Exhibit 10.16

SECURITY AGREEMENT

This Security Agreement ("Agreement") is made and
entered into as of July 12, 2001, by and between E-Loan, Inc., a Delaware
corporation ("Company" or "Debtor"), and The Charles Schwab
Corporation, a Delaware corporation ("Secured Party").

RECITALS

A.	Concurrently with the execution of this Agreement the
Company has executed and delivered to Secured Party its 8% Convertible Note in
the principal amount of $5,000,000, a copy of which is attached hereto as
Exhibit A (the "Promissory Note").

B.	The Company and Secured Party desire to enter into this
Agreement pursuant to which the Company grants to the Secured Party a security
interest in the Collateral (as that term is hereinafter defined) to secure the
payment and performance by the Company of its obligations under the Promissory
Note.

TERMS AND CONDITIONS

NOW, THEREFORE, the parties hereto agree as follows:

1. Definitions.
2. Specific Terms. As used in this Agreement, the
following terms have the following meanings (such meanings being equally
applicable to both the singular and plural forms of the terms defined):
3. All Accounts of Debtor;
4. All Contracts and Chattel Paper of Debtor, including
without limitation, Contracts and Chattel Paper, whether in written or
electronic form, evidencing both a debt and security interest in motor
vehicles;
5. All Commercial Tort Claims of Debtor;
6. the Debtor's Auto Base Account, Account #: [*], and Auto
ZBA/Draft Account, Account # [*], held by Bank One, N.A. (collectively, the
"Deposit Accounts");
7. All Documents of Debtor;
8. All Equipment of Debtor;
9. All Fixtures of Debtor;
10. All General Intangibles of Debtor, including, without
limitation, all Payment Intangibles and all Intellectual Property;
11. All Instruments of Debtor, including without limitation,
Promissory Notes;
12. All Investment Property of Debtor, including the
securities accounts identified on Schedule C hereto (the "Securities
Accounts");
13. All Letter of Credit Rights of Debtor;
14. All Supporting Obligations of Debtor;
15. All of Debtor's Books;
16. All other goods and personal property of Debtor
(excepting therefrom all deposit accounts of Debtor not set forth under Section
1.1(d) above), wherever located, whether tangible or intangible, and whether now
owned or hereafter acquired, existing, leased or consigned by or to Debtor;
and
17. All proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Collateral, and any and all accounts, general intangibles,
negotiable collateral, money, deposit accounts (excepting therefrom all deposit
accounts of Debtor not set forth under Section 1.1(d) above), or other tangible
or intangible property resulting form the sale, exchange, collection or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.PROVIDED, HOWEVER, that the Collateral shall not in any event include
property included in the "Collateral" described in the Warehouse Credit
Agreement dated as of June 24, 1998, as amended, among Cooper River Funding
Inc., GE Capital Mortgage Services, Inc. and Debtor, or the property included in
the "Collateral" described in the Master Loan and Security Agreement dated as of
May 20, 1999 between Greenwich Capital Mortgage Services, Inc. and
Debtor.
18. Other Definitional Provisions.
19. All capitalized terms not otherwise defined in this
Agreement shall have the same meanings as defined in the Code.
20. The words "hereof" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
21. Attachment of Security
Interest. Debtor hereby grants and assigns to Secured Party a security
interest (the "Security Interest") in and to the Collateral to secure payment by
Debtor of the Promissory Note. In addition, the Security Interest hereby created
shall attach immediately upon execution of this Agreement by Debtor and shall
secure (a) any and all amendments, extensions, renewals of the Promissory
Note; (b) strict performance and observance of all agreements, warranties
and covenants contained in the Promissory Note and this Agreement; and
(c) the repayment of all monies expended by Secured Party under the
provisions hereof, with interest thereon from the date of expenditure at the
highest lawful rate.
22. Subordination of Security Interest. The Security
Interest granted by Debtor to the Secured Party pursuant to this Agreement shall
be subject, junior and subordinate to the Senior Indebtedness. At the request of
Debtor, Secured Party agrees to promptly execute and deliver at any time and
from time to time, as requested by the holders of the Senior Indebtedness,
subordination agreements, on forms requested by the holder(s) of the Senior
Indebtedness, and other evidence or agreements ratifying, confirming and/or
consenting to the subordination of the Secured Party's Security Interest to the
Lien(s) in favor of the holder(s) of the Senior Indebtedness.
23. Revised Article 9. The parties acknowledge that
revised Article 9 of the Uniform Commercial Code in the form approved by the
American Law Institute and the National Conference of Commissioners on Uniform
State Law and contained in the 1999 official text of Revised Article 9 ("Revised
Article 9") has been adopted in the State of California and elsewhere and hereby
agree to the following provisions of this Agreement in anticipation of the
possible application thereof, in one or more jurisdictions, to the transactions
contemplated hereby.
24. Revised Article of Collateral.In applying
the law of any jurisdiction in which Revised Article 9 is in effect, the
Collateral is all assets of Debtor included in the definition of "Collateral" in
Section 1, whether or not within the scope of Revised Article 9.
25. Continuation Statements. Secured Party may at any
time and from time to time file financing statements, continuation statements
(including "in lieu" financing statements) and amendments thereto that describe
the Collateral and which contain any other information required by Part 5 of
Revised Article 9 for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including whether
Debtor is an organization, the type of organization and any organization
identification number issued to Debtor. Debtor agrees to furnish any such
information to Secured Party promptly upon request. Any such financing
statements, continuation statements or amendments may be signed by Secured Party
on behalf of Debtor and may be filed at any time in any jurisdiction whether or
not Revised Article 9 is then in effect in that jurisdiction.
26. Cooperation.Debtor shall at any time and from
time to time, whether or not Revised Article 9 is in effect in any particular
jurisdiction, take such steps as Secured Party may reasonably request (i) to
obtain an acknowledgment, in form and substance reasonably satisfactory to
Secured Party, of any bailee having possession of any of the Collateral that the
bailee holds such Collateral for Secured Party, (ii) for Secured Party to obtain
"control" of any investment property, letter-of-credit rights or electronic
chattel paper (as such terms are defined in Revised Article 9 with corresponding
provisions in Rev.    9-104, 9-105, 9-106 and 9-107 relating to what constitutes
"control" for such items of Collateral), with any agreements establishing
control to be in form and substance reasonably satisfactory to Secured Party,
and (iii) otherwise to insure the continued perfection and priority of Secured
Party's security interest in any of the Collateral and of the preservation of
its rights therein, whether in anticipation of or following the effectiveness of
Revised Article 9 in any jurisdiction.
27. No Impairment. Nothing contained in this Section 4
shall be construed to narrow the scope of Secured Party's security interest in
any of the Collateral or the perfection or priority thereof or to impair or
otherwise limit any of the rights, powers, privileges or remedies of Secured
Party hereunder except (and then only to the extent) mandated by Revised Article
9 to the extent then applicable.
28. Obligations of Secured Party; Collection of Accounts.
29. Obligations of Secured Party. Secured Party shall
have no obligation or liability under any Contract by reason of or arising out
of this Agreement or the granting to Secured Party of a lien therein or the
receipt by Secured Party of any payment relating to any Contract pursuant
hereto, nor shall Secured Party be required or obligated in any manner to
perform or fulfill any of the obligations of Debtor under or pursuant to any
Contract, or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any performance
by any party under any Contract, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
30. Collection of Accounts. Secured Party authorizes
Debtor to collect its Accounts, provided that such collection is performed in a
prudent and businesslike manner, and Secured Party may, upon the occurrence and
during the continuation of any Event of Default and without notice, limit or
terminate said authority at any time. Upon the occurrence and during the
continuance of any Event of Default, at the request of Secured Party, Debtor
shall deliver all original and other documents evidencing and relating to the
performance of labor or service which created such Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
31. Notification of Third Parties. Secured Party may at
any time, upon the occurrence and during the continuance of any Event of
Default, without notifying Debtor of its intention to do so, notify Account
Debtors of Debtor, parties to the Contracts of Debtor, obligors in respect of
Instruments of Debtor and obligors in respect of Chattel Paper of Debtor that
the Accounts and the right, title and interest of Debtor in and under such
Contracts, Instruments and Chattel Paper have been assigned to Secured Party and
that payments shall be made directly to Secured Party. Upon the request of
Secured Party, Debtor shall so notify such Account Debtors, parties to such
Contracts, obligors in respect of such Instruments and obligors in respect of
such Chattel Paper. Upon the occurrence and during the continuance of any Event
of Default, Secured Party may, in its name or in the name of others, communicate
with such Account Debtors, parties to such Contracts, obligors in respect of
such Instruments and obligors in respect of such Chattel Paper to verify with
such parties, to Secured Party's satisfaction, the existence, amount and terms
of any such Accounts, Contracts, Instruments or Chattel Paper. Debtor agrees
that it will hold in trust for the Secured Party, as the Secured Party trustee,
any collections that it receives with respect to any such Accounts, Contracts,
Instruments or Chattel Paper and immediately will deliver said collections to
the Secured Party in their original form as received by Debtor.
32. Representations and Warranties. Debtor hereby
represents and warrants to Secured Party that:
33. Organization; Good Standing, etc. Debtor is a
corporation, validly existing under the laws of the State of Delaware. Debtor
has the requisite power and all necessary governmental authority to conduct its
business as currently being conducted. Debtor's taxpayer identification number
is, and chief executive office, principal place of business, and the place where
Debtor maintains its records concerning the Collateral are set forth on the
signature page hereof.
34. Ownership of Collateral. Except for the security
interest granted to Secured Party under this Agreement and Permitted Liens,
Debtor is the sole legal and equitable owner or, has the power to transfer each
item of the Collateral in which it purports to grant a security interest
hereunder.
35. Priority. No effective Agreement, financing
statement, equivalent security or lien instrument or continuation statement
covering all or any part of the Collateral exists, except such as may have been
filed by Debtor in favor of Secured Party pursuant to this Agreement, except for
Permitted Liens.
36. Perfected Security Interest. This Agreement creates a
legal and valid security interest on and in all of the Collateral in which
Debtor now has rights and all filings and other actions necessary or desirable
to perfect and protect such security interest will be duly taken. Accordingly,
Debtor will undertake all necessary action required by it to create a fully
perfected security interest for the benefit of Secured Party in all of the
Collateral in which Debtor now has rights subject only to Permitted Liens. This
Agreement will create a legal and valid and fully perfected security interest in
the Collateral in which Debtor later acquires rights, when Debtor acquires those
rights subject only to Permitted Liens and additional filings to be made by
Secured Party as are necessary to perfect Secured Party's security interest in
subsequent ownership rights.
37. Location of Principal Place of Business and
Records. Debtor's principal place of business and the place where Debtor
maintains his records concerning the Collateral are set forth on the signature
page hereof. Debtor shall not change his legal residence or remove or cause to
be removed, the records concerning the Collateral from those premises without
prior written notice to Secured Party.
38. Location of Collateral. The Collateral, other than
Deposit Accounts and motor vehicles and other mobile goods of the type
contemplated in Section 9103(3)(a) of the Code, is presently located at such
address and at such additional addresses set forth on Schedule B attached
hereto.
39. Account Information. The name and address of each
depository institution at which Debtor maintains any Securities Account
consisting of a portion of the Collateral and the account number and account
name of each such Securities Account is listed on Schedule C attached
hereto. Debtor agrees to amend Schedule C from time to time within five (5)
business days after opening any additional Securities Account or closing or
changing the account name or number on any existing Securities Account.
40. Ownership of Securities. Debtor is the sole holder
of record and the sole beneficial owner of all certificated securities and
uncertificated securities pledged to Secured Party by Debtor under Section 2 of
this Agreement, free and clear of any adverse claim, as defined in Section
8102(a)(1) of the Code, except for the Lien created in favor of Secured Party by
this Agreement.
41. Compliance with Securities Laws. None of the
Investment Property of Debtor has been transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such transfer may be subject.
42. Description of Intellectual Property. All Trademarks,
patents, copyrights and other Intellectual Property now owned, held or in which
Debtor otherwise has any interest are listed on Schedule D attached hereto.
Debtor shall amend Schedule D from time to time within twenty (20) business
days after the filing of any application for a patent, Trademark or copyright or
the issuance of any patent or registration of any Trademark or copyright to
reflect any additions to or deletions from this list. Except as set forth on
Schedule D, none of the patents, Trademarks or copyrights has been licensed
to any third party.
43. Affirmative Covenants of Debtor. So long as any
sums are due Secured Party under the Promissory Note or this Agreement, Debtor
hereby covenants and agrees as follows:
44. Disposition of Collateral. Other than in the
ordinary course of business, Debtor shall not sell, lease, transfer or otherwise
dispose of any of the Collateral, or attempt or contract to do so.
45. Change of Jurisdiction of Organization, Relocation of
Business or Collateral. Debtor shall not change its jurisdiction of
organization, relocate its chief executive office, principal place of business
or its records, or allow the relocation of any Collateral (except as allowed
pursuant to Section 7.1 immediately above) from such address(es) provided to the
Secured Party pursuant to Section 6 above without thirty (30) days prior written
notice to the Secured Party.
46. Corporate Existence, Etc. At all times to preserve
and keep in full force and effect its corporate existence and rights and
franchises material to its business.
47. Limitation on Liens on Collateral. Debtor shall
not, directly or indirectly, create, permit or suffer to exist, and shall defend
the Collateral against and take such other action as is necessary to remove, any
Lien on the Collateral, except (a) Permitted Liens and (b) the Lien granted to
the Secured Party under this Agreement. Debtor shall further defend the right,
title and interest of the secured Party in and to any of Debtor's rights under
the Chattel Paper, Contracts, Documents, General Intangibles, Instruments and
Investment Property and to the Equipment and Fixtures and in and to the Proceeds
thereof against the claims and demands of all persons whomsoever.
48. Insurance. To maintain or cause to be maintained,
with financially sound and reputable insurers, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in the same or similar
businesses and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations.
Every policy of insurance referred to in this Section shall contain an agreement
by the insurer that it will not cancel such policy except after 30 days' prior
written notice to Secured Party.
49. Inspection. To permit any authorized
representatives designated by the Secured Party to visit and inspect any of the
properties of the Debtor and Debtor's Books, and to make copies and take
extracts therefrom, and to discuss Debtor's affairs, finances and accounts with
its officers and independent public accountants, all at such reasonable times
during normal business hours and as often as may be reasonably
requested.
50. Compliance with Laws, Etc. To exercise due
diligence in order to comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance with
which would materially and adversely affect the business, properties, assets,
operations or condition (financial or otherwise) of Debtor.
51. Notice of Default under Senior Indebtedness.
Debtor shall promptly deliver to Secured Party any written notice which it
receives from any holder(s) of the Senior Indebtedness of any claim of breach or
default under the Senior Indebtedness or of any event or occurrence which with
notice or the passage of time, or both, constitutes or may constitute a breach
or default under the Senior Indebtedness.
52. Attachment of Collateral; Litigation. Debtor shall
immediately notify Secured Party of any attachment or other legal process levied
against the Collateral and the commencement, or threatened commencement, of any
legal action against Debtor and/or the Collateral.
53. Consents and Approvals. At Debtor's expense and
Secured Party's request, before or after an Event of Default, Debtor shall file
or cause to be filed such applications and take such other actions as Secured
Party may request to obtain the consent or approval of any governmental
authority to Secured Party's rights, remedies, powers, privileges and benefits
hereunder, including, without limitation, the right to sell all the Collateral
upon an Event of Default without additional consent or approval from such
governmental authority (and, because Debtor agrees that Secured Party's remedies
at law for failure of Debtor to comply with this provision would be inadequate
and that such failure would not be adequately compensable in damages, Debtor
agrees that its covenants in this provision may be specifically
enforced).
54. Taxes, Assessments, Etc. Debtor shall pay promptly
when due all property and other taxes, assessments and government charges or
levies imposed upon, and all claims (including claims for labor, materials and
supplies) against, any item of Collateral, except to the extent the validity
thereof is being contested in good faith and adequate reserves are being
maintained in connection therewith.
55. Maintenance of Records. Debtor shall keep and
maintain at his own cost and expense satisfactory and complete records of the
Collateral.
56. Further Assurances; Pledge of Instruments. At any
time and from time to time, upon the written request of Secured Party, and at
the sole expense of Debtor, Debtor shall promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as Secured Party may reasonably deem necessary or desirable to obtain the full
benefits of this Agreement. Debtor also hereby authorizes Secured Party to file
any such financing or continuation statement (including "in lieu" continuation
statements) without the signature of Debtor. If any amount payable under or in
connection with any of the Collateral is or shall become evidenced by any
Instrument, such Instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner reasonably
satisfactory to Secured Party and delivered to Secured Party promptly and in any
event within five (5) business days of Debtor's receipt thereof; provided until
an Event of Default shall have occurred and be continuing, Debtor shall have no
obligation to endorse and deliver to secured party any instruments arising out
of or related to Debtor's auto loan activities.
57. Notification Regarding Changes in Intellectual
Property. Debtor shall promptly advise Secured Party of any subsequent
ownership right or interest of the Debtor in or to any item of Intellectual
Property not specified on Schedule D hereto, and any subsequent changes to
Debtor's ownership right or interest in any item of Intellectual Property
specified on Schedule D hereto, and shall amend such Schedule, as
necessary, to reflect any addition, deletion or other change to such ownership
rights.
58. Defense of Intellectual Property. Debtor shall
(i) protect, defend and maintain the validity and enforceability of the
copyrights, patents and Trademarks, (ii) use its reasonable best efforts to
detect infringements of the copyrights, patents and Trademarks and promptly
advise Secured Party in writing of material infringements detected and
(iii) not allow any copyrights, patents or Trademarks to be abandoned,
forfeited or dedicated to the public without the written consent of Secured
Party.
59. Remedies in Favor of Secured Parties. Upon the
occurrence of an Event of Default, the Secured Party shall have the following
rights and remedies:
60. Rights. The Secured Party shall have all rights
and remedies afforded a secured party by the chapter on "Default" of Division 9
of the Code, in addition to the rights and remedies provided in this Agreement,
the Promissory Note or otherwise permitted by law. Without limiting the
generality of the foregoing, Debtor expressly agrees that in any such event
Secured Party, without demand of performance or other demand, advertisement or
notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon Debtor or any other person (all and each of
which demands, advertisements and notices are hereby expressly waived to the
maximum extent permitted by the Code and other applicable law), may (i) reclaim,
take possession, recover, store, maintain, finish, repair, prepare for sale or
lease, shop, advertise for sale or lease and sell or lease (in the manner
provided herein) the Collateral, and in connection with the liquidation of the
Collateral and collection of the accounts receivable pledged as Collateral, use
any Trademark, copyright or process used or owned by Debtor and (ii) forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, assign, give an option or options to
purchase or sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of Secured
Party offices or elsewhere at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. To the
extent Debtor has the right to do so, Debtor authorizes Secured Party, on the
terms set forth in this Section 8 to enter the premises where the
Collateral is located, to take possession of the Collateral, or any part of it,
and to pay, purchase, contact, or compromise any encumbrance, charge, or lien
which, in the opinion of Secured Party, appears to be prior or superior to its
security interest. Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of said Collateral so sold, free of any
right or equity of redemption, which equity of redemption Debtor hereby
releases. Debtor further agrees, at Secured Party's request, to assemble his
Collateral and make it available to Secured Party at places which Secured Party
shall reasonably select, whether at Debtor's premises or elsewhere. To the
maximum extent permitted by applicable law, Debtor waives all claims, damages,
and demands against Secured Party arising out of the repossession, retention or
sale of the Collateral. Debtor agrees that Secured Party need not give more than
ten (10) days' notice of the time and place of any public sale or of the time
after which a private sale may take place and that such notice is reasonable
notification of such matters.
61. Remedies Cumulative. The rights and remedies of
the Secured Party under this Agreement shall be cumulative. The Secured Party
shall have all other rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by Secured Party of one right
or remedy shall be deemed an election, and no waiver by Secured Party of any
Event of Default shall be deemed a continuing waiver. No delay by the Secured
Party shall constitute a waiver, election, or acquiescence by it.
62. Disposition of Collateral. Secured Party shall
apply the proceeds of any sale or other disposition of the Collateral under this
Section 8 in the following order: first, to the payment of all its expenses
incurred in retaking, holding, and preparing any of the Collateral for sale or
other disposition, in arranging for such sale or other disposition, and in
actually selling or disposing of the same (all of which are part of the
obligations secured by this Agreement); second, toward repayment of amounts
expended by Secured Party under Section 7; third, toward payment of the
balance of the obligations secured by this Agreement in such order and manner as
Secured Party, in its discretion, may deem advisable, or as a court of competent
jurisdiction may direct, fourth, to Debtor. If the proceeds are insufficient to
pay the obligations secured by this Agreement in full, Debtor shall remain
liable for any deficiency, Debtor also being liable for the attorney costs of
any attorneys employed by Secured Party to collect such deficiency. The
Collateral may be sold, transferred or otherwise disposed of by Debtor in the
ordinary course of business for a fair consideration and upon commercial credit
terms.
63. Financing Statement. Debtor shall sign and execute
alone or with the Secured Party any financing statements, notices or other
document or procure any document reasonably requested by the Secured Party in
order to create, perfect or continue the security interest created by this
Agreement.
64. Waiver of Demand, Etc. Debtor hereby expressly
waives demand, presentment, protest and notice of protest and notice of dishonor
with respect to any and all instruments and commercial paper, included in or
evidencing any of the obligations, and any and all other demands and notices of
any kind or nature whatsoever with respect to the obligations and this
Agreement, except such as are expressly provided for herein. No notice to or
demand on Debtor which the Secured Party may elect to give shall entitle Debtor
to any other or further notice or demand in the same, similar or other
circumstances.
65. Indemnification. Debtor hereby assumes all
liability for the Collateral, for the Security Interest, and for any use,
possession, maintenance, and management of, all or any of the Collateral,
including, without limitation, any taxes arising as a result of, or in
connection with, the transactions contemplated herein, and agrees to assume
liability for, and to indemnify and hold Secured Party harmless from and
against, any and all claims, causes of action, or liability, for injuries to or
deaths of persons and damage to property, howsoever arising from or incident to
such use, possession, maintenance, and management, whether such persons be
agents or employees of Debtor or of third parties, or such damage be to property
of Debtor or of others. Debtor agrees to indemnify, save, and hold Secured Party
harmless from and against, and covenants to defend Secured Party against, any
and all losses, damages, claims, costs, penalties, liabilities, and expenses,
including, without limitation, court costs and reasonable attorneys' fees,
howsoever arising or incurred because of, incident to, or with respect to
Collateral or any use, possession, maintenance, or management thereof (a
"Claim"). In the event that any Claim is brought against Secured Party,
Secured Party agrees to give prompt written notice to Debtor with respect to
same, together with a copy of such claim, and so long as no Event of Default
shall have occurred and be continuing, Debtor shall have the right in good faith
and by appropriate proceedings to defend Secured Party against such Claim and
employ counsel acceptable to Secured Party to conduct such defense (at Debtor's
sole expense) so long as such defense shall not involve any danger of the
foreclosure, sale, forfeiture or loss, or imposition of any Lien, other than a
Permitted Lien, on any part of the Collateral, or subject Secured Party to
criminal liability. Should Debtor elect to engage its own counsel acceptable to
Secured Party, Secured Party may continue to participate in the defense of any
such claim and will retain the right to settle any such matter on terms and
conditions satisfactory to Secured Party and Debtor. All such settlements shall
be paid by and remain the sole responsibility of Debtor. In the event Debtor
does not accept the defense of the Claim as provided above, Secured Party shall
have the right to defend against such Claim, in its sole discretion, and pursue
its rights hereunder.
66. Reinstatement. This Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against Debtor for liquidation or reorganization, should Debtor become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of Debtor's property and
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the obligations secured hereby, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the obligations secured
hereby, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the obligations secured hereby shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or
returned.
67. Termination of this Agreement. Subject to Section
12 hereof, this Agreement shall terminate upon the payment and performance in
full of all of the obligations secured hereby.
68. Notices. All notices or other written
communications required or permitted to be given by Agreement shall be deemed
given if personally delivered or five (5) days after it has been sent (the date
of posting shall be considered as the first day and there shall be excluded any
Sundays, legal holidays or other days upon which the United States mail
generally is not delivered) by United States registered or certified mail,
postage prepaid, properly addressed to the party to receive the notice at the
following address or any other address given to the other party in the manner
provided by this Section 14:
69. Severability. If any provision of this Agreement
is determined to be invalid or unenforceable, the provision shall be deemed to
be severable from the remainder of this Agreement and shall not cause the
invalidity or unenforceability of the remainder of this Agreement.
70. Attorneys' Fees and Litigation Costs. If any legal
action or other proceeding is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any provision of this Agreement, the successful or prevailing
party shall be entitled to recover reasonable attorneys' fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it may be entitled.
71. Governing Law. This Agreement shall be governed
by, interpreted under, and construed and enforced in accordance with the
internal laws, and not the laws pertaining to conflicts or choice of laws, of
the State of California applicable to agreements made and to be performed wholly
within the State of California.
72. Captions. The captions of the sections and
subsections of this Agreement are included for reference purposes only and are
not intended to be a part of the Agreement or in any way to define, limit or
describe the scope or intent of the particular provision to which they
refer.
73. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
74. Entire Agreement; Amendment. This Agreement
contains the entire understanding between the parties with respect to the
subject matter hereof and supersedes any and all prior and contemporaneous
written or oral negotiations and agreements between them regarding the subject
matter hereof. This Agreement may be amended only in a writing signed by both of
the parties.
75. Successor and Assigns. This Agreement and all
obligations of Debtor hereunder shall be binding upon the successors and assigns
of Debtor, and shall, together with the rights and remedies of Secured Party
hereunder, inure to the benefit of Secured Party, any future holder of any of
the obligations secured hereby and their respective successors and assigns. No
sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the obligations
secured hereby or any portion thereof or interest therein shall in any manner
affect the lien granted to Secured Party hereunder.