TERMINATION AND EXPENSE SECURITY AGREEMENT
This TERMINATION AND EXPENSE SECURITY AGREEMENT (this
"Agreement"), dated as of October 9, 1995, among I.C.H. Corporation, a
Delaware corporation (the "Pledgor"), Shinnecock Holdings Inc., a Delaware
corporation (the "Secured Party"), and Texas Commerce Bank National
Association, as collateral agent (the "Collateral Agent"). Unless otherwise
defined herein, the terms defined in Chapters 8 and 9 of the Texas Business
and Commerce Code (as in effect and amended from time to time, the "Texas
Code") are used herein as defined in the Texas Code.
1. Collateral Accounts.
(a) The Pledgor hereby establishes with the Collateral Agent
(i) a collateral account, number 3855124229 (together with any replacement or
substitute account, the "Expense Collateral Account"), into which the Pledgor
shall deposit $4,000,000 in cash and (ii) a collateral account, number
3855124238 (together with any replacement or substitute account, the
"Termination Collateral Account", and, together with the Expense Collateral
Account, collectively referred to herein as the "Collateral Accounts"), into
which the Pledgor shall deposit $10,000,000 in cash, each deposit to be held
by the Collateral Agent as pledgee on behalf of the Secured Party.
Contemporaneously herewith, the Pledgor has adopted the necessary resolutions
and executed the necessary documentation to establish the Collateral Accounts
in the manner contemplated herein.
(b) The Collateral Agent is hereby irrevocably authorized and
directed by the Pledgor and the Secured Party to invest and reinvest the funds
from time to time held in the Collateral Accounts in securities that are
direct obligations of the United States for the payment of which its full
faith and credit is pledged (collectively, the "Investments") pursuant to the
written instructions of the Secured Party. Before December 31, 1995, the
Investments shall have a maturity of not more than thirteen weeks after their
deposit in the Collateral Account. If this Agreement has not terminated on or
prior to December 31, 1995, one-half of the Investments, measured by principal
amount at the time of investment, shall have a maturity of not more than three
months from the date of investment, and the other one-half of such
Investments, measured by principal amount at the time of investment, shall
have a maturity of not more than twelve months from the date of investment.
Any income or gain on the Investments from time to time held in any Collateral
Account shall be
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promptly reinvested by the Collateral Agent as a part of such Collateral
Account and any net loss on any such Investments shall be charged against such
Collateral Account.
(c) All certificates or instruments constituting any part of the
Collateral hereinafter defined shall be delivered to the Collateral Agent in
form suitable for transfer by delivery.
(d) The Collateral Accounts shall be maintained in the name of
the Collateral Agent, as pledgee of the Collateral Accounts for the sole and
absolute benefit of the Secured Party. The Collateral Agent shall retain
exclusive control over the deposit to and withdrawal from the Collateral
Accounts of any funds or securities, subject only to compliance with the terms
of this Agreement. The parties hereto acknowledge and agree to the following:
(1) that the Collateral Agent shall hold and maintain the
Collateral (hereafter defined) and the Collateral Accounts as a
"securities intermediary" (as such term is defined in Section 8.102 of
the Texas Code);
(2) that the Collateral Accounts constitute accounts to which
the Investments will be credited and such accounts shall not be deemed
to be demand, time, savings, passbook or like accounts; and
(3) that the Collateral Agent shall only comply with
"entitlement orders" (as such term is defined in Section 8.102 of the
Texas Code) originated by Secured Party without further consent by
Pledgor.
2. The Security Interests.
(a) In order to secure (i) the full payment and performance when
due of the obligation (the "Expense Reimbursement Obligation") of the Pledgor
under Section 9.2(c) of the Purchase Agreement, dated as of October 9, 1995,
among the Pledgor, Facilities Management Installation, Inc., SWL Holding
Corporation, Care Financial Corporation, the Secured Party and Shinnecock
Services Corp. (the "Purchase Agreement") and (ii) the performance by the
Pledgor of its obligations hereunder, the Pledgor hereby grants, assigns,
transfers and sets over to the Collateral Agent, for the benefit of the
Secured Party, a continuing security interest (the "Expense Security
Interest") in and lien on all of the following property of the Pledgor,
whether now owned or hereafter acquired or arising and regardless of where
located (collectively, the "Expense Collateral"):
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(1) the Expense Collateral Account and all certificates,
instruments, documents and other writings from time to time representing
or evidencing the Expense Collateral Account;
(2) the balance of cash from time to time contained in the
Expense Collateral Account credited thereto and payable thereon,
together with all Investments, instruments, certificates, security
entitlements or investment property from time to time contained in the
Expense Collateral Account;
(3) all Investments acquired or obtained by the Collateral Agent
using funds from time to time held in the Expense Collateral Account,
together with all instruments, certificates, security entitlements or
investment property from time to time representing or evidencing such
Investments; and
(4) all general intangibles related to or arising from, and all
proceeds of, any of the Collateral referenced in clauses (1) through (3)
above, all reinvestments, renewals and substitutions of such Collateral
and all interest and other income earned or accrued on or in respect of
any such Collateral.
(b) In order to secure (i) the full payment and performance when
due of the obligation (the "Termination Fee Obligation") of the Pledgor under
Section 9.3(b) of the Purchase Agreement, and (ii) the performance by the
Pledgor of its obligations hereunder, the Pledgor hereby grants, assigns,
transfers and sets over to the Collateral Agent, for the benefit of the
Secured Party, a continuing security interest (the "Termination Security
Interest," and together with the Expense Security Interest, the "Security
Interests") in and lien on all of the following property of the Pledgor,
whether now owned or hereafter acquired or arising and regardless of where
located (collectively, the "Termination Collateral" and, together with the
Expense Collateral, the "Collateral"):
(1) the Termination Collateral Account and all certificates and
instruments, documents and other writings from time to time representing
or evidencing the Termination Collateral Account;
(2) the balance of cash from time to time contained in the
Termination Collateral Account credited thereto or payable thereon,
together with all Investments, instruments, certificates, security
entitlements or investment property from time to time contained in the
Termination Collateral Account;
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(3) all Investments acquired or obtained by the Collateral Agent
using funds from time to time held in the Termination Collateral
Account, together with all instruments, certificates, security
entitlements or investment property from time to time representing or
evidencing such Investments; and
(4) all general intangibles related to or arising from, and all
proceeds of, any of the Collateral referenced in clauses (1) through (3)
above, all reinvestments, renewals and substitutions of such Collateral
and all interest and other income earned or accrued on or in respect of
any such Collateral.
(c) The Security Interests are granted as security only and
shall not subject the Collateral Agent to, or transfer or in any way affect or
modify, any obligation or liability of the Pledgor with respect to any of the
Collateral or any transaction in connection therewith.
3. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor (i) is the sole legal and beneficial owner of
the Collateral free and clear of any security interest, lien or other
encumbrance including but not limited to those arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes (a "Lien"), except for the Security
Interests created by this Agreement, and (ii) will own each item of Collateral
hereafter acquired in addition to any then existing Collateral free and clear
of all such Liens.
(b) Each of the Security Interests is a valid and perfected
first priority security interest in the Expense Collateral or the Termination
Collateral, as the case may be (subject to no prior Lien) securing the
performance of the Expense Reimbursement Obligations and the obligations set
forth in Section 2(a)(ii), or the Termination Fee Obligations and the
obligations set forth in Section 2(b)(ii), as the case may be. Except as
contemplated by the Purchase Agreement, the Pledgor has not performed any acts
which might prevent the Collateral Agent from enforcing any of the terms and
conditions of this Agreement or which would limit the Collateral Agent in any
such enforcement.
(c) Except for the approval of the Bankruptcy Court contemplated
by the Purchase Agreement, no authorization, approval, or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required to be
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obtained or made by the Pledgor either (1) for the pledge by the Pledgor of
the Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor, or (2) for the exercise by the
Collateral Agent of any rights provided for in this Agreement or the remedies
in respect of the Collateral pursuant to this Agreement.
(d) Pledgor has established the Collateral Accounts with the
Collateral Agent in the name of the Collateral Agent, and the Collateral and
the Collateral Accounts are within the sole dominion and control of the
Collateral Agent.
4. Further Assurances; Covenants.
(a) The Pledgor shall, from time to time, at its expense,
execute, deliver, file and record any instrument, document, agreement or other
paper and take any other action, that the Collateral Agent or the Secured
Party may reasonably request from time to time, or that the Pledgor shall
become aware may be necessary or desirable, in order to create, preserve,
perfect, confirm or validate the Security Interests or to enable the
Collateral Agent, for the benefit of the Secured Party, to obtain the full
benefits of this Agreement, or to enable the Collateral Agent to exercise and
enforce any of its rights, powers and remedies hereunder with respect to any
of the Collateral. The Pledgor shall pay the costs of, or incidental to, any
recording or filing of any instrument, document, agreement or other paper con-
cerning the Collateral.
(b) The Pledgor shall keep full and accurate books and records
relating to the Collateral, and stamp or otherwise xxxx such books and records
in such manner as the Collateral Agent or the Secured Party may reasonably
require in order to reflect the Security Interests.
(c) From time to time upon request by the Collateral Agent or
the Secured Party the Pledgor shall, at its cost and expense, cause to be
delivered to the Collateral Agent an opinion of counsel reasonably
satisfactory to the Collateral Agent and the Secured Party as to such matters
relating to the transactions contemplated hereby as the Collateral Agent or
the Secured Party may reasonably request.
5. Distributions to the Secured Party.
(a) Following receipt of a certificate substantially in the form
of Exhibit A (the "Expense Certificate") of the Secured Party indicating that
the Pledgor has failed to pay when due the Expense Reimbursement Obligation to
the Secured
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Party, the Collateral Agent shall, without demand of performance or other
demand, advertisement or notice of any kind to or upon the Pledgor or any
other person (all rights to any such demand, advertisement or notice being
hereby expressly waived by the Pledgor), take action in accordance with the
Texas Code to realize upon the Expense Collateral or any part thereof
sufficient to pay to the Secured Party the amount set forth in paragraph (2)
of the Expense Certificate (the "Expense Amount") and make the payment
pursuant to clause (c) below and subject to Section 8 hereof. In addition to
the rights and remedies granted to the Collateral Agent under this Agreement,
the Collateral Agent may exercise all rights of a secured party under the
Texas Code as in effect in the State of Texas and under any other applicable
law, as the same may from time to time be in effect, including, without
limitation, the right to apply by way of offset the amounts then maintained in
the Expense Collateral Account.
(b) Following receipt of a certificate substantially in the form
of Exhibit B of the Secured Party indicating that the Pledgor has failed to
pay when due the Termination Fee Obligation to the Secured Party, the
Collateral Agent shall, without demand of performance or other demand,
advertisement or notice of any kind to or upon the Pledgor or any other person
(all rights to any such demand, advertisement or notice being hereby expressly
waived by the Pledgor), take action in accordance with the Texas Code to
realize upon the Termination Collateral or any part thereof sufficient to pay
the Secured Party $10 million, pursuant to clause (c) below and subject to
Section 8 hereof. In addition to the rights and remedies granted to the
Collateral Agent under this Agreement, the Collateral Agent may exercise all
rights of a secured party under the Texas Code as in effect in the State of
Texas and under any other applicable law, as the same may from time to time be
in effect, including, without limitation, the right to apply by way of offset
the amounts then maintained in the Termination Collateral Account.
(c) On the tenth calendar day after receipt of a certificate
pursuant to clause (a) or (b) (or as soon thereafter as reasonably
practicable), the Collateral Agent shall apply against (i) the Expense
Reimbursement Obligation an amount equal to the Expense Amount or (ii) the
Termination Fee Obligation an amount equal to $10 million, as the case may be,
and disburse such amounts by wire transfer of immediately available funds, or
as otherwise directed, to the Secured Party. Simultaneously with the delivery
of a certificate pursuant to Section 5(a) or 5(b) hereof to the Collateral
Agent, the Secured Party shall deliver a copy to the Pledgor.
(d) The Collateral Accounts shall at all times be maintained
with Collateral Agent, in the name of Collateral Agent, and shall be within
the sole
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dominion and control of the Collateral Agent. Pledgor shall not have any right
to the effect withdrawals or issue entitlement orders with respect to the
Collateral Accounts.
(e) All Investments, instruments, certificates, security
entitlements or investment property representing or evidencing the Collateral
Accounts or the Collateral shall be, or in the case of proceeds of,
reinvestments, renewals or substitutions for, the Collateral Accounts, or in
the case of Collateral hereafter acquired, immediately upon acquisition shall
be, delivered to and held by or on behalf of the Collateral Agent pursuant
hereto and shall be in suitable form for transfer or delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Secured Party and the Collateral
Agent. The Collateral Agent shall have the right, at any time in its
discretion without notice to the Pledgor, to transfer to or register in the
name of the Collateral Agent or any of its nominees any or all of the
Collateral. In addition, the Collateral Agent shall have the right at any time
to exchange certificates or instruments representing or evidencing the
Collateral in its possession for certificates or instruments of smaller or
larger denominations.
(f) To the extent any Investment (or any certificates,
instruments or other investment property (if any) from time to time
representing or evidencing such Investment) is at any time in the custody of a
clearing corporation or a nominee subject to the control of a clearing
corporation, then the Pledgor shall cause a pledge of such Investment to be
effected hereunder by causing appropriate entries to be made on the books of
the clearing corporation reducing the account of Pledgor or its financial
intermediary and increasing the account of Collateral Agent or its financial
intermediary.
6. Agreements Pertaining to Collateral Agent. (a) Except for
the exercise of reasonable care in the custody thereof, the Collateral Agent
shall have no duty as to any Collateral in its possession or control or in the
possession or control of any agent or bailee of the Collateral Agent. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its
own property, and shall not be liable or responsible for any loss or damage to
any of the Collateral, or for any diminution in the value thereof, by reason
of the act or omission of the Collateral Agent or of any agent or bailee
selected by the Collateral Agent in good faith.
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(b) The Collateral Agent takes no responsibility for any matter
contained in the Purchase Agreement and referred to herein. The Collateral
Agent shall have no liability or responsibility for the adequacy or
sufficiency of the amounts in the Collateral Accounts for any purpose. It is
the intention of the parties hereto that the Collateral Agent shall never be
required to use, advance or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or the exercise of any of
its rights and powers hereunder. The Collateral Agent shall have no liability
to any person for any action or omission taken by it hereunder in the absence
of gross negligence or willful misconduct.
(c) The Collateral Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents.
(d) The Collateral Agent may consult at any time with counsel
satisfactory to it (other than counsel to any party having any interest in the
Collateral Accounts), may rely on and shall not incur any liability or
responsibility in respect of any action taken, suffered or omitted by the
Collateral Agent in good faith and in accordance with the opinion or the
advice of such counsel, and, if not paid by any party as provided in Section 8
hereof, may pay any reasonable fees and costs incurred in connection therewith
from any amounts in the Collateral Accounts.
(e) The Collateral Agent shall be entitled to rely upon the
genuineness and validity of all signatures of the Secured Party and the
Pledgor and to rely and act or refrain from acting on the basis of any notice,
instrument or other paper believed by the Collateral Agent to be genuine which
is delivered in accordance with the provisions hereof.
(f) This Agreement sets forth exclusively the duties of the
Collateral Agent with respect to any and all matters pertinent hereto, and the
Collateral Agent shall neither refer to nor be bound by, the provisions of any
other agreement (including the Purchase Agreement), document or instrument,
except any order or process of courts of law, and the Collateral Agent is
hereby expressly authorized to comply with and obey any order, judgment or
decree of any court directed to the Collateral Agent of which the Collateral
Agent has notice.
(g) The Secured Party and the Pledgor hereby jointly and
severally indemnify the Collateral Agent for, and hold it harmless against any
loss, liability or expense incurred without gross negligence or wilful
misconduct on the part of the
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Collateral Agent and arising out of or in connection with the performance by
the Collateral Agent of its duties under this Agreement, including the
reasonable costs and expenses of defending itself against any claim or
liability or in any lawsuit in connection with the exercise or performance of
its duties hereunder. As between the Pledgor and the Secured Party only, one-
half of such amount shall be borne by the Pledgor and the other one-half by
the Secured Party. The Collateral Agent shall be entitled to deduct the amount
of indemnification owed to it by any party from any amounts in Collateral
Accounts.
(h) The Pledgor shall pay or reimburse the Collateral Agent upon
request for any transfer taxes or other taxes relating to the Collateral
Accounts incurred in connection herewith and shall indemnify and hold harmless
the Collateral Agent from any amounts that it is obligated to pay in the way
of such taxes. The Collateral Agent shall be entitled to charge against the
respective Collateral Accounts, and any interest and other income earned on
the amounts in the Collateral Accounts owing to the Pledgor, any transfer
taxes or other taxes incurred in connection therewith. Any payments from the
Collateral Accounts shall be subject to applicable withholding regulations
then in force with respect to United States taxes. The parties hereto will
provide the Collateral Agent with appropriate W-9 forms for tax identification
number certification. The parties acknowledge and agree that the Pledgor shall
be treated as owner of all earnings in respect of the Collateral Accounts for
all U.S. federal, state, local and foreign tax purposes, and the Pledgor shall
report such earnings in accordance with applicable law. To the extent required
by applicable law, the Collateral Agent shall file annually or otherwise as
required by applicable law all required tax information reports or forms (or
other tax returns that may be required by applicable law) reporting such
earnings as being for the Pledgor's tax account. It is understood that the
Collateral Agent shall be responsible for tax reporting only with respect to
earnings on investment of funds that are a part of the Collateral Accounts and
is not responsible for any other reporting. This clause and clause (g) of this
Section 6 and Section 8 shall survive notwithstanding termination of this
Agreement or the resignation of the Collateral Agent.
(i) Any party hereto may from time to time, but not more
frequently than on a monthly basis, request that the Collateral Agent render a
detailed accounting, which will be distributed to all of the parties hereto,
of the amounts held in the Collateral Accounts, which request will be complied
with by the Collateral Agent within 30 days of such request.
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(j) Excluding the Security Interests and the rights of offset
accorded to Collateral Agent expressly set forth herein, Collateral Agent
hereby waives, and agrees that Collateral Agent will not exercise or claim:
(i) any right of offset, banker's lien or other similar rights against the
Collateral or the Collateral Accounts; or (ii) any other assignment, security
interest or other interest in the Collateral or the Collateral Accounts.
Collateral Agent further waives, and releases to Secured Party, any right or
claim which Collateral Agent may have as a financial intermediary (as defined
on the Texas Code) in any of the Collateral or the Collateral Accounts to
secure the payments of any indebtedness, obligations or liabilities of Pledgor
other than the obligations of Pledgor secured by this Agreement.
7. Appointment as Attorney-in Fact. The Pledgor hereby
irrevocably appoints the Collateral Agent as its true and lawful attorney-in-
fact, with full power of substitution, in the name of the Pledgor, the
Collateral Agent or otherwise, for the sole use and benefit of the Collateral
Agent but at the Pledgor's expense, at any time and from time to time in the
Collateral Agent's discretion to take any action and to execute any instrument
which the Collateral Agent may deem necessary or advisable to accomplish the
purposes of this Agreement.
8. Certain Expenses. In the event that the Pledgor fails to
comply with the provisions of this Agreement or the Purchase Agreement, such
that the value of the Collateral or the validity, perfection, rank or value of
the Security Interests is thereby diminished or potentially diminished or put
at risk, the Collateral Agent may, to the fullest extent permitted by
applicable law, effect such compliance on behalf of the Pledgor and the
Pledgor shall reimburse the Collateral Agent for the costs thereof on demand;
and if the Pledgor fails to pay promptly any portion thereof when due, the
Collateral Agent may, at its option, to the fullest extent permitted by
applicable law, pay the same and charge the Collateral Accounts therefor, and
the Pledgor agrees to replenish the Collateral Accounts therefor on demand.
All expenses of protecting, storing, insuring, handling, maintaining and
shipping the Collateral, and any and all excise, property, sales and use taxes
imposed by any state, federal or local authority on any of the Collateral, or
in respect of the sale or other disposition thereof, shall be borne and paid
by the Pledgor; and if the Pledgor fails to pay promptly any portion thereof
when due, the Collateral Agent may, at its option, to the fullest extent
permitted by applicable law, pay the same and charge the Collateral Accounts
therefor, and the Pledgor agrees to replenish the Collateral Accounts therefor
on demand. All sums so paid or incurred by the Collateral Agent for any of the
foregoing and any and all other sums for which the Pledgor may become liable
hereunder and all costs and expenses (including attorneys' fees, legal
expenses and court costs) reasonably incurred
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by the Collateral Agent in enforcing or protecting the Security Interests or
any of its rights or remedies under this Agreement, shall, together with
interest thereon until paid at the higher of (a) the Federal Funds Rate, as
published by the Federal Reserve Bank of New York plus 0.5% and (b) the prime
commercial lending rate of the Collateral Agent, as announced from time to
time at its head office, be additional secured obligations hereunder and the
Collateral Agent shall be entitled to set off against the Collateral Accounts
for the full amount thereof.
9. Termination of Security Interests; Release of Collateral.
(a) The Security Interest in the Expense Collateral shall
terminate and all rights to such Collateral shall revert to the Pledgor (i) at
the Closing of the Purchase Agreement, if any, or (ii) in the event the
Purchase Agreement is terminated because of a material breach by Secured Party
of its obligations under the Purchase Agreement. Upon receipt by the
Collateral Agent of a certificate from the Secured Party substantially in the
form of Exhibit C confirming that one of the conditions for the return of the
Expense Collateral to the Pledgor set forth in Section 2.6.5 or Section 9.2(c)
of the Purchase Agreement has been satisfied, the Expense Security Interest
shall terminate and all rights to the Expense Collateral shall revert to the
Pledgor, and as promptly as practicable thereafter the Collateral Agent shall
close the Expense Collateral Account, and release the funds or return
securities then held in the Expense Collateral Account to the Pledgor as soon
as reasonably practicable, with any cash funds being delivered by wire
transfer of immediately available funds to an account designated by the
Pledgor by notice prior to the release of such funds.
(b) The Security Interests in the Termination Collateral shall
terminate and all rights to such Collateral shall revert to the Pledgor (i) at
the Closing of the Purchase Agreement, (ii) in the event the Secured Party has
failed to give notice to Pledgor after electing to close or terminating the
Purchase Agreement, as contemplated by Section 9.2(c) of the Purchase
Agreement, or (iii) in the event the period of the Pledgor's potential
liability under Section 9.3(b) of the Purchase Agreement has expired. Upon
receipt by the Collateral Agent of a certificate from the Secured Party
substantially in the form of Exhibit D confirming that one of the conditions
for the return of the Termination Collateral to the Pledgor set forth in
Section 2.6.5 or Section 9.3(c) of the Purchase Agreement has been satisfied
or that the period of the Pledgor's potential liability under Section 9.3(b)
of the Purchase Agreement has expired, the Termination Security Interest shall
terminate and all rights to the Termination Collateral shall revert to the
Pledgor, and as promptly as practicable thereafter the Collateral Agent shall
close the Termination Collateral Account, and
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release the funds or return securities then held in the Termination Collateral
Account to the Pledgor as soon as reasonably practicable, with any cash funds
being delivered by wire transfer of immediately available funds to an account
designated by the Pledgor by notice prior to the release of such funds.
(c) Upon any termination of the Security Interests in, or
release of, the Expense Collateral or the Termination Collateral, the
Collateral Agent will, at the expense of the Pledgor, execute and deliver to
the Pledgor such documents as the Pledgor shall reasonably request to evidence
the termination of such Security Interests or the release of such Collateral,
as the case may be.
10. Notices. All notices, requests, demands and other com-
munications required or permitted hereunder shall be deemed to be duly given
when delivered by hand or two days after being mailed by certified or
registered mail, return receipt requested, with postage prepaid, or when
telecopied subject to confirmation of receipt:
(a) If to the Collateral Agent, to:
Texas Commerce Bank National Association
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
(b) If to the Pledgor, to:
I.C.H. Corporation
000 Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx, Executive Vice
President and General Counsel
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
(c) If to the Secured Party to:
Shinnecock Holdings Inc.
c/o Shinnecock Group, L.L.C.
1999 Avenue of the Stars, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
Any person entitled to notice hereunder may designate another person or
another address at which notices are to be sent by giving notice as provided
herein.
11. Resignation or Removal of Collateral Agent; Successor. (a)
The Collateral Agent may resign as such following the giving of 30 days' prior
written notice to the Pledgor and the Secured Party, and may be removed and
replaced following the giving of 30 days' prior written notice to the
Collateral Agent by the Pledgor and the Secured Party. In either event, the
duties of the Collateral Agent shall terminate 30 days after the date of such
notice (or at such earlier date as may be mutually agreeable) and the
Collateral Agent shall then deliver the balance of the Collateral Amount in
its possession and all books and records relating to the Collateral Amount to
a successor Collateral Agent as shall be appointed by the Secured Party and
the Pledgor as evidenced by a written notice filed with the Collateral Agent.
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(b) If for any reason any successor bank is unwilling to serve as
successor Collateral Agent and if the other parties hereto are unable to agree
upon a successor or have failed to appoint a successor prior to the expiration
of 30 days following the date of the notice of resignation or removal, the
then acting Collateral Agent may petition any court of competent jurisdiction
for the appointment of a successor Collateral Agent (a bank or other entity
licensed as a trust company by the State of Texas) or other appropriate relief
and any such resulting appointment will bind all of the parties hereto.
(c) Every successor appointed hereunder will execute, acknowledge
and deliver to its predecessor and also to the Secured Party and the Pledgor,
an instrument in writing accepting such appointment hereunder, and thereupon
such successor, without any further act, will become fully vested with all the
duties, responsibilities and obligations of its predecessor; but such
predecessor will, nevertheless, on the written request of its successor or any
of the parties hereto, execute and deliver an instrument or instruments
transferring to such successor all the rights of such predecessor hereunder,
and will duly assign, transfer and deliver all property, securities and monies
held by it pursuant to this Agreement to its successor. Should any instrument
be required by any successor for more fully vesting in such successor the
duties, responsibilities and obligations hereby vested or intended to be
vested in the predecessor, any and all such instruments in writing will, on
the request of any of the other parties hereto, be executed, acknowledged and
delivered by the predecessor.
(d) In the event of an appointment of a successor, the predecessor
shall cease to be custodian of any funds, securities or other assets and
records it may hold pursuant to this Agreement, and the successor shall become
such custodian.
(e) Upon acknowledgment by any successor Collateral Agent of the
receipt of the then remaining balance of the Collateral Accounts, the then
acting Collateral Agent will be fully released and relieved of all duties,
responsibilities and obligations under this Agreement.
12. Compensation of Collateral Agent. The Collateral Agent shall
be entitled to compensation for performing its duties hereunder in accordance
with Exhibit E attached hereto and shall be further entitled to reimbursement
of all reasonable expenses incurred by it in connection with this Agreement,
including, without limitation, the expenses set forth in Section 8. Such
compensation and expenses shall be borne by the Pledgor. Failing payment of
any compensation and reimbursement of the Collateral Agent, the Collateral
Agent shall be entitled to deduct such compensation
14
and reimbursement from any amounts in the Collateral Accounts. All bills for
such compensation and expenses shall be mailed by the Collateral Agent to the
Pledgor, with a copy to the Secured Party.
13. Waivers, Non-Exclusive Remedies. No failure on the part of
the Collateral Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral
Agent of any right under the Purchase Agreement or this Agreement preclude any
other or further exercise thereof or the exercise of any other right. The
rights in this Agreement and the Purchase Agreement are cumulative and are not
exclusive of any other remedies provided by law.
14. Assigns. This Agreement is for the benefit of the Collateral
Agent and its successors and assigns, and the Secured Party and its permitted
assigns under the Purchase Agreement, and in the event of an assignment of all
or any of the obligations secured hereby, the rights hereunder, to the extent
applicable to the obligations so assigned, may be transferred with such
obligations. This Agreement shall be binding on the Pledgor and its successors
and assigns.
15. Changes in Writing. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by the Pledgor, the Collateral Agent and the Secured Party.
16. GOVERNING LAW; JURISDICTION. (a) THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS, EXCEPT
WITH RESPECT TO PERFECTION, PRIORITY AND ENFORCEMENT OF LIENS AND SECURITY
INTERESTS IN THE COLLATERAL, WHICH SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF TEXAS INCLUDING WITHOUT LIMITATION THE TEXAS CODE.
(b) THE PARTIES SUBMIT TO THE JURISDICTION OF THE BANKRUPTCY COURT
TO THE SAME EXTENT CONTEMPLATED BY THE PURCHASE AGREEMENT, INCLUDING WITHOUT
LIMITATION SECTION 10.12 THEREOF. SUBJECT TO THE PRECEDING SENTENCE, EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA LOCATED IN XXX XXXXX,
00
XXXX XXX XXXXXX XX XXX XXXX. SOLELY IN RESPECT OF THE INTERPRETATION AND
ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED
TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF
ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR
PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT
THE VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH
DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO
IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING
SHALL BE HEARD AND DETERMINED IN SUCH A NEW YORK STATE OR FEDERAL COURT. EACH
OF THE PARTIES HERETO HEREBY CONSENTS TO AND GRANTS ANY SUCH COURT JURIS-
DICTION OVER THE PERSON OF SUCH PARTY AND OVER THE SUBJECT MATTER OF ANY SUCH
DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH
ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 10 OR IN SUCH
OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE
THEREOF.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWL-
EDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS
16
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 16.
(d) Each party hereto agrees that the Collateral Agent is not a
necessary party to any controversy between the Pledgor and the Secured Party
pertaining to the subject matter of this Agreement.
17. Severability. If any provision hereof is invalid or unen-
forceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
for the benefit of the Secured Party in order to carry out the intentions of
the parties hereto as nearly as may be possible; and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
18. Term and Termination. This Agreement shall begin on the date
hereof and shall continue through the close of business on the date upon which
the Security Interests in the Expense Collateral and the Termination
Collateral shall terminate in accordance with Section 9 hereof. Within two (2)
business days following the termination of this Agreement, the Collateral
Agent shall release all amounts then remaining in the Collateral Accounts to
the Pledgor.
19. Counterparts. This Agreement may be executed in one or more
counterparts, which together shall constitute but one instrument. It shall not
be necessary for each party to sign each counterpart so long as each party has
signed at least one counterpart.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
I.C.H. CORPORATION
By: /s/Xxxxx X. Xxxxxxx, Xx.
------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Chairman and Chief
Executive Officer
SHINNECOCK HOLDINGS INC.
By: /s/Xxxx X. Xxxxxx
-----------------------
Name: Xxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Collateral Agent
By: /s/Xxxx Xxxxx
-----------------------
Name: Xxxx Xxxxx
Title: Vice President
18
EXHIBIT A
to
Security Agreement
SHINNECOCK HOLDINGS INC.
Certificate for Payment from
Expense Collateral Account
The undersigned, a duly authorized senior officer of Shinnecock
Holdings Inc., a Delaware corporation (the "Secured Party"), hereby certifies
to Texas Commerce Bank National Association, as Collateral Agent (the
"Collateral Agent"), with reference to the Termination and Expense Security
Agreement (the "Security Agreement"), dated as of October ___, 1995, among
I.C.H. Corporation, as Pledgor, the Secured Party and the Collateral Agent, as
follows (capitalized terms used herein without definition having the
respective meanings specified in the Security Agreement):
(1) The Purchase Agreement terminated effective [fill in date]
pursuant to Section 10.1__ [fill in subsection] of the Purchase
Agreement other than by reason of a material breach by the undersigned.
(2) The amount required to be paid to the Secured Party pursuant
to Section 9.2(c) of the Purchase Agreement hereof is $_______, which
amount has not been paid when due.
Dated: ______________ SHINNECOCK HOLDINGS INC.
By _____________________________
Name:
Title:
cc: I.C.H. Corporation
000 Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention:
EXHIBIT B
to
Security Agreement
SHINNECOCK HOLDINGS INC.
Certificate for Payment from
Termination Collateral Account
The undersigned, a duly authorized senior officer of Shinnecock
Holdings Inc., a Delaware corporation (the "Secured Party"), hereby certifies
to Texas Commerce Bank National Association, as Collateral Agent (the
"Collateral Agent"), with reference to the Termination and Expense Security
Agreement (the "Security Agreement"), dated as of October ___, 1995, among
I.C.H. Corporation, as Pledgor, the Secured Party and the Collateral Agent, as
follows (capitalized terms used herein without definition having the
respective meanings specified in the Security Agreement):
(1) This notice is delivered pursuant to Section 9.3(b) of the
Purchase Agreement.
(2) The condition set forth in Section 9.3(b) of the Purchase
Agreement for the Secured Party to receive $10 million has been
satisfied, and such amount has not been paid when due.
Dated:_________________ SHINNECOCK HOLDINGS INC.
By _____________________________
Name:
Title:
cc: I.C.H. Corporation
000 Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention:
EXHIBIT C
to
Security Agreement
SHINNECOCK HOLDINGS INC.
Certificate for Release from
Funds in Expense Collateral Account
The undersigned, a duly authorized officer of Shinnecock Holdings
Inc., a Delaware corporation (the "Secured Party"), hereby certifies to Texas
Commerce Bank National Association, as Collateral Agent (the "Collateral
Agent"), with reference to the Termination and Expense Security Agreement (the
"Security Agreement"), dated as of October ___, 1995, among I.C.H.
Corporation, as Pledgor, the Secured Party and the Collateral Agent, as
follows (capitalized terms used herein without definition having the
respective meanings specified in the Security Agreement):
(1) A condition set forth in Section 2.6.5 or Section 9.2(c) of
the Purchase Agreement for the release of all funds or securities in the
Expense Collateral Account to the Pledgor has been satisfied.
(2) Pursuant to Section 9(a) of the Security Agreement, all
funds and securities in the Expense Collateral Account shall be
transferred to the Pledgor at [fill in delivery instructions].
Dated:__________________ SHINNECOCK HOLDINGS INC.
By _____________________________
Name:
Title:
cc: I.C.H. Corporation
000 Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention:
EXHIBIT D
to
Security Agreement
SHINNECOCK HOLDINGS INC.
Certificate for Release of
Funds in Termination Collateral Account
The undersigned, a duly authorized officer of Shinnecock Holdings
Inc., a Delaware corporation (the "Secured Party"), hereby certifies to Texas
Commerce Bank National Association, as Collateral Agent (the "Collateral
Agent"), with reference to the Termination and Expense Security Agreement (the
"Security Agreement"), dated as of _______, 1995, among I.C.H. Corporation, as
Pledgor, the Secured Party and the Collateral Agent, as follows (capitalized
terms used herein without definition having the respective meanings specified
in the Security Agreement):
(1) A condition set forth in Section 2.6.5, Section 9.3(b) or
Section 9.3(c) of the Purchase Agreement for the release of all funds
and securities in the Termination Collateral Account to the Pledgor has
been satisfied.
(2) Pursuant to Section 9(b) of the Security Agreement, all
funds and securities in the Termination Collateral Account shall be
transferred to the Pledgor at [fill in delivery instructions].
Dated:__________________ SHINNECOCK HOLDINGS INC.
By _____________________________
Name:
Title:
cc: I.C.H. Corporation
000 Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention:
