DOMESTIC SUBSIDIARY SECURITY AGREEMENT
THIS DOMESTIC SUBSIDIARY SECURITY AGREEMENT (this "Security Agreement"),
dated as of September [A], 1999 is executed by [_______________], a
[_______________] ("Grantor"), in favor of ABN AMRO BANK N.V., a Netherlands
public company acting through its San Francisco Representative Office, acting as
agent (in such capacity, "Agent") for the financial institutions which are from
time to time parties to the Credit Agreement referred to in Recital A below
(collectively, the "Lenders").
RECITALS
A. Pursuant to an Amended and Restated Credit Agreement, dated as of March
29, 1999 as amended by that certain First Amendment to Amended and Restated
Credit Agreement dated as of August 17, 1999 (as amended, and as further amended
from time to time, the "Credit Agreement"), among Adac Laboratories, a
California corporation ("Borrower"), the Lenders and Agent, the Lenders have
agreed to extend certain credit facilities to Borrower upon the terms and
subject to the conditions set forth therein.
B. The Lenders' obligations to continue to extend the credit facilities to
Borrower under the Credit Agreement are subject, among other conditions, to
receipt by Agent of this Security Agreement, duly executed by Grantor. Grantor
expects to derive substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with Agent, for the ratable benefit of the
Lenders and Agent, as follows:
1. Definitions and Interpretation. When used in this Security Agreement,
the following terms shall have the following respective meanings:
"Account Debtor" shall have the meaning given to that term in
subparagraph 3(g) hereof.
"Agent" shall have the meaning given to that term in the introductory
paragraph hereof.
"Borrower" shall have the meaning given to that term in the
introductory paragraph hereof.
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"Collateral" shall have the meaning given to that term in paragraph 2
hereof.
"Collateral Certificate" shall have the meaning given to that term in
the Credit Agreement.
"Credit Agreement" shall have the meaning given to that term in
Recital A hereof.
"Depositary Bank" shall have the meaning given to that term in
subparagraph 4(e) hereof.
"Equipment" shall have the meaning given to that term in Attachment 1
hereto.
"Grantor" shall have the meaning given to that term in the
introductory paragraph hereof.
"Intermediary" shall have the meaning given to that term in
subparagraph 4(f) hereof.
"Inventory" shall have the meaning given to that term in Attachment 1
hereto.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
"Receivables" shall have the meaning given to that term in Attachment
1 hereto.
"Related Contracts" shall have the meaning given to that term in
Attachment 1 hereto.
"Secured Obligations" shall have the meaning given to that term in the
Credit Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of California from time to time.
Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC. The rules of
construction set forth in Section I of the Credit Agreement shall, to the extent
not inconsistent with the terms of this Security Agreement, apply to this
Security Agreement and are hereby incorporated by reference.
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2. GRANT OF SECURITY INTEREST. As security for the Secured Obligations,
Grantor hereby pledges and assigns to Agent (for the ratable benefit of the
Lenders and Agent) and grants to Agent (for the ratable benefit of the Lenders
and Agent) a security interest in all right, title and interest of Grantor in
and to the property described in Attachment 1 hereto, whether now owned or
hereafter acquired (collectively and severally, the "Collateral"), which
Attachment 1 is incorporated herein by this reference.
3. REPRESENTATIONS AND WARRANTIES. Grantor represents and warrants to the
Lenders and Agent as follows:
(a) Grantor is the legal and beneficial owner of the Collateral (or,
in the case of after-acquired Collateral, at the time Grantor acquires
rights in the Collateral, will be the legal and beneficial owner thereof).
No other Person has (or, in the case of after-acquired Collateral, at the
time Grantor acquires rights therein, will have) any right, title, claim or
interest (by way of Lien, purchase option or otherwise) in, against or to
the Collateral, other than Permitted Liens.
(b) Agent has (or in the case of after-acquired Collateral, at the
time Grantor acquires rights therein, will have) a first priority perfected
security interest in the Collateral to the extent that a security interest
in such Collateral can be perfected by the filing of a financing statement,
and a security interest in all other Collateral, subject to no other Liens
except for Permitted Liens.
(c) All Equipment and Inventory are (i) located at the locations
indicated in item 8 of the Collateral Certificate, (ii) in transit to such
locations or (iii) in transit to a third party purchaser which will become
obligated on a Receivable to Grantor upon receipt. Except for Equipment and
Inventory referred to in clauses (ii) and (iii) of the preceding sentence,
Grantor has exclusive possession and control of the Inventory and
Equipment.
(d) All Inventory has been (or, in the case of hereafter produced
Inventory, will be) produced in compliance with all applicable Governmental
Rules, including the Fair Labor Standards Act (if applicable).
(e) Grantor keeps all records concerning the Receivables and the
originals of all Related Contracts at its chief executive office located at
the address set forth in item 2 of the Collateral Certificate.
(f) Each Receivable is genuine and enforceable against the party
obligated to pay the same (an "Account Debtor") free from any right of
rescission, defense, setoff or discount.
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(g) Each insurance policy maintained by Grantor is validly existing
and is in full force and effect. Grantor is not in default in any material
respect under the provisions of any insurance policy, and there are no
facts which, with the giving of notice or passage of time (or both), would
result in such a default under any provision of any such insurance policy.
(h) The information set forth in the Collateral Certificate is true,
correct and accurate.
4. COVENANTS. Grantor hereby agrees as follows:
(a) Grantor, at Grantor's expense, shall promptly procure, execute and
deliver to Agent all documents, instruments and agreements and perform all
acts which are necessary, or which Agent may reasonably request, to
establish, maintain, preserve, protect and perfect the Collateral, the Lien
granted to Agent therein and the first priority of such Lien (subject to
Permitted Liens) or to enable Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the preceding sentence, Grantor shall (i) procure, execute
and deliver to Agent all stock powers, endorsements, assignments, financing
statements and other instruments of transfer requested by Agent, (ii)
[deliver to Agent promptly upon receipt all originals of Collateral
consisting of instruments, documents and chattel paper in amounts exceeding
$1,000,000 (provided, however, that upon the occurrence of a Default, if
requested by Agent, Grantor shall deliver to Agent promptly upon receipt
all originals of Collateral consisting of instruments, documents and
chattel paper in amounts of less than $1,000,000 but exceeding $100,000)]
{for use in all Domestic Subsidiary Security Agreements other than ADAC
Capital, LLC}[upon the occurrence of a Default, if requested by Agent,
deliver to Agent promptly upon receipt all originals of Collateral
consisting of instruments, documents and chattel paper in amounts exceeding
$1,000,000] {for use in ADAC Capital, LLC Domestic Subsidiary Security
Agreement}and (iii) take such actions as may be necessary or reasonably
requested by Agent to perfect the Lien of Agent in any Collateral
consisting of investment property (including taking the actions required by
Subparagraph 4(f) hereof and, in those jurisdictions where appropriate,
causing such Liens to be recorded or registered in the books of any
financial intermediary or clearing corporation requested by Agent).
(b) Grantor shall not use or permit any Collateral to be used in
violation of (i) any provision of the Credit Agreement, this Security
Agreement or any other Security Document, (ii) any applicable Governmental
Rule where such use might have a Material Adverse Effect, or (iii) any
policy of insurance covering the Collateral.
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(c) Grantor shall pay promptly when due all taxes and other
governmental charges, all Liens and all other charges now or hereafter
imposed upon, relating to or affecting any Collateral.
(d) Without thirty (30) days prior written notice to Agent, Grantor
shall not (i) change Grantor's name or place of business (or, if Grantor
has more than one place of business, its chief executive office), or the
office in which Grantor's records relating to Receivables or the originals
of Related Contracts are kept, (ii) keep Collateral consisting of chattel
paper and documents at any location other than its chief executive office
set forth in item 2 of the Collateral Certificate, or (iii) keep Collateral
consisting of Equipment, Inventory or other goods at any location other
than the locations set forth in item 8 of the Collateral Certificate.
(e) For each deposit account maintained by Grantor, Grantor shall (i)
execute and deliver to the bank or other depository institution at which
such deposit account is maintained (the "Depositary Bank") a Notice of
Security Interest in the form of Attachment 2 hereto and (ii) use its best
efforts to cause the Depositary Bank to execute and deliver to Agent an
Acknowledgment and Agreement in the form set forth in such Notice of
Security Interest (or in any other form acceptable to Agent in its sole
discretion). Without ten (10) days prior written notice to Agent, Grantor
shall not establish any deposit account not set forth in item 15 of the
Collateral Certificate.
(f) For each securities account and commodity account maintained by
Grantor, Grantor shall (i) complete, execute and deliver to the bank,
broker or other Person at which such account is maintained (the
"Intermediary") a Notice of Security Interest in the form of Attachment 3
hereto and (ii) cause the Intermediary to execute and deliver to Agent an
Acknowledgment and Agreement in the form set forth in such Notice of
Security Interest (or in any other form acceptable to Agent in its sole
discretion). Without thirty (30) days prior written notice to Agent,
Grantor shall not establish any securities account or commodity account not
set forth in item 16 of the Collateral Certificate.
(g) If requested by Agent, Grantor shall deposit, or cause to be
deposited, all remittances, checks and other funds (in whatever form)
received with respect to Receivables to a deposit account for which Grantor
has complied with subparagraph 4(e) above and in which Agent has a first
priority perfected security interest.
(h) Grantor shall appear in and defend any action or proceeding which
may affect its title to or Agent's interest in the Collateral if an adverse
decision is reasonably likely to have a Material Adverse Effect.
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(i) If Agent gives value to enable Grantor to acquire rights in or the
use of any Collateral, Grantor shall use such value for such purpose.
(j) Grantor shall keep separate, accurate and complete records of the
Collateral and shall provide Agent with such records and such other reports
and information relating to the Collateral as Agent may reasonably request
from time to time.
(k) Grantor shall not surrender or lose possession of (other than to
Agent), sell, encumber, lease, rent, option, or otherwise dispose of or
transfer any Collateral or right or interest therein except as permitted in
the Credit Agreement, and, notwithstanding any provision of the Credit
Agreement, Grantor shall keep the Collateral free of all Liens except
Permitted Liens.
(l) Grantor shall, if requested by Agent, type, print or stamp
conspicuously on the face of all original copies of all Collateral
consisting of chattel paper and documents in excess of $100,000 not in the
possession of Agent a legend satisfactory to Agent indicating that such
chattel paper and documents are subject to the security interest granted
hereby.
(m) Grantor shall collect, enforce and receive delivery of the
Receivables in accordance with past practice until otherwise notified by
Agent.
(n) Grantor shall comply with all material Requirements of Law
applicable to Grantor which relate to the production, possession,
operation, maintenance and control of the Collateral (including, without
limitation, the Fair Labor Standards Act).
(o) Grantor shall (i) carry and maintain insurance on the Collateral
as required pursuant to Subparagraph 5.02(c) of the Credit Agreement, (ii)
deliver to Agent from time to time, as Agent may request, schedules setting
forth all insurance then in effect, and (iii) deliver to Agent copies of
each policy of insurance which replaces, or evidences the renewal of, each
existing policy of insurance at least fifteen (15) days prior to the
expiration of such policy. Agent shall be named as additional insured or
additional loss payee, as appropriate, on all liability and property
insurance of Grantor and such policies shall contain such additional
endorsements as shall be required by Agent. Prior to the occurrence and the
continuance of an Event of Default, all proceeds of any property insurance
paid as a result of any event or occurrence shall be paid to Grantor. All
proceeds of any property insurance paid after the occurrence and during the
continuance of an Event of Default shall be paid to Agent to be held as
Collateral and applied as provided in the Credit Agreement or, at the
election of the Required Lenders, returned to Grantor.
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5. AUTHORIZED ACTION BY AGENT. Grantor hereby irrevocably appoints Agent as
its attorney-in-fact and agrees that Agent may perform (but Agent shall not be
obligated to and shall incur no liability to Grantor or any third party for
failure so to do) any act which Grantor is obligated by this Security Agreement
to perform, and to exercise such rights and powers as Grantor might exercise
with respect to the Collateral, including, without limitation, the right to (a)
collect by legal proceedings or otherwise and endorse, receive and receipt for
all dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process, preserve and enforce the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any Indebtedness of Grantor
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder; provided, however,
that Agent shall not act pursuant to this appointment or otherwise hereunder
unless an Event of Default has occurred and is continuing. Grantor agrees to
reimburse Agent upon demand for all reasonable costs and expenses, including
attorneys' fees, Agent may incur while acting as Grantor's attorney-in-fact
hereunder, all of which costs and expenses are included in the Secured
Obligations. Grantor agrees that such care as Agent gives to the safekeeping of
its own property of like kind shall constitute reasonable care of the Collateral
when in Agent's possession; provided, however, that Agent shall not be required
to make any presentment, demand or protest, or give any notice and need not take
any action to preserve any rights against any prior party or any other Person in
connection with the Secured Obligations or with respect to the Collateral.
6. DEFAULT AND REMEDIES. Grantor shall be deemed in default under this
Security Agreement upon the occurrence and during the continuance of an Event of
Default, as that term is defined in the Credit Agreement. In addition to all
other rights and remedies granted to Agent by this Security Agreement, the
Credit Agreement, the other Credit Documents, the UCC and other applicable
Governmental Rules, Agent may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies: (a) collect, receive, appropriate or realize upon the Collateral or
otherwise foreclose or enforce Agent's security interests in any or all
Collateral in any manner permitted by applicable Governmental Rules or in this
Security Agreement; (b) notify any or all Account Debtors to make payments on
Receivables directly to Agent; (c) direct any Depositary Bank or Intermediary to
liquidate the account(s) maintained by it, pay all amounts payable in connection
therewith to Agent and/or deliver any proceeds thereof to Agent; (d) sell or
otherwise dispose of any or all Collateral at one or more public or private
sales, whether or not such Collateral is present at the place of sale, for cash
or credit or future delivery, on such terms and in such manner as Agent may
determine; (e) require Grantor to assemble the Collateral and make it available
to Agent at a place to be designated by Agent; (f)
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enter onto any property where any Collateral is located and take possession
thereof with or without judicial process; and (g) prior to the disposition of
the Collateral, store, process, repair or recondition any Collateral consisting
of goods, perform any obligations and enforce any rights of Grantor under any
Related Contracts or otherwise prepare and preserve Collateral for disposition
in any manner and to the extent Agent deems appropriate. In furtherance of
Agent's rights hereunder, Grantor hereby grants to Agent an irrevocable,
non-exclusive license (exercisable without royalty or other payment by Agent) to
use, license or sublicense any patent, trademark, tradename, copyright or other
intellectual property in which Grantor now or hereafter has any right, title or
interest, together with the right of access to all media in which any of the
foregoing may be recorded or stored. In any case where notice of any sale or
disposition of any Collateral is required, Grantor hereby agrees that seven (7)
days notice of such sale or disposition is reasonable.
7. AUTHORIZATIONS, WAIVERS, ETC.
(a) Authorizations. Grantor authorizes Agent and the Lenders, in their
discretion, without notice to Grantor, irrespective of any change in the
financial condition of Borrower, Grantor or any other guarantor of the
Secured Obligations since the date hereof, and without affecting or
impairing in any way the liability of Grantor hereunder, from time to time
to:
(i) Create new Secured Obligations and renew, compromise, extend,
accelerate or otherwise change the time for payment or performance of,
or otherwise amend or modify the Credit Documents or change the terms
of the Secured Obligations or any part thereof, including increase or
decrease of the rate of interest thereon;
(ii) Take and hold security for the payment or performance of the
Secured Obligations and exchange, enforce, waive or release any such
security; apply such security and direct the order or manner of sale
thereof; and purchase such security at public or private sale;
(iii) Otherwise exercise any right or remedy they may have
against Borrower, Grantor, any other guarantor of the Secured
Obligations or any security, including, without limitation, the right
to foreclose upon any such security by judicial or nonjudicial sale;
(iv) Settle, compromise with, release or substitute any one or
more makers, endorsers or guarantors of the Secured Obligations; and
(v) Assign the Secured Obligations, this Security Agreement or
the other Credit Documents in whole or in part to the
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extent provided in the Credit Agreement and the other Credit
Documents.
(b) Waivers. Grantor hereby waives:
(i) Any right to require Agent or any Lender to (A) proceed
against Borrower or any other guarantor of the Secured Obligations,
(B) proceed against or exhaust any security received from Borrower,
Grantor, or any other guarantor of the Secured Obligations or
otherwise marshall the assets of Borrower, Grantor, or any other
guarantor of the Secured Obligations or (C) pursue any other remedy in
Agent's or any Lender's power whatsoever;
(ii) Any defense arising by reason of the application by Borrower
of the proceeds of any borrowing;
(iii) Any defense resulting from the absence, impairment or loss
of any right of reimbursement, subrogation, contribution or other
right or remedy of Grantor against Borrower, any other guarantor of
the Secured Obligations or any security, whether resulting from an
election by Agent or any Lender to foreclose upon security by
nonjudicial sale, or otherwise;
(iv) Any setoff or counterclaim of Borrower or any defense which
results from any disability or other defense of Borrower or the
cessation or stay of enforcement from any cause whatsoever of the
liability of Borrower (including, without limitation, the lack of
validity or enforceability of any of the Credit Documents);
(v) Any defense based upon any law, rule or regulation which
provides that the obligation of a surety must not be greater or more
burdensome than the obligation of the principal;
(vi) Until all obligations of Agent or any Lender to extend
credit to Borrower have terminated and all of the Secured Obligations
have been fully, finally and indefeasibly paid, any right of
subrogation, reimbursement, indemnification or contribution and other
similar right to enforce any remedy which Agent, the Lenders or any
other Person now has or may hereafter have against Borrower on account
of the Secured Obligations, and any benefit of, and any right to
participate in, any security now or hereafter received by Agent, any
Lender or any other Person on account of the Secured Obligations;
(vii) All presentments, demands for performance, notices of
non-performance, notices delivered under the Credit Documents,
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protests, notice of dishonor, and notices of acceptance of this
Security Agreement and of the existence, creation or incurring of new
or additional Secured Obligations and notices of any public or private
foreclosure sale;
(viii) The benefit of any statute of limitations to the extent
permitted by law;
(ix) Any appraisement, valuation, stay, extension, moratorium
redemption or similar law or similar rights for marshalling;
(x) Any right to be informed by Agent or any Lender of the
financial condition of Borrower, any other guarantor of the Secured
Obligations or any change therein or any other circumstances bearing
upon the risk of nonpayment or nonperformance of the Secured
Obligations;
(xi) Until all obligations of Agent or any Lender to extend
credit to Borrower have terminated and all of the Secured Obligations
have been fully, finally and indefeasibly paid, any right to revoke
this Security Agreement;
(xii) Any defense arising from an election for the application of
Section 1111(b)(2) of the United States Bankruptcy Code which applies
to the Secured Obligations;
(xiii) Any defense based upon any borrowing or grant of a
security interest under Section 364 of the United States Bankruptcy
Code;
(xiv) Any right it may have to a fair value hearing to determine
the size of a deficiency judgment following any foreclosure on any
security for the Secured Obligations;
(xv) All rights and defenses arising out of an election of
remedies by Agent or any Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for a Secured Obligation, has destroyed Grantor's rights of
subrogation and reimbursement against Borrower by the operation of
Section 580d of the Code of Civil Procedure or otherwise; and
(xvi) All other rights and defenses available to Grantor by
reason of Sections 2787 to 2855, inclusive, Section 2899 or Section
3433 of the California Civil Code or Section 3605 of the California
Commercial Code.
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Without limiting the scope of any of the foregoing provisions of this
Paragraph 5, and pursuant to the provisions of California Civil Code
Section 2856, Grantor hereby further waives all rights and defenses
that Grantor may have because the Secured Obligations are secured by
real property. This means, among other things:
(A) Agent or any Lender may collect from Grantor without
first foreclosing on any real or personal property collateral
pledged by Borrower.
(B) If Agent or any Lender forecloses on any real property
collateral pledged by Borrower:
(1) The amount of the Secured Obligations may be
reduced only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is worth
more than the sale price.
(2) Agent or any Lender may collect from Grantor even
if Agent or any Lender, by foreclosing on the real property
collateral, has destroyed any right Grantor may have to
collect from Borrower.
This is an unconditional and irrevocable waiver of any rights and
defenses Grantor may have because the Secured Obligations are secured
by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b,
580d, or 726 of the California Code of Civil Procedure.
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(c) Financial Condition of Borrower, Etc. Grantor is fully aware of
the financial condition and affairs of Borrower. Grantor has executed this
Security Agreement without reliance upon any representation, warranty,
statement or information concerning Borrower furnished to Grantor by Agent
or any Lender and has, independently and without reliance on Agent or any
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of the financial condition and affairs
of Borrower and of other circumstances affecting the risk of nonpayment or
nonperformance of the Secured Obligations. Grantor is in a position to
obtain, and assumes full responsibility for obtaining, any additional
information about the financial condition and affairs of Borrower and of
other circumstances affecting the risk of nonpayment or nonperformance of
the Secured Obligations and will, independently and without reliance upon
Agent or any Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action in connection with this Security
Agreement.
8. Miscellaneous.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to
or upon Grantor, any Lender or Agent under this Security Agreement or
the other Credit Documents to which Grantor is a party shall be in
writing and faxed, mailed or delivered, if to Grantor or Agent, at its
respective facsimile number or address set forth below or, if to any
Lender, at the address or facsimile number specified beneath the
heading "Address for Notices" under the name of such Lender in
Schedule I to the Credit Agreement (or to such other facsimile number
or address for any party as indicated in any notice given by that
party to the other parties). All such notices and communications shall
be effective (i) when sent by overnight service of recognized
standing, on the second Business Day following the deposit with such
service; (ii) when mailed, first class postage prepaid and addressed
as aforesaid through the United States Postal Service, upon receipt;
(iii) when delivered by hand, upon delivery; and (iv) when faxed, upon
confirmation of receipt.
Grantor: [__________________________]
c/o ADAC Laboratories
540 Alder Drive
Milpitas, CA 95035
Attn: Ronald Lindberg
Telephone: (408) 321-9100
Facsimile: (408) 321-9686
Agent: ABN AMRO Bank N.V.
101 California Street, Suite 4550
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San Francisco, CA 94111-5812
Attn: Dianne Barkley
Telephone: (415) 984-3706
Facsimile: (415) 362-3524
with a copy to:
ABN AMRO Bank N.V.
1325 Avenue of the Americas, 9th Floor
New York, NY 10017
Attn: Linda Boardman
Telephone: (212) 314-1724
Fax No: (212) 314-1709
(b) Waivers; Amendments. Any term, covenant, agreement or
condition of this Security Agreement may be amended or waived only as
provided in the Credit Agreement. No failure or delay by Agent or any
Lender in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of
any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.
(c) Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of Agent, the Lenders and
Grantor and their respective successors and assigns; provided,
however, that Agent, the Lenders and Grantor may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Credit Agreement. Agent and the Lenders may disclose
this Security Agreement as provided in the Credit Agreement.
(d) Partial Invalidity. If at any time any provision of this
Security Agreement is or becomes illegal, invalid or unenforceable in
any respect under the law or any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this
Security Agreement nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction shall in any
way be affected or impaired thereby.
(e) Cumulative Rights, etc. The rights, powers and remedies of
Agent and the Lenders under this Security Agreement shall be in
addition to all rights, powers and remedies given to Agent and the
Lenders by virtue of any applicable Governmental Rule, the Credit
Agreement, any other Credit Document or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Agent's
rights hereunder. Grantor waives any right to
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require Agent or any Lender to proceed against any Person or to
exhaust any Collateral or to pursue any remedy in Agent's or such
Lender's power.
(f) Payments Free of Taxes, Etc. All payments made by Grantor
under this Security Agreement shall be made by Grantor free and clear
of and without deduction for any and all present and future taxes,
levies, charges, deductions and withholdings. In addition, Grantor
shall pay upon demand any stamp or other taxes, levies or charges of
any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Security Agreement.
Upon request by Agent, Grantor shall furnish evidence satisfactory to
Agent that all requisite authorizations and approvals by, and notices
to and filings with, governmental authorities and regulatory bodies
have been obtained and made and that all requisite taxes, levies and
charges have been paid.
(g) Grantor's Continuing Liability. Notwithstanding any provision
of this Security Agreement or any other Credit Document or any
exercise by Agent of any of its rights hereunder or thereunder
(including, without limitation, any right to collect or enforce any
Collateral), (i) Grantor shall remain liable to perform its
obligations and duties in connection with the Collateral (including,
without limitation, the Related Contracts and all other agreements
relating to the Collateral) and (ii) neither Agent nor any Lender
shall assume any liability to perform such obligations and duties or
to enforce any of Grantor's rights in connection with the Collateral
(including, without limitation, the Related Contracts and all other
agreements relating to the Collateral).
(h) Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the State of California
without reference to conflicts of law rules (except to the extent
otherwise provided in the UCC).
H-2-14
IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be
executed as of the day and year first above written.
[_____________________________]
By:
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Name:
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Title:
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