GUARANTY
AND SECURITY AGREEMENT
Date: December 30, 1997
SECTION 1. Definitions. The following terms have the following meanings unless
otherwise specified herein:
"Bank" means Republic National Bank of New York, a national banking association,
and its successors and assigns, and any Person acting as agent or nominee for
Republic National Bank of New York and any corporation the stock of which is
owned or controlled directly or indirectly by, or is under common control with,
Republic National Bank of New York and/or Republic New York Corporation.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, and any
amendments thereto (Title 11, United States Code).
"Borrower", shall mean Wise Partners, L.P., a Delaware limited partnership (if
more than one, "Borrower" shall mean each, any or all of them).
"Claims" shall mean each "claim" as that term is defined under Section 101(5) of
the Bankruptcy Code.
"Collateral" shall mean all property that secures the payment of the
Obligations, and any Proceeds thereof.
"Guaranty" shall mean this Guaranty and Security Agreement.
"Guarantor" shall mean the undersigned (and if more than one, "Guarantor" shall
mean each, any and all of them, jointly and severally).
"Liabilities" shall mean any and all indebtedness, obligations (whether monetary
or non-monetary) and liabilities of Guarantor to the Bank under this Guaranty,
and all Claims thereon.
"Lien" means any lien, security interest, pledge, hypothecation, or other claim
in or with respect to any Security.
"Obligations" shall mean any and all indebtedness, obligations and liabilities
of the Borrower to the Bank, and all Claims of the Bank against the Borrower,
now existing or hereafter arising, which indebtedness, obligations, liabilities
and Claims arise solely in connection with the $9,000,000 demand grid note of
the Borrower dated December __, 1997 and all extensions and renewals of the
foregoing.
"Person" shall mean any natural person, corporation, partnership, trust,
government or other association or legal entity.
"Proceeds" shall have the meaning assigned to that 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 Bankruptcy Code.
"Security" shall mean any property which secures payment or performance of any
of the Liabilities, and all Proceeds thereof.
SECTION 2. Scope of Guaranty. In consideration of any extension of credit or
other financial accommodation heretofore, now or hereafter made by the Bank to
or for the account of the Borrower, whether voluntary or obligatory, Guarantor
hereby absolutely and unconditionally guarantees to the Bank the prompt and
complete payment and performance when due (whether at stated maturity, by
required prepayment, acceleration, or otherwise) of all Obligations and all
reasonable expenses incurred in collecting or enforcing the same, as more fully
set forth below, all of which conclusively shall be deemed to have been incurred
in reliance upon this
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Guaranty, as if each of the foregoing were the direct and primary legal
responsibility of Guarantor and not the Borrower.
SECTION 3. Security. As Security for the Liabilities of Guarantor, Guarantor
hereby grants to the Bank a continuing lien upon and security interest in, and
hereby pledges, assigns and transfers to the Bank, all right, title and interest
of Guarantor in and to all deposits (general or special) of Guarantor at any
time maintained with the Bank or any branch, subsidiary or affiliate of the
Bank, wherever located, and any substitutions and all products and Proceeds
thereof, and any other property described below, whether now or hereafter
existing or acquired and wherever located, and any substitutions and all
products and Proceeds (including but not limited to insurance proceeds) thereof:
[xxxx or initial the applicable boxes]
Specific X All of the following property: See Schedule A
Property
Guarantor further grants to the Bank a continuing lien upon and security
interest in, and hereby pledges and assigns to the Bank, all right, title and
interest of Guarantor in and to any and all moneys, securities and any other
property of Guarantor and the Proceeds thereof, now or hereafter actually or
constructively held or received by or in transit to or from the Bank, including
its branches, subsidiaries and affiliates, wherever located, for any purpose,
including, without limitation, for collection, custody, pledge and transmission.
Guarantor hereby authorizes the Bank to sign and file financing statements at
any time with respect to any Security without the signature of Guarantor.
Guarantor will, however, at any time on request of the Bank, sign financing
statements, trust receipts, security agreements or other agreements or
instruments with respect to any Security. Upon Guarantor's failure to do so, the
Bank is authorized, as the agent of Guarantor, to sign (and file, if Bank deems
appropriate) any such instrument. Guarantor agrees to pay all filing fees and to
reimburse the Bank for all costs and expenses of any kind reasonably incurred in
any way in connection with the Security.
The Bank or its nominee may exercise any right of Guarantor with respect to
any Security whether or not any Obligation or Liability is then due and payable
or any default has occurred. In any statutory or non-statutory proceeding,
affecting the Borrower, Guarantor or any Security or any Obligation or
Liability, the Bank or its nominee may, whether or not any Obligation or
Liability is then due and payable or any default shall have occurred, and
regardless of the amount of Obligations or Liabilities, assert, or file a proof
of claim for, the full amount of any such Obligation, Liability or the Security
and vote such claim, for the full amount thereof: (a) for or against any
proposal or resolution; (b) for a trustee or trustees or for a committee of
creditors; or (c) for the acceptance or rejection of any proposed arrangement,
plan of reorganization, wage earners plan, composition or extension, and the
Bank or its nominee may receive any payment or distribution and give acquittance
therefor and may exchange or release any Security. Guarantor agrees that at any
time, whether or not any Obligation or Liability is then due and payable or any
default shall have occurred, the Bank shall have the right to notify any account
debtor (with respect to any Security consisting of Accounts), or the obligor on
any Instrument or other right or claim of Guarantor to any payment which is
Security, to make payment directly to the Bank, whether or not any default shall
have occurred and whether or not Guarantor was theretofore making collections on
such Security, and also to take control of any Proceeds the Bank is entitled to
under Section 9-306 of the New York Uniform Commercial Code. If any Security
consists of Accounts, Instruments or other rights or claims of Guarantor to any
payment, then at the Bank's request Guarantor shall promptly notify (in manner,
form and substance satisfactory to the Bank) all Persons obligated to Guarantor
under any such Accounts, Instruments or other rights or claims of Guarantor to
any payment that the Bank possesses a security interest in such Accounts,
Instruments or other rights or claims of Guarantor to any payment and that all
payments in respect of such Accounts, Instruments or other rights or claims of
Owner to any payment are to be made directly to the Bank. Guarantor 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
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or claim of Guarantor to any payment which constitutes Security under this
Guaranty. After the Bank shall have given any notice to an account debtor of the
type specified above, any and all accounts recovered by Guarantor from the
account debtor or other obligor so notified shall be promptly remitted to the
Bank, and until so remitted shall be segregated by Guarantor and held in trust
for the Bank.
Any and all stocks, bonds or other securities of Guarantor at any time held
by the Bank hereunder may, with notice, when an event of default exists
hereunder, be registered in the name of the Bank or its nominee without
disclosing that the Bank is a pledgee. The Bank or such nominee (when an event
of default exists hereunder and regardless of the amount of Obligations or
Liabilities) may, with 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 the 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, trustee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it. If Guarantor, as registered holder of any
security, shall become entitled to receive or does receive any stock
certificate, option or right, in substitution of, or in exchange for, such
security, or otherwise, Guarantor agrees to accept same as the Bank's agent and
to hold same in trust for the Bank, and to forthwith deliver the same to the
Bank in the exact form received, with Guarantor's endorsement when necessary, to
be held by the Bank as Security.
Guarantor recognizes that the Bank may be unable to effect a public sale of
any securities which may constitute a portion of the Security 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 Security 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. Guarantor
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. The Bank shall be
under no obligation to delay a sale of any of the securities constituting part
of the Security for the period of time necessary to permit the issuer of such
securities to register them for public sale under the Securities Act of 1933 or
under applicable state securities laws.
To the extent permitted by applicable law, the Bank or its nominee is hereby
given a right of setoff for the amount of the Liabilities upon any of and all
said deposits and any credits of Guarantor with, and any and all claims of
Guarantor against, the Bank at any time existing and the Bank is hereby
authorized to setoff and apply such deposits, credits and claims, without prior
notice or demand, to the Liabilities in such order and amounts as the Bank may
elect.
Guarantor shall, upon request of the Bank, assemble the Security and make it
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to the Bank and Guarantor. The Bank will give Guarantor
notice of the time and place of any public sale of the Security or of the time
after which any private sale or any other intended disposition thereof is to be
made by sending notice, as provided below, at least five days before the time of
the sale or disposition, which provisions for notice Guarantor agrees are
reasonable. No such notice need be given by the Bank with respect to Security
which is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. Guarantor shall remain liable to the
Bank for the payment of any deficiency with interest thereon at the highest rate
applicable to the Obligations, or if no rate is specified with respect to such
Obligations, at the then legal rate of interest.
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Guarantor 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 the Bank may
reasonably deem necessary or advisable from time to time in order to perfect and
preserve the Liens created by this Guaranty 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. The Bank, acting through its officers,
employees and authorized agents, is hereby irrevocably appointed the
attorney-in-fact of Guarantor to do, at Guarantor's expense, all acts and things
which the Bank may reasonably deem necessary or advisable to preserve, perfect,
continue to perfect and/or maintain the priority of such Liens, including the
signing of financing, continuation or other similar statements and notices on
behalf of Guarantor, and which Guarantor is required to do by the terms of this
Guaranty. Guarantor hereby authorizes the Bank to sign and file financing
statements with respect to the Security without the signature of Guarantor.
Guarantor shall pay all filing fees for financing statements with respect to the
Security.
SECTION 4. Reinstatement. If after receipt of any payment of or proceeds of
Security applied (or intended to be applied) to the payment of, all or any part
of the Obligations, the Bank is for any reason compelled to surrender or
voluntarily surrenders, such payment or proceeds to any person, (a) because such
payment or application of proceeds is or may be avoided, invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference,
fraudulent conveyance, impermissible setoff or a diversion of trust funds; or
(b) for any other reason, including without limitation (i) any judgment, decree
or order of any Court or administrative body having jurisdiction over the Bank
or any of its property, or (ii) any settlement or compromise of any such claim
effected by the Bank with any such claimant (including the Borrower), then the
Obligations or part thereof intended to be satisfied shall be reinstated and
continue and this Guaranty shall continue in full force as if such payment or
proceeds had not been received by the Bank, notwithstanding any revocation
thereof or the cancellation of any note or other instrument evidencing any
Obligation or otherwise; and Guarantor shall be liable to pay to the Bank, and
hereby does indemnify the Bank and hold the Bank harmless for, the amount of
such payment or proceeds so surrendered and all expenses (including all
attorneys' fees, court costs and expenses attributable thereto) incurred by the
Bank in the defense of any claim made against the Bank that any payment or
proceeds received by the Bank in respect of all or any part of the Obligations
must be surrendered. The provisions of this Section 4 shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Borrower
by virtue of any payment, court order or any federal or state law.
SECTION 5. Waiver. Guarantor hereby waives (a) notice of acceptance of this
Guaranty and all notice of the creation, extension or accrual of any of the
Obligations; (b) presentment and protest; (c) notice of any other nature
whatsoever, except for notices specifically provided for in this Guaranty or
which may not be waived under applicable law; (d) any requirement that the Bank
file any claim in the event of the bankruptcy of the Borrower; or (e) failure to
exercise or enforce the Bank's rights under any other guaranties of or security
for the Obligations; and Guarantor further agrees that this Guaranty will not be
discharged (subject to the provisions contained in Section 11) except by
complete performance of all Obligations of the Borrower and the Liabilities of
Guarantor hereunder. **See Addendum to this Section 5.
SECTION 6. Consent. Guarantor hereby consents that from time to time, and
without further notice to or consent of Guarantor, the Bank may take any or all
of the following actions without diminishing, releasing or otherwise affecting
the liability of Guarantor to pay and perform under this Guaranty: (a) extend,
renew, modify, compromise, settle or release the Obligations (including without
limitation any increase or decrease in the interest rate); (b) release or
compromise any liability of any party or parties with respect to Obligations;
(c) release its security interest in any or all of the Collateral or exchange,
surrender, or otherwise deal with the Collateral as the Bank may determine; or
(d) exercise or refrain from exercising any right or remedy of the Bank against
any person or property.
SECTION 7. Guaranty Absolute. The liability of Guarantor under this Guaranty
shall be absolute and unconditional irrespective of any lack of validity,
regularity or enforceability of the Obligations or any note, instrument or
agreement evidencing the same or relating thereto, the acceptance of additional
guarantees or
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collateral or the termination, by operation of law or otherwise, of the
liability of anyone with respect to the Obligations, or any other circumstance
which might otherwise constitute a defense available to, or a discharge of, the
Borrower.
SECTION 8. [Deleted]
SECTION 9. Expenses. Guarantor hereby agrees to pay any and all expenses
reasonably incurred by the Bank in enforcing any rights under this Guaranty or
in defending any of its rights or any amounts received hereunder. Without
limiting the foregoing, Guarantor agrees that whenever any attorney is used by
the 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 or amounts received hereunder, the Bank shall be entitled to recover all
reasonable attorneys' fees, court costs, and expenses attributable thereto.
SECTION 10. Binding Effect. Except to the extent it may be terminated in
accordance with Section 11, this Guaranty shall remain in full force and effect
and shall be binding upon Guarantor, its successors and assigns, in accordance
with its terms, notwithstanding any increase, decrease or change in the partners
of Guarantor, if it should be a partnership, or the merger, consolidation, or
reorganization of Guarantor, if it be a corporation, or any other change
concerning the form, structure or substance of any such entity.
SECTION 11. Continuing Guaranty; Termination. This Guaranty is a continuing
guaranty, which shall remain in effect until notice of termination in writing
from Guarantor is actually received by the Bank at the Bank's address set forth
below. Such termination will be effective only with respect to all Obligations
incurred or contracted by the Borrower or acquired by the Bank after the date on
which such notice is so received, but this Guaranty shall remain in full force
and effect as to all Obligations existing at the date of receipt of such notice,
including all renewals, compromises, modifications, extensions and other
amendments relating thereto, all interest thereon and collection expenses
therefor, until full payment of such Obligations to the Bank.
SECTION 12. Obligations Deemed to Become Due. If the Borrower or Guarantor makes
an assignment for the benefit of creditors or a trustee or receiver is appointed
for the Borrower or Guarantor or for any of its property; or any proceeding by
or against the Borrower or Guarantor (or any other guarantor), under any
bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt, receivership, liquidation or dissolution law or statute is commenced; or
Guarantor fails to furnish to the Bank such financial information concerning
Guarantor as the Bank may from time to time request; or Bank shall in good faith
determine that there has been a material adverse change in Guarantor's or the
Borrower's net worth or in good xxxxx xxxx itself insecure with respect to
Guarantor's or the Borrower's financial condition or ability to pay the
Liabilities or Obligations, as the case may be, then all Obligations, regardless
of their terms, for the purposes of this Guaranty, together with all
Liabilities, shall be immediately due and payable, notwithstanding the absence
of any default by the Borrower under any of the Obligations.
SECTION 13. [Deleted]
SECTION 14. Notices. Each notice or other communication hereunder shall be in
writing, shall be sent by messenger, by first class mail or by facsimile
transmitter, and shall be effective when received, and shall be sent as follows:
If to the Guarantor, to the address set forth below its signature or such
other address as it may designate, by written notice to the Bank as herein
provided or such other address as may appear in the records of the Bank.
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If to the Bank, to the following address:
Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan Department
or such other address as it may designate, by written notice to the Guarantor as
herein provided. **See Addendum to this section 14.
SECTION 15. Other Guarantees; Amendments. The execution and delivery hereafter
to the Bank by Guarantor of a new instrument of guarantee shall not terminate,
supersede or cancel this instrument, unless expressly provided therein, and this
instrument shall not terminate, supersede or cancel any instrument of guarantee
previously delivered to the Bank by Guarantor, and all rights and remedies of
the Bank hereunder or under any instrument of guarantee hereafter or heretofore
executed and delivered to the Bank by Guarantor shall be cumulative and may be
exercised singly or concurrently. This Guaranty may be amended only by a writing
executed by Guarantor and a duly authorized officer of the Bank.
SECTION 16. No Waiver; Cumulative Remedies. No delay on the part of the Bank in
exercising any of its options, powers or rights, or partial or single exercise
thereof, shall constitute a waiver thereof. NO WAIVER OF ANY PROVISION OF THIS
GUARANTY IS EFFECTIVE UNLESS MADE IN WRITING AND EXECUTED BY A DULY AUTHORIZED
OFFICER OF THE BANK. All rights and remedies hereunder are cumulative and may be
exercised singly or concurrently.
SECTION 17. Statute of Limitations. Any acknowledgment, new promise, payment of
principal or interest or other act by the Borrower or others with respect to the
Obligations shall be deemed to be made as agent of Guarantor, and shall, if the
statute of limitations in favor of Guarantor against the Bank shall have
commenced to run, toll the running of such statute of limitations, and if such
statute of limitations shall have expired, prevent the operation of such
statute.
SECTION 18. Governing Law; Consent to Jurisdiction; Service of Process. This
Guaranty shall be governed by and construed in accordance with the laws of the
State of New York made and to be performed wholly within that State. Guarantor
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 Guarantor by registered or
certified mail sent to its address as set forth in Section 14.
SECTION 19. RIGHT OF BANK TO ARBITRATE DISPUTES.
(a) GUARANTOR AGREES THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR CONTROVERSY
BETWEEN OR AMONG GUARANTOR AND THE BANK WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT THE BANK'S ELECTION, WHICH
ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE COMMENCEMENT OF A JUDICIAL
PROCEEDING BY THE BANK, OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED
BY GUARANTOR AT ANY TIME PRIOR TO THE LAST DAY TO ANSWER AND/OR RESPOND TO
A SUMMONS AND/OR COMPLAINT MADE BY GUARANTOR, BE RESOLVED BY ARBITRATION IN
NEW YORK, NEW YORK IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 19 AND
SHALL, AT THE ELECTION OF THE BANK, INCLUDE ALL DISPUTES ARISING OUT OF OR
IN CONNECTION WITH (I) THIS GUARANTY OR ANY RELATED AGREEMENTS OR
INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS INVOLVING
GUARANTOR AND THE BANK,
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(III) ANY TRANSACTION CONTEMPLATED HEREBY AND ALL PAST, PRESENT AND FUTURE
TRANSACTIONS INVOLVING GUARANTOR AND THE BANK, AND (IV) ANY ASPECT OF THE
PAST, PRESENT OR FUTURE RELATIONSHIP OF GUARANTOR AND THE BANK. Bank may
elect to require arbitration of any such Dispute with Guarantor without
thereby being required to arbitrate all Disputes between the Bank and
Guarantor. 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 19(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 19(d).
(b) No provision of, nor the exercise of any rights under, subsection 19(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 the Bank, even if the Bank is the plaintiff, to submit the
Dispute to arbitration if the Bank would otherwise have such right.
(c) The Bank may require arbitration of any Dispute(s) concerning the
lawfulness, unconscionableness, propriety, or reasonableness of any
exercise by the 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 the Bank.
(d) Whenever an arbitration is required under subsection 19(a), the arbitrator
shall be selected, except as otherwise herein provided, in accordance with
the Commercial Arbitration Rules of the AAA. A single arbitrator shall
decide any claim of $100,000 or less and he or she shall be an attorney
with at least five years' experience. Where the claim of any party exceeds
$100,000, the Dispute shall be decided by a majority vote of three
arbitrators, at least two of whom shall be attorneys (at least one of whom
shall have not less than five years' experience representing commercial
banks).
(e) In the event of any Dispute governed by this Section 19, 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.
SECTION 20. Severability. If any one or more of the provisions contained in this
Guaranty 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.
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SECTION 21. Headings. The descriptive headings used in this Guaranty are for
convenience only and shall not be deemed to affect the meaning or construction
of any provision hereof.
SECTION 20. WAIVER OF TRIAL BY JURY. EACH OF THE BANK AND GUARANTOR 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 GUARANTY OR THE OBLIGATIONS.
SECTION 21. WAIVER OF CERTAIN OTHER RIGHTS. GUARANTOR HEREBY WAIVES THE RIGHT TO
INTERPOSE ANY DEFENSE BASED UPON ANY CLAIMS OF 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 Guarantor(s) has/have executed this Guaranty and Security
Agreement.
[SEAL]
/s/
-----------------------------
Xxxx X. Xxxxxxxxx
/s/
-----------------------------
Xxxxxxxx X. Xxxxxxxxx
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SCHEDULE AND ADDENDA
TO
GUARANTY AND SECURITY AGREEMENT
DATED AS OF DECEMBER 30, 1997
OF
XXXXXXXX X. XXXXXXXXX AND XXXX X. XXXXXXXXX
TO
REPUBLIC NATIONAL BANK OF NEW YORK
Schedule A - Property constituting Security
A. Deposited by Xxxxxxxx X. Xxxxxxxxx:
55,000 Shares of Common Stock of Individual Investor Group, Inc. ("IIGI")
B. Deposited by Xxxx X. Xxxxxxxxx:
500,000 Shares of Common Stock of IIGI
1,650,000 Shares of Common Stock of Reliance Group Holdings, Inc.
Addendum to Section 5
Bank hereby agrees to seek payment of the Obligation, first by making demand for
payment from the Borrower, second by demanding payment from the Guarantors under
this Guaranty and then by selling the Security.
Addendum to Section 14
With respect to any notice relating to a default of the Borrower or any
Guarantor or to the sale of any Security hereunder, Bank shall attempt to give
oral notice of such default by placing a telephone call to Xxxxxxxx X. Xxxxxxxxx
(212-843-2744) and to Xxxx X. Xxxxxxxxx (212-909-1100). However, the failure of
the Bank to reach either or both of these individuals by telephone shall not
prevent the Bank from exercising any of its rights under law or this Guaranty.
Copies of all written notices given by Bank to the Guarantors shall be sent to:
Xxxxxxxx Mollen & Xxxxxx Xxxxxx X. Xxxxxxxxx, Esq.
000 Xxxxx Xxxxxx Xxxxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Reliance Group Holdings, Inc.
Attention: Xxxxx X. Xxxxxx, Esq. Park Avenue Plaza
Tel No: (000) 000-0000 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel No: (000) 000-0000
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RIDER
TO
GUARANTY AND SECURITY AGREEMENT
DATED AS OF DECEMBER 30, 1997
OF
XXXXXXXX X. XXXXXXXXX AND XXXX X. XXXXXXXXX
TO
REPUBLIC NATIONAL BANK OF NEW YORK
A. This Rider constitutes part of the Guaranty and Security Agreement,
dated as of April 22, 1996, of Xxxxxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx to
Republic National Bank of New York, to which this Rider is attached. Capitalized
terms that are used but are not defined in this Rider are used as they are
defined in the printed portion of said Guaranty and Security Agreement (the
"Printed Text"). In the event of any conflict between the Printed Text and this
Rider, the terms set forth in this Rider shall control (except to the extent
that the printed Text includes any typewritten changes, in which case the
Printed Text as so changed shall control). Reference to this Guaranty, and like
references, whether appearing in the Printed Text, any Addendum (including the
schedule and addenda, the "Addendum") or in this Rider, shall mean the Printed
Text, any such Addendum and this Rider, and shall include the same as
supplemented, modified, amended or restated from time to time in accordance with
the terms of this Guaranty.
B. Each Guarantor represents and warrants to Bank, severally as to
himself only and not jointly and only as to any Collateral pledged by him, as to
each of the matters set forth below: (a) such Guarantor has the full legal
capacity, power and authority to execute and deliver this Guaranty and to
perform all of such Guarantor's obligations hereunder; and (b) this Guaranty is
the legal, valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms and provisions. Each Guarantor
further represents, warrants and covenants, severally as to himself only and not
jointly and only as to any Collateral pledged by him, that the following are
true and correct at present and at all times while any Obligations are
outstanding the following will be true and correct; such Collateral (i) is and
will be owned of record (unless in the name of Bank's nominee) and beneficially
solely by the undersigned (except as otherwise provided in this Guaranty) with
good and marketable title thereto, free and clear of any lien, security
interest, charge or encumbrance, except that the Bank will have a valid first
priority security interest therein, (ii) is and will be duly and validly issued,
fully paid and non-assessable (iii) in the case of Xxxxxxxx X. Xxxxxxxxx, the
13,000, 20,000, 18,000 and 4,000 shares of Common Stock of Individual Investor
Group, Inc. pledged by him as Collateral were acquired by him in open market
purchase transactions on January 11, 1995, May 17, 1995, May 22, 1995 and May
23, 1995, respectively, and are not "restricted securities" under Rule 144
("Rule 144") promulgated by the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Act"); and (iv) in the case
of Xxxx X. Xxxxxxxxx, all Collateral pledged by him has been beneficially owned
by him for a period of at least three (3) years determined in accordance with
paragraph (d) of Rule 144.
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C. Without limiting the generality of any other provision of this
Guaranty, Bank shall have, and shall be entitled to exercise, all the right and
remedies granted to a secured party under the New York Uniform Commercial Code,
except as otherwise expressly provided in this Guaranty. To the extent waiver is
not limited under applicable law, each Guarantor hereby expressly waives each
and every claim or defense, and agrees that such Guarantor will not assert or
pursue (by action, suit, counterclaim or otherwise) any claim or defense,
respecting (i) the selection or order of disposition of the Collateral (which
may be as to such Collateral, and in any order, Bank may select in its
reasonable discretion, and may be without regard to any holding period or tax
basis that any person may have therein), (ii) the private sale of any shares of
Individual Investor Group, Inc., whether or not any public market exists and
regardless of the availability of any registration statement or of Rule 144,
(iii) the choice or timing of any sale date (which Bank may select in its
reasonable discretion), irrespective of whether greater sale proceeds would be
realizable on a different sale date, (iv) the adequacy of the sale price of any
shares of Individual Investor Group, Inc., (v) any insufficiency of the proceeds
to fully satisfy the Liabilities or (vi) any sale of shares of Individual
Investor Group, Inc., to the first person to receive an offer or make a bid or
the selection of any purchaser of those shares (which may be restricted, in
Bank's discretion, to purchasers or prospective purchasers by number, class,
nature and investment intention) or any default by any such purchaser; provided
that such dispositions are effected in a commercially reasonable manner. In
enforcing its remedies, Bank may sell pledged shares of Reliance Group Holdings,
Inc. only through public markets.
D. In enforcing its rights in accordance with Addendum to Section 5,
and without limiting the rights of Bank under the Printed Text, but subject
however to the provisions of the Addendum and to any typewritten provisions in
the Printed Text, Bank may take (and/or may cause one or more of its designees
to take) any or all of the following actions, all without notice to the
Guarantor or any other person (except as may otherwise be required in this
Guaranty or by applicable law), with a single notice (if required or otherwise
given, and except as otherwise required under the Addendum) being sufficient to
entitle Bank from time to time thereafter to take any one or more of the actions
described below; to sell, assign, lease or otherwise dispose of the whole of, or
from time to time any part of, the Collateral, or offer or agree to do so, in
any established market or, in the case of shares of Individual Investor Group,
Inc., private sale or public auction or sale (with or without demand on the
Guarantor or any advertisement or other notice of the time, place or terms of
sale, and with or without any reserve or minimum bid price, whether disclosed or
undisclosed) for cash and upon such other terms and subject to such other
conditions as Bank in its reasonable discretion may determine, and the Bank may
postpone or adjourn any such auction, sale or other disposition or cause the
same to be postponed or adjourned from time to time to a subsequent time and
place, or to abandon or cause the abandonment of the same, all without any
advertisement or other notice thereof, and to carry out any agreement to sell
any item or items of the Collateral in accordance with the terms and provisions
of such agreement, notwithstanding that, after Bank shall have entered into such
an agreement, all of the Liabilities may have been paid and satisfied in full.
Any sale of Collateral conducted in conformity with reasonable commercial
practices of banks disposing of similar collateral shall be deemed to be
commercially reasonable for all purposes of this Guaranty.
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E. This Rider may be executed in one or more counterparts which, taken
together, shall constitute one and the same instrument and each of which shall
be deemed an original.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty for the benefit of Bank as of the date set forth in the Printed Text.
/s/
---------------------------------
Xxxxxxxx X. Xxxxxxxxx
/s/
----------------------------------
Xxxx X. Xxxxxxxxx
Acknowledged and Agreed:
REPUBLIC NATIONAL BANK OF NEW YORK
By: /s/
---------------------------------------
Xxxx Xxxxx Pan, First Vice President
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