RIGHT OF SETOFF.
IN ADDITION TO ALL LIENS UPON AND RIGHTS OF
SETOFF AGAINST THE BORROWER'S MONEY, SECURITIES OR OTHER PROPERTY GIVEN TO THE
BANK BY LAW, THE BANK SHALL HAVE, WITH RESPECT TO THE BORROWER'S OBLIGATIONS TO
THE BANK UNDER THIS NOTE AND TO THE EXTENT PERMITTED BY LAW, A CONTRACTUAL
POSSESSORY SECURITY INTEREST IN AND A CONTRACTUAL RIGHT OF SETOFF AGAINST, AND
THE BORROWER HEREBY GRANTS THE BANK A SECURITY INTEREST IN, AND HEREBY ASSIGNS,
CONVEYS, DELIVERS, PLEDGES AND TRANSFERS TO THE BANK, ALL OF THE BORROWER'S
RIGHT, TITLE AND INTEREST IN AND TO, ALL OF THE BORROWER'S DEPOSITS, MONEYS,
SECURITIES AND OTHER PROPERTY NOW OR HEREAFTER IN THE POSSESSION OF OR ON
DEPOSIT WITH, OR IN TRANSIT TO, THE BANK OR ANY OTHER DIRECT OR INDIRECT
SUBSIDIARY OF THE PNC FINANCIAL SERVICES GROUP, INC., WHETHER HELD IN A GENERAL
OR SPECIAL ACCOUNT OR DEPOSIT, WHETHER HELD JOINTLY WITH SOMEONE ELSE, OR
WHETHER HELD FOR SAFEKEEPING OR OTHERWISE, EXCLUDING, HOWEVER, ALL IRA, KEOGH,
AND TRUST ACCOUNTS.
EVERY SUCH SECURITY INTEREST AND RIGHT OF SETOFF MAY BE
EXERCISED WITHOUT DEMAND UPON OR NOTICE TO THE BORROWER.
EVERY SUCH RIGHT OF
SETOFF SHALL BE DEEMED TO HAVE BEEN EXERCISED IMMEDIATELY UPON THE OCCURRENCE OF
AN EVENT OF DEFAULT HEREUNDER WITHOUT ANY ACTION OF THE BANK, ALTHOUGH THE BANK
MAY ENTER SUCH SETOFF ON ITS BOOKS AND RECORDS AT A LATER TIME.
12.
INDEMNITY.
THE BORROWER AGREES TO INDEMNIFY EACH OF THE BANK, EACH
LEGAL ENTITY, IF ANY, WHO CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL
WITH THE BANK, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES
(THE "INDEMNIFIED PARTIES"), AND TO HOLD EACH INDEMNIFIED PARTY HARMLESS FROM
AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES AND REASONABLE
OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES AND CHARGES OF EXTERNAL COUNSEL WITH
WHOM ANY INDEMNIFIED PARTY MAY CONSULT AND ALL EXPENSES OF LITIGATION AND
PREPARATION THEREFOR) WHICH ANY INDEMNIFIED PARTY MAY INCUR OR WHICH MAY BE
ASSERTED AGAINST ANY INDEMNIFIED PARTY BY ANY
7
PERSON, ENTITY OR GOVERNMENTAL AUTHORITY (INCLUDING ANY PERSON OR ENTITY
CLAIMING DERIVATIVELY ON BEHALF OF THE BORROWER), IN CONNECTION WITH OR ARISING
OUT OF OR RELATING TO THE MATTERS REFERRED TO IN THIS NOTE OR IN THE OTHER LOAN
DOCUMENTS OR THE USE OF ANY ADVANCE HEREUNDER, WHETHER (A) ARISING FROM OR
INCURRED IN CONNECTION WITH ANY BREACH OF A REPRESENTATION, WARRANTY OR COVENANT
BY THE BORROWER, OR (B) ARISING OUT OF OR RESULTING FROM ANY SUIT, ACTION,
CLAIM, PROCEEDING OR GOVERNMENTAL INVESTIGATION, PENDING OR THREATENED, WHETHER
BASED ON STATUTE, REGULATION OR ORDER, OR TORT, OR CONTRACT OR OTHERWISE, BEFORE
ANY COURT OR GOVERNMENTAL AUTHORITY; PROVIDED, HOWEVER, THAT THE FOREGOING
INDEMNITY AGREEMENT SHALL NOT APPLY TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES
AND EXPENSES TO THE EXTENT ATTRIBUTABLE TO AN INDEMNIFIED PARTY'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
THE INDEMNITY AGREEMENT CONTAINED IN THIS
SECTION SHALL SURVIVE THE TERMINATION OF THIS NOTE, PAYMENT OF ANY ADVANCE
HEREUNDER AND THE ASSIGNMENT OF ANY RIGHTS HEREUNDER.
THE BORROWER MAY