EXHIBIT 2
SECURITY AGREEMENT
(Negotiable Collateral)
For value received, the undersigned ("Debtor") assigns, transfers,
delivers, and pledges to Comerica Bank, a Michigan banking corporation, whose
address is 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Bank"), a continuing
security interest in (a) the following securities, stocks, bonds, notes,
instruments, documents of title, and/or other property; (b) interest,
dividends, increase, profits, new securities or other increments,
distributions or rights of any kind received on account of this property; (c)
Debtor's Property in Possession of Bank; and (d) all property substituted
therefor or for any part thereof, all records (including computer software)
pertaining thereto and all rights, products or Proceeds thereof (whether cash
or non-cash Proceeds) resulting from any sale or exchange or transfer thereof
or arising by virtue of ownership thereof (such as, but not limited to, the
rights to additional or other securities or property upon any corporate
reorganization, merger, consolidation, liquidation, or dissolution, offering
of stock rights, stock split or stock or liquidating dividend or the rights to
any goods evidenced by such property or insurance proceeds with respect
thereto), and all subscription, voting, and preferential rights:
See Exhibit "A"
to secure payment of any and all indebtedness of Debtor to Bank under that
certain Installment Note dated as of the date hereof made in the principal
amount of Twelve Million Dollars ($12,000,000) by Debtor payable to Bank, and
any and all renewals, extensions or modifications thereof (the
"Indebtedness").
1. Definitions. As used in this Agreement:
1.1 "Collateral" means any and all property of Debtor in which Bank now
has or by this Agreement now or later acquires a security interest.
1.2 "Debtor's Property in Possession of Bank" means goods, instruments,
documents, policies and certificates of insurance, deposits, money
or other property now owned or later acquired by Debtor or in which
Debtor now has or later acquires an interest and which are now or
later in possession of Bank, or as to which Bank now or later
controls possession by documents or otherwise.
1.3 "Proceeds" has the meaning assigned it in Article 9 of the Uniform
Commercial Code, as of the date of this Agreement, and also
includes, without limit, cash or other property which were proceeds
and are recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
1.4 "Uniform Commercial Code" means Act No. 174 of the Michigan Public
Acts of 1962, as amended.
1.5 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or,
absent definition in Article 9, in any other Article) of the Uniform
Commercial Code, as of the date of this Agreement.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the seller
of any Collateral to be acquired with proceeds of loans from Bank.
2.2 Bank, at its option, may require delivery of any Collateral to Bank
at any time with such endorsement or assignments of the Collateral
as Bank may request.
2.3 Debtor shall (a) keep adequate records of the Collateral and other
records as Bank shall determine to be appropriate; and (b) allow
Bank to examine, inspect and make abstracts from, or copy any of
Debtor's books and records (relating to the Collateral or otherwise
and whether printed or in magnetic tape or discs or in other machine
readable form).
2.4 At any time and without notice during the continuation of an Event
of Default, the Bank may (a) cause the Collateral or any portion of
it to be transferred to its name or to the name of its nominee or
nominees; (b) receive or collect by legal proceedings or otherwise
all dividends, interest, principal payments and other sums and all
other distributions at any time payable or receivable on account of
the Collateral, and hold the same as Collateral, or apply the same
to the Indebtedness, the manner and distribution of the application
to be in the sole discretion of the Bank; (c) enter into an
extension, subordination, reorganization, deposit, merger or
consolidation agreement or any other agreement relating to or
affecting the Collateral, and deposit or surrender control of the
Collateral, and accept other property in exchange for the Collateral
and hold or apply the property or money so received in accordance
with the provisions of this Agreement.
2.5 The Bank may assign any of the Indebtedness and deliver all or any
part of the Collateral to its assignee, who then shall have with
respect to the Collateral so delivered all the rights and powers of
the Bank under this Agreement, and after that the Bank shall be
fully discharged from all liability and responsibility with respect
to the Collateral so delivered.
2.6 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(a) the ultimate sale or exchange thereof, or
(b) presentation, collection, renewal, or registration of transfer thereof,
or
(c) loading, unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing therewith preliminary to sale or
exchange, such redelivery shall be in trust for the benefit of Bank and
shall not constitute a release of Bank's security interest therein or in
the proceeds or products thereof unless Bank specifically so agrees in
writing. If Debtor requests any such redelivery, Debtor will deliver
with such request a duly executed financing statement in form and
substance satisfactory to Bank. Any proceeds of collateral coming into
Debtor's possession as a result of any such redelivery shall be held in
trust for Bank and forthwith delivered to Bank for application on the
Indebtedness. Bank may (if, in its sole discretion, it elects to do so)
deliver the Collateral or any part of the Collateral to Debtor, and such
delivery by Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.7 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any asset(s),
whether realty or personalty, to secure payment of the Indebtedness,
and Debtor is not relying upon assets in which the Bank has or may
have a lien or security interest for payment of the Indebtedness.
2.8 Debtor shall at the request of Bank (a) xxxx its records and the
Collateral to clearly indicate the security interest of Bank under
this Agreement, and (b) deliver to Bank all accounting and other
records pertaining to, and all writings evidencing, the Collateral
or any portion of it, together with all books, records and documents
of Debtor related to it in whatever form kept by Debtor, whether
printed or in magnetic tape or discs or in other machine readable
form or otherwise, and all forms, programs, software and other
materials and instructions necessary or useful to Bank, to monitor
the Collateral or enforce its rights under this Agreement.
2.9 At the time any Collateral becomes, or is represented to be, subject
to a security interest in favor of Bank, Debtor shall be deemed to
have warranted that (a) Debtor has the right and authority to
subject it to a security interest granted to Bank and (b) none of
the Collateral is subject to any security interest other than that
in favor of Bank and there are no financing statements on file,
other than in favor of Bank.
2.10 Debtor will keep the Collateral free at all times from any and all
claims, liens, security interests and encumbrances other than those
in favor of Bank. Debtor will not, without the prior written
consent of Bank, sell, transfer or lease, or permit or suffer to be
sold, transferred or leased, any or all of the Collateral. Bank or
its agents or attorneys may at all reasonable times inspect the
Collateral and may enter upon all premises where the Collateral is
kept or might be located.
2.11 Debtor shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and
other writings requested by Bank to establish, maintain, reinstate,
and/or continue the perfected and first priority status of the
security interest of Bank in the Collateral or to implement or
further effectuate the terms or purpose of this Agreement, although
the failure of the Debtor to do so shall not affect in any way
Bank's perfected and first priority security interest in the
Collateral, and will on demand pay all costs and expenses of filing
and recording, including the costs of any record searches, deemed
necessary by Bank from time to time, to establish or determine the
validity and the priority of Bank's security interest. Debtor
further makes, constitutes and appoints Bank its true and lawful
attorney-in-fact with full power of substitution during the
continuation of an Event of Default to take any action in
furtherance of this Agreement, including, without limitation, the
signing of financing statements, endorsing of instruments, and the
execution and delivery of all documents and agreements necessary to
obtain or accomplish any protection for or collection or disposition
of any part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
2.12 Debtor will pay promptly and within the time that they can be paid
without interest or penalty all taxes, assessments and similar
imposts and charges which at any time are or may become a lien,
charge, or encumbrance upon any of the Collateral, except to the
extent contested in good faith and bonded in a manner satisfactory
to Bank. If Debtor fails to pay any of these taxes, assessments or
other charges in the time provided above, Bank has the option (but
not the obligation) to do so and Debtor agrees to repay all amounts
so expended by Bank immediately upon demand, together with interest
at the highest default rate which could be charged by Bank to Debtor
on any Indebtedness.
2.13 [Reserved]
2.14 [Reserved]
2.15 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the Indebtedness
or any part of it (through formal or informal collection actions,
workouts or otherwise), in defending the validity or priority of its
security interest, or in pursuing its rights and remedies under this
Agreement or under any other agreement between Bank and Debtor; (b)
in connection with any proceeding (including, without limit,
bankruptcy, insolvency, administrative, appellate, or probate
proceedings or any lawsuit) in which Bank at any time is involved as
a result of any lending relationship or other financial
accommodation involving Bank and Debtor; or (c) incurred by Bank
during the continuance of an Event of Default, which fees and
expenses relate to or would not have been incurred but for any
lending relationship or other financial accommodation involving Bank
and Debtor. The fees and expenses include, without limit, court
costs, legal expenses, reasonable attorneys' fees, paralegal fees,
internal transfer charges for in-house attorneys and paralegals and
other services, and audit expenses.
2.16 Debtor at all times shall be in material compliance with all
applicable laws with respect to which Debtor's failure to comply
would have a material adverse effect on the value of the Collateral
or Bank's rights with respect to the Collateral.
2.17 [Reserved].
2.18 Debtor acknowledges and agrees that if any Guaranty is executed by
the Debtor in connection with or related to this Agreement, all
waivers contained in that Guaranty shall be and are incorporated by
reference into this Agreement.
3. Collection of Proceeds.
3.1 Upon the occurrence and during the continuance of an Event of
Default, immediately upon notice to Debtor by Bank, Debtor agrees to
hold in trust for Bank all payments received in connection with the
Collateral and from the sale, lease or other disposition of any
Collateral, all rights by way of suretyship or guaranty and all
rights in the nature of a mortgage, lien or security interest which
Debtor now has or may later acquire regarding the Collateral.
Debtor agrees to collect and enforce payment of all Collateral until
Bank shall direct Debtor to the contrary and, from and after this
direction, Debtor agrees to fully and promptly cooperate and assist
Bank (or any other person as Bank shall designate) in the collection
and enforcement of all Collateral. Immediately upon notice to such
effect to Debtor by Bank and at all times after that, Debtor agrees
to (a) endorse to Bank and immediately deliver to Bank all payments
received by Debtor on Collateral or from the sale, lease or other
disposition of any Collateral or arising from any other rights or
interests of Debtor in the Collateral, in the form received by
Debtor without commingling with any other funds, and (b) immediately
deliver to Bank all property in Debtor's possession or later coming
into Debtor's possession through enforcement of Debtor's rights or
interests.
3.2 During the continuation of an Event of Default, Debtor irrevocably
authorizes Bank or any Bank employee or agent to endorse the name of
Debtor upon any Collateral, checks, or other items which are
received in payment of any Collateral, and to do any and all things
necessary in order to reduce these items to money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of any
related rights, beyond the use of reasonable care in the custody and
preservation of Collateral in the possession of Bank. Debtor agrees
to take all steps necessary to preserve rights against prior parties
with respect to Debtor's Property in Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness, Debtor
understands that Bank imposes a minimum one business day delay in
crediting payments received by Bank against the Indebtedness to
allow time for collection and Debtor agrees that Bank may, at Bank's
option, make such credits only when payments are actually collected
by Bank in immediately available funds. Any credit of payment by
Bank prior to receipt by Bank of immediately available funds is
conditional upon Bank's receipt of those funds. For the purpose of
calculating the principal amount which Debtor may request to borrow
from Bank under any borrowing arrangements with Bank, Debtor
understands that Bank may, at Bank's option, use a method different
from that used for the purpose of calculating interest.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an "Event
of Default"), Debtor shall be in default under this Agreement:
(a) Any failure or neglect to comply with, or breach of, the provisions of
Sections 2.10 or 8.1 hereof,
(b) Any failure or neglect to comply with, or breach of, any of the other
terms, provisions, warranties or covenants of this Agreement, or any
other agreement or commitment between Debtor or any guarantor of any of
the Indebtedness ("guarantor") and Bank which is not cured within fifteen
(15) days after notice by Bank to Debtor; or
(c) Any failure to pay the Indebtedness when due, or such portion of it as
may be due, by acceleration or otherwise; or
(d) Any warranty, representation, financial statement or other information
made, given or furnished to Bank by or on behalf of Debtor or any
guarantor shall be, or shall prove to have been, false in any material
respect or materially misleading when made, given, or furnished; or
(e) Any loss, theft, substantial damage or destruction to or of any of the
Collateral, or the issuance or filing of any attachment, levy,
garnishment or the commencement of any proceeding in connection with any
of the Collateral or of any other judicial process of, upon or in respect
of Debtor or any guarantor or any of the Collateral which proceeding or
judicial process is not stayed, lifted, dismissed or bonded within thirty
(30) days after commencement; or
(f) Sale or other disposition by Debtor of any substantial portion of his
assets or property or assignment for the benefit of creditors of or by
Debtor or any guarantor; or commencement of any proceedings under any
state or federal bankruptcy or insolvency laws or laws for the relief of
debtors by or against Debtor or any guarantor; or the appointment of a
receiver, trustee, court appointee, sequestrator or otherwise, for all or
any part of the property of Debtor or any guarantor which proceedings are
not dismissed or stayed within forty-five (45) days after commencement;
or
(g) Any termination or notice of termination of any guaranty of collection or
payment of, or any breach, termination or notice of termination of any
subordination agreement, pledge, or collateral assignment relating to,
all or any part of the Indebtedness; or
(h) Any failure by Debtor to pay when due any of his direct indebtedness for
money borrowed by him (other than to Bank) in excess of One Million
Dollars ($1,000,000) or in the observance or performance of any term,
covenant or condition in any agreement evidencing, securing or relating
to that indebtedness which results in an acceleration of such
indebtedness in an amount in excess of One Million Dollars ($1,000,000).
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or all of
the Indebtedness to be immediately due and payable, and, after
giving Debtor ten (10) days notice, if notice is required by law,
shall have and may exercise any one or more of the following rights
and remedies:
(a) exercise all the rights and remedies upon default, in foreclosure and
otherwise, available to secured parties under the provisions of the
Uniform Commercial Code and other applicable law;
(b) institute legal proceedings to foreclose upon and against the lien and
security interest granted by this Agreement, to recover judgment for all
amounts then due and owing as Indebtedness, and to collect the same out
of any of the Collateral or the proceeds of any sale of it;
(c) institute legal proceedings for the sale, under the judgment or decree of
any court of competent jurisdiction, of any or all of the Collateral;
and/or
(d) personally or by agents, attorneys, or appointment of a receiver, enter
upon any premises where the Collateral or any part of it may then be
located, and take possession of all or any part of it and/or render it
unusable; and without being responsible for loss or damage to such
Collateral,
(i) hold, store, and keep idle, or lease, operate, remove or
otherwise use or permit the use of the Collateral or any
part of it, for that time and upon those terms as Bank,
in its sole discretion, deems to be in its own best
interest, and demand, collect and retain all resulting
earnings and other sums due and to become due from any
party, accounting only for net earnings, if any (unless
the Collateral is retained in satisfaction of the
Indebtedness, in which case no accounting will be
necessary), arising from that use (which net earnings may
be applied against the Indebtedness) and charging against
all receipts from the use of the Collateral or from its
sale, by court proceedings or pursuant to subsection (ii)
below, all other costs, expenses, charges, damages and
other losses resulting from that use; and/or
(ii) sell, lease, dispose of, or cause to be sold, leased or
disposed of, all or any part of the Collateral at one or
more public or private sales, leasings or other
dispositions, at places and times and on terms and
conditions as Bank may deem fit, without any previous
demand or advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to sell,
lease or otherwise dispose of the Collateral or as to the
application by Bank of the proceeds of sale or otherwise,
which would otherwise be required by, or available to
Debtor under, applicable law are expressly waived by
Debtor to the fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under the
power of sale, by virtue of judicial proceedings or otherwise,
it shall not be necessary for Bank or a public officer under
order of a court to have present physical or constructive
possession of the Collateral to be sold. The recitals
contained in any conveyances and receipts made and given by
Bank or the public officer to any purchaser at any sale made
pursuant to this Agreement shall, to the extent permitted by
applicable law, conclusively establish the truth and accuracy
of the matters stated (including, without limit, as to the
amounts of the principal of and interest on the Indebtedness,
the accrual and nonpayment of it and advertisement and conduct
of the sale); and all prerequisites to the sale shall be
presumed to have been satisfied and performed. Upon any sale
of any of the Collateral, the receipt of the officer making
the sale under judicial proceedings or of Bank shall be
sufficient discharge to the purchaser for the purchase money,
and the purchaser shall not be obligated to see to the
application of the money. Any sale of any of the Collateral
under this Agreement shall be a perpetual bar against Debtor
with respect to that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
obligors of the security interest of Bank in any Collateral and
direct payment of it to Bank. Bank may, itself, upon the occurrence
of any Event of Default so notify and direct any obligor and may
take control of any proceeds to which it may be entitled under this
Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon all
expenses authorized by the Uniform Commercial Code and all
reasonable attorney fees and legal expenses incurred by Bank; the
balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest, then
to principal, then to remaining Indebtedness and the surplus, if
any, shall be paid over to Debtor or to such other person(s) as may
be entitled to it under applicable law. Debtor shall remain liable
for any deficiency, which it shall pay to Bank immediately upon
demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed, to
preclude Bank from pursuing any other remedy provided by law for the
collection of any or all of the Indebtedness or for the recovery of
any other sum to which Bank may be or become entitled for the breach
of this Agreement by Debtor. Nothing in this Agreement shall reduce
or release in any way any rights or security interests of Bank
contained in any existing agreement between Debtor and Bank, nor
shall anything in this Agreement modify the terms of any
Indebtedness owing to Bank on a demand basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer of
Bank. No waiver of any default or forbearance on the part of Bank
in enforcing any of its rights under this Agreement shall operate as
a waiver of any other default or of the same default on a future
occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any employee or agent of Bank
(which appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) in the name,
place and stead of, and at the expense of, Debtor to do any of the
following during a continuation of an Event of Default:
(a) to demand, receive, xxx for and give receipts or acquittances for any
moneys due or to become due on any Collateral and to endorse any item
representing any payment on or proceeds of the Collateral;
(b) with respect to any Collateral, to assent to any or all extensions or
postponements of the time of its payment or any other indulgence in
connection with it, to the substitution, exchange, or release of
Collateral, to the addition or release of any party primarily or
secondarily liable, to the acceptance of partial payments on it and the
settlement, compromise or adjustment of it, all in a manner and at times
as Bank shall deem advisable;
(c) to make all necessary transfers of all or any part of the Collateral in
connection with any sale, lease or other disposition made pursuant to
this Agreement;
(d) to adjust and compromise any insurance loss on the Collateral and to
endorse checks or drafts payable to Debtor in connection with the
insurance;
(e) to execute and deliver for value all necessary or appropriate bills of
sale, assignments and other instruments in connection with any sale,
lease or other disposition of the Collateral. Debtor ratifies and
confirms all that its said attorney (or any substitute) shall lawfully do
under this Agreement. Nevertheless, if requested by Bank or a purchaser
or lessee, Debtor shall ratify and confirm any sale, lease or other
disposition by executing and delivering to Bank or the purchaser or
lessee all proper bills of sale, assignments, releases, leases and other
instruments as may be designated in any request; and
(f) to execute and file in the name of and on behalf of Debtor all financing
statements or other filings deemed necessary or desirable by Bank to
evidence, perfect or continue the security interests granted in this
Agreement.
4.8 Upon the occurrence and continuation of an Event of Default, Debtor
also agrees, upon request of Bank, to assemble the Collateral and
make it available to Bank at any place designated by Bank which is
reasonably convenient to Bank and Debtor.
5. Miscellaneous.
5.1 This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of Michigan.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with and when required under the
applicable provisions of the Uniform Commercial Code, but the
obligations contained in Section 2.17 of this Agreement shall
survive termination. Until terminated, the security interest
created by this Agreement shall continue in full force and effect
and shall secure and be applicable to all advances now or later made
by Bank to Debtor, whether or not Debtor is indebted to Bank
immediately prior to the time of any advance, and to all other
Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement
shall automatically continue or be reinstated, as the case may be,
in the event that (a) any payment received or credit given by the
Bank in respect of the Indebtedness is returned, disgorged or
rescinded as a preference, impermissible setoff, fraudulent
conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation, laws
pertaining to bankruptcy or insolvency, in which case this Agreement
shall be enforceable against Debtor as if the returned, disgorged or
rescinded payment or credit had not been received or given, whether
or not the Bank relied upon this payment or credit or changed its
position as a consequence of it; or (b) any liability is imposed, or
sought to be imposed, against the Bank relating to the environmental
condition of, or the presence of Hazardous Materials on, in or
about, any Property given as Collateral to the Bank whether this
condition is known or unknown, now exists or subsequently arises
(excluding only conditions which arise after any acquisition by the
Bank of any such Property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful act or omission of the
Bank), in which case this Agreement shall be enforceable to the
extent of all liability, costs and expenses (including without limit
reasonable attorney fees) incurred by the Bank as the direct or
indirect result of any environmental condition or Hazardous
Materials. In the event of continuation or reinstatement of this
Agreement, Debtor agree(s) upon demand by the Bank to execute and
deliver to the Bank those documents which the Bank determines are
appropriate to further evidence (in the public records or otherwise)
this continuation or reinstatement, although the failure of Debtor
to do so shall not affect in any way the reinstatement or
continuation. If Debtor does not execute and deliver to the Bank
upon demand such documents, the Bank and each Bank officer is
irrevocably appointed (which appointment is coupled with an
interest) the true and lawful attorney of Debtor (with full power of
substitution) to execute and deliver such documents in the name and
on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and
assigns and to any other holder who derives from Bank title to or an
interest in the Indebtedness or any portion of it, and shall bind
Debtor and the heirs, legal representatives, successors and assigns
of Debtor.
5.5 If there is more than one Debtor, all undertakings, warranties and
covenants made by Debtor and all rights, powers and authorities
given to or conferred upon Bank are made or given jointly and
severally.
5.6 In addition to Bank's other rights, any indebtedness owing from Bank
to Debtor can be set off and applied by Bank on any Indebtedness at
any time(s) either before or after maturity or demand without notice
to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 In the event that applicable law shall obligate Bank to give prior
notice to Debtor of any action to be taken under this Agreement,
Debtor agrees that a written notice given to it at least ten days
before the date of the act shall be reasonable notice of the act
and, specifically, reasonable notification of the time and place of
any public sale or of the time after which any private sale, lease
or other disposition is to be made, unless a shorter notice period
is reasonable under the circumstances. A notice shall be deemed to
be given under this Agreement when delivered to Debtor or when
placed in an envelope addressed to Debtor and deposited, with
postage prepaid, in a post office or official depository under the
exclusive care and custody of the United States Postal Service. The
mailing shall be registered, certified, or first class mail.
5.9 A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement under the Uniform Commercial
Code and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power under this Agreement, shall preclude other or further
exercise of the rights and powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No waiver, consent, modification or change of the terms of this
Agreement shall bind the Debtor or the Bank unless in writing and
signed by the waiving party or an authorized officer of the waiving
party, and then this waiver, consent, modification or change shall
be effective only in the specific instance and for the specific
purpose given.
5.13 This Agreement constitutes the entire agreement of Debtor and Bank
with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon demand,
nothing contained in this Agreement shall modify the terms and
conditions of that Indebtedness nor shall anything contained in this
Agreement prevent Bank from making demand, without notice and with
or without reason, for immediate payment of any or all of that
Indebtedness at any time(s), whether or not an Event of Default has
occurred.
6. Statement of Business Name, Residence and Location of Collateral. Debtor
warrants, covenants and agrees as follows:
6.1 Debtor's principal residence is located at 00 Xxxx Xxxxx Xxxx, Xxxx
Xxxxxxxx, Xxxxxxxxxxx, 00000 in the County of Hartford.
6.2 [Reserved]
6.3 Any other residence of Debtor is indicated below: None.
6.4 Debtor's correct legal name is set forth at the end of this
Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by
law shall be given to, or made upon, Debtor at the address indicated
in Section 6.1 above, with a copy to:
Xxxx X. Xxxxxxx
XX Xxxxx Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
and to:
Kronish, Lieb, Weiner & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
6.6 The Collateral (or any records concerning the Collateral) will be
kept at Debtor's address(es) above and/or in the County of Hartford.
Mailing Address: XX Xxxxx Enterprises, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, XX
00000.
6.7 Debtor will give Bank not less than ninety (90) days prior written
notice of all contemplated changes in Debtor's name, identity,
corporate structure, and/or any of the above addresses, but the
giving of this notice shall not cure any default caused by this
change.
7. JURY WAIVER.
7.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED
TO, THIS AGREEMENT OR THE INDEBTEDNESS.
8. Special Provisions Applicable to this Agreement.
8.1 If at any time the value of the Collateral consisting of the money
market investment account described in Exhibit "A" hereto ("Cash
Collateral Account") and the shares of stock described in Exhibit
"A" hereto ("Pledged Shares"), as such value is determined from time
to time in the sole, but reasonable discretion of Bank, is less than
fifty percent (50%) of the outstanding principal balance of the
Indebtedness ("Collateral Value Requirement"), Debtor shall, upon
ten (10) days prior written notice from Bank, pay or cause to be
paid to Bank an amount sufficient to reduce the Indebtedness such
that the value of the Collateral is equal to or greater than fifty
percent (50%) of the outstanding principal balance of the
Indebtedness. Bank shall apply payments made under this paragraph
in payment of the Indebtedness in such order and manner of
application as Bank in its sole discretion elects. In the
alternative, Debtor may, at his election, provide or cause to be
provided to Bank additional collateral in the form of cash or other
property acceptable to Bank and with a value, as determined by Bank,
that when added to the Collateral will constitute compliance with
the Collateral Value Requirement. Shares of capital stock of Accel
International Corporation and The United Illuminating Company shall
be deemed acceptable additional collateral, provided that, in the
Bank's sole discretion, there is no material adverse change in the
value of such shares after the date of this Agreement.
8.2 If the value of the Collateral consisting of the Cash Collateral
Account and the Pledged Shares, as determined by Bank in its sole
but reasonable discretion, at any time exceeds seventy-five percent
(75%) of the outstanding principal balance of the Indebtedness,
Debtor may remove Pledged Shares from the Brokerage Account (as
defined in Exhibit "A" hereto), provided that the quantity of shares
of each type of stock to be removed is acceptable to the Bank in its
sole discretion, and provided further that after such removal, the
value of such Collateral shall not be less than 75% of the
outstanding principal balance of the Indebtedness.
8.3 Subject to Section 8.1, and provided there is no Event of Default,
Debtor may withdraw from the Brokerage Account dividends paid in the
ordinary course of business on account of the Pledged Shares.
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Dated and delivered on this 30th day of December, 1997 at Detroit,
Michigan.
WITNESS:
/S/ [ILLEGIBLE] /S/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
/S/ XXXXX XXXXXXXX
STATE OF CT )
)
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30 day of
December, 1997 by Xxxxx X. Xxxxx.
/S/ XXXXX XXXXXXXX
Notary Public
_________County, ______________
My Commission expires: _________
XXXXX X. XXXXXXXX
NOTARY PUBLIC
MY COMMISSION EXPIRES OCT. 31, 1998