Exhibit 10.19
[SEAFIRST BANK LOGO]
BORROWER: PHYSIO-CONTROL CORPORATION LENDER: "LENDER"
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ N.E. C/0 CLSC-W
REDMOND, WA 98052 ▇▇▇ ▇▇▇▇▇ ▇▇▇ (▇▇▇-▇▇)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GRANTOR: PHYSIO-CONTROL MANUFACTURING CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ N.E.
REDMOND, WA 98052
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THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN PHYSIO-CONTROL
CORPORATION (REFERRED TO BELOW AS "GRANTOR"); AND "LENDER" (REFERRED TO BELOW
AS "LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO LENDER A SECURITY
INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND AGREES THAT LENDER
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.
DEFINITIONS. The following words shall have the following meanings when used
in this AGREEMENT. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
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.
GRANTOR. The word "Grantor" means PHYSIO-CONTROL CORPORATION, ITS
SUCCESSORS AND ASSIGNS.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:
ORGANIZATION. Grantor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement by Grantor have been duly authorized by all necessary action
by Grantor and do not conflict with, result in a violation of, or
constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Grantor or (b) any law, governmental
regulation, court decree, or order to Grantor.
PERFECTION OF SECURITY INTEREST. ▇▇▇▇▇▇▇ agrees to execute such
financing statements and to take whatever other actions are reasonably
requested by ▇▇▇▇▇▇ to perfect and continue ▇▇▇▇▇▇'s security interest in
the Collateral. Upon request of ▇▇▇▇▇▇, Grantor will deliver to Lender
any and all of the documents evidencing or constituting the Collateral,
and Grantor will note ▇▇▇▇▇▇'s interest upon any and all chattel paper if
not delivered to Lender for possession by ▇▇▇▇▇▇. Grantor hereby appoints
▇▇▇▇▇▇ as its irrevocable attorney-in-fact for the purpose of executing
any documents necessary to perfect or to continue the security
interest granted in this Agreement. Lender may at any time, and without
further authorization from Granter, 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
▇▇▇▇▇▇'s security interest in the Collateral. Grantor promptly will
notify Lender before any change in Grantor's name including any change
to the assumed business names of Grantor. THIS IS A CONTINUING SECURITY
AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH ALL OR ANY PART OF
THE INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD OF TIME
GRANTOR MAY NOT BE INDEBTED TO LENDER.
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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, the Collateral is
enforceable in accordance with its terms, is genuine, and complies
with applicable laws concerning form, content and manner of preparation
and execution, and all persons appearing to be obligated on the
Collateral have authority and capacity to contract and are in fact
obligated as they appear to be on the Collateral.
LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, 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: (a) all real property owned
or being purchased by Grantor; (b) all real property being rented or
leased by Grantor; (c) all storage facilities owned, rented, leased, or
being used by Grantor; and (d) all other properties where Collateral is
or may be located. Except in the ordinary course of its business,
Grantor shall not remove the Collateral from its existing locations
without the prior written consent of Lender.
REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as accounts,
the records concerning the Collateral) at Grantor's address shown
above, or at such other locations as are acceptable to Lender. Except
in the ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender. 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 Washington, without the prior written consent of Lender.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall
not sell, offer to sell, or otherwise transfer or dispose of the
Collateral. Grantor shall not pledge, mortgage, encumber or otherwise
permit the Collateral to be subject to any lien, security interest,
encumbrance, or charge, other than the security interest provided for in
this Agreement, without the prior written consent of Lender. This
includes security interests even if junior in right to the security
interests granted under this Agreement. Unless waived by ▇▇▇▇▇▇, all
proceeds from any disposition of the Collateral (for whatever reason)
shall be held in trust for Lender and shall not be commingled with any
other funds; provided however, this requirement shall not constitute
consent by Lender to any sales or other disposition. Upon receipt,
Grantor shall immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that it 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 ▇▇▇▇▇▇'s rights in the Collateral against the claims and demands
of all other persons.
COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists
of inventory, Grantor shall deliver to Lender, as often as Lender shall
require, such list, descriptions, and designations of such Collateral as
Lender may require to identify the nature, extent, and location of such
Collateral. Such information shall be submitted for Grantor and each of
its subsidiaries or related companies.
MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not
commit or permit damage to or destruction of the Collateral or any part
of the Collateral. Lender and its designated representatives and agents
shall have the right at all reasonable times to examine, inspect, and
audit the Collateral wherever located. Grantor shall immediately notify
Lender of all cases involving the return, rejection, repossession,
loss or damage of or to any Collateral involving Collateral exceeding
$500,000.00 in the aggregate, of any request for credit or adjustment
or of any other dispute arising with respect to the Collateral involving
Collateral exceeding $500,000.00 in the aggregate, and generally of all
happenings and events affecting the Collateral or the value or the
amount of the Collateral.
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 as ▇▇▇▇▇▇'s interest in the Collateral is
not jeopardized in ▇▇▇▇▇▇' sole opinion. If the Collateral is
subjected to a lien which is not discharged within (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 ▇▇▇▇▇▇
and shall satisfy any final adverse judgment before enforcement against
the Collateral. Grantor shall name ▇▇▇▇▇▇ as an additional obligee under
any surety bond furnished in the contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
with laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor may contest
in good faith any such law, ordinance or regulation and withhold
compliance during any proceeding, including appropriate appeals, so
long as ▇▇▇▇▇▇▇'s interest in the Collateral, in Lenders' 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 other than in compliance with applicable laws
and regulations, used for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of
any hazardous waste or substance, as those terms are defined in 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 ("▇▇▇▇"), 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., or other applicable state or Federal
laws, rules, or regulations, adopted pursuant to any of the foregoing.
The terms "hazardous waste" and "hazardous substance" shall also
include, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos. The representations and warranties
contained herein are based on Grantor's due diligence in investigating
the Collateral for hazardous wastes and substances. Grantor hereby (a)
releases and waives any future claims against ▇▇▇▇▇▇ for indemnity or
contribution in the event Grantor becomes liable for cleanup or other
costs under any such laws, and (b) 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 indemnify 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
▇▇▇▇▇▇, 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 forty five (45) 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 or 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 it so chooses
"single interest insurance," which will cover only ▇▇▇▇▇▇'s interest in the
Collateral.
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APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender
of any loss or damage to the Collateral exceeding $500,000 in the
aggregate. Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. All proceeds of any insurance
on the Collateral, including accrued proceeds 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 for the
proceeds for the reasonable cost of repair or restoration. If Lender
does not consent to repair or replacement for the Collateral, Lender shall
retain a sufficient amount of the 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 REPORTS. Grantor, upon request of ▇▇▇▇▇▇, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the property insured; (e) the current value on the basis
of which insurance has been obtained and the manner of determining that
value; and (f) 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.
▇▇▇▇▇▇▇'S RIGHT TO POSSESSION. Until default, 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. 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 the purpose as Grantor shall request or as
Lender, in ▇▇▇▇▇▇'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.
EXPENDITURES BY ▇▇▇▇▇▇. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay 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
Indebtedness from the date incurred or paid by ▇▇▇▇▇▇ to the date of
repayment by Grantor. All such expenses shall 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 Indebtedness and be apportioned among and be
payable with any installment payments to become due during either (i) the
term of any applicable insurance policy or (ii) the remaining term of the
Indebtedness or (c) be treated as a balloon payment which will be due and
payable at the Indebtedness' maturity. This Agreement also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which ▇▇▇▇▇▇ may be entitled upon the occurrence of an Event
of Default.
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 Washington Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following
rights and remedies:
ACCELERATE INDEBTEDNESS. ▇▇▇▇▇▇ may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable.
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. ▇▇▇▇▇▇ 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 at
the time of repossession, Grantor agrees Lender may take such other goods,
provided that ▇▇▇▇▇▇ makes reasonable efforts to return them to Grantor
after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
its own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized
market, Lender will give Grantor reasonable notice of the time after
which any private sale or any other intended disposition of the
Collateral is to be made. 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
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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. To the extent permitted by applicable law, ▇▇▇▇▇▇
shall have the following rights and remedies regarding the appointment of
a receiver: (a) Lender may have a receiver appointed as a matter of
right, (b) the receiver may be an employee of ▇▇▇▇▇▇ and may serve
without bond, and (c) all fees of the receiver and his or her attorney
shall become 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.
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 its discretion transfer any
Collateral into its own name or that of its nominee and receive the
payments, rents, income, and revenue 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, sue for, foreclose, or realize on the Collateral as Lender may
determine, whether or not Indebtedness or Collateral is then due. For
these purposes, ▇▇▇▇▇▇ 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 payment, shipment, or storage of any Collateral. To
facilitate collection, ▇▇▇▇▇▇ may notify account debtors and obligors on
any Collateral to make payments directly to Lender.
OBTAIN DEFICIENCY. If ▇▇▇▇▇▇ chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor 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. Grantor 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.
CUMULATIVE REMEDIES. All of ▇▇▇▇▇▇'s rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇'s failure to perform, shall not affect ▇▇▇▇▇▇'s right to
declare a default and to 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 the is 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.
APPLICABLE LAW. This Agreement has been delivered to Lender and accepted
by ▇▇▇▇▇▇ in the State of Washington. If there is a lawsuit, ▇▇▇▇▇▇▇
agrees upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the courts
situated in King County, the State of Washington. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Washington.
ATTORNEY'S FEES; EXPENSES. ▇▇▇▇▇▇▇ agrees to pay upon demand all of
▇▇▇▇▇▇'s costs and expense, including reasonable attorneys' fees and
▇▇▇▇▇▇'s legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may pay someone else to help enforce this
Agreement, and Grantor shall pay the costs and expense of such
enforcement. Costs and expense include ▇▇▇▇▇▇'s attorneys' fees and
legal expense whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (and 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.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under
this Agreement shall be joint and several, and all references to Grantor
shall mean each and every Grantor. This means that each of the persons
signing below is responsible for ALL obligations in this Agreement.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile, and shall be effective when
actually delivered or when deposited with a nationally recognized
overnight courier or deposited in the United States mail, first class,
postage prepaid, addressed to the party to whom the notice is to be
given at the address shown above. Any party may change it 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. To the extent permitted by applicable law, if there
is more than one Grantor, notice to any Grantor will constitute notice
to all Grantors. For notice purposes, Grantor will keep ▇▇▇▇▇▇ informed
at all times of Grantor's current address(es). Grantor will give Lender
prior written notice of any change of either Grantor's legal structure or
of any change of Grantor's chief executive office, or if Grantor has no
place of business, ▇▇▇▇▇▇▇'s residence, and change of records location.
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover
all sums of money or other property which may now or hereafter become
due, owing or payable from the Collateral; (b) to execute, sign and
endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral; (c) to settle or
compromise any and all claims arising under the Collateral, and, in the
place and stead of Grantor, to execute and deliver its release and
settlement for the claim; and (d) to file any claim or claims or to take
any action or institute or take part in any proceedings, either in its
own name or in the name of Grantor, or otherwise, which in the
discretion of Lender may seem to be necessary or advisable. This power
is given as security for the Indebtedness, and the authority hereby
conferred is and shall be irrevocable and shall remain in full force and
effect until renounced by ▇▇▇▇▇▇.
PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
preference claim in ▇▇▇▇▇▇▇▇'s bankruptcy will become a part of the
Indebtedness and, at ▇▇▇▇▇▇'s option, shall be payable by Borrower as
provided above in the "EXPENDITURES BY ▇▇▇▇▇▇" paragraph.
SEVERABILITY. If a court of competent jurisdication finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Agreement in all other repsecces shall remain valid
and enforceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and
inure to the benefit of the parties, their successors and assigns.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by ▇▇▇▇▇▇. 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
▇▇▇▇▇▇ of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with
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that provision or any other provision of this Agreement. No prior waiver
by ▇▇▇▇▇▇, nor any course of dealing between ▇▇▇▇▇▇ and Grantor, shall
constitute a waiver of any of Lender's rights or of any 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 of subsequent
instances where such consent is required and all cases such consent may
be granted or withheld in the sole discretion of Lender.
WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
the Indebtedness, Borrower irrevocably waivers, disclaims and
relinquishes all claims against such other person which Borrower 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.
ADDITIONAL PROVISION. "LENDER" means (a) as to the granting clause of this
Agreement, Bank of America National Trust and Savings Association, doing
business as Seafirst Bank ("Seafirst"), as agent for itself and Mellon Bank,
N.A. ""Mellon"), and means (b) as to all other provisions of this Agreement
both Bank of America National Trust and Savings Association, doing business
as Seafirst Bank, and Mellon Bank, N.A., and their respective successors and
assigns. "INDEBTEDNESS" shall mean all the "Obligations", as such term is
defined in the Credit Agreement dated as of June 3, 1997 (including all
amendments thereto and restatements thereof, the "Credit Agreement"), between
Borrower and Lender, including all renewals, modifications, and extensions
thereof and all obligations of Grantor under this Agreement. ▇▇▇▇▇▇▇
acknowledges and agrees that all rights, powers, and privileges for either
Seafirst or Mellon, in their respective individual capacities as Banks,
may be exercised by Seafirst in its capacity as agent for the Banks; and the
Grantor is neither permitted nor required to inquire as to Seafirst's
authority to act for the Banks when its it purporting to act in its capacity
as Agent. This provision does not hinder in any way each Bank's right to
demand performance in its individual capacity. "COLLATERAL" shall have the
meaning given to such term in the Credit Agreement. "EVENTS OF DEFAULT" shall
mean each of the events which constitutes a "Default" under the terms of the
Credit Agreement.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS
DATED JUNE 3, 1997.
BORRWER:
PHYSIO-CONTROL CORPORATION
By: V ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇.▇. ▇▇▇▇▇▇▇▇▇▇, Exec. V.P./CFO
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GRANTOR:
PHYSIO-CONTROL MANUFACTURING CORPORATION
By: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
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By: ▇.▇. ▇▇▇▇▇▇▇▇▇▇, Exec. V.P./CFO
---------------------------------