00 438.59 0.00 438.59 296.49 59.83 356.32
27-Aug-93M SCANJET IIP INTERFACE MA200 5.00 778.32 0.00 778.32 526.14 100.87 627.01
27-Aug-93M TYPEREADER - WINDOWS MA200 5.00 514.19 0.00 514.19 347.59 66.64 414.23
27-Aug-93M COMPUTER MA200 5.00 2105.46 0.00 2105.46 1423.29 272.87 1696.16
27-Aug-93M JET DIRECT CARD MA200 5.00 405.94 0.00 405.94 274.41 52.61 327.02
31-Aug-93M AUTO DOCUMENT FEEDER MA200 5.00 286.86 0.00 286.86 193.92 37.18 231.10
16-Sep-93M UNKNOWN MA200 5.00 3767.36 0.00 3767.36 2546.74 488.25 3034.99
20-Oct-93M UNKNOWN MA200 5.00 1488.44 0.00 1488.44 1006.30 192.86 1199.16
28-Feb-94M COMPUTER MA200 5.00 1723.29 0.00 1723.29 1051.21 268.83 1320.04
28-Feb-94M COMPUTER MA200 5.00 1723.29 0.00 1723.29 1051.21 268.83 1320.04
28-Feb-94M COMPUTER MA200 5.00 1723.29 0.00 1723.29 1051.21 268.83 1320.04
21-Mar-94M COLOR MONITOR MA200 5.00 300.00 0.00 300.00 183.00 46.80 229.80
21-Mar-94M COLOR MONITOR MA200 5.00 300.00 0.00 300.00 183.00 46.80 229.80
21-Mar-94M COLOR MONITOR MA200 5.00 300.00 0.00 300.00 183.00 46.80 229.80
21-Mar-94M LOTUS & WORDPERFECT MA200 5.00 1840.80 0.00 1840.80 1380.56 184.10 1564.66
30-Mar-94M BUFFALO BOX CABLES MA200 5.00 994.82 0.00 994.82 606.84 155.19 762.03
14-Jul-94M UNKNOWN MA200 5.00 7657.61 0.00 7657.61 3752.23 1562.15 5314.38
31-Aug-94M UNKNOWN MA200 5.00 761.99 0.00 761.99 373.38 155.44 528.82
30-Sep-94M UNKNOWN MA200 5.00 5855.30 0.00 5855.30 2869.10 1194.48 4063.58
15-Nov-94M UNKNOWN MA200 5.00 4350.50 0.00 4350.50 1870.72 991.91 2862.63
01-Mar-95 INSIG MA200 5.00 3357.00 0.00 3357.00 671.40 1074.24 1745.64
03-Mar-95 ATL NETWORK MA200 5.00 337.87 0.00 337.87 67.57 108.12 175.69
01-Aug-95 ORBIT MA200 5.00 5825.00 0.00 5825.00 1165.00 1864.00 3029.00
01-Aug-95 2 HP JETDIRECT PRINTERS MA200 5.00 1106.94 0.00 1106.94 221.39 354.22 575.61
01-Aug-95 ACER 486VLB DX4 W/ZIF 25 @$1,165.00 MA200 5.00 1165.00 0.00 1165.00 233.00 372.80 605.80
18-Sep-95 7-AMD 486DX4/100MHZ 3.3V MA200 5.00 8155.00 0.00 8155.00 1631.00 2609.60 4240.60
22-Oct-95 7-AMD 486DX4/100MHZ 3.3V MA200 5.00 8155.00 0.00 8155.00 1631.00 2609.60 4240.60
22-Oct-95 6-AMD 486DX4/100MHZ 3.3V MA200 5.00 7545.00 0.00 7545.00 1509.00 2414.40 3923.40
</TABLE>
<PAGE> 126
ASSET DEPRECIATION SHORT REPORT - SORTED BY ASSET A/C
COMPANY: NRA
METHOD: 1 FEDERAL Std Conv Applied YEAR END: 12/31/96
NOTES: Range: 100-300 Include: All assets
<TABLE>
<CAPTION>
includes Section 179
--------------------------------
Date Acq. Description Meth. Life Cost Sec. 179 Depr. Basis Beg A/Depr Curr Depr End A/Depr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
20-Nov-95 HJ LJ4 PRINTER MA200 5.00 2590.16 0.00 2590.16 518.03 828.85 1346.88
29-Nov-95 BACKUP MACHINE FOR ALL 6 OFFICES MA200 5.00 4031.62 0.00 4031.62 806.32 1290.12 2096.44
01-Dec-95 MICRON COMPUTERS MA200 5.00 1655.62 0.00 1655.62 331.12 529.80 860.92
01-Dec-95 MICRON COMPUTERS MA200 5.00 8180.10 0.00 8180.10 1636.02 2617.63 4253.65
29-Dec-95 ORBIT MA200 5.00 1407.31 0.00 1407.31 281.46 450.34 731.80
29-Dec-95 CDW COMPUTERS MA200 5.00 1441.73 0.00 1441.73 288.35 461.35 749.70
31-Dec-95 MICRON COMPUTERS MA200 5.00 1636.02 0.00 1636.02 327.20 523.53 850.73
31-Dec-95 PERIFITECH MA200 5.00 4392.53 0.00 4392.53 878.51 1405.61 2284.12
31-Dec-95 MICRON COMPUTERS MA200 5.00 1135.50 0.00 1135.50 227.10 363.36 590.46
31-Dec-95 PERIFITECH MA200 5.00 4451.00 0.00 4451.00 890.20 1424.32 2314.52
31-Dec-95 PERIFITECH MA200 5.00 2892.77 0.00 2892.77 578.55 925.69 1504.24
01-Feb-96A 4-Acer 486 VLB Complete MA200 5.00 4814.39 0.00 4814.39 0.00 962.88 962.88
01-Feb-96A 2-Simms 32MB MA200 5.00 2236.50 0.00 2236.50 0.00 447.30 447.30
01-Feb-96A V Aerial Pentium Server, 32 MB Simms MA200 5.00 11322.05 0.00 11322.05 0.00 2264.41 2264.41
01-Feb-96A APC Smart Ups Online MA200 5.00 1129.54 0.00 1129.54 0.00 225.91 225.91
01-Feb-96A Aerial Pentium Server & Disk 32 MB Si MA200 5.00 16804.67 0.00 16804.67 0.00 3360.93 3360.93
01-Mar-96A Upgrade for Laptop-Winbook XP5 MA200 5.00 3476.94 0.00 3476.94 0.00 695.39 695.39
01-Mar-96A Upgrade for Laptop-Winbool XP5 MA200 5.00 3476.94 0.00 3476.94 0.00 695.39 695.39
01-Apr-96A Aerial Pentium Server L100/0 MA200 5.00 4759.49 0.00 4759.49 0.00 951.90 951.90
01-Apr-96A 2-64MB simms 70ns MA200 5.00 4952.25 0.00 4952.25 0.00 990.45 990.45
01-Apr-96A Aerial 8 Device Power Hot Swap MA200 5.00 1543.18 0.00 1543.18 0.00 308.64 308.64
01-Apr-96A 4 Aerial 4.2 Gb Disk MA200 5.00 5959.74 0.00 5959.74 0.00 1191.95 1191.95
01-Apr-96A APC Smart UPS 2200 Online MA200 5.00 1125.00 0.00 1125.00 0.00 225.00 225.00
01-Apr-96A HP LJ4 12PPM & Universal Tray MA200 5.00 1726.76 0.00 1726.76 0.00 345.35 345.35
01-May-96A Netware 4.1 25 user external CD-ROM MA200 5.00 4025.84 0.00 4025.84 0.00 805.17 805.17
01-Jun-96A 3-Power Builder-Data Modeling & Prog. MA200 5.00 19653.01 0.00 19653.01 0.00 3930.60 3930.60
01-Jun-96A NOV*IX Client Server-10 user MA200 5.00 1475.00 0.00 1475.00 0.00 295.00 295.00
01-Jun-96A Connect Microfost 2 Mail & 2 SMTP-UN MA200 5.00 2209.68 0.00 2209.68 0.00 441.94 441.94
01-Jun-96A Novell 3.12 SN#00288037 MA200 5.00 2239.13 0.00 2239.13 0.00 447.83 447.83
01-Jun-96A VAerial Pentium Server, 32MB Simms MA200 5.00 15782.27 0.00 15782.27 0.00 3156.45 3156.45
01-Jul-96A 64MB Simms,Pentium Upgrade MA200 5.00 3395.17 0.00 3395.17 0.00 679.03 679.03
01-Jul-96A MA200 5.00 0.00 0.00 0.00 0.00 0.00 0.00
01-Jul-96A Aerial & Device Power Swap, 4.2Gb disk MA200 5.00 5082.22 0.00 5082.22 0.00 1016.44 1016.44
01-Jul-96A Aerial 8 Device Tower,Int 8Gb DAT-drive MA200 5.00 4853.24 0.00 4853.24 0.00 970.65 970.65
01-Jul-96A CPU,Intel Pentium 100 MHZ MA200 5.00 1246.79 0.00 1246.79 0.00 249.36 249.36
01-Jul-96A 2 Network 3 User upgrades MA200 5.00 2806.00 0.00 2806.00 0.00 561.20 561.20
01-Sep-96A CPU, Intel Pentium 100 MHZ MA200 5.00 1234.00 0.00 1234.00 0.00 246.80 246.80
01-Sep-96A CPU, Intel Pentium 100 MHZ MA200 5.00 1234.00 0.00 1234.00 0.00 246.80 246.80
01-Sep-96A CPU, Intel Pentium 100 MHZ MA200 5.00 1234.00 0.00 1234.00 0.00 246.80 246.80
01-Sep-96A CPU, Intel Pentium 100 MHZ MA200 5.00 1234.00 0.00 1234.00 0.00 246.80 246.80
01-Oct-96A Three-user Network upgrade MA200 5.00 1050.00 0.00 1050.00 0.00 210.00 210.00
01-Oct-96A Internal 8Gb Aerial DAT Drive & Cbl MA200 5.00 1259.38 0.00 1259.38 0.00 251.88 251.88
01-Nov-96A CPU, Intel Pentium 100 MHZ MA200 5.00 2478.00 0.00 2478.00 0.00 495.60 495.60
01-Dec-96A CPU, Intel Pentium 166 MHZ MA200 5.00 1509.05 0.00 1509.05 0.00 301.81 301.81
31-Dec-96A CPU 100 100MHZ Pentium Processor MA200 5.00 1332.45 0.00 1332.45 0.00 266.49 266.49
Totals for ASSET A/C: 200 756029.49 0.00 755979.49 481297.93 576913.04
Less: Disposed Assets (Curr Depr: 1382.04) 116551.81 0.00 116551.81 112656.51 114038.55
---------- ----- --------- --------- ---------
Net Totals for ASSET A/C: 200 (206 assets) 639477.68 0.00 639427.68 368641.42 95615.11 462874.49
- ------------------------------------------------------- ========== ===== ========= ========= ======== =========
A/C# 300 BUILDINGS
- -------------------------------------------------------
30-Nov-94 PORTER, WRIGHT, MORRIS & ARHTUR MSL 40.00 8500.00 0.00 8500.00 221.60 212.50 434.10
01-Dec-94 PURCHASE OF BUILDING MSL 40.00 1022655.00 0.00 1022655.00 26951.50 25566.38 52517.88
31-Dec-94 ARCON INTERESTS MSL 40.00 76340.02 0.00 76340.02 1990.18 1908.50 3898.68
30-Jan-95 ARCON INTERESTS MSL 40.00 21067.68 0.00 21067.68 504.75 526.69 1031.44
31-May-95 ARCCON INTERESTS MSL 40.00 3909.86 0.00 3909.86 61.09 97.75 158.84
Totals for ASSET A/C: 300 (5 assets) 1132472.56 0.00 1132472.56 29729.12 28311.82 58040.94
========== ===== ========== ======== ======== ========
Grand Totals for all accounts: 2373725.16 0.00 2373675.16 791861.38 1010344.98
Less: Disposed assets (Curr Depr: 1382.04) 116551.81 0.00 116551.81 112656.51 114038.55
---------- ----- ---------- --------- ----------
Net Totals for all accounts: (705 assets) 2257173.35 0.00 2257123.35 679204.87 218483.60 896306.43
========== ===== ========== ========= ========= ==========
</TABLE>
Codes that may appear next to date acquired: A-Addition, D-Disposal,
T-Traded, M-Mid Quarter Applied
<PAGE> 127
SCHEDULE 4.1(g)
CONTRACTS AND OTHER INSTRUMENTS
Seller operates under the following asset management and disposition contracts:
1. PAMI/ALI-NorthCorp Master Asset Management and Servicing Agreement;
2. Asset Management and Servicing Agreement between Columbus Realty
Investment Corporation and Columbus Property Corporation and NorthCorp Realty
Advisors, Inc.;
3. Sub-Servicing Agreement with EQ Services;
4. Sub-Servicing Agreement with AMRESCO Management Inc.; and
5. Subservicing Agreement between CMC TEJV-1, L.L.C. and Crown
NorthCorp, Inc.
Crown Revenue Services operates under asset management and disposition
contracts with:
1. The Board of Participants of Port Liberte Partners;
2. CRS Bond Portfolio, L.P. and CRS Bond Portfolio I, L.P.
Eastern Realty Corporation operates under the following asset management
contracts:
1. A Loan Advisory Agreement with COMAC Ramser Properties, LLC;
2. An Advisory Agreement with COMAC West Partners, L.P.;
3. A Portfolio Management Agreement with COMAC Ramser Properties, LLC;
4. A Management Agreement with Baltimore Portfolio REO Holdings, L.P.;
5. An Advisory Agreement Potomac Mid-Atlantic Partners, L.P.;
6. A Portfolio Management Agreement with Potomac Mid-Lantic Partners,
L.P.; and
7. A Portfolio Management Agreement with Providence Land Partners,
L.P.
Other agreements, instruments, leases, licenses, arrangements or understandings
under which the Seller and its Subsidiaries operate are set forth on Schedule
4.1(f) [Properties] and Schedule 4.1 (k) [Intellectual Property Rights].
<PAGE> 128
SCHEDULE 4.1(h)
EMPLOYEES
(i) See attached benefit summary
(ii) No information to be scheduled
(iii) No information to be scheduled
(iv) No information to be scheduled
(v) No information to be scheduled
(vi) See attached schedule
<PAGE> 129
EMPLOYEE BENEFITS SUMMARY
VACATION
Vacation is accrued as follows:
Initial Partial Year Pro Rata (Maximum of 5 days)
Calendar Years 1-4 10 days per year
Calendar Years 5-9 15 days per year
Over 10 Years 20 days per year
HOLIDAYS
The following days are observed as paid holidays:
New Years Day
Martin Luther King Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
The Day after Thanksgiving
Christmas Day
SICK LEAVE/DISABILITY PAY
An employee is entitled to 5 days of sick leave per year, and may
carry over up to five sick days into the following calendar year.
An employee is entitled to half-pay for up to twenty days of a
disability.
PERSONAL DAYS
An employee is entitled to two personal days which may not be carried
over.
TUITION REIMBURSEMENT
The company currently provides tuition reimbursement up to an annual
maximum of $1,000 for classes in a related field.
<PAGE> 130
EMPLOYEE BENEFITS SUMMARY
PAGE 2
COMPANY PAID INSURANCE
Health insurance is provided through Avalon Benefits Services. The
company pays for the employee's share of premiums, and the company fully funds
a Medical Incentive Reimbursement Account. The plan has a PPO attached with
both in and out of network benefits. The PPO's are office specific.
A life insurance policy in the amount of twice annual salary, not to
exceed $50,000, is provided through Erie Life.
VOLUNTARY INSURANCE
Short-term and long-term disability are available on a payroll
deduction basis through Paul Revere.
Dental insurance is available on a payroll deduction basis through
American Prepaid Dental.
401(k)
An employee retirement program or 401(k) is offered through T. Rowe
Price. Employees can differ up to 15% of their pay, up to current IRS maximums.
The company will match 25% of deferral contributed, not exceeding 1% of the
employee's annual salary or 25% of maximum deferral allowed.
125 FLEXIBLE SPENDING ACCOUNT
A flexible spending account is set up through Avalon benefits for
pre-tax deductions for all insurance premiums, excluding disability, dependent
care and medical expenses.
<PAGE> 131
CROWN // NORTHCORP
EMPLOYEE LISTING AS OF MARCH 28, 1997
<TABLE>
<CAPTION>
ANNUALIZED
LAST NAME FIRST NAME LOCATION SALARY
- --------- ---------- -------- ----------
<S> <C> <C> <C>
Roark Ronald Columbus $300,000
Friedberg Rob Hoboken $125,000
Rollins Jay D.C. $125,000
Brock Richard Columbus $115,000
Stanley William Atlanta $115,000
Melchi Dean Columbus $110,000
Druseikis Ray Columbus $90,750
Jenkins Grace Columbus $90,000
Jacoby Robert D.C. $88,147
Farrell, Jr. Robert Hoboken $88,000
Clayton Mark Atlanta $84,000
Barnett Don Columbus $80,000
Lewis Ricky Dallas $78,900
Lloyd Jerry Atlanta $77,250
Sanders III John Dallas $77,250
Wilson David Dallas $76,000
TOTAL EMPLOYEES 16 $1,720,297
</TABLE>
<PAGE> 132
SCHEDULE 4.1(j)
AUTHORITY TO SELL
Except for such consents or filings as may be required by various state Blue
Sky laws, no consents, authorizations, approvals, orders, licenses,
certificates or permits of or from, or declarations of filings, with any
federal, state, local, or other government authority or any court or other
tribunal are required.
No consents of any party to any contract, agreement, instrument, lease,
license, arrangement or understanding to which the Seller or and Subsidiary is
a party, or to which it or any of its businesses, properties, or assets are
subject, are required.
<PAGE> 133
SCHEDULE 4.1(k)
INTELLECTUAL PROPERTY RIGHTS
The Seller and the Subsidiaries license the computer software set forth below:
SOFTWARE IN USE AT CROWN NORTHCORP:
McCracken Financial Services' Strategy loan servicing system was acquired by
Crown NorthCorp in 1996 as a replacement for the FICS loan servicing system,
which was deemed inadequate for our needs. Strategy enjoys an excellent
reputation among loan servicers, rating agencies, and others, having been
selected by nine of the ten largest servicers in the nation. However, Crown
NorthCorp has also found it necessary to enhance the functionality of the
Strategy system by creating supplementary programs for the generation of
General Ledger entries and funds transfer capabilities. This work was performed
by Ms. Landa, with guidance from Messrs.. Gliem, Payne and England.
Databases are regularly provided to clients in lieu of paper-based reporting
for managed assets. These client databases are assembled from the files of the
Asset Management database, the General Ledger and the Strategy loan servicing
system using a series of reports and programs developed by Ms. Landa and Mr.
England.
Commercial software:
<TABLE>
<S> <C>
Productivity Software:
ACT for Windows v2.0 Contact management
Corel Draw v5.0
Freelance Graphics v2.1
HiJaak Pro v2.0 Screen capture utility
HotDog Web Editor HTML editor
Lotus 123 v5.0
Microsoft Works v3.0
Microsoft Excel v5.0
Microsoft PowerPoint v4.0
Microsoft Word v6.0
Power Translator
Snap Graphics v1.0
Visio v3.0
WordPerfect v6.1
Carera Pro Scanner OCR
Desktop Operating Systems:
Microsoft DOS v6.22
</TABLE>
<PAGE> 134
<TABLE>
<S> <C>
Microsoft Windows for Workgroups v3.11
Network Operating Systems & Connectivity:
Novell NetWare v3.11
Novell NetWare v3.12
Novell NetWare v4.10
NetWare Connect v2.0 Communications server
NOV*IX v3.11 IPX-IP gateway
NetWare for SAA v2.0 AS/400 gateway
Newport Systems Enterprise Router Wide Area Network communications
Reflections v6.01 AS/400 connectivity
RUMBA Access/400 v3.0 AS/400 connectivity
Firewall 1 InterNet firewall
SMTP & MHS Mail Gateways InterNet mail connectivity
Mid-Range Operating Systems:
OS/400 v3r1
Network & Utility Software:
Hewlett Packard JetAdmin Network printer administration
Lan Escort v3.52c Windows desktop administration
SofTrack v2.70c Application metering
ClickNet v2.41 Network diagraming
Clientele - IS v2.01 Help desk software
Data Junction v5.1 File format translator
McAfee Viruscan For Win v2.52 Virus scanning
WinZip v6.0 File compression
ARCserve v5.01g Tape backup
McAfee Netshield v2.32 Virus scanning
PowerChute Plus v4.24 Power monitoring
Communications Software:
Adobe Acrobat Reader v.2.1
Business Express/PC Bank account access
CompuServe v2.01
Edgar Link SEC filings
Mornet Manager FNMA filings
Mortgage Bankers Fin Reporting
Microsoft Mail v3.5 Internal e-mail
Netscape v3.0 Web browser
PcAnyWhere v2.0 General purpose communications
Procomm for Windows v2.0 General purpose communications
Reference Software:
Anderson's Ohio Law on Disk v3.1
</TABLE>
<PAGE> 135
<TABLE>
<S> <C>
CCH Securities Law v2.0
CT Advantage v3.0 Public record filings
Multifamily Guide Express FNMA regulations
Database & Development Software:
Clipper v5.3
Crystal Reports v4.5
DataEase v5.11
DB2/400
Dbase III
Dbase IV
Dclip v3.53
FoxPro for DOS v2.6
FoxPro for Windows v2.6a
Microsoft Access v2.0
PowerBuilder 5.0
R&R for SQL v6.5
R&R for Xbase v6.5
R&R for RUMBA v6.0
S-Designor v5.1 Data modeling
Advantage Database Server v4.00 Database management
Gupta SQL Server v6.01
Sybase SQL Anywhere Network Server v5.5
Administrative Software:
Plan Manager v3.20b 401(k) administration
ADP Payroll v6.0
Asset Keeper v11 Fixed assets
Descriptions Now v3.01
FloorPlan Plus v2.0
ManagePro v3.1
Platinum Accounting Series Corporate G/L
Skills Assessment Testing
Asset Management Software:
Argus v6.0 Real estate performance modeling
Workout Prospector v1.13 Freddie Mac workout modeling
Strategy Document Generation
Not in Use:
FICS Loan Servicing v4.10
Great Plains Asset Accounting
Power Translator
System Once Access
</TABLE>
<PAGE> 136
SCHEDULE 4.1(l)
INSURANCE
<TABLE>
<CAPTION>
COVERAGE CARRIER POLICY NO.
- -------- ------- ----------
<S> <C> <C>
Property & Contents Kemper Group 3MG421774-02
Valuable Papers Kemper Group 3MG421774-02
Electronic Equipment Kemper Group 3MG421774-02
Commercial General Liability Kemper Group 3MG421774-02
Boiler & Machinery Kemper Group 3XA029110-00
Automobile Kemper Group E3C0018977
Worker's Compensation Kemper Group 3CM943670-02
Umbrella Liability Kemper Group 3MG421774-02
Errors & Omissions American Dynasty TER1214420
Surplus Lines Ins. Co.
Directors & Officers American Dynasty TDO 1235936
Surplus Line Ins. Co.
Fiduciary Liability Aetna Casualty & FF100963396
Surety Company
Crime U S F & G Co. CCR145598122
Kidnap & Ransom Chubb 8145-42-48
Flood Omaha Property & 3-0062-5564-4
Casualty Co.
</TABLE>
<PAGE> 137
SCHEDULE 4.1(m)
RELATED PARTY TRANSACTIONS
Neither the Seller nor any of its Subsidiaries is directly a party to any oral
or written contract, agreement, lease or arrangement with, or written contract,
agreement, lease or arrangement with or commitment to any Related Party. No
Related Party directly or indirectly owns or controls any assets or properties
used in the business of the Seller or any Subsidiary. No Related Party,
directly or indirectly, engages in or has any significant interest in any
business which is a competitor, customer or supplier of the Seller or any
Subsidiary.
During 1996, the Seller engaged in the following transactions with Ronald E.
Roark or his affiliates:
1. The Seller and its Subsidiaries incurred $11,405.89 in rent expense
to Cliffs Purchase Company, Ltd. an affiliate of Mr. Roark, for the storage of
extensive records and equipment.
2. The Seller and its Subsidiaries incurred $16,870.40 in expense to
Trident Air Services, Inc., an affiliate of Mr. Roark.
3. The Seller performed servicing, accounting and consulting services
for various companies affiliated with Mr. Roark. Revenues generated for these
services were $85,968.58.
<PAGE> 1
Exhibit 10.58
ESCROW AGREEMENT
THIS AGREEMENT is made as of the 7th day of March 1997, by and among
HARBERT EQUITY FUND I, L.L.C., a Georgia limited liability company
("PURCHASER"), AMSOUTH BANK OF ALABAMA, an Alabama banking corporation ("ESCROW
AGENT"), and CROWN NORTHCORP, INC., a Delaware Corporation ("SELLER").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller have entered into that certain Stock
Purchase Agreement of even date herewith providing for the purchase by
Purchaser of certain shares of common stock of Seller and other related
transactions (the "PURCHASE AGREEMENT"); and
WHEREAS, SECTION 2.1 of the Purchase Agreement requires that this
Escrow Agreement be executed and delivered by Purchaser, Seller and Escrow
Agent in order to facilitate the consummation of certain Third-Party
Acquisitions; and
WHEREAS, Seller and Purchaser desire Escrow Agent to invest, manage
and disburse the funds deposited with it as provided herein;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. The parties hereby appoint and
designate Escrow Agent as the "Escrow Agent" for purposes of the Purchase
Agreement and for the purposes set forth herein, and Escrow Agent hereby
accepts such appointment.
2. DEPOSITS OF ESCROW FUND. From time to time, Purchaser may deposit
funds with Escrow Agent in accordance with Section 2.1(a) of the Purchase
Agreement (the aggregate funds so deposited and held by Escrow Agent from time
to time being referred to herein as the "Escrow Fund"). Escrow Agent agrees to
hold and distribute the Escrow Fund as provided herein.
3. INVESTMENT OF THE ESCROW FUND. Escrow Agent shall manage the Escrow
Fund under the terms of this Agreement and shall from time to time invest and
reinvest the funds held in the Escrow Fund, as and when instructed by Purchaser
in writing, in any one or more of the following:
(a) obligations of the United States of America;
(b) general obligations of any State of the United States of
America;
(c) general obligations of any political subdivision of a State of
the United
<PAGE> 2
States of America, if such obligations are rated by at least
two recognized rating services as at least "AA";
(d) certificates of deposit of Escrow Agent and any national bank
or banks insured by the Federal Deposit Insurance Corporation
with a net worth in excess of $100,000,000;
(e) obligations of state or municipal public housing authorities
chartered by the United States of America and guaranteed by the
United States of America;
(f) demand interest bearing accounts of Escrow Agent; and
(g) money market funds of Escrow Agent which invest in any of the
preceding (a) through (f).
If no instructions are received from Purchaser as provided above, Escrow Agent
shall invest the Escrow Fund in money market funds of the type described in the
preceding CLAUSE (G). Subject to PARAGRAPH 6 below, any and all income and
interest realized from the investments of the Escrow Fund made by Escrow Agent
pursuant hereto shall be added to and become part of the Escrow Fund.
4. RELEASES FROM ESCROW FUND.
(a) Upon receipt by Escrow Agent of a written certificate expressly
issued by Seller in accordance with SECTION 2.1(B) of the Purchase Agreement
(and executed by an authorized officer of Seller), Escrow Agent shall release
and pay to Seller the portion of the Escrow Fund specified therein on the date
and in the manner specified therein. Simultaneously with the delivery of such
certificate to Escrow Agent by Seller, Seller shall deliver a copy of such
certificate to Purchaser.
(b) Upon receipt by Escrow Agent of a written certificate expressly
issued by Purchaser in accordance with SECTION 2.1(c) or SECTION 2.5(c) of the
Purchase Agreement (and executed by an authorized officer of the Manager of
Purchaser), Escrow Agent shall release and pay to Purchaser any and all amounts
(if any) then remaining in the Escrow Fund, or such lesser portion of the
Escrow Fund specified in such certificate, including all accrued interest
applicable thereto, on the date and manner specified therein. Simultaneously
with the delivery of such certificate to Escrow Agent by Purchaser, Purchaser
shall deliver a copy of such certificate to Seller.
(c) Each certificate issued to Escrow Agent by Seller or Purchaser
under this PARAGRAPH 4 shall contain an express representation to the effect
that Seller or Purchaser (as applicable) has the right to issue such
certificate under the terms of the Purchase Agreement.
- 2 -
<PAGE> 3
5. ESCROW AGENT.
(a) Escrow Agent shall not be liable to any Person (as defined below)
for any damages, losses, or expenses incurred as a result of any act or
omission of Escrow Agent, unless such damages, losses, or expenses are caused
by Escrow Agent's willful misconduct or gross negligence. Without limiting the
foregoing, Escrow Agent shall not incur any such liability with respect to (i)
any action taken or omitted in good faith upon the advice of counsel for Escrow
Agent given with respect to any question relating to the duties and
responsibilities of Escrow Agent under this Agreement, or (ii) any action taken
or omitted in reliance upon any instrument, including any certificate, written
notice or instruction provided for herein, not only as to its due execution by
an authorized person and as to the validity and effectiveness of such
instrument, but also as to the truth and accuracy of any information contained
therein that Escrow Agent shall in good faith believe to be genuine, to have
been signed by a proper person or persons and to conform to the provisions of
this Agreement. For purposes of this Agreement, "Person" means any individual,
partnership, joint venture, corporation, limited liability company, trust,
unincorporated organization, joint-stock company, bank, association or other
entity.
(b) In the event of a dispute between or among any of the parties
hereto sufficient in the discretion of Escrow Agent to justify its doing so,
Escrow Agent shall be entitled to tender the Escrow Fund into the registry or
custody of the United States District Court for the Northern District of
Georgia, Atlanta Division, to initiate such legal proceedings as it deems
appropriate, and thereupon to be discharged from all further duties and
liabilities under this Agreement. Any such legal action may be brought in any
such court as Escrow Agent shall determine to have jurisdiction over the Escrow
Fund. The filing of any such legal proceedings shall not deprive Escrow Agent
of its compensation hereunder earned prior to such actions.
(c) If all or any part of the Escrow Fund is attached, garnished or
levied upon, or the delivery thereof shall be stayed or enjoined by the order
of a court of competent jurisdiction, or any other order, judgment or decree
affecting the Escrow Fund is made or entered by a court of competent
jurisdiction, Escrow Agent is hereby expressly authorized to obey and comply
with all final writs, orders, judgments or decrees so entered or issued by any
such court, and if Escrow Agent obeys or complies with any such writ, order,
judgment or decree, it shall not be liable to any of the parties hereto or to
any other person by reason of such compliance.
(d) If at any time any attempt should be made to modify this Agreement
in a manner that would increase the duties and responsibilities of Escrow
Agent, or in any manner that Escrow Agent shall reasonably deem undesirable, or
at any other time, Escrow Agent may resign by notifying the other parties
hereto. From the date upon which such notice is received by Purchaser and
Seller until the earlier of (i) the acceptance by a successor escrow agent as
shall be appointed (A) by mutual agreement of such parties, or (B) in the event
the parties are unable to agree within 20 days following their receipt of such
notice, by the senior active Judge of the United States District Court for the
Northern District of Georgia, Atlanta Division, upon application by either
Purchaser or Seller, or (ii) 60 days following the date upon which notice was
mailed, Escrow
- 3 -
<PAGE> 4
Agent's sole obligation hereunder shall be to perform its duties hereunder in
accordance with the terms of this Agreement prior to any attempted modification
hereof.
6. ESCROW AGENT'S FEES. The total fee payable to Escrow Agent for its
services and obligations hereunder shall be $1,000.00, and shall be paid to
Escrow Agent in equal proportions by Seller and Purchaser. Escrow Agent agrees
that no fee shall be due and payable hereunder unless and until the Escrow Fund
has been deposited by Purchaser as provided in PARAGRAPH 2.
7. NOTICES.
(a) All notices, demands, certificates or other communications
required or permitted to be given or made hereunder shall be in writing and
delivered personally or sent by pre-paid, first class, certified or registered
mail, return receipt requested, or by facsimile transmission to the intended
recipient thereof at its address, or facsimile number set out below. Any such
notice, demand or communication shall be deemed to have been duly given
immediately (if given or made by personal delivery or confirmed facsimile), or
three days after mailing (if given or made by letter addressed to a location
within the country in which it is posted) or seven days after mailing (if made
or given by letter addressed to a location outside the country in which it is
posted), and in proving same it shall be sufficient to show that the envelope
containing the same was duly addressed, stamped and posted, or that receipt of
a facsimile or hand delivery was confirmed by the recipient. The addresses and
facsimile numbers of the parties for purposes of this Agreement are:
i) If to Purchaser: Harbert Equity Fund I, L.L.C.
One Riverchase Parkway South
Birmingham, Alabama 35244
Facsimile No. (205)987-5505
Attention: Mr. Michael Luce
With a copy to: Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Facsimile No. (404) 815-6555
Attention: Joel B. Piassick, Esq.
ii) If to Seller: Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Facsimile No. (614) 488-9780
Attention: Mr. Ronald E. Roark
Stephen W. Brown, Esq.
- 4 -
<PAGE> 5
With a copy to: Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Facsimile No. (404) 572-6999
Attention: Jonathan R. Shils, Esq.
iii) If to Escrow Agent: AmSouth Bank of Alabama
1901 6th Ave. North, Suite 730
Birmingham, Alabama 35203
Facsimile No. (205) 581-7661
Attention: Ms. Renee Ragland
(b) Any party may change the address to which notices, requests,
demands or other communications to such parties shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided
herein.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, executors, administrators, beneficiaries, transferees,
successors and assigns.
9. AMENDMENTS. This Agreement may be amended at any time or from time
to time in a writing executed by the party to be charged.
10. EFFECT ON AGREEMENT. The provisions of this Agreement are not
amended to alter, modify, negate or replace any provisions of the Purchase
Agreement that may be in conflict with the provisions hereof.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
12. GOVERNING LAW. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia, without regard to principles of conflicts of laws.
13. PARTIAL INVALIDITY AND SEVERABILITY. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid
or unenforceable by a court of competent jurisdiction, it is the intention of
the parties that the remaining terms hereof, or part thereof, shall constitute
their agreement with respect to the subject matter hereof and all
- 5 -
<PAGE> 6
such remaining terms, or parts thereof, shall remain in full force and effect.
To the extent legally permissible, any illegal, invalid or unenforceable
provision of this Agreement shall be replaced by a valid provision which will
implement the commercial purpose of the illegal, invalid or unenforceable
provision.
14. WAIVER. Any term or condition of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, but only if
such waiver is evidenced by a writing signed by such party. No failure on the
part of any party hereto to exercise, and no delay in exercising any right,
power or remedy created hereunder, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy by any such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. No waiver by any party hereto to any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
15. HEADINGS. The headings of particular provisions of this Agreement
are inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
16. NUMBER AND GENDER. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
17. TIME OF PERFORMANCE. Time is of the essence.
18. ENTIRE AGREEMENT. This Agreement supersedes all prior discussions
and agreements between the parties with respect to the subject matter hereof,
and this Agreement contains the sole and entire agreement among the parties
with respect to the matters covered hereby.
[Signatures on following page]
- 6 -
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement as of the date first hereinabove set forth.
PURCHASER:
HARBERT EQUITY FUND I, L.L.C.
By Harbert Management Corporation, its Manager
By: /s/
------------------------------------------
David A. Boutwell
Vice President
(CORPORATE SEAL)
ESCROW AGENT:
AMSOUTH BANK OF ALABAMA
By: /s/
------------------------------------------
Name: Renee Ragland
Title: Corporate Trust Officer
(CORPORATE SEAL)
SELLER:
CROWN NORTHCORP, INC.
By: /s/
------------------------------------------
Name: Stephen W. Brown
Title: Secretary
(CORPORATE SEAL)
- 7 -
<PAGE> 1
Exhibit 10.59
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement"), dated as of March 7, 1997,
is between and among RONALD E. ROARK, an individual with an office at 1251
Dublin Road, Columbus, Ohio 43215 ("Roark"), TUCKER HOLDING COMPANY, LTD., an
Ohio limited liability company with an office at 1251 Dublin Road, Columbus,
Ohio 43215 ("Tucker"), and HARBERT EQUITY FUND I, L.L.C., a Georgia limited
liability company with an office at One Riverchase Parkway South, Birmingham,
Alabama 35244 ("Harbert").
W I T N E S S E T H :
WHEREAS, Roark and Tucker (collectively, the "Tucker
Parties") beneficially own shares of the Common Stock, par value $.01 per share
(the "Stock"), of Crown NorthCorp, Inc., a Delaware corporation (the
"Company"); and
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, Harbert has acquired shares of the Stock pursuant to that
certain Stock Purchase Agreement, dated as of even date herewith, between and
among Harbert and the Company (the "Stock Purchase Agreement"); and
WHEREAS, Harbert desires that each of the Tucker Parties
agrees to vote its shares in accordance with the provisions of this Agreement
to more fully effectuate certain provisions of the Stock Purchase Agreement
whereby Harbert is entitled to nominate one or more persons for election as a
director of the Company for a certain period; and
WHEREAS, the Tucker Parties desire that Harbert and its
affiliates agrees to vote their shares in accordance with the provisions of
this Agreement for the continued election of Ronald E. Roark as a director of
the Company for such period;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the adequacy, sufficiency, and receipt
of which are hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein but not
otherwise defined herein shall have the meaning ascribed thereto in the Stock
Purchase Agreement.
SECTION 2. VOTING AGREEMENT OF THE TUCKER PARTIES. During the
Corporate Governance Period, each of the Tucker Parties, severally and not
jointly, agrees:
(a) To vote all shares of securities issued by the
Company and entitled to vote in the election of directors
("Voting Securities") beneficially owned by him or it for the
election as a director of the Company of such
<PAGE> 2
nominees for election as a director of the Company as Harbert
is entitled to designate for nomination as such pursuant to
the Stock Purchase Agreement;
(b) To cause (x) each of the members of Roark's
immediate family, (y) each entity controlled by any Tucker
Party, and (z) each trust of which Roark is a grantor
(collectively, the "Roark Affiliates"), to vote all Voting
Securities beneficially owned by him, her, or it for the
election as a director of the Company of such nominees for
election as a director of the Company as Harbert is entitled
to designate for nomination as such pursuant to the Stock
Purchase Agreement;
(c) In the event a director of the Company so
designated for nomination by Harbert ceases to be a director
of the Company for any reason before his or her term as such
expires, to vote all shares of Voting Securities beneficially
owned by him, her, or it in favor of another individual
designated for nomination by Harbert for election as a
director of the Company to the extent Harbert is then
entitled to designate such other individual for nomination
for election as a director of the Company pursuant to the
Stock Purchase Agreement; and
(d) In the event a director of the Company so
designated for nomination by Harbert ceases to be a director
of the Company for any reason before his or her term expires,
to cause each of the Roark Affiliates to vote all shares of
Voting Securities owned by him, her or it in favor of another
individual designated for nomination by Harbert for election
as a director of the Company to the extent Harbert is then
entitled to designate such other individual for nomination
for election as a director of the Company pursuant to the
Stock Purchase Agreement.
Notwithstanding the foregoing, however, to the extent that the Tucker
Parties and Roark Affiliates collectively do not possess the sole power to vote
or direct the voting of any such Voting Securities from time to time (the
shares as to which the Tucker Parties and Roark Affiliates do not so possess
such voting power being referred to herein as "Non-Exclusive Tucker Shares"),
they shall be obligated to use their reasonable best efforts to cause such
NonExclusive Tucker Shares to be voted in compliance with the foregoing.
SECTION 3. VOTING AGREEMENT OF HARBERT. Until the earlier of (i) the
expiration of the Corporate Governance Period, and (ii) the occurrence of a
Seller Breach (as defined in the Registration Rights Agreement, dated as of the
date hereof, between and among the Company and Harbert), Harbert agrees:
(a) To vote all shares of Voting Securities
beneficially owned by it for the election of Roark as a
director of the Company;
<PAGE> 3
(b) To cause each Person controlling it, controlled
by it, or under common control with it (collectively, the
"Harbert Affiliates") to vote all shares of Voting Securities
beneficially owned by him, her, or it for the election of
Roark as a director of the Company;
(c) In the event that Roark ceases to be a director
of the Company for any reason before his term as such
expires, to vote all shares of Voting Securities beneficially
owned by it in favor of another individual nominated by Roark
or, in the event of Roark's death or incapacity, his heirs,
legatees, executors, successors, guardians, legal
representatives, or administrators, as the case may be,
beneficially owning at least 50% of the Voting Securities
beneficially owned by Roark immediately prior to his death or
incapacity, for election as a director of the Company; and
(d) In the event that Roark ceases to be a director
of the Company for any reason before his term as such
expires, to cause each of the Harbert Affiliates to vote all
shares of Voting Securities beneficially owned by him, her,
or it in favor of another individual nominated by Roark or,
in the event of Roark's death or incapacity, his heirs,
legatees, executors, successors, guardians, legal
representatives, or administrators, as the case may be,
beneficially owning at least 50% of the Voting Securities
beneficially owned by Roark immediately prior to his death or
incapacity, for election as a director of the Company.
Notwithstanding the foregoing, however, to the extent that Harbert and
the Harbert Affiliates collectively do not possess the sole power to vote or
direct the voting of any such Voting Securities from time to time (the shares
as to which they do not so possess such voting power being referred to herein
as "Non-Exclusive Harbert Shares"), then Harbert shall be obligated to use its
reasonable best efforts to cause such Non-Exclusive Harbert Shares to be voted
in compliance with the foregoing.
SECTION 4. TERMINATION. This Agreement shall terminate upon the
expiration of the Corporate Governance Period in accordance with the Stock
Purchase Agreement.
SECTION 5. LEGENDS. The Tucker Parties and Harbert will, and the
Tucker Parties will cause the Roark Affiliates to, and Harbert will cause the
Harbert Affiliates to, deliver certificates representing Voting Securities
beneficially owned by them to the Company for imprinting with the following
legend (which legend shall be removed, with respect to any of such Voting
Securities, upon the earlier of (i) the sale, assignment, or other transfer of
such Voting Securities to a Person not subject to the purview of this
Agreement, and (ii) the expiration of this Agreement), in each case on or
before the date that is the last to occur of (x) 30 days from the date of this
Agreement, and (y) their acquisition of beneficial ownership of such Voting
Securities:
<PAGE> 4
"The voting securities represented by this certificate are subject to
restrictions on voting, as provided in a Voting Agreement, dated as of
March 7, 1997, between and among Harbert Equity Fund I, L.L.C., Tucker
Holding Company, Ltd., and Ronald E. Roark, a copy of which is on file
with the Secretary of the Company."
Notwithstanding the foregoing, however, Harbert shall be obligated to
utilize its reasonable best efforts to cause the beneficial owners of the
Non-Exclusive Harbert Shares to comply with this Section 5, and the Tucker
Parties shall be obligated to utilize their respective reasonable best efforts
to cause the beneficial owners of the Non-Exclusive Tucker Shares to comply
with this Section 5.
SECTION 6. SECRETARY TO RETAIN COPY. A copy of this Agreement shall be
filed with the Secretary of the Company.
SECTION 7. STOCK CHANGES. The provisions of this Agreement shall be
deemed to apply equally to any share of Stock or other securities distributed
in respect of shares of Stock.
SECTION 8. FURTHER ACTIONS. At any time and from time to time each
party agrees, at its or his expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
SECTION 9. AVAILABILITY OF EQUITABLE REMEDIES. Since a breach of the
provisions of this Agreement could not adequately be compensated by money
damages, any party shall be entitled, in addition to any other right or remedy
available to him, to an injunction restraining such breach or a threatened
breach and to specific performance of any such provision of this Agreement, and
in either case no bond or other security shall be required in connection
therewith, and the parties hereby consent to such injunction and to the
ordering of specific performance.
SECTION 10. MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements among them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
SECTION 11. NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement or at such other address as the other parties hereto
shall have been notified in writing pursuant hereto. Except as otherwise
specifically provided in this Agreement, any notice given by certified mail
shall be deemed given at the time of certification thereof except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof.
<PAGE> 5
SECTION 12. WAIVER. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision
of this Agreement. The failure of a party to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing.
SECTION 13. BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and the respective
successors and assigns of the corporate parties hereto and the respective
assigns, heirs, and personal representatives of the individual parties hereto.
SECTION 14. NO THIRD PARTY BENEFICIARIES. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
SECTION 15. SEPARABILITY. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
SECTION 16. HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
SECTION 17. PRONOUNS. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal pronoun, as
the context requires.
SECTION 18. COUNTERPARTS; GOVERNING LAW. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflict of law
principles thereof.
SECTION 19. REPRESENTATIONS AND WARRANTIES OF TUCKER. Tucker hereby
represents and warrants to Harbert that:
(i) It is a limited liability company duly
organized, validly existing, and in good standing under the
laws of the State of Ohio, with full limited liability
company power and authority to conduct its business as
currently conducted; and
<PAGE> 6
(ii) Assuming the due authorization,
execution, and delivery of this Agreement by the other
parties hereto, this Agreement constitutes its legal, valid,
and binding obligation, enforceable against it in accordance
with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, moratorium, or other
laws affecting creditors' rights generally and by the
availability of equitable remedies.
<PAGE> 7
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
TUCKER HOLDING COMPANY, LTD.
By: /s/
---------------------------------
Name: Ronald E. Roark
Title: Managing Member
/s/
-------------------------------------
RONALD E. ROARK
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By: /s/
---------------------------------
Name: Michael D. Luce
Title: Executive Vice President & CFO
<PAGE> 1
Exhibit 10.60
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
March 7, 1997, is by and among HARBERT EQUITY FUND I, L.L.C., a Georgia limited
liability company (the "Purchaser"), and CROWN NORTHCORP, INC., a Delaware
corporation (the "Company").
WITNESSETH:
WHEREAS, the Purchaser desires to purchase certain shares of the
Common Stock from the Company on the date hereof and in the future; and
WHEREAS, the Company desires to encourage the Purchaser to purchase
such shares of the Common Stock by granting to the Holders certain registration
rights relating to such shares;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt, adequacy, and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. The following terms shall have the following
meanings:
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of the Company, as amended and as in effect on the date hereof.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of
the Company.
"COMMISSION" means the Securities and Exchange Commission or any
similar federal agency then having jurisdiction to enforce the Securities Act
and other federal securities laws.
"HOLDERS" means the owners of the Registrable Securities at the time
of determination.
"NASD" means the National Association of Securities Dealers, Inc. or
any successor corporation thereto.
"MARKET PRICE," with respect to any security, means:
(a) if such security is traded on a securities exchange or through
Nasdaq National Market, the average of the closing prices of such security on
such exchange over the thirty-day period ending three days prior to the date of
determination;
<PAGE> 2
(b) if such security is actively traded over-the counter, the average
of the closing bid or sales prices (whichever is applicable) of such security
over the thirty-day period ending three days prior to the date of
determination;
(c) If there is no active public market for such security, the fair
market value thereof as mutually determined by the Company and the holders of
the securities at issue; provided, however, that if the Company and such
holders are unable to reach agreement as to such fair market value within 15
business days after such security is to be valued hereunder, then such fair
market value shall be conclusively determined as expeditiously as practicable
thereafter by an independent investment bank designed by mutual agreement of
the Company and such holders holding at least 50% of such securities at issue;
provided, however, that if the Company and such holders fail to agree upon the
selection of such investment banker within 10 additional business days, then
either party may petition the Chief Judge for the United States District Court,
Northern District of Georgia, to select an independent appraiser, and such
judge's selection shall be conclusively binding on the parties; provided,
further, however, that if such judge declines to make such election, such
investment banker will be selected in an arbitration proceeding pursuant to
Section 7(h).
"PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof), or other entity of
any kind.
"PURCHASER BREACH" has the meaning ascribed thereto in the Stock
Purchase Agreement.
"REGISTRABLE SECURITIES," collectively, means (i) the Shares, (ii) any
shares of Common Stock hereafter distributed to the Holders by the Company as a
stock dividend or otherwise thereon, and (iii) any equity securities of the
Company convertible into, or exercisable or exchangeable for, any of the shares
of Common Stock identified in the foregoing clauses (i) through (ii); provided,
however, that any such securities shall cease to be Registrable Securities when
(i) such securities shall have been registered under the Securities Act, the
Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act, and such securities shall have been
disposed of pursuant to such effective registration statement, (ii) such
securities shall have been otherwise transferred, if new certificates or other
evidences of ownership for them not bearing a legend restricting further
transfer and not subject to any stop transfer order or other restrictions on
transfer shall have been delivered by the Company and subsequent disposition of
such securities shall not require registration or qualification of such
securities under the Securities Act or any state securities law then in force,
or (iii) such securities shall cease to be outstanding.
"REGISTRATION PERIOD," with respect to any registration of Registrable
Securities, has the meaning ascribed thereto in Section 2(c)(1).
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<PAGE> 3
"SECOND CLOSING" has the meaning ascribed thereto in the Stock
Purchase Agreement.
"SECOND CLOSING SHARES" has the meaning ascribed thereto in the Stock
Purchase Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, or any successor federal statute, and the rule and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
"SELLER BREACH" means either:
(i) each of the applicable conditions precedent to the
Company's obligation under the Stock Purchase Agreement to consummate the
transactions to be consummated thereunder at a Second Closing set forth in
Section 2.4 (other than Section 2.4(c)) are satisfied, but such Second Closing
does not occur due to either:
(A) the failure to satisfy a condition precedent to
the Purchaser's obligation to consummate the transactions to be consummated
under the Stock Purchase Agreement at the Second Closing pursuant to Sections
2.3(b),(d),(g),(h),(i), or (j); or
(B) the Company's breach or anticipatory breach of
its obligation under the Stock Purchase Agreement to deliver the Common Stock to
be delivered at the related Second Closing;
OR
(ii) each of the applicable conditions precedent to the
Company's obligation under the Stock Purchase Agreement to consummate the
transactions to be consummated thereunder at the Third Closing set forth
Section 3.4 (other than Section 3.4(b)) are satisfied, but the Third Closing
does not occur due to either:
(A) the failure to satisfy a condition precedent to
the Purchaser's obligation to consummate the transactions to be consummated
under the Stock Purchase Agreement at the Third Closing pursuant to Section
3.3(b),(d),(g),(h),(i), or (j); or
(B) the Company's breach or anticipatory breach of
its obligation under the Stock Purchase Agreement to deliver the Third Closing
Shares.
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<PAGE> 4
"SHARES" means the shares of Common Stock purchased by the Purchaser
from the Company at any time and from time to time pursuant to the Stock
Purchase Agreement.
"STOCK" means all share, options, warrants, general or limited
partnership interests, participations, or other equivalents (regardless of how
designated) of or in a corporation, partnership, or equivalent entity, whether
voting or nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in Rule 3a11-1
of the General Rules and Regulations promulgated by the Commission under the
Securities Exchange Act.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement, dated as of even date herewith, between and among the Company and
the Purchaser.
"SUBSTANTIAL MARKET VALUE SECURITIES" shall mean Reduction Securities
not then sellable at the time of determination under Rule 144 of the Securities
Act and having a Market Price equal to or in excess of $250,000 at the time of
determination.
"THIRD CLOSING" has the meaning ascribed thereto in the Stock Purchase
Agreement.
"THIRD CLOSING SHARES" has the meaning ascribed thereto in the Stock
Purchase Agreement.
SECTION 2. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION. From and after the earlier of (x) date that
is one calendar year after the date hereof, (y) the occurrence of a Seller
Breach, and (z) the date that the Purchaser no longer owns 5% of the
outstanding Common Stock, in each case after receipt of a written request from
the Holders owning 50% of the Registrable Securities of each class requesting
that the Company effect the registration of all or a portion of the Registrable
Securities and specifying the intended method or methods of disposition thereof
(a "Holder Notice"), the Company shall, as expeditiously as is possible, use
its reasonable best efforts to effect the registration for sale under the
Securities Act of all shares of Registrable Securities which the Company has
been so requested to register by such Holders, all to the extent required to
permit the disposition (in accordance with the intended method or methods
thereof, as aforesaid) of such Registrable Securities so registered; provided,
however, that the Company shall not be required to effect more than one (1)
registration of any Registrable Securities pursuant to this Section 2(a) except
as otherwise expressly provided herein. Notwithstanding any provision of this
Agreement to the contrary, however, the rights granted to the Purchaser and the
Holders pursuant to this Agreement including, without limitation, this Section
2(a), shall be irrevocably terminated upon the occurrence of a Purchaser
Breach.
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<PAGE> 5
If the managing underwriter of a proposed public offering shall advise
the Company in writing that, in its opinion, the distribution of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company or such other registering security
holders would materially and adversely affect the distribution of such
securities by the Company or such registering security holders, then the Company
may require all selling security holders (other than the Company) to reduce the
amount of securities each intended to distribute through such offering on a pro
rata basis; provided, however, that if the Company requires such reduction, and
if Holders requesting such registration pursuant to this Section 2(a) are unable
to include in such registration Registable Securities that they requested be
included in such registration in the related Holder Notice that constitute
Substantial Market Value Securities, due to such pro rata reduction (the
Registrable Securities that such Holder so requested to be included in such
registration that were not included in such registration due to such pro rata
reduction being referred to herein as the "Reduction Shares", and the
registration in which such reduction occurred being referred to herein as a
"Failed Registration"), then subject to the other provisions hereof applicable
to a demand registration the Holders of the Reduction Shares shall have the
right, exercisable commencing on the day that is two calendar months after the
termination of the Registration Period relating to the Failed Registration by
written notice sent to the Company by Holders of 50% of the Reduction Shares (a
"Repurchase/Register Notice"), to require the Company to elect (at the Company's
option) to either register the Reduction Shares otherwise pursuant to this
Section 2(a) or, if the foregoing offer to sell or resulting sale is then
lawful, to repurchase the Reduction Shares at the higher of (i) the price per
share for which Registrable Securities were actually sold in the Failed
Registration, or (ii) the Market Price on the date the Repurchase/Register
Notice is sent to the Company in compliance with this Agreement; provided,
however, that the Holders shall not be deemed hereby or thereby to have made any
offer to sell to the Company that does not comply with applicable law and the
Company shall not be entitled or deemed to be entitled to repurchase such
Reduction Shares or to be offered the right to or solicit the right to
repurchase such Reduction Shares or deemed to have bid for such Reduction Shares
hereby or thereby if such repurchase, offer, or bid would violate any applicable
securities law; and provided further, however, that any such repurchase shall
otherwise comply with the procedures applicable to the Company's right to
repurchase securities upon the occurrence of a Purchaser Breach set forth in
Article VIII of the Stock Purchase Agreement, to the extent that such procedures
do not conflict with the provisions hereof, without requirement for the
occurrence of a Purchaser Breach. The Company shall respond to such
Repurchase/Register Notice by written notice to the Purchaser within 30 business
days after its receipt of the Repurchase/ Register Notice (an "Election
Notice"), which Election Notice shall set forth whether the Company desires to
so register such Reduction Shares or to repurchase such Reduction Shares;
provided, however, that the Company shall be deemed to have elected to register
such Reduction Shares if it does not give such notice within such 30 business
day period. If the Company so elects to repurchase such Reduction Shares, and if
the Market Price requires an agreement of the Company and such holders as to the
fair market value of such Reduction Shares, the consummation of such repurchase
shall not be required to be consummated until as
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<PAGE> 6
soon as practicable after such fair market value has been determined as set
forth in the definition of Market Price set forth herein.
(b) INCIDENTAL REGISTRATION. If the Company at any time proposes to
file on its behalf and/or on behalf of any of its security holders (the
"registering security holders") a Registration Statement under the Securities
Act on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of the Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash with respect to its Common Stock
or any other class of equity security of the Company, it will give written
notice to the Purchaser at least 45 days before the initial filing with the
Commission of such Registration Statement, which notice shall set forth the
intended method of disposition of the securities proposed to be registered by
the Company. The notice shall offer to include in such filing the aggregate
number of shares of Registrable Securities as the Holders owning 50% or more of
the Registrable Securities of each class may request.
The Holders owning 50% or more of the Registrable Securities of each
class may advise the Company in writing within 20 days after the date of such
receipt of such offer from the Company, setting forth the amount of Registrable
Securities for which registration is so requested. The Company shall thereupon
include in such filing the number of shares of Registrable Securities for which
registration is so requested, subject to the next sentence, and shall use its
reasonable best efforts to effect registration under the Securities Act of such
shares. If the managing underwriter of a proposed public offering shall advise
the Company in writing that, in its opinion, the distribution of the
Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company or such
registering security holder would materially and adversely affect the
distribution of such securities by the Company or such registering security
holder, then all selling security holders (other than the Company) shall reduce
the amount of securities each intended to distribute through such offering on a
pro rata basis.
Notwithstanding any provision of this Agreement to the contrary, the
Holders and the Purchaser, collectively, shall be entitled to include shares of
Registrable Securities in any registration of Stock pursuant to this Section
2(b) on a maximum of three occasions. Notwithstanding any provision of this
Agreement to the contrary, however, the rights granted to the Purchaser and the
Holders pursuant to this Agreement including, without limitation, this Section
2(b), shall be irrevocably terminated upon the occurrence of a Purchaser
Breach.
(c) REGISTRATION PROCEDURES. If the Company is required by the
provisions of Section 2(a) or Section 2(b) to use its reasonable best efforts
to effect the registration of any of its securities under the Securities Act,
the Company will, as expeditiously as possible:
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<PAGE> 7
(i) prepare and file with the Commission a Registration
Statement with respect to such securities and use its reasonable best efforts
to cause such Registration Statement to become and remain effective for a
period of time required for the disposition of such securities by the selling
Holders, but not to exceed 180 days; provided, however that such time shall be
extended by the length, minus 30 days, of any period(s) in excess of 30 days in
the aggregate during which such Holders must suspend sales in order to permit
the filing and effectiveness of any amendment or supplement to the Registration
Statement necessitated by an event not precipitated by a Holder (such period,
as it may be so extended with respect to any registration, is referred to
herein as the "Registration Period" with respect to such registration);
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of any securities covered by such Registration
Statement until the end of the related Registration Period;
(iii) furnish to each selling Holder such number of copies of
a summary prospectus or other prospectus (including any amendments or
supplements to any Registration Statement), including a preliminary prospectus,
in conformity with the requirements of the Securities Act, and such other
documents as such Holder may reasonably request;
(iv) use its reasonable best efforts to register or qualify
the securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions within the United States and
Puerto Rico as the selling Holders shall request (provided, however, that the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified
or to file any general consent to service of process), and do such other
reasonable acts and things as may be required of it to enable such Holders to
consummate the disposition in such jurisdiction of the securities covered by
such Registration Statement;
(v) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities; and
(vi) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, but not less than 18
months after the effective date of the Registration Statement, an earnings
statement covering the period of at least 12 months beginning with the first
full month after the effective date of such Registration Statement, which
earnings statements shall satisfy the provisions of Section 11(a) of the
Securities Act.
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<PAGE> 8
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 2 in respect of the securities which
are to be registered at the request of any Holder that such Holder furnishes to
the Company such information regarding the securities held by such Holder and
the intended method of disposition thereof as the Company shall reasonably
request and as shall be required under the Securities Act in connection with
the action taken by the Company and that such Holder shall execute such
agreements, instruments, and other documents in connection with such
registration (including, without limitation, an escrow agreement relating to
such securities) as the Company may reasonably request.
SECTION 3. REGISTRATION EXPENSES. All expenses incurred in complying
with Section 2 of this Agreement, including, without limitation, all
registration and filing fees (including all expenses incident to filing with
the NASD), printing expenses, fees and disbursements of counsel for the
Company, expense of any special audits incident to or required by such
registration, time charges of Company personnel, and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to Section 2(c),
shall be paid by the Company, except that:
(a) all such expenses in connection with any amendment or supplement
to the Registration Statement or prospectus filed more than 120 days after the
effective date of such Registration Statement because any Holder has not
effected the disposition of the securities it requested to be registered shall
be paid by such Holder; provided, however, that such 120 day period shall be
extended by the length, minus 30 days, of any period(s) in excess of 30 days in
the aggregate during which the selling Holders must suspend sales to permit the
filing and effectiveness of any amendment or supplement to the Registration
Statement necessitated by an event not precipitated by any Holder;
(b) the Company shall not be liable for any fees, discounts, or
commissions to any underwriter in respect of the securities sold by any of the
Holders; and
(c) the Company shall not be liable for any fees or expenses of
counsel to selling security holders.
SECTION 4. INDEMNIFICATION AND CONTRIBUTION. (a) In the event of any
registration of any Registrable Securities under the Securities Act pursuant to
this Agreement, the Company shall indemnify and hold harmless the Holders,
their directors and officers, and each other Person (including each
underwriter) who participated in the offering of such Registrable Securities
and each other Person, if any, who controls a Holder or such participating
person within the meaning of the Securities Act, against any losses, claims,
damages, or liabilities, joint or several, to which any of the Holders or any
such director or officer or participating person or controlling person may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
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<PAGE> 9
thereof) arise out of or are based upon (i) any alleged untrue statement of any
material fact contained, on the effective date thereof, in any Registration
Statement under which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse the Holders or such
director, officer, or participating person or controlling person for any legal
or any other expenses reasonably incurred by such Person in connection with
investigating or defending any such loss, claim, damage, or liability;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or is
based upon any alleged untrue statement or alleged omission made (x) in such
Registration Statement, preliminary prospectus, prospectus, or amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Holder, any other selling
security holder other than the Company, or such underwriter specifically for
use therein, or (y) in such Registration Statement, preliminary prospectus, or
amendment or supplement but corrected in such final prospectus if the Company
complied with its obligations pursuant to Section 2(c)(iii) with respect to the
related selling Holder but such final prospectus was not delivered to the
Person alleging such loss, claim, damage, or liability. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Holder or such director, officer, or participating person or
controlling Person, and shall survive the transfer of such securities by the
Holder.
(b) The Purchaser and each other Holder, by its acceptance of any of
the Registrable Securities, agrees to indemnify and hold harmless the Company,
its directors and officers, and each other Person, if any, who controls the
Company within the meaning of the Securities Act, against any losses, claims,
damages, or liabilities, joint or several, to which the Company or any such
director or officer or any such Person may become subject under the Securities
Act or any other statute or at common law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon information in writing provided to the Company by or on behalf of
such Holder specifically for use in the following documents (and not corrected
by or on behalf of such Holder in a written notice actually received by the
Company prior to the effective date thereof), in any Registration Statement
under which securities were registered under the Securities Act at the request
of the Holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto.
(c) If the indemnification provided for in this Section 4 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities, or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities, or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified parties
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<PAGE> 10
in connection with the actions which resulted in such losses, claims, damages,
liabilities, or expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, as well as the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities, and expenses referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not also guilty of such fraudulent
misrepresentation.
SECTION 5. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding
the other provisions of this Agreement, the Company shall not be obligated to
register the Registrable Securities of any Holder if and to the extent that, in
the written opinion, addressed to the Company and upon which such Holder shall
be entitled to rely, of Powell, Goldstein, Frazer & Murphy LLP or such other
counsel to the Company reasonably satisfactory to such Holder and its counsel
(or, if such Holder has engaged an investment banking firm, to such investment
banking firm and its counsel), the sale or other disposition of such Holder's
Registrable Securities, in the manner and aggregate amount proposed by such
Holder (or by such investment banking firm), may be effected without
registering such Registrable Securities under the Securities Act, a copy of
which opinion shall be sent to such Holder.
SECTION 6 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit
the sale of restricted securities (as that term is used in Rule 144 or any
successor rule under the Securities Act) to the public without registration,
the Company agrees to:
(a) make and keep public information available pursuant to Rule
144(c) under the Securities Act;
(b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act at any time after it has become
subject to such reporting requirements; and
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(c) so long as the Purchaser owns any restricted securities, furnish
to the Purchaser forthwith upon request a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (or any successor
rule), and of the Securities Act and the Securities Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as the Purchaser may reasonably request
in availing itself of any rule or regulation of the Commission allowing the
Purchaser to sell any such securities without registration.
SECTION 7. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified, or supplemented, and
waivers or consents to departure from the provisions thereof may not be given,
without the prior written consent of the parties hereto.
(b) NOTICES. Any notice, demand, request, consent, approval,
declaration, or other communication hereunder to be made pursuant to the
provisions of this Agreement, shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
(i) If to any Holder or to the Purchaser:
Harbert Equity Fund I, L.L.C.
One Riverchase Parkway South
Birmingham, Alabama 35244
Attn: Mr. Michael D. Luce
With a copy to:
Kilpatrick Stockton LLP
1100 Peachtree Street, N.E.
Atlanta, Georgia 30309-4530
Attn: Joel B. Piassick, Esq.
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<PAGE> 12
(ii) If to the Company:
Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Attn: Mr. Ronald E. Roark
Stephen W. Brown, Esq.
With a copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Jonathan R. Shils, Esq.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Every notice, demand, request, consent,
approval, declaration, delivery, or other communication hereunder shall be
deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three (3) business days after the same
shall have been deposited in the United States mail.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties hereto. This Agreement may be assigned by the Company to any successor
to the Company without the consent of any Holder. The rights of the Company
pursuant to Section 2(a) to repurchase Reduction Shares may be assigned, in
whole or in part, without the consent of any Holder; provided, however, that
the Company shall remain liable for the performance of its obligations under
Section 2(a). This Agreement may not otherwise be assigned by the Company
without the prior written consent of the Purchaser, which consent shall not be
unreasonably delayed or withheld. Subject to compliance with any applicable
securities laws, the Purchaser may assign all or any part of its rights
hereunder in connection with any transfer, assignment, sale or conveyance of
all or any portion of its Registrable Securities.
(d) HEADINGS. The headings in this Agreement are for convenience of
reference only, and shall not limit or otherwise affect the meaning thereof.
(e) GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Delaware, without regard to the conflict of law provisions
thereof.
(f) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any
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<PAGE> 13
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(g) ENTIRE AGREEMENT. This Agreement represents the complete agreement
and understanding of the parties in respect of the subject matter contained
herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.
(h) ARBITRATION AND LITIGATION. (i) Subject to clauses (ii) and (iii)
hereof, all disputes relating to this Agreement may be settled by arbitration
in Atlanta, Georgia before a single arbitrator pursuant to the rules of the
American Arbitration Association (the "Rules"). Arbitration may be commenced at
any time by any party hereto giving notice to the other parties hereto that are
parties to a dispute that such dispute has been referred to arbitration
pursuant hereto. The arbitrator shall be selected by agreement of the Purchaser
and the Company, but if they do not so agree within 20 days after the date of
the notice referred to above, the selection shall be made pursuant to the Rules
from the panel or arbitrators maintained by the Association. Any award rendered
by the arbitrator shall be conclusive and binding upon the parties hereto;
provided, however, that any such award shall be accompanied by a written
opinion of the arbitrator giving the award. This provision shall be
specifically enforceable by the parties and the decision of the arbitrator in
accordance herewith shall be final and binding, and there shall be no right of
appeal therefrom. Each party shall pay its own expense of arbitration and the
expenses of the arbitrator shall be equally shared; provided, however, that if
in the opinion of the arbitrator any party to the arbitration has raised a
frivolous claim, defense, or objection, then the arbitrator may assess, as a
part of his award, all or any part of the arbitration expenses of the other
parties (including reasonable attorney's fees) against the party raising such
frivolous claim, defense, or objection.
(ii) To the extent that arbitration may not be legally permitted
hereunder or the parties to any dispute hereunder may not at the time of such
dispute mutually agree to submit such dispute to arbitration, any party may
commence a civil action in a court of appropriate jurisdiction to resolve
disputes hereunder. None of the provisions hereof shall prevent the parties
from settling any dispute by mutual agreement at any time.
(iii) Any non-arbitration action, suit, or proceeding arising out of,
based upon, or in connection with this Agreement or the transactions
contemplated hereby may be brought only in a United States District Court
located in the State of Georgia and each party covenants and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such action, suit,
or proceeding, any claim that it is not subject personally to the jurisdiction
of such court, that its property is exempt or immune from attachment or
execution, that the action, suit, or proceeding is brought in an inconvenient
forum, that the venue of the action, suit, or proceeding is improper, or that
this Agreement or the subject matter hereof may not be enforced in or by such
court.
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<PAGE> 14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HARBERT EQUITY FUND I, L.L.C.
BY: HARBERT MANAGEMENT CORPORATION,
MANAGER
By: /s/
----------------------------------
Name: Michael D. Luce
Title: Executive Vice President & CEO
CROWN NORTHCORP, INC.
By: /s/
----------------------------------
Name: Ronald E. Roark
Title: Chairman & CEO
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<PAGE> 1
Exhibit 10.61
$750,000 March 27, 1997
VARIABLE RATE COGNOVIT PROMISSORY NOTE
Crown NorthCorp, Inc., a Delaware corporation ("Maker"), promises to pay to the
order of The Fifth Third Bank of Columbus, an Ohio banking corporation
("Payee"), the principal sum of $750,000, or so much thereof as may be advanced
by Payee to Maker from time to time as permitted under this note, plus interest
on the outstanding principal balance from time to time at a variable rate (the
"Variable Rate") equal to 25 basis points above the prime rate of interest of
The Fifth Third Bank, as publicly announced by such bank from time to time as
its prime rate of interest for domestic commercial loans (the "Prime Rate") as
follows:
(a) Interest at the Variable Rate shall accrue from the date of
this note through and including March 31, 1998 and shall be
due and payable monthly commencing on May 1, 1997 and on the
first day of each consecutive calendar month thereafter
through and including March 1, 1998.
(b) The entire unpaid principal balance, plus all accrued and
unpaid interest, shall be due and payable on the April 1,
1998 (the "Maturity Date").
All payments on this note shall be made by Maker to Payee on or before the date
required above and shall be made to Payee at 21 East State Street, Columbus,
Ohio 43215, or at such other address as may be designated by Payee or the
holder of this note from time to time. Maker shall have the right to prepay
this note, in whole or in part, at any time without penalty; provided that in
the event that any such prepayment is made by Maker obtaining funds to prepay
this note, in whole or in part, from any lending institution other than Payee,
there shall be a prepayment penalty equal to two percent (2%) of the principal
balance outstanding immediately prior to such prepayment.
This note evidences a $750,000 revolving line of credit more fully described in
the Loan Agreement dated this same date (the "Loan Agreement") between Maker
and Payee. Provided that no Event of Default (as defined in the Loan
Agreement) exists, Maker shall have the right, from time to time at its
discretion, to borrow, reborrow, pay, or repay principal under this note up to
$750,000 without penalty.
During the term of this note, the Variable Rate shall increase or decrease
automatically, without notice, upon and in the same amount as any increase or
decrease in the Prime Rate. Interest calculations on this note shall be based
upon a 360-day year consisting of 12, 30-day months, but shall be charged for
the actual number of days for which principal is outstanding. In the event
that The Fifth Third Bank discontinues the practice of quoting the Prime Rate,
the rate used for the calculation of the Variable Rate under this note shall
instead be the rate of interest charged by such bank from time to time on
90-day commercial loans made to its prime borrowers.
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<PAGE> 2
During the period when an Event of Default exists, the unpaid principal balance
outstanding under this note plus all accrued interest thereon, together with
any late charge provided for under this note, shall bear interest at a rate 600
basis points in excess of the Variable Rate (the "Default Rate").
In addition to the accrual of interest at the Default Rate as provided for in
the previous paragraph, in the event that any payment provided for under this
note shall become overdue for a period in excess of 15 days, a default in the
making of such payment shall exist under this note and a late charge in an
amount equal to five percent (5%) of the defaulted payment shall become
immediately due to the Payee or holder of this note as liquidated damages for
failure to make prompt payment. Such charge shall be payable in any event not
later than the due date of the next subsequent installment of interest or
principal and interest.
This note is being made pursuant to the Loan Agreement. The payment of this
note and all interest under this note is secured by, among other security, a
Security Agreement dated this same date between Maker and Payee (the "Security
Agreement") upon the Collateral (as defined in the Security Agreement), and by
the additional security described in the Loan Agreement. The covenants,
conditions, and agreements contained in the Loan Agreement, the Security
Agreement, and all of the other Loan Documents (as defined in the Loan
Agreement) are hereby made a part of this note. Upon the occurrence of an
Event of Default, the entire unpaid principal sum of this note and all interest
accrued thereon shall become due and payable immediately, without notice at the
option of the holder of this note.
This note was made and negotiated in Columbus, Ohio and all questions
concerning the validity or meaning of this note or relating to the rights and
obligations hereunder shall be construed and resolved under the laws of Ohio.
The undersigned hereby designates the Court of Common Pleas of Franklin County,
Ohio as the court of proper jurisdiction and exclusive venue of and for any and
all lawsuits or other legal proceedings relating to this note; hereby
irrevocably consents to such designation, jurisdiction, and venue; and hereby
waives any objections or defenses relating to jurisdiction or venue with
respect to any lawsuit or other legal proceeding initiated in or transferred to
the Court of Common Pleas of Franklin County, Ohio. In the event any provision
of this note is deemed to be invalid, such a determination shall not affect the
validity of the remainder of this note.
Waiver of Jury Trial
- --------------------
Maker, after consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily, and intentionally waives any right it may have to a
trial by jury in any litigation based upon or arising out of this note or any
course of conduct, dealing, statements (whether oral or written), or actions of
Maker. This waiver shall not in any way affect Payee's ability to pursue
remedies pursuant to any confession of judgment or cognovit provision contained
in this note or the other Loan Documents. Maker shall not seek to consolidate,
by counterclaim or otherwise,
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<PAGE> 3
any action in which a jury trial has been waived with any other action in which
a jury trial cannot be or has not been waived.
Warrant of Attorney
- -------------------
Maker hereby irrevocably authorizes any attorney-at-law to appear in any court
of record in the State of Ohio or in any other state or territory of the United
States at any time after this note becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against the Maker in favor of Payee or the holder of this note for the amount
due hereunder together with interest, expenses, the costs of suit and
reasonable attorneys' fees, and thereupon to release and waive all errors,
rights of appeal and stays of execution. Such authority shall not be exhausted
by one exercise, but judgment may be confessed from time to time as any sums
and/or costs, expenses or reasonable attorneys' fees shall be due, by filing an
original or a photostatic copy of this guaranty. The Maker waives any right to
move any court for an order having an attorney or firm representing Payee or
the holder of this note removed or disqualified as counsel for Payee or the
holder of this note as a result of such attorney or firm confessing judgment
against Maker in accordance with this provision. The Maker hereby expressly
waives any conflicts of interest that may now or hereafter exist as a result of
any attorney representing Payee or the holder of this note confessing judgment
against the Maker and expressly consents to any attorney representing Payee or
the holder of this note or to any other attorney to confess judgment against
the Maker in accordance with this provision. The Maker hereby further consents
and agrees that Payee or the holder of this note may pay any attorney
confessing judgment against the Maker in accordance with this provision, a
reasonable fee for confessing judgment and that any fees so aid may be included
in the amount of such judgment.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
CROWN NORTHCORP, INC.
By /s/
---------------------------
Print Name:Richard A. Brock
Its: Senior Vice President
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<PAGE> 1
$125,000 March 27, 1997
VARIABLE RATE COGNOVIT PROMISSORY NOTE
Crown NorthCorp, Inc., a Delaware corporation ("Maker"), promises to pay to the
order of The Fifth Third Bank of Columbus, an Ohio banking corporation
("Payee"), the principal sum of $125,000, or so much thereof as may be advanced
by Payee to Maker from time to time as permitted under this note, with interest
on the amount of principal outstanding from time to time at the Variable Rate
defined and set forth below:
(a) From the date of this note through and including May 31, 1997,
interest shall accrue on the amount of principal outstanding
from time to time at a variable rate equal to 25 basis points
above the prime rate of interest of The Fifth Third Bank, as
publicly announced by such bank from time to time as its prime
rate of interest for domestic commercial loans (the "Prime
Rate"), and interest only at such variable rate shall be due and
payable monthly, in arrears, on May 1, 1997 and on June 1, 1997.
(b) From June 1, 1997 through and including May 31, 2000, interest
shall accrue on the amount of principal outstanding from time to
time at a variable rate equal to 50 basis points above the Prime
Rate. Commencing on July 1, 1997 and continuing on the first day
of each of the next 35 consecutive calendar months thereafter:
(i) principal shall be due and payable by Maker to Payee in an
amount equal to one/thirty-sixth of the principal balance plus
all accrued interest outstanding on June 1, 1997, and (ii)
accrued interest at such variable rate on the declining unpaid
principal balance of this note shall be due and payable by Maker
to Payee.
(c) The entire unpaid principal balance, plus all accrued and unpaid
interest, shall be due and payable on June 1, 2000 (the
"Maturity Date").
All payments on this note shall be made by Maker to Payee on or before the date
required above and shall be made to Payee at 21 East State Street, Columbus,
Ohio 43215, or at such other address as may be designated by Payee or the
holder of this note from time to time. Maker shall have the right to prepay
this note, in whole or in part, at any time without penalty; provided that in
the event that any such prepayment is made by Maker obtaining funds to prepay
this note, in whole or in part, from any lending institution other than Payee,
there shall be a prepayment penalty equal to two percent (2%) of the principal
balance outstanding immediately prior to such prepayment.
This note evidences a $125,000 draw loan more fully described in the Loan
Agreement dated this same date (the "Loan Agreement") between Maker and Payee.
Provided that no Event of Default
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<PAGE> 2
(as defined in the Loan Agreement) exists, Maker shall have the right, from
time to time at its discretion, to borrow or pay principal under this note up
to $125,000 without penalty. Principal amounts drawn and paid under the note
may not be reborrowed and repaid.
During the term of this note, the Variable Rate shall increase or decrease
automatically, without notice, upon and in the same amount as any increase or
decrease in the Prime Rate. Interest calculations on this note shall be based
upon a 360-day year consisting of 12, 30-day months, but shall be charged for
the actual number of days for which principal is outstanding. In the event that
The Fifth Third Bank discontinues the practice of quoting the Prime Rate, the
rate used for the calculation of the Variable Rate under this note shall
instead be the rate of interest charged by such bank from time to time on
90-day commercial loans made to its prime borrowers.
During the period when an Event of Default exists, the unpaid principal balance
outstanding under this note plus all accrued interest thereon, together with
any late charge provided for under this note, shall bear interest at a rate 600
basis points in excess of the Variable Rate (the "Default Rate").
In addition to the accrual of interest at the Default Rate as provided for in
the previous paragraph, in the event that any payment provided for under this
note shall become overdue for a period in excess of 15 days, a default in the
making of such payment shall exist under this note and a late charge in an
amount equal to five percent (5%) of the defaulted payment shall become
immediately due to the Payee or holder of this note as liquidated damages for
failure to make prompt payment. Such charge shall be payable in any event not
later than the due date of the next subsequent installment of interest or
principal and interest.
This note is being made pursuant to the Loan Agreement. The payment of this
note and all interest under this note is secured by, among other security, a
Security Agreement dated this same date between Maker and Payee (the "Security
Agreement") upon the Collateral (as defined in the Security Agreement), and by
the additional security described in the Loan Agreement. The covenants,
conditions, and agreements contained in the Loan Agreement, the Security
Agreement, and all of the other Loan Documents (as defined in the Loan
Agreement) are hereby made a part of this note. Upon the occurrence of an Event
of Default, the entire unpaid principal sum of this note and all interest
accrued thereon shall become due and payable immediately, without notice at the
option of the holder of this note.
This note was made and negotiated in Columbus, Ohio and all questions
concerning the validity or meaning of this note or relating to the rights and
obligations hereunder shall be construed and resolved under the laws of Ohio.
The undersigned hereby designates the Court of Common Pleas of Franklin County,
Ohio as the court of proper jurisdiction and exclusive venue of and for any and
all lawsuits or other legal proceedings relating to this note; hereby
irrevocably consents to such designation, jurisdiction, and venue; and hereby
waives any objections or defenses relating to jurisdiction or venue with
respect to any lawsuit or other legal proceeding initiated in or transferred to
the Court of Common Pleas of Franklin County, Ohio. In the event any provision
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<PAGE> 3
of this note is deemed to be invalid, such a determination shall not affect the
validity of the remainder of this note.
Waiver of Jury Trial
Maker, after consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily, and intentionally waives any right it may have to a
trial by jury in any litigation based upon or arising out of this note or any
course of conduct, dealing, statements (whether oral or written), or actions of
Maker. This waiver shall not in any way affect Payee's ability to pursue
remedies pursuant to any confession of judgment or cognovit provision contained
in this note or the other Loan Documents. Maker shall not seek to consolidate,
by counterclaim or otherwise, any action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
Warrant of Attorney
Maker hereby irrevocably authorizes any attorney-at-law to appear in any court
of record in the State of Ohio or in any other state or territory of the United
States at any time after this note becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against the Maker in favor of Payee or the holder of this note for the amount
due hereunder together with interest, expenses, the costs of suit and
reasonable attorneys' fees, and thereupon to release and waive all errors,
rights of appeal and stays of execution. Such authority shall not be exhausted
by one exercise, but judgment may be confessed from time to time as any sums
and/or costs, expenses or reasonable attorneys' fees shall be due, by filing an
original or a photostatic copy of this guaranty. The Maker waives any right to
move any court for an order having an attorney or firm representing Payee or
the holder of this note removed or disqualified as counsel for Payee or the
holder of this note as a result of such attorney or firm confessing judgment
against Maker in accordance with this provision. The Maker hereby expressly
waives any conflicts of interest that may now or hereafter exist as a result of
any attorney representing Payee or the holder of this note confessing judgment
against the Maker and expressly consents to any attorney representing Payee or
the holder of this note or to any other attorney to confess judgment against
the Maker in accordance with this provision. The Maker hereby further consents
and agrees that Payee or the holder of this note may pay any attorney
confessing judgment against the Maker in accordance with this provision, a
reasonable fee for confessing judgment and that any fees so aid may be included
in the amount of such judgment.
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<PAGE> 4
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
CROWN NORTHCORP, INC.
By /s/
----------------------------
Print Name: Richard A. Brock
Its: Senior Vice President
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<PAGE> 1
Exhibit 10.63
SECURITY AGREEMENT
This agreement is made effective March 27, 1997, at Columbus, Ohio,
between Crown NorthCorp, Inc., a Delaware corporation ("Debtor"), having its
principal place of business at 1251 Dublin Road, Columbus, Ohio 43215 and The
Fifth Third Bank of Columbus, an Ohio banking corporation ("Secured Party"),
having its principal place of business at 21 East State Street, Columbus, Ohio
43215, who hereby agree as follows:
ss.
Grant of Security Interest. To secure the payment of all of the
Obligations (defined in ss.2, below), including without limitation all of the
Notes (defined in ss.2, below), Debtor grants to Secured Party a security
interest in, and pledges, assigns, and transfers to Secured Party, all of
Debtor's rights, title, and interests in and to all of the foregoing
(collectively referred to hereinafter as, the "Collateral"):
(a) All of Debtor's machinery, equipment, tools, furniture,
furnishings and fixtures including, but not limited to, all
manufacturing, fabricating, processing, transporting and packaging
equipment, power systems, heating, cooling and ventilating systems,
lighting and communications systems, electric, gas and water
distribution systems, food service systems, fire prevention, alarm and
security systems, laundry systems and computing and data processing
systems, excepting Debtor's leasehold interest in any of the above
("Equipment"); all of Debtor's inventory, including, but not limited
to, parts, supplies, raw materials, work in process, finished goods,
materials used or consumed in Debtor's business, repossessed and
returned goods (hereinafter the "Inventory"); all of Debtor's
accounts, accounts receivable, contract rights, guaranties of
accounts, accounts receivable and contract rights and security
therefor, chattel paper, income tax refunds, instruments, negotiable
documents, notes, drafts, acceptances and other forms of obligations
and receivables arising from or in connection with the operation of
Debtor's business including, but not limited to, those arising from or
in connection with Debtor's sale, lease or other disposition of the
Inventory (hereinafter the "Receivables"); and all books, records,
ledger cards, computer programs and other documents or property at any
time evidencing or relating to the Receivables; all of Debtor's
general intangibles, trade names, trademarks, trade secrets, goodwill,
patents, patent applications, copyrights, deposit accounts, licenses
and franchises; and any and all deposits or other sums at any time
credited by or due from the Secured Party to the Debtor, any and all
policies, certificates of insurance, securities, goods, accounts
receivable, choses in action, cash, property and the proceeds thereof
owned by the Debtor or in which the Debtor has an interest, which now
or hereafter are at any time in the possession or control of the
Secured Party or in transit by mail or carrier to or from the Secured
Party, or in the possession of any third party acting in the Secured
Party's behalf, without regard to whether the Secured Party received
the same in pledge for safekeeping, as agent for collection or
transmission or otherwise, or whether the Secured Party has
conditionally released the same (all of the
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foregoing items and types of property hereinafter the "Business
Assets"); whether Debtor's interests in the Business Assets as owner,
co-owner, lessee, consignee, secured party or otherwise be now owned
or existing, or hereafter arising or acquired, and wherever located,
together with all substitutions, replacements, additions and
accessions therefor or thereto, all replacement and repair parts
therefor, all documents including, but not limited to, negotiable
documents, documents of title, warehouse receipts, storage receipts,
dock receipts, dock warrants, express bills, freight bills, airbills,
bills of lading and other documents relating thereto, all products
thereof and all cash and non-cash proceeds thereof including, but not
limited to, notes, drafts, checks, instruments, insurance proceeds,
indemnity proceeds, warranty and guaranty proceeds and proceeds
arising in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Business
Assets by any governmental body, authority, bureau or agency (or any
person acting under color of governmental authority); and
(b) All payments on and proceeds of any of the foregoing
Collateral, and including all rights to payments under any insurance
policy or any warranty, guaranty, or indemnity, payable with respect
to any of the foregoing Collateral.
ss.1. Obligations Secured. This agreement is being made in connection
with the Loan Agreement dated this same date between Debtor and Secured Party
(the "Loan Agreement") and shall secure all obligations of Debtor to Secured
Party, including without limitation all obligations arising under
(collectively, the "Obligations"): (a) the $750,000 Note, the $950,000 Note,
and the $125,000 Note (all as defined in the Loan Agreement and collectively,
the "Notes"); (b) the Loan Agreement; (c) all of Debtor's obligations under the
other Loan Documents (as defined in the Loan Agreement); and (d) any other
indebtedness to Secured Party, whether or not any such obligations are now or
hereafter evidenced by promissory notes or other documents and irrespective of
any guarantees or other security now or hereafter given for any such
obligations.
ss.2. Representations and Warranties. Debtor represents and warrants
to Secured Party that: (a) other than the Huntington Liens (defined below)
which Borrower is causing to be terminated and released of record prior to the
execution and delivery of this agreement, Debtor owns all of the Collateral
free and clear of all leases, security interests, liens, encumbrances, charges,
liabilities, or claims of any nature, except the security interest created by
this agreement; (b) other than financing statements relating to the Huntington
Liens and financing statements in favor of Secured Party, no financing
statements covering all or any part of the Collateral are on file with the
Secretary of State of any state, the recorder of any county, or any other
recording office; (c) upon filing UCC-3 termination statements relating to the
Huntington Liens, which Borrower will file immediately upon execution of this
agreement, this agreement will create a valid first-priority security interest
in all the Collateral securing the payment and performance of the Obligations;
and (d) all filings or other actions necessary or desirable to perfect and
protect such security interests, including without limitation the termination
and release of the Huntington Liens, have been duly made or taken or shall be
duly made or taken immediately upon execution of this agreement. For purposes
of this agreement, the "Huntington Liens" shall mean the first-
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<PAGE> 3
priority security interests and liens of The Huntington National Bank in all of
the business assets of Debtor, as modified by the Intercreditor Agreement among
Debtor, Secured Party, and The Huntington National Bank dated this same date
(the "Intercreditor Agreement"), which are security for the HNB Indebtedness
(as defined in the Intercreditor Agreement).
ss.3. Location of Office and Collateral. Debtor warrants that: (a)
Debtor's principal office and principal place of business in the State of Ohio
is located at the address specified at the beginning of this agreement (the
"Principal Office"); (b) Debtor's principal office and principal place of
business in the States of Georgia, Texas, New Jersey, Virginia, and Missouri
are located at the respective addresses specified on the Exhibit A attached to
this agreement (each, a "State Office"); (c) Debtor will not change the
location of the Principal Office in Ohio or the location of the State Office in
each of those states listed in (b), above, without the giving of written notice
to Secured Party not less than 15 days prior to any such change.
ss.4. Use of Collateral. Except in connection with the ordinary and
usual course of its business, Debtor shall not sell, assign, pledge, or
otherwise transfer or encumber any Collateral.
ss.5. Financing Statements. Debtor hereby irrevocably authorizes
Secured Party or Secured Party's designees to execute on behalf of Debtor such
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as Secured Party may consider
necessary or desirable to perfect, protect, or preserve the security interest
granted or purported to be granted by this agreement.
ss.6. Execution of Documents. Debtor shall execute any documents and
take any other actions requested by Secured Party from time to time to perfect
or protect the security interest granted or purported to be granted by this
agreement or to enable Secured Party to exercise or enforce its rights or
remedies under this agreement.
ss.7. Event of Default. Upon the occurrence of an Event of Default (as
defined in the Loan Agreement), Secured Party may exercise with respect to the
Collateral all rights and remedies of a secured party upon default under the
Uniform Commercial Code as adopted and set forth in the Ohio Revised Code
(including without limitation Chapter 1309, Ohio Revised Code) and all other
rights and remedies under this agreement or otherwise available to Secured
Party. In any action or proceeding to enforce its rights or remedies under this
agreement, Secured Party shall be entitled forthwith to immediate exclusive
possession and control of the Collateral and to receive directly all payments
due or otherwise being made on any of the Collateral, and, upon ex parte
application by Secured Party to any court of competent jurisdiction without
notice to Debtor, shall be entitled to an order giving such immediate exclusive
possession and control to Secured Party or, if Secured Party so elects, to an
order appointing a receiver for the Collateral and without any requirement of
bond or other security and without any showing that immediate or irreparable
injury, loss, or damage will result if such an order is not issued by that
court. For purposes of this agreement, notice to Debtor prior to the date of
public sale of any Collateral or five days prior to the date after which
private sale or other disposition of any Collateral will be made shall
constitute reasonable notice of any such sale.
-3-
<PAGE> 4
ss.8. Notices. All notices and other communications under this
agreement to be made to either Secured Party or Debtor shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed
electronically), or mailed by certified mail (return receipt requested) or sent
by Federal Express, UPS, or other nationally recognized overnight delivery
service for overnight delivery to that party at the address for that party (or
at such other address for such party as such party shall have specified in
notice to the other party):
(a) If to Secured Party:
The Fifth Third Bank of Columbus
21 East State Street
Columbus, Ohio 43215
Attn: Charles D. Hale
Telecopy No.: (614) 341-2606
With a copy to Secured Party's Counsel:
Baker & Hostetler LLP
65 East State Street, Suite 2100
Columbus, Ohio 43215
Attn: Paul G. Ghidotti, Esq.
Telecopy No.: (614) 462-2616
(b) If to Debtor:
Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Attn: Richard A. Brock
Telecopy No.: (614) 488-9780
With a copy to:
Stephen W. Brown, Esq.
Crown NorthCorp, Inc.
1251 Dublin Road
Columbus, Ohio 43215
Telecopy No.: (614) 488-9780
ss.9. Governing Law. Except as to issues relating to perfection of the
security interests granted by Debtor to Secured Party in states other than
Ohio, which shall be construed and resolved under the laws of such other state,
all questions concerning the validity or meaning of
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<PAGE> 5
this agreement or relating to the rights and obligations of the parties with
respect to performance under this agreement shall be construed and resolved
under the laws of Ohio.
ss.10. Severability. The intention of the parties to this agreement is
to comply fully with all laws and public policies, and this agreement shall be
construed consistently with all laws and public policies to the extent
possible. If and to the extent that any court of competent jurisdiction
determines it is impossible to construe any provision of this agreement
consistently with any law or public policy and consequently holds that
provision to be invalid, such holding shall in no way affect the validity of
the other provisions of this agreement, which shall remain in full force and
effect.
ss.11. Venue. The parties to this agreement hereby designate the Court
of Common Pleas of Franklin County, Ohio, as a court of proper jurisdiction and
exclusive venue for any actions or proceedings relating to this agreement;
hereby irrevocably consent to such designation, jurisdiction, and venue; and
hereby waive any objections or defenses relating to jurisdiction or venue with
respect to any action or proceeding initiated in the Court of Common Pleas of
Franklin County, Ohio.
ss.12. Nonwaiver. No failure by either party to insist upon compliance
with any term of this agreement or to exercise any option, enforce any right,
or seek any remedy upon any default of either party shall affect or constitute
a waiver of the first party's right to insist upon such strict compliance,
exercise that option, enforce that right, or seek that remedy with respect to
that default or any prior, contemporaneous, or subsequent default; nor shall
any custom or practice of the parties at variance with any provision of this
agreement affect, or constitute a waiver of, either party's right to demand
strict compliance with the provisions of this agreement.
ss.13. No Third Party Benefit. This agreement is intended for the
exclusive benefit of the parties to this agreement and their respective heirs,
successors, and assigns, and nothing contained in this agreement shall be
construed as creating any rights or benefits in or to any third party.
ss.14. Jury Trial Waiver. Debtor, after consulting or having the
opportunity to consult with legal counsel, knowingly, voluntarily and
intentionally waives any right it may have to a trial by jury in any action or
proceeding based upon or arising out of this agreement or any of the Loan
Documents or any course of conduct, dealings, statements, whether oral or
written, or actions of either party. Debtor shall not seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
ss.16. Complete Agreement. This agreement (including any exhibits and
any documents incorporated into this agreement by reference) contains the
entire agreement among the parties and supersedes any prior agreements,
negotiations, representations, or discussions among them with respect to the
subject matter of this agreement. No additions or other changes to this
agreement shall be binding upon either party unless made in writing and signed
by both parties.
-5-
<PAGE> 6
ss.17. Counterparts. This agreement may be executed in multiple
counterparts, and all such executed counterparts shall constitute one original
agreement, binding on all of the parties, whether or not both of the parties
have executed the same counterparts and whether or not the signature pages from
different counterparts have been combined, and the signature of any party to
any counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
ss.18. Captions. The captions of the various sections of this
agreement are not part of the context of this agreement, but are only labels to
assist in locating those sections, and shall be ignored in construing this
agreement.
ss.19. Survival. All agreements, obligations, warranties, and
representations under this agreement shall survive any modifications made by
either party to this agreement.
ss.20. Genders and Numbers. When permitted by the context, each
pronoun used in this agreement includes the same pronoun in other genders or
numbers and each noun used in this agreement includes the same noun in other
numbers.
ss.21. Successors. This agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the respective heirs, personal
representatives, successors and assigns of each party to this agreement.
ss.22. Cumulative Effect. This agreement is intended as additional
security to Secured Party and does not supersede, waive, or otherwise affect
any other security interests, guarantees, or other agreements between Secured
Party and Debtor.
CROWN NORTHCORP, INC. THE FIFTH THIRD BANK OF
COLUMBUS
By /s/ By /s/
Print Name: Richard A. Brock Charles D. Hale
Its: Senior Vice President Vice President
-6-
<PAGE> 7
EXHIBIT A
-7-
<PAGE> 8
EXHIBIT A
1. Atlanta, Georgia Office
5600 Roswell Road
Prado East
Suite 350
Atlanta, GA 30342
2. Austin, Texas Office
Prime TEMPUS
800 Brazos Street
Suite 1030
Austin, TX 78701
3. Dallas, Texas Office
Park Central VII
12750 Merit Drive
Suite 1015
Dallas, TX 75251
4. Columbus, Ohio Office
1251 Dublin Road
Columbus, OH 43215
5. Hoboken, New Jersey Office
5 Marine View Plaza
Suite 316
Hoboken, NJ 07030
6. McLean, Virginia Office
c/o Eastern Realty
Suite 222
1568 Springhill Road
McLean, VA 22102
<PAGE> 1
Exhibit 10.64
$950,000 March 27, 1997
VARIABLE RATE COGNOVIT PROMISSORY NOTE
Crown NorthCorp, Inc., a Delaware corporation ("Maker"), promises to pay to the
order of The Fifth Third Bank of Columbus, an Ohio banking corporation
("Payee"), the principal sum of $950,000, plus interest on the outstanding
principal balance from time to time at a variable rate (the "Variable Rate")
equal to 50 basis points above the prime rate of interest of The Fifth Third
Bank, as publicly announced by such bank from time to time as its prime rate of
interest for domestic commercial loans (the "Prime Rate") as follows:
(a) Interest at the Variable Rate shall accrue from the date of
this note through and including April 14, 1997.
(b) The entire unpaid principal balance, plus all accrued and
unpaid interest, shall be due and payable on April 15, 1997
(the "Maturity Date").
All payments on this note shall be made by Maker to Payee on or before the date
required above and shall be made to Payee at 21 East State Street, Columbus,
Ohio 43215, or at such other address as may be designated by Payee or the
holder of this note from time to time. Maker shall have the right to prepay
this note, in whole or in part, at any time without penalty; provided that in
the event that any such prepayment is made by Maker obtaining funds to prepay
this note, in whole or in part, from any lending institution other than Payee,
there shall be a prepayment penalty equal to two percent (2%) of the principal
balance outstanding immediately prior to such prepayment.
During the term of this note, the Variable Rate shall increase or decrease
automatically, without notice, upon and in the same amount as any increase or
decrease in the Prime Rate. Interest calculations on this note shall be based
upon a 360-day year consisting of 12, 30-day months, but shall be charged for
the actual number of days for which principal is outstanding. In the event that
The Fifth Third Bank discontinues the practice of quoting the Prime Rate, the
rate used for the calculation of the Variable Rate under this note shall
instead be the rate of interest charged by such bank from time to time on
90-day commercial loans made to its prime borrowers.
During the period when an Event of Default exists, the unpaid principal balance
outstanding under this note plus all accrued interest thereon, together with
any late charge provided for under this note, shall bear interest at a rate 600
basis points in excess of the Variable Rate (the "Default Rate").
In addition to the accrual of interest at the Default Rate as provided for in
the previous paragraph, in the event that any payment provided for under this
note shall become overdue for a period in excess of 15 days, a default in the
making of such payment shall exist under this note and a late
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<PAGE> 2
charge in an amount equal to five percent (5%) of the defaulted payment shall
become immediately due to the Payee or holder of this note as liquidated
damages for failure to make prompt payment. Such charge shall be payable in any
event not later than the due date of the next subsequent installment of
interest or principal and interest.
This note is being made pursuant to the Loan Agreement. The payment of this
note and all interest under this note is secured by, among other security, a
Security Agreement dated this same date between Maker and Payee (the "Security
Agreement") upon the Collateral (as defined in the Security Agreement), and by
the additional security described in the Loan Agreement. The covenants,
conditions, and agreements contained in the Loan Agreement, the Security
Agreement, and all of the other Loan Documents (as defined in the Loan
Agreement) are hereby made a part of this note. Upon the occurrence of an Event
of Default, the entire unpaid principal sum of this note and all interest
accrued thereon shall become due and payable immediately, without notice at the
option of the holder of this note.
This note was made and negotiated in Columbus, Ohio and all questions
concerning the validity or meaning of this note or relating to the rights and
obligations hereunder shall be construed and resolved under the laws of Ohio.
The undersigned hereby designates the Court of Common Pleas of Franklin County,
Ohio as the court of proper jurisdiction and exclusive venue of and for any and
all lawsuits or other legal proceedings relating to this note; hereby
irrevocably consents to such designation, jurisdiction, and venue; and hereby
waives any objections or defenses relating to jurisdiction or venue with
respect to any lawsuit or other legal proceeding initiated in or transferred to
the Court of Common Pleas of Franklin County, Ohio. In the event any provision
of this note is deemed to be invalid, such a determination shall not affect the
validity of the remainder of this note.
Waiver of Jury Trial
Maker, after consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily, and intentionally waives any right it may have to a
trial by jury in any litigation based upon or arising out of this note or any
course of conduct, dealing, statements (whether oral or written), or actions of
Maker. This waiver shall not in any way affect Payee's ability to pursue
remedies pursuant to any confession of judgment or cognovit provision contained
in this note or the other Loan Documents. Maker shall not seek to consolidate,
by counterclaim or otherwise, any action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
Warrant of Attorney
Maker hereby irrevocably authorizes any attorney-at-law to appear in any court
of record in the State of Ohio or in any other state or territory of the United
States at any time after this note becomes due, whether by acceleration or
otherwise, to waive the issuing and service of process, and to confess judgment
against the Maker in favor of Payee or the holder of this note for the
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<PAGE> 3
amount due hereunder together with interest, expenses, the costs of suit and
reasonable attorneys' fees, and thereupon to release and waive all errors,
rights of appeal and stays of execution. Such authority shall not be exhausted
by one exercise, but judgment may be confessed from time to time as any sums
and/or costs, expenses or reasonable attorneys' fees shall be due, by filing an
original or a photostatic copy of this guaranty. The Maker waives any right to
move any court for an order having an attorney or firm representing Payee or
the holder of this note removed or disqualified as counsel for Payee or the
holder of this note as a result of such attorney or firm confessing judgment
against Maker in accordance with this provision. The Maker hereby expressly
waives any conflicts of interest that may now or hereafter exist as a result of
any attorney representing Payee or the holder of this note confessing judgment
against the Maker and expressly consents to any attorney representing Payee or
the holder of this note or to any other attorney to confess judgment against
the Maker in accordance with this provision. The Maker hereby further consents
and agrees that Payee or the holder of this note may pay any attorney
confessing judgment against the Maker in accordance with this provision, a
reasonable fee for confessing judgment and that any fees so aid may be included
in the amount of such judgment.
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
CROWN NORTHCORP, INC.
By /s/
Print Name: Richard A. Brock
Its: Senior Vice President
-3-
<PAGE> 1
Exhibit 10.65
COLLATERAL ASSIGNMENT
OF 1996 FEDERAL INCOME TAX REFUND
Crown NorthCorp, a Delaware corporation ("Assignor"), having its
mailing address at 1251 Dublin Road, Columbus, Ohio 43215, for valuable
consideration received to its full satisfaction, hereby assigns, pledges,
transfers, and sets over to The Fifth Third Bank of Columbus, an Ohio banking
corporation ("Assignee"), having its principal office at 21 East State Street,
Columbus, Ohio 43215, all of Assignor's rights, titles, and interests in, to,
and under Assignor's 1996 federal income tax refund (the "Collateral").
This assignment is made by Assignor for the purpose of securing the
obligations of Assignor (collectively, the "Obligations") to: (i) pay to
Assignee all amounts due to Assignee under the $950,000 Variable Rate Cognovit
Promissory Note dated this same date (the "$950,000 Note") executed and
delivered by Assignor to Assignee, and (ii) perform and observe all obligations
and agreements to be performed by Assignor under this assignment, the $950,000
Note, the Loan Agreement dated this same date (the "Loan Agreement") between
Assignor and Assignee, the Loan Commitment (as defined in the Loan Agreement),
and all of the other Loan Documents (as defined in the Loan Agreement).
In connection with this assignment, Assignor irrevocably appoints
Assignee as its attorney-in-fact to demand, receive, and enforce Assignor's
rights with respect to the Collateral, to give appropriate receipts, releases,
and satisfactions for and on behalf of Assignor relating to the Collateral, and
to do any and all other acts in the name of Assignor relating to the Collateral
with the same force and effect as Assignor could do if this assignment had not
been made. Following the occurrence of an Event of Default (as defined in the
Loan Agreement), Assignee shall have the right to exercise any of the rights to
the Collateral granted to it by Assignor hereunder.
Assignor represents and warrants to Assignee that: (a) Assignor has
full power and authority to execute and deliver this assignment to Assignee;
(b) no previous assignment of Assignor's interest in the Collateral has been
made; (c) Assignor's rights, title, and interests in and to the Collateral is
free and clear from all liens, encumbrances, or other claims; (d) Assignor is
the sole owner of all rights, title, and interests in and to the Collateral;
and (e) all of the Collateral is in full force and effect as of the date of
this assignment and no event, condition, or occurrence exists that constitutes,
or with notice or passage of time, or both, would constitute a breach of or
default under any term or condition of any of the Collateral. Assignor agrees
not to grant a security interest in, assign, sell, pledge, transfer, mortgage,
or otherwise encumber its interest in the Collateral so long as this assignment
is in effect.
At any time and from time to time, upon the reasonable request by
Assignee, Assignor shall promptly execute any documents and take any other
actions to perfect, protect, or preserve the obligations of Assignor under this
agreement and the security interest granted or purported to be granted by this
agreement as a first priority security interest upon the Collateral or to
enable Secured Party to exercise or enforce its rights or remedies under this
agreement.
-1-
<PAGE> 2
Assignor hereby irrevocably appoints Assignee as Assignor's
attorney-in-fact, with full power of substitution, to take such actions and
execute one or more financing statements, continuation statements, or
amendments thereto, and such other instruments or notices as Assignee may
consider necessary or desirable, in its sole and absolute discretion, to
perfect, protect, or preserve the security interest granted or purported to be
granted by this agreement on behalf of and in the name of Assignor.
The security interest granted by Assignor to Assignee under this
agreement shall be governed by the Uniform Commercial Code as enacted in the
State of Ohio. In addition to and not in limitation of the other rights of
Assignee under this agreement, in the Event of Default under the Loan
Agreement, Loan Commitment, or any of the Loan Documents, Assignee shall have,
with respect to the rights, title, and interests of Assignor in the Contracts
(including without limitation this agreement), all of the rights of a secured
party under the Uniform Commercial Code as enacted in the State of Ohio.
This assignment shall be binding upon and inure to the benefit of
Assignee, Assignor, and their respective successors and assigns. This
assignment is assignable by Assignee in connection with an assignment of the
$950,000 Note.
Assignor, after consulting or having the opportunity to consult with
legal counsel, knowingly, voluntarily and intentionally waives any right it may
have to a trial by jury in any action or proceeding based upon or arising out
of this assignment or any course of conduct, dealings, statements, whether oral
or written, or actions of Assignor or Assignee. Assignor shall not seek to
consolidate, by counterclaim or otherwise, any action in which a jury trial has
been waived with any other action in which a jury trial cannot be or has not
been waived.
If and when the indebtedness evidenced by the $950,000 Note have been
fully paid and satisfied, and all of the obligations and agreements of Assignor
under the Loan Agreement, Loan Commitment, and all of the Loan Documents have
been performed and observed by Assignor, without the necessity of Assignee
exercising its rights hereunder, this assignment shall terminate and thereafter
be of no further force or effect.
This assignment is made effective March 31, 1997.
CROWN NORTHCORP, INC.
By: /s/
Print Name: Richard A. Brock
Its: Senior Vice President
-2-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES IN THIS FORM 10-QSB AND IS
QUALIFIED IN ITS ENTIRITY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000915338
<NAME> CROWN NORTHCORP, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 737,940
<SECURITIES> 0
<RECEIVABLES> 996,573
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,125,149
<PP&E> 3,150,366
<DEPRECIATION> 1,161,216
<TOTAL-ASSETS> 12,088,525
<CURRENT-LIABILITIES> 2,045,909
<BONDS> 3,618,675
2,000,000
10
<COMMON> 98,270
<OTHER-SE> 2,704,177
<TOTAL-LIABILITY-AND-EQUITY> 12,088,525
<SALES> 0
<TOTAL-REVENUES> 1,679,711
<CGS> 0
<TOTAL-COSTS> 2,477,380
<OTHER-EXPENSES> 206,563
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78,170
<INCOME-PRETAX> (1,082,402)
<INCOME-TAX> (182,563)
<INCOME-CONTINUING> (899,839)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (899,839)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> 0
</TABLE>
