Exhibit 10.2
SECURITY AGREEMENT
SECURITY AGREEMENT (this agreement, together with all amendments and
restatements, this “Agreement”), dated as of December 29, 2009, made by PMC
COMMERCIAL TRUST, a real estate investment trust organized under the laws of the
State of Texas (the “Debtor”), in favor of JPMorgan Chase Bank, National
Association, as Administrative Agent, as secured party (Administrative Agent in
such capacity, the “Secured Party”), for Secured Party and the benefit of each
Lender.
BACKGROUND.
JPMorgan Chase Bank, National Association, as Administrative Agent, the Lenders
party thereto, and Debtor, entered into the Credit Agreement dated as of
February 29, 2004 (such agreement, together with all amendments and restatements
thereto, the “Credit Agreement”).
It is the intention of the parties hereto that this Agreement create a first
priority security interest in property of Debtor in favor of Secured Party for
Secured Party and the benefit of Lenders securing the payment and performance of
the Secured Obligations.
AGREEMENT.
NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders to make the Loans under the Credit
Agreement and to extend other credit and financial accommodations under the
Credit Documents, Debtor hereby agrees with the Secured Party, for its benefit
and the benefit of Lenders, and each Lender as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. For purposes of this Agreement:
“Accession” means all right, title, and interest of Debtor (in each case whether
now or hereafter existing, owned, arising, or acquired) in and to an accession
(as defined in the UCC), and (whether or not included in that definition), a
good that is physically united with another good in such a manner that the
identity of the original good is not lost.
“Account” means all right, title, and interest of Debtor (in each case whether
now or hereafter existing, owned, arising, or acquired) in and to an account (as
defined in the UCC), and (whether or not included in such definition), a right
to payment of a monetary obligation, whether or not earned by performance for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, and for service rendered or to be rendered, and all
right, title, and interest in any returned property, together with all rights,
titles, securities, and guarantees with respect thereto, including any rights to
stoppage in transit, replevin, reclamation, and resales, and all related Liens
whether voluntary or involuntary.
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“Account Debtor” means any Person who is or who may become obligated to Debtor
under, with respect to or on account of an Account.
“Acquisition Rights” means each warrant, option, instrument, subscription right,
redemption right and other right (including any instrument or right convertible
into an Equity Interest) to acquire or sell any Equity Interest in First
Western.
“Collateral” means (a) all Accounts in respect of the Pledged Debt, (b) Deposit
Box, (c) all Pledged Equity Interests, (d) all General Intangibles related to or
arising in respect of the Pledged Debt or the Pledged Equity Interests, (e) all
Instruments evidencing, related to or arising in connection with the Pledged
Debt, (f) all Payment Intangibles related to or arising in connection with
Pledged Debt, (g) all Pledged Debt, (h) all supporting obligations related to or
arising in respect of the Pledged Debt, (i) all Proceeds, (j) all products and
(k) all Collateral Records.
“Collateral Records” means books, records, ledger cards, files, correspondence,
customer lists, blueprints, technical specifications, manuals, computer
software, computer printouts, tapes, disks and related data processing software
and similar items that at any time evidence or contain information relating to
any of the Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon.
“Deposit Box” means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to the
Deposit Box (as defined in the Credit Agreement), and (whether or not included
in such definition), all items contained therein.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
“Event of Default” has the meaning assigned to such term in the Credit
Agreement.
“General Intangible” means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
general intangible (as defined in the UCC), and (whether or not included in such
definition), all personal property, including things in action, other than
Accounts, chattel paper, commercial tort claims, deposit accounts, documents,
goods, Instruments, investment property, letter-of-credit rights, letters of
credit, money, and oil, gas or other minerals before extraction.
“Instrument” means all right, title, and interest of Debtor (in each case
whether now or hereafter existing, owned, arising, or acquired) in and to an
instrument (as defined in the UCC), and (whether or not included in such
definition), a negotiable instrument or any other writing that evidences a right
to the payment of a monetary obligation, is not itself a security agreement or
lease, and is of a type that in ordinary course of business is transferred by
delivery with any necessary indorsement or assignment.
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“Insurance” means all insurance policies for which Debtor is the owner, an
insured, an additional insured, beneficiary or loss payee, including any policy
covering any or all of the Collateral (regardless of whether Secured Party is
the loss payee thereof).
“MERSCORP” means MERSCORP, Inc.
“MERS System” means MERSCORP’s mortgage electronic registry system.
“Money” means “money” as defined in the UCC.
“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constituent documents with respect to any entity organized under the
laws of a jurisdiction other than the United States, a State or other political
subdivision thereof or the District of Columbia); (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement (or equivalent or comparable constituent
documents with respect to any entity organized under the laws of a jurisdiction
other than the United States, a State or other political subdivision thereof or
the District of Columbia); and (c) with respect to any partnership, joint
venture, trust or other form of business entity, the certificate or articles of
partnership, the partnership, joint venture or other applicable agreement of
formation or organization (or equivalent or comparable constituent documents
with respect to any entity organized under the laws of a jurisdiction other than
the United States, a State or other political subdivision thereof or the
District of Columbia) and any agreement, instrument, filing or notice with
respect thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any other governance agreement or voting
agreement or similar agreement.
“Payment Intangible” means all right, title, and interest of Debtor (in each
case whether now or hereafter existing, owned, arising, or acquired) in and to a
payment intangible (as defined in the UCC), and (whether or not included in such
definition), a General Intangible under which the Account Debtor’s principal
obligation is a monetary obligation.
“Permit” means all right, title, and interest of Debtor (in each case whether
now or hereafter existing, owned, arising, or acquired) in and to any
authorization, consent, approval, permit, license or exemption of, registration
or filing with, or report or notice to, any Governmental Authority.
“Pledged Debt” means collectively, (a) all indebtedness owed to Debtor, the
instruments evidencing such indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness, (b) all right, title and interest of Debtor in and to all loan
agreements, mortgages, deeds of trust, other notes, security agreements, chattel
mortgages, assignments of rent and other security instruments whether now or
hereafter owned, acquired or held by Debtor which evidence or secure (or
constitute collateral for any note, instrument or agreement securing) the
indebtedness described in clause (a) above, (c) all right, title and interest of
Debtor in and to all guaranties and other instruments by which any Person
executing the same guarantee, among other things, the indebtedness described in
clause (a) above, (d) all right, title and interest of Debtor to all title
insurance reports, title insurance binders, commitments and reports relating to
any indebtedness described in clause (a), and (e) all right, title and interest
to all surveys, insurance policies, participation agreements or any other
agreement, instrument or document pertaining to, affecting, obtained by Debtor
in connection with, or arising out of, the indebtedness described in clause (a)
above.
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“Pledged Equity Interests” means all Acquisition Rights and Pledged Stock.
“Pledged Stock” means all interests of Debtor (in each case whether now or
hereafter existing, owned, arising, or acquired) in any capital stock and other
equity interest in First Western and the certificates, if any, representing such
shares and any interest of Debtor on the books of the issuer of such shares or
on the books of any securities intermediary pertaining to such shares, and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares.
“Proceeds” means all right, title, and interest of Debtor (in each case whether
now or hereafter existing, owned, arising, or acquired) in and to proceeds (as
defined in the UCC), and (whether or not included in such definition),
(a) whatever is acquired upon the sale, lease, license, exchange, or other
disposition of the Collateral, (b) whatever is collected on, or distributed on
account of, the Collateral, (c) rights arising out of the Collateral, (d) claims
arising out of the loss, nonconformity, or interference with the use of, defects
or infringement of rights in, or damage to the Collateral, (e) proceeds of
Insurance, including insurance payable by reason of the loss or nonconformity
of, defects or infringement of rights in, or damage to the Collateral, and
(f) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
“Release Date” means the date on which all of the following are satisfied:
(a) Secured Party and each Lender have received in cash indefeasible payment of
all Obligations owed to it, and (b) each Lender has no obligation to extend
credit to or for the benefit of Borrower or any Subsidiary pursuant to any
Credit Document.
“Secured Obligations” means, collectively, all Obligations.
“UCC” means Chapters 8 and 9 of the Uniform Commercial Code as in effect from
time to time in the State of Texas or, where applicable as to specific items or
types of Collateral, any other relevant state.
SECTION 1.02. Other Definitional Provisions. Capitalized terms not otherwise
defined herein have the meaning specified in the Credit Agreement, and, to the
extent of any conflict, terms as defined herein shall control (provided, that a
more expansive or explanatory definition shall not be deemed a conflict).
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SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or any other Credit
Document, (b) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. This Agreement is a Credit Document.
ARTICLE II
Grant of Security Interest
SECTION 2.01. Assignment and Grant of Security Interest. As security for the
payment and performance, as the case may be, in full of the Secured Obligations,
Debtor hereby assigns to, and pledges and grants to Secured Party, for it and
the benefit of Lenders, a security interest in the entire right, title, and
interest of Debtor in and to all Collateral, whether now or hereafter existing,
owned, arising or acquired.
SECTION 2.02. Debtor Remains Liable. Anything herein to the contrary
notwithstanding, (a) Debtor shall remain liable with respect to and under all
Collateral, (b) the exercise by Secured Party or any other Lender of any of the
rights hereunder shall not release Debtor from any of its duties or obligations
with respect to or under any Collateral or under this Agreement, and (c) neither
Secured Party nor any other Lender shall have any obligation or liability with
respect to or under any Collateral by reason of this Agreement, nor shall
Secured Party or any other Lender be obligated to perform any of the obligations
or duties of Debtor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 2.03. Future Advances. Debtor acknowledges that the Credit Documents
provide for future advances and this Agreement secures performance of such
future advances.
SECTION 2.04. Limited Exclusions. Notwithstanding anything herein to the
contrary, in no event shall the security interest granted in Section 2.01 attach
to any lease, license, contract, property rights or agreement to which Debtor is
a party or any of its rights or interests thereunder if and for so long as the
grant of such security interest shall constitute or result in the abandonment,
termination pursuant to the terms of, or a breach or default under, any such
lease, license, contract, property rights or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Sections 9.406,
9.407, 9.408 or 9.409 of the UCC (or any successor provision or provisions) of
any relevant jurisdiction or any other applicable law (including the United
States Bankruptcy Code) or principles of equity); provided, however, that such
security interest shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and to the
extent severable, shall attach immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of
the consequences specified above. So long as any property of Debtor is excluded
from the security interest granted in Section 2.01 pursuant to the immediately
preceding sentence, such property shall be excluded from the term “Collateral”
for all purposes hereunder.
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ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties. Debtor represents and warrants to
Secured Party and each Lender with respect to itself and the Collateral that:
(a) This Agreement and the grant of the security interest pursuant to this
Agreement in the Collateral create a valid security interest in favor of Secured
Party for the benefit of Lenders in the Collateral (subject to Permitted Liens),
securing the payment and performance of the Secured Obligations. All filings and
other actions necessary to perfect and protect such security interest and assure
that such security interest in first priority have been duly taken (or will be
taken upon Debtor obtaining rights in Collateral after the date hereof) and,
upon the filing of UCC-1 financing statements for Debtor, in the form delivered
by Debtor to Secured Party on or prior to the date of this Agreement and in the
filing offices listed on Schedule 1, Section (b) and upon obtaining
authentication control agreements for Collateral requiring a control agreement
for perfection, all filings and other actions necessary to perfect and protect
such security interest and such priority have been duly taken (or will be taken
upon Debtor obtaining rights in Collateral after the date hereof); subject,
however, with respect to Proceeds, to the provisions of Section 9.315 of the
UCC.
(b) Debtor has good and indefeasible title to, or a valid leasehold interest in,
all of the Collateral free and clear of any Lien, except for Permitted Liens.
Debtor has not granted a security interest or other Lien in or made an
assignment of any of the Collateral (except for Permitted Liens). Debtor has not
entered into nor is its property subject to any agreement limiting the ability
of Debtor to grant a Lien in property of Debtor, or the ability of Debtor to
agree to grant or not grant a Lien in property of Debtor. No effective financing
statement or other similar effective document used to perfect and preserve a
security interest or other Lien under the laws of any jurisdiction covering all
or any part of the Collateral is on file in any recording office, except such as
may have been filed (i) pursuant to this Agreement or other Credit Document, or
(ii) relating to Permitted Liens. Debtor has not sold any interest in any of its
Pledged Debt, Accounts related to or arising in connection with Pledged Debt,
promissory notes, or Payment Intangibles related to or arising in connection
with Pledged Debt. No control agreement in favor of anyone other than Secured
Party exists with respect to any Collateral. If any of the Pledged Debt has been
subject to a securitization, such Pledged Debt has been conveyed to Debtor free
and clear of all Liens.
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(c) Schedule 1, Section (a) states the exact name of Debtor, as such name
appears in its currently effective Organization Documents as filed with the
appropriate authority of the jurisdiction of Debtor’s organization to the extent
applicable. Schedule 1, Section (a) states the jurisdiction of organization of
Debtor, the current type of entity of Debtor, the Federal Taxpayer
Identification Number of Debtor and the organizational identification number of
Debtor issued by Debtor’s jurisdiction of organization. Debtor is not organized
in more than one jurisdiction. Debtor has not changed its identity or type of
entity or name in any way within the past five years. Changes in identity or
type of entity include mergers, consolidations, acquisitions (including both
equity and asset acquisitions), and any change in the form, nature, or
jurisdiction of organization. The chief executive officer of Debtor has not been
located at another address in the past five years.
(d) The chief executive office of Debtor is located at the address stated on
Schedule 2, Section (a). The chief executive officer of Debtor has not been
located at any other address during the past five years. Schedule 2, Section (c)
states the names and addresses of all Persons other than Debtor who have
possession of any of the Collateral or other property of Debtor.
(e) No consent of any other Person and no authorization, approval or other
action by, and no notice to or filing (other than filings required by the UCC)
with, any Governmental Authority is required (i) for the pledge by Debtor of the
Collateral pledged by it hereunder, for the grant by Debtor of the security
interest granted hereby, or for the execution, delivery, or performance of this
Agreement by Debtor, (ii) for the perfection or maintenance of the pledge,
assignment, and security interest created hereby (including the first priority
nature of such pledge, assignment, and security interest) or (iii) for the
enforcement of remedies by Secured Party or any other Lender.
(f) Debtor possesses all Permits required for the operation of its business,
except to the extent that the failure to possess such Permits could not
reasonably be expected to result in a Material Adverse Event. All Permits of
Debtor have been duly authorized and obtained, and are in full force and effect,
and Debtor is in compliance in all material respects with all provisions
thereof, except, in each case, to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Event. No Permit is the
subject of any pending or, to Debtor’s best knowledge, threatened challenge or
revocation, which challenge or revocation could reasonably be expected to result
in a Material Adverse Event.
(g) All of the Pledged Equity Interests have been duly and validly issued and
are fully paid and nonassessable and were not issued in violation of the
preemptive rights of any party or of any agreement by which Debtor or the issuer
thereof is bound. No unpaid capital call exists with respect to any Collateral.
The interest of Debtor is the percentage of all authorized, issued and
outstanding Equity Interest of First Western as specified on Schedule (3),
Section (a). None of the Collateral is subject to any buy–sell, voting trust,
preferential right to purchase or similar agreement or any option, warrant, put
or call or similar agreement. Schedule 3 contains a complete and correct
description of each certificate or other instrument or agreement included in or
evidencing the Pledged Equity Interests as of the date of this Agreement.
Schedule 3 lists the exact name of First Western, its jurisdiction of
organization, its organizational identification number as issued by the
appropriate authority of jurisdiction of
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organization, its federal taxpayer identification number (if any), and the
authorized, issued and outstanding Equity Interests of First Western. All of the
Pledged Equity Interests consisting of certificated securities have been
delivered to Secured Party. There are no Pledged Equity Interests other than
that represented by certificates in the possession of Secured Party. There are
no restrictions in any Organization Document governing any Pledged Equity
Interest or any other document related thereto which would limit or restrict
(i) the grant of a Lien in the Pledged Equity Interests, (ii) the perfection of
such Lien, (iii) the exercise of remedies in respect of such perfected Lien in
the Pledged Equity Interests as contemplated by this Agreement or (iv) the
admission of any transferee of the Collateral as a shareholder, member, partner
or equity holder of First Western.
(h) Debtor has delivered to Secured Party complete and correct copies of all
Organization Documents for First Western.
(i) None of the Collateral has been registered in the MERS System, and Debtor is
not a member in MERSCORP.
(j) None of the Pledged Debt is either insured by the Federal Housing
Administration, guaranteed by U.S. Department of Veteran Affairs, guaranteed by
the Government National Mortgage Association or the Small Business Association
or has been sold to Fannie Mae or Freddie Mac.
(k) None of the Collateral is subject to a securitization.
ARTICLE IV
Covenants
SECTION 4.01. Delivery of Security and Instrument Collateral. All certificates
constituting or evidencing the Collateral shall be delivered to and held by or
on behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by undated and duly executed stock
powers or instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to Secured Party. All Instruments constituting
or evidencing the Collateral shall be delivered to and held in the Deposit Box
and shall be in suitable form for transfer by delivery. On or before January 8,
2010, all Instruments shall have affixed to them an endorsement or other
instrument of transfer or assignment in blank, all in form and substance
reasonably satisfactory to Secured Party. If an Event of Default exists, Secured
Party has the right, without notice to Debtor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of such Collateral.
In addition, Secured Party has the right, if Secured Party reasonably determines
that the exercise of such right is necessary to protect its rights, at any time
to exchange certificates or instruments representing or evidencing Collateral
for certificates or instruments of smaller or larger denominations. On or before
January 15, 2010, Debtor shall deliver to Secured Party a copy of Debtor’s key
to the Deposit Box and shall have taken all actions necessary to provide an
authorized officer of Secured Party with free access to the Deposit Box.
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SECTION 4.02. Further Assurances.
(a) Debtor will, from time to time and at Debtor’s expense, promptly execute and
deliver all further instruments and documents (including the delivery of
certificated securities and supplements to all schedules), authenticate and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be reasonably necessary, or as Secured Party may
reasonably request, in order to perfect and preserve the pledge, assignment, and
security interest granted or purported to be granted hereby, and take all
further action that Secured Party may reasonably request, in order to perfect
and protect any pledge, assignment, or security interest granted or purported to
be granted hereby, and the priority thereof, or to enable Secured Party to
exercise and enforce Secured Party’s and other Lenders’ rights and remedies
hereunder with respect to any Collateral.
(b) In addition to such other information as shall be specifically provided for
herein, Debtor shall furnish to Secured Party such other information with
respect to the Collateral as Secured Party may reasonably request.
(c) Debtor authorizes Secured Party to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the authentication of Debtor where permitted by law and
that (i) indicate the Collateral (A) as all assets of Debtor (or words of
similar effect), regardless of whether any particular asset included in the
Collateral is within the scope of UCC Article 9 of the state or such
jurisdiction or whether such assets are included in the Collateral, or (B) as
being of an equal or lesser scope or with greater detail, and (ii) contain any
other information required by UCC Article 9 of the state or such jurisdiction
for the sufficiency or filing office acceptance of any financing statement,
continuation or amendment, including (A) whether Debtor is an organization, the
type of organization, and any organization identification number issued to
Debtor and, (B) in the case of a financing statement filed as a fixture filing
or indicating Collateral to be fixtures, as-extracted collateral or timber to be
cut, a sufficient description of real property to which the Collateral relates.
Debtor agrees to furnish any such information to Secured Party promptly upon
request. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law. Debtor ratifies its authentication
and delivery of, and the filing of, any financing statement or amendment thereto
describing any of the Collateral which was filed prior to the date of this
Agreement.
(d) Debtor shall pay promptly when due all taxes, assessments, and governmental
charges or levies imposed upon, and all claims (including claims for labor,
materials, and supplies) against, the Collateral except such taxes, assessments,
and governmental charges or levies, and such claims, as are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP; provided, Debtor shall pay all such amounts
prior to any Lien attaching to any Collateral.
(e) Debtor shall, and shall cause each issuer of Collateral to, allow Secured
Party to inspect and copy all records related to the Collateral.
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SECTION 4.03. Place of Perfection; Records; Collection of Collateral.
(a) Debtor shall not change the jurisdiction of its organization from the
jurisdiction specified in Schedule 1, Section (a), its type of entity from the
type of entity specified in Schedule 1, Section (a), its name from the name
specified in Schedule 1, Section (a), or its organizational identification
number from the organizational number specified in Schedule 1, Section (a),
unless Debtor has delivered to Secured Party 30 days prior written notice and
taken such actions as Secured Party may reasonably require with respect to such
change. Debtor shall keep its chief executive office at the address specified in
Schedule 2, Section (a), and the office where it keeps its records concerning
the Accounts constituting any part of the Collateral and all Instruments
constituting any part of the Collateral at the address specified in Schedule 2,
Section (b), unless Debtor has delivered to Secured Party 30 days prior written
notice and taken such actions as Secured Party may reasonably require with
respect to such change. Debtor will hold and preserve such records and
Instruments in a commercially reasonable manner.
(b) Except as otherwise provided in this Section 4.03(b), Debtor shall continue
to collect, in accordance with commercially reasonable procedures and at its own
expense, all amounts due or to become due Debtor under the Collateral. In
connection with such collections, Debtor may take (and, following the occurrence
and during the continuation of an Event of Default, at Secured Party’s
direction, shall take) such action as Debtor or Secured Party may deem necessary
or advisable to enforce collection of the Collateral; provided, however, that
Secured Party shall have the right, if an Event of Default exists, without
notice to Debtor, to notify the Account Debtors or obligors under any Collateral
of the assignment of such Collateral to Secured Party and to direct such Account
Debtors or obligors to make payment of all amounts due or to become due to
Debtor thereunder directly to Secured Party and, at the expense of Debtor, to
enforce collection of any such Collateral, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as
Debtor might have done or as Secured Party reasonably deems appropriate. If any
Event of Default exists, all amounts and proceeds (including Instruments)
received by Debtor in respect of the Collateral shall be received in trust for
the benefit of Secured Party hereunder, shall be segregated from other funds and
property of Debtor and shall be forthwith paid or delivered over to Secured
Party in the same form as so received (with any necessary endorsement) to be
held as cash collateral, thereafter to be applied as provided in the Credit
Agreement. Debtor shall not adjust, settle, or compromise the amount or payment
of any Collateral, release wholly or partly any Account Debtor or obligor
thereof, or allow any credit or discount thereon, except in the ordinary course
of business.
SECTION 4.04. [Intentionally Omitted.]
SECTION 4.05. Deposit Box. On or before 90 days after the date hereof, Debtor
shall cause the bank in which the Deposit Box is maintained to deliver to
Secured Party acknowledgments of the assignment of, and control agreements, with
respect to the Deposit Box, in form and substance reasonably satisfactory to
Secured Party. Debtor shall not establish or maintain any new Deposit Box,
unless prior to the establishment of such new Deposit Box Debtor executes and
delivers to Secured Party assignments of, and control agreements with respect
to, such new Deposit Box in such form as Secured Party may reasonably request,
and cause the bank in which such safety deposit box is or will be maintained, to
deliver to Secured Party acknowledgments of the assignment of, and control
agreements with respect to, such Deposit Box, in form and substance reasonably
satisfactory to Secured Party, and take all actions necessary to establish in
Secured Party control (as that term is defined in the UCC) with respect to such
Deposit Box, including without limitation, delivery of a copy of Debtor’s key to
such Deposit Box.
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SECTION 4.06. [Intentionally Omitted.]
SECTION 4.07. Insurance. Debtor shall, at its own expense, maintain insurance in
accordance with the terms set forth in the Credit Agreement.
SECTION 4.08. Transfers and Other Liens. Debtor shall not (a) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except as permitted under the Credit
Documents, or (b) create or permit to exist any Lien, option, or other
encumbrance upon or with respect to any of the Collateral, except for Permitted
Liens.
SECTION 4.09. Secured Party Appointed Attorney-in-Fact. Debtor hereby
irrevocably appoints Secured Party Debtor’s attorney-in-fact, with full
authority in the place and stead of Debtor and in the name of Debtor or
otherwise to take any action and to execute any instrument which Secured Party
may deem reasonably necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation (provided that the actions listed in
each clause below other than the obtainment and adjustment of insurance may only
be taken or exercised if an Event of Default exists):
(a) to obtain and adjust insurance required to be paid to Secured Party pursuant
to Section 4.07;
(b) to ask, demand, collect, sue for, recover, compromise, receive, and give
acquittance and receipts for moneys due and to become due under or in connection
with the Collateral;
(c) to receive, indorse, and collect any drafts or other Instrument constituting
Collateral in connection therewith;
(d) to file any claims or take any action or institute any proceedings which
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce compliance with the terms and conditions of
any Collateral or the rights of Secured Party with respect to any of the
Collateral;
(e) to amend, modify, extend, restate, or supplement any of the terms,
conditions or other provisions of the Pledged Debt; and
(f) to contact and negotiate directly with the borrowers under the Pledged Debt
or the other parties thereto, and take any other actions deemed reasonably
necessary by Secured Party.
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DEBTOR HEREBY IRREVOCABLY GRANTS TO SECURED PARTY DEBTOR’S PROXY (EXERCISABLE IF
AN EVENT OF DEFAULT EXISTS) TO VOTE ANY SECURITIES INCLUDED IN COLLATERAL AND
APPOINTS SECURED PARTY DEBTOR’S ATTORNEY-IN-FACT TO PERFORM ALL OBLIGATIONS OF
DEBTOR UNDER THIS AGREEMENT AND TO EXERCISE ALL OF SECURED PARTY’S AND EACH
LENDER’S RIGHTS HEREUNDER. THE PROXY AND EACH POWER OF ATTORNEY HEREIN GRANTED,
AND EACH STOCK POWER AND SIMILAR POWER NOW OR HEREAFTER GRANTED (INCLUDING ANY
EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE
IRREVOCABLE PRIOR TO THE RELEASE DATE.
SECTION 4.10. Changes to Representations, Schedules. Not later than 30 days
after the day on which any information disclosed on any Schedule to this
Agreement changed and at such other times as required by this Agreement, Debtor
shall deliver to Secured Party any updated Schedule (provided, the delivery of
any updated Schedule shall not be deemed a waiver of any obligation of Debtor
under any Credit Document and such updated Schedule shall not be effective until
it is accepted by Secured Party). Debtor shall promptly notify Secured Party of
any change in any representation herein and any information on any Schedule
hereto if such change could reasonably be expected to result in a Material
Adverse Event.
SECTION 4.11. Rights to Dividends and Distributions. With respect to any Pledged
Equity Interests, Secured Party shall have authority if an Event of Default
exists, without notice to Debtor, either to have the same registered in Secured
Party’s name or in the name of a nominee, and, with or without such
registration, to demand of First Western, and to receive and receipt for, any
and all dividends and distributions (including any stock or similar dividend or
distribution) payable in respect thereof, whether they be ordinary or
extraordinary. If Debtor shall become entitled to receive or shall receive any
Equity Interests of First Western (including, without limitation, any Equity
Interest representing a dividend or a distribution in connection with any
reclassification, increase, or reduction of capital, or issued in connection
with any reorganization), or any option or rights arising from or relating to
any Equity Interests, whether as an addition to, in substitution of, as a
conversion of, or in exchange for any of the Pledged Equity Interests, or
otherwise, or any Acquisition Rights, Debtor agrees to accept the same as
Secured Party’s agent and to hold the same in trust on behalf of and for the
benefit of Secured Party, and to deliver the same immediately to Secured Party
in the exact form received, with appropriate undated stock or similar powers,
duly executed in blank, to be held by Secured Party, subject to the terms
hereof, as Collateral. Unless an Event of Default exists or will result
therefrom and subject to the Credit Agreement, Debtor shall be entitled to
receive all cash dividends or distributions (to the extent such dividend or
distribution does not represent a return of capital, a liquidating dividend or
similar dividend or distribution) paid or distributed with respect to the
Pledged Equity Interests. Secured Party shall be entitled to all dividends and
distributions, and to any sums paid upon or in respect of any Pledged Equity
Interests, upon the liquidation, dissolution, or reorganization of First
Western, which shall be paid to Secured Party to be held by it as additional
collateral security for and application to the Secured Obligations as provided
in the Credit Agreement. All dividends, distributions and Proceeds paid or
distributed in respect of the Pledged Equity Interests which are received by
Debtor in violation of this Agreement shall, until paid or delivered to Secured
Party, be held by Debtor in trust as additional collateral for the Secured
Obligations.
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SECTION 4.12. Right of Secured Party to Notify First Western. If an Event of
Default exists and at such other times as Secured Party is entitled to receive
dividends, distributions and other property in respect of or consisting of any
Pledged Equity Interests, Secured Party may notify First Western to make
payments of all dividends, distributions and other property directly to Secured
Party and Secured Party may take control of all Proceeds of any Pledged Equity
Interests.
SECTION 4.13. Dilution of Ownership. As to any Pledged Equity Interests, Debtor
will not consent to or approve of the issuance of (a) any additional shares or
units of any class of Equity Interests of First Western (unless immediately upon
issuance additional Equity Interests are pledged and delivered to Secured Party
pursuant to the terms hereof to the extent necessary to give Secured Party a
security interest after such issuance in at least the same percentage of First
Western’s outstanding securities or other Equity Interest as Secured Party had
before such issuance), (b) any instrument convertible voluntarily by the holder
thereof or automatically upon the occurrence or non-occurrence of any event or
condition into, or exchangeable for, any such securities or other Equity
Interests, or (c) any warrants, options, contracts or other commitments
entitling any third party to purchase or otherwise acquire any such securities
or other Equity Interests.
SECTION 4.14. Restrictions on Securities. Debtor will not enter into any
agreement creating, or otherwise permit to exist, any restriction or condition
upon the transfer, voting or control of any Pledged Equity Interests, except as
consented to in writing by Secured Party. No certificate or other instrument
evidencing or constituting any Pledged Equity Interest shall contain any
restriction on transfer or other legend not acceptable to Secured Party. With
respect to each certificate that contains any such legend that is not acceptable
to Secured Party, Debtor shall cause First Western to reissue such certificate
in a form acceptable to Secured Party.
SECTION 4.15. Waiver. To the extent not prohibited by applicable law, Debtor,
agrees that any provision of any Organization Document of First Western, any
applicable law or any other agreement that in any manner restricts, prohibits or
provides conditions to (a) the grant of a Lien on any Equity Interest or other
interest in First Western or any other Collateral, (b) any transfer of any
Equity Interest or other interest in First Western or any other Collateral,
(c) any change in management or control of First Western or (d) any other
exercise by Secured Party or any other Lender of any rights pursuant to this
Agreement or any other Credit Document, or law shall not apply to (i) the grant
of any Lien hereunder, (ii) the execution, delivery and performance of this
Agreement by Debtor, (iii) the foreclosure or other realization upon any
interest in any Collateral, or (iv) the admission of any transferee of any
Collateral as a shareholder, member, partner or equity holder of First Western.
Debtor shall not permit any amendment to or restatement of any Organization
Document, any other governance document or any agreement in any manner to
adversely affect Secured Party’s ability to foreclose on any Collateral or which
conflicts with the provisions of this Section 4.15 without the prior written
consent of Secured Party.
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ARTICLE V
Rights and Powers of Secured Party
SECTION 5.01. Secured Party May Perform. If Debtor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of Secured Party
incurred in connection therewith shall be payable by Debtor under Section 5.07.
SECTION 5.02. Secured Party’s Duties. The powers conferred on Secured Party
hereunder are solely to protect Secured Party’s and Lenders’ interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by Secured Party and Lenders hereunder,
neither Secured Party nor any other Lender shall have any duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders, or other matters relative to any
Collateral, whether or not Secured Party or any other Lender has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Secured Party accords its own property. Except as provided in this
Section 5.02, neither Secured Party nor any other Lender shall have any duty or
liability to protect or preserve any Collateral or to preserve rights pertaining
thereto. Nothing contained in this Agreement shall be construed as requiring or
obligating Secured Party or any other Lender, and neither Secured Party nor any
other Lender shall be required or obligated, to (a) present or file any claim or
notice or take any action, with respect to any Collateral or in connection
therewith or (b) notify Debtor of any decline in the value of any Collateral.
SECTION 5.03. [Intentionally Omitted.]
SECTION 5.04. Remedies. If an Event of Default exists:
(a) Secured Party may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it or
any Lender pursuant to any applicable law, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may require Debtor to, and Debtor will at its
expense and upon request of Secured Party forthwith, assemble all or part of the
Collateral as directed by Secured Party and make it available to Secured Party
at a place to be designated by Secured Party which is reasonably convenient to
both parties at public or private sale, at any of Secured Party’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Secured Party may deem commercially reasonable. Debtor agrees that, to the
extent notice of sale shall be required by law, ten days’ notice to Debtor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
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(b) All cash proceeds received by Secured Party upon any sale of, collection of,
or other realization upon, all or any part of the Collateral shall be applied as
provided in the Credit Agreement.
(c) All payments received by Debtor under or in connection with any Collateral
shall be received in trust for the benefit of Secured Party, shall be segregated
from other funds of Debtor, and shall be forthwith paid over to Secured Party in
the same form as so received (with any necessary indorsement).
(d) Because of the Securities Act of 1933, as amended (“Securities Act”), and
other laws, including without limitation state “blue sky” Laws, or contractual
restrictions or agreements, there may be legal restrictions or limitations
affecting Secured Party in any attempts to dispose of the Collateral and the
enforcement of rights under this Agreement. For these reasons, Secured Party is
authorized by Debtor, but not obligated, if any Event of Default exists, to sell
or otherwise dispose of any of the Collateral at private sale, subject to an
investment letter, or in any other manner which will not require the Collateral,
or any part thereof, to be registered in accordance with the Securities Act, or
any other law. Secured Party is also hereby authorized by Debtor, but not
obligated, to take such actions, give such notices, obtain such consents, and do
such other things as Secured Party may deem required or appropriate under the
Securities Act or other securities laws or other laws or contractual
restrictions or agreements in the event of a sale or disposition of any
Collateral. Debtor understands that Secured Party may in its discretion approach
a restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral than would otherwise be
obtainable if same were registered and/or sold in the open market. No sale so
made in good faith by Secured Party shall be deemed to be not “commercially
reasonable” because so made. Debtor agrees that if an Event of Default exists,
and Secured Party sells the Collateral or any portion thereof at any private
sale or sales, Secured Party shall have the right to rely upon the advice and
opinion of appraisers and other Persons, which appraisers and other Persons are
acceptable to Secured Party, as to the best price reasonably obtainable upon
such a private sale thereof. In the absence of actual fraud, such reliance shall
be conclusive evidence that Secured Party and the other Lenders handled such
matter in a commercially reasonable manner under applicable law.
(e) After notice to Debtor, Secured Party and such Persons as Secured Party may
reasonably designate shall have the right, at Debtor’s own cost and expense, to
verify under reasonable procedures, the validity, amount, quality, quantity,
value, condition, and status of, or any other matter relating to, the
Collateral, including, in the case of Accounts or Collateral in the possession
of any third person, by contacting Account Debtors or the third person
possessing such Collateral for the purpose of making such a verification.
Secured Party shall have the absolute right to share any information it gains
from such inspection or verification with any Lender.
(f) For purposes of enabling Secured Party to exercise rights and remedies under
this Agreement, Debtor grants to Secured Party an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to Debtor
or any other Person; provided, that if the license granted to Secured Party is a
sublicense, Debtor shall be solely responsible for, and indemnify Secured Party
and each Lender against, any royalty or other compensation payable to Debtor’s
licensor or other Person) to use all of Debtor’s software, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded and all related manuals.
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(g) For the purpose of enabling Secured Party to exercise rights and remedies
under this Agreement, Debtor grants to Secured Party an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to Debtor or any other Person; provided, that if the license
granted to Secured Party is a sublicense, Debtor shall be solely responsible
for, and indemnify Secured Party and Lenders against, any royalty or other
compensation payable to Debtor’s licensor or other Person) to use, license, or
sub-license any of the Collateral consisting of intellectual property and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all Software used for the use, compilation, or printout thereof. In
connection therewith, Debtor shall execute and deliver a license agreement to
Secured Party to evidence the grant of such license. The use of such license by
Secured Party shall be exercised, at the option of Secured Party, if an Event of
Default exists; provided, that any license, sub-license, or other transaction
entered into by Secured Party in accordance herewith shall be binding upon
Debtor notwithstanding any subsequent cure or waiver of an Event of Default.
SECTION 5.05. Appointment of Receiver or Trustee. In connection with the
exercise of Secured Party’s rights under this Agreement or any other Credit
Document, Secured Party may, if an Event of Default exists, obtain the
appointment of a receiver or trustee to assume, upon receipt of any necessary
judicial or other Governmental Authority consents or approvals, control of or
ownership of any Collateral. Such receiver or trustee shall have all rights and
powers provided to it by law or by court order or provided to Secured Party
under this Agreement or any other Credit Document. Upon the appointment of such
trustee or receiver, Debtor shall cooperate, to the extent necessary or
appropriate, in the expeditious preparation, execution, and filing of an
application to any Governmental Authority or for consent to the transfer of
control or assignment of such Collateral to the receiver or trustee.
SECTION 5.06. Further Approvals Required.
(a) In connection with the exercise by Secured Party of rights under this
Agreement that affects the disposition of or use of any Collateral (including
rights relating to the disposition of or operation under any Permit), it may be
necessary to obtain the prior consent or approval of Governmental Authorities
and other Persons to a transfer or assignment of Collateral. Debtor shall
execute, deliver, and file, and hereby appoints (to the extent not prohibited by
applicable law) Secured Party as its attorney (exercisable if an Event of
Default exists), to execute, deliver, and file on Debtor’s behalf and in
Debtor’s name, all applications, certificates, filings, instruments, and other
documents (including without limitation any application for an assignment or
transfer of control or ownership) that may be necessary or appropriate, in
Secured Party’s reasonable opinion, to obtain such consents or approvals. Debtor
shall use commercially reasonable efforts to obtain the foregoing consents,
waivers, and approvals, including receipt of consents, waivers, and approvals
under applicable agreements regardless of whether a Potential Default or Event
of Default exists.
(b) Debtor acknowledges that there is no adequate remedy at law for failure by
it to comply with the provisions of this Section 5.06 and that such failure
would not be adequately compensable in damages, and therefore agrees that this
Section 5.06 may be specifically enforced.
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SECTION 5.07. Expenses.
(a) Debtor will upon demand pay to Secured Party (i) all reasonable
out-of-pocket expenses incurred by Secured Party and its Affiliates, including
the reasonable fees, charges and disbursements of counsel for Secured Party, in
connection with the preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions hereof or thereof, and
(ii) all out-of-pocket expenses incurred by Secured Party, including the fees,
charges and disbursements of any counsel or advisor for Secured Party, in
connection with the enforcement or protection of its rights and the rights of
Lenders in connection with this Agreement including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of any of the Secured Obligations.
(b) DEBTOR SHALL INDEMNIFY SECURED PARTY AND EACH LENDER, AND EACH RELATED PARTY
OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)
AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND
DISBURSEMENTS OF ANY COUNSEL OR ADVISOR FOR ANY INDEMNITEE, INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR
UNDER ANY OTHER CREDIT DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS OR ANY
OTHER TRANSACTIONS CONTEMPLATED HEREBY, AND (II) ANY ACTUAL OR PROSPECTIVE
CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER
ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO
ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE.
SECTION 5.08. Voting Rights. Debtor shall retain all voting rights to the
Collateral unless an Event of Default exists, at which time such voting rights
shall transfer to or be exercised as directed by Secured Party, at its sole
discretion; provided, however, that no voting or management rights shall be
exercised, vote case, consent, waiver, or ratification given, or action taken by
Debtor which would be inconsistent with or violate any provision of this
Agreement or any other Credit Document.
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ARTICLE VI
Miscellaneous
SECTION 6.01. Waiver of Subrogation. Until the Release Date, Debtor shall not
assert, enforce, or otherwise exercise (a) any right of subrogation to any of
the rights or Liens of Secured Party or any Lender or any Person acting for the
benefit of Secured Party or any Lender against any Subsidiary or any Collateral
or any other security, or (b) any right of recourse, reimbursement,
contribution, indemnification, or similar right against any Subsidiary on all or
any part of the Secured Obligations, and Debtor hereby waives any and all of the
foregoing rights and the benefit of, and any right to participate in, any
Collateral or other security given to Secured Party, any Lender or any Person
acting for the benefit of Secured Party or any Lender to secure payment of the
Secured Obligations. This Section 6.01 shall survive the termination of this
Agreement, and any satisfaction and discharge of Debtor by virtue of any
payment, court order, or law.
SECTION 6.02. Cumulative Rights. All rights of Secured Party and each Lender
under the Credit Documents are cumulative of each other and of every other right
which Secured Party and each Lender may otherwise have at law or in equity or
under any other agreement. The exercise of one or more rights shall not
prejudice or impair the concurrent or subsequent exercise of other rights.
SECTION 6.03. Amendments; Waivers. Any term, covenant, agreement, or condition
of this Agreement may be amended, and any right under this Agreement may be
waived, if, but only if, such amendment or waiver is in writing and is signed by
Secured Party and, in the case of an amendment, by Debtor. Unless otherwise
specified in such waiver, a waiver of any right under this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given. No election not to exercise, failure to exercise or delay in exercising
any right, nor any course of dealing or performance, shall operate as a waiver
of any right of Secured Party or any Lender under this Agreement, any other
Credit Document or applicable law, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right of Secured Party or any Lender under this Agreement or any other
Credit Document or applicable law.
SECTION 6.04. Continuing Security Interest. This Agreement creates a continuing
security interest in the Collateral and shall (i) remain in full force and
effect until the Release Date, (ii) be binding upon Debtor, its permitted
successors and assigns, and Debtor as a debtor in possession and any trustee or
administrator for Debtor or is property, and (iii) inure to the benefit of, and
be enforceable by, Secured Party and its successors, transferees and assigns.
Upon any such termination, all Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of Secured Party, each Lender and
Debtor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the granting parties and Secured Party will, at Debtor’s expense,
execute and deliver to Debtor such documents as Debtor shall reasonably request
to evidence such termination and shall deliver to Debtor any Collateral held by
Secured Party hereunder. Debtor agrees that to the extent that Secured Party or
any Lender receives any payment or benefit and such payment or benefit, or any
part thereof, is subsequently invalidated, declared to be fraudulent or
preferential, set aside or is required to be repaid to a trustee, receiver, or
any other party under any proceeding under any bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally,
common law or equitable cause, then to the extent of such payment or benefit,
the Secured Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or benefit had
not been made and, further, any such repayment by Secured Party or any Lender,
to the extent that Secured Party or any Lender did not directly receive a
corresponding cash payment, shall be added to and be additional Secured
Obligations payable upon demand by Secured Party or any Lender and secured
hereby, and, if the Lien and security interest hereof shall have been released,
such Lien and security interest shall be reinstated with the same effect and
priority as on the date of execution hereof all as if no release of such Lien or
security interest had ever occurred.
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SECTION 6.05. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the
laws of the State of Texas.
(b) Debtor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the state and Federal courts in
Texas and of the United States District Court for the Northern District of
Texas, Dallas Division, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in the State of Texas or, to
the extent not prohibited by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that Secured Party or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against Debtor or the Collateral in the
courts of any jurisdiction.
(c) Debtor hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Credit Document in any court
referred to in Section 6.05(b). Each of the parties hereto hereby irrevocably
waives, to the fullest extent not prohibited by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 6.11. Nothing in this Agreement or
any other Credit Document will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 6.06. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
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SECTION 6.07. Secured Party’s Right to Use Agents. Secured Party may exercise
its rights under this Agreement through an agent or other designee.
SECTION 6.08. No Interference, Compensation or Expense. Secured Party may
exercise its rights under this Agreement (a) without resistance or interference
by Debtor and (b) without payment of any rent, license fee, or compensation of
any kind to Debtor.
SECTION 6.09. Waivers of Rights Inhibiting Enforcement. Debtor waives (a) any
claim that, as to any part of the Collateral, a private sale, should Secured
Party elect so to proceed, is, in and of itself, not a commercially reasonable
method of sale for such Collateral, (b) except as otherwise provided in this
Agreement, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, NOTICE OR
JUDICIAL HEARING IN CONNECTION WITH SECURED PARTY’S DISPOSITION OF ANY OF THE
COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE HAVE UNDER ANY
LAW AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER
REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF SECURED PARTY’S OR CREDITORS’
RIGHTS HEREUNDER and (c) all rights of redemption, appraisement or valuation.
SECTION 6.10. Obligations Not Affected. To the fullest extent not prohibited by
applicable law, the obligations of Debtor under this Agreement shall remain in
full force and effect without regard to, and shall not be impaired or affected
by:
(a) any amendment, addition, or supplement to, or restatement of any Credit
Document or any instrument delivered in connection therewith or any assignment
or transfer thereof;
(b) any exercise, non-exercise, or waiver by Secured Party or any Lender of any
right, remedy, power, or privilege under or in respect of, or any release of any
guaranty, any collateral, or the Collateral or any part thereof provided
pursuant to, this Agreement, any other Credit Document;
(c) any waiver, consent, extension, indulgence, or other action or inaction in
respect of this Agreement, any other Credit Document or any assignment or
transfer of any thereof;
(d) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation, or the like of any Borrower, Subsidiary or any other
Person, whether or not Debtor shall have notice or knowledge of any of the
foregoing; or
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(e) any other event which may give Debtor or any Subsidiary a defense to, or a
discharge of, any of its obligations under any Credit Document.
SECTION 6.11. Notices and Deliveries. All notices and other communications
provided for hereunder shall be effectuated in the manner provided for in
Section 14.2 of the Credit Agreement; provided, that notices to Debtor shall be
addressed to Debtor’s address in Schedule 2, Section (a), to the attention of
President.
SECTION 6.12. Survival. All covenants, agreements, representations and
warranties made by Debtor herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by Secured Party and Lenders and shall survive the
execution and delivery of this Agreement, regardless of any investigation made
by Secured Party or any Lender or on its behalf and notwithstanding that Secured
Party or any Lender may have had notice or knowledge of any Potential Default or
Event of Default or incorrect representation or warranty at the time any credit
is extended, and shall continue in full force and effect as long as any Secured
Obligation is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 4.02(d), 5.02, 5.07, 6.01,
6.04, 6.05, 6.06 and 6.12 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Secured Obligations, the expiration or termination of the
Commitments or the termination of this Agreement, any other Credit Document or
any provision hereof or thereof.
SECTION 6.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument. Executed counterpart signature
pages delivered by facsimile or as an attachment to electronic mail shall be
deemed to be an original.
SECTION 6.14. ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER
CREDIT DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first above written.

            Debtor:

PMC COMMERCIAL TRUST
      By:   /s/ Barry N. Berlin         Barry N. Berlin        Executive Vice
President and
Chief Financial Officer   

 

 

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            Secured Party:

JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Administrative Agent
      By:   /s/ Denise Parks        Denise Parks        Senior Vice President