EXHIBIT 3 TO SCHEDULE 13D
LOAN AGREEMENT
This Loan Agreement ("Agreement"), dated as of ____________, 2000, is made
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("SSB") and the undersigned ("Client") to set
forth the terms and conditions that will govern one or more extensions of credit
(each, an "Advance") by SSB to the Client.
1. a) Subject to the terms and conditions of this Agreement, SSB agrees to
make one or more Advances to the Client in an aggregate principal amount
selected by the Client and approved by SSB. The initial Advance is set forth in
Schedule "A". The Client may use Advances for the purpose of purchasing,
carrying or trading one or more "margin securities" as such term is defined in
Regulation T promulgated by the Federal Reserve Board or for any other purpose
as the Client may desire. All advances will comply with the requirements of
Regulation T and other applicable rules for margin accounts. SSB will not under
any circumstances be required to extend any type of credit to the client unless
the collateral that secures the Client's obligation to repay each Advance (and
accrued interest, if any) is acceptable to SSB. If the Client's obligation to
repay one or more Advances (and accrued interest, if any) is guaranteed by a
third party and the guarantor pledges securities in the guarantor's account at
SSB, the Client acknowledges that such securities must be acceptable to SSB.
b) The Client may obtain an Advance by (i) writing a check drawn on the
Client's Account at SSB, (ii) requesting SSB to issue a branch check payable to
the Client in the amount of the Advance, (iii) by requesting SSB to
wire-transfer Federal funds in the amount of the Advance to a bank account in
the Client's name, or (iv) by any other means requested by the Client and agreed
upon by SSB.
c) SSB may, in its sole discretion, obtain reports form, and provide
information to, other persons concerning the Client's credit standing and
business conduct. SSB may ask credit-reporting agencies for consumer reports of
the Client's credit history. Upon the Client's request, SSB will inform the
Client of the name and address of the consumer reporting agency or agencies that
furnish such consumer reports to SSB.
2. SSB shall charge the Client interest on the aggregate principal amount
of Advances outstanding, if any. Such interest shall be computed in the same
manner as that set forth for securities margin accounts in the pamphlet prepared
by SSB entitled "Important New Account Information" (hereafter referred to as
"New Account Document"), which may be amended from time to time and which
amendment shall become binding upon written notice to the Client. The Client
hereby acknowledges receipt of the New Account Document. Interest shall be
payable monthly. If (i) a sufficient amount of cash or money market fund shares
is not available in the Client's margin account at SSB ("Account") to pay the
monthly interest amount, or if the Client elects not to make interest payments
form the Account, and (ii) sufficient Collateral acceptable to SSB is in SSB's
possession, the interest due shall be added to the Client's outstanding
principal balance hereunder and thereafter interest shall accrue on such amount
until the Client's outstanding balance on all Advances has been repaid in full,
whether before or after demand or termination of this Agreement. The Client
understands that by adding interest to the
outstanding principal balance of Client's Advances, the amount of additional
Advances the Client may obtain shall be proportionately reduced. In no event
shall the total interest and fees charged under this Agreement exceed the
maximum interest rate or total fees permitted by law. In the event any excess
interest or fees are collected, the same shall be refunded or credited to the
Client.
3. The Client agrees to pay on demand any balance owing with respect to all
Advances, including interest, fees and any costs of collection (including
reasonable attorney's fees, if any). The Client understands that SSB may demand
full or partial payment of any balance outstanding hereunder at its sole option
and without cause at any time, and that Advances hereunder are not for any
specific term or duration. The Client may pay any amount outstanding hereunder
at any time in whole or in part without penalty.
4. a) As security for the Clients obligations to SSB under this Agreement,
the Client hereby assigns, grants and conveys to SSB a first priority lien and
security interest in all cash, stocks, bonds, other securities, and instruments
now or hereafter in Client's Account and all other accounts maintained by the
Client with SSB, and all dividends, interest and proceeds of such property, and
any property substituted by the Client (collectively, the "Collateral"). SSB
reserves the right to require the Client at any time to deposit promptly into
the Account additional Collateral acceptable to SSB, in good deliverable form
and freely saleable, and in such amount as SSB reasonably prescribes or to
substitute new Collateral acceptable to SSB, in good deliverable form and freely
saleable, for any Collateral that has previously been deposited into the
Client's Account. The Client may, with SSB's approval (not to be unreasonably
withheld) and upon such terms and conditions as SSB shall prescribe, substitute
securities or other property for Collateral in the Client's Account. No
withdrawal or substitution may be made if after such withdrawal or substitution
the minimum equity level required to be maintained on deposit in the Account.
The Client agrees to take any action reasonably requested by SSB to maintain and
preserve SSB's first priority lien and security interest in the Collateral.
b) In Accordance with its customary practices, but without affecting
SSB's duties to client, SSB may, in its sole discretion, borrow margin
securities and effect, among other things, short sale transactions with such
borrowed securities. The Client understandings and agrees that such borrowed
securities will be deemed Collateral for purposes of this Agreement.
5. Whenever SSB makes a demand upon the Client, or reasonably deems it
necessary or appropriate for its protection (which may include but is not
limited to a decline in the market value of the Collateral or a decline in the
market value of securities or other property in an SSB account pledged by a
guarantor as security for the Client's Advances), SSB may require the Client to
repay promptly all or a specified amount of the outstanding balance of the
Advances or to deposit promptly into Client's Account a specific amount of
additional Collateral. If the Client fails to do either of these things, SSB
may, in its sole discretion, take one or more of the following actions: (a)
reduce the Loan Limit to a level required by law or as determined by SSB, in the
manner and in the order described in Section 4 of this Agreement, (b) liquidate,
withdraw or sell the Collateral and apply it to any amounts owed to SSB, in the
manner and in the order described in Section 4 of this Agreement, and (c)
terminate the Client's borrowing privileges hereunder. Without limiting the
generality of the foregoing, any sale may be made in
SSB's sole discretion on the exchange or market where such business is then
usually transacted, at public auction or private sale. SSB will attempt to make
a good faith effort to notify the Client before selling the Collateral and its
failure to provide such notice will not in any way limit its rights under this
Section 5. In additional to SSB's rights under this Agreement, SSB shall have
the right to exercise any one or more of the rights and remedies of a secured
creditor under the New York Uniform Commercial Code then in effect. All rights
and remedies under this Agreement are cumulative and are in addition to all
other rights and remedies that SSB may have at law or equity. Notwithstanding
the foregoing, to the extent permitted by law, the Client expressly waives
compliance with the provisions of Section 202 of the New York Lien Law.
6. This Agreement shall be governed by, and construed in accordance with,
the law of the State of New York, without regard to the conflict of laws rules
of such State.
7. This Agreement may not be assigned by the Client without SSB's prior
written consent, and shall be binding upon the Client's heirs, executors,
administrators, successors and permitted assigns (whichever is applicable). SSB
may assign this Agreement to any affiliated entity that is authorized by law to
make advances to the Client without the Client's consent or prior notice to the
Client, and this Agreement shall inure to the benefit of SSB's successors and
assigns (whether by merger, consolidation or otherwise).
8. This Agreement may be amended with the written consent of both parties.
Any such amendment shall be effective as of the dare established by both
parties. This Agreement may not be amended orally. Either the Client or SSB may
by joint consent thereto, waive compliance with any provision of this Agreement.
Such waiver must be in writing. Any such waiver will not be deemed to be a
waiver of any other provision of this Agreement. If any provision of this
Agreement is held to be invalid, illegal or unenforceable by reason of any law,
rule, administrative order or judicial decision, such determination shall not
affect the validity of the remaining provisions of this Agreement.
9. SSB shall not be liable to the Client for: (a) any loss caused directly
or indirectly by causes that are beyond its reasonable control, including
government restrictions, exchange or market rulings, suspension of trading, war,
strikes or other conditions commonly known as "Acts of God", or (b) any
consequential, incidental, indirect or special damages, even if such damages are
reasonably foreseeable.
10. Each party represents and warrants to the other that it has full
authority to enter into this Agreement and to perform its obligations hereunder.
In addition, the Client represents and warrants to SSB that (a) the Collateral
is not subject to any lien, encumbrance or impediment to transfer (other than
SSB's lien and security interest and any restrictive legend restricting the sale
of the security under the Securities Act of 1933), and (b) while any Advance
(and accrued interest, if any) is outstanding, it will not pledge the Collateral
or grant a security interest in the Collateral to a third party, enter into a
"lock-up" agreement or other agreement that affects the Collateral or permit the
Collateral to become subject to any lien, encumbrance or restriction other than
as provided above, and (c) in the event SSB liquidates and sells the Collateral,
all Collateral consisting of securities will be readily transferable into
"street name" in good deliverable form, and together with the securities of any
other person whose sales must be aggregated with the Client's under applicable
law or rules, will be saleable under the Securities
Act of 1933 and other applicable law and rules. The Client shall be deemed to
repeat each of these representations each time an Advance is obtained hereunder.
11. This Agreement and the New Account Document reflect the entire
agreement between SSB and the Client concerning Advances to the Client and
supersede any other agreement, promise, representation or undertaking, whether
written or oral, concerning the Advances and the Account. In the event of a
conflict between the provisions of this Agreement and the New Account Document,
and any other agreement between the Client and SSB, this Agreement will govern.
12. Without the necessity of a judicial determination, the Client hereby
agrees to indemnify and hold harmless SSB and its directors, officers,
employees, agents and affiliates from any and all claims (whether or not
meritorious), liabilities, judgments, damages, losses, costs and expenses of any
nature whatsoever (including reasonable attorney's fees and expenses) in any way
related to, or arising out of or in connection with, this Agreement, including
without limitation the Client's grant of a first priority lien and security
interest in the Collateral and any action taken or omitted by SSB at the
Client's request, or any untruth or inaccuracy of any of the Client's
representations and warranties in this Agreement. Notwithstanding, the
foregoing, the Client will have no obligation to indemnify SSB for any
liability, judgment, damage, loss, cost or expense to the extent arising from
SSB's gross negligence or willful misconduct, or that of SSB's directors,
officers, employees, agents or affiliates.
13. ARBITRATION
Arbitration is final and binding on the parties.
The parties are waiving their right to seek remedies in court, including
the right to jury trial.
Pre-arbitration discovery is generally more limited than and different from
court proceedings.
The arbitrators' award is not required to include factual findings or legal
reasoning, and any party's rights to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
The Client agrees that all claims or controversies, whether such claims or
controversies arose prior, on or subsequent to the date hereof, between the
Client and SSB and/or any of its present
or former officers, directors, or employees concerning or arising from
(i) Client's Account, (ii) Advances and any other transaction involving SSB or
any predecessor firms by merger, acquisition or other business combination and
the Client, whether or not such transaction occurred in Client's Account, or
(iii) the construction, performance or breach of this Agreement or any other
agreement between Client and SSB, or any duty arising from the business of SSB
or otherwise, shall be determined by binding arbitration before, and only
before, any self-regulatory organization or exchange or which SSB is a member.
The Client may elect which of these arbitration forums shall hear the matter by
sending a registered letter or telegram addressed to SSB Inc. at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Law Department. If the Client fails to
make such election, SSB shall have the right to choose the forum.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied, (ii)
the class is decertified, or (iii) the customer is excluded from the class by
the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this Agreement except to the extent stated herein.
BY SIGNING BELOW, THE CLIENTS AGREES TO BE BOUND BY THE TERMS AND CONDITIONS OF
THIS AGREEMENT. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT
SECTION 13.
CLIENT NAME AND SIGNATURE[S] (IF CLIENT IS A CORPORATION, PARTNERSHIP, TRUST OR
OTHER ENTITY, INSERT THE NAME OF THE ENTITY AND THE NAME AND TITLE OF THE PERSON
SIGNING FOR THE ENTITY).
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▇▇▇▇ ▇. ▇▇▇▇▇
Account No.: 315-07250-1-2-288
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
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