SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and entered into as of the 13th day of
November, 1995, by PEREGRINE SYSTEMS, INC., a Delaware corporation ("DEBTOR"),
whose address is 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, in favor
of NATIONSBANK OF TEXAS, N.A., a national banking association ("SECURED PARTY"),
whose address is 700 Louisiana, X.X. Xxx 0000, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx
00000-0000.
W I T N E S S E T H:
WHEREAS, pursuant to a Loan Agreement (as may be modified and amended
from time to time, the "LOAN AGREEMENT") dated of even date herewith, by and
between Debtor and Secured Party, Debtor has executed (a) a Promissory Note in
the maximum principal amount of $2,200,000.00, and (b) a Revolving Promissory
Note in the maximum principal amount of $4,000,000.00, each dated of even date
herewith and made payable to the order of Secured Party (collectively as each
may be renewed, modified, increased, replaced, substituted, and rearranged, the
"NOTES"); and
WHEREAS, Secured Party has conditioned its funding of the Notes upon,
among other things, the execution and delivery by Debtor of this Security
Agreement, and Debtor has agreed to enter into this Security Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees
with Secured Party as follows:
ARTICLE I
GENERAL TERMS
Section 1.1 TERMS DEFINED ABOVE. As used in this Security
Agreement, the terms "LOAN AGREEMENT," "DEBTOR," "SECURED PARTY," and "NOTES"
shall have the respective meanings indicated above.
Section 1.2 CERTAIN DEFINITIONS. As used in this Security
Agreement, the following terms shall have the following meanings unless the
context otherwise requires:
"ACCOUNTS" shall mean all accounts receivable, book debts, notes,
drafts, instruments, documents, acceptances, and other forms of obligations
now owned or hereafter received or acquired by or belonging or owing to the
Debtor (including, without limitation, under any trade names, styles, or
divisions thereof), whether arising from the sale or lease of goods or the
rendition of services or any other transaction (including, without
limitation, any such obligation which might be characterized as an account,
general intangible, other
than contract rights under contracts containing prohibitions against
assignment of or the granting of a security interest in the rights of a
party thereunder, or chattel paper under the Uniform Commercial Code in
effect in any jurisdiction), and all rights of the Debtor in, to, and under
all purchase orders now owned or hereafter received or acquired by it for
goods or services, and all rights of the Debtor to any goods the sale or
lease of which gave rise to any of the foregoing (including, without
limitation, returned or repossessed goods and rights of unpaid sellers),
and all moneys due or to become due to the Debtor under all contracts for
the sale or lease of goods or the performance of services (whether or not
earned by performance) or in connection with any other transaction, now in
existence or hereafter arising, including, without limitation, all
collateral security and guarantees of any kind given by any Person with
respect to any of the foregoing.
"CHATTEL PAPER" shall mean all chattel paper (as such term is defined
in Section 9-105(a)(2) of the UCC) of Debtor.
"COLLATERAL" shall have the meaning set forth in Section 2.1 hereof.
"DOCUMENTS" shall mean all documents (as such term is defined in
Section 9-105(a)(6) of the UCC) of Debtor.
"EQUIPMENT" shall mean all (a) goods classified as "equipment," in
Section 9.109(2) of the UCC, (b) vehicles, and (c) rolling stock of the
Debtor, now owned or hereafter acquired, together with all accessions,
improvements, attachments, and other additions thereto and substitutes and
replacements therefor, and all tools, parts, and appurtenances now or at
any time hereafter used in connection therewith.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in the
Loan Agreement.
"FIXTURES" shall mean all goods which are "fixtures" under and for
purposes of Section 9.313 of the UCC.
"GENERAL INTANGIBLES" shall mean the right to use (only to the extent
necessary for Secured Party to dispose of the other Collateral as provided
for in this Security Agreement) all general intangibles (as such term is
defined in Section 9-106 of the UCC) of Debtor, including, without
limitation, rights to the payment of money, trademarks, copyrights,
patents, contracts, licenses, and franchises (excluding contracts,
licenses, and franchises which prohibit the assignment or grant of a
security interest by Debtor), limited and general partnership interests and
joint venture interests, federal income tax refunds, trade names,
distributions on certificated securities and uncertificated securities,
computer programs and other computer software, inventions, designs, trade
secrets, goodwill, proprietary rights, customer lists, supplier contracts,
sale orders, correspondence, advertising materials, payments due in
connection with
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any requisition, confiscation, condemnation, seizure or forfeiture of any
property, reversionary interests in pension and profit-sharing plans, and
reversionary, beneficial, and residual interests in trusts, credits with
and other claims against any person, together with any collateral for any
of the foregoing and the rights under any security agreement granting a
security interest in such collateral.
"HAZARDOUS MATERIALS" shall mean any substance, materials, or waste
which is or becomes regulated by any governmental authority including, but
not limited to, (i) petroleum; (ii) asbestos; (iii) polychlorinated
biphenyls; (iv) those substances, materials or wastes designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act or
listed pursuant to Section 307 of the Clean Water Act or any amendments or
replacements to these statutes; (v) those substances, materials or wastes
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act or any amendments or replacements to that
statute; or (vi) those substances, materials, or wastes defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, or any amendments
or replacements to that statute.
"INSTRUMENTS" shall mean all instruments (as such term is defined in
Section 9-105(a)(9) of the UCC) of Debtor.
"INVENTORY" shall mean all of Debtor's inventory, whether now owned or
hereafter acquired and wherever located, including but not limited to, all
goods intended for sale or lease by Debtor, or for display or
demonstration; all work in process; all raw materials and other materials
and supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed
in Debtor's business; and all documents evidencing and general intangibles
relating to any of the foregoing.
"INVESTMENT PROPERTY" shall mean investment property (as such term is
defined in Section 9.115 of the UCC) of Debtor.
"RELATED RIGHTS" shall mean all Chattel Paper, Documents and/or
Instruments relating to the Accounts, Fixtures, the Inventory, the
Investment Property, and the General Intangibles and all rights now or
hereafter existing in and to all security agreements, leases, and other
contracts securing or otherwise relating to the Accounts, Fixtures, the
Inventory, the Investment Property, or the General Intangibles or any such
Chattel Papers, Documents, and/or Instruments.
"SECURITY AGREEMENT" shall mean this Security Agreement, as the same
as may be amended, modified, restated, or supplemented from time to time.
"TRANSFER" shall have the meaning set forth in Section 4.1.
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"UCC" shall mean the Uniform Commercial Code in effect at any time in
the State of Texas.
Section 1.3 TERMS DEFINED IN UCC. All terms used herein which are
defined in the UCC shall have the same meaning herein unless the context
otherwise requires.
ARTICLE II
SECURITY INTEREST
Section 2.1 GRANT OF SECURITY INTEREST. Debtor hereby pledges,
assigns, conveys, transfers, and grants to Secured Party a security interest in,
general lien upon, and right of set-off against the following described personal
property of Debtor, whether now owned or existing or hereafter acquired or
arising and wherever located (the "COLLATERAL"):
(a) all of Debtor's Accounts, Fixtures, Inventory, Equipment, Chattel
Paper, Documents, Investment Property, and General Intangibles, and all
Related Rights; and
(b) all proceeds, cash proceeds, cash equivalents, products,
replacements, additions and improvements to, substitutions for, and
accessions of any and all property described in Subsection (a) of this
Section 2.1.
Section 2.2 OBLIGATIONS SECURED. The security interest in, general
lien upon, and right of set-off against the Collateral is granted to secure the
performance of all obligations of Debtor whether now existing or hereafter
arising, under or in connection with the Notes (and any amendments,
modifications, restatements, or substitutions thereof) and all other Obligations
(as such term is defined in the Loan Agreement)(collectively, the "SECURED
OBLIGATIONS").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Security Agreement,
Debtor represents and warrants to Secured Party (which representations and
warranties will survive the execution of this Security Agreement) that:
Section 3.1 OWNERSHIP AND LIENS. Except for the security interest
of Secured Party granted in this Security Agreement, Debtor, owns good and
indefeasible title to the Collateral, free and clear of any other liens,
security interest, adverse claims, or options. Debtor has full right, power,
and authority to grant to Secured Party a security interest in the legal and
beneficial title in and to the Collateral in the manner provided herein, free
and clear of any other liens, security interests, adverse claims, and options.
No other lien, security interest, adverse claim, or option has been created by
any Debtor or is known by any Debtor to exist with respect
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to any Collateral. Debtor has the right to transfer the legal and beneficial
interest purported to be transferred under this Security Agreement; the
Collateral is not subject to the interest of any third person, except as herein
provided; and Debtor will defend the Collateral and its proceeds against the
claims and demands of all third persons.
Section 3.2 LOCATION OF DEBTOR AND COLLATERAL. Debtor's place of
business is located at the address set forth in the opening paragraph of this
Security Agreement. Currently, Debtor's Equipment and Inventory are located in
California, and all of Debtor's Accounts are billed from and made payable in
California.
Section 3.3 SECURED PARTY'S SECURITY INTEREST. This Security
Agreement creates a valid and binding security interest in the Collateral
securing the Secured Obligations. All filings described in Section 4.6 of
this Security Agreement and other actions necessary to perfect or protect
such security interest in all applicable jurisdictions have been duly taken
or will be taken in due time in accordance with applicable law. No further
or subsequent filing, recording, registration, or other public notice is
necessary in any office or jurisdiction in order to perfect or to continue,
preserve or protect such security interest except for continuation statements.
Section 3.4 HAZARDOUS MATERIALS. Neither Debtor nor, to the best
of Debtor's knowledge, any other party has used, generated, released,
discharged, stored, or disposed of any Hazardous Materials in a concentration in
excess of applicable legal requirements, and Debtor shall not commit or permit
such actions to be taken in the future.
ARTICLE IV
COVENANTS AND AGREEMENTS
Debtor will at all times comply with the covenants contained in this
Article IV from the date hereof and for so long as any part of the Secured
Obligations is outstanding.
Section 4.1 TITLE: PROHIBITED LIENS AND FILINGS. Debtor agrees to
protect the title to the Collateral and to defend the same against all claims
and demands of all persons or entities claiming any interest therein adverse to
Secured Party. Debtor will not pledge, mortgage, encumber, create, or suffer a
lien to exist on any of the Collateral, or sell, assign, lend, rent, lease, or
otherwise transfer or dispose of (collectively called "TRANSFER") any of the
Collateral to or in favor of any person or entity other than Secured Party.
Debtor will not file or execute or permit to be filed or recorded any financing
statement or other security instrument with respect to the Collateral other than
in favor of Secured Party.
Section 4.2 POSSESSION OF COLLATERAL. Secured Party shall be
deemed to have possession of any of the Collateral in transit to it or set apart
for it. Otherwise the Collateral shall remain in Debtor's constructive
possession and control at all times, at Debtor's risk of loss, and shall be kept
at the locations represented in Section 3.2 hereof or as otherwise disclosed to
Secured Party in accordance with the terms of the Loan Agreement.
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Section 4.3 FILINGS BY SECURED PARTY. Debtor hereby authorizes
Secured Party to execute and deliver on behalf of Debtor and to file
financing statements, without the signature of Debtor, either in Secured
Party's name or in the name of Debtor and as agent and attorney-in-fact for
Debtor. Upon payment in full of the Secured Obligations, Secured Party will
execute UCC-3 termination statements, terminating the security interest
created under this Security Agreement.
Section 4.4 FILING REPRODUCTIONS. At the option of Secured Party,
a photocopy or other reproduction of this Security Agreement or of a financing
statement covering the Collateral shall be sufficient and may be filed as a
financing statement.
Section 4.5 DELIVERY OF INFORMATION. Debtor will promptly transmit
to Secured Party all information that Debtor may have or receive with respect to
the Collateral which might in any way materially affect the value of the
Collateral or Secured Party's rights or remedies with respect thereto.
Section 4.6 FINANCING STATEMENT FILINGS: NOTIFICATIONS. Debtor
recognizes that financing statements pertaining to the Collateral have been or
will be filed with the office of the Secretary of State of the State of Texas
and in all other jurisdictions necessary to perfect the security interests
granted hereby. Debtor will immediately notify Secured Party of any condition
or event that may change the proper location for the filing of any financing
statements or other public notice or recordings for the purpose of perfecting a
security interest in the Collateral. Without limiting the generality of the
foregoing, Debtor will: (a) notify Secured Party within a reasonable period of
time in advance of any change to a jurisdiction other than as represented in
Section 3.2 hereof, (i) in the location of the Debtor's place of business, (ii)
in the location of the office where Debtor keeps its records concerning the
original of all the Related Rights, or (iii) in the "location" of Debtor within
the meaning of Section 9-103(c) of the UCC: and (b) immediately notify Secured
Party of any change in Debtor's name. In any notice furnished pursuant to this
Section, Debtor will expressly state that the notice is required by this
Security Agreement and contains facts that will or may require additional
filings of financing statements or other notices for the purpose of continuing
perfection of Secured Party's security interest in the Collateral.
Section 4.7 RENEWAL. This Security Agreement is, in part, executed
in renewal and extension of security interests granted and created by, and in
complete restatement, of the Security Agreement dated August 15, 1990, executed
by Debtor in favor of Secured Party.
ARTICLE V
RIGHTS, REMEDIES AND DEFAULT
Section 5.1 RIGHTS AND REMEDIES WITH RESPECT TO COLLATERAL. Upon
the happening and during the continuance of any Event of Default, Secured Party
is hereby fully authorized and empowered (without the necessity of any further
consent or authorization from Debtor) and the right is expressly granted to
Secured Party, and Debtor hereby appoints and
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makes Secured Party as Debtor's true and lawful attorney-in-fact and agent for
Debtor and in Debtor's name, place, and stead with full power of substitution,
in Secured Party's name or Debtor's name or otherwise, for Secured Party's use
and benefit, but at Debtor's cost and expense, to exercise, without notice, all
or any of the following powers at any time with respect to all or any of the
Collateral: (a) notify account debtors or the obligers on the Related Rights to
make and deliver payment and/or provide performance directly to Secured Party;
(b) demand, xxx for, collect, receive, and give acquittance for any and all
moneys due or to become due by virtue of the Collateral, and otherwise deal with
proceeds; (c) receive, take, endorse, assign and deliver any and all checks,
notes, drafts, documents and other negotiable and non-negotiable instruments and
chattel paper and Related Rights taken or received by Secured Party in
connection therewith; (d) settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto; (e) deal in or with the Collateral as
fully and effectively as if Secured Party were the absolute owner thereof; and
(f) extend or alter the time or manner of payment or performance of any or all
thereof, grant waivers and make any allowance or other adjustment with reference
thereto; PROVIDED, HOWEVER, Secured Party shall be under no obligation or duty
to exercise any of the powers hereby conferred upon it and shall be without
liability for any act or failure to act in connection with the collection of, or
the preservation of any rights under or the depreciation in value of, any
Collateral. Debtor hereby irrevocably authorizes and directs each person or
entity who shall be a party to or liable for the performance or payment of any
of the Related Rights, upon receipt of written notice from Secured Party to pay
or otherwise perform or accept performance of the obligations under the Related
Rights to, with or for Secured Party directly, and to continue to do so until
otherwise notified by Secured Party. Each such person or entity shall have no
duty to inquire or investigate as to whether an Event of Default shall have
actually occurred or whether this Security Agreement shall have terminated, and
no such person or entity shall be liable to Debtor or its successors or assigns
for acting in reliance on Secured Party's notification as provided in this
Section.
Section 5.2 ADDITIONAL DEFAULT REMEDIES. Without limiting any of
the above powers, to the extent permitted by applicable law, Secured Party
may, upon the happening and during the continuance of any Event of Default,
apply, set-off, collect, sell in one or more sales, lease, or otherwise
Transfer any or all of the Collateral, in its then condition or following any
commercially reasonable preparation or processing, in such order as Secured
Party may elect, and any such sale may be made either at public or private
sale at its place of business or elsewhere, or at any brokers' board or
securities exchange, either for cash or upon credit or for future delivery,
at such price as Secured Party may deem fair, and Secured Party may be the
purchaser of any or all of the Collateral so sold and may hold the same
thereafter in its own right, free from any claim of Debtor or right of
redemption. No such purchase or holding by Secured Party shall be deemed a
retention by Secured Party in satisfaction of the Secured Obligations. All
demands, notices, and advertisements, and the presentment of property at
sale, are hereby waived. If, notwithstanding the foregoing provisions, any
applicable provisions of the UCC or other applicable law requires Secured
Party to give reasonable notice of any such sale or disposition or other
action, and reasonable notice is not defined in such law, Debtor hereby
agrees that five days' prior written notice shall constitute reasonable
notice. Secured Party may require Debtor to assemble the Collateral and make
it available to Secured Party at a place designated by Secured Party which is
reasonable convenient to Secured Party and Debtor. To the extent permitted
by applicable law, any sale hereunder may be conducted by an auctioneer
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or any officer or agent of Secured Party. After an Event of Default, Secured
Party shall have the right to take possession of any or all of the Collateral
and to take possession of all books, records, documents, information,
agreements, and other property of Debtor or in Debtor's possession or control
relating to the Collateral, and for such purpose may enter upon any premises
upon which any of the Collateral or any of such books, records, information,
agreements or other property are situated and remove the same therefrom without
any liability for trespass or damages occasioned thereby.
Section 5.3 PROCEEDS. After the happening of any Event of Default,
the proceeds of any sale or other Transfer of the Collateral and all sums
received or collected by Secured Party from or on account of the Collateral
shall be applied by Secured Party in the manner set forth in Section 9.504 of
the UCC (unless otherwise required by any other applicable law). In connection
with the exercise of Secured Party's rights hereunder, Debtor hereby grants to
Secured Party, after the happening of an Event of Default, the right to receive,
change the address for delivery, open, and dispose of mail addressed to Debtor
(to the extent that it relates to the Collateral), and to execute, assign and
endorse negotiable and other instruments, documents or other evidence of
payment, shipment, storage, or Transfer for any form of Collateral on behalf of
and in the name of Debtor.
Section 5.4 DEFICIENCY. Debtor shall remain liable to Secured
Party for any unpaid Secured Obligations, advances, costs, charges, and expenses
incurred by Secured Party in connection herewith, together with interest
thereon, and shall pay the same immediately to Secured Party at Secured Party's
offices.
Section 5.5 SECURED PARTY'S DUTIES. The powers conferred upon
Secured Party by this Security Agreement are solely to protect Secured Party's
interest in the Collateral, and shall not impose any duty upon Secured Party to
exercise any such powers. Secured Party shall be under no duty whatsoever to
make or give any presentment, demand for performance, notice of nonperformance,
protest, notice of protest, notice of dishonor, notice of intent to accelerate,
notice of acceleration, or other notice or demand in connection with any
Collateral or the Secured Obligations, except as specifically provided in this
Security Agreement and the Loan Agreement, or to take any steps necessary to
preserve any rights against prior parties. Secured Party shall not be liable
for failure to collect or realize upon the Collateral, or for any delay in so
doing, nor shall Secured Party be under any duty to take action whatsoever with
regard thereto. Secured Party shall use reasonable care in the custody and
preservation of any Collateral in its possession but need not take any steps to
keep the Collateral identifiable. Secured Party shall have no duty to comply
with any recording, filing or other legal requirements necessary to establish or
maintain the validity, priority or enforceability of, or Secured Party's rights
in, any of the Collateral.
Section 5.6 SECURED PARTY'S ACTIONS. Debtor waives (i) any right
to require Secured Party to proceed against any person or entity, exhaust any
Collateral, or have any person or entity joined with Debtor in any suit arising
out of the Secured Obligations or this Security Agreement or pursue any other
remedy in Secured Party's power; (ii) any and all notice of acceptance of this
Security Agreement or of creation, modification, rearrangement, renewal or
extension for any period of any of the Secured Obligations from time to time;
and (iii) any
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defense arising by reason of any disability or other such defense. All
dealings between Debtor and Secured Party, whether or not in connection with
the Secured Obligations, shall conclusively be presumed to have been had or
consummated in reliance upon this Security Agreement. Until all the Secured
Obligations shall have been paid in full, Debtor shall have no right to
subrogation, and Debtor waives any benefit of and any right to participate in
any Collateral or security whatsoever now or hereafter held by Secured Party.
Debtor authorizes Secured Party, without notice or demand and without any
reservation of rights against Debtor and without affecting Debtor's liability
hereunder or on the Secured Obligations, from time to time to (a) take and
hold any other property as collateral, other than the Collateral, as security
for any or all of the Secured Obligations, and exchange, enforce, waive and
release any or all of the Collateral or such other property; (b) apply the
Collateral or such other property and direct the order or manner of sale
thereof as Secured Party, in its discretion, may determine; (c) renew, extend
for any period, accelerate, modify, compromise, settle, or release the
obligation of any person or entity with respect to any or all of the Secured
Obligations or the Collateral; and (d) waive, enforce, modify, amend, or
supplement any of the provisions of this Security Agreement or either of the
Notes.
Section 5.7 TRANSFER OF OBLIGATIONS AND COLLATERAL. Secured Party may
transfer any or all of the Secured Obligations, and upon any such transfer
Secured Party may transfer any or all of the Collateral and shall be fully
discharged thereafter from all liability with respect to the Collateral so
transferred, and the Transferee shall be vested with all rights, powers and
remedies of Secured Party hereunder with respect to Collateral so
transferred. With respect to any Collateral not so transferred, Secured Party
shall retain all rights, powers, and remedies hereby given. Secured Party may
at any time deliver any or all of the Collateral to Debtor whose receipt
shall be a complete and full acquittance for the Collateral so delivered, and
Secured Party shall thereafter be discharged from any liability therefor.
Section 5.8 CUMULATIVE SECURITY. The execution and delivery of this
Security Agreement in no manner shall impair or affect any other security (by
endorsement or otherwise) for the Secured Obligations. No security taken
hereafter as security for the Secured Obligations shall impair in any manner
or affect this Security Agreement. All such present and future additional
security is to be considered as cumulative security.
Section 5.9 CONTINUING AGREEMENT. This is a continuing agreement, and
the grant of a security interest hereunder shall remain in full force and
effect. All the rights of Secured Party hereunder shall continue to exist
until (i) the Secured Obligations are paid in full as the same becomes due
and payable; and (ii) Secured Party, upon request of Debtor, has executed a
written termination statement reassigning to Debtor, without recourse, the
Collateral and all rights conveyed hereby and returning possession of the
Collateral, if applicable, to Debtor. Otherwise this Security Agreement shall
continue irrespective of the fact that the liability of Debtor or any other
person or entity may have ceased, or irrespective of the validity or
enforceability of the Notes or any other note or any other loan document to
which Debtor or any other person or entity may be a party, and
notwithstanding the reorganization or bankruptcy of Debtor or any other
person or entity, or any other event or proceeding affecting Debtor or any
other person or entity.
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Section 5.10 RIGHTS UNDER UNIFORM COMMERCIAL CODE. Regardless of
whether the Uniform Commercial Code is in effect in the jurisdiction where such
rights under this Security Agreement are asserted, Secured Party shall have the
rights, powers and remedies of a secured party under the UCC or any similar law
in any other jurisdiction whose laws are applicable. Secured Party may exercise
its right of set-off with respect to the Secured Obligations in the same manner
as if the Secured Obligations were unsecured. Without limitation of the
foregoing, Secured Party may directly offset against the Secured Obligations any
amounts due Debtor under or in connection with the Notes or any other note, or
any future agreement or contract between Debtor and Secured Party.
Section 5.11 EXERCISE OF RIGHTS, ETC. Time shall be of the essence
for the performance of any act under this Security Agreement or the Secured
Obligations by Debtor, but neither Secured Party's acceptance of partial or
delinquent payments nor any forbearance, failure or delay be Secured Party in
exercising any right shall be deemed a waiver of any obligation of Debtor or of
any right of Secured Party or preclude any other or further exercise thereof;
and no single or partial exercise of any right shall preclude any other or
further exercise thereof, or the exercise of any other right.
Section 5.12 REMEDY AND WAIVER. Secured Party may remedy any Event
of Default and may waive any Event of Default without waiving the Event of
Default remedied or waiving any prior or subsequent Event of Default.
Section 5.13 NON-JUDICIAL REMEDIES. To the fullest extent permitted
by law, Secured Party may enforce its rights hereunder without prior judicial
process or judicial hearing, and Debtor expressly waives, renounces, and
knowingly relinquishes any and all legal rights which might otherwise require
Secured Party to enforce its rights by judicial process. In so providing for
non-judicial remedies, Debtor recognizes that such remedies are consistent with
the usage of the trade, are responsive to commercial necessity and are the
result of bargain at arm's length. Nothing herein is intended to prevent
Secured Party or Debtor from resorting to judicial process at either party's
option.
ARTICLE VI
MISCELLANEOUS
Section 6.1 PRESERVATION OF LIABILITY. Neither this Security
Agreement nor the exercise by Secured Party of (or the failure to so exercise)
any right conferred herein or by law shall be construed as relieving any person
or entity liable on the Secured Obligations from liability on the Obligations
and for any deficiency thereon.
Section 6.2 SURVIVAL OF AGREEMENTS. All representations and
warranties of Debtor herein, and all covenants and agreements herein not fully
performed before the effective date of this Security Agreement, shall survive
such date.
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Section 6.3 NOTICE. Except as otherwise provided herein, all
notices, demands, requests, and communications permitted or required under this
Agreement shall be delivered in the time and manner as required by the Loan
Agreement.
Section 6.4 AMENDMENT AND WAIVER. This Security Agreement may not
be amended nor may any of its terms be waived except in writing duly signed by
the party against whom enforcement of the amendment or waiver is sought.
Section 6.5 INVALIDITY. If any provision of this Security
Agreement is rendered or declared illegal, invalid, or unenforceable by reason
of any existing or subsequently enacted legislation or by a judicial decision
that has become final, Debtor and Secured Party shall promptly meet and
negotiate substitute provisions for those rendered illegal, invalid, or
unenforceable, but all of the remaining provisions shall remain in full force
and effect.
Section 6.6 SUCCESSORS AND ASSIGNS. The covenants,
representations, warranties, and agreements herein set forth shall be binding
upon Debtor and shall inure to the benefit of Secured Party and its heirs, legal
representatives, successors, and assigns.
Section 6.7 CONFLICTING PROVISIONS. To the extent any
irreconcilable conflicts or inconsistencies exist between the terms of this
Security Agreement and the Loan Agreement, the terms of the Loan Agreement shall
govern and control.
SECTION 6.8 CONSTRUCTION. THIS SECURITY AGREEMENT HAS BEEN MADE IN
AND THE SECURITY INTEREST GRANTED HEREBY IS GRANTED IN, AND EACH SHALL BE
GOVERNED BY THE LAWS OF, THE STATE OF TEXAS (EXCEPT TO THE EXTENT THAT THE LAWS
OF ANY OTHER JURISDICTION GOVERN THE PERFECTION, PRIORITY, OR FORECLOSURE OF THE
SECURITY INTEREST GRANTED HEREBY) AND OF THE UNITED STATES OF AMERICA, AS
APPLICABLE, IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY,
ENFORCEMENT, AND PERFORMANCE.
SECTION 6.9 ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF
AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD,
THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE
FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 6.10 ARBITRATION. ALL CONTROVERSIES, CLAIMS, AND DISPUTES
AMONG THE PARTIES HERETO ARISING UNDER OR IN CONNECTION
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WITH THIS SECURITY AGREEMENT SHALL BE SUBJECT TO THE ARBITRATION PROVISION SET
FORTH IN THE LOAN AGREEMENT.
IN WITNESS HEREOF, Debtor and Secured Party have caused this
instrument to be duly executed as of the date first above written.
DEBTOR:
PEREGRINE SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: XXXXX X. XXXXXX
----------------------------------
Title: CHIEF FINANCIAL OFFICER
---------------------------------
SECURED PARTY:
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxx Xxxxx Xxxxxx
------------------------------------
Xxx Xxxxx Xxxxxx,
Vice President
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