COMMERCIAL SECURITY AGREEMENT
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Borrower: MEDIVISION - MEDICAL IMAGING LTD. Lender: Bank Leumi Le-Israel, B.M.
X.X. Xxx 00 c/o Bank Leumi U.S.A.
Industrial Park 8383 Wilshire Blvd. Suite 400
Xxxxxx Hatamar Xxxxxxx Xxxxx, XX 00000
Yokneam Elit, Israel
Grantor: OPHTHALMIC IMAGING SYSTEMS
000 Xxxxxxx Xxx, Xxxxx 0
Xxxxxxxxxx, XX 00000
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THIS COMMERCIAL SECURITY AGREEMENT dated April 30, 2003, is made and executed
among OPHTHALMIC IMAGING SYSTEMS ("Grantor"); MEDIVISION - MEDICAL IMAGING LTD.
("Borrower"); and Bank Leumi Le-Israel, B.M. ("Lendor").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lendor shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this
Agreement:
ALL INVENTORY, CHATTEL PAPER, ACCOUNTS AND GENERAL INTANGIBLES.
In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements of and additions to any of the collateral described
herein, whether added now or later.
(B) All products and produce of any of the property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral
section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's
Insurer, whether due to judgment, settlement or other process.
(E) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition,
COMMERCIAL SECURITY AGREEMENT
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if because of the type of any Property, Lender is required to give a notice of
the right to cancel under Truth in Lending for the Indebtedness, then Lender
will not have a security interest in such Collateral unless and until such a
notice is given.
CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures all
obligations, debts and liabilities, plus interest thereon, of Borrower to
Lender, or any one or more of them, as well as all claims by Lender against
Borrower or any one or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, direct or indirect, determined or
undetermined, absolute or contingent, liquidated or unliquidated whether
Borrower or Grantor may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and whether
recovery upon such amounts may be or hereafter may become barred by any statute
of limitations, and whether the obligation to repay such amounts may be or
hereafter may become otherwise unenforceable.
BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this
Agreement or by applicable law, (A) Borrower agrees that Lender need not tell
Borrower about any action or inaction Lender takes in connection with this
Agreement; (B) Borrower assumes the responsibility for being and keeping
informed about the Collateral; and (C) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without limitation
any failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral; and Borrower agrees to remain liable under the
Note no matter what action Lender takes or fails to take under this Agreement.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (A) this
Agreement is executed at Borrower's request and not at the request of Lender;
(B) Grantor has the full right, power and authority to enter into this Agreement
and to pledge the Collateral to Lender; (C) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (D) Lender has made no representation to
Grantor about Borrower and Borrower's creditworthiness.
GRANTOR'S WAIVERS. Except as prohibited by applicable law, Grantor waives any
right to require Lender to (A) make any presentment, protest, demand, or notice
or any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional Indebtedness; (B) proceed against
any person, including Borrower, before proceeding against Grantor; (C) proceed
against any collateral for the Indebtedness, including Borrower's collateral,
before proceeding against Grantor; (D) apply any payments or proceeds received
against the Indebtedness in any order; (E) give notice of the terms, time, and
place of any sale of any collateral pursuant to the Uniform Commercial Code or
any other law governing such sale; (F) disclose any information about the
Indebtedness, the Borrower, any collateral, or any other guarantor or surety, or
about any action or nonaction of Lender; or (G) pursue any remedy or course of
action in Lender's power whatsoever.
Grantor also waives any and all rights or defenses arising by reason of (A) any
disability or other defense of Borrower, any other guarantor or surety or any
other person; (B) the cessation from any cause whatsoever, other than payment in
full, of the Indebtedness; (C) the application of proceeds of the Indebtedness
by Borrower for purposes other than the purposes understood and intended by
Grantor and Lender; (D) any act of omission or commission by Lender which
directly or indirectly results in or contributes to the discharge of Borrower or
any other guarantor or surety, or the Indebtedness, or the loss or release of
any collateral by operation of law or otherwise; (E) any modification or change
in terms of the Indebtedness, whatsoever, including without limitation, the
renewal, extension, acceleration, or other change in the time payment of the
Indebtedness is due and any change in the interest rate.
Grantor waives all rights and defenses arising out of an election of remedies by
Lender even though that election of remedies, such as a non-judicial foreclosure
with respect to security for a guaranteed obligation, has destroyed Grantor's
rights of subrogation and reimbursement against Borrower by operation of Section
580d of the California Code of Civil Procedure or otherwise.
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COMMERCIAL SECURITY AGREEMENT
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Grantor waives all rights and defenses that Grantor may have because Borrower's
obligation is secured by real property. This means among other things: (1)
Lender may collect from Grantor without first foreclosing on any real property
collateral pledged by Borrower; and (2) if Lender forecloses on any real
property collateral pledged by the Borrower: (A) The amount of the Borrower's
obligation may be reduced only by the price for which the collateral is sold at
the foreclosure sale, even if the collateral is worth more than the sale price;
(B) The Lender may collect from the Grantor even if the Lender, by foreclosing
on the real property collateral, has destroyed any right the Grantor may have to
collect from the borrower. This is an unconditional waiver of any rights and
defenses the Grantor may have because the Borrower's obligation is secured by
real property. These rights and defenses include, but are not limited to, any
rights and defenses based upon Sections 580a, 580b, 580d, or 728 of the Code of
Civil Procedure.
Grantor understands and agrees that the foregoing waivers are unconditional and
irrevocable waivers of substantive rights and defenses to which Grantor might
otherwise be entitled under state and federal law. Grantor further understands
and agrees that this Agreement is a separate and independent contract between
Grantor and Lender, given for full and ample consideration, and is enforceable
on its own terms. Grantor acknowledges that Grantor has provided these waivers
of rights and defenses with the intention that they be fully relied upon by
Lender. Until all Indebtedness is paid in full, Grantor waives any right to
enforce any remedy Grantor may have against Borrower or any other guarantor,
surety, or other person, and further, Grantor waives any right to participate in
any collateral for the Indebtedness now or hereafter held by Lender.
RIGHT OF SETOFF. To the extent permitted by [. . .],checking, savings, or some
other account). This includes all accounts Grantor holds jointly with someone
else and all accounts Grantor may open in the future. However, this does not
include any XXX or Xxxxx accounts, or any trust accounts for which setoff would
be prohibited by law. Grantor authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute financing
statements and to take whatever other actions are requested by Lender
to perfect and continue Lender's security interest in the Collateral.
Upon request of Lender, Grantor will deliver to Lender any and all of
the documents evidencing or constituting the Collateral, and Grantor
will note Lender's interest upon any and all chattel paper if not
delivered to Lender for possession by Lender. This is a continuing
Security Agreement and will continue in effect even though all or any
part of the Indebtedness is paid in full or even though for a period of
time Borrower may not be indebted to Lender.
NOTICES TO LENDER. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's name;
(2) change in Grantor's assumed business name(s); (3) change in the
management of the Corporation Grantor; (4) change in the authorized
signer(s); (5) change in Grantor's principal office address; (6) change
in Grantor's state of organization; (7) conversion of Grantor to a new
or different type of business entity; or (8) change in any other aspect
of Grantor that directly or indirectly relates to any agreements
between Grantor and Lender. No change in Grantor's name or state of
organization will take effect until after Lender has received notice.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party, and its certificate or articles of incorporation and bylaws do
not prohibit any term or condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance
with its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral
have authority
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and capacity to contract and are in fact obligated as they appear to be
on the Collateral. At the time any Account becomes subject to a
security interest in favor of Lender, the Account shall be a good and
valid account representing an undisputed, bona fide Indebtedness
incurred by the account debtor, for merchandise held subject to
delivery instructions or previously shipped or delivered pursuant to a
contract of sale, or for services previously performed by Grantor with
or for the account debtor. So long as this Agreement remains in effect,
Grantor shall not, without Lender's prior written consent, compromise,
settle, adjust, or extend payment under or with regard to any such
Accounts. There shall be no setoffs or counterclaims against any of the
Collateral, and no agreement shall have been made under which any
deductions or discounts may be claimed concerning the Collateral except
those disclosed to Lender in writing.
LOCATION OF THE COLLATERAL. Except in the ordinary course of Grantor's
business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general
intangibles, the records concerning the Collateral) at Grantor's
address shown above or at such other locations as are acceptable to
Lender. Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral
locations relating to Grantor's operations, including without
limitation the following: (1) all real property Grantor owns or is
purchasing; (2) all real property Grantor is renting or leasing; (3)
all storage facilities Grantor owns, rents, leases, or uses; and (4)
all other properties where Collateral is or may be located.
REMOVAL OF THE COLLATERAL. Except in the ordinary course of Grantor's
business, including the sales of inventory, Grantor shall not remove
the Collateral from its existing location without Lender's prior
written consent. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit
any action which would require application for certificates of title
for the vehicles outside the State of California, without Lender's
prior written consent. Grantor shall, whenever requested, advise Lender
of the exact location of the Collateral.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell, offer
to sell, or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A
sale in the ordinary course of Grantor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale.
TITLE. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral, free and clear of all
liens and encumbrances except for the lien of this Agreement. No
financing statement covering any of the Collateral is on file in any
public office other than those which reflect the security interest
created by this Agreement or to which Lender has specifically
consented. Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
REPAIRS AND MAINTENANCE. Grantor agrees to keep and maintain, and to
cause others to keep and maintain, the Collateral in good order, repair
and condition at all times while this Agreement remains in effect.
Grantor further agrees to pay when due all claims for work done on, or
services rendered or material furnished in connection with the
Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
INSPECTION OF COLLATERAL. Lender and Lender's designated
representatives and agents shall have the right at all reasonable times
to examine and inspect the Collateral wherever located.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long
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COMMERCIAL SECURITY AGREEMENT
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as Lender's interest in the Collateral is not jeopardized in Lender's
sole opinion. If the Collateral is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit with Lender
cash, a sufficient corporate surety bond or other security satisfactory
to Lender in an amount adequate to provide for the discharge of the
lien plus any interest, costs, attorneys' fees or other charges that
could accrue as a result of foreclosure or sale of the Collateral. In
any contest Grantor shall defend itself and Lender and shall satisfy
any final adverse judgment before enforcement against the Collateral.
Grantor shall name Lender as an additional obligee under any surety
bond furnished in the contest proceedings. Grantor further agrees to
furnish Lender with evidence that such taxes, assessments, and
governmental and other charges have been paid in full and in a timely
manner. Grantor may withhold any such payment or may elect to contest
any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereunder in effect, applicable to the
ownership, production, disposition, or use of the Collateral, including
all laws or regulations relating to the undue erosion of
highly-erodible land or relating to the conversion of wetlands for the
production of an agricultural product or commodity. Grantor may contest
in good faith any such law, ordinance or regulation and withhold
compliance during any proceeding, including appropriate appeals, so
long as Lender's interest in the Collateral, in Lender's opinion, is
not jeopardized.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of
any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Collateral for Hazardous Substances. Grantor hereby (1) releases and
waives any future claims against Lender for indemnity or contribution
in the event Grantor becomes liable for cleanup or other costs under
any Environmental Laws, and (2) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a breach of
this provision of this Agreement. This obligation to indemnity shall
survive the payment of the Indebtedness and the satisfaction of this
Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without
at least ten (10) days' prior written notice to Lender and not
including any disclaimer of the insurer's liability for failure to give
such a notice. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Grantor or any other person. In
connection with all policies covering assets in which Lender holds of
is offered a security interest, Grantor will provide Lender with such
loss payable or other endorsements as Lender may require. If Grantor at
any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such
insurance as Lender deems appropriate, including if Lender so chooses
"single interest insurance," which will cover only Lender's interest in
the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender
of any loss or damage to the Collateral. Lender may make proof of loss
if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance [. . .] thereon, shall be held by Lender as
part of the Collateral. If Lender consents to repair or replacement of
the damaged or destroyed Collateral, Lender shall, upon satisfactory
proof of expenditure, pay or reimburse Grantor from the proceeds for
the reasonable cost of repair or restoration. If Lender does not
consent to repair or replacement of the Collateral, Lender shall retain
a sufficient amount of the
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COMMERCIAL SECURITY AGREEMENT
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proceeds to pay all of the Indebtedness, and shall pay the balance to
Grantor. Any proceeds which have not been disbursed within six (6)
months after their receipt and which Grantor has not committed to the
repair or restoration of the Collateral shall be used to prepay the
Indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender
to be sufficient to produce, at least fifteen (15) days before the
premium due date, amounts at least equal to the insurance premiums to
be paid. If fifteen (15) days before payment is due, the reserve funds
are insufficient, Grantor shall upon demand pay any deficiency to
Lender. The reserve funds shall be held by Lender as a general deposit
and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by
Grantor as they become due. Lender does not hold the reserve funds in
trust for Grantor, and Lender is not the agent of Grantor for payment
of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor's sole
responsibility.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of
the policy; (4) the property insured; (5) the then current value on the
basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
FINANCING STATEMENTS. Grantor authorizes Lender to file a UCC-1
financing statement, or alternatively, a copy of this Agreement to
perfect Lender's security interest. At Lender's request, Grantor
additionally agrees to sign all other documents that are necessary to
perfect, protect, and continue Lender's security interest in the
Property. Grantor irrevocably appoints Lender to execute financing
statements and documents of title in Grantor's name and to execute all
documents necessary to transfer title if there is a default. Lender may
file a copy of this Agreement as a financing statement. If Grantor
changes Grantor's name or address, or the name or address of any person
granting a security interest under this Agreement changes, Grantor will
promptly notify the Lender of such change.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.
LENDER'S EXPENDITURE. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests,
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encumbrances and other claims, at any time levied or placed on the Collateral
and paying all costs for insuring, maintaining and preserving the Collateral.
All such expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Grantor. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
PAYMENT DEFAULT. Borrower fails to make any payment when due under the
Indebtedness.
OTHER DEFAULTS. Borrower or Grantor fails to comply with or to perform
any other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with or to
perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower or Grantor.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Grantor's
property or Borrower's or any Grantor's ability to repay the
Indebtedness or perform their respective obligations under this
Agreement or any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Borrower or Grantor or on Borrower's or
Grantor's behalf under this Agreement or the Related Documents is false
or misleading in any material respect, either now or at the time made
or furnished or becomes false or misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Borrower's or Grantor's
existence as a going business, the insolvency of Borrower or Grantor,
the appointment of a receiver for any part of Borrower's or Grantor's
property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower or Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or
Grantor or by any governmental agency against any collateral securing
the Indebtedness. This includes a garnishment of any of Borrower's or
Grantor's accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute
by Borrower or Grantor as to the validity of reasonableness of the
claim which s the basis of the creditor or forfeiture proceeding and if
Borrower or Grantor gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety bond
for the creditor or forfeiture proceeding, in an amount determined by
Lender, in its sole discretion, as being an adequate reserve or bond
for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to Guarantor of any of the Indebtedness or Guarantor dies or
becomes incompetent or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
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ADVERSE CHANGE. A material adverse change occurs in Borrower's or
Grantor's financial condition, or Lender believes the prospect of
payment or performance of the Indebtedness is impaired.
INSECURITY. Lender in good faith believes itself insecure.
CURE PROVISIONS. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of a breach of the
same provision of this Agreement within the preceding twelve (12)
months, it may be cured (and no event of default will have occurred) if
Grantor, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within fifteen (15) days; or (2) if
the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient
to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon
as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the California Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
including any prepayment penalty which Borrower would be required to
pay, immediately due and payable, without notice of any kind to
Borrower or Grantor.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession of
and remove the Collateral. If the Collateral contains other goods not
covered by this Agreement a the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes reasonable
efforts to return them to Grantor after repossession.
SELL THE COLLATERAL. Lender shall have the full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
Lender's own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale [. . .] the time and place of any public
sale, or the time after which any private sale or any other disposition
of the Collateral is to be made. However, no notice need be provided to
any person who, after Event of Default occurs, enters into and
authenticates an agreement waiving that person's right to notification
of sale. The requirements of reasonable notice shall be met if such
notice is given at least ten (10) days before the time of the sale or
disposition. All expenses relating to the disposition of the
Collateral, including without limitation the expenses of retaking,
holding, insuring, preparing for sale and selling the Collateral, shall
become a part of the Indebtedness secured by this Agreement and shall
be payable on demand, with interest at the Note rate from date of
expenditure until repaid.
APPOINT RECEIVER. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Collateral, with
the power to protect and preserve the Collateral, to operate the
Collateral preceding foreclosure or sale, and to collect the Rents from
the Collateral and apply the proceeds, over and above the cost of the
receivership, against the Indebtedness. The receiver may serve without
bond if permitted by law, Lender's right to the appointment of a
receiver shall exist whether or not the apparent value of the
Collateral exceeds the Indebtedness by a substantial amount. Employment
by Lender shall not disqualify a person from serving as a receiver.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion transfer
any Collateral into Lender's own name or that of Lender's nominee and
receive the payments, rents, income, and revenues
8
COMMERCIAL SECURITY AGREEMENT
(Continued)
--------------------------------------------------------------------------------
therefrom and hold the same as security for the Indebtedness or apply
it to payment of the Indebtedness in such order of preference as Lender
may determine. Insofar as the Collateral consists of accounts, general
intangibles, insurance policies, instruments, chattel paper, choses in
action, or similar property, Lender may demand, collect, receipt for,
settle, compromise, adjust, xxx for, foreclose or realize on the
Collateral as Lender may determine, whether or not Indebtedness or
Collateral is then due. For these purposes, Lender may, on behalf of
and in the name of Grantor, receive, open and dispose of mail addressed
to Grantor; change any address to which mail and payments are to be
sent; and endorse notes, checks, drafts, money orders, documents of
title, instruments and items pertaining to payments, shipment, or
storage of any Collateral. To facilitate collection, Lender may notify
account debtors and obligors on any Collateral to make payments
directly to Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Borrower for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Borrower shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and remedies
it may have available at law, in equity, or otherwise.
ELECTION OF REMEDIES. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to
perform an obligation of Grantor under this Agreement, after Grantor's
failure to perform, shall not affect Lender's right to declare a
default and exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
ATTORNEYS' FEES; EXPENSES. All the expenses below will be in force only
if the Company files for Chapter 11. Grantor agrees to pay upon demand
all of Lender's costs and expenses, including Lender's attorneys' fees
and Lender's legal expenses, incurred in connection with the
enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Grantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional
fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
GOVERNING LAW. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
California. This Agreement has been accepted by Lender in the State of
California.
CHOICE OF VENUE. If there is a lawsuit, Grantor agrees upon Lender's
request to submit to the jurisdiction of the courts of Sacramento
County, State of California.
9
COMMERCIAL SECURITY AGREEMENT
(Continued)
--------------------------------------------------------------------------------
JOINT AND SEVERAL LIABILITY. All obligations of Borrower and Grantor
under this Agreement shall be joint and several, and all references to
Grantor shall mean each and every Grantor, and all references to
Borrower shall mean each and every Borrower. This means that each
Borrower and Grantor signing below is responsible for all obligations
in this Agreement. Where any one or more of the parties is a
corporation, partnership, limited liability company or similar entity,
it is not necessary for Lender to inquire into the powers of any of the
officers, directors, partners, members, or other agents acting or
purporting to act on the entity's behalf, and any obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed under this Agreement.
PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
preference claim in Borrower's or Grantor's bankruptcy will become a
part of the Indebtedness and, at Lender's option, shall be payable by
Borrower and Grantor as provided in this Agreement.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall
not prejudice or constitute a waiver of Lender's right otherwise to
demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
NOTICES. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Agreement. Any party may change its
address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Grantor agrees
to keep Lender informed at all times of Grantor's current address.
Unless otherwise provided or required by law, if there is more than one
Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.
POWER OF ATTORNEY. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest
granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or other
reproduction of any financing statement or of this Agreement for use as
a financing statement. Grantor will reimburse Lender for all expenses
for the perfection and the continuation of the perfection of Lender's
security interest in the Collateral.
WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
the Indebtedness, Grantor irrevocably waives, disclaims and
relinquishes all claims against such other person which Grantor has or
would otherwise have by virtue of payment of the Indebtedness or any
part thereof, specifically including but not limited to all rights of
indemnity, contribution or exoneration.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision
illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be considered modified so that
it becomes legal, valid and enforceable. If the offending provision
cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement
shall not affect the legality, validity or enforceability of any other
provision of this Agreement.
10
COMMERCIAL SECURITY AGREEMENT
(Continued)
--------------------------------------------------------------------------------
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Collateral becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with
Grantor's successors with reference to this Agreement and the
Indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
Indebtedness.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect until
such time as Borrower's Indebtedness shall be paid in full.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVE JURY. All parties to this Agreement hereby waive the right to any
jury trial in any action, proceeding, or counterclaim brought by any
party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:
ACCOUNT. The word "Account" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Grantor (or to a third party grantor acceptable to
Lender).
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
BORROWER. The word "Borrower" means MEDIVISION - MEDICAL IMAGING LTD.,
and all other persons and entities signing the Note in whatever
capacity.
COLLATERAL. The word "Collateral" means all of Grantor's right, title
and interest in and to all the Collateral as described in the
Collateral Description section of this Agreement.
DEFAULT. The word "Default" means the Default set forth in this
Agreement in the section titled "Default".
ENVIRONMENTAL LAWS. The words "Environmental Laws" means any and all
state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7
of Division 20 of the California Health and Safety Code, Section 25100,
et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
EVENT OF DEFAULT. The words "Event of Default" mean any of the events
of default set forth in this Agreement in the default section of this
Agreement.
GRANTOR. The word "Grantor" means OPHTHALMIC IMAGING SYSTEMS.
11
COMMERCIAL SECURITY AGREEMENT
(Continued)
--------------------------------------------------------------------------------
GUARANTOR. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Indebtedness.
GUARANTY. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of the
Note.
HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used,
treated, stored, disposed of, generated, manufactured, transported or
otherwise handled. The words "Hazardous Substances" are used in their
very broadest sense and include without limitation any and all
hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances"
also includes, without limitation, petroleum and petroleum by-products
or any fraction thereof and asbestos.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise; whether
recovery upon such Indebtedness may be or hereafter may become barred
by any statute of limitations; and whether such Indebtedness may be or
hereafter may become otherwise unforeseeable.
LENDER. The word "Lender" means Bank Leumi, Le-Israel, B.M., its
successors and assigns.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan
obligations in favor of Lender, as well as any substitute, replacement
or refinancing note or notes therefor.
PROPERTY. The word "Property" means all of Grantor's right, title and
interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED
APRIL 30, 2003.
GRANTOR:
OPHTHALMIC IMAGING SYSTEMS
By: /s/ Xxx Xxxxx By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------- --------------------------------------------------
Authorized Signer for OPHTHALMIC Authorized Signer for OPHTHALMIC
IMAGING SYSTEMS IMAGING SYSTEMS
BORROWER:
12
COMMERCIAL SECURITY AGREEMENT
(Continued)
--------------------------------------------------------------------------------
MEDIVISION-MEDICAL IMAGING LTD.
By: /s/ Xxxxx Xxxxxxx By:
-------------------------------------------------- --------------------------------------------------
Authorized Signer for MEDIVISION - Authorized Signer for MEDIVISION -
MEDICAL IMAGING LTD. MEDICAL IMAGING LTD.
13
COMMERCIAL GUARANTY
-------------------------------------------------------------------------------------------------------------------
Borrower: MEDIVISION - MEDICAL IMAGING LTD. Lender: Bank Leumi Le-Israel, B.M.
X.X. XXX 00 c/o Bank Leumi USA
INDUSTRIAL PARK 8383 Wilshire Blvd., Suite 400
XXXXXX HATAMAR Xxxxxxx Xxxxx, XX 00000
YOKNEAM ELIT, ISRAEL
Guarantor: OPHTHALMIC IMAGING SYSTEMS
000 XXXXXXX XXX, XXXXX 0
XXXXXXXXXX, XX 00000
-------------------------------------------------------------------------------------------------------------------
AMOUNT OF GUARANTY. The amount of this Guaranty is limited to $900,000.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, OPHTHALMIC
IMAGING SYSTEMS ("Guarantor") absolutely and unconditionally guarantees and
promises to pay to Bank Leumi, Le-Israel, B.M. ("Lender") or its order, in legal
tender of the United States of America, the Indebtedness (as that term is
defined below) of MEDIVISION - MEDICAL IMAGING LTD. ("Borrower") to Lender on
the terms and conditions set forth in this Guaranty. Under this Guaranty, the
liability of Guarantor is limited and the obligations of Guarantor are
continuing.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty includes
any and all of Borrower's Indebtedness to Lender and is used in the most
comprehensive sense and means and includes any and all of Borrower's
liabilities, obligations and debts to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft Indebtedness, credit card Indebtedness, lease
obligations, other obligations, and liabilities of Borrower, or any of them, and
any present or future judgments against Borrower, or any of them; and whether
any such Indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined;
whether Borrower may be liable individually or jointly with others, or primarily
or secondarily, or as guarantor or surety; whether recovery on the Indebtedness
may be or may become barred or unenforceable against Borrower for any reason
whatsoever; and whether the Indebtedness arises from transactions which may be
voidable on account of infancy, insanity, ultra xxxxx, or otherwise.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all of Guarantor's other obligations
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at Lender's
address listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new Indebtedness"
does not include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. This Guaranty shall
bind Guarantor's estate as to Indebtedness created both before and after
Guarantor's death or incapacity, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall not
affect the
COMMERCIAL GUARANTY
(Continued)
--------------------------------------------------------------------------------
liability of any remaining Guarantors under this Guaranty. Guarantor's
obligations under this Guaranty shall be in addition to any of Guarantor's
obligations, or any of them, under any other guaranties of Borrower's
Indebtedness or any other person heretofore or hereafter given to Lender unless
such other guaranties are modified or revoked in writing; and this Guarantor
shall not, unless provided in this Guaranty, affect, invalidate, or supersede
any such other guaranty. It is anticipated that fluctuations may occur in the
aggregate amount of Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of
Indebtedness, even to zero dollars ($0.00), prior to Guarantor's written
revocation of this Guaranty shall not constitute a termination of this Guaranty.
This Guaranty is binding upon Guarantor and Guarantor's heirs, successors and
assigns so long as any of the guaranteed Indebtedness remains unpaid and even
though the Indebtedness guaranteed may from time to time be zero dollars
($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, written notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (A) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (B) to alter, compromises,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to xxx, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (E) to determine how, when and what application
of payments and credits shall be made on the Indebtedness (F) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudical sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(G) to sell, transfer, assign or grant participation in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (A) Except for guarantees given to [. . .] on September 12, 2002, no
representations or agreements of any kind have been made to Guarantor which
would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty
is executed at Borrower's request and not at the request of Lender; (C)
Guarantor has full power, right and authority to enter into this Guaranty; (D)
the provisions of this Guaranty do not conflict with or result in a default
under any agreement or other instrument binding upon Guarantor and do not result
in a violation of any law, regulation, court decree or other applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written consent
of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets, or any interest
therein; (F) upon Lender's request, Guarantor will provide to Lender financial
and credit information in form acceptable to Lender, and all such financial
information which currently has been, and all future financial information which
will be provided to Lender is and will be true and correct in all material
respects and fairly present Guarantor's financial condition as of the dates the
financial information is provided; (G) no material adverse change has occurred
in Guarantor's financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor's financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action (including those for
unpaid taxes) against Guarantor is pending or threatened except as written in
the Company's financials; (I) Lender has made no representation to Guarantor as
to the creditworthiness of Borrower; and (J) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis information regarding
Borrower's financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events, or circumstances which might in any way
affect Guarantor's risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Lender shall have no obligation to disclose to
Guarantor any information or documents acquired by Lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender to (A) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower,
COMMERCIAL GUARANTY
(Continued)
--------------------------------------------------------------------------------
Lender, or any other guarantor or surety of Borrower, or the creation of new or
additional Indebtedness; (B) proceed against any person, including Borrower,
before proceeding against Guarantor; (C) proceed against any collateral for the
Indebtedness, including Borrower's collateral, before proceeding against
Guarantor; (D) apply any payments or proceeds received against the Indebtedness
in any order; (E) give notice of the terms, time, and place of any sale of the
collateral pursuant to the Uniform Commercial Code or any other law governing
such sale; (F) disclose any information about the Indebtedness, the Borrower,
the collateral, or any other guarantor or surety, or about any action or
nonaction of Lender; or (G) pursue any remedy or course of action in Lender's
power whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of (H)
any disability or other defense of Borrower, any other guarantor or surety or
any other person; (I) the cessation from any cause whatsoever, other than
payment in full, of the Indebtedness; (J) the application of proceeds of the
Indebtedness by Borrower for purposes other than the purposes understood and
intended by Guarantor and Lender; (K) any act of omission or commission by
Lender which directly or indirectly results in or contributes to the discharge
of Borrower or any other guarantor or surety, or the Indebtedness, or the loss
or release of any collateral by operation of law or otherwise; (L) any statute
of limitations in any action under this Guaranty or on the Indebtedness; or (M)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate, and
including any such modification or change in terms after revocation of this
Guaranty on Indebtedness incurred prior to such revocation.
Guarantor waives all rights and any defenses arising out of an election of
remedies by Lender even though that the election of remedies, such as a
non-judicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Guarantor's rights of subrogation and reimbursement against
Borrower by operation of Section 580d of the California Code of Civil Procedure
or otherwise.
Guarantor waives all rights and defenses that Guarantor may have because
Borrower's obligation is secured by real property. This means among other
things: (1) Lender may collect from Guarantor without first foreclosing on any
real or personal property pledged by Borrower, (2) if Lender forecloses on any
real property collateral pledged by Borrower: (a) the amount of Borrower's
obligation may be reduced only by the price for which the collateral is sold at
the foreclosure sale, even if the collateral is wroth more than the sale price,
(b) Lender may collect from Guarantor even if Lender, by foreclosing on the real
property collateral [. . .] irrevocable waiver of any rights and defenses
Guarantor may have because Borrower's obligation is secured by real property.
These rights and defenses include, but are not limited to, any rights and
defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil
Procedure.
Guarantor understands and agrees that the foregoing waivers are unconditional
and irrevocable waivers of substantive rights and defenses to which Guarantor
might otherwise be entitled under state and federal law. Guarantor acknowledges
that Guarantor has provided these waivers of rights and defenses with the
intention that they be fully relied upon by Lender. Guarantor further
understands and agrees that this Guaranty is a separate and independent contract
between Guarantor and Lender, given for full and ample consideration, and is
enforceable on its own terms. Until all Indebtedness is paid in full, Guarantor
waives any right to enforce any remedy Guarantor may have against the Borrower
or any other guarantor, surety, or other person, and further, Guarantor waives
any right to participate in any collateral for the Indebtedness now or hereafter
held by Lender.
In addition to the waivers set forth herein, if now or hereafter Borrower is or
shall become insolvent and the Indebtedness shall not at all times until paid be
fully secured by collateral pledged by Borrower, Guarantor hereby forever waives
and gives up in favor of Lender and Borrower, and Lender's and Borrower's
respective successors, any claim or right to payment Guarantor may now have or
hereafter have or acquire against Borrower, by subrogation or otherwise, so that
at no time shall Guarantor be or become a "creditor" of Borrower within the
meaning of 11 U.S.C. section 547(b), or any successor provision of the Federal
bankruptcy laws.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that,
COMMERCIAL GUARANTY
(Continued)
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under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Guarantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Guarantor holds
jointly with someone else and all accounts Guarantor may open in the future.
However, this does not include any XXX or Xxxxx accounts, or any trust accounts
for which setoff would be prohibited by law. Guarantor authorizes Lender, to the
extent permitted by applicable law, to hold these funds if there is a default,
and Lender may apply the funds in these accounts to pay what Guarantor owes
under the terms of this Guaranty.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be superior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lender to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender.
Guarantor agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Guaranty. No alteration of or amendment
to this Guaranty shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
ATTORNEYS' FEES; EXPENSES. All the expenses below will be in force only
if the Company files for Chapter 11. Guarantor agrees to pay upon
demand all of Lender's costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Guaranty. Lender may hire or pay someone
else to help enforce this Guaranty, and Guarantor shall pay the costs
and expenses of such enforcement. Costs and expenses include Lender's
attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Guaranty.
GOVERNING LAW. This Guaranty will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
California. This Guaranty has been accepted by Lender in the State of
California.
CHOICE OF VENUE. If there is a lawsuit, Guarantor agrees upon Lender's
request to submit to the jurisdiction of the courts of Sacramento
County, State of California.
COMMERCIAL GUARANTY
(Continued)
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INTEGRATION. Guarantor further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor's attorney with respect to this
Guaranty; the Guaranty fully reflects Guarantor's intentions and parol
evidence is not required to interpret the terms of this Guaranty.
Guarantor hereby indemnities and holds Lender harmless from all losses,
claims, damages, and costs suffered or incurred by Lender as a result
of any breach by Guarantor of the warranties, representations and
agreements of this paragraph.
INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall
be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower
named in this Guaranty or when this Guaranty is executed by more than
one Guarantor, the words "Borrower" and "Guarantor" respectively shall
mean all and any one or more of them. The words "Guarantor,"
"Borrower," and "Lender" include the heirs, successors, assigns, and
transferees of each of them. If a court finds that any provision of
this Guaranty is not valid or should not be enforced, that fact by
itself will not mean that the rest of this Guaranty will not be valid
or enforced. Therefore, a court will enforce the rest of the provisions
of this Guaranty even if a provision of this Guaranty may be found to
be invalid or unenforceable. If any one or more of Borrower or
Guarantor are corporations, partnerships, limited liability companies,
or similar entities, it is not necessary for Lender to inquire into the
powers of Borrower or Guarantor or of the officers, directors,
partners, managers, or other agents acting or purporting to act on
their behalf, and any Loan Indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed under
this Guaranty.
NOTICES. Any notice required to be given under this Guaranty shall be
given in writing, and, except for revocation notices by Guarantor,
shall be effective when actually delivered, when actually received by
telefascimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited
in the United States mail, as first class, certified or registered mail
postage prepaid, directed to the addresses shown near the beginning of
this Guaranty. All revocation notices by Guarantor shall be in writing
and shall be effective upon delivery to Lender as provided in the
section of this Guaranty entitled "DURATION OF GUARANTY." Any party may
change its address for notices under this Guaranty by giving formal
written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Guarantor
agrees to keep Lender informed at all times of Guarantor's current
address. Unless otherwise provided or required by law, if there is more
than one Guarantor, any notice given by Lender to any Guarantor is
deemed to be notice given to all Guarantors.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Guaranty shall
not prejudice or constitute a waiver of Lender's right otherwise to
demand strict compliances with that provision or any other provision of
this Guaranty. No prior waiver by Lender, nor any course of dealing
between Lender and Guarantor, shall constitute a waiver of any of
Lender's rights or of any of Guarantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Guaranty on transfer of Guarantor's interest, this Guaranty shall be
binding upon and inure to the benefit of the parties, their successors
and assigns.
WAIVE JURY. Lender and Guarantor hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other.
COMMERCIAL GUARANTY
(Continued)
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DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:
BORROWER. The word "Borrower" means MEDIVISION - MEDICAL IMAGING LTD.,
and all other persons and entities signing the Note in whatever
capacity.
GUARANTOR. The word "Guarantor" means each and every person or entity
signing this Guaranty, including without limitation OPHTHALMIC IMAGING
SYSTEMS.
GUARANTY. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of the
Note.
INDEBTEDNESS. The word "Indebtedness" means Borrower's Indebtedness to
Lender as more particularly described in this Guaranty.
LENDER. The word "Lender" means Bank Leumi Le-Israel, B.M., its
successors and assigns.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan
obligations in favor of Lender, as well as any substitute, replacement
or refinancing note or notes therefor.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE, THIS GUARANTY
IS DATED APRIL 30, 2003.
GUARANTOR:
OPHTHALMIC IMAGING SYSTEMS
By: /s/ Xxx Xxxxx By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------- --------------------------------------------------
Authorized Signer for OPHTHALMIC IMAGING Authorized Signer for OPHTHALMIC
SYSTEMS IMAGING SYSTEMS
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL GUARANTY
(Continued)
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CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF SACRAMENTO )
On June 2, 2003 before me, Xxxxx X. Xxxxxx, Notary Public, personally appeared
Xxxxx Xxxxxxx and Xxx Xxxxx, (proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) are subscribed to the within
instrument and acknowledged to me that they executed the same in their
authorized capacity(ies), and that by their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature /s/ Xxxxx X. Xxxxxx
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