[LOGO] Republic National Bank
Republic National Bank of New York
HYPOTHECATION AND SECURITY AGREEMENT
Dated: 5/9/00
As used in this Agreement:
"Collateral" means all right, title and interest of the Owner in and to any and
all of the following property, whether now or hereafter existing or acquired and
wherever located, all products and Proceeds (including but not limited to
insurance proceeds) of such property, wherever located and in whatever form, and
all books and records pertaining to such property and all other property of the
Owner in which Bank now or hereafter is granted a security interest pursuant to
this Agreement or otherwise:
[▇▇▇▇ or initial the applicable boxes]
Accounts, [ ] All Accounts (including, without
General limitation, all accounts receivable),
Intangibles, General Intangibles (including, without
Chattel Paper, limitation, contract rights and tax
Instruments, refunds) and all returned or repossessed
Deposit Accounts Goods, all Chattel Paper (including,
and Investment without limitation, leases), Instruments,
Property Deposit Accounts, and Investment Property,
and all interests of the Owner in all
guarantees, security agreements and other
property securing the payment or
performance of obligations under any of
the foregoing.
Imported [ ] All Imported Inventory, and all Documents
Inventory and (including, without limitation, all
Documents documents of title, transport or
otherwise) relating to such Inventory.
Inventory [ ] All Inventory of every description
and (including, without limitation, Imported
Documents Inventory, raw materials, work in process
and finished Goods), and all Documents
(including, without limitation, all
documents of title, transport or
otherwise) relating to such Inventory.
Equipment [ ] All Equipment of every description and all
Accessions thereto.
Fixtures [ ] All Fixtures of every description and all
Accessions thereto located at the
Collateral Location or at _________________
__________________________________________.
Securities |X| Securities Account No. 8554 at Republic
Account at Financial Services Corp. held in the name
Republic of Bank and any and all successor,
Financial Services substitute and replacement accounts
Corp. held in name (collectively, the "Republic Account") and
of Bank and all Investment Property, including without
all Investment limitation, Securities (whether
Property certificated or uncertificated), Financial
contained therein Assets, Security Entitlements, Commodity
Contracts and Commodity Accounts held in
the Republic Account.
Specific [ ] * All of the following property:
Property ___________________________________________
___________________________________________
___________________________________________
All [ ] All property of every description
Property (including, without limitation, all
Accounts, General Intangibles, Chattel
Paper, Instruments, Investment Property,
Deposit Accounts, Inventory, Documents,
Equipment, Fixtures, Goods and all
Accessions to any of the foregoing).
*If no box is marked, Collateral shall mean All Property.
"Collateral Location" means the following address(es) where all Collateral
consisting of Inventory, Equipment, Fixtures or other tangible property is
located: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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"Customer" means Equistar Consolidated Holdings, LLC and its successors and
assigns, and if more than one Person is named as Customer, "Customer" shall mean
each, any or all of them. Customer is/are:
[ ] individual(s).
[ ] a corporation organized under the laws of _______________________.
|X| a limited liability company or partnership organized under the
laws of Nevada.
[ ] a partnership organized under the laws of _______________________.
[ ] a limited partnership organized under the laws of _______________.
[ ] other (specify) _________________________________________________.
"Owner" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and its successors and assigns, and if more than
one Person is named as Owner, "Owner" shall mean each, any or all of them, and
their liabilities and obligations hereunder shall be joint and several. Owner
is/are:
|X| individual(s).
[ ] a corporation organized under the laws of _______________________.
[ ] a limited liability company or partnership organized under
the laws of _____________________________________________________.
[ ] a partnership organized under the laws of _______________________.
[ ] a limited partnership organized under the laws of _______________.
[ ] other (specify) _________________________________________________.
In consideration of any extension of credit or other financial
accommodation heretofore, now or hereafter made by bank to or for the account of
the Customer, or to or for the account of Owner, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Owner, the Owner agrees as follows:
1. Security Interest; Right of Set-Off. As security for the prompt and
unconditional payment of any and all Obligations, the Owner does hereby grant to
Bank a continuing lien upon and security interest in, and does hereby pledge,
assign and transfer to Bank, all of the Collateral. In order to secure further
the payment of the Obligations, Bank is hereby given a continuing lien upon and
is granted a security interest in any and all monies, Investment Property
(including, without limitation, all dividends and distributions in respect
thereof (whether payable in cash, Investment Property or "in kind"), options or
rights, whether in respect of, in addition to, or in exchange for such
Investment Property) and any and all other property of the Owner and the
Proceeds thereof, now or hereafter actually or constructively held or received
by or in transit in any manner to or from Bank, its correspondents or agents
from or for the Owner, whether for safekeeping, custody, pledge, transmission,
collection or for any other purpose (whether or not for the express purpose of
being used by Bank as collateral security), or coming into the possession of
Bank or its correspondents or agents in any way, or placed in any safe deposit
box leased by Bank to the Owner, and all such monies, Investment Property and
other property shall also constitute "Collateral" and shall be held subject to
all the terms of this Agreement as collateral security for the prompt and
unconditional payment of any and all Obligations. Owner hereby assigns and
grants Bank a security interest in, and Bank is also given a continuing lien on
and/or right of set-off for the amount of the Obligations with respect to, any
and all deposits (general or special) and credits of the Owner with, and any and
all claims of the Owner against, Bank at any time existing and Bank is hereby
authorized at any time or times, without prior notice, to apply such deposit or
credits, or any part thereof, to the Obligations in such amounts as Bank may
elect, although the Obligations may be contingent or unmatured, and whether the
collateral security therefor is deemed adequate or not.
2. Control Agreement. In respect of any security interest granted under
this Agreement by the Owner in any Collateral which constitutes Investment
Property, the Owner may enter into one or more account control agreements
("Control Agreement") among the Owner, and the Securities Intermediary, with
whom the related Securities Account of the Owner is held or maintained. With
respect to each such Securities Account subject to a Control Agreement, so long
as no Event of Default has occurred or is continuing, or Bank, in its sole
discretion, has not given notice to the Owner to the contrary, the Owner may
make trades in such Securities Account, but in no event is the Owner permitted
to, and the Owner agrees that the Owner shall not, withdraw any money or
property from such Securities Account or modify or terminate any Control
Agreement or any customer agreement with the Securities Intermediary under which
such Securities Account was established. If an Event of Default has occurred, or
Bank gives such above notice to the Owner, the Owner shall no longer be
permitted to make trades in the Securities Account and shall cease doing so.
The Owner agrees that all items of income, gain, expense and loss
recognized in any such Securities Account, any other Securities Account holding
Collateral or in respect of any other Investment Property constituting
Collateral, shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the name and taxpayer identification number of
the Owner.
3. Representations of Owner. The Owner represents and warrants to Bank
that (a) no financing statement or other filing listing any of the Collateral as
collateral is on file in any jurisdiction (other than any financing statement
filed on behalf of Bank, as secured party); (b) the chief executive office of
the Owner, if any, is located at the address set forth in the space provided
therefor in this Agreement; (c) all Collateral, other than intangible property
and property which is in the possession of Bank or its agents, is located at the
Collateral Location(s) and the Owner has no place of business other than the
chief executive office specified herein, if any and the Collateral Location(s);
(d) the Owner is the legal and beneficial owner of the Collateral and the
Collateral is free and clear of all Liens, other than the Lien created by this
Agreement in favor of Bank; (e) if the Owner is not a natural person, the
execution, delivery and performance of this Agreement have been duly authorized
by all required corporate, limited liability company, partnership or other
applicable actions of the Owner; (f) this Agreement constitutes a valid, binding
and enforceable obligation of the Owner; (g) the execution, delivery and
performance of this Agreement do not violate any law or any agreement or
undertaking to which the Owner is a party or by which the Owner may be bound and
do not result in the imposition of any Lien upon any Collateral other than the
Lien in favor of Bank created by this Agreement; (h) all consents, approvals,
authorizations, permits and licenses necessary for the Owner to enter and
perform its obligations under this Agreement and the Obligations and/or to
conduct its
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business have been obtained; and (i) the Owner did not have or conduct business
under any name or trade name in any jurisdiction during the past six years other
than its name and trade names, if any, set forth on the signature page of this
Agreement, and the Owner is entitled to use such name and trade names.
4. Covenants. Unless and until all of the Obligations have been
indefeasibly paid in full and all commitments of Bank to extend credit which,
once extended, would give rise to Obligations, have expired or been terminated,
the Owner shall: (a) keep the Collateral free and clear of any Lien of any kind
other than the Lien created by this Agreement; (b) promptly pay, when due, all
taxes and transportation, storage, warehousing and other charges and fees
affecting or arising out of the Collateral and defend the Collateral against all
claims and demands of all Persons at any time claiming any interest therein
adverse to or the same as that of Bank; (c) at all times keep all insurable
Collateral insured at the expense of the Owner to Bank's satisfaction against
loss by fire, theft and any other risks to which the Collateral may be subject,
and cause all such policies to be endorsed in favor of Bank and to name Bank as
loss payee and as an additional insured, and, if Bank so requests, deposit the
same with Bank, and cause all such policies to provide that each insurer will
give Bank not less than 30 days' notice in writing prior to the exercise of any
right of cancellation; (d) keep the Collateral in good condition at all times
(normal wear and tear excepted) and provide Bank with such information as Bank
may from time to time request with respect to the location of the Collateral and
the Owner's places of business; (e) give Bank at least 30 days' prior written
notice before changing the Owner's name or chief executive office or changing
the location or disposing of any Collateral (other than in connection with the
sale of any Inventory in the ordinary course of business); (f) except as
otherwise specifically provided herein and subject to any other and further
restrictions contained herein, not sell or otherwise dispose of any Collateral
except on commercially reasonable terms and in the ordinary course of business;
(g) if a Control Agreement has been entered into, cause the Securities
Intermediary to send to Bank a complete and accurate copy of every statement,
confirmation, notice or other communication concerning the Securities Account
referred to in the Control Agreement that the Securities Intermediary sends to
the Owner; (h) permit Bank, by its officers and agents, to have access to,
examine and copy at all reasonable times the Collateral, properties, minute
books and other corporate, limited liability company, or partnership records,
books of accounts, and financial and other business records of the Owner
(including, without limitation, all books, records, ledger cards, computer
programs, tapes and computer disks and diskettes and other property recording,
evidencing or relating to any Collateral); and (i) promptly notify Bank upon the
occurrence of any Event of Default of which the Owner has knowledge.
5. Events of Default. The occurrence of any of the following events
shall constitute an Event of Default: (a) the failure of the Owner or Customer
to pay when due any of the Obligations; (b) any representation or warranty of
the Owner to Bank in this Agreement or of Owner or Customer in any other
instrument or agreement with or in favor of Bank shall prove to be inaccurate or
untrue; (c) the breach by the Owner or Customer of any covenant in this
Agreement or in any other instrument or agreement with or in favor of Bank; (d)
the occurrence of any event of default under any agreement or instrument
enducing or relating to any of the Obligations; (e) Bank shall in good ▇▇▇▇▇
▇▇▇▇ itself insecure at any time with respect to the Owner's or Customer's
financial condition or ability to pay the Obligations; (f) Bank shall have
determined in good faith that the value of the Collateral has materially
decreased after the date of this Agreement; or (g) if a Control Agreement has
been entered into, the termination or purported termination of such Control
Agreement without the consent of Bank, or the Securities Intermediary thereto
challenges the validity of or its liability under the Control Agreement, or any
default occurs thereunder. The occurrence of any of the following events with
respect to any Owner, Customer, maker, endorser, acceptor, surety or guarantor
of, or any other party to, the Obligations or the Collateral shall also
constitute an Event of Default: (aa) a default in respect of any liabilities,
obligations or agreements, present or future, absolute or contingent, secured or
unsecured, matured or unmatured, several or joint, original or acquired, of any
of the Responsible Parties to or with Bank; (bb) death (in the case of any of
the Responsible Parties who is an individual) or dissolution (in the case of any
of the Responsible Parties which is not a natural person); (cc) death or
suspension of the usual business activities of any member of any partnership or
limited liability company included in the term "the Responsible Parties"; (dd)
making, or sending a notice of, an intended bulk transfer; (ee) granting a
security interest to anyone other than Bank in any property including, without
limitation, the rights of any of the Responsible Parties in the Collateral or
permitting such security interest to exist; (ff) suspension of payment; (gg) the
whole or partial suspension or liquidation of its usual business; (hh) failing,
after demand, to furnish to Bank any financial information or to permit
inspection of books and records of account; (ii) making any misrepresentation to
Bank for the purpose of obtaining credit or an extension of credit; (jj) failing
to pay any tax, or failing to withhold, collect or remit any tax or tax
deficiency when assessed or due; (kk) failing to pay when due any obligations,
whether or not in writing; (ll) making of any tax assessment by the United
States or any state or foreign country; (mm) entry of a judgment or issuance of
an order of attachment or an injunction against, or against any of the property
of, any of the Responsible Parties; (nn) commencement against any of the
Responsible Parties of any proceeding for enforcement of a money judgment under
Article 52 of the New York Civil Practice Law and Rules or amendments thereto;
(oo) if any of the Responsible Parties or if any of the Obligations or
Collateral at any time fails to comply with Regulation U of the Federal Reserve
Board or any amendments thereto; (pp) the issuance of any warrant, process or
order of attachment, garnishment or lien, and/or the filing of a Lien as a
result thereof against any of the property of the Owner or Customer whether or
not Collateral; (qq) any of the Responsible Parties challenges or institutes any
proceeding, or any proceedings are instituted, which challenge the validity,
binding effect or enforceability of this Agreement; (rr) any of the Responsible
Parties makes, receives or retains any payment on account of indebtedness
subordinated to the Obligations in violation of the terms of such subordination;
(ss) any of the Responsible Parties or any partnership or limited liability
company of which any of the Responsible Parties is a member is expelled from or
suspended by any stock or securities exchange or other exchange; (tt) any of the
Responsible Parties shall make an assignment for the benefit of creditors or a
composition with creditors, shall be unable or admit in writing an inability to
pay its respective debts as they mature, shall file a petition in bankruptcy,
shall become insolvent (however such insolvency may be evidenced), shall be
adjudicated insolvent or bankrupt, shall petition or apply to any tribunal for
the appointment of any receiver, liquidator or trustee of or for any of the
Responsible Parties or any substantial part of the property or assets of any of
the Responsible Parties, shall commence any proceedings relating to it under any
bankruptcy, reorganization, arrangement, readjustment of debt, receivership,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or there shall be commenced against any of the Responsible
Parties any such proceeding, or any order, judgment or decree approving the
petition in any such proceeding shall be entered, or any of the Responsible
Parties shall by any act or failure to act indicate its consent to, approval of
or acquiescence in any such proceeding or in the appointment of any receiver,
liquidator or trustee of or for any of the Responsible Parties or any
substantial part of the property or assets of any of the Responsible Parties, or
shall suffer any such appointment, or any of the Responsible Parties shall take
any action for
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the purpose of effecting any of the foregoing, or any court of competent
jurisdiction shall assume jurisdiction with respect to any such proceeding or a
receiver or trustee or other officer or representative of the court or of
creditors, or any court, governmental officer or agency, shall under color of
legal authority, take and hold possession of any substantial part of the
Collateral or the property or assets of any of the Responsible Parties; or (uu)
Bank shall in good ▇▇▇▇▇ ▇▇▇▇ itself insecure with respect to the financial
condition of any of the Responsible Parties.
6. Remedies of Bank.
(a) After the occurrence of an Event of Default, Bank shall have no
obligation to make further loans, extensions of credit or other financial
accommodations to or on behalf of the Owner or Customer, anything in any other
agreement to the contrary notwithstanding.
(b) After the occurrence of an Event of Default, other than an Event of
Default referred to in clause (tt) of the second sentence of Section 5, Bank may
declare by notice to the Owner, any and all Obligations of Owner to be
immediately due and payable and in the case of any Event of Default referred to
in clause (tt) of the second sentence of Section 5 all of the Obligations shall
automatically be and become due and payable, in either case without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Owner, anything in any other agreement to the contrary notwithstanding, Bank may
at any time exercise whatever rights it may have to accelerate the maturity of
any Obligations of Customer.
(c) After the occurrence of an Event of Default, Bank may, without
notice to or demand (other than any notice required by law, the giving of which
is not waivable), upon the Owner (all of which are hereby waived by the Owner),
without releasing the Owner from any obligation under this Agreement or any
other instruments or agreements with Bank and without waiving any rights Bank
may have or impairing any declaration of default or election to cause the
Collateral to be sold or any sale proceeding predicated on the same: (i) demand,
collect or receive upon all or any part of the Collateral and assemble or
require the Owner, at the Owner's expense, to assemble all or any part of the
Collateral and, if Bank so requests, the Owner shall assemble the Collateral and
make it available to Bank at a place to be designated by Bank; (ii) without
notice, demand or other process and without charge enter any of the Owner's
premises and without breach of peace until Bank completes the enforcement of its
rights in the Collateral, take possession of such premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of the Owner's equipment for the purpose of completing any work-in process,
preparing any Collateral for disposition and disposing of or collecting any
Collateral, and in exercise of its rights under this Agreement, without payment
of compensation of any kind, use any and all trademarks, trade styles, trade
names, patents, patent applications, licenses, franchises and the like to the
extent of the Owner's rights therein and the Owner hereby grants a license and
the right to grant sublicenses for that purpose; (iii) in such manner and to
such extent as Bank may deem necessary to protect the Collateral or the
interests, rights, powers or duties of Bank, enter into and upon any premises of
the Owner and take and hold possession of all or any part of the Collateral (the
Owner hereby waiving and releasing any claim for damages in respect of such
taking) and exclude the Owner and all other Persons from the Collateral, operate
and manage the Collateral and rent and lease the same, perform such reasonable
acts of repair or protection as may be reasonably necessary or proper to
conserve the value of the Collateral, collect any and all income, rents, issues,
profits and proceeds from the Collateral, the same being hereby assigned and
transferred to Bank, and from time to time apply or accumulate such income,
rents, issues, profits and proceeds in such order and manner as Bank, in its
sole discretion, shall instruct, it being understood that the collection or
receipt of income, rents, issues, profits or proceeds from the Collateral after
declaration of default and election to cause the Collateral to be sold under and
pursuant to the terms of this Agreement shall not affect or impair any event of
default or declaration of default under any agreement or instrument between the
Owner and Bank or Customer and Bank or election to cause any Collateral to be
sold or any sale proceedings predicated on the same, but such proceedings may be
conducted and sale effected notwithstanding the collection or receipt of any
such income, rents, issues, profits and proceeds; (iv) deliver a notice of
exclusive control under any Control Agreement specifying that Bank has the
exclusive right to give Entitlement Orders with respect to the Investment
Property covered by such Control Agreement; (v) take control of any and all of
the Accounts, contractual or other rights that are included in the Collateral
and Proceeds arising from any such Accounts or contractual or other rights,
enforce collection, either in the name of Bank or in the name of the Owner, of
any or all of the Accounts, contractual and other rights that are included in
the Collateral and Proceeds by suit or other otherwise, receive, receipt for,
surrender, release or exchange all or any part of such Collateral or compromise,
settle, extend or renew (whether or not longer than the original period) any
indebtedness under such Collateral; (vi) sell all or any part of the Collateral
at public or private sale at such place or places and at such time or times and
in such manner and upon such terms, whether for cash or credit, as Bank in its
sole discretion may determine; (vii) endorse in the name of the Owner any
Instrument, however received by Bank, representing Collateral or Proceeds of any
of the Collateral; (viii) require the Owner to turn over, or instruct the
financial institutions holding the same to turn over, all monies and investments
in any of Owner's accounts to Bank; and (ix) exercise all rights and remedies
granted to a secured party under the UCC, and all other rights and remedies
given to Bank under this Agreement or any other instrument or agreement or
otherwise available at law or in equity. Bank shall be under no obligation to
make any of the payments or do any of the acts referred to in this Section 6 or
elsewhere in this Agreement and any of the actions referred to in this Section 6
or elsewhere in this Agreement may be taken regardless of whether any notice of
defaults or election to sell has been given under this Agreement (provided,
however, that all notices required by law, the giving of which may not be
waived, shall be given in accordance with such law) without regard to the
adequacy of the security for the Obligations.
(d) The Owner hereby waives notice of the sale of any Collateral by
Bank pursuant to any provision of this Agreement or any applicable provisions of
the UCC, as amended or other applicable law. In the event that notice of the
sale of Collateral cannot be waived or Bank gives notice of such sale to the
Owner, Bank will give the Owner notice of the time and place of any public sale
of the Collateral or of the time after which any private sale or any other
intended disposition thereof is to be made by sending notice, as provided below,
at least five days before the time of the sale or disposition, which provisions
for notice the Owner and Bank agree are reasonable. No such notice need be given
by Bank with respect to Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market.
(e) Bank may apply the net proceeds of any sale, lease or other
disposition of Collateral, after deducting all costs and expenses of every kind
incurred thereon or incidental to the retaking, holding, preparing for sale,
selling,
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leasing, or the like of the Collateral or in any way relating to the rights of
Bank thereunder, including attorneys' fees and expenses hereinafter provided
for, to the payment, in whole or in part, in such order as Bank may elect, of
one or more of the Obligations (and to such Obligations of Customer and/or
Obligations of Owner, as Bank determines in its discretion), whether due or not
due, absolute or contingent, making proper rebate for interest or discount on
items not then due, and only after so applying such net proceeds and after the
payment by Bank of any other amounts required by any existing or future
provision of law (including Section 9-504(1)(c) of the Uniform Commercial Code
of any jurisdiction in which any of the Collateral may at the time be located)
need Bank account for the surplus, if any. The Owner shall remain liable to Bank
for the payment of any deficiency, with interest at the default rate provided
for in the instruments, if any, evidencing the Obligations, but if there is no
such instrument with respect to any Obligation or no default rate is specified
therein, at a variable rate equal to 4% above the Bank's reference lending rate
applicable to domestic commercial loans as established by Bank from time to
time, but in no event shall such rate exceed the maximum rate allowed by law.
Bank may make loans to its customers above, at or below its reference rate.
(f) Whether or not an Event of Default shall have occurred, Bank may
sell all or any part of the Collateral, although the Obligations may be
contingent or unmatured, whenever in its discretion Bank considers such sale
necessary for its protection. Any such sale may be made without prior demand for
payment on account, margin or additional margin or any other demands whatsoever;
the making of any such demands shall not establish a course of conduct nor
constitute a waiver of the right of Bank to sell the Collateral as herein
provided or of the right of Bank to accelerate the maturity of the Obligations
as herein provided.
(g) If, prior to the expiration date of this Agreement, (i) any
Collateral is due to mature, replacement Collateral acceptable to the Bank must
be received prior to said maturity date, and (ii) any Collateral is sold,
exchanged or disposed of (in accordance with the Bank's prior written consent)
prior to said sale, exchange or disposition, replacement Collateral acceptable
to the Bank must be received by the Bank.
7. Additional Rights of Bank and Duties of Owner Regarding Obligations
and Collateral.
(a) If the Owner, as registered holder of any Collateral, shall become
entitled to receive or does receive any stock or other certificate, option,
right, dividend or other distribution (whether payable in cash Investment
Property or "in kind"), whether in respect of, as an addition to, in
substitution of, or in exchange for, such Collateral, or otherwise, the Owner
agrees to accept same as Bank's agent and to hold same in trust for Bank, and to
forthwith deliver the same to Bank in the exact form received, with the Owner's
endorsement when necessary or requested by Bank, to be held by Bank as
Collateral.
(b) The Owner waives protest, demand for payment, notice of default or
nonpayment to the Owner or any other party liable for or upon any of said
Obligations or Collateral.
(c) The Owner consents that the obligation of any party upon or of any
guarantor, surety or indemnitor for any Obligations or any Collateral may, from
time to time, in whole or in part, be renewed, extended, modified, accelerated,
compromised, settled or released and that any Collateral or Liens for any
Obligations may, from time to time, in whole or in part, be exchanged, sold,
released or surrendered, by Bank, all without any notice to, or further assent
by, or any reservation of rights against, Owner, and all without in any way
affecting or releasing the liability of Owner with respect to such Obligations
or any security interest hereby created.
(d) Bank shall not be liable for failure to collect or realize upon the
Obligations or upon the Collateral, or any part thereof, or for any delay in so
doing, nor shall Bank be under any obligation to take any action whatsoever with
regard thereto. Bank shall use reasonable care in the custody and preservation
of the Collateral in its possession but need not take any steps to preserve
rights against prior parties or to keep the Collateral identifiable. Bank shall
have no obligation to comply with any recording, re-recording, filing, re-filing
or other legal requirements necessary to establish or maintain the validity,
priority, or enforceability of, or Bank's rights in and to the Collateral or any
part thereof. Bank may exercise any right of the Owner with respect to any
Collateral. Bank shall have no duty to exercise any of the aforesaid rights,
privileges or options with respect to Collateral and shall not be responsible
for any failure to do so or delay in so doing.
(e) In any statutory or non-statutory proceeding affecting the Owner or
any Collateral, Bank or its nominee may, whether or not an Event of Default
shall have occurred and regardless of the amount of the Obligations, file a
proof of claim for the full amount of any Collateral and vote such Claim for the
full amount thereof (i) for or against any proposal or resolution; (ii) for a
trustee or trustees or for a committee of creditors; and/or (iii) for the
acceptance or rejection of any proposed arrangement, plan of reorganization,
wage earners' plan, composition or extension; and Bank or its nominee may
receive any payment or distribution and give acquittance therefor and may
exchange or release any Collateral.
(f) Whether or not an Event of Default shall have occurred, Bank may,
without notice to or demand upon the Owner, (i) commence, appear in or defend
any action or proceeding purporting to affect all or any part of the Collateral
or the interests, rights, powers or duties of Bank, whether brought by or
against the Owner or Bank; and/or (ii) pay, purchase, contest or compromise any
claim, debt, lien, charge or encumbrance which in the judgment of Bank may
affect or appear to affect the Collateral or the interests, rights, powers or
duties of Bank.
(g) Any and all Investment Property granted to and/or held by Bank as
Collateral hereunder, whether or not in a Securities Account of the Owner and
whether or not subject to a Control Agreement, may, without notice (and whether
or not an Event of Default exists), be registered in the name of Bank or its
nominee or be transferred to a Securities Account held in the name of Bank or
its nominee, or otherwise be under the Control of Bank with Bank as the
Entitlement Holder, without disclosing that Bank is a secured party. The Owner
hereby irrevocably appoints the Bank acting through its officers, employees and
agents as its attorney-in-fact, at Owner's own cost and expense, to act on the
Owner's behalf to register in the name of the Bank or its nominee any or all
such Investment Property and/or to transfer such Investment Property to a
Securities Account of and in the name of Bank, with Bank being the Entitlement
Holder of such Securities Account and having Control thereof, and to take such
other action as Bank may deem appropriate to fully perfect and protect its
security interest in the Investment Property and related
-5-
Securities Account, if any. Owner may at any time make a request to Bank to
permit a substitution of Investment Property constituting Collateral, whether or
not subject to a Control Agreement or held in a Securities Account, either by
delivery or transfer to Bank of new Investment Property or by a request made to
Bank to sell certain specified Investment Property constituting Collateral,
whether held in a Securities Account, either by delivery or transfer to Bank of
new Investment Property or by a request made to Bank to sell certain specified
Investment Property constituting Collateral, whether held in a Securities
Account subject to Control Agreement or held in the name of Bank or its nominees
in a Securities Account or otherwise, and to purchase other specified Investment
Property, but Bank shall be under no obligation whatsoever to honor such request
or to permit or effect, through a securities intermediary, or otherwise, such a
substitution and Bank may in its sole and absolute discretion refuse to do so.
Bank or such nominee (after an Event of Default and regardless of the amount of
the Obligations) may, without notice, exercise all voting and corporate rights
at any meeting of any corporation issuing such Investment Property, and (whether
or not an Event of Default exists and regardless of the amount of the
Obligation) exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to such Investment Property
as if the absolute owner thereof, including, without limitation, the right to
exchange, at its discretion, any and all of such Investment Property for other
Investment Property or any other property upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any corporation
issuing the same or upon the exercise by the issuing corporation or Bank of any
right, privilege or option pertaining to such Investment Property, and in
connection therewith, to deposit and deliver any and all of such Investment
Property with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it. BANK
SHALL HAVE NO DUTY OR OBLIGATION TO EXERCISE ANY OF THE AFORESAID RIGHTS,
PRIVILEGES OR OPTIONS OR TO AGREE TO ANY SUCH REQUEST AND SHALL NOT BE
RESPONSIBLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN SO DOING, OR FOR ANY
LOSS IN THE VALUE OF THE COLLATERAL RESULTING FROM BANK'S ACTION OR INACTION.
8. Sale of Collateral Consisting of Securities. The Owner recognizes
that Bank may be unable to effect a public sale of any securities which may
constitute a portion of the Collateral by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities laws and
instead may resort to one or more private sales of such Collateral to a
restricted group of purchasers who would be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution of or resale thereof. The Owner recognizes and
agrees that, because of this restriction, sales of securities may result in
prices and other terms less favorable to the seller than if the disposition were
made pursuant to a public sale and, notwithstanding such circumstances, agrees
that any such private or limited sale or sales shall be deemed to have been made
in a commercially reasonable manner. Bank shall be under no obligation to delay
a sale of any of the securities constituting part of the Collateral for the
period of time necessary to permit the issuer of such securities to register
them for public sale under the Securities Act of 1933 or under applicable state
securities laws.
9. Collection Rights of Bank. The Owner agrees that at any time,
whether or not an Event of Default shall have occurred, Bank shall have the
right to notify any account debtor (with respect to any Collateral consisting of
Accounts), the owner on any Instrument or other right or claim of the Owner to
any payment which is Collateral or the issuer of any securities constituting
Investment Property (with respect to any Collateral consisting of Investment
Property), to make payment directly to Bank, whether or not an Event of Default
shall have occurred and whether or not the Owner was theretofore making
collections on such Collateral, and also to take control of any Proceeds Bank is
entitled to under Section 9-306 of the UCC. If any Collateral consists of
Accounts, Instruments, Investment Property, or other rights or claims of the
Owner to any payment, then at Bank's request, the Owner shall promptly notify
(in manner, form and substance satisfactory to Bank) all Persons obligated to
the Owner under any such Accounts, Instruments, Investment Property or other
rights or claims of the Owner to any payment that Bank possesses a security
interest in such Accounts, Instruments, Investment Property or other rights or
claims of the Owner to any payment and that all payments in respect of such
Accounts, Instruments, Investment Property or other rights or claims of the
Owner to any payment are to be made directly to Bank. The Owner shall not
settle, compromise or adjust any disputed amount, or allow any credit, rebate or
discount with respect to any Account, Instrument or other right or claim of the
Owner to any payment which constitutes Collateral. After Bank shall have given
any notice of the type specified in the first sentence of this Section 9, any
and all amounts received by the Owner from the account debtor or other owner or
issuer so notified shall be promptly remitted to Bank, and until so remitted
shall be segregated by the Owner and held in trust for Bank.
10. Additional Security. If Bank shall at any time hold security for
any Obligations in addition to the Collateral, Bank may enforce the terms of
this Agreement or otherwise realize upon the Collateral, at its option, either
before or concurrently, with the exercise of remedies as to such other security
or, after a sale is made of such other security, it may apply the proceeds upon
the Obligations without affecting the status of or waiving any right to exhaust
all or any other security, including the Collateral, and without waiving any
breach or default or any right or power whether exercised under this Agreement,
contained in this Agreement, or provided for in respect of any such other
security.
11. Preservation and Protection of Security Interest; Power of
Attorney. The Owner will faithfully preserve and protect the Lien in the
Collateral created by this Agreement and will, at its own cost and expense,
cause such Lien to be perfected and continue to be perfected and to be and
remain prior to all other Liens, so long as all or any part of the Obligations
are outstanding and unpaid, and for such purpose the Owner will from time to
time at the request of Bank (i) make notations of the security interest in
certificates of title of Collateral, a security interest in which is perfected
by such notation, and deliver the same to Bank, (ii) deliver possession of
Collateral (concurrent with the acquisition of such Collateral) to Bank, a
security interest in which is perfected by the taking of possession, and (iii)
file or record, or cause to be filed or recorded, such instruments, documents
and notices, including financing statements and continuation statements, as Bank
may reasonably deem necessary or advisable from time to time in order to perfect
and continue to perfect such Liens and to maintain their priority over all other
Liens. The Owner will do all such other acts and things and will execute and
deliver all such other instruments and documents, including further security
agreement, pledges, endorsements, stock powers, assignments, and notices as Bank
may reasonably deem necessary or advisable from time to time in order to perfect
and preserve the priority of the Liens in the Collateral as contemplated by this
Agreement. Bank, acting through its officers, employees and authorized agents,
is hereby irrevocably appointed the attorney-in-fact of the Owner to do, at the
Owner's expense, all acts and
-6-
things which Bank may reasonably deem necessary or advisable to preserve,
perfect, continue to perfect and/or maintain the priority of such Liens in the
Collateral, including the signing of financing, continuation or other similar
statements and notices on behalf of the Owner, and which the Owner is required
to do by the terms of this Agreement, the registration of any and all Investment
Property held by Bank as Collateral hereunder in the name of Bank or its nominee
or the transfer of same to a Securities Account held in the name of Bank or its
nominee. The Owner hereby authorizes Bank to sign and file financing statements
with respect to the Collateral without the signature of the Owner. The Owner
shall pay all filing fees for financing statements with respect to the
Collateral.
12. Risk of Loss; Insurance. Risk of loss of, damage to or destruction
of the Collateral is and shall remain upon the Owner. If the Owner fails to
obtain and keep in force insurance covering the Collateral as required by
Section 4 of this Agreement, or fails to pay the premiums on such insurance when
due, Bank may, but is not obligated to, do so for the account of the Owner and
the cost of so doing shall thereupon become an Obligation. Such amounts shall be
payable to the Owner upon demand by the Bank and following demand shall bear
interest at a variable rate equal to 4% above the Bank's reference lending rate
applicable to domestic commercial loans as established by Bank from time to
time, but in no event shall such rate exceed the maximum rate allowed by law.
Bank, acting through its officers, employees and authorized agents, is hereby
irrevocably appointed the attorney-in-fact of the Owner to endorse any draft or
check that may be payable to the Owner in order to collect the proceeds of such
insurance or any return or unearned premiums.
13. Change in Law. In the event of the passage, after the date of this
Agreement, of any law which has the effect of changing in any way the laws now
in force for the taxation of security documents such as this Agreement or debts
secured by such security documents or the manner of the collection of any such
taxes so as in any case to affect his Agreement or to impose payment of the
whole or any portion of any taxes, assessments or other similar charges against
the Collateral upon Bank, the Obligations shall immediately become due and
payable at the option of Bank and upon 30 days' notice to the Owner.
14. WAIVER OF SUBROGATION; INDEPENDENT VALIDITY OF AGREEMENT.
NOTWITHSTANDING ANY AMOUNTS WHICH BANK MAY REALIZE BY EXERCISING ANY OF ITS
RIGHTS WITH RESPECT TO ANY COLLATERAL, OR ANY SET-OFF OR APPLICATION BY BANK OF
THE COLLATERAL OR OF ANY CREDITS OR CLAIMS, OWNER WILL NOT ASSERT OR EXERCISE
ANY RIGHTS OF BANK OR OWNER AGAINST CUSTOMER TO RECOVER THE AMOUNT OR VALUE OF
ANY COLLATERAL OR OTHER ASSETS OF OWNER APPLIED BY BANK PURSUANT HERETO TO
SATISFY ANY OBLIGATIONS OF CUSTOMER BY WAY OF SUBROGATION, REIMBURSEMENT,
CONTRIBUTION, INDEMNITY OR OTHERWISE ARISING BY CONTRACT OR OPERATION OF LAW,
AND OWNER SHALL HAVE NO RIGHT OF RECOURSE TO OR ANY CLAIM AGAINST ANY ASSETS OR
PROPERTY OF CUSTOMER, ALL OF SUCH RIGHTS BEING HEREIN EXPRESSLY WAIVED BY OWNER
UNLESS AND UNTIL ALL OF THE OBLIGATIONS OF CUSTOMER HAVE BEEN SATISFIED IN FULL.
The provisions of this paragraph shall survive the termination of this
Agreement, and any satisfaction and discharge of Customer by virtue of any
payment, court order or any federal or state law. The validity of the security
interests created hereunder and the enforceability of Bank's rights hereunder
shall be independent of, and shall not be affected or impaired by, and lack of
validity, regularity or enforceability of the Obligations of Customer or any
note, instrument or agreement evidencing the same or relating thereto, the
acceptance of guarantees or other collateral or the termination, by operation of
law or otherwise, of the liability of anyone with respect to any Obligations, or
any other circumstance which might constitute a defense available to, or a
discharge of, the Customer, it being the intent of the parties that Bank's
rights hereunder shall be absolute and unconditional to the same extent as if
the security interests granted hereunder secured an absolute and unconditional
guarantee by Owner to Bank of all Obligations of Customer.
15. Expenses. The Owner hereby agrees to pay any and all expenses
incurred by Bank in enforcing any rights under this Agreement or in defending
any of its rights to any amounts received hereunder. Without limiting the
foregoing, the Owner agrees that whenever any attorney is used by Bank to obtain
payment hereunder, to advise it as to its rights, to adjudicate the rights of
the parties hereunder or for the defense of any of its rights to amounts
secured, received or to be received hereunder. Bank shall be entitled to recover
all reasonable attorneys' fees and disbursements, court costs and all other
expenses attributable thereto.
16. Notices. Each notice or other communication hereunder shall be in
writing, shall be sent by messenger, by registered or certified first class
mail, return receipt requested, by Federal Express, Express Mail or other
recognized overnight delivery service or by facsimile transmitter or tested
telex (if such facsimile or telex number is noted as provided herein), and shall
be effective if by hand, upon delivery, if by such overnight delivery service,
one (1) day after dispatch, and if mailed by first class mail as above-provided,
five (5) days after mailing, and shall be sent as follows;
If to the Owner, to the address, facsimile or tested telex number set
forth below its signature or such other address, facsimile or tested telex
number as it may designate, by written notice to Bank as herein provided or to
any other address, facsimile or tested telex number as may appear in the records
of Bank as Owner's address.
If to Bank, to Republic National Bank of New York, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention, Loan Department, or such other address as
it may designate, by written notice to the Owner as herein provided.
17. Additional Definitions. The following terms have the following
meanings unless otherwise specified herein:
"Accessions," "Account," "Chattel Paper," "Commodity Accounts," "Commodity
Contracts," "Control," "Document," "Entitlement Holder," "Entitlement Order,"
"Equipment," "Financial Assets," "Fixtures," "General Intangibles," "Goods,"
"Instrument," "Inventory," "Investment Property," "Securities," "Securities
Account," "Securities Entitlements" and "Securities Intermediary" have the
meanings assigned to those terms by the UCC.
"Agreement" means this continuing General Security Agreement.
-7-
"Bank" means Republic National Bank of New York, a national banking association,
and its successors and assigns, and any Person acting as agent or nominee for
Republic National Bank of New York and any corporation the stock of which is
owned or controlled directly or indirectly by, or is under common control with,
Republic National Bank of New York and/or Republic New York Corporation.
"Claims" means each "claim" as that term is defined under Section 101(4) of the
United States Bankruptcy Code, and any amendments thereto (Title 11, United
States Code).
"Deposit Account" shall mean a demand, time, savings, passbook or similar
account maintained with a bank and any certificate of deposit maintained with a
bank.
"Event of Default" means any of the events described in Section 5 of this
Agreement.
"Imported Inventory" means all Inventory of the Owner of every description
(including, without limitation, raw materials, work in process and finished
Goods) imported from outside of the United States, including but not limited to
Inventory consisting of parts or components produced in whole or in part in the
United States and sent outside of the United States for assembly, completion or
packaging.
"Lien" means any lien, security interest, pledge, hypothecation, encumbrance or
other claim in or with respect to any property.
"Obligations" means any and all indebtedness, obligations and liabilities of the
Owner to Bank, and all Claims of Bank against the Owner and/or Customer, now
existing or hereafter arising, direct or indirect (including participations or
any interest of Bank in indebtedness of the Owner and/or Customer to others),
acquired outright conditionally, or as collateral security from another,
absolute or contingent, joint or several, secured or unsecured, matured or
unmatured, monetary or non-monetary, arising out of contract or tort, liquidated
or unliquidated, arising by operation of law or otherwise, and all extensions,
renewals, refundings, replacements and modifications of any of the foregoing.
"Obligations of Customer" means the Obligations of Customer to Bank, and does
not include any Obligations of Owner for which Customer is not jointly liable.
"Obligations of Owner" means the Obligations of Owner to Bank, and does not
include any Obligations of Customer for which Owner is not jointly liable.
"Person" means any natural person, corporation, limited liability company,
partnership, trust, government or other association or legal entity.
"Proceeds" has the meaning assigned to that term by the UCC and also means all
"proceeds," "products," "offspring," "rents" or "profits" of any property, as
such quoted terms are used in the United States Bankruptcy Code, and any
amendments thereto (Title 11, United States Code).
"Responsible Parties" includes all Owner, Customers, and all makers, endorsers,
acceptors, sureties and guarantors of, and all other parties to, the Obligations
or the Collateral.
"UCC" means the Uniform Commercial Code as in effect from time to time in the
State of New York.
18. Miscellaneous. This Agreement shall remain in full force and effect
and shall be binding upon the Owners, its successors and assigns, in accordance
with its terms, notwithstanding any increase, decrease or change in the partners
of the Owner, if it should be a partnership, or the merger, consolidation, or
reorganization of the Owner, if it be a corporation or a limited liability
company, or any other change concerning the form, structure or substance of any
such entity. If there is more than one Person named as an Owner in this
Agreement, this Agreement shall be binding upon each of the Owners who execute
and deliver this Agreement to Bank even if this Agreement is not executed by any
other Person or Persons also named as an Owner herein, Bank may assign all or a
portion of its rights under this Agreement and may deliver the Collateral, or
any part thereof, to any assignee and such assignee shall thereupon become
vested with all the powers and rights given to Bank in respect thereof; and Bank
shall thereafter be forever relieved and discharged from any liability or
responsibility in the matter but, with respect to any collateral not so
delivered or assigned, Bank shall retain all powers and rights given to it
hereby. The execution and delivery hereafter to Bank by the Owner of a new
security agreement shall not terminate, supersede or cancel this Agreement,
unless expressly provided therein, and this Agreement shall not terminate,
supersede or cancel any security agreement previously delivered to Bank by the
Owner, and all rights and remedies of Bank hereunder or under any security
agreement hereafter or heretofore executed and delivered to Bank by the Owner
shall be cumulative and may be exercised singly or concurrently. This Agreement
may not be changed or terminated orally, but only by a writing executed by the
Owner and a duly authorized officer of Bank; provided, that Bank is authorized
to fill in any blank spaces and to otherwise complete this Agreement and correct
any patent errors herein. Unless Bank, in its discretion, otherwise agrees, the
security interests granted in this Agreement shall not terminate until all of
the Obligations have been indefeasibly paid in full and all commitments of Bank
to extend credit which, once extended, would give rise to Obligations have
expired or been terminated. No delay on the part of Bank in exercising any of
its options, powers or rights, or partial or single exercise thereof, shall
constitute a waiver thereof. No modification or waiver of this Agreement or any
provision hereof or of any other agreement or instrument made or issued in
connection herewith or contemplated hereby, nor consent to any departure by the
Owner therefrom, shall in any event be effective, irrespective, of any course of
dealing between the parties, unless the same shall be in a writing executed by a
duly authorized officer of Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on the Owner in any case shall thereby entitle the
Owner to any other or further notice of demand in the same, similar or other
circumstances. The remedies herein provided are cumulative and not exclusive of
any other remedies provided at equity or by law and all such remedies may be
exercised singly or concurrently. If any one or more of the provisions contained
in this Agreement or any document executed in connection herewith shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity,
-8-
legality and enforceability of the remaining provisions contained herein shall
not (to the full extent permitted by law) in any way be affected or impaired.
The descriptive headings used in this Agreement are for convenience only and
shall not be deemed to affect the meaning or construction of any provision
hereof. The word "including" shall be deemed to be followed by the words
"without limitation." The Owner waives any and all notice of the acceptance of
this Agreement by Bank, or of the creation, accrual or maturity (whether by
declaration or otherwise), of any and all Obligations, or of any renewals or
extensions thereof from time to time, or of Bank's reliance on this Agreement.
19. Governing Law; Consent to Jurisdiction; Service of Process. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be performed wholly within
that state. The Owner hereby consents to the jurisdiction of the courts of the
State of New York and the courts of the United States of America for the
Southern District of New York and consents that any action or proceeding
hereunder may be brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; and authorizes the service of process on
the Owner by registered or certified mail sent to any address authorized in
Section 16 as an address for the sending of notices.
20. RIGHT OF BANK TO ARBITRATE DISPUTES.
(a) THE OWNER AGREES THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR
CONTROVERSY BETWEEN OR AMONG THE PARTIES WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT BANK'S ELECTION, WHICH ELECTION
MAY BE MADE AT ANY TIME PRIOR TO THE COMMENCEMENT OF A JUDICIAL PROCEEDING BY
BANK, OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED BY THE OWNER, BE
RESOLVED BY ARBITRATION IN NEW YORK, NEW YORK IN ACCORDANCE WITH THE PROVISIONS
OF THIS SECTION 20 AND SHALL, AT THE ELECTION OF BANK, INCLUDE ALL DISPUTES
ARISING OUT OF OR IN CONNECTION WITH (1) THIS AGREEMENT OR ANY RELATED
AGREEMENTS OR INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS
INVOLVING THE PARTIES, (III) ANY TRANSACTION CONTEMPLATED HEREBY AND ALL PAST,
PRESENT AND FUTURE TRANSACTIONS INVOLVING THE PARTIES AND (IV) ANY ASPECT OF THE
PAST, PRESENT OR FUTURE RELATIONSHIP OF THE PARTIES. Bank may elect to require
arbitration of any Dispute with the Owner without thereby being required to
arbitrate all Disputes between Bank and the Owner. Any such Dispute shall be
resolved by binding arbitration in accordance with Article 75 of the New York
Civil Practice Law and Rules and the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"). In the event of any inconsistency
between such Rules and these arbitration provisions, these provisions shall
supersede such Rules. All statutes limitations which would otherwise be
applicable shall apply to any arbitration proceeding under this subsection
20(a). In any arbitration proceeding subject to these provisions, the
arbitration panel (the "arbitrator") is specifically empowered to decide (by
documents only, or with a hearing, at the arbitrator's sole discretion)
prehearing motions which are substantially similar to pre-hearing motions to
dismiss and motions for summary adjudication. In any such arbitration
proceeding, the arbitrator shall not have the power or authority to award
punitive damages to any party. Judgment upon the award rendered may be entered
in any court having jurisdiction. Whenever an arbitration is required, the
parties shall select an arbitrator in the manner provided in subsection 20(d).
(b) No provision of, nor the exercise of any rights under, subsection
20(a) shall limit the right of any party (i) to foreclose against any real or
personal property collateral through judicial foreclosure, by the exercise of a
power of sale under a deed of trust, mortgage or other security agreement or
instrument, pursuant to applicable provisions of the UCC, or otherwise pursuant
to applicable law, (ii) to exercise self help remedies including but not limited
to setoff and repossession, or (iii) to request and obtain from a court having
jurisdiction before, during or after the pendency of any arbitration,
provisional or ancillary remedies and relief including but not limited to
injunctive or mandatory relief or the appointment of a receiver. The institution
and maintenance of an action or judicial proceeding for, or pursuit of,
provisional or ancillary remedies or exercise of self help remedies shall not
constitute a waiver of the right of Bank, even if Bank is the plaintiff, to
submit the Dispute to arbitration if Bank would otherwise have such right.
(c) Bank may require arbitration of any Dispute(s) concerning the
lawfulness, unconscionableness, propriety, or reasonableness of any exercise by
Bank of its right to take or dispose of any Collateral or its exercise of any
other right in connection with Collateral including, without limitation,
judicial foreclosure, exercising a power of sale under a deed of trust or
mortgage, obtaining or executing a writ of attachment, taking or disposing of
property with or without judicial process pursuant to Article 9 of the UCC or
otherwise as permitted by applicable law, notwithstanding any such exercise by
Bank.
(d) Whenever an arbitration is required under subsection 20(a), the
arbitrator shall be selected, except as otherwise herein provided, in accordance
with the Commercial Arbitration Rules of the AAA. A single arbitrator shall
decide any claim of $100,000 or less and he or she shall be an attorney with at
least five years' experience. Where the claim of any party exceeds $100,000, the
Dispute shall be decided by a majority vote of three arbitrators, at least two
of whom shall be attorneys (at least one of whom shall have not less than five
years' experience representing commercial banks).
(e) In the event of any Dispute governed by this Section 20, each of
the parties shall, subject to the award of the arbitrator, pay an equal share of
the arbitrator's fees. The arbitrator shall have the power to award recovery of
all costs and fees (including attorneys' fees, administrative fees, arbitrator's
fees and court costs) to the prevailing party.
-9-
21. WAIVER OF TRIAL BY JURY. EACH OF BANK AND THE OWNER HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM OR CROSS-CLAIM BROUGHT BY
OR AGAINST IT ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OBLIGATIONS.
22. WAIVER OF CERTAIN OTHER RIGHTS. THE OWNER HEREBY WAIVES THE RIGHT
TO INTERPOSE ANY DEFENSE, SET-OFF COUNTERCLAIM OR CROSS-CLAIM OF ANY NATURE OR
DESCRIPTION, ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE, AND ANY CLAIM
FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.
IN WITNESS WHEREOF, the Owner(s) has/have executed this Hypothecation
and Security Agreement.
Chief Executive Office:
----------------------------------------
Name of the Owner, if an Entity
By:
--------------------------------- -------------------------------------
Print Name and Title
--------------------------------- ----------------------------------------
Signature
Address and facsimile number of By:
the Owner: ------------------------------------
Type Name and Title
--------------------------------- ----------------------------------------
Signature
By:
--------------------------------- ------------------------------------
Type Name and Title
Address and facsimile number of
the Owner: ----------------------------------------
Signature
/s/ DDE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------------
Signature of Individual Owner
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ----------------------------------------
Print Name
c/o Keswick Management Inc.
1330 Ave. of the Americas, 27th Floor
----------------------------------------
Address and Facsimile Number for Notices
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
-----------------------------------
---------------------------------
Signature(s) Verified By
Authorized Bank Officer
------------------------
---------------------------------
-10-
[Individual Acknowledgment(s)]
STATE OF NEW YORK
COUNTY OF New York
-----------------
On this 9th day of May, 2000, before me personally appeared ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ___________________ to me known, and known to me to be the
individual(s) described in and who executed the foregoing instrument and
(t)(s)he(y) duly acknowledged to me that (t)(s)she(y) executed the same.
▇▇▇▇▇ ▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in Richmond County /s/ ▇▇▇▇▇ ▇▇▇▇
Commission Expires November 30, 2000 ---------------------------------------
Notary Public
[Partnership Acknowledgment]
STATE OF NEW YORK
COUNTY OF
-------------------
On this ______ day of ______________, ____, before me personally
appeared __________________ and ___________________ to me known, and known to me
to be the members of ______________________________, the partnership mentioned
and described in and which executed the foregoing instrument, and the said
members duly acknowledged to me that they executed said instrument for and on
behalf of and with the authority of the said partnership for the uses and
purposes therein mentioned.
---------------------------------------
Notary Public
[Corporate Acknowledgment]
STATE OF NEW YORK
COUNTY OF
-------------------
On this ______ day of ______________, ____, before me personally came
_______________________ and _________________________to me known who, being duly
sworn, deposes and says that (t)(s)he(y) is/are ___________________________ and
_____________________ of ___________________________, the corporation described
in and which executed the above instrument; that (t)(s)he(y) know(s) the seal of
the corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation and (t)(s)he(y) signed his(her)(their) name(s) by like order.
---------------------------------------
Notary Public
[Limited Liability Company or Partnership Acknowledgment]
STATE OF NEW YORK
COUNTY OF
-------------------
On this ______ day of ______________, ____, before me personally
appeared ___________________________ and _____________________ to me known who,
being duly sworn, deposes and says that (t)(s)he(y) is/are the
_____________________ and the ______________________ of _______________________,
the limited liability company/partnership described in and which executed the
foregoing instrument; that (t)(s)he(y) executed said instrument for and on
behalf of and with the authority of the said limited liability
company/partnership pursuant to and under the authority given to them under the
articles of organization and operating agreement of said company.
---------------------------------------
Notary Public
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SECRETARY'S CERTIFICATE
I, ________________________________________, do hereby certify as follows:
1. I am the duly elected, qualified and acting Secretary of ________
____________________, a ____________________________________ corporation (the
"Corporation"), and as such Secretary have the care and custody of the corporate
books and records, have personal knowledge of the matters set forth herein, and
have authority to make this Certificate for and on behalf of the Corporation.
2. At a special meeting of the directors of the Corporation, called in
accordance with the provisions of the By-Laws of the Corporation and held on
________________, _______, or pursuant to the unanimous written consent of the
directors of the Corporation dated ________________, _______, as authorized by
the By-Laws of the Corporation, the following resolutions were adopted by the
unanimous vote or consent of all the directors:
WHEREAS, the Corporation has a definite, important and direct financial
interest in the business of ___________________________________________
(hereinafter referred to as the "Customer") and the successful
operation of Borrower's business is in furtherance of the best
interests, welfare and financial advantage of the Corporation; and
WHEREAS, the Corporation desires to induce Republic National Bank of
New York (hereinafter referred to as the "Bank") hereafter to extend
credit or other financial accommodations to the Customer upon such
terms and conditions as may be required by the Bank.
IT IS, THEREFORE, RESOLVED, that the Corporation shall grant to the
Bank a security interest in property of the Corporation designated by
any officer of the Corporation to secure any and all obligations of the
Customer to the Bank, whether now existing or hereafter incurred; and
FURTHER RESOLVED, that any officer of the Corporation be, and each of
them hereby is, authorized and directed to execute, and the Secretary
or any Assistant Secretary of the Corporation is hereby authorized and
directed to attest to and to affix the seal of the Corporation to, any
security agreements and other instruments or documents related thereto,
in the form required by the Bank; and
FURTHER RESOLVED, that the Corporation shall agree to submit to
arbitration and to waive the right of trial by jury with respect to any
dispute arising under such security agreement or any related document.
3. I further certify that the foregoing resolutions remain in full force and
effect and have not been rescinded or modified in any manner whatsoever and
neither their adoption nor their implementation violate the Corporation's
certificate of incorporation or by-laws or breach or constitute a default under
any agreement or indenture to which the Corporation is a party or by which it is
bound.
4. I have examined the stock books, stock transfer books and other records of
the Corporation and know by virtue thereof and of my own knowledge that the
following (is) (are) the holder(s) of all of the outstanding shares of stock of
the Corporation entitled to vote thereon.
Name(s) of Shareholder(s) No. of Shares
_____________________________ ___________________________
_____________________________ ___________________________
_____________________________ ___________________________
_____________________________ ___________________________
IN WITNESS WHEREOF, I have set my hand and the seal of _______________________
____________________________, at ___________________________________________
this ______________ day of ________________, _____.
[SEAL]
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Secretary
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SHAREHOLDERS' CONSENT TO HYPOTHECATION AND SECURITY AGREEMENT
The undersigned represent and warrant to Republic National Bank of New York (the
"Bank") that they are the holders and owners of all of the outstanding shares of
_________________________________________________, a ________________________
____________________________ corporation (the "Corporation") (owning the
(respective) number(s) of shares set opposite their respective signatures
below), and do hereby consent to and approve of the adoption by the Board of
Directors of the Corporation of the resolutions described in the foregoing
certificate and do further specifically consent to and approve the grant of a
security interest by the Corporation in its property to secure any and all of
the obligations of ___________________________________ to the Bank, and in
connection therewith, further hereby specifically consent to and approve the
execution and delivery, from time to time, by the Corporation to the Bank of
security agreements and other documents which shall be required by the Bank to
effectuate the purpose of such resolutions.
Dated: _____________________, ______
Signatures of Stockholders No. of Shares Owned
-------------------------- -------------------
_____________________________ ___________________________
_____________________________ ___________________________
_____________________________ ___________________________
_____________________________ ___________________________
STATE OF NEW YORK ):ss.:
COUNTY OF NEW YORK )
On this ______________ day of __________________, _______ before me personally
appeared _______________ ___________________________________________ to me known
and known to me to be the individuals described in and who executed the
foregoing instrument, and they duly acknowledged that they executed the same.
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Notary Public
INCUMBENCY CERTIFICATE
The undersigned, being the duly elected Secretary of
___________________________________________ (the "Corporation"), DOES HEREBY
CERTIFY that:
1. The officers of the Corporation are as set forth below, and the
signature is set opposite the name of each such officer is a genuine specimen of
such officer's signature:
NAME SIGNATURE OFFICE HELD
_________________________ __________________________ President
_________________________ __________________________ Vice President
_________________________ __________________________ Secretary
_________________________ __________________________ Treasurer
_________________________ __________________________
_________________________ __________________________
2. The individuals named above constitute all of the officers of the
Corporation; each of such individuals indicated as an officer of the Corporation
was and is duly elected, qualified and acting as such officer.
IN WITNESS WHEREOF, the undersigned has executed the foregoing instrument this
_______________________ day of ______________, ______.
[Corp. Seal]
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Secretary
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