-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F5tUpaYDG8KaVW9pWAHWvBZrCaNLIsBhwpZMEK5HpZO/Csqgy0uEPpWlgPb6ElYy lK3zgQ/J9Ux+Zytzddc25A== 0000906602-98-000025.txt : 19980212 0000906602-98-000025.hdr.sgml : 19980212 ACCESSION NUMBER: 0000906602-98-000025 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980211 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ACCEL INTERNATIONAL CORP CENTRAL INDEX KEY: 0000001985 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 310788334 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-33042 FILM NUMBER: 98532126 BUSINESS ADDRESS: STREET 1: 475 METRO PLACE N CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147647000 MAIL ADDRESS: STREET 1: 475 METRO PLACE NORTH CITY: DUBLIN STATE: OH ZIP: 43017 FORMER COMPANY: FORMER CONFORMED NAME: ACCELERATION CORP DATE OF NAME CHANGE: 19870814 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHASE DAVID T CENTRAL INDEX KEY: 0001047023 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O CHASE ENTERPRISEA STREET 2: ONE COMMERCIAL PLAZA CITY: HARTFORD STATE: CT ZIP: 06103 BUSINESS PHONE: 8605491674 MAIL ADDRESS: STREET 1: C/O CHASE ENTERPRISES STREET 2: ONE COMMERCIAL PLAZA CITY: HARTFORD STATE: CT ZIP: 06103 SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* ACCEL International Corporation - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.10 per share - ------------------------------------------------------------------------------- (Title of Class of Securities) 004299 10 3 - ------------------------------------------------------------------------------- (CUSIP Number) William H. Cuddy, Esq. Day, Berry & Howard CityPlace I, Hartford, Connecticut 06103-3499 (860) 275-0100 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 24, 1997 ------------------------------------------------------------------------- (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). 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! 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 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 EX-99.1 2 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 EX-99.2 3 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. [THIS PAGE INTENTIONALLY LEFT BLANK] 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 EX-99.3 4 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: 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 -----END PRIVACY-ENHANCED MESSAGE-----