SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
ACCEL International Corporation
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(Name of Issuer)
Common Stock, par value $0.10 per share
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(Title of Class of Securities)
004299 10 3
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(CUSIP Number)
William H. Cuddy, Esq.
Day, Berry & Howard
CityPlace I, Hartford, Connecticut 06103-3499
(860) 275-0100
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 24, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on the following pages)
(Page 1 of 8 Pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 004299 10 3 Page 2 of 8
1 NAME OF REPORTING PERSONS
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
David T. Chase
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
7 SOLE VOTING POWER
1,006,500 shares, to the extent that the
NUMBER OF reporting person has been temporarily
transferred voting power over
SHARES 1,000,000 of such shares
BENEFICIALLY 8 SHARED VOTING POWER
0 shares
OWNED BY EACH
9 SOLE DISPOSITIVE POWER
REPORTING 1,006,500 shares, to the extent that the
reporting person has been temporarily
PERSON transferred dispositive power over
1,000,000 such shares
WITH
10 SHARED DISPOSITIVE POWER
3,000,648 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,007,148 shares, to the extent that the reporting person has been
temporarily transferred dispositive power and voting power over
1,000,000 such shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* /X/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
46.4% (see Row 11, above)
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
AMENDMENT NO. 1 TO STATEMENT ON SCHEDULE 13D
The reporting person hereby amends in part his Statement on Schedule
13D dated November 20, 1997 (the "Initial Schedule 13D"), with respect to
the common stock, par value $0.10 per share (the "Common Stock"), of ACCEL
International Corporation ("ACCEL"). This amendment amends only those
portions of the information previously reported that have changed since the
prior filing.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 24, 1997, the reporting person borrowed 1,000,000 shares
of Common Stock (the "Borrowed Securities") from his spouse, Rhoda L.
Chase, pursuant to a loan agreement (the "Loan Agreement") dated December
24, 1997 between the reporting person and Rhoda L. Chase. In exchange for
Rhoda L. Chase lending the reporting person the Borrowed Securities, the
reporting person has agreed to pay quarterly to Rhoda L. Chase a service
fee (the "Service Fee") equal to six percent (6%) per annum of the average
monthly market value of the Borrowed Securities pro rated over the number
of days the Loan Agreement is in effect. The reporting person intends to
use personal funds to pay the Service Fee. The terms of the Loan Agreement
are more fully described in Item 6 hereof. Prior to such loan, the
Borrowed Securities were held by Rhoda L. Chase in the brokerage account to
which her Trading Authorization described in the Initial Schedule 13D
relates.
On January 14, 1998, Insurance Holdings Limited Partnership ("IHLP")
returned to Rhoda L. Chase 335,000 shares of Common Stock which Rhoda L.
Chase previously loaned to IHLP. The 335,000 shares of Common Stock
returned to Rhoda L. Chase were deposited by Rhoda L. Chase into the
brokerage account to which the Trading Authorization described in the
Initial Schedule 13D relates.
Item 4. PURPOSE OF TRANSACTION.
The reporting person is holding all of the shares of Common Stock
owned by him for investment purposes. The reporting person has pledged the
Borrowed Securities to secure a loan with Comerica Bank pursuant to a
security agreement (the "Security Agreement") dated December 30, 1997. The
terms of the Security Agreement are more fully described in Item 6 hereto.
Based on his ongoing evaluation of the business, prospects and financial
condition of ACCEL, the market for and price of the Common Stock, other
opportunities available to him, offers for his shares of Common Stock,
general economic conditions and other future developments, the reporting
person reserves the right to change his plans and intentions at any time,
as he deems appropriate. In particular, the reporting person may decide to
sell or seek the sale of all or part of his present or future beneficial
holdings of Common Stock, or may decide to acquire additional Common Stock,
or securities convertible into or exchangeable for Common Stock, either in
the open market, in private transactions, or by any other permissible
means. He may also decide to enter into derivative transactions relating
to the Common Stock. Any such transactions may be effected at any time and
from time to time.
Other than the above, as of the date hereof, the reporting person does
not have any plans or proposals that relate to or would result in any of
the following:
(a) The acquisition by any person of additional securities of ACCEL,
or the disposition of securities of ACCEL;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving ACCEL or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of ACCEL or any
of its subsidiaries;
(d) Any change in the present board of directors or management of
ACCEL, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of ACCEL;
(f) Any other material change in ACCEL's business or corporate
structure;
(g) Changes in ACCEL's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
ACCEL by any person;
(h) Causing a class of securities of ACCEL to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of ACCEL becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or
(j) Any action similar to any of those enumerated above.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, the reporting person may be deemed to
beneficially own 4,007,148 shares of Common Stock (including the 1,000,000
shares of Common Stock the reporting person borrowed pursuant to the Loan
Agreement and currently exercisable options (the "Options") for 6,500
shares of Common Stock), representing approximately 46.4% of the 8,637,042
shares of Common Stock reported to be outstanding as of November 17, 1997
(as reported in ACCEL's Definitive Proxy Statement dated December 18,
1997).
This statement does not relate to, and, in accordance with Rule 13d-4
under the Exchange Act, the reporting person expressly declares that the
filing of this statement shall not be construed as an admission that he is,
for purposes of Section 13(d) or 13(g) of the Exchange Act, the beneficial
owner of, any of (i) the 5,350 shares of Common Stock, or less than 0.1% of
the shares of Common Stock reported to be outstanding as of November 17,
1997, owned by Sandra M. Chase, the reporting person's daughter-in-law, or
(ii) 335,000 shares of Common Stock, or 3.9% of the shares of Common Stock
reported to be outstanding as of November 17, 1997, owned by Rhoda L.
Chase. Insurance Holdings Limited Partnership, a limited partnership of
which Chase Insurance Corporation (a corporation owned by Rhoda L. Chase
and of which the reporting person is President and a director) is the
general partner and Rhoda L. Chase, Sandra M. Chase and Cheryl A. Chase are
the limited partners, may be deemed to be the beneficial owner of the
335,000 shares of Common Stock referred to in clause (ii) of the
immediately preceding sentence.
(b) As described in greater detail in Item 6 hereof, the reporting
person has the sole power to vote, direct the vote of, dispose of, and
direct the disposition of, the 1,000,000 shares of Common Stock he borrowed
from Rhoda L. Chase during the term of the Loan Agreement. Upon the
exercise of any of the Options, the reporting person will also have the
sole power to vote or to direct the vote of, and the sole power to dispose
or to direct the disposition of, the shares of Common Stock received by him
as a result of such exercise. The reporting person shares the power to
dispose or to direct the disposition of (i) 665,000 shares of Common Stock
owned by Rhoda L. Chase with Rhoda L. Chase, (ii) 1,167,824 shares of
Common Stock owned by Arnold L. Chase with Arnold L. Chase and (iii)
1,167,824 shares of Common Stock owned by The Darland Trust (the "Trust"),
a trust whose beneficiaries are Cheryl A. Chase (the reporting person's
daughter) and her children, with the Trust.
Rhoda L. Chase's residence is at 96 High Ridge Road, West Hartford
Connecticut 06117. She is not employed. Arnold L. Chase is an Executive
Vice President and director of D.T. Chase Enterprises ("DTCE"), a holding
company for various Chase family interests. Arnold L. Chase's business
address and the principal business address of DTCE is: D.T. Chase
Enterprises, Inc., One Commercial Plaza, Hartford, Connecticut 06103.
Rhoda L. Chase and Arnold L. Chase are citizens of the United States of
America.
The Trust is a trust for which Rothschild Trust Cayman Limited serves
as trustee and of which Cheryl A. Chase and her children are the
beneficiaries. The Trust's address is FBO: The Darland Trust, P.O. Box
472, St. Peter's House, Le Bordage, St. Peter Port, Guernsey GYI6AX,
Channel Islands. The Trust is an entity of the Cayman Islands.
During the past five years, none of Rhoda L. Chase, Arnold L. Chase or
the Trust has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). During the past five years, none of
Rhoda L. Chase, Arnold L. Chase or the Trust has been a party to a civil
proceeding of a judicial or an administrative body of competent
jurisdiction and as a result of such proceeding is or was subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(c) No transactions in the Common Stock have been effected by or on
behalf of the reporting person during the past 60 days other than the
transactions described in Item 3.
(d) As described in greater detail in Item 6 hereof, Rhoda L. Chase
may be deemed to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the 1,000,000
shares of Common Stock the reporting person has borrowed from Rhoda L.
Chase during the term of the Loan Agreement. Upon the exercise of any of
the Options, the reporting person will have the sole right to receive or
direct the receipt of dividends from, and the proceeds from the sale of,
the shares of Common Stock received by him as a result of such exercise.
Each of the reporting person and, with respect to (i) 665,000 shares of
Common Stock owned by Rhoda L. Chase, Rhoda L. Chase, (ii) 1,167,824 shares
of Common Stock owned by Arnold L. Chase, Arnold L. Chase and (iii)
1,167,824 shares of Common Stock owned by the Trust, the Trust, has the
power to direct the dividends from, and the proceeds from the sale of, the
shares of Common Stock owned by the reporting person. No other person is
known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the shares of Common
Stock owned by the reporting person.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The reporting person borrowed the Borrowed Securities from Rhoda L.
Chase pursuant to the Loan Agreement. Under the terms of the Loan
Agreement, the reporting person has full use of the Borrowed Securities,
including the right to sell, pledge or otherwise transfer or encumber the
Borrowed Securities, until termination of the Loan Agreement. In exchange
for use of the Borrowed Shares, the reporting person is to pay Rhoda L.
Chase the Service Fee. In addition, the reporting person is to pay to
Rhoda L. Chase any cash dividends or distributions declared by ACCEL on the
Common Stock during the term of the Loan Agreement. Upon the termination
of the Loan Agreement, the reporting person is to deliver to Rhoda L. Chase
securities that are identical in kind and amount to the Borrowed Securities
and including all dividends and distributions in the form of stock, rights,
warrants or other securities which ACCEL makes during the term of the Loan
Agreement. The Loan Agreement is to terminate December 31, 2001 unless
terminated sooner by one of the parties pursuant to the terms of the Loan
Agreement.
The reporting person has pledged the Borrowed Securities to
secure a loan with Comerica Bank ("Comerica") pursuant to the Security
Agreement. In connection with the Security Agreement, the reporting person
has executed and delivered to Comerica Securities, Inc. ("CSI"), the
brokerage company through which he holds the Borrowed Securities, a Notice
to Financial Intermediary of Security Interest in Securities and Brokerage
Account (the "Notice to Financial Intermediary") dated December 30, 1997,
informing CSI of the pledge and instructing CSI (i) not to sell, transfer
or take any other action with respect to the Borrowed Securities until it
receives written instructions to the contrary from Comerica and (ii) to
follow the instructions of Comerica with respect to the Borrowed
Securities.
The foregoing description of the Loan Agreement, the Security
Agreement and the Notice to Financial Intermediary is subject to, and is
qualified in its entirety by reference to the Loan Agreement, the Security
Agreement and the Notice to Financial Intermediary, each of which is filed
as an exhibit to this Statement on Schedule 13D.
Except as described in this Statement on Schedule 13D, the reporting
person knows of no contracts, arrangements, understandings or relationships
(legal or otherwise) between any of the persons named in Item 2 or between
such persons and any other person with respect to any securities of ACCEL,
including, but not limited to, transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
The reporting person has not agreed to act together with any other
person or entity for the purpose of acquiring, holding, voting or disposing
of shares of Common Stock and the reporting person disclaims membership in
any "group" with respect to the Common Stock for purposes of Section
13(d)(3) of the Exchange Act and Rule 13d-5(b) (1) adopted thereunder.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) Loan Agreement
(2) Security Agreement
(3) Notice to Financial Intermediary
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: February 10, 1998 /s/ David T. Chase
David T. Chase
EXHIBIT 1
RHODA L. CHASE
c/o Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
December 24, 1997
David T. Chase
c/o Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth and confirm the agreement entered into between
David T. Chase ("Borrower") and Rhoda L. Chase ("Lender") regarding shares
of common stock of ACCEL International Corporation (the "Company").
1. Lender hereby confirms that it has loaned to Borrower 1,000,000
shares of the common stock, no par value, of the Company ("Borrowed
Securities").
2. Until this Agreement is terminated, Borrower shall have the full
use of the Borrowed Securities including the right to sell, pledge or
otherwise transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities
and including all dividends and distributions in the form of stock, rights,
warrants or other securities which the Company has made during the term of
this Agreement with respect to the Borrowed Securities. During the term of
this Agreement and from time to time, but in no event later than ten (10)
days after the date of any distributions, Borrower shall pay over to Lender
in cash the amount of any cash dividends or distributions made by the
Company respecting the Borrowed Securities. In the event of a
recapitalization, stock split or other exchange by the Company with respect
to the Borrowed Securities, the exchanged or newly issued shares shall be
deemed identical in kind to the Borrowed Securities.
4. Borrower agrees to pay Lender a service fee for the use of the
Borrowed Securities. The service fee shall be six percent (6%) per annum
of the average monthly market value of the Borrowed Securities pro rated
over the number of days this Agreement is in effect. Such fee shall be due
and payable Borrowed Securities pro rated over the number of days this
Agreement is in effect. Such feel shall be due and payable quarterly on
the last day of each March, June, September and December for which this
Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this
agreement by delivering to Lender marketable securities or other property
having a market value of at least one hundred and five percent (105%) of
the market value of the Borrowed Securities. Such transfer of property as
security shall be accompanied by such instruments and documents as shall be
adequate to provide Lender with a good and valid security interest therein.
The said security interest shall give Borrower the right to substitute
collateral. Except in the event of a default by Borrower, Lender shall not
have any right to sell or otherwise dispose of the collateral.
6. Lender and Borrower agree that the loan of the Borrowed
Securities shall not reduce Lender's risk of loss or opportunity for gain
respecting the Borrowed Securities.
7. Borrower and Lender agree that they shall maintain their
respective books and records with respect to the Borrowed Securities to
reflect the transfer of said securities under this Agreement; to record any
obligation that may arise with respect to any dividends or distributions
respecting the Borrowed Securities which may be made by the Company; to
record the transfer of any property or cash in satisfaction of any dividend
or distribution obligation; and to record the transfer of stock in whole or
partial satisfaction of the obligation respecting return of the Borrowed
Securities. Borrower and Lender further agree that they will, upon
reasonable request, confirm to the other or any auditors of the other their
respective obligations with respect to the Borrowed Securities. The
obligation hereunder regarding the records of the parties shall also apply
with respect to any collateral which may be transferred to secure
Borrower's obligation.
8. Unless otherwise sooner terminated as herein provided, this
Agreement shall terminate on December 31, 2001. Borrower reserves the
right to terminate this Agreement by return of the Borrowed Securities upon
two (2) days' notice to Lender. Such right of termination shall be
exercisable in whole or in part. Lender reserves the right to terminate
this Agreement on written notice to Borrower of five (5) business days at
which time Borrower shall fulfill its obligations to Lender as provided in
paragraph 3 hereof.
9. This Agreement shall be binding upon the respective successors
and assigns of Lender and Borrower.
Please confirm that the foregoing sets forth our understanding
regarding the Borrowed Securities by signature below.
Very truly yours,
/s/ Rhoda L. Chase
Rhoda L. Chase
THE FOREGOING IS HEREBY
CONFIRMED AND AGREED TO:
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 2
SECURITY AGREEMENT
(Negotiable Collateral)
For value received, the undersigned ("Debtor") assigns, transfers,
delivers, and pledges to Comerica Bank, a Michigan banking corporation,
whose address is 500 Woodward Avenue, Detroit, Michigan 48226 ("Bank"), a
continuing security interest in (a) the following securities, stocks,
bonds, notes, instruments, documents of title, and/or other property; (b)
interest, dividends, increase, profits, new securities or other increments,
distributions or rights of any kind received on account of this property;
(c) Debtor's Property in Possession of Bank; and (d) all property
substituted therefor or for any part thereof, all records (including
computer software) pertaining thereto and all rights, products or Proceeds
thereof (whether cash or non-cash Proceeds) resulting from any sale or
exchange or transfer thereof or arising by virtue of ownership thereof
(such as, but not limited to, the rights to additional or other securities
or property upon any corporate reorganization, merger, consolidation,
liquidation, or dissolution, offering of stock rights, stock split or stock
or liquidating dividend or the rights to any goods evidenced by such
property or insurance proceeds with respect thereto), and all subscription,
voting, and preferential rights:
See Exhibit "A"
to secure payment of any and all indebtedness of Debtor to Bank under that
certain Installment Note dated as of the date hereof made in the principal
amount of Twelve Million Dollars ($12,000,000) by Debtor payable to Bank,
and any and all renewals, extensions or modifications thereof (the
"Indebtedness").
1. Definitions. As used in this Agreement:
1.1 "Collateral" means any and all property of Debtor in which Bank
now has or by this Agreement now or later acquires a security
interest.
1.2 "Debtor's Property in Possession of Bank" means goods,
instruments, documents, policies and certificates of insurance,
deposits, money or other property now owned or later acquired by
Debtor or in which Debtor now has or later acquires an interest
and which are now or later in possession of Bank, or as to which
Bank now or later controls possession by documents or otherwise.
1.3 "Proceeds" has the meaning assigned it in Article 9 of the
Uniform Commercial Code, as of the date of this Agreement, and
also includes, without limit, cash or other property which were
proceeds and are recovered by a bankruptcy trustee or otherwise
as a preferential transfer by Debtor.
1.4 "Uniform Commercial Code" means Act No. 174 of the Michigan
Public Acts of 1962, as amended.
1.5 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or,
absent definition in Article 9, in any other Article) of the
Uniform Commercial Code, as of the date of this Agreement.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the
seller of any Collateral to be acquired with proceeds of loans
from Bank.
2.2 Bank, at its option, may require delivery of any Collateral to
Bank at any time with such endorsement or assignments of the
Collateral as Bank may request.
2.3 Debtor shall (a) keep adequate records of the Collateral and
other records as Bank shall determine to be appropriate; and (b)
allow Bank to examine, inspect and make abstracts from, or copy
any of Debtor's books and records (relating to the Collateral or
otherwise and whether printed or in magnetic tape or discs or in
other machine readable form).
2.4 At any time and without notice during the continuation of an
Event of Default, the Bank may (a) cause the Collateral or any
portion of it to be transferred to its name or to the name of its
nominee or nominees; (b) receive or collect by legal proceedings
or otherwise all dividends, interest, principal payments and
other sums and all other distributions at any time payable or
receivable on account of the Collateral, and hold the same as
Collateral, or apply the same to the Indebtedness, the manner and
distribution of the application to be in the sole discretion of
the Bank; (c) enter into an extension, subordination,
reorganization, deposit, merger or consolidation agreement or any
other agreement relating to or affecting the Collateral, and
deposit or surrender control of the Collateral, and accept other
property in exchange for the Collateral and hold or apply the
property or money so received in accordance with the provisions
of this Agreement.
2.5 The Bank may assign any of the Indebtedness and deliver all or
any part of the Collateral to its assignee, who then shall have
with respect to the Collateral so delivered all the rights and
powers of the Bank under this Agreement, and after that the Bank
shall be fully discharged from all liability and responsibility
with respect to the Collateral so delivered.
2.6 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(2) the ultimate sale or exchange thereof, or
(2) presentation, collection, renewal, or registration of
transfer thereof, or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing therewith
preliminary to sale or exchange, such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest therein or in the
proceeds or products thereof unless Bank specifically so
agrees in writing. If Debtor requests any such redelivery,
Debtor will deliver with such request a duly executed
financing statement in form and substance satisfactory to
Bank. Any proceeds of collateral coming into Debtor's
possession as a result of any such redelivery shall be held
in trust for Bank and forthwith delivered to Bank for
application on the Indebtedness. Bank may (if, in its sole
discretion, it elects to do so) deliver the Collateral or
any part of the Collateral to Debtor, and such delivery by
Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.7 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of the
Indebtedness, and Debtor is not relying upon assets in which the
Bank has or may have a lien or security interest for payment of
the Indebtedness.
2.8 Debtor shall at the request of Bank (a) mark its records and the
Collateral to clearly indicate the security interest of Bank
under this Agreement, and (b) deliver to Bank all accounting and
other records pertaining to, and all writings evidencing, the
Collateral or any portion of it, together with all books, records
and documents of Debtor related to it in whatever form kept by
Debtor, whether printed or in magnetic tape or discs or in other
machine readable form or otherwise, and all forms, programs,
software and other materials and instructions necessary or useful
to Bank, to monitor the Collateral or enforce its rights under
this Agreement.
2.9 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall be
deemed to have warranted that (a) Debtor has the right and
authority to subject it to a security interest granted to Bank
and (b) none of the Collateral is subject to any security
interest other than that in favor of Bank and there are no
financing statements on file, other than in favor of Bank.
2.10 Debtor will keep the Collateral free at all times from any and
all claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit or
suffer to be sold, transferred or leased, any or all of the
Collateral. Bank or its agents or attorneys may at all
reasonable times inspect the Collateral and may enter upon all
premises where the Collateral is kept or might be located.
2.11 Debtor shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and
other writings requested by Bank to establish, maintain,
reinstate, and/or continue the perfected and first priority
status of the security interest of Bank in the Collateral or to
implement or further effectuate the terms or purpose of this
Agreement, although the failure of the Debtor to do so shall not
affect in any way Bank's perfected and first priority security
interest in the Collateral, and will on demand pay all costs and
expenses of filing and recording, including the costs of any
record searches, deemed necessary by Bank from time to time, to
establish or determine the validity and the priority of Bank's
security interest. Debtor further makes, constitutes and
appoints Bank its true and lawful attorney-in-fact with full
power of substitution during the continuation of an Event of
Default to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing
statements, endorsing of instruments, and the execution and
delivery of all documents and agreements necessary to obtain or
accomplish any protection for or collection or disposition of any
part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
2.12 Debtor will pay promptly and within the time that they can be
paid without interest or penalty all taxes, assessments and
similar imposts and charges which at any time are or may become a
lien, charge, or encumbrance upon any of the Collateral, except
to the extent contested in good faith and bonded in a manner
satisfactory to Bank. If Debtor fails to pay any of these taxes,
assessments or other charges in the time provided above, Bank has
the option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest default rate which could be
charged by Bank to Debtor on any Indebtedness.
2.13 [Reserved]
2.14 [Reserved]
2.15 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the
Indebtedness or any part of it (through formal or informal
collection actions, workouts or otherwise), in defending the
validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other
agreement between Bank and Debtor; (b) in connection with any
proceeding (including, without limit, bankruptcy, insolvency,
administrative, appellate, or probate proceedings or any lawsuit)
in which Bank at any time is involved as a result of any lending
relationship or other financial accommodation involving Bank and
Debtor; or (c) incurred by Bank during the continuance of an
Event of Default, which fees and expenses relate to or would not
have been incurred but for any lending relationship or other
financial accommodation involving Bank and Debtor. The fees and
expenses include, without limit, court costs, legal expenses,
reasonable attorneys' fees, paralegal fees, internal transfer
charges for in-house attorneys and paralegals and other services,
and audit expenses.
2.16 Debtor at all times shall be in material compliance with all
applicable laws with respect to which Debtor's failure to comply
would have a material adverse effect on the value of the
Collateral or Bank's rights with respect to the Collateral.
2.17 [Reserved].
2.18 Debtor acknowledges and agrees that if any Guaranty is executed
by the Debtor in connection with or related to this Agreement,
all waivers contained in that Guaranty shall be and are
incorporated by reference into this Agreement.
3. Collection of Proceeds.
3.1 Upon the occurrence and during the continuance of an Event of
Default, immediately upon notice to Debtor by Bank, Debtor agrees
to hold in trust for Bank all payments received in connection
with the Collateral and from the sale, lease or other disposition
of any Collateral, all rights by way of suretyship or guaranty
and all rights in the nature of a mortgage, lien or security
interest which Debtor now has or may later acquire regarding the
Collateral. Debtor agrees to collect and enforce payment of all
Collateral until Bank shall direct Debtor to the contrary and,
from and after this direction, Debtor agrees to fully and
promptly cooperate and assist Bank (or any other person as Bank
shall designate) in the collection and enforcement of all
Collateral. Immediately upon notice to such effect to Debtor by
Bank and at all times after that, Debtor agrees to (a) endorse to
Bank and immediately deliver to Bank all payments received by
Debtor on Collateral or from the sale, lease or other disposition
of any Collateral or arising from any other rights or interests
of Debtor in the Collateral, in the form received by Debtor
without commingling with any other funds, and (b) immediately
deliver to Bank all property in Debtor's possession or later
coming into Debtor's possession through enforcement of Debtor's
rights or interests.
3.2 During the continuation of an Event of Default, Debtor
irrevocably authorizes Bank or any Bank employee or agent to
endorse the name of Debtor upon any Collateral, checks, or other
items which are received in payment of any Collateral, and to do
any and all things necessary in order to reduce these items to
money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of
any related rights, beyond the use of reasonable care in the
custody and preservation of Collateral in the possession of Bank.
Debtor agrees to take all steps necessary to preserve rights
against prior parties with respect to Debtor's Property in
Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness,
Debtor understands that Bank imposes a minimum one business day
delay in crediting payments received by Bank against the
Indebtedness to allow time for collection and Debtor agrees that
Bank may, at Bank's option, make such credits only when payments
are actually collected by Bank in immediately available funds.
Any credit of payment by Bank prior to receipt by Bank of
immediately available funds is conditional upon Bank's receipt of
those funds. For the purpose of calculating the principal amount
which Debtor may request to borrow from Bank under any borrowing
arrangements with Bank, Debtor understands that Bank may, at
Bank's option, use a method different from that used for the
purpose of calculating interest.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an
"Event of Default"), Debtor shall be in default under this
Agreement:
(4) Any failure or neglect to comply with, or breach of, the
provisions of Sections 2.10 or 8.1 hereof,
(4) Any failure or neglect to comply with, or breach of, any of
the other terms, provisions, warranties or covenants of this
Agreement, or any other agreement or commitment between
Debtor or any guarantor of any of the Indebtedness
("guarantor") and Bank which is not cured within fifteen
(15) days after notice by Bank to Debtor; or
(4) Any failure to pay the Indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise;
or
(4) Any warranty, representation, financial statement or other
information made, given or furnished to Bank by or on behalf
of Debtor or any guarantor shall be, or shall prove to have
been, false in any material respect or materially misleading
when made, given, or furnished; or
(4) Any loss, theft, substantial damage or destruction to or of
any of the Collateral, or the issuance or filing of any
attachment, levy, garnishment or the commencement of any
proceeding in connection with any of the Collateral or of
any other judicial process of, upon or in respect of Debtor
or any guarantor or any of the Collateral which proceeding
or judicial process is not stayed, lifted, dismissed or
bonded within thirty (30) days after commencement; or
(4) Sale or other disposition by Debtor of any substantial
portion of his assets or property or assignment for the
benefit of creditors of or by Debtor or any guarantor; or
commencement of any proceedings under any state or federal
bankruptcy or insolvency laws or laws for the relief of
debtors by or against Debtor or any guarantor; or the
appointment of a receiver, trustee, court appointee,
sequestrator or otherwise, for all or any part of the
property of Debtor or any guarantor which proceedings are
not dismissed or stayed within forty-five (45) days after
commencement; or
(4) Any termination or notice of termination of any guaranty of
collection or payment of, or any breach, termination or
notice of termination of any subordination agreement,
pledge, or collateral assignment relating to, all or any
part of the Indebtedness; or
(4) Any failure by Debtor to pay when due any of his direct
indebtedness for money borrowed by him (other than to Bank)
in excess of One Million Dollars ($1,000,000) or in the
observance or performance of any term, covenant or condition
in any agreement evidencing, securing or relating to that
indebtedness which results in an acceleration of such
indebtedness in an amount in excess of One Million Dollars
($1,000,000).
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or all
of the Indebtedness to be immediately due and payable, and, after
giving Debtor ten (10) days notice, if notice is required by law,
shall have and may exercise any one or more of the following
rights and remedies:
(4) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties
under the provisions of the Uniform Commercial Code and
other applicable law;
(4) institute legal proceedings to foreclose upon and against
the lien and security interest granted by this Agreement, to
recover judgment for all amounts then due and owing as
Indebtedness, and to collect the same out of any of the
Collateral or the proceeds of any sale of it;
(4) institute legal proceedings for the sale, under the judgment
or decree of any court of competent jurisdiction, of any or
all of the Collateral; and/or
(4) personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where the Collateral or
any part of it may then be located, and take possession of
all or any part of it and/or render it unusable; and without
being responsible for loss or damage to such Collateral,
(i) hold, store, and keep idle, or lease, operate, remove
or otherwise use or permit the use of the Collateral or
any part of it, for that time and upon those terms as
Bank, in its sole discretion, deems to be in its own
best interest, and demand, collect and retain all
resulting earnings and other sums due and to become due
from any party, accounting only for net earnings, if
any (unless the Collateral is retained in satisfaction
of the Indebtedness, in which case no accounting will
be necessary), arising from that use (which net
earnings may be applied against the Indebtedness) and
charging against all receipts from the use of the
Collateral or from its sale, by court proceedings or
pursuant to subsection (ii) below, all other costs,
expenses, charges, damages and other losses resulting
from that use; and/or
(ii) sell, lease, dispose of, or cause to be sold, leased or
disposed of, all or any part of the Collateral at one
or more public or private sales, leasings or other
dispositions, at places and times and on terms and
conditions as Bank may deem fit, without any previous
demand or advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to sell,
lease or otherwise dispose of the Collateral or as to
the application by Bank of the proceeds of sale or
otherwise, which would otherwise be required by, or
available to Debtor under, applicable law are expressly
waived by Debtor to the fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under the
power of sale, by virtue of judicial proceedings or
otherwise, it shall not be necessary for Bank or a public
officer under order of a court to have present physical or
constructive possession of the Collateral to be sold. The
recitals contained in any conveyances and receipts made and
given by Bank or the public officer to any purchaser at any
sale made pursuant to this Agreement shall, to the extent
permitted by applicable law, conclusively establish the
truth and accuracy of the matters stated (including, without
limit, as to the amounts of the principal of and interest on
the Indebtedness, the accrual and nonpayment of it and
advertisement and conduct of the sale); and all
prerequisites to the sale shall be presumed to have been
satisfied and performed. Upon any sale of any of the
Collateral, the receipt of the officer making the sale under
judicial proceedings or of Bank shall be sufficient
discharge to the purchaser for the purchase money, and the
purchaser shall not be obligated to see to the application
of the money. Any sale of any of the Collateral under this
Agreement shall be a perpetual bar against Debtor with
respect to that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
obligors of the security interest of Bank in any Collateral and
direct payment of it to Bank. Bank may, itself, upon the
occurrence of any Event of Default so notify and direct any
obligor and may take control of any proceeds to which it may be
entitled under this Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorney fees and legal expenses incurred by Bank; the
balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest,
then to principal, then to remaining Indebtedness and the
surplus, if any, shall be paid over to Debtor or to such other
person(s) as may be entitled to it under applicable law. Debtor
shall remain liable for any deficiency, which it shall pay to
Bank immediately upon demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed,
to preclude Bank from pursuing any other remedy provided by law
for the collection of any or all of the Indebtedness or for the
recovery of any other sum to which Bank may be or become entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Debtor and Bank, nor shall anything in this Agreement
modify the terms of any Indebtedness owing to Bank on a demand
basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer
of Bank. No waiver of any default or forbearance on the part of
Bank in enforcing any of its rights under this Agreement shall
operate as a waiver of any other default or of the same default
on a future occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any employee or agent of Bank
(which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in
the name, place and stead of, and at the expense of, Debtor to do
any of the following during a continuation of an Event of
Default:
(4) to demand, receive, sue for and give receipts or
acquittances for any moneys due or to become due on any
Collateral and to endorse any item representing any payment
on or proceeds of the Collateral;
(4) with respect to any Collateral, to assent to any or all
extensions or postponements of the time of its payment or
any other indulgence in connection with it, to the
substitution, exchange, or release of Collateral, to the
addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments on it and the
settlement, compromise or adjustment of it, all in a manner
and at times as Bank shall deem advisable;
(4) to make all necessary transfers of all or any part of the
Collateral in connection with any sale, lease or other
disposition made pursuant to this Agreement;
(4) to adjust and compromise any insurance loss on the
Collateral and to endorse checks or drafts payable to Debtor
in connection with the insurance;
(4) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments
in connection with any sale, lease or other disposition of
the Collateral. Debtor ratifies and confirms all that its
said attorney (or any substitute) shall lawfully do under
this Agreement. Nevertheless, if requested by Bank or a
purchaser or lessee, Debtor shall ratify and confirm any
sale, lease or other disposition by executing and delivering
to Bank or the purchaser or lessee all proper bills of sale,
assignments, releases, leases and other instruments as may
be designated in any request; and
(4) to execute and file in the name of and on behalf of Debtor
all financing statements or other filings deemed necessary
or desirable by Bank to evidence, perfect or continue the
security interests granted in this Agreement.
4.8 Upon the occurrence and continuation of an Event of Default,
Debtor also agrees, upon request of Bank, to assemble the
Collateral and make it available to Bank at any place designated
by Bank which is reasonably convenient to Bank and Debtor.
5. Miscellaneous.
5.1 This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of Michigan.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with and when required under
the applicable provisions of the Uniform Commercial Code, but the
obligations contained in Section 2.17 of this Agreement shall
survive termination. Until terminated, the security interest
created by this Agreement shall continue in full force and effect
and shall secure and be applicable to all advances now or later
made by Bank to Debtor, whether or not Debtor is indebted to Bank
immediately prior to the time of any advance, and to all other
Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement
shall automatically continue or be reinstated, as the case may
be, in the event that (a) any payment received or credit given by
the Bank in respect of the Indebtedness is returned, disgorged or
rescinded as a preference, impermissible setoff, fraudulent
conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation,
laws pertaining to bankruptcy or insolvency, in which case this
Agreement shall be enforceable against Debtor as if the returned,
disgorged or rescinded payment or credit had not been received or
given, whether or not the Bank relied upon this payment or credit
or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Bank
relating to the environmental condition of, or the presence of
Hazardous Materials on, in or about, any Property given as
Collateral to the Bank whether this condition is known or
unknown, now exists or subsequently arises (excluding only
conditions which arise after any acquisition by the Bank of any
such Property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful act or omission of
the Bank), in which case this Agreement shall be enforceable to
the extent of all liability, costs and expenses (including
without limit reasonable attorney fees) incurred by the Bank as
the direct or indirect result of any environmental condition or
Hazardous Materials. In the event of continuation or
reinstatement of this Agreement, Debtor agree(s) upon demand by
the Bank to execute and deliver to the Bank those documents which
the Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or reinstatement,
although the failure of Debtor to do so shall not affect in any
way the reinstatement or continuation. If Debtor does not
execute and deliver to the Bank upon demand such documents, the
Bank and each Bank officer is irrevocably appointed (which
appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) to execute
and deliver such documents in the name and on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and
assigns and to any other holder who derives from Bank title to or
an interest in the Indebtedness or any portion of it, and shall
bind Debtor and the heirs, legal representatives, successors and
assigns of Debtor.
5.5 If there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.6 In addition to Bank's other rights, any indebtedness owing from
Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to it at
least ten days before the date of the act shall be reasonable
notice of the act and, specifically, reasonable notification of
the time and place of any public sale or of the time after which
any private sale, lease or other disposition is to be made,
unless a shorter notice period is reasonable under the
circumstances. A notice shall be deemed to be given under this
Agreement when delivered to Debtor or when placed in an envelope
addressed to Debtor and deposited, with postage prepaid, in a
post office or official depository under the exclusive care and
custody of the United States Postal Service. The mailing shall
be registered, certified, or first class mail.
5.9 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power under this Agreement, shall preclude other or
further exercise of the rights and powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No waiver, consent, modification or change of the terms of this
Agreement shall bind the Debtor or the Bank unless in writing and
signed by the waiving party or an authorized officer of the
waiving party, and then this waiver, consent, modification or
change shall be effective only in the specific instance and for
the specific purpose given.
5.13 This Agreement constitutes the entire agreement of Debtor and
Bank with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate payment
of any or all of that Indebtedness at any time(s), whether or not
an Event of Default has occurred.
6. Statement of Business Name, Residence and Location of Collateral.
Debtor warrants, covenants and agrees as follows:
6.1 Debtor's principal residence is located at 96 High Ridge Road,
West Hartford, Connecticut, 06117 in the County of Hartford.
6.2 [Reserved]
6.3 Any other residence of Debtor is indicated below: None.
6.4 Debtor's correct legal name is set forth at the end of this
Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by
law shall be given to, or made upon, Debtor at the address
indicated in Section 6.1 above, with a copy to:
John P. Redding
DT Chase Enterprises
One Commercial Plaza
Hartford, Connecticut 06103
and to:
Kronish, Lieb, Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036
Attention: Chet F. Lipton, Esq.
6.6 The Collateral (or any records concerning the Collateral) will be
kept at Debtor's address(es) above and/or in the County of
Hartford.
Mailing Address: DT Chase Enterprises, One Commercial Plaza, Hartford,
CT 06103.
6.7 Debtor will give Bank not less than ninety (90) days prior
written notice of all contemplated changes in Debtor's name,
identity, corporate structure, and/or any of the above addresses,
but the giving of this notice shall not cure any default caused
by this change.
7. JURY WAIVER.
7.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
8. Special Provisions Applicable to this Agreement.
8.1 If at any time the value of the Collateral consisting of the
money market investment account described in Exhibit "A" hereto
("Cash Collateral Account") and the shares of stock described in
Exhibit "A" hereto ("Pledged Shares"), as such value is
determined from time to time in the sole, but reasonable
discretion of Bank, is less than fifty percent (50%) of the
outstanding principal balance of the Indebtedness ("Collateral
Value Requirement"), Debtor shall, upon ten (10) days prior
written notice from Bank, pay or cause to be paid to Bank an
amount sufficient to reduce the Indebtedness such that the value
of the Collateral is equal to or greater than fifty percent (50%)
of the outstanding principal balance of the Indebtedness. Bank
shall apply payments made under this paragraph in payment of the
Indebtedness in such order and manner of application as Bank in
its sole discretion elects. In the alternative, Debtor may, at
his election, provide or cause to be provided to Bank additional
collateral in the form of cash or other property acceptable to
Bank and with a value, as determined by Bank, that when added to
the Collateral will constitute compliance with the Collateral
Value Requirement. Shares of capital stock of Accel
International Corporation and The United Illuminating Company
shall be deemed acceptable additional collateral, provided that,
in the Bank's sole discretion, there is no material adverse
change in the value of such shares after the date of this
Agreement.
8.2 If the value of the Collateral consisting of the Cash Collateral
Account and the Pledged Shares, as determined by Bank in its sole
but reasonable discretion, at any time exceeds seventy-five
percent (75%) of the outstanding principal balance of the
Indebtedness, Debtor may remove Pledged Shares from the Brokerage
Account (as defined in Exhibit "A" hereto), provided that the
quantity of shares of each type of stock to be removed is
acceptable to the Bank in its sole discretion, and provided
further that after such removal, the value of such Collateral
shall not be less than 75% of the outstanding principal balance
of the Indebtedness.
8.3 Subject to Section 8.1, and provided there is no Event of
Default, Debtor may withdraw from the Brokerage Account dividends
paid in the ordinary course of business on account of the Pledged
Shares.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Dated and delivered on this 30th day of December, 1997 at Detroit,
Michigan.
WITNESS:
/S/ [ILLEGIBLE] /S/ DAVID T. CHASE
David T. Chase
/S/ SCOTT UNSWORTH
STATE OF CT )
)
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30 day of
December, 1997 by David T. Chase.
/S/ SCOTT UNSWORTH
Notary Public
_________County, ______________
My Commission expires: _________
SCOTT D. UNSWORTH
NOTARY PUBLIC
MY COMMISSION EXPIRES OCT. 31, 1998
EXHIBIT 3
NOTICE TO FINANCIAL INTERMEDIARY OF SECURITY
INTEREST IN SECURITIES AND BROKERAGE ACCOUNT
TO: Comerica Securities, Inc.
100 Renaissance Center
13th Floor
Mail Code 3089
Detroit, Michigan 48243
The undersigned is the registered or present owner(s) of the following
securities ("Securities") that you hold in Account No. ORJ-605727
("Account") for the undersigned:
1,000,000 shares of Accel International Corporation
100,000 shares of The United Illuminating Company
On December 30, 1997, the undersigned granted a security interest in
the Securities, the Account, all cash, securities or other financial assets
at any time deposited in the Account and any brokerage accounts substituted
therefor and the proceeds of all of the above (collectively, the
"Collateral") to Comerica Bank of 500 Woodward Avenue, MC 3239, Detroit,
Michigan 48226, taxpayer identification no. 38-0477375 ("Secured Party")
pursuant to a Security Agreement, a copy of which is attached hereto. The
Secured Party has required that the undersigned obtain your confirmation
that you will hold the Collateral subject to the security interest in favor
of the Secured Party.
Until you receive written instructions to the contrary from the
Security Party, you shall not sell, transfer or take any action with
respect to any of the Collateral, notwithstanding any direction by the
undersigned to the contrary. You are authorized and directed to follow the
instructions of the Secured Party with respect to Collateral or any part
thereof. The Secured Party will notify you when its security interest in
the Collateral has been terminated.
Please sign the enclosed Confirmation to confirm that you hold the
Collateral subject to the security interest in favor of the Secured Party
and that you have identified the Collateral in your records as being
subject to the security interest. Please deliver or send the Confirmation
to the Secured Party at the following address:
<PAGE>
Comerica Bank, 500 Woodward Avenue, MC 3239, Detroit, Michigan 48226, attn:
Eric Rolf ((313) 222-4865).
WITNESSES: Very truly yours,
/S/ [ILLEGIBLE] /S/ DAVID T. CHASE
David T. Chase
/S/ SCOTT UNSWORTH
One Commercial Plaza
Hartford, CT 06103
Taxpayer ID No.__________________
Dated: December 30, 1997
Signature Guaranteed:
/S/ [ILLEGIBLE], V.P. NEAL CHORNEY
(Name of Guarantor)
By:/S/ [ILLEGIBLE]
(Authorized Signature)
Title:
STATE OF CT )
)SS.
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30 day of
December, 1997, by David T. Chase.
/S/ SCOTT UNSWORTH
Notary Public
_____________ County, __________
My commission expires:___________
SCOTT D. UNSWORTH
Notary Public
My Commission Expires Oct. 31, 1998
