AT BORROWER'S EXPENSE FOR THE
INSURER OF THE LIABILITY OR BY COUNSEL DESIGNATED BY BORROWER (UNLESS REASONABLY
DISAPPROVED BY LENDER PROMPTLY AFTER LENDER HAS BEEN NOTIFIED OF SUCH COUNSEL);
PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL COMPROMISE THE RIGHT OF LENDER (OR
ANY OTHER INDEMNIFIED PARTY) TO APPOINT ITS OWN COUNSEL AT BORROWER'S EXPENSE
FOR ITS DEFENSE WITH RESPECT TO ANY ACTION WHICH, IN THE REASONABLE OPINION OF
LENDER OR SUCH OTHER INDEMNIFIED PARTY, AS APPLICABLE, PRESENTS A CONFLICT OR
POTENTIAL CONFLICT BETWEEN LENDER OR SUCH OTHER INDEMNIFIED PARTY THAT WOULD
MAKE SUCH SEPARATE REPRESENTATION ADVISABLE.
ANY INDEMNIFIED PARTY WILL GIVE
BORROWER PROMPT NOTICE AFTER SUCH INDEMNIFIED PARTY OBTAINS ACTUAL KNOWLEDGE OF
ANY POTENTIAL CLAIM BY SUCH INDEMNIFIED PARTY FOR INDEMNIFICATION HEREUNDER.
THE INDEMNIFIED PARTIES SHALL NOT SETTLE OR COMPROMISE ANY ACTION, PROCEEDING OR
CLAIM AS TO WHICH IT IS INDEMNIFIED HEREUNDER WITHOUT NOTICE TO BORROWER.
NOTWITHSTANDING THE FOREGOING, SO LONG AS NO DEFAULT HAS OCCURRED AND IS
CONTINUING AND BORROWER IS RESISTING AND DEFENDING SUCH ACTION, SUIT OR
PROCEEDING AS PROVIDED ABOVE IN A PRUDENT AND COMMERCIALLY REASONABLE MANNER, IN
ORDER TO OBTAIN THE BENEFIT OF THIS SECTION WITH RESPECT TO SUCH ACTION, SUIT OR
PROCEEDING, LENDER AND THE INDEMNIFIED PARTIES AGREE THAT THEY SHALL NOT SETTLE
SUCH ACTION, SUIT OR PROCEEDING WITHOUT OBTAINING BORROWER'S CONSENT WHICH
BORROWER AGREES NOT TO UNREASONABLY WITHHOLD, CONDITION OR DELAY; PROVIDED,
HOWEVER, (X) IF
BORROWER IS NOT DILIGENTLY DEFENDING SUCH ACTION, SUIT OR
PROCEEDING IN A PRUDENT AND COMMERCIALLY REASONABLE MANNER AS PROVIDED ABOVE AND
LENDER HAS PROVIDED BORROWER WITH THIRTY (30) DAYS' PRIOR WRITTEN NOTICE, OR
SHORTER PERIOD IF MANDATED BY THE REQUIREMENTS OF THE APPLICABLE LAW, AND
BORROWER HAS FAILED TO CORRECT SUCH FAILURE, OR (Y) FAILURE TO SETTLE COULD, IN
LENDER'S REASONABLE JUDGMENT, EXPOSE LENDER TO CRIMINAL LIABILITY, LENDER MAY
SETTLE SUCH ACTION, SUIT OR PROCEEDING WITHOUT THE CONSENT OF BUT UPON NOTICE TO
BORROWER AND BE ENTITLED TO THE BENEFITS OF THIS SECTION WITH RESPECT TO THE
SETTLEMENT OF SUCH ACTION, SUIT OR PROCEEDING.
ARTICLE V.
SECURITY AGREEMENT
SECTION 5.01.
SECURITY AGREEMENT.
(A)
THIS AGREEMENT IS A "SECURITY
AGREEMENT" WITHIN THE MEANING OF THE UCC.
IF AN EVENT OF DEFAULT SHALL OCCUR,
LENDER, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES WHICH IT MAY HAVE, SHALL
HAVE AND MAY EXERCISE IMMEDIATELY AND WITHOUT DEMAND, ANY AND ALL RIGHTS AND
REMEDIES GRANTED TO A SECURED PARTY UPON DEFAULT UNDER THE UCC, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE RIGHT TO TAKE POSSESSION
OF THE COLLATERAL OR ANY PART THEREOF, AND TO TAKE SUCH OTHER MEASURES AS LENDER
MAY DEEM NECESSARY FOR THE CARE, PROTECTION AND PRESERVATION OF THE COLLATERAL.
UPON REQUEST OR DEMAND OF LENDER FOLLOWING AN EVENT OF DEFAULT, BORROWER SHALL,
AT ITS EXPENSE, ASSEMBLE THE COLLATERAL AND MAKE IT AVAILABLE TO LENDER AT A
CONVENIENT PLACE ACCEPTABLE TO LENDER.
BORROWER SHALL PAY TO LENDER
44
ON DEMAND ANY AND ALL EXPENSES, INCLUDING REASONABLE LEGAL EXPENSES AND
ATTORNEYS' FEES AND ALL TRANSFER TAXES, INCURRED OR PAID BY