THE SECURED PARTY ACCEPTS THE FIRST OFFER
RECEIVED AND DOES NOT OFFER SUCH COLLATERAL TO MORE THAN ONE OFFEREE.
THE
SECURED PARTY SHALL NOT BE LIABLE FOR ANY INCORRECT OR IMPROPER PAYMENT MADE
PURSUANT TO THIS SECTION IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(D)
PLEDGOR RECOGNIZES THAT, BY REASON OF
CERTAIN PROHIBITIONS CONTAINED IN THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND APPLICABLE STATE SECURITIES LAW, THE SECURED PARTY MAY BE
COMPELLED, WITH RESPECT TO ANY SALE OF ALL OR ANY PART OF THE COLLATERAL, TO
LIMIT PURCHASERS TO PERSONS WHO WILL AGREE, AMONG OTHER THINGS, TO ACQUIRE THE
COLLATERAL FOR THEIR OWN ACCOUNT, FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE THEREOF.
PLEDGOR ACKNOWLEDGES THAT ANY SUCH PRIVATE
SALES MAY BE AT PRICES AND ON TERMS LESS FAVORABLE TO THE SECURED PARTY THAN
THOSE OBTAINABLE THROUGH A PUBLIC SALE WITHOUT SUCH RESTRICTIONS (INCLUDING,
WITHOUT LIMITATION, A PUBLIC OFFERING MADE PURSUANT TO A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT), AND, NOTWITHSTANDING SUCH CIRCUMSTANCES, AGREES THAT
ANY SUCH PRIVATE SALE SHALL BE DEEMED TO HAVE BEEN MADE IN A COMMERCIALLY
REASONABLE MANNER AND THAT THE SECURED PARTY SHALL HAVE NO OBLIGATION TO ENGAGE
IN PUBLIC SALES AND NO OBLIGATION TO DELAY THE SALE OF ANY
5
COLLATERAL FOR THE PERIOD OF TIME NECESSARY TO PERMIT THE ISSUER THEREOF TO
REGISTER IT FOR A FORM OF PUBLIC SALE REQUIRING REGISTRATION UNDER THE
SECURITIES ACT OR UNDER APPLICABLE STATE SECURITIES LAWS, EVEN IF SUCH ISSUER
WOULD AGREE TO DO SO.
SECTION 3.3
APPLICATION OF PROCEEDS.
ALL
DISTRIBUTIONS HELD FROM TIME TO TIME BY THE SECURED PARTY AND ALL PROCEEDS
RECEIVED BY THE SECURED PARTY IN RESPECT OF ANY SALE OF, COLLECTION FROM, OR
OTHER REALIZATION UPON ALL OR ANY PART OF THE COLLATERAL PURSUANT TO THE
EXERCISE BY THE SECURED PARTY OF ITS REMEDIES AS A SECURED CREDITOR AS PROVIDED
HEREIN SHALL BE APPLIED, TOGETHER WITH ANY OTHER SUMS THEN HELD BY THE SECURED
PARTY PURSUANT TO THIS PLEDGE AGREEMENT, PROMPTLY BY THE SECURED PARTY AS
FOLLOWS:
FIRST, TO THE PAYMENT OF ALL COSTS AND EXPENSES, FEES, COMMISSIONS AND TAXES OF
SUCH SALE, COLLECTION OR OTHER REALIZATION, INCLUDING, WITHOUT LIMITATION,
COMPENSATION TO THE SECURED PARTY AND ITS AGENTS AND COUNSEL, AND ALL EXPENSES,
LIABILITIES AND ADVANCES MADE OR INCURRED BY THE SECURED PARTY IN CONNECTION
THEREWITH, TOGETHER WITH INTEREST ON EACH SUCH AMOUNT AT THE HIGHEST RATE THEN
IN EFFECT UNDER THE SURPLUS NOTE PURCHASE AGREEMENT FROM AND AFTER THE DATE SUCH
AMOUNT IS DUE, OWING OR UNPAID UNTIL PAID IN FULL;
SECOND, WITHOUT DUPLICATION OF AMOUNTS APPLIED PURSUANT TO CLAUSE FIRST ABOVE,
TO THE INDEFEASIBLE PAYMENT IN FULL IN CASH OF THE SECURED OBLIGATIONS IN
ACCORDANCE WITH THE TERMS OF THE SURPLUS NOTE PURCHASE AGREEMENT; AND
THIRD, THE BALANCE, IF ANY, TO THE PERSONS LAWFULLY ENTITLED THERETO (INCLUDING
PLEDGOR OR ITS SUCCESSORS OR ASSIGNS).
SECTION 3.4
EXPENSES.
PLEDGOR WILL UPON
DEMAND PAY TO THE SECURED PARTY THE AMOUNT OF ANY AND