CONTINUING GENERAL SECURITY AGREEMENT
Dated: 2/24/97
As used in this Agreement:
"Collateral" means all right, title and interest of the Obligor 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
Obligor in which Bank now or hereafter is granted a security interest pursuant
to this Agreement or otherwise:
[xxxx or initial the applicable boxes]
Accounts, [ ] All Accounts (including, without limitation, all
General accounts receivable), General Intangibles (including,
Intangibles, without limitation, contract rights and tax refunds)
Chattel Paper and all returned or repossessed Goods, all Chattel
and Instruments Paper (including, without limitation, leases) and
Instruments, and all interests of the Obligor 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 (including,
Inventory and without limitation, all documents of title, transport
Documents or otherwise) relating to such Inventory.
Inventory [ ] All Inventory of every description (including, without
and Documents limitation, Imported 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 an all Accessions
thereto located at the Collateral Location or at
Specific [ ] All of the following property:
Property
All [X]* All property of every description (including, without
Property limitation, all Accounts, General Intangibles, Chattel
Paper, Instruments, 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: 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx. Xxx Xxxx 00000
"Obligor" means The Solomon-Page Group Ltd. and its successors and assigns, and
if more than one Person is named as Obligor, "Obligor" shall mean each, any or
all of them, and their liabilities and obligations hereunder shall be joint and
several. Obligor is/are:
[ ] individual(s).
[X] a corporation organized under the laws of Delaware
[ ] a partnership organized under the laws of
[ ] a limited partnership organized under the laws of
[ ] a limited liability company 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 Obligor, or to or for the account of any other Person made by Bank at the
request of the Obligor or with respect to which the Obligor's agreements
hereunder have been required by Bank, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Obligor, the
Obligor agrees as follows:
1. Security Interest; Right of Set-Off. As security for the prompt and
unconditional payment of any and all Obligations, the Obligor 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, securities and any and all other property
of the Obligor 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 Obligor, 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 Obligor, and all such monies, securities 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. Obligor 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
Obligor with, any and all claims of the Obligor 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. Representations of Obligor. The Obligor 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 Obligor, 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 Obligor has no place of business other than the chief executive
office specified herein, if any, and the Collateral Location(s); (d) the
Obligor has not created and is not aware of any Lien on or affecting any
Collateral other than the Lien created by this Agreement in favor of Bank;
(e) if the Obligor is not a natural person, the execution, delivery and
performance of this Agreement have been duly authorized by all required
corporate, partnership or other applicable actions of the Obligor; (f) this
Agreement constitutes a valid, binding and enforceable obligation of the
Obligor; (g) the execution, delivery and performance of this Agreement do
not violate any law or any agreement or undertaking to which the Obligor is
a party or by which the Obligor 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 Obligor to enter and
perform its obligations under this Agreement and the Obligations and/or to
conduct its business have been obtained; (i) the Obligor 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 Obligor is entitled to use
such name and trade names; and (j) the Obligor is the legal and beneficial
owner of all Collateral specifically identified on page 1 of this Agreement
(alongside the box designated "Specific Property") and any Collateral
specifically identified in any rider, schedule or exhibit to this
Agreement.
3. 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 Obligor 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
Obligor 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 Obligor's places of business; (e) give Bank at least 30
days' prior written notice before changing the Obligor'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) not sell or otherwise dispose of any Collateral
except on commercially reasonable terms and in the ordinary course of
business; (g) 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 or partnership records, books of accounts, and
financial and other business records of the Obligor (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); (h) promptly notify Bank upon the occurrence
of any Event of Default of which the Obligor has knowledge; (i) maintain,
with financially sound and reputable insurers, with companies and in form
satisfactory to the Bank, fire, hazard, vandalism, malicious mischief,
business interruption, public liability, flood and other insurance, all in
coverage and amounts and upon other terms customary for companies engaged
in the same or similar business and similarly situated to the Borrower as
the Bank may from time to time require, and deliver to the Bank
certificates of all such insurance in effect, provided, that the amount of
such insurance in effect from time to time shall in no event be less than
One Million ($ 1 ,000,000) Dollars, in the aggregate. Each such insurance
policy shall (aa) name the Bank and its successors and assigns as their
interests may appear, as additional insured and as sole loss payee, as the
case may he, (bb) insure the interests of the Bank and its successors and
assigns regardless of any breach of or violation by the Borrower of any
representations, warranties or conditions contained therein, and (cc)
provide that no cancellation, reduction in amount or change in coverage
thereof shall be effective until at least thirty (30) days after receipt by
the Bank of written notice thereof. The Borrower shall deliver to the Bank
copies of renewals of each insurance policy maintained by the Borrower not
later than thirty (30) days prior to the expiration date of such insurance
policy. Regarding proceeds of insurance, the Bank may at its options apply
such proceeds to the repayment of any of the Obligor's outstanding
obligations to the Bank; (j) within 90 days of the end of each fiscal year,
from the (late hereof throughout the term of this Agreement, furnish the
Bank with a balance sheet and income financial statement, prepared by an
independent accountant satisfactory to the Bank based on a review of
Borrower's books and records. Such statements shall be accompanied by a
letter addressed to the Bank of said independent accountant satisfactory to
the Bank certifying that the statements have been prepared in accordance
with generally accepted accounting principles and practices applied on a
consistent basis and that they are a fair presentation consistent with that
of the preceding year; (k) within 60 days of the end of each six-month
period from the date hereof throughout the term of this Agreement, furnish
the Bank with a balance sheet and income financial statement, prepared
-2-
by an independent accountant satisfactory to the Bank based on a review of
Borrower's books and records. Such statements shall be accompanied by a
letter addressed to the Bank of said independent accountant satisfactory to
the Bank certifying that the statements have been prepared in accordance
with generally accepted accounting principles and practices applied on a
consistent basis and that they are a fair presentation consistent with that
of the preceding six-month interim report; and (1) deliver to the Bank from
the date hereof throughout the term of this Agreement, by the 15th day of
each month of this Agreement, the following: (aa) a complete list of
accounts receivable agings of the immediately preceding month, (bb) a
report on any and all sales occurring in the immediately preceding month,
and (cc) an inventory valuation report on the immediately preceding month,
each of the aforementioned (aa), (bb) and (cc) shall be certified by an
affidavit from the Chief Financial Officer of the Borrower to be a complete
and accurate representation of same.
4. Events of Default. The occurrence of any of the following events shall
constitute an Event of Default: (a) the failure of the Obligor to pay when
due any of the Obligations; (b) any representation or warranty of the
Obligor to Bank in this Agreement or any other instrument or agreement with
or in favor of Bank shall prove to be inaccurate or untrue; (c) the breach
by the Obligor of any covenant in this Agreement or in any other instrument
or agreement with or in favor of Bank; (d) Bank shall in good xxxxx xxxx
itself insecure at any time with respect to the Obligor's financial
condition or ability to pay the Obligations; or (e) Bank shall have
determined in good faith that the value of the Collateral has materially
decreased after the date of this Agreement. The occurrence of any of the
following events with respect to any Obligor, 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 matured person); (cc) death or suspension of the
usual business activities of any member of any partnership 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; (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; (11)
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 Obligor whether
or not Collateral; (qq) any of the Responsible Parties challenges or 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 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 of 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 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 xxxxx xxxx itself insecure
with respect to the financial condition of any of the Responsible Parties.
5. Remedies of Rank.
(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 Obligor, 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
4, Bank may declare by notice to the Obligor, any and all Obligations,
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 4
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 Obligor, anything
in any other agreement to the contrary notwithstanding.
-3-
(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 Obligor (all of which are hereby
waived by the Obligor), without releasing the Obligor 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 Obligor, at the Obligor's expense, to assemble all or
any part of the Collateral and, if Bank so requests, the Obligor 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 Obligor'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 Obligor'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 Obligor's rights therein and the Obligor 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 Obligor and take and hold
possession of all or any part of the Collateral (the Obligor hereby
waiving and releasing any claim for damages in respect of such
taking) and exclude the Obligor 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 instinct, 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
Obligor 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) 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 Obligor, of any or all of the
Accounts, 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; (v) 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; (vi) endorse in the name of Obligor any Instrument, however
received by Bank, representing Collateral or Proceeds of any of the
Collateral; (vii) require the Obligor to turn over, or instruct the
financial institutions holding the same to turn over, all monies and
investments in any of Obligor's accounts to Bank; and (viii) exercise
all the rights and remedies granted to a secured party under the New
York Uniform Commercial Code 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 5 or elsewhere in this Agreement and any of the
actions referred to in this Section 5 or elsewhere in this Agreement
may be taken regardless of whether any notice of default 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 Obligor hereby waives notice of the sale of any Collateral by Bank
pursuant to any provision of this Agreement or any applicable
provisions of the Uniform Commercial Code 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 Obligor, Bank will give the
Obligor 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 thereto is to be made by sending notice, as
provided led below, at least five days before the time of the sale or
disposition, which provisions for notice the Obligor 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, 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, 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 requited 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 Obligor 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 (1, whenever in its discretion Bank considers
such sale necessary
-4-
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 provide !.
6. Additional Rights of Bank and Duties of Obligor Regarding Obligations and
Collateral.
(a) If the Obligor, as registered holder of any Collateral, shall become
entitled to receive or does receive any stock certificate, option or
right, whether as an addition to, in substitution of, or in exchange
for, such Collateral, or otherwise, the Obligor 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
Obligor's endorsement when necessary or requested by Bank, to be held
by Bank as Collateral.
(b) The Obligor waives protest, demand for payment, notice of default or
nonpayment to the Obligor or any other party liable for or upon any of
said Obligations or Collateral.
(c) The Obligor 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, the Obligor, and all without in any way
affecting or releasing the liability of the Obligor 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 right in and to the
Collateral or any part thereof. Bank may exercise any right of the
Obligor with respect to any Collateral. Bank shall have no duty to
exercise any of the aforesaid rights, privileges or options with
respect to any 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 Obligor 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 acquaintance 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 Obligor, (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 Obligor 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 stocks, bonds or other securities held by Bank as
Collateral hereunder may, without notice (and whether or not a default
exists), be registered in the name of Bank or its nominee without
disclosing that Bank is a pledgee. Bank (whether or not a default
exists and regardless of the amount of the Obligations) or its nominee
may, without notice, exercise all voting and corporate rights at any
meeting of any corporation issuing such stocks, bonds or other
securities, and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to
such stocks, bonds or other securities as if the absolute owner
thereof, including, without limitation, the right to exchange, at its
discretion, any and all of such stocks, bonds or other securities for
other stocks, bonds, securities 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 stocks, bonds or other securities, and in
connection therewith, to deposit and deliver any and all of such
stocks, bonds or other securities with any committee, depository,
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
to exercise any of the aforesaid rights, privileges or options and
shall not be responsible for any further to do so or for any delay in
so doing.
7. Sale of Collateral Consisting of Securities. The Obligor 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 or resale thereof. The
Obligor 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 any of the securities constituting part of the Collateral for the period
of time
-5-
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 law.
8. Collection Rights of Bank. The Obligor agrees that at any time, whether or
not an Event of Default shall have occurred, Bank shall have the right to
notify an account debtor (with respect to any Collateral consisting of
Accounts), or the obligor on any Instrument or other right or claim of the
Obligor to any payment which is Collateral, to make payment directly to
Bank, whether or not Event of Default shall have occurred and whether or
not the Obligor 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 New York Uniform Commercial Code. If any Collateral consists
of Accounts, Instruments or other rights or claims of the Obligor to any
payment, then at Bank's request, the Obligor shall promptly notify, (in
manner, form and substance satisfactory to Bank) all Persons obligated to
the Obligor under any such Accounts, Instruments or other rights or claims
of the Obligor to any payment that Bank possesses a security interest in
such Accounts, Instruments or other rights or claims of the Obligor to any
payment and that all payments in respect of such Accounts, Instruments, or
other rights or claims of the Obligor to any payment are to be made
directly to Bank. The Obligor 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 Obligor to any
payment which constitutes Collateral. After Bank shall have given any
notice of the type specified in the first sentence of this Section 8, any
and all amounts received by the Obligor from the account debtor or other
obligor so notified shall be promptly remitted to Bank, and until so
remitted shall be segregated by the Obligor and held in trust for Bank.
9. 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 security.
10. Preservation and Protection of Security Interest; Power of Attorney. The
Obligor 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 Obligor 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 Obligor will do all such other acts and things and will execute and
deliver all such other instruments and documents, including further
security agreements, pledges, endorsements, 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 Obligor to do, at the Obligor's expense, all acts
and 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 Obligor, and which
the Obligor is required to do by the terms of the Agreement. The Obligor
hereby authorizes Bank to sign and file financing statements with respect
to the Collateral without the signature of the Obligor. The Obligor shall
pay all filing fees for financing statements with respect to the
Collateral.
11. Risk of loss; Insurance. Risk of loss, damage to or destruction of the
Collateral is and shall remain upon the Obligor. If the Obligor fails to
obtain and keep in force insurance covering the Collateral as required by
Section 3 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
Obligor and the cost of so doing shall thereupon become an Obligation. Such
amounts shall be payable by the Obligor 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 Obligor to endorse any draft or check that may be
payable to the Obligor in order to collect the proceeds of such insurance
or any return or unearned premiums.
12. Change of 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 this 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 Obligor.
13. Expenses. The Obligor 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 Obligor 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 distributions, court
costs and all other expenses attributable thereto.
-6-
14. Notices. Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by registered or certified mail or by facsimile
transmitter or tested telex, and shall be effective when sent, and shall be
sent as follows:
If to the Obligor, to the address set forth below its signature or such
other address as it may designate, by written notice to Bank as herein
provided or to any other address as may appear in the records of Bank as
Obligor's address.
If to Bank, The Dime Savings Bank of New York, FSB, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx, or such other address as it
may designate, by written notice to the Obligor as herein provided.
15. Additional Definitions. The following terms have the following meaning
unless otherwise specified herein:
"Accessions," "Account," "Chattel Paper," "Equipment," "Fixtures," "General
Intangibles," "Goods," "Instrument" and "Inventory" have the meanings
assigned to those terms by the New York Uniform Commercial Code, as
amended.
"Agreement" means this Continuing General Security Agreement.
"Bank" means The Dime Savings Bank of New York, FSB, a federally chartered
savings bank, and any Person acting as agent or nominee for The Dime
Savings Bank of New York, FSB and any corporation the stock of which is
owned or controlled directly or indirectly by, or is under common control
with, The Dime Savings Bank of New York, FSB.
"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).
"Event of Default" means any of the events described in Section 4 of this
Agreement.
"Imported Inventory" means all Inventory of the Obligor 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 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 Obligor to Bank, including those arising from or related to letters
of credit issued on behalf of the Obligor through the Bank, and all Claims
of Bank against the Obligor, now existing or hereafter arising, direct or
indirect (including participation or any interest of Bank in indebtedness
of the Obligor 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.
"Person" means any natural person, corporation, partnership, trust,
government or other association or legal entity.
"Proceeds" has the meaning assigned to the term by the New York Uniform
Commercial Code, as amended, 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 amendment thereto
(Title 11, United States Code).
"Responsible Parties" includes all Obligors and all makers, endorsors,
acceptors, sureties and guarantors of, and all other parties, to the
Obligations or the Collateral.
16. Miscellaneous. This Agreement shall remain in full force and effect and
shall be binding upon the Obligor, its successors and assigns, in
accordance with its terms, notwithstanding any increase, decrease or change
in the partners of the Obligor, if it should be a partnership, or the
merger, consolidation, or reorganization of the Obligor, if it be a
corporation, or any other change concerning the form, structure or
substance of any such entity or any other legal entity. If there is more
than one Person named as an Obligor in this Agreement, this Agreement shall
be binding upon each of the Obligors 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 Obligor 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 Obligor of a
new security agreement shall not terminate, supercede 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 Obligor, and all rights and remedies of Bank hereunder or
under any security agreement hereafter or heretofore executed and delivered
to Bank by the Obligor 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 Obligor and a duly authorized officer of
Bank. 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 right 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 Obligor therefrom, shall in any event
be effective,
-7-
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 of which given. No notice to or
demand on the Obligor in any case shall thereby entitle the Obligor to any
other or further notice or 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, 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 Obligor 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.
17. Governing Law; Consent in 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 Obligor 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 Obligor by registered or
certified mail sent to any address authorized in Section 14 as an address
for the sending of notices.
18. RIGHT OF BANK TO ARBITRATE DISPUTES.
(a) THE OBLIGOR 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 OBLIGOR AT ANY TIME PRIOR TO THE LAST DAY TO ANSWER
AND/OR RESPOND TO A SUMMONS AND/OR COMPLAINT MADE BY THE OBLIGOR, BE
RESOLVED BY ARBITRATION IN NEW YORK, NEW YORK IN ACCORDANCE WITH THE
PROVISIONS OF THIS SECTION 18 AND SHALL, AT THE ELECTION OF BANK,
INCLUDE ALL DISPUTES ARISING OUT OF OR IN CONNECTION WITH (I) 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 Obligor without thereby
being required to arbitrate all Disputes between Bank and the Obligor.
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 of limitations which would
otherwise be applicable shall apply to any arbitration proceeding
under this subsection 18(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) pre-hearing 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 18(d).
(b) No provision of, nor the exercise of any rights under, subsection
18(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 Uniform Commercial Code, 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 of 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 Uniform
Commercial Code or otherwise as permitted by applicable law,
notwithstanding any such exercise by Bank.
(d) Whenever an arbitration is required under subsection 18(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 lease five years' experience. Where the
claim of any party exceeds $100,000, the Dispute shall be decided by
a majority vote of three
-8-
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 18, 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.
19. WAIVER OF TRIAL BY JURY. EACH OF BANK AND THE OBLIGOR HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM 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.
20. WAIVER OF CERTAIN OTHER RIGHTS. THE OBLIGOR HEREBY WAIVES THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY CLAIMS OR LACHES OR SET-OFF OR
COUNTERCLAIM 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 Obligor(s) has/have executed this Continuing
General Security Agreement.
THE SOLOMON-PAGE GROUP LTD.
Name of the Obligor, if an Entity
Chief Executive Office:
By: /s/ Xxxx X. Xxxxx
1140 Avenue of the Americas -----------------------------
Xxx Xxxx, Xxx Xxxx 00000 Title: CFO, V.P. Finance
[Corporate Acknowledgment]
STATE OF NEW YORK
COUNTY OF NEW YORK
On this 24th day of February, 1997 before me personally came Xxxx X. Xxxxx
to me known who, being duly sworn, deposes and says that he is the___________ of
The Solomon-Page Group Ltd., the corporation described in and which executed the
above Instruments that he knows 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 he signed his name by
like order.
[Illegible]
----------------------------------
Notary Public
May 31, 1997
CERTIFICATE
I, Xxxx X. Xxxxx , do hereby certify as follows:
1. I am the duly elected, qualified and acting Secretary of The Solomon-Page
Group Ltd., a Delaware corporation (the "Company"), and as such, have the
care and custody of the books and records of the Company, have personal
knowledge of the matters set forth herein, and have authority to make this
Certificate for and on behalf of the Company.
2. At a special meeting of the Board of Directors of the Company, called in
accordance with the provisions of the organizational documents of the
Company and held on February 13, 1997, or pursuant to the unanimous written
consent of the Board of Directors of the Company dated ____________ , 1997,
as authorized by the organizational documents of the Company. the following
resolutions were adopted by unanimous vote or consent:
WHEREAS, the Company desires The Dime Savings Bank of New York, FSB
(hereinafter referred to as the "Bank") hereafter to extend credit or other
financial accommodations to the Company upon such terms and conditions as
may be required by the Bank.
IT IS, THEREFORE, RESOLVED, that the Company borrow and accept
$4,000,000.00 from the Bank and shall grant to the Bank a security interest
in property of the Company designated by any duly authorized representative
of the Company to secure any and all obligations of the Company to the
Bank, whether now existing or hereafter incurred; and
FURTHER RESOLVED, that any duly authorized representative of the Company
be, and each of them hereby is, authorized and directed to execute, and the
President or Secretary of the Company is hereby authorized and directed to
attest to and to affix the seal of the Company to, any security agreements
and other instruments or documents related thereto, in the form required by
the Bank: and
FURTHER RESOLVED, that the Company 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 Company's
organizational documents or constitute a default under any agreement or
indenture to which the Company is a party or by which it is bound.
IN WITNESS WHEREOF, I have set my hand and the seal of The Solomon-Page Group
Ltd at New York, New York this 13 day of February, 1997.
[SEAL] THE SOLOMON-PAGE GROUP LTD.
By: /s/ Xxxx X. Xxxxx
----------------------------
Title:.Secretary
-10-
