Document:

Exhibit
10.49

 

AMENDMENT
TO MANAGEMENT SERVICES AGREEMENT

 

THIS
AMENDMENT TO MANAGEMENT SERVICES AGREEMENT (“Agreement”) is made and entered
into as of October 1, 1998, by and between SIERRA MEDICAL MANAGEMENT, INC., a
Delaware corporation (“Manager”), SIERRA PRIMARY CARE MEDICAL GROUPS, INC., a
California professional corporation, and Antelope Valley Medical Associates,
Inc. (“GROUPS”).

 

RECITALS

 

A.            GROUPS and Sierra
Medical Management (Manager’s predecessor in interest) entered into that
certain Management Services Agreement dated as of June 4, 1996 (“Management
Agreement”).

 

B.            The parties desire
to amend and restate Exhibit D to the Management Agreement as follows:

 

EXHIBIT D -
MANAGEMENT FEE

 

A.            Definitions

 

Cost of Medical Services means with respect to the GROUPS, the
aggregate compensation of GROUPS’ employed physicians and physician extenders
(e.g. physician assistants and nurse practitioners), charges incurred by the
GROUPS for independent contractor physicians, the cost of services ordered by
GROUPS through its physicians for managed care patients, the cost of GROUPS’
employee benefits including, but not limited to, vacation pay, employer and
employee contributions to any 401(k) plan or other retirement plan for the
benefit of GROUPS employees, sick pay, health care expenses, GROUPS’ share of
employment and payroll taxes, GROUPS’ employees’ professional dues and all
other expenses and payments required to be made by GROUPS to or for physicians
pursuant to physician employment and independent contractor agreements
(including expense reimbursements, discretionary bonuses, incentives based on
profitability or productivity, and payments paid and accrued or deferred).

 

Manager’s Costs means all operating and non-operating third
party vendor and consultant expenses and costs, as well as expenses and costs
directly related to Manager’s employees working at GROUPS’ facility, incurred
by Manager on behalf of GROUPS in conjunction with the operation of the
Practice.  These expenses and costs
include, but are not limited to, direct labor costs (for all employees of
Manager or its affiliates working at GROUPS’ facility, and for any independent
contractors or consultants to Manager or other third parties whose services are
specifically retained primarily for the benefit of GROUPS), indirect labor
costs for services primarily for the benefit of GROUPS, supplies, all amounts
paid by Manager or GROUPS to satisfy any obligations of GROUPS to
non-professional employees and third parties (other than for the Cost of Medical
Services), obligations under any lease or purchase

 

 

agreement
or arrangement for which Manager has direct or indirect financial liability,
and direct and indirect corporate overhead of GROUPS.

 

Gross Revenues means all sums which are (i) attributed to
GROUPS (determined on an accrual basis) as compensation for the provision of
medical services by GROUPS employed and independent contractor physicians and
physician extenders, including but not limited to all capitated income, all
rights to receive GROUPS’ portion of hospital and other shared risk pool
payments, all copayments, coordination of benefits, third party recovery,
insured services, enrollment protection (or other such revenue as is available
to replenish capitated services) and all rights to receive fee-for-service
income for medical, diagnostic and therapeutic services provided to GROUPS
patients; and (ii) derived by GROUPS or its employees other than from the
provision of medical services, including but not limited to consulting
services, insurance and legal recoveries, royalties and licensing payments,
franchise payments, rents and lease payments, and proceeds from the sale of
assets or the merger or other business combination of GROUPS.

 

Net Pre-Tax  Income
means Gross Revenues less the sum of Manager’s Costs and the Cost of Medical
Services after provision of any physician incentive payments but before
provision for income taxes.

 

Net Pre-Tax  Loss
means any loss resulting after the deduction from Gross Revenues of Manager’s
Costs and the Cost of Medical Services after provision of any physician
incentive payments but before provision for income taxes.

 

Net Pre-Tax  Profit
means any profit resulting after the deduction from Gross Revenues of Manager’s
Costs and the Cost of Medical Services after provision of any physician
incentive payments but before provision for income taxes.

 

B.            Management Fee

 

Base Management Fee: for its services hereunder, which shall
include the provision of all facilities and furniture, fixtures and equipment
at the Premises and all non-physician employees of Manager who perform services
at or for the Practice and all management services provided hereunder, Manager
shall (i) retain that portion of the Gross Revenues which is equal to Manager’s
Costs plus (ii) fifteen percent (15%) of Gross Revenues the (“Management Fee”)
plus (iii) a fee for marketing and public relations services in the amount of
four thousand dollars ($4,000) per month. 
Notwithstanding the foregoing, if, after the payment of Manager’s Costs
as set forth in item (i) above, GROUPS’ working capital is insufficient to meet
GROUPS’ liabilities or other obligations to the extent necessary to meet such
obligations, the Management Fee provided for in item (ii) above shall be
deferred until GROUPS is able to meet all such obligations.  The Management Fee shall be reviewed on an
annual basis by Manager’s Board of Directors to ensure that it remains
consistent with the fair market value for the services rendered to GROUPS by Manager.

 

Performance Incentive Bonus Payment: if, at the end of GROUPS’ fiscal year, it is
determined that GROUPS has a Net Pre-Tax Profit for the year, Manager shall be
entitled to

 

2

 

a
performance incentive bonus payment consistent with the fair market value of
the services provided by Manager to GROUPS (as determined on an annual basis by
the Board of Directors of Manager), but no more than fifty percent (50%) of Net
Pre-Tax Income in excess of eight percent (8%) of Net Pre-Tax Profits.

 

Performance Incentive Penalty
Payment:  if, at the end of GROUPS’ fiscal year, it is
determined that GROUPS has a Net Pre-Tax Loss for the year, Manager shall be
obligated to pay to GROUPS (in the form a reduction in future management fees)
a penalty payment in the amount of fifty percent (50%) of one hundred percent
(100%) of such Net Pre-Tax Loss.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	
  MANAGER

  	
  GROUPS

  
	
   

  	
   

  
	
  SIERRA
  MEDICAL MANAGEMENT, INC.

  	
  SIERRA
  PRIMARY CARE

  
	
   

  	
  MEDICAL
  GROUPS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  R. Stewart Kahn

  	
   

  	
  By:

  	
  /s/
  Jacob Y. Terner

  	
   

  
	
   

  	
  R.
  Stewart Kahn,

  	
   

  	
   

  	
  Jacob
  Y. Terner, M.D.,

  	
   

  
	
   

  	
  Executive
  Vice President

  	
   

  	
   

  	
  Vice
  President

  	
   

  

 

3Exhibit 10.51

 

AMENDED AND
RESTATED SECURITY AGREEMENT

(Sierra Medical Management, Inc.)

 

This AMENDED AND RESTATED SECURITY AGREEMENT, dated
as of September 24, 2003, is entered into between SIERRA MEDICAL
MANAGEMENT, INC. a Delaware corporation (“Debtor”),  and COMERICA BANK, a Michigan banking
corporation, successor-by-merger to Comerica Bank-California, a California
banking corporation, successor-by-merger to Imperial Bank, a California banking
corporation (“Secured Party”),  with reference to the following facts:

 

RECITALS

 

A.          Debtor and Secured Party previously entered into that certain Security
Agreement, dated as of September 25, 1997 (the “Prior Security Agreement”),
in order to secure the obligations of Debtor owing to Secured Party
under that certain Continuing Guaranty, dated as of even date with the Prior
Security Agreement (as may be amended, restated, supplemented or otherwise
modified from time to time, the “Guaranty”);

 

B.          Concurrent herewith Borrower (as defined in the Prior Security
Agreement and the Guaranty) and Secured Party, at the request of Borrower, are
entering into that certain Sixth Amendment to Amended and Restated Revolving
Credit Agreement (the “Sixth Amendment”);  and

 

C.          In order to induce Secured Party to enter into the Sixth Amendment, and
in consideration thereof, Debtor has agreed to enter into this Security
Agreement in order amend and restate the Prior Security Agreement in its
entirety.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual
promises, covenants, conditions, representations, and warranties hereinafter
set forth, and for other good and valuable consideration, the parties hereto
agree as follows:

 

1.           Definitions.  All initially capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Loan Agreement.  In addition, as used herein, the following terms shall have the
following meanings:

 

“Account Debtor” means any Person who is or who may become
obligated with respect to, or on account of, an Account, Chattel Paper or
General Intangible.

 

“Accounts” means any and all of Debtor’s presently
existing and hereafter arising accounts (including health-care-insurance
receivables, contract rights, and all other forms of monetary obligations owing
to Debtor, and all credit insurance, guaranties, or security therefor),
irrespective of whether earned by performance.

 

1

 

“Chattel Paper” means all of Debtor’s presently existing and
hereafter acquired or created chattel paper (including tangible chattel paper
and intangible chattel paper).

 

“Code” means the California Uniform Commercial Code,
as amended or supplemented from time to time. 
Any and all terms used in this Security Agreement which are defined in
the Code shall be construed and defined in accordance with the meaning and
definition ascribed to such terms under the Code, unless otherwise defined
herein.

 

“Collateral” means the following, collectively: any and
all of the Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents,
Equipment, Instruments, Inventory, Investment Property, General Intangibles,
Letter of Credit Rights, Negotiable Collateral, Supporting Obligations,
Debtors’ Books, in each case whether now existing or hereafter acquired or
created, any money or other assets of any Debtor that now or hereafter come
into the possession, custody, or control of Secured Party and any Proceeds or
products of any of the foregoing, or any portion thereof.

 

“Collateral Access Agreement” means a landlord waiver, mortgagee waiver,
bailee letter, or acknowledgement agreement of any warehouseman, processor,
lessor, consignee, or other Person in possession of, having a Lien upon, or
having rights or interests in the Equipment or Inventory, in each case, in form
and substance satisfactory to Secured Party.

 

“Commercial Tort Claims” means all of Debtor’s presently existing and
hereafter acquired commercial tort claims (as such term is defined in the
Code).

 

“Debtor’s Books” means any and all presently existing and
hereafter acquired or created books and records of Debtor, including all
records (including maintenance and warranty records), ledgers, computer
programs, disc or tape files, printouts, runs, and other computer prepared
information indicating, summarizing, or evidencing the Collateral.

 

“Deposit Account” means any demand, time, savings, passbook or
similar account now or hereafter maintained by or for the benefit of Debtor
with an organization that is engaged in the business of banking including a
bank, savings bank, savings and loan association, credit union and trust
companies, and all funds and amounts therein, whether or not restricted or
designated for a particular purpose.

 

“Documents” means any and all documents and documents of
title, including documents of title, bills of lading, dock warrants, dock
receipts, warehouse receipts and other documents of Debtor, whether or not
negotiable, and includes all other documents which purport to be issued by a
bailee or agent and purport to cover goods in any bailee’s or agent’s
possession which are either identified or are fungible portions of an
identified mass, including such documents of title made available to Debtor for
the purpose of ultimate sale or exchange of goods or for the purpose of
loading, unloading, storing, shipping, transshipping, manufacturing, processing
or otherwise dealing with goods in a manner preliminary to their sale or
exchange, in each case whether now existing or hereafter acquired.

 

“Equipment” means any and all of Debtor’s presently
existing and hereafter acquired equipment, wherever located, including
machinery, furniture, furnishings,

 

2

 

fixtures,
computer and other electronic data processing equipment and other office
equipment and supplies, computer programs and related data processing software,
spare parts, tools, motors, automobiles, trucks, tractors and other motor
vehicles, rolling stock, jigs, and other goods (other than Inventory, farm
products, and consumer goods), including software embedded in such goods,
together with any and all parts, improvements, additions, attachments,
replacements, accessories, and substitutions thereto or therefor, and all other
rights of Debtor relating thereto, whether in the possession and control of
Debtor, or in the possession and control of a third party for the account of
Debtor.

 

“Expenses” has the meaning of “Bank Expenses” under the Loan Agreement and shall also
mean: any and all costs or expenses required to be paid by Debtor under this
Security Agreement which are paid or advanced by Secured Party; all costs and
expenses of Secured Party, including its attorneys’ fees and expenses
(including attorneys’ fees incurred pursuant to proceedings arising under the
Bankruptcy Code), incurred or expended to correct any default or enforce any
provision of this Security Agreement, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, irrespective of whether a sale is consummated;
and all costs and expenses of suit incurred or expended by Secured Party,
including its attorneys’ fees and expenses (including attorneys’ fees incurred
pursuant to proceedings arising under the Bankruptcy Code) in enforcing or
defending this Security Agreement, irrespective of whether suit is brought.

 

“FEIN” means Federal Employer Identification Number.

 

“General Intangibles” means any and all of Debtor’s presently
existing and hereafter acquired or arising general intangibles and any other
intangible personal property of every kind and description, including:

 

(a)         contracts and contract rights, noncompetition covenants, licensing and
distribution agreements, indemnity agreements, guaranties, insurance policies,
franchise agreements and lease agreements;

 

(b)         uncertificated certificates of deposit, and interests in any joint
ventures, partnerships or limited liability companies;

 

(c)         choses in action and causes of action (whether legal or equitable,
whether in contract or tort or otherwise, and however arising);

 

(d)         licenses, approvals, permits or any other authorizations issued by any
Governmental Authority;

 

(e)         Intellectual Property Collateral;

 

(f)          computer software, magnetic media, electronic data processing files,
systems and programs;

 

(g)         rights of stoppage in transit, replevin and reclamation, rebates or
credits of every kind and nature to which Debtor may be entitled;

 

3

 

(h)         purchase orders, customer lists, subscriber lists and goodwill;

 

(i)          monies due or recoverable from pension funds, refunds and claims for
tax or other refunds against any Governmental Authority;

 

(j)          payment intangibles; and

 

(k)         other contractual, equitable and legal rights of whatever kind and
nature.

 

“Instruments” means any and all negotiable instruments, and
every other writing which evidences a right to the payment of a monetary
obligation, in each case whether now existing or hereafter acquired.

 

“Intellectual Property Collateral”
means the following
Assets owned or held by Debtor or in which Debtor otherwise has any interest,
now existing or hereafter acquired or arising:

 

(a)         all
patents and patent applications, domestic or foreign, all licenses relating to
any of the foregoing and all income and royalties with respect to any licenses,
all rights to sue for past, present or future infringement thereof, all rights
arising therefrom and pertaining thereto and all reissues, divisions,
continuations, renewals, extensions and continuations in-part thereof;

 

(b)         all
copyrights and applications for copyright, domestic or foreign, together with
the underlying works of authorship (including titles), whether or not the
underlying works of authorship have been published and whether said copyrights
are statutory or arise under the common law, and all other rights and works of
authorship, all rights, claims and demands in any way relating to any such
copyrights or works, including royalties and rights to sue for past, present or
future infringement, and all rights of renewal and extension of copyright;

 

(c)         all
state (including common law), federal and foreign trademarks, service marks and
trade names, and applications for registration of such trademarks, service
marks and trade names, all licenses relating to any of the foregoing and all
income and royalties with respect to any licenses, whether registered or
unregistered and wherever registered, all rights to sue for past, present or
future infringement or unconsented use thereof, all rights arising therefrom
and pertaining thereto and all reissues, extensions and renewals thereof;

 

(d)         all
trade secrets, confidential information, customer lists, license rights,
advertising materials, operating manuals, methods, processes, know-how, sales
literature, sales and operating plans, drawings, specifications, blue prints,
descriptions, inventions, name plates and catalogs;

 

(e)         the
entire goodwill of or associated with the businesses now or hereafter conducted
by Debtor connected with and symbolized by any of the aforementioned properties
and assets; and

 

4

 

(f)          Intellectual
Property Collateral shall include, without limitation, rights and interests
pursuant to licensing or other contracts in favor of Debtor pertaining to
patents, trademarks, copyrights and other intellectual property presently or in
the future owned or used by third Persons.

 

“Inventory” means any and all of Debtor’s presently
existing and hereafter acquired goods (including software embedded in such
goods) of every kind and description (including goods in transit) which are
held for sale or lease, or to be furnished under a contract of service or which
have been so leased or furnished, or other disposition, wherever located,
including those held for display or demonstration or out on lease or
consignment or are raw materials, work in process, finished materials, or
materials used or consumed, or to be used or consumed, in Debtor’s business,
and the resulting product or mass, and all repossessed, returned, rejected,
reclaimed and replevied goods, together with all materials, parts, supplies,
packing and shipping materials used or usable in connection with the
manufacture, packing, shipping, advertising, selling or furnishing of such
goods; and all other items hereafter acquired by Debtor by way of substitution,
replacement, return, repossession or otherwise, and all additions and
accessions thereto, and any Document representing or relating to any of the
foregoing at any time.

 

“Investment Property” means any and all of Debtor’s presently
existing and hereafter acquired investment property.

 

“Letter of Credit Rights” means any and all of Debtor’s presently
existing and hereafter acquired letter of credit rights.

 

“Loan Agreement” means that certain Amended and Restated
Revolving Credit Agreement, dated as of July 3, 1997, between Borrower and
Secured Party, as amended to date, including by the Sixth Amendment, and as may
be at any time hereafter further supplemented, modified, amended or restated.

 

“Negotiable Collateral” means any and all of Debtor’s presently
existing and hereafter acquired or arising letters of credit, letter of credit
rights, advises of credit, certificates of deposit, notes, drafts, money,
Instruments, Documents and tangible Chattel Paper.

 

“Proceeds” means whatever is receivable or received from
or upon the sale, lease, license, collection, use, exchange or other
disposition, whether voluntary or involuntary, of any Collateral, including
“proceeds” as defined in the Code, any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to or for the account of Debtor from
time to time with respect to any of the Collateral, any and all payments (in
any form whatsoever) made or due and payable to Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), any and all other
amounts from time to time paid or payable under or in connection with any of
the Collateral or for or on account of any damage or injury to or conversion of
any Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.

 

5

 

“Rights to Payment” means all Accounts and any and all rights and
claims to the payment or receipt of money or other forms of consideration of
any kind in, to and under all electronic Chattel Paper, General Intangibles,
Letter of Credit Rights, Negotiable Collateral and Proceeds thereof.

 

“Secured Obligations” shall have the meaning of “Obligations” under
the Loan Agreement and shall also mean any and all debts, liabilities,
obligations, or undertakings owing by Debtor to Secured Party arising under,
advanced pursuant to, or evidenced by this Security Agreement, whether direct
or indirect, absolute or contingent, matured or unmatured, due or to become
due, voluntary or involuntary, whether now existing or hereafter arising, and
including all interest not paid when due and all Expenses which Debtor is
required to pay or reimburse pursuant to this Security Agreement, the Loan
Agreement, the other Loan Documents or by law.

 

“Security Agreement” shall mean this Security Agreement, as
amended or restated from time to time.

 

“Supporting Obligations” has the meaning given to such term in the
Code.

 

2.           Construction.   Unless the context of this Security Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the part includes the whole, “including” is not
limiting, and “or” has the inclusive meaning represented by the phrase
“and/or.”  References in this Security
Agreement to “determination” by Secured Party include reasonable estimates
(absent manifest error) by Secured Party, as applicable (in the case of
quantitative determinations) and reasonable beliefs (absent manifest error) by
Secured Party, as applicable (in the case of qualitative determinations).  The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Security Agreement refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement.  Article, section, subsection,
exhibit, and schedule references are to this Security Agreement unless
otherwise specified.

 

3.           Creation of Security
Interest.   Debtor hereby grants to Secured Party a
continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure the prompt payment and performance of
all of the Secured Obligations.  Debtor
acknowledges and affirms that such security interest in the Collateral has
attached to all Collateral without further act on the part of Secured Party or
Debtor.

 

4.           Further Assurances.

 

4.1         Debtor shall execute and deliver to Secured Party concurrently with
Debtor’s execution of this Security Agreement, and from time to time at the
request of Secured Party, and Debtor hereby authorizes Secured Party to file,
all financing statements, continuation financing statements, fixture filings,
security agreements, chattel mortgages, assignments, and all other documents
that Secured Party may require, in form satisfactory to Secured Party, to perfect
and maintain perfected Secured Party’s security interests in the Collateral,
and in order to consummate fully all of the transactions contemplated by this
Security

 

6

 

Agreement
and the Loan Agreement.  Debtor hereby
irrevocably makes, constitutes, and appoints Secured Party (and Secured Party’s
officers, employees, or agents) as Debtor’s true and lawful attorney with power
to sign the name of Debtor on any of the above-described documents or on any
other similar documents which need to be executed, recorded, or filed, and to
do any and all things necessary in the name and on behalf of Debtor in order to
perfect, or continue the perfection of, Secured Party’s security interests in
the Collateral.  Debtor agrees that
neither Secured Party, nor any of its designees or attorneys-in-fact, will be
liable for any act of commission or omission, or for any error of judgment or
mistake of fact or law with respect to the exercise of the power of attorney
granted under this Section 4.1, other than as a result of its or their
gross negligence or willful misconduct. 
THE POWER OF ATTORNEY GRANTED UNDER
THIS SECTION 4.1 IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
UNTIL ALL OF THE SECURED OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN FULL, THE
LOAN AGREEMENT TERMINATED, AND ALL DEBTOR’S DUTIES HEREUNDER AND THEREUNDER
HAVE BEEN DISCHARGED IN FULL.

 

4.2         Without limiting the generality of the foregoing Section 4.1 or
any of the provisions of the Loan Agreement, Debtor shall: (i) at the request
of Secured Party, mark conspicuously Debtor’s Books with a legend, in form and
substance satisfactory to Secured Party, indicating that the Collateral is
subject to the security interest granted hereby; (ii) immediately mark all Chattel
Paper with a conspicuous legend indicating Secured Party’s security interest
therein and otherwise in form and substance satisfactory to Secured Party; and
(iii) at the request of Secured Party, appear in and defend any action or
proceeding which may affect Debtor’s title to, or the security interest of
Secured Party in, any of the Collateral.

 

4.3         With respect to the Negotiable Collateral  (other than drafts received in the ordinary course of business so
long as no Event of Default is continuing), Debtor shall, immediately upon
request by Secured Party, endorse (where appropriate) and assign the Negotiable
Collateral over to Secured Party, and deliver to Secured Party actual physical
possession of the Negotiable Collateral to Secured Party together with any
instruments of transfer or assignment, all in form and substance satisfactory
to Secured Party, in order to fully perfect the security interest therein of
Secured Party.

 

4.4         In the event that any Collateral is in the possession of a third party,
Debtor shall join with Secured Party in notifying such third party of Secured
Party’s security interest and obtaining an acknowledgement from such third
party that it is holding such Collateral for the benefit of Secured Party.

 

4.5         Debtor shall deliver to Secured Party a duly executed control agreement
in form and substance satisfactory to Secured Party with respect to all Deposit
Accounts, electronic Chattel Paper, Investment Property, and Letter of Credit
Rights.

 

4.6         Debtor shall promptly notify Secured Party of any Commercial Tort
Claims it may bring against any Person, including the name and address of each
defendant, a summary of the facts, an estimate of Debtor’s damages, copies of
any complaint or demand letter submitted by Debtor, and such other information
as Secured Party may request, and in

 

7

 

connection
therewith, at Secured Party’s request, Debtor and Secured Party shall enter
into an amendment to this Security Agreement granting a security interest to
Secured Party in each such Commercial Tort Claim to secured the Secured
Obligations.

 

5.           Representations and
Warranties.  In order to induce Secured Party to enter
into the Sixth Amendment and to continue to make Loans to Borrower and/or issue
any Letter of Credit, in addition to the representations and warranties of
Debtor set forth in the Guaranty which are incorporated herein by this
reference, Debtor represents and warrants to Secured Party that on the date
hereof and thereafter on the date of each and every Borrowing or issuance of a
Letter of Credit:

 

5.1        Legal Name; State of Organization; Location of Chief
Executive Office and Collateral; FEIN.  
Debtor’s exact legal
name, state of incorporation, FEIN and charter or organizational identification
number is accurately set forth in Schedule I.  Debtor’s chief executive office
is located at the address set forth in Schedule 1,
and all other locations where Debtor conducts business or Collateral
is kept are set forth in Schedule 1.

 

5.2        Locations of Debtor’s Books.  All locations
where Debtor’s Books are kept, including all equipment necessary for accessing
Debtor’s Books and the names and addresses of all service bureaus, computer or
data processing companies and other Persons keeping Debtor’s Books or
collecting Rights to Payment for Debtor, are set forth in Schedule 1.

 

5.3        Trade Names and Trade Styles.  All trade
names and trade styles under which Debtor presently conducts its business
operations are set forth in Schedule 1,
and, except as set forth in Schedule 1,
Debtor has not, at any time during the preceding five years: (i)
been known as or used any other corporate, trade or fictitious name; (ii)
changed its name; (iii) been the surviving or resulting corporation in a merger
or consolidation; or (iv) acquired through asset purchase or otherwise any
business of any Person.

 

5.4        Ownership of Collateral.  
Debtor has rights in
and the power to transfer the Collateral, and Debtor’s title to the Collateral
is free from all Liens and restrictions other than Permitted Liens.

 

5.5        Enforceability; Priority of Security Interest.    (i) This Security Agreement creates a security interest which is
enforceable against the Collateral in which Debtor now has rights and will
create a security interest which is enforceable against the Collateral in which
Debtor hereafter acquires rights at the time Debtor acquires any such rights,
and (ii) Secured Party has a perfected security interest (to the fullest extent
perfection can be obtained by filing, notification to third parties, possession
or control) and a first priority security interest in the Collateral in which
Debtor now has rights (subject only to Permitted Liens), and will have a
perfected and first priority security interest (to the fullest extent
perfection can be obtained by filing, notification to third parties, possession
or control) in the Collateral in which Debtor hereafter acquires rights at the
time Debtor acquires any such rights (subject only to Permitted Liens), in each
case securing the payment and performance of the Secured Obligations.

 

8

 

5.6         Other Financing Statements.   Other than
financing statements in favor of Secured Party and financing statements filed
in connection with Permitted Liens, no effective financing statement naming
Debtor as debtor, assignor, grantor, mortgagor, pledgor or the like and
covering all or any part of the Collateral is on file in any filing or
recording office in any jurisdiction.

5.7         Rights to Payment.

 

(a)         the Rights to Payment represent valid, binding and enforceable
obligations of the Account Debtors or other Persons obligated thereon,
representing undisputed, bona fide transactions completed in accordance with
the terms and provisions contained in any documents related thereto, and are
and will be genuine, free from Liens, adverse claims, counterclaims, setoffs,
defaults, disputes, defenses, retainages, holdbacks and conditions precedent of
any kind of character, except to the extent reflected by Debtor’s reserves for
uncollectible Rights to Payment;

 

(b)         to Debtor’s knowledge, all Account Debtors and other obligors on the
Rights to Payment are Solvent and generally paying their debts as they come
due;

 

(c)         all Rights to Payment comply with all applicable laws concerning form,
content and manner of preparation and execution, including where applicable any
federal and state consumer credit laws;

 

(d)         Debtor has not assigned any of its rights under the Rights to Payment
other than to Secured Party pursuant to this Security Agreement;

 

(e)         all statements made, all unpaid balances and all other information in
Debtor’s Books and other documentation relating to the Rights to Payment are
true and correct and in all respects what they purport to be; and

 

(f)          Debtor has no knowledge of any fact or circumstance which would impair
the validity or collectibility of any of the Rights to Payment.

 

5.8        Inventory.  No Inventory is stored with any bailee,
warehouseman or similar Person or on any premises leased to Debtor, nor has any
Inventory been consigned to Debtor or consigned by Debtor to any Person or is
held by Debtor for any Person under any “bill and hold” or other arrangement.

 

5.9        Intellectual Property.

 

(a)         except as set forth in Schedule 1,
Debtor (directly or through any Subsidiary) does not own, possess or
use under any licensing arrangement any patents, copyrights, trademarks,
service marks or trade names, nor is there currently pending before any
Governmental Authority any application for registration of any patent, copyright,
trademark, service mark or trade name;

 

9

 

(b)         all patents, copyrights, trademarks, service marks and trade names are
subsisting and have not been adjudged invalid or unenforceable in whole or in
part;

 

(c)         all maintenance fees required to be paid on account of any patents have
been timely paid for maintaining such patents in force, and, to the best of
Debtor’s knowledge, each of the patents is valid and enforceable and Debtor has
notified Secured Party in writing of all prior art (including public uses and
sales) of which it is aware;

 

(d)         to the best of Debtor’s knowledge after due inquiry, no infringement or
unauthorized use presently is being made of any Intellectual Property
Collateral by any Person;

 

(e)         Debtor is the sole and exclusive owner of the Intellectual Property
Collateral and the past, present and contemplated future use of such
Intellectual Property Collateral by Debtor has not, does not and will not
infringe or violate any right, privilege or license agreement of or with any
other Person; and

 

(f)          Debtor owns, has material rights under, is a party to, or an assignee
of a party to all material licenses, patents, patent applications, copyrights,
service marks, trademarks, trademark applications, trade names and all other
intellectual property Collateral necessary to continue to conduct its business
as heretofore conducted.

 

5.10      Equipment.

 

(a)          none of the Equipment or other Collateral is affixed to real property,
except Collateral with respect to which Debtor has supplied Secured Party with
all information and documentation necessary to make all fixture filings
required to perfect and protect the priority of Secured Party’s security
interest in all such Collateral which may be fixtures as against all Persons
having an interest in the premises to which such property may be affixed; and

 

(b)         none of the Equipment is leased from or to any Person, except as set
forth in Schedule 1.

 

5.11      Deposit Accounts.    The names and addresses of all financial
institutions at which Debtor maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.

 

5.12      Investment Property.  
All Investment
Property is set forth and described in Schedule 1,
and all financial institutions or financial intermediaries holding
or in possession of such Investment Property are set forth in Schedule 1.

 

6.           Covenants.  In addition to the covenants of Debtor set forth in the Guaranty which
are incorporated herein by this reference, Debtor agrees that from the date
hereof and thereafter until the payment, performance and satisfaction in full,
in cash, of the Secured Obligations, and all of Secured Party’s obligations
under the Loan Agreement to Borrower have been terminated and no Letters of
Credit are outstanding:

 

10

 

6.1         Defense of Collateral.   Debtor shall appear in and defend any action, suit or proceeding which
may affect its title to or right or interest in, or Secured Party’s right or
interest in, the Collateral.

 

6.2         Preservation of
Collateral.    Debtor shall do and perform all commercially
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.

 

6.3         Compliance with Laws,
Etc.  Debtor shall comply with all laws, regulations and ordinances, and all
policies of insurance, relating to the possession, operation, maintenance and
control of the Collateral.

 

6.4         Location of Debtor’s Books
and Chief Executive Office.   Debtor shall: (i) keep all Debtor’s Books at
the locations set forth in Schedule 1; and
(ii) maintain the location of Debtor’s chief executive office or principal
place of business at the location set forth in Schedule 1;
provided, however, that Debtor may amend Schedule 1 so long as (i) such amendment occurs by
written notice to Secured Party not less than 30 days prior to the date on
which the location of Debtor’s Books or Debtor’s chief executive office or
principal place of business is changed, and (ii) at the time of such written
notification, Debtor executes and delivers any financing statement amendments
or fixture filing amendments necessary to perfect or continue perfected Secured
Party’s security interests in the Collateral and also obtains for Secured Party
such duly executed Collateral Access Agreement as Secured Party shall require
with respect to such new location.

 

6.5         Location of
Collateral.    Debtor shall keep the Inventory and Equipment
only at the locations identified on Schedule 1;
provided, however, that Debtor may amend Schedule 1 so long as (i) such amendment occurs by
written notice to Secured Party not less than 30 days prior to the date on
which the Inventory or Equipment is moved to such new location, (ii) such new
location is within the continental United States, and (iii) at the time of such
written notification, Debtor executes and delivers any financing statements or
fixture filings necessary to perfect and continue perfected Secured Party’s
security interests in such Assets and also obtains for Secured Party such duly
executed Collateral Access Agreement as Secured Party shall require with
respect to such new location.

 

6.6         Change in Name, Trade Name,
Trade Style or FEIN.  Debtor shall not change its legal name, trade
names, trade styles or FEIN, or add any new trade names or trade styles from
those listed on Schedule 1; provided,
however, that Debtor may amend Schedule 1
so long as (i) such amendment occurs by written notice to Secured
Party not less than 30 days prior to the date on which such new name, trade
name, trade style or FEIN becomes effective, and (ii) at the time of such
written notification, Debtor executes and delivers any financing statement
amendments or fixture filing amendments necessary to continue perfected Secured
Party’s security interests in the Collateral.

 

6.7         State of Incorporation or
Formation.  Debtor shall not change the state of its
incorporation or formation.

 

11

 

6.8          Maintenance of Records. 
Debtor shall keep
separate, accurate and complete Debtor’s Books, disclosing Secured Party’s
security interest hereunder.

 

6.9          Disposition of Collateral.    Debtor shall
not surrender or lose possession of (other than to Secured Party), sell, lease,
rent, license, or otherwise dispose of or transfer any of the Collateral or any
right or interest therein.

 

6.10        Liens.   Debtor shall keep the Collateral free of all
Liens except Permitted Liens.

 

6.11        Leased Premises.  At Secured Party’s request, Debtor shall
obtain from each Person from whom Debtor leases any premises at which any
Collateral is at any time present, such Collateral Access Agreements as Secured
Party may require.

 

6.12        Rights to Payment.  Debtor shall:

 

(a)         perform and observe all terms and provisions of the Rights to Payment
and all obligations to be performed or observed by it in connection therewith
and maintain the Rights to Payment in full force and effect;

 

(b)         enforce all Rights to Payment strictly in accordance with their terms,
and take all such action to such end as may be from time to time reasonably
requested by Secured Party;

 

(c)         if, to the knowledge of Debtor, any dispute, setoff, claim,
counterclaim or defense shall exist or shall be asserted or threatened with
respect to a Right to Payment (whether with or against Debtor or otherwise),
disclose such fact fully to Secured Party in Debtor’s Books relating to such
Account or other Right to Payment and in connection with any report furnished
by Debtor to Secured Party relating to such Right to Payment;

 

(d)         furnish to Secured Party such information and reports regarding the
Rights to Payment as Secured Party may request, and upon request of Secured
Party make such demands and requests for information and reports as Debtor is
entitled to make in respect of the Rights to Payment; and

 

(e)         upon the occurrence of
any Event of Default, establish such lockbox
or similar arrangements for the payment of the Rights to Payment as Secured
Party shall require.

 

6.13        Inventory.  Debtor
shall:

 

(a)         at such times as Secured Party shall request, prepare and deliver to
Secured Party periodic reports pertaining to the Inventory, in form and
substance satisfactory to Secured Party;

 

(b)         upon the request of Secured Party, take a physical listing of the
Inventory and promptly deliver a copy of such physical listing to Secured
Party;

 

12

 

(c)         not store any Inventory with a bailee, warehouseman or similar Person
or on premises leased to Debtor without obtaining for Secured Party such
Collateral Access Agreements as Secured Party shall require; and

 

(d)         not dispose of any Inventory on a bill-and-hold, guaranteed sale, sale
and return, sale on approval, consignment or similar basis, nor acquire any
Inventory from any Person on any such basis, without in each case giving
Secured Party prior written notice thereof.

 

6.14      Equipment.  Debtor shall, upon Secured Party’s request,
deliver to Secured Party a report of each item of Equipment, in form and
substance satisfactory to Secured Party.

 

6.15      Intellectual Property Collateral.  Debtor shall:

 

(a)          not enter into any agreement (including any license or royalty
agreement) pertaining to any Intellectual Property Collateral without in each
case giving Secured Party prior notice thereof;

 

(b)         not allow or suffer any Intellectual Property Collateral to become
abandoned, nor any registration thereof to be terminated, forfeited, expired or
dedicated to the public;

 

(c)          promptly give Secured Party notice of any rights Debtor may obtain to
any new patentable inventions, trademarks, servicemarks, copyrightable works or
other new Intellectual Property Collateral, prior to the filing of any
application for registration thereof; and

 

(d)         diligently prosecute all applications for patents, copyrights and trademarks,
and file and prosecute any and all continuations, continuations-in-part,
applications for reissue, applications for certificate of correction and like
matters as shall be reasonable and appropriate in accordance with prudent
business practice, and promptly and timely pay any and all maintenance,
license, registration and other fees, taxes and expenses incurred in connection
with any Intellectual Property Collateral.

 

7.           Collection of Rights to
Payment.  Secured Party shall have the right at any time
(i) to notify the Account Debtors to make payments directly to Secured Party or
a lockbox account as set forth in clause (iii) of this Section 7, (ii) to
enforce Debtor’s rights against the Account Debtors, and (iii) to require that
all payments made by Account Debtors be deposited directly into a lockbox
account as Secured Party may specify, pursuant to a lockbox agreement in form
and substance satisfactory to Secured Party, with a lockbox servicing Secured
Party acceptable to Secured Party.

 

8.           Events of Default.  The occurrence of any Event of Default under the Loan Agreement shall
constitute an event of default (“Event of
Default”) hereunder.

 

13

 

9.           Rights and Remedies.

 

9.1          During
the continuance of an Event of Default, Secured Party, without notice or
demand, may do any one or more of the following, all of which are authorized by
Debtor:

 

(a)         Settle or adjust disputes and claims directly with Account Debtors for
amounts and upon terms which Secured Party considers advisable, and in such
cases, Secured Party will credit the Secured Obligations with only the net
amounts received by Secured Party in payment of such disputed Accounts after
deducting all Expenses incurred or expended in connection therewith;

 

(b)         Cause Debtor to hold all returned Inventory in trust for Secured Party,
segregate all returned Inventory from all other property of Debtor or in
Debtor’s possession and conspicuously label said returned Inventory as the
property of Secured Party;

 

(c)         Without notice to or demand upon Debtor or any guarantor, make such
payments and do such acts as Secured Party considers necessary or reasonable to
protect its security interests in the Collateral.  Debtor agrees to assemble the Collateral if Secured Party so
requires, and to make the Collateral available to Secured Party as Secured
Party may designate.  Debtor authorizes
Secured Party to enter the premises where the Collateral is located, to take
and maintain possession of the Collateral, or any part of it, and to pay,
purchase, contest, or compromise any encumbrance, charge, or Lien that in
Secured Party’s determination appears to conflict with its security interests
and to pay all expenses incurred in connection therewith.  With respect to any of Debtor’s owned or
leased premises, Debtor hereby grants Secured Party a license to enter into
possession of such premises and to occupy the same, without charge, for up to
120 days in order to exercise any of Secured Party’s rights or remedies
provided herein, at law, in equity, or otherwise;

 

(d)         Without notice to Debtor (such notice being expressly waived), and
without constituting a retention of any collateral in satisfaction of an
obligation), set off and apply to the Secured Obligations any and all (i) balances
and Deposit Accounts of Debtor held by Secured Party, or (ii) indebtedness at
any time owing to or for the credit or the account of Debtor held by Secured
Party;

 

(e)         Hold, as cash collateral, any and all balances and Deposit Accounts of
Debtor held by Secured Party, to secure the full and final repayment of all of
the Secured Obligations;

 

(f)          Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral.  Secured Party is hereby
granted a license or other right to use, without charge, Debtor’s labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and Debtor’s rights under all
licenses and all franchise agreements shall inure to Secured Party’s benefit;

 

14

 

(g)         Sell the Collateral at either a public or private sale, or both, by way
of one or more contracts or transactions, for cash or on terms, in such manner
and at such places (including Debtor’s premises) as Secured Party determines is
commercially reasonable.  Secured Party
shall have no obligation to clean-up or otherwise prepare the Collateral for
sale.  It is not necessary that the
Collateral be present at any such sale;

 

(h)         Secured Party shall give notice of the disposition of the Collateral as  follows:

 

(i)       Secured
Party shall give Debtor and each holder of a security interest in the
Collateral who has filed with Secured Party a written request for notice, a
notice in writing of the time and place of public sale, or, if the sale is a
private sale or some other disposition other than a public sale is to be made
of the Collateral, then the time on or after which the private sale or other
disposition is to be made;

 

(ii)      The
notice shall be personally delivered or mailed, postage prepaid, to Debtor as
provided in Section 10.1 of the Loan Agreement, at least ten (10) days
before the date fixed for the sale, or at least ten (10) days before the date
on or after which the private sale or other disposition is to be made; no
notice needs to be given prior to the disposition of any portion of the
Collateral that is perishable or threatens to decline speedily in value or that
is of a type customarily sold on a recognized market.  Notice to Persons other than Debtor claiming an interest in the
Collateral shall be sent to such addresses as they have furnished to Secured
Party;

 

(iii)     If the
sale is to be a public sale, Secured Party also shall give notice of the time
and place by publishing a notice one time at least ten (10) days before the date
of the sale in a newspaper of general circulation in the county in which the
sale is to be held;

 

(i)           Secured Party may credit bid and purchase at any public sale; and

 

(j)           Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Debtor.  Any excess will be returned, without interest and subject to the
rights of third Persons, by Secured Party to Debtor.

 

9.2        Secured Party shall have no obligation to attempt to satisfy the
Secured Obligations by collecting them from any third Person which may be
liable for them or any portion thereof, and Secured Party may release, modify
or waive any collateral provided by any other Person as security for the
Secured Obligations or any portion thereof, all without affecting Secured
Party’s rights against Debtor.  Debtor
waives any right it may have to require Secured Party to pursue any third
Person for any of the Secured Obligations.

 

9.3        Secured Party may comply with any applicable state or federal law
requirements in connection with a disposition of the Collateral, and Secured
Party’s compliance therewith will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

 

15

 

9.4         Secured
Party may sell the Collateral without giving any warranties as to the
Collateral.  Secured Party may
specifically disclaim any warranties of title or the like.  This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

9.5         If
Secured Party sells any of the Collateral upon credit, Debtor will be credited
only with payments actually made by the purchaser, received by Secured Party
and applied to the indebtedness of the purchaser.  In the event that the purchaser fails to pay for the Collateral,
Secured Party my resell the Collateral and Debtor will be credited with the
proceeds of such sale.

 

9.6         Secured
Party shall be under no obligation to marshal any assets in favor of Debtor, or
against or in payment of the Secured Obligations or any other obligation owned
to Secured Party or any Lender by Debtor or any other Person.

 

9.7         Upon
the exercise by Secured Party of any power, right, privilege, or remedy
pursuant to this Security Agreement which requires any consent, approval,
registration, qualification, or authorization of any Governmental Authority,
Debtor agrees to execute and deliver, or will cause the execution and delivery
of, all applications, certificates, instruments, assignments, and other documents
and papers that Secured Party or any purchaser of the Collateral may be
required to obtain for such governmental consent, approval, registration,
qualification, or authorization.

 

9.8         The
rights and remedies of Secured Party under this Security Agreement, the Loan
Agreement, the other Loan Documents, and all other agreements contemplated
hereby and thereby shall be cumulative. 
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 any one
right or remedy shall be deemed an election of remedies, and no waiver by
Secured Party of any default on Debtor’s part shall be deemed a continuing
waiver of any further defaults.  No
delay by Secured Party shall constitute a waiver, election or acquiescence with
respect to any right or remedy.

 

10.         Secured Party Not
Liable.   So long as Secured Party complies with the
obligations, if any, imposed by the Code, Secured Party shall not otherwise be
liable or responsible in any way or manner for:  (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion or from any cause; (c)
any diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever.  Debtor bears the risk of loss or damage of
the Collateral.

 

11.         Indefeasible Payment.   The Secured Obligations shall not be considered indefeasibly paid for
purposes of this Security Agreement unless and until all payments to Secured
Party are no longer subject to any right on the part of any Person, including
Debtor, Debtor as a debtor in possession, or any trustee (whether appointed
under the Bankruptcy Code or otherwise) of Debtor or Debtor’s Assets to
invalidate or set aside such payments or to seek to recoup the amount of such
payments or any portion thereof, or to declare same to be fraudulent

 

16

 

or
preferential.  In the event that, for
any reason, any portion of such payments to Secured Party is set aside or
restored, whether voluntarily or involuntarily, after the making thereof, then
the obligation intended to be satisfied thereby shall be revived and continued
in full force and effect as if said payment or payments had not been made.

 

12.        Notices.  All notices or demands by any party hereto to
the other party and relating to this Security Agreement shall be made in the
manner and to the addresses set forth in Section 15 of the Guaranty.

 

13.        General Provisions.

 

13.1      Successors and Assigns. 
This Security
Agreement shall bind and inure to the benefit of the respective successors and
assigns of Debtor and Secured Party; provided,
however, that Debtor may not assign this Security Agreement nor
delegate any of its duties hereunder without Secured Party’s prior written
consent and any prohibited assignment or delegation shall be absolutely
void.  No consent by Secured Party to an
assignment by Debtor shall release Debtor from the Secured Obligations.  Secured Party reserves its right to sell,
assign, transfer, negotiate, or grant participations in all or any part of, or
any interest in, the rights and benefits hereunder pursuant to and in accordance
with the provisions of the Loan Agreement. 
In connection therewith, Secured Party may disclose all documents and
information which Secured Party now or hereafter may have relating to Debtor,
Debtor’s business, or the Collateral to any such prospective or actual
Transferee, subject to the terms of Section 9.5(e) of the Loan Agreement.

 

13.2      Exhibits and Schedules. 
All of the exhibits
and schedules attached hereto shall be deemed incorporated by reference.

 

13.3      No Presumption Against Any Party.    Neither this
Security Agreement nor any uncertainty or ambiguity herein shall be construed
or resolved against Secured Party or Debtor, whether under any rule of
construction or otherwise.  On the
contrary, this Security Agreement has been reviewed by each of the parties and
their counsel and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.

 

13.4      Amendments and Waivers.  
Any provision of this
Security Agreement or any of the Loan Documents to which Debtor is a party may
be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the party asserted to be bound thereby, and then such
amendment or waiver shall be effective only in the specific instance and
specific purpose for which given.

 

13.5      Counterparts; Integration; Effectiveness.  This Security Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.  This Security Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the

 

17

 

subject
matter hereof.  This Security Agreement
shall become effective when executed by each of the parties hereto and
delivered to Secured Party.

 

13.6       Severability.   
The provisions of
this Security Agreement are severable. 
The invalidity, in whole or in part, of any provision of this Security
Agreement shall not affect the validity or enforceability of any other of its
provisions.  If one or more provisions
hereof shall be declared invalid or unenforceable, the remaining provisions
shall remain in full force and effect and shall be construed in the broadest
possible manner to effectuate the purposes hereof

 

13.7       CHOICE OF
LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)         THE VALIDITY OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

 

(b)         THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT SECURED PARTY’S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SECURED PARTY ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  DEBTOR AND SECURED PARTY WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13.7.

 

(c)         DEBTOR AND SECURED PARTY
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  DEBTOR AND SECURED
PARTY REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL

 

18

 

COUNSEL.  IN THE EVENT  OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

13.8       Amended and Restated Security Agreement.  This Security Agreement shall amend and restate the
Prior Security Agreement in its entirety, and continue the Secured Obligations
incurred by Debtor thereunder and the grant of a security interest created
thereunder.

 

remainder
of this page intentionally left blank

 

19

 

IN WITNESS WHEREOF, the parties have executed this
Security Agreement as of the date first set forth above. 

 

 

	
  Debtor:

  	
  SIERRA
  MEDICAL MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ R . Stewart Kahn

  	
   

  
	
   

  	
   

  	
  R . Stewart Kahn, Executive Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Secured
  Party:

  	
  COMERICA
  BANK

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Stephanie
  D. McElroy

  	
   

  
	
   

  	
   

  	
  Stephanie D. McElroy, Vice President

  	
   

  

 

20

 

SCHEDULE 1

 

Section 5.1       Legal Name, State of Organization, FEIN and
Charter Identification Number

 

Section 5.1       Location of Chief Executive Office and
Collateral

 

Section 5.2       Locations of Debtor’s Books

 

Section 5.3       Trade Names or Trade Styles

 

Section 5.9       Intellectual Property

 

Section 5.10     Equipment Leases

 

Section 5.11     Deposit Accounts

 

Section 5.12     Investment Property

 

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]