Exhibit 10.3
[COMERICA LOGO] SECURITY AGREEMENT
(ALL ASSETS)
As of September 5, 2001, for value received, the undersigned ("Debtor")
pledges, assigns and grants to Comerica Bank-Texas, a Texas banking
association ("Bank"), whose address is P. 0. Xxx 000000, Xxxxxx, Xxxxx
00000-0000, Attention: Xxxxx Xxxxx, Mail Code MC 6571, a continuing security
interest and lien (any pledge, assignment, security interest or other lien
arising hereunder is sometimes referred to herein as a "security interest")
in the Collateral (as defined below) to secure payment when due, whether by
stated maturity, demand, acceleration or otherwise, of all existing and
future indebtedness ("Indebtedness") to the Bank of Debtor. Indebtedness
includes without limit any and all obligations or liabilities of the Debtor to
the Bank, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown,
originally payable to the Bank or to a third party and subsequently acquired
by the Bank including, without limitation, any late charges, loan fees or
charges, and overdraft indebtedness, any and all obligations or liabilities
for which the Debtor would otherwise be liable to the Bank were it not for
the invalidity or unenforceability of them by reason of any bankruptcy,
insolvency or other law, or for any other reason; any and all amendments,
modifications, renewals and/or extensions of any of the above; all costs
incurred by Bank in establishing, determining, continuing, or defending the
validity or priority of any security interest, or in pursuing its rights and
remedies under this Agreement or under any other agreement between Bank and
Debtor or in connection with any proceeding involving Bank as a result of any
financial accommodation to Borrower and/or Debtor; and all other costs of
collecting Indebtedness, including without limit attorneys' fees. Debtor
agrees to pay Bank all such costs incurred by the Bank, immediately upon
demand, and until paid all costs shall bear interest at the highest per annum
rate applicable to any of the Indebtedness, but not in excess of the maximum
rate permitted by law. Any reference in this Agreement to attorneys' fees
shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether inside or outside
counsel is used, whether or not a suit or action is instituted, and to court
costs if a suit or action is instituted, and whether attorneys' fees or court
costs are incurred at the trial court level, on appeal, in a bankruptcy,
administrative or probate proceeding or otherwise.
Debtor further covenants, agrees, represents and warrants as follows:
1. COLLATERAL shall mean all of the following property Debtor now or later
owns or has an interest in, wherever located:
(a) all Accounts Receivable (for purposes of this Agreement,
"Accounts Receivable" consists of all accounts, general
intangibles, chattel paper (including without limit electronic
chattel paper and tangible chattel paper), contract rights,
deposit accounts, documents, instruments and rights to
payment evidenced by chattel paper, documents or instruments,
health care insurance receivables, commercial tort claims,
letters of credit, letter of credit rights, supporting
obligations, and rights to payment for money or funds advanced
or sold),
(b) all Inventory,
(c) all Equipment and Fixtures,
(d) all goods, instruments, documents, policies and certificates
of insurance, deposit accounts, money, investment property or
other property (except real property which is not a fixture)
which are now or later in possession or control of Bank, or
as to which Bank now or later controls possession by
documents or otherwise, and
(e) all additions, attachments, accessions, parts, replacements,
substitutions, renewals, interest, dividends, distributions,
rights of any kind (including but not limited to stock splits,
stock rights, voting and preferential rights), products, and
proceeds of or pertaining to the above including, without
limit, cash or other property which were proceeds and are
recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
In the definition of Collateral, a reference to a type of collateral
shall not be limited by a separate reference to a more specific or
narrower type of that collateral. "Collateral" shall EXCLUDE
intellectual property. Intellectual property includes "Proprietary
Information". "Proprietary Information" shall mean trade secrets,
confidential knowledge, data, or any other proprietary information of
the Debtor and each of its subsidiaries or affiliated companies. By
way of illustration but not limitation, "Proprietary Information"
includes (a) inventions, trade secrets, ideas, concepts, processes,
formulas, data, lists, software programs, all other works of
authorship, mask works, proprietary test tooling, know-how,
improvements, discoveries, developments, designs, and techniques
relating to the business or proposed business of the Debtor whether
or not any of the foregoing is or are patentable, copyrightable, or
registrable under any intellectual property laws and (b) information
owned by the Debtor or licensed from third parties regarding plans
for research, development, products, services, marketing and selling,
business plans, budgets and unpublished financial statements, licenses,
prices and costs, suppliers, customers, customer lists (except to the
extent necessary for Bank to perfect or exercise its lien on Debtor's
Accounts Receivable), information regarding the skills and compensation
of other employees of the Debtor and (c) intellectual property of third
parties in Debtor's possession. Notwithstanding anything in this
Security Agreement, the usage of the terms "rights of any kind" or
"general intangibles" will not serve to diminish to exclusion of
Debtor's Intellectual Property rights from the definition of
"Collateral."
2. WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and
agrees as follows:
2.1 Debtor shall furnish to Bank, in form and at intervals as
Bank may request, any information Bank may reasonably request
and allow Bank to examine, inspect, and copy any of Debtor's
books and records. Debtor shall, at the request of Bank, xxxx
its records and the Collateral to clearly indicate the
security interest of Bank under this Agreement.
2.2 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 is the lawful
owner of the Collateral and has the right and authority to
subject it to a security interest granted to Bank; (b) none of
the Collateral is subject to any security interest other than
that in favor of Bank; (c) there are no financing statements
on file, other than in favor of Bank; (d) no person, other
than Bank, has possession or control (as defined in the
Uniform Commercial Code) of any Collateral of such nature that
perfection of a security interest may be accomplished by
control; and (e) Debtor acquired its rights in the Collateral
in the ordinary course of its business.
2.3 Debtor will keep the Collateral free at all times from 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, lease or grant
control to any person other than Bank over, or permit to be
sold, transferred, leased or controlled (by a person other
than Bank), any or all of the Collateral, except for Inventory
in the ordinary course of its business and will not return any
Inventory to its supplier. Bank or its representatives may at
all reasonable times inspect the Collateral and may enter upon
all premises where the Collateral is kept or might be located.
2.4 Debtor will do all acts and will execute or cause to be
executed all writings requested by Bank to establish,
maintain and continue an exclusive, perfected and first
security interest of Bank in the Collateral. Debtor agrees
that 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 may have a lien
or security interest for payment of the Indebtedness.
2.5 Debtor will pay within the time that they can be paid without
interest or penalty all taxes, assessments and similar charges
which at any time are or may become a lien, charge, or
encumbrance upon any 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 lawful
default rate which could be charged by Bank on any
Indebtedness.
2.6 Debtor will keep the Collateral in good condition and will
protect it from loss, damage, or deterioration from any cause.
Debtor has and will maintain at all times (a) with respect to
the Collateral, insurance under an "all risk" policy against
fire and other risks customarily insured against, and (b)
public liability insurance and other insurance as may be
required by law or reasonably required by Bank, all of which
insurance shall be in amount, form and content, and written by
companies as may be satisfactory to Bank, containing a
lender's loss payable endorsement acceptable to Bank. Debtor
will deliver to Bank immediately upon demand evidence
satisfactory to Bank that the required insurance has been
procured. If Debtor fails to maintain satisfactory insurance,
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
lawful default rate which could be charged by Bank on any
Indebtedness. Notwithstanding the foregoing, Borrower is under
no obligation to obtain foreign accounts receivable credit
insurance.
2.7 Debtor will do all commercially reasonable acts and will
execute all writings requested by Bank to perform, enforce
performance of, and collect all Accounts Receivable. Debtor
shall neither make nor permit any modification, compromise or
substitution for any Account Receivable without the prior
written consent of Bank. Debtor shall, at Bank's request,
arrange for verification of Accounts Receivable directly with
account debtors or by other methods acceptable to Bank.
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2.8 Debtor at all times shall be in strict compliance with all
applicable laws, including without limit any laws, ordinances,
directives, orders, statutes, or regulations an object of
which is to regulate or improve health, safety, or the
environment ("Environmental Laws").
2.9 If Bank, acting in its sole discretion, redelivers Collateral
to Debtor or Debtor's designee for the purpose of (a) the
ultimate sale or exchange thereof; or (b) presentation,
collection, renewal, or registration of transfer thereof; or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with it
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 in it or in the proceeds
or products of it 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
immediately delivered to Bank for application on the
Indebtedness. Bank may (in its sole discretion) deliver any or
all of the Collateral to Debtor, and such delivery by Bank
shall discharge Bank from all liability or responsibility for
such Collateral. Bank, at its option, may require delivery of
any Collateral to Bank at any time with such endorsements or
assignments of the Collateral as Bank may request.
2.10 At any time and without notice, Bank may (a) cause any or all
of the Collateral to be transferred to its name or to the name
of its nominees, provided that any such nominee is not a
competitor of Debtor not normally in the business of serving
as a collateral trustee or related activities; (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 Bank; (c) enter
into any 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 pursuant to this Agreement; and (d) take
such actions in its own name or in Debtor's name as Bank, in
its sole discretion, deems necessary or appropriate to
establish exclusive control (as defined in the Uniform
Commercial Code) over any Collateral of such nature that
perfection of the Bank's security interest may be accomplished
by control.
2.11 Bank may assign any of the Indebtedness and deliver any or all
of the Collateral to its assignee, who then shall have with
respect to Collateral so delivered all the rights and powers
of Bank under this Agreement, and after that Bank shall be
fully discharged from all liability and responsibility with
respect to Collateral so delivered.
2.12 Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, affiliates, officers, and
directors from and against any and all claims, damages, fines,
expenses, liabilities or causes of action of whatever kind,
including without limit consultant fees, legal expenses, and
attorneys' fees, suffered by any of them as a direct or
indirect result of any actual or asserted violation of any
law, including, without limit, Environmental Laws, or of any
remediation relating to any property required by any law,
including without limit Environmental Laws, INCLUDING ANY
CLAIMS, DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF
ACTION OF WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE
OR ARISING OUT OF ANY CLAIM OR THEORY OF STRICT LIABILITY,
except and to the extent (but only to the extent) caused by
Bank's gross negligence or wilful misconduct.
3. COLLECTION OF PROCEEDS.
3.1 Debtor agrees to collect and enforce payment of all Collateral
until Bank shall direct Debtor to the contrary. Immediately
upon notice to Debtor by Bank and at all times after that,
Debtor agrees to fully and promptly cooperate and assist Bank
in the collection and enforcement of all Collateral and to
hold in trust for Bank all payments received in connection
with 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 lien or security interest
which Debtor now or later has regarding Collateral.
Immediately upon and after such notice, Debtor agrees to (a)
endorse to Bank and immediately deliver to Bank all payments
received 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 in the Collateral.
Debtor irrevocably authorizes Bank or any Bank employee or
agent to endorse the name of Debtor upon any checks or other
items which are received in payment for any Collateral, and to
do any and all things necessary in order to reduce these items
to money. Bank shall have no duty as to the collection or
protection of Collateral or the proceeds of it, or 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 the Collateral. Nothing in this Section 3.1 shall
be deemed a consent by Bank to any sale, lease or other
disposition of any Collateral.
3.2 Debtor agrees that immediately upon Bank's request, following
the occurrence of an Event of Default, the Indebtedness shall
be on a "remittance basis" as follows: Debtor shall at its
sole expense establish and maintain (and Bank, at Bank's
option may establish and maintain at Debtor's expense): (a) an
United States Post Office lock box (the "Lock Box"), to which
Bank shall have exclusive access and control. Debtor expressly
authorizes Bank, from time to time, to remove contents from
the Lock Box, for disposition in accordance with this
Agreement. Debtor agrees to notify all account debtors and
other parties obligated to Debtor that all payments made to
Debtor (other than payments by electronic funds transfer)
shall be remitted, for the credit of Debtor, to the Lock Box,
and Debtor shall include a like statement on all invoices; and
(b) a non-interest bearing deposit account with Bank which
shall be titled as designated by Bank (the "Cash Collateral
Account") to which Bank shall have exclusive access and
control. Debtor agrees to notify all account debtors and other
parties obligated to Debtor that all payments made to Debtor
by electronic funds transfer shall be remitted to the Cash
Collateral Account, and Debtor, at Bank's request, shall
include a like statement on all invoices. Debtor shall execute
all documents and authorizations as required by Bank to
establish and maintain the Lock Box and the Cash Collateral
Account.
3.3 All items or amounts which are remitted to the Lock Box, to
the Cash Collateral Account, or otherwise delivered by or for
the benefit of Debtor to Bank on account of partial or full
payment of, or with respect to, any Collateral shall, at
Bank's option, (a) be applied to the payment of the
Indebtedness, whether then due or not, in such order or at
such time of application as Bank may determine in its sole
discretion, or, (b) be deposited to the Cash Collateral
Account. Debtor agrees that Bank shall not be liable for any
loss or damage which Debtor may suffer as a result of Bank's
processing of items or its exercise of any other rights or
remedies under this Agreement, including without limitation
indirect, special or consequential damages, loss of revenues
or profits, or any claim, demand or action by any third party
arising out of or in connection with the processing of items
or the exercise of any other rights or remedies under this
Agreement. Debtor agrees to indemnify and hold Bank harmless
from and against all such third party claims, demands or
actions, and all related expenses or liabilities, including,
without limitation, attorneys' fees and INCLUDING CLAIMS,
DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF
WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE OR ARISING
OUT OF ANY CLAIM OR THEORY OF STRICT LIABILITY except to the
extent (but only to the extent) caused by Bank's gross
negligence or willful misconduct.
4. DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.
4.1 Upon the occurrence of any Event of Default (as defined in the
Credit Agreement of even date herewith between, Debtor and
Bank, as from time to time amended modified or restated),
Debtor shall be in default under this Agreement.
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 shall have and
may exercise any right or remedy available to it including, without
limitation, any one or more of the following rights and remedies:
(a) 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;
(b) Institute legal proceedings to foreclose upon 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 Collateral or the proceeds
of any sale of it;
(c) Institute legal proceedings for the sale, under the judgment
or decree of any court of competent jurisdiction, of any or
all Collateral; and/or
(d) Personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where Collateral may
then be located, and take possession of all or any of it
and/or render it unusable; and without being responsible for
loss or damage to such Collateral, hold, operate, sell, lease,
or dispose of all or any 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.
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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 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
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 Collateral under this Agreement shall be a
perpetual bar against Debtor with respect to that Collateral.
At any sale or other disposition of the Collateral pursuant to
this Section 4.2, Bank disclaims all warranties which would
otherwise be given under the Uniform Commercial Code,
including without limit a disclaimer of any warranty relating
to title, possession, quiet enjoyment or the like, and Bank
may communicate these disclaimers to a purchaser at such
disposition. This disclaimer of warranties will not render the
sale commercially unreasonable.
4.3 Debtor shall at the request of Bank, notify the account
debtors or obligors of Bank's security interest in the
Collateral and direct payment of it to Bank. Bank may, itself,
upon the occurrence of any Event of Default so notify and
direct any account debtor or obligor. At the request of Bank,
whether or not an Event of Default shall have occurred, Debtor
shall immediately take such actions as the Bank shall request
to establish exclusive control (as defined in the Uniform
Commercial Code) by Bank over any Collateral which is of such
a nature that perfection of a security interest may be
accomplished by control.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank in such
order as the Bank, in its discretion, deems appropriate
including, without limitation, the following order: first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorneys' 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. Debtor agrees that Secured Party shall be under no
obligation to accept any noncash proceeds in connection with
any sale or disposition of Collateral unless failure to do so
would be commercially unreasonable. If Secured Party agrees in
its sole discretion to accept noncash proceeds (unless the
failure to do so would be commercially unreasonable), Secured
Party may ascribe any commercially reasonable value to such
proceeds. Without limiting the foregoing, Secured Party may
apply any discount factor in determining the present value of
proceeds to be received in the future or may elect to apply
proceeds to be received in the future only as and when such
proceeds are actually received in cash by Secured Party.
4.5 Nothing in this Agreement is intended, nor shall it be
construed, to preclude Bank from pursuing any other remedy
provided by law or in equity for the collection of the
Indebtedness or for the recovery of any other sum to which
Bank may be 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.
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 (a) irrevocably appoints Bank or any 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
and (b) authorizes Bank or any agent of Bank, in its own name,
at Debtor's expense, to do any of the following, as Bank, in
its sole discretion, deems appropriate:
(i) to demand, receive, xxx for, and give receipts or
acquittances for any moneys due or to become due on
any Collateral (including, without limit, to draft
against Collateral) and to endorse any item
representing any payment on or proceeds of the
Collateral;
(ii) to execute and file in the name of and on behalf of
Debtor all financing statements or other filings or
Collateral control agreements deemed necessary or
desirable by Bank to evidence, perfect, or continue
the security interests granted in this Agreement; and
(iii) to do and perform any act on behalf of Debtor
permitted or required under this Agreement.
4.8 Upon the occurrence 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.
4.9 The following shall be the basis for any finder of fact's
determination of the value of any Collateral which is the
subject matter of a disposition giving rise to a calculation
of any surplus or deficiency under Section 9.615 (f) of the
Uniform Commercial Code (a) the Collateral which is the
subject matter of the disposition shall be valued in an "as
is" condition as of the date of the disposition, without any
assumption or expectation that such Collateral will be
repaired or improved in any manner; (b) the valuation shall be
based upon an assumption that the transferee of such
Collateral desires a resale of the Collateral for cash
promptly (but no later than 30 days) following the
disposition; (c) all reasonable closing costs customarily
borne by the seller in commercial sales transactions relating
to property similar to such Collateral shall be deducted
including, without limitation, brokerage commissions, tax
prorations, attorneys' fees, whether inside or outside counsel
is used, and marketing costs; (d) the value of the Collateral
which is the subject matter of the disposition shall be
further discounted to account for any estimated holding costs
associated with maintaining such Collateral pending sale (to
the extent not accounted for in (c) above), and other
maintenance, operational and ownership expenses; and (e) any
expert opinion testimony given or considered in connection
with a determination of the value of such Collateral must be
given by persons having at least 5 years experience in
appraising property similar to the Collateral and who have
conducted and prepared a complete written appraisal of such
Collateral taking into consideration the factors set forth
above. The "value" of any such Collateral shall be a factor in
determining the amount of proceeds which would have been
realized in a disposition to a transferee other than a secured
party, a person related to a secured party or a secondary
obligor under Section 9-615(f) of the Uniform Commercial
Code.
5. MISCELLANEOUS.
5.1 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 first address indicated in Section 5.15 below.
5.2 Debtor will give Bank not less than 30 days (or such longer
period of time as is reasonable under the particular
circumstances) prior written notice of all contemplated
changes in Debtor's name, location, chief executive office,
principal place of business , and/or location of any
Collateral, but the giving of this notice shall not cure any
Event of Default caused by this change.
5.3 Bank assumes no duty of performance or other responsibility
under any contracts contained within the Collateral.
5.4 Bank has the right to sell, assign, transfer, negotiate or
grant participations or any interest in, any or all of the
Indebtedness and any related obligations, including without
limit this Agreement. In connection with the above, but
without limiting its ability to make other disclosures to the
full extent allowable, Bank may disclose all documents and
information which Bank now or later has relating to Debtor,
the Indebtedness or this Agreement, however obtained. Debtor
further agrees that Bank may provide information relating to
this Agreement or relating to Debtor or the Indebtedness to
the Bank's parent, affiliates, subsidiaries, and service
providers.
5.5 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. Any such action shall not
constitute acceptance of collateral in discharge of any
portion of the Indebtedness.
5.6 Debtor, to the extent not expressly prohibited by applicable
law, waives any right to require the Bank to: (a) proceed
against any person or property; (b) give notice of the terms,
time and place of any public or private sale of personal
property security held from Borrower or Debtor or any other
person, or otherwise comply with the provisions of Section
9.611 or 9.621 of the Uniform Commercial Code; or (c) pursue
any other remedy in the Bank's power. Debtor waives notice of
acceptance of this Agreement and presentment, demand, protest,
notice of protest, dishonor, notice of dishonor, notice of
default, notice of intent to accelerate or demand payment or
notice of acceleration of any Indebtedness, any and all other
notices to which the undersigned might otherwise be entitled,
and diligence in collecting any Indebtedness, and agree(s)
that the Bank may, once or any number of times, modify the
terms of any Indebtedness, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all
Indebtedness, or permit Borrower to incur additional
Indebtedness, all without notice to Debtor and without
affecting in any manner the unconditional obligation of Debtor
under this Agreement. Debtor unconditionally and irrevocably
waives each and every defense and setoff of any nature which,
under principles of guaranty or otherwise, would operate to
impair or diminish in any way the obligation of Debtor under
this Agreement, and acknowledges that such waiver is by this
reference incorporated into each security agreement,
collateral assignment, pledge and/or other document from
Debtor now or later securing the Indebtedness, and
acknowledges that as of the date of this Agreement no such
defense or setoff exists.
5.7 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 Debtor
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
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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
or delivered to an overnight courier. The mailing shall be by
overnight courier, certified, or first class mail.
5.8 Notwithstanding any prior revocation, termination, surrender,
or discharge of this Agreement in whole or in part, the
effectiveness of this Agreement shall automatically continue
or be reinstated in the event that any payment received or
credit given by Bank in respect of the Indebtedness is
returned, disgorged, or rescinded under any applicable law,
including, without limitation, bankruptcy or insolvency laws,
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 by Bank, and whether or
not Bank relied upon this payment or credit or changed its
position as a consequence of it. In the event of continuation
or reinstatement of this Agreement, Debtor agrees upon demand
by Bank to execute and deliver to Bank those documents which
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.
5.9 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. Nothing in
this Section 5.9 is deemed a consent by Bank to any assignment
by Debtor.
5.10 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.
5.11 Except as otherwise expressly provided in this Agreement, all
terms in this Agreement which are defined in the Uniform
Commercial Code shall 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 those meanings may
be amended, revised or replaced from time to time. "Uniform
Commercial Code" means the Texas Business and Commerce Code as
amended, revised or replaced from time to time.
Notwithstanding the foregoing, the parties intend that the
terms used herein which are defined in the Uniform Commercial
Code have, at all times, the broadest and most inclusive
meanings possible. Accordingly, if the Uniform Commercial Code
shall in the future be amended or held by a court to define
any term used herein more broadly or inclusively than the
Uniform Commercial Code in effect on the date of this
Agreement, then such term, as used herein, shall be given such
broadened meaning. If the Uniform Commercial Code shall in the
future be amended or held by a court to define any term used
herein more narrowly, or less inclusively, than the Uniform
Commercial Code in effect on the date of this Agreement, such
amendment or holding shall be disregarded in defining terms
used in this Agreement.
5.12 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. The unenforceability of any provision of this
Agreement shall not affect the enforceability of the remainder
of this Agreement. This Agreement constitutes the entire
agreement of Debtor and Bank with respect to the subject
matter of this Agreement. No amendment or modification of this
Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of
Bank. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
5.13 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.
5.14 Debtor represents and warrants that Debtor's exact name is the
name set forth in this Agreement. Debtor further represents
and warrants the following and agrees that Debtor is, and at
all times shall be, located in the following place :
Debtor is a registered organization which is organized under
the laws of one of the states comprising the United States
(e.g. corporation, limited partnership, registered limited
liability partnership or limited liability company), and
Debtor is located (as determined pursuant to the Uniform
Commercial Code) in the state under the laws of which it was
organized, which is (street address, state and county or
parish): Delaware.
If Collateral is located at other than the address specified
above, such Collateral is located and shall be maintained at
Lantana Xxxx. 0 and Lantana Bldg. 2,, 7000 W. Wm. Xxxxxx, Suite 210
-------------------------------------------------------------------
STREET ADDRESS
Xxxxxx XX 00000
-------------------------------------------------------------------
CITY STATE ZIP CODE COUNTY
Collateral shall be maintained only at the locations identified in
this Section 5.14.
5.15 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.
5.16 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable
provisions of the Uniform Commercial Code, but the obligations
contained in Section 2.12 of this Agreement shall survive
termination.
5.17 Debtor agrees to reimburse the Bank upon demand for any and
all costs and expenses (including, without limit, court costs,
legal expenses and reasonable attorneys' fees, whether inside
or outside counsel is used, whether or not suit is instituted
and, if suit is instituted, whether at the trial court level,
appellate level, in a bankruptcy, probate or administrative
proceeding or otherwise) incurred in enforcing or attempting
to enforce this Agreement or in exercising or attempting to
exercise any right or remedy under this Agreement or incurred
in any other matter or proceeding relating to this Security
Agreement.
6. 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.
7. THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS
DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE)
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
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8. SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)
DEBTOR: BANK:
Silicon Laboratories Inc. COMERICA BANK-TEXAS, a Texas
---------------------------- banking association
Debtor Name Typed/Printed
By: /s/ Xxxxxxx Xxxxx
------------------------------- By: /s/ Xxxxx X. Xxxxx
Signature of: Xxxxxxx Xxxxx ----------------------------
---------------------- Signature of: Xxxxx X. Xxxxx
Its: Chief Executive Officer ----------------
----------------------------- Its: Vice President
Title (If applicable) ---------------------------
Title (If applicable)
By: /s/ Xxxx X. XxXxxxxx
--------------------------------
Signature of: Xxxx X. XxXxxxxx
----------------------
Its: Chief Financial Officer
-------------------------------
Title (If applicable)
5
