ACCOUNT SECURITY AND CONTROL AGREEMENT
AMONG
NORD RESOURCES CORPORATION,
THE CHASE MANHATTAN BANK,
COMMONWEALTH DEVELOPMENT CORPORATION,
DEG - DEUTSCHE INVESTITIONS UND ENTWICKLUNGSGESELLSCHAFT MBH,
EXPORT-IMPORT BANK OF THE UNITED STATES,
INTERNATIONAL FINANCE CORPORATION,
AND
OVERSEAS PRIVATE INVESTMENT CORPORATION
DATED AS OF MAY 15, 1998
ACCOUNT CONTROL AND SECURITY AGREEMENT
ACCOUNT CONTROL AND SECURITY AGREEMENT, dated as of May 15, 1998 (this
"AGREEMENT"), by and among NORD RESOURCES CORPORATION, a corporation organized
and existing under the laws of the State of Delaware (the "PLEDGOR"), THE CHASE
MANHATTAN BANK, a New York State chartered bank, as securities intermediary (in
such capacity, together with its successors and assigns, the "SECURITIES
INTERMEDIARY"), the OVERSEAS PRIVATE INVESTMENT CORPORATION, an agency of the
United States of America ("OPIC"), COMMONWEALTH DEVELOPMENT CORPORATION ("CDC"),
DEG - DEUTSCHE INVESTITIONS UND ENTWICKLUNGSGESELLSCHAFT MBH ("DEG"),
EXPORT-IMPORT BANK OF THE UNITED STATES ("EX-IM"), and INTERNATIONAL FINANCE
CORPORATION ("IFC" and together with OPIC, CDC, DEG and Ex-Im, the "BANKS").
PRELIMINARY STATEMENTS
(1) The Banks and the Pledgor entered into a Pledge, Assignment and
Security Agreement, dated as of February 28, 1996, as amended by a First
Amendment to Pledge Assignment and Security Agreement dated March 31, 1998 (as
the same may be further amended from time to time, the "PLEDGE AGREEMENT"),
pursuant to which the Pledgor pledged and assigned to the Banks all of its
right, title and interest in and to its rights to receive all but
US$4,564,024.27 of amounts payable under or in connection with OPIC Contract of
Insurance No. A628 and any extensions or renewals thereof or substitutions
therefor (the "OPIC Contract"), entered into by and between OPIC, as insurer,
and the Assignor, together with all proceeds thereof (collectively, the "Excess
Proceeds") as security for the Pledgor's obligations under(i) its Guaranty dated
as of February 28, 1996 (as the same may be amended from time to time, the
"GUARANTY") made for the benefit of the Banks, and (ii) to the extent the
Pledgor may have any obligations thereunder, the First Amendment and Restatement
of Project Funds Agreement dated as of November 17, 1992, (the "PFA") among,
INTER ALIA, the Pledgor and the Banks (the "LIABILITIES").
(2) The Pledge Agreement provides, INTER ALIA, that, so long as no
Default (as defined in the Pledge Agreement) shall have occurred and be
continuing, the parties thereto will use best efforts to appoint a collateral
agent to hold the Excess Proceeds on behalf of the Banks as security for the
Liabilities.
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(3) Each of the Banks has entered into a waiver and amendment agreement
dated as of May 15, 1998 (collectively, the "WAIVER AND AMENDMENT AGREEMENTS"),
pursuant to which the Banks have agreed to reschedule, and to waive certain
defaults with respect to, the payment obligations guaranteed under the Guaranty,
and to apply a portion of the Excess Proceeds to such payment obligations.
(4) It is a condition precedent to the effectiveness of the Waiver and
Amendment Agreements that the Pledgor shall have made the pledge and assignment
contemplated by this Agreement, which the Pledgor has agreed to do to induce the
Banks to enter into such Waiver and Amendment Agreements.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Banks to enter into the Waiver and Amendment Agreements, the parties hereto
hereby agree as follows:
SECTION 1. ASSIGNMENT. The Pledgor hereby pledges and assigns to the
Banks, and hereby grants to the Banks a security interest in, all of its right,
title, and interest in and to the portion of the Excess Proceeds referenced to
in Section 4 below together with all interest, dividends and other income
thereon and proceeds thereof including, without limitation, the following,
whether now owned or hereafter acquired (collectively, the "COLLATERAL"):
(i) account no. E-00937, a non-interest bearing trust account
maintained by the Pledgor with the Securities Intermediary pursuant to Section
15(e) (the "SECURITIES ACCOUNT"), and all funds (including, without limitation,
that portion of the Excess Proceeds credited to such account as provided in
Section 4, and any other cash balances credited to such account), securities,
certificates, instruments, investment property, and all other property and
assets constituting financial assets from time to time held therein or required
to be deposited therein by the Pledgor and all other rights of the Pledgor in
and arising out of such account
(ii) all assets of whatever type or kind (whether or not such asset is a
Permitted Investment as hereinafter defined), placed or to be place in the
Securities Account, including all securities, investment securities,
instruments, accounts, general intangibles, contract rights, chattel paper,
choses in action, deposit accounts, and certificates of deposit, and the
certificates, certificates of deposit, or other instruments or documents
(including depository receipts, if any) evidencing any of such assets, any
investments made therewith, and all dividends, interest, cash, or other income
on and all proceeds of any of the foregoing now owned or hereafter acquired by
the Pledgor;
(iii) all proceeds of any and all of the foregoing Collateral and all
rights and privileges pertaining thereto (including, without limitation, any
proceeds derived from the sale, conversion, exchange, exercise, payment, or
liquidation
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thereof, any funds or payments received from any reinvestment of such proceeds
in whatever form the same may be, and proceeds which constitute property of the
types described in clauses (i) and (ii) of this Section 1) and, to the extent
not otherwise included, any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Collateral and cash.
SECTION 2. SECURITY FOR OBLIGATIONS. The pledge, assignment, and grant in
this Agreement is made by the Pledgor to the Banks to secure: (a) the payment
in full when due of all obligations and liabilities, whether contingent or
otherwise, of the Pledgor now or hereafter existing under the Guaranty and, to
the extent the Pledgor may have any obligations thereunder, the PFA, whether for
principal, interest, premium, indemnity amounts, fees, expenses, or otherwise,
including, without limitation, all obligations of the Pledgor now or hereafter
existing under this Agreement; (b) the performance by the Pledgor of all of its
obligations and liabilities to the Banks under the Guaranty and, to the extent
the Pledgor may have any obligations thereunder, the PFA; and (c) in the event
of any proceeding for the collection or enforcement of any indebtedness,
obligations, or liabilities referred to in clauses (a) and (b) above, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling,
or otherwise disposing of or realizing on the Collateral, together with
attorneys' fees and court costs (all such obligations, liabilities, sums, and
expenses of the Pledgor set forth in clauses (a) through (c) above being herein
collectively called the "OBLIGATIONS"). Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Obligations and would be owed by the Pledgor to the Banks but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization, or similar proceeding involving the Pledgor.
SECTION 3. WAIVER. The Pledgor hereby waives demand, notice, protest,
notice of acceptance of this Agreement, Collateral received or delivered, or
other action taken in reliance hereon, all demands and notices in connection
with the delivery, acceptance, performance, default, or enforcement of any of
the Obligations for which any of the Collateral is pledged and all other demands
and notices of any description, and assents to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange, or
release of Collateral, or to the addition or release of any Person primarily or
secondarily liable.
SECTION 4. DELIVERY OF PLEDGED COLLATERAL. Pursuant to a notice delivered
by the Banks to Overseas Private Investment Corporation, as insurer, (in such
capacity, the "INSURER") in the form attached hereto as Exhibit A, Excess
Proceeds in the amount of $5,513,046.56 shall be delivered by the Insurer to the
Securities Intermediary to be held in the Securities Account for the benefit of
the Banks as set forth herein. Upon receipt of such Excess Proceeds, the
Securities Intermediary shall deliver to each of the Banks, with a copy to Nord,
a receipt in the form attached hereto as Exhibit B acknowledging such deposit.
All interest, dividends and other proceeds of the Collateral shall be deposited
in or otherwise
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credited to the Securities Account by the Securities Intermediary. All
certificates or instruments, if any, representing or evidencing the Collateral
shall be held in the Securities Account by the Securities Intermediary and
remain in its possession in the State of New York, shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Banks.
SECTION 5. INVESTMENT OF COLLATERAL HELD IN SECURITIES ACCOUNT.
The Securities Intermediary shall invest all cash deposited or credited to the
Securities Account (including without limitation, the Excess Proceeds and any
interest, dividends or other proceeds of the Collateral deposited in or
otherwise credited to the Securities Account pursuant to Section 4) in Dollar
denominated investments, consisting of (A) securities that, at the date of
investment, are direct obligations of, or obligations fully guaranteed or
insured by, the United States or any agency or instrumentality of the United
States having a maturity of not later than September 30, 1998, and (B) such
other short-term, liquid investments considered to be of high-grade investment
quality by the Pledgor as the Banks may approve in writing (any or all of such
investments referred to herein as "PERMITTED INVESTMENTS") pursuant to written
instruction from Pledgor or, after notice of default as provided in Section 11,
from the Banks. The Excess Proceeds shall be invested initially as set forth on
Schedule 2 annexed hereto. All Permitted Investments shall be registered in the
name of the Security Intermediary for the benefit of the Banks pursuant to this
Agreement. The Banks irrevocably instruct the Securities Intermediary with
respect to any Federal Book-Entry Securities constituting part of the
Collateral, to continuously (a) maintain, or cause or direct to be maintained,
such Collateral in the records of the Federal Reserve Bank of New York for the
sole and exclusive account of the applicable securities intermediary, and
(b) identify, or cause or direct to be identified, on the books and records of
the applicable securities intermediary for the sole and exclusive benefit of the
Securities Intermediary and in the books and records of the Securities
Intermediary as being the property of, or subject to a pledge and security
interest in favor of, the Banks.
SECTION 6. DISPOSITION OF COLLATERAL HELD IN SECURITIES ACCOUNT.
So long as no default shall have occurred and be continuing under the
Guaranty, amounts shall be disbursed from the Securities Account as follow:
A Unless the Securities Intermediary has received contrary instructions from
the Banks, the Securities Intermediary shall disburse from the Securities
Account to each of the Banks on September 30, 1998, the respective amount
set forth next to its name on the attached Exhibit C. The Banks agree to
apply such amounts to the obligations of SRL guaranteed by the Pledgor
under the Guaranty coming due on
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September 30, 1998 pursuant to the Waiver and Amendment Agreements. For
purposes of such disbursement, the Excess Proceeds shall not constitute
"Distribution Moneys" as such term is defined in the Security Sharing and
Intercreditor Agreement dated as of November 17, 1993, among the Banks and
Sierra Rutile Limited, a corporation organized and existing under the laws
of Sierra Leone and indirectly 50% owned by the Pledgor ("SRL"). In the
event the Collateral, after liquidation of all Permitted Investments, is
not sufficient to make such payments in full on such date, each payment
shall instead be made in proportion to Pro-Rata Share (as set forth on
Exhibit C).
B In the event the Banks receive a notice of prepayment concerning the
Obligations, the Banks agree, at the request of the Pledgor, to issue a
notice of prepayment to the Securities Intermediary directing that the
Securities Intermediary disburse to the Banks from the Securities Account
on the prepayment date the amount specified by the Pledgor in its request
to the Banks, and the Securities Intermediary shall disburse to each Bank a
percentage of such amount equal to the respective percentage set forth next
to its name on the attached Exhibit C (such percentage, its "PRO RATA
SHARE").
C The Securities Intermediary shall take any other action with respect to
disbursements from the Securities Account pursuant to written instructions
from the Banks.
D Upon notice from the Banks that the Obligations have been paid in full, the
Securities Intermediary shall disburse any balance remaining in the
Securities Account to or at the direction of the Pledgor.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants as follows:
(a) It has established the Securities Account with the Securities
Intermediary.
(b) The Collateral held by it or on its behalf shall be fully paid and
nonassessable, and all documentary, stamp, or other taxes or fees that may be
owing in connection with the issuance, transfer, and pledge thereof hereunder
shall have been paid by it or on its behalf.
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(c) This Agreement creates a valid security interest in the Collateral
purported to be pledged and assigned by the Pledgor hereunder securing the
payment of the Obligations.
(d) Each item of Collateral held in the Securities Account constitutes
a "security entitlement" (as defined in Article 8 of the Uniform Commercial Code
as in effect in the State of New York (the "UCC")); all of such Collateral is
located in the State of New York; the security interest created by this
Agreement in the Securities Account and such Collateral is perfected under the
UCC, and such security interest, as so perfected, is first priority.
(e) The Pledgor is the legal and beneficial owner of and has good title
to the Collateral purported to be pledged and assigned by it hereunder, free and
clear of any lien thereon, other than the lien created under the Pledge
Agreement . No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral is on file in any recording
office, except such as may have been filed in favor of the Banks relating to
this Agreement.
(f) The Permitted Investments, when deposited into the Securities
Account, will constitute "financial assets", as defined in Article 8 of the UCC.
(g) The Pledgor is not a party to any agreement with respect to the
establishment, management, or operation of the Securities Account or investment
of amounts deposited or held therein, except for this Agreement.
(h) The Banks have sole "control" (as defined in Article 8 of the UCC)
of the Securities Account and the financial assets held therein.
(i) The Pledgor has neither (i) borrowed any money from, (ii) been
extended any credit by, nor (iii) become otherwise obligated to pay any money
to, the Securities Intermediary, other than the fees or expenses payable to the
Securities Intermediary pursuant to Section 12(b).
(j) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived;
(k) This Agreement has been duly and validly authorized by the Pledgor,
is binding and enforceable against the Pledgor in accordance with its terms,
does not violate any provision of any law, rule, regulation, order, judgment or
decree applicable to Pledgor, and no consent of any other party is necessary to
accomplish the pledge, assignment and grant of security interest contemplated
hereby
(l) The Pledgor is now, and after execution and delivery of this
Agreement will continue to be, solvent and no bankruptcy or insolvency
proceedings are pending or contemplated by or against the Pledgor
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SECTION 8. FURTHER ASSURANCES. (a) The Pledgor agrees that from time to
time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Banks may request, in order to perfect, protect, and
preserve the pledge, assignment, and security interest granted or purported to
be granted hereby or to enable the Banks to exercise and enforce their rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor will execute and file such assignments,
certificates, supplemental writings, financing or (at the request of the Banks)
continuation statements, or amendments thereto, and such other instruments or
notices, and do all other acts and things, as may be necessary or desirable, or
as the Banks may request, in order to evidence more fully and perfect and
preserve the pledge, assignment and security interest granted or purported to be
granted hereby.
(b) The Pledgor hereby further authorizes the Banks to file one or more
financing or continuation statements, and amendments thereto (any such financing
or continuation statements or amendments to be delivered by the Pledgor to the
Banks in form sufficient for filing and with instructions for filing thereof),
relating to all or any part of the Collateral without the signature of the
Pledgor where permitted by law. A photographic or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Banks from time to time, and no
less than once every fiscal quarter of each Fiscal Year of the Pledgor,
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Banks may reasonably
request, all in reasonable detail.
SECTION 9. COVENANTS. The Pledgor covenants and agrees that, so long as
any of the Obligations shall remain unpaid, unless the Banks shall otherwise
consent in writing, the Pledgor will:
(a) not make any withdrawal from or direct that any payment be debited
from the Securities Account other than as expressly permitted by this Agreement;
(b) not permit any Person other than the Banks to have "control" (as
defined in Article 8 of the UCC) of the Securities Account or any of the
financial assets held therein, including, without limitation, as a result of the
grant of a security interest in any such Securities Account or assets to the
Chase Manhattan Bank or any other Person acting as securities intermediary with
respect to such Securities Account and assets;
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(c) pay all documentary, stamp, registration, or other taxes or fees,
if any, to which this Agreement may be subject or give rise, and to indemnify
the Banks against any and all liabilities with respect to or resulting from any
delay or omission on the part of the Pledgor to pay any such duties, taxes, or
fees;
(d) not (i) borrow any money from, (ii) allow any credit to be extended
to it by, or (iii) become otherwise obligated to pay any money to, the
Securities Intermediary, other than the fees or expenses payable to the
Securities Intermediary pursuant to Section 12(b); and
(e) not take any action in connection with the Collateral that would
materially impair the value of the Collateral or that would impair the interest
or rights of the Banks therein.
SECTION 10. BANKS MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Banks, or any of them, may perform, or cause
performance of, such agreement, and the expenses of the Banks incurred in
connection therewith shall be payable by the Pledgor under Section 12(b).
SECTION 11. REMEDIES. If any default under the Guaranty shall have
occurred and be continuing:
(a) The Banks, and each of them, shall be entitled to exercise all of
the rights, powers and remedies (whether vested in them by this Agreement, by
law, in equity, by statute or otherwise), to the maximum extent permitted by
applicable law, for the protection and enforcement of their rights in respect of
the Collateral, and to exercise the following rights to the maximum extent
permitted by applicable law:
(i) to have and exercise all of the rights and remedies with
respect to the Collateral of a pledgeholder or a secured party under the UCC,
and such additional rights and remedies to which a pledgeholder or secured party
is entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the right to
exercise all powers of ownership pertaining to the Collateral (whether or not
transferred into the name of the Banks) as if the Banks were the sole and
absolute owner thereof;
(ii) to direct the Securities Intermediary to transfer such
Bank's Pro Rata Share of the Collateral from the Securities Account to, or to
the account of, such Bank. Upon receipt of any such instruction from any Bank,
the Securities Intermediary shall notify each other Bank thereof, and shall
transfer to such Bank its Pro Rata Share of the Collateral in accordance with
wiring instructions delivered by such Bank to the Securities Intermediary. Upon
any such transfer to a
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Bank, such Bank's Pro Rata Share of the Collateral shall be reduced to zero,
and the Pro Rata Shares of the other Banks with respect to the remaining
Collateral shall be adjusted accordingly.
SECTION 12. CONCERNING THE SECURITIES INTERMEDIARY.
(a) POWERS OF THE SECURITIES INTERMEDIARY. The Pledgor and each of the
Banks hereby designates and appoints The Chase Manhattan Bank as Securities
Intermediary and agrees that the Securities Intermediary shall exercise such
powers under this Agreement as are delegated to the Securities Intermediary by
the terms hereof. The Chase Manhattan Bank hereby agrees to act as Securities
Intermediary upon the express terms and conditions contained in this Agreement.
(b) COMPENSATION AND REIMBURSEMENT OF SECURITIES INTERMEDIARY. (i)
The Pledgor upon execution hereof shall pay the Securities Intermediary the fees
payable pursuant to Schedule I hereto.
(ii) The Pledgor shall reimburse the Securities Intermediary upon
request for all expenses, disbursements, and advances incurred or made by the
Securities Intermediary in implementing any of the provisions of this Agreement,
including, without limitation, compensation and the expenses and disbursements
of its counsel and agents, except any such expense, disbursement, or advance as
may arise from its gross negligence or willful misconduct.
(iii) The Securities Intermediary shall promptly notify the Banks
of any failure by the Pledgor to pay the Securities Intermediary for any fees
and expenses due and payable to the Securities Intermediary pursuant to this
Section 12(b).
(c) SECURITIES INTERMEDIARY'S WAIVER OF LIEN ON COLLATERAL. The
Securities Intermediary hereby waives any Lien, any right of setoff, and any
other claim or right that it may have against or on the Collateral, including,
without limitation the Securities Account, express or implied, statutory or
otherwise.
(d) RESPONSIBILITIES OF THE SECURITIES INTERMEDIARY. (i) The
Securities Intermediary shall exercise the same degree of care toward the
Collateral as it exercises toward its own similar property and shall not be held
to any higher standard of care under this Agreement.
(ii) The Securities Intermediary shall be obligated to perform
only such duties as are expressly set forth in this Agreement. No implied
covenants or obligations shall be inferred from this Agreement against the
Securities Intermediary, nor shall the Securities Intermediary be bound by the
provisions of any other agreement.
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(iii) The Securities Intermediary shall not be liable hereunder
except for its own gross negligence or willful misconduct and the Pledgor agrees
to indemnify the Securities Intermediary and any predecessor securities
intermediary for and hold it harmless as to any and all documented loss,
liability, claim, damage, or expense, including, without limitation, taxes other
than taxes based on the income of the Securities Intermediary and reasonable
attorney's fees and expenses, incurred without gross negligence or willful
misconduct on the part of the Securities Intermediary and arising out of or in
connection with the Securities Intermediary's duties under this Agreement.
Anything in this agreement to the contrary notwithstanding, in no event shall
the Securities Intermediary be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Securities Intermediary has been advised of the likelihood
of such loss or damage and regardless of the form of action. Specifically and
without limiting the foregoing, the Securities Intermediary shall in no event
have any liability in connection with its investment, reinvestment or
liquidation, in good faith and in accordance with the terms hereof, of any
Collateral held by it hereunder, including, without limitation, any liability
for any delay not resulting from gross negligence or willful misconduct in such
investment, reinvestment or liquidation, or for any loss of income incident to
any such delay. The Securities Intermediary shall have the right to liquidate
any investments held, in order to provide funds necessary to make required
payments under this Agreement. The Securities Intermediary in its capacity as
agent hereunder shall not have any liability for any loss sustained as a result
of any investment made pursuant to the instructions of the parties hereto or as
a result of any liquidation of any investment prior to its maturity or for the
failure of the parties to give the Securities Intermediary instructions to
invest or reinvest fund or any earnings thereon.
(iv) In no event shall the Securities Intermediary be liable (A)
for acting in accordance with entitlement orders or other instructions,
directions, or requests from the Banks or (B) for special or consequential
damages.
(v) The Securities Intermediary shall be entitled to
conclusively rely upon any order, judgment, certification, instruction, notice,
opinion, or other writing delivered to it in compliance with the provisions of
this Agreement without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of service
thereof. The Securities Intermediary may act in reliance upon any instrument
comporting with the provisions of this Agreement or signature believed by it to
be genuine and may assume that any Person purporting to give notice or receipt
or advice or make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
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(vi) At any time the Securities Intermediary may request in writing
an instruction in writing from the Banks, the Securities Intermediary may at its
own option include in such request the course of action it proposes to take and
the date on which it proposes to act, regarding any matter arising in connection
with its duties and obligations hereunder. The Securities Intermediary shall
not be liable for acting without the Banks' consent in accordance with such a
proposal on or after the date specified therein, provided that the specified
date shall be at least two (2) Business Days after the Banks receive the
Securities Intermediary's request for instructions and its proposed course of
action, and provided further that, prior to so acting, the Securities
Intermediary has not received the written instructions requested.
(vii) The Securities Intermediary does not have any interest in
the Collateral deposited hereunder but is serving only as securities
intermediary under the Securities Account and has only possession thereof.
(viii) The Securities Intermediary makes no representation as to
the validity, value, genuineness or collectability of any security or other
document or instrument held by or delivered to it.
(ix) The Securities Intermediary shall not be called upon to
advise any party as to selling or retaining, or taking or refraining from taking
any action with respect to, any securities or other property and assets
deposited hereunder.
(x) No provision of this Agreement shall require the Securities
Intermediary to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties, or in the exercise of any of
its rights or powers, hereunder.
(xi) For purposes of the duties of the Securities Intermediary
hereunder a default shall occur or be deemed to occur when the Securities
Intermediary shall have received a written notice from any Bank so stating.
(xii) The provisions of this Section 12 shall survive termination
of this Agreement and/or the closing of the Securities Account by the Securities
Intermediary.
(e) THE SECURITIES ACCOUNT. (1) The Securities Intermediary has
established the Securities Account for the benefit of the Banks pursuant to this
Agreement. The Securities Intermediary has styled the Securities Account to
read: "The Chase Manhattan Bank, as Securities Intermediary under the Account
Control And Security Agreement, dated as of May 15, 1998, by and among for Nord
Resources Corporation, the Overseas Private Investment Corporation, Commonwealth
Development Corporation, DEG - Deutsche Investitions Und
Entwicklungsgesellschaft Mbh, Export-Import Bank of the United States, and
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International Finance Corporation, Collateral Account." The Securities
Intermediary shall not change the name or account number of the Securities
Account without the prior written consent of the Banks and notice to the
Pledgor. The Securities Intermediary shall maintain the Securities Account and
shall not terminate or close the Securities Account without the prior written
consent of the Banks and notice to the Pledgor, except as provided in Section
12(f). The Securities Account shall at all times (A) be maintained at an office
of the Securities Intermediary located in the State of New York, which office
shall be identified on the account statements pertaining to the Securities
Account, and (B) be in the exclusive possession of, and under the exclusive
dominion and control of, the Securities Intermediary acting pursuant to the
terms of this Agreement or otherwise at the direction of the Banks. The
Securities Intermediary shall provide to the Banks (1) copies of all account
statements, confirmations, and other correspondence relating to the Securities
Account that is provided to the Pledgor, (2) a monthly report of all of the
financial assets held in, and transactions in connection with, the Securities
Account, and (3) any other reports or other correspondence that the Banks, or
any of them, may reasonably request.
(ii) The Securities Intermediary agrees to accept all funds,
securities, instruments, investment property, financial assets, and other
property and assets, including, without limitation, the Excess Proceeds (or any
portion thereof), constituting Collateral to be delivered by or on behalf of the
Pledgor to the Securities Intermediary pursuant to Section 4, and promptly to
deposit all such Collateral into the Securities Account. Any and all Collateral
delivered to the Securities Intermediary to be held in the Securities Account
and the Pledgor's rights to such Collateral shall be subject to the terms of
this Agreement without any further documentation. The Pledgor irrevocably
directs the Securities Intermediary to make all notations in the Securities
Intermediary's records pertaining to the Securities Account that are necessary
or appropriate to reflect the security interest granted hereunder to the Banks.
(iii) The Securities Intermediary shall hold the Securities
Account during the term of this Agreement as a securities intermediary for such
account, and shall treat the funds, securities, instruments, investment
property, financial assets, and other property and assets, including, without
limitation, the Excess Proceeds, constituting Collateral, and all rights related
thereto, now or hereafter deposited in or credited to the Securities Account as
financial assets, pledged by the Pledgor to the Banks. The Securities
Intermediary agrees to hold such Collateral in the State of New York, including,
without limitation, the Excess Proceeds (including, without limitation, any free
credit balances), for the benefit of the Banks. All amounts held in the
Securities Account shall constitute a part of the Collateral and shall not
constitute payment of any Indebtedness or any other obligation of the Pledgor
until applied as provided in this Agreement.
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(iv) The Securities Intermediary hereby unconditionally agrees,
and the other parties hereto acknowledge and agree, that (A) the Securities
Intermediary will comply with any and ALL WRITTEN INSTRUCTIONS (each being an
"entitlement order" as defined in Art. 8 of the UCC and notification
communicated to the Securities Intermediary directing transfer, investment or
redemption of any financial asset in, or the withdrawal of any financial asset
from, the Securities Account) and other instructions originated by the Banks
with respect to the Securities Account (or the financial assets deposited
therein or credited thereto) without further consent by the Pledgor and
notwithstanding any contrary instructions to the Securities Intermediary from
the Pledgor, and (B) the Pledgor shall have only such rights to transfer,
invest, redeem or withdraw such financial assets as specifically provided in a
written instruction by the Banks to the Securities Intermediary.
(v) The Securities Intermediary represents, warrants and
covenants as follows: (A) the Securities Account has been established by the
Securities Intermediary for the Pledgor and is subject to this Agreement; (B)
Securities Intermediary will not take any action with regard to the Securities
Account or the Collateral except in accordance with this Agreement (C) the
Securities Intermediary hereby agrees that all items of income (including,
without limitation, dividends, interest and other distributions on the financial
assets contained in the Securities Account), gain, expense, and loss recognized
in the Securities Account shall be reported by the Securities Intermediary in
the name and under the tax identification number of the Pledgor; (D) The Chase
Manhattan Bank, acting solely in its capacity as Securities Intermediary under
this Agreement, has not extended, and agrees that it will not extend, any credit
to the Pledgor; (E) the Securities Intermediary shall at all times maintain an
office located in the State of New York; (F) it is a bank which regularly
accepts in the ordinary course of its business securities of the same type as
the Collateral as a custodial service for customers and maintains in the State
of New York securities accounts for its customers and will be acting in such
capacity at all times hereunder; (G) it will maintain its offices and books and
records with respect to its securities accounts in the State of New York; (H) it
will not be a "clearing corporation" as defined in Section 8-102(3) of the UCC;
and (I) it will at all times maintain a book-entry account with the Federal
Reserve Bank of New York.
(f) CLOSING OF SECURITIES ACCOUNT. (i) The Securities Intermediary
may resign or close the Securities Account at any time by giving at least 60
days' written notice to the Pledgor and the Banks. The Banks may enter into an
agreement with a successor securities intermediary during such notice period, at
which time the Securities Intermediary shall keep the Securities Account open
and hold all of the Collateral deposited therein or credited thereto, pending
distribution to such successor, until all fees owed to the Securities
Intermediary pursuant to the provisions of Section 12(b) are paid.
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(ii) The Banks may cause the Securities Account to be closed upon
written notice to the Securities Intermediary signed by the Banks. Such closing
shall take effect upon delivery of the Collateral then in the possession of the
Securities Intermediary or maintained in its name to a successor securities
intermediary designated in writing by the Banks, or directly to the Banks in
accordance with their Pro Rata Shares, and the Securities Intermediary shall
thereupon be discharged from all obligations under this Agreement and shall have
no further duties or responsibilities in connection herewith. The Securities
Intermediary shall deliver the Collateral without unreasonable delay after
receiving the Banks' notice.
(iii) Upon termination of this Agreement pursuant to Section 16
(a), but subject to the provisions of Section 16 (b), the Securities
Intermediary promptly shall turn over all Collateral then in its possession or
maintained in its name to the Pledgor and cause the Securities Account to be
closed.
SECTION 13. CERTAIN RIGHTS, POWERS AND REMEDIES. The rights, powers and
remedies of the Banks hereunder are in addition to all rights, powers and
remedies given by applicable law, the Guaranty, or any other document or
agreement. The exercise by the Banks or any of them of any one or more of the
rights, powers and remedies herein shall not be construed as a waiver of any
other rights, powers and remedies, including, without limitation, any other
rights of setoff, or rights under any other document or agreement, and, in like
manner, the exercise by the Banks, or any of them, of any right, power or remedy
under applicable law or another document or agreement shall not diminish or
otherwise affect their rights, powers and remedies hereunder.
SECTION 14. AMENDMENTS; ETC. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Pledgor therefrom shall in
any event be effective unless the same shall be in writing and signed by each of
the Banks, the Pledgor, and the Securities Intermediary, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 15. ADDRESSES FOR NOTICES. Each notice, demand, report, or other
communication to any party hereof relating to this Agreement shall be in
writing, shall be hand-delivered or sent by mail (postage prepaid), air courier,
or facsimile transmission (with a copy by mail to follow, receipt of which copy
shall not be required to effect notice), and shall be deemed duly given when
received, in each case to the address for such party on Schedule 3 attached
hereto, or to such other address or number as such party shall have last
specified by written notice to the other parties.
SECTION 16. CONTINUING PLEDGE, ASSIGNMENT, AND SECURITY INTEREST;
TERMINATION. (a) This Agreement shall create a continuing pledge and
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assignment of, and security interest in, the Collateral and shall remain in full
force and effect until the Obligations shall have been indefeasibly paid in full
in Dollars and (ii) be binding upon the Pledgor, its successors and permitted
assigns. Upon the indefeasible payment in full in Dollars of the Obligations,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the Banks
will, at the Pledgor's expense, execute and deliver to the Pledgor and the
Securities Intermediary such documents as the Pledgor and Securities
Intermediary shall reasonably request to evidence such termination.
(b) To the extent that any payments on the Obligations or proceeds of
the Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, other law or
equitable cause, then to such extent the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received by the
Banks, and the Banks' security interest, rights, powers and remedies hereunder
shall continue in full force and effect. In such event, this Agreement shall be
automatically reinstated if it shall theretofore have been terminated pursuant
to this Section 16.
(c) The provisions of Section 16(b) shall survive any termination of
this Agreement.
SECTION 17. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO CONFLICTS OF LAW OTHER THAN AS PROVIDED IN SECTION 9-103 OF THE
UCC. UNLESS OTHERWISE DEFINED HEREIN OR IN THE FINANCE AGREEMENT, TERMS DEFINED
IN ARTICLE 8 OR 9 OF THE UCC ARE USED HEREIN AS THEREIN DEFINED.
SECTION 18. WAIVER OF JURY TRIAL. THE PLEDGOR, THE SECURITIES
INTERMEDIARY, AND THE BANKS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP BETWEEN THEM ESTABLISHED BY THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT, OR AGREEMENT ENTERED INTO IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 19. JURISDICTION AND CONSENT TO SUIT (a) Without prejudice to
any Bank's right to bring suit in any appropriate domestic or foreign
jurisdiction, any proceeding to enforce this Agreement may be brought by any
Bank in any state or federal court of competent jurisdiction of the County of
New York, the State of
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New York, or in any other jurisdiction where the Pledgor or any property of the
Pledgor may be found. The Pledgor hereby irrevocably waives any present or
future objection to any such venue, and irrevocably and unconditionally consents
and submits, for itself and in respect of any of its property, to the
nonexclusive jurisdiction of any such court. Final judgment against the Pledgor
in any action or proceeding arising out of or relating to this Agreement shall
be conclusive and may be enforced in any other jurisdiction within or outside
the United States of America by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and of the amount of its
obligations.
(b) The Pledgor irrevocably designate and appoint Xxxxxxx & Xxxxxxx PC
as agent for service of process in the State of New York as its authorized agent
to receive, accept, and acknowledge on its behalf service of process in any
proceeding and has provided the Banks and the Securities Intermediary with
evidence of the prepayment in full of the fees of such agent. The Pledgor
agrees that service of process, writ, judgment, or other notice of legal process
upon said agent shall be deemed and held in every respect to be effective
personal service upon it. The Pledgor shall maintain such appointment (or that
of a successor satisfactory to the Banks) continuously in effect at all times
while the Pledgor is obligated under this Agreement. Nothing herein shall
affect any Bank's right to serve process in any other manner permitted by
applicable law.
SECTION 20. MISCELLANEOUS
(a) The Securities Intermediary shall not be liable for any action
taken or omitted by it in good faith unless a court of competent jurisdiction
determines that the Securities Intermediary's willful misconduct was the primary
cause of any loss to the parties hereto. In the administration of the account
hereunder, the Securities Intermediary may execute any of its powers and perform
its duties hereunder directly or through agents or attorneys and may, consult
with counsel, accountants and other skilled persons to be selected and retained
by it. The Securities Intermediary shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the advice or opinion
of any such counsel, accountants or other skilled persons.
(b) Each party hereto, except the Securities Intermediary, shall, in
the notice section of this agreement, provide the Securities Intermediary with
their Tax Identification Number (TIN), if any, as assigned by the Internal
Revenue Service. All interest or other income earned under the Agreement shall
be allocated and paid as provided herein and reported by the recipient to the
Internal Revenue Service as having been so allocated and paid.
(c) The Securities Intermediary shall not incur any liability for
following the instructions herein contained or expressly provided for, or
written instructions given by the parties hereto.
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(d) In the event that the Securities Intermediary shall be uncertain as
to its duties or rights hereunder or shall receive instructions, claims or
demands from any party hereto which, in its opinion, conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action and its sole obligation shall be to keep safely all property held in
escrow until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order or judgment of a court of competent
jurisdiction.
(ii) In the event funds transfer instructions are given (other
than in writing at the time of execution of the Agreement), whether in writing,
by telecopier or otherwise, the Securities Intermediary is authorized to seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule 2 hereto, and the Securities Intermediary may
rely upon the confirmations of anyone purporting to be the persons so
designated. The persons and telephone numbers for call-backs may be changed
only in writing actually received and acknowledged by the Securities
Intermediary. The parties to this Agreement acknowledge that such security
procedure is commercially reasonable.
(ii) It is understood that the Securities Intermediary in any
funds transfer to or for the benefit of a Bank or the Pledgor hereunder may rely
solely upon any account numbers or similar identifying number provided by such
party to identify (i) the beneficiary, (ii) the beneficiary's bank, or (iii) an
intermediary bank. The Securities Intermediary may apply any of the Collateral
for any payment order it executes using any such identifying number, even where
its use may result in a person other than the Bank being paid, or the transfer
of funds to a bank other than the Ban's bank, or an intermediary bank
designated.
SECTION 21. SEVERABILITY. If any provision of this Agreement is
prohibited or held to be invalid, illegal or unenforceable in any jurisdiction,
the parties hereto agree, to the fullest extent permitted by law, that (i) the
validity, legality and enforceability of the other provisions in such
jurisdiction shall not be affected or impaired thereby and (ii) any such
prohibition, invalidity, illegality or unenforceability shall not render such
provision prohibited, invalid, illegal, or unenforceable in any other
jurisdiction.
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto,
PROVIDED that the Pledgor shall not, without the Banks' prior written consent,
assign or delegate all or any part of its interests or obligations herein or
hereunder.
SECTION 23. DESCRIPTIVE HEADINGS. The headings in this Agreement are for
the purpose of reference only and do not limit or affect its meaning.
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SECTION 24. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Facsimile copies hereof shall be deemed to be originals for all purposes
hereunder.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed and delivered on its behalf by its duly authorized representative as of
the date first above written.