Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in installments, or otherwise modify the terms of, or
release, any of the Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, the undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Rent A Wreck One Way
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Suite 120 By: /s/ Kenneth L. Blum, Jr.
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Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
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Telecopier No. ( ) Title: President
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