Exhibit 10.4
SECURITY AGREEMENT
SECURITY AGREEMENT (this “
Security Agreement ”) dated as of the 2nd day
of July, 2009, by and among NovaRay Medical, Inc. (the “
Company ” and/or the “
Debtor ”), and Vision Capital Advisors, LLC, in
its capacity as the collateral agent (together with any successors
thereto in such capacity, the “ Collateral
Agent ”) for the benefit of the holders (the “
Holders ”) of the Notes (as defined below) (the
Collateral Agent and the Holders are hereinafter referred to as the
“ Secured Parties ”).
Recitals
A. Pursuant to the Note and Warrant
Purchase Agreement, dated as of the date hereof (including all
annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “
Purchase Agreement ”), among the Debtor and the
Purchasers named therein (the “ Purchasers
”), the Debtor has agreed to issue, and subject to the terms
thereof, and the Purchasers have agreed to purchase, the
Debtor’s Senior Secured 12% convertible bridge notes in the
aggregate principal amount of up to $4,250,000 (together with all
renewals, extensions and modifications thereof and any note or
notes issued in substitution or exchange therefor, the “
Notes ”); and
B. As a condition to each of the
Purchasers’ obligation to purchase the Notes, the Purchasers
have required, and the Debtor has agreed, to execute and deliver
this Security Agreement to provide collateral security for the
Secured Obligations of the Debtor under the Purchase Agreement, the
Notes, this Security Agreement (hereinafter collectively referred
to as the “ Note Documents ”).
Agreement
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms . Terms not
otherwise defined in this Security Agreement (including Annex
A hereto), unless the context indicates otherwise, have the
meanings set forth in the Purchase Agreement, or if not defined in
the Purchase Agreement, then as provided for by the Code to the
extent the same are used or defined therein.
2. Grant Of Lien .
(a) To secure the prompt and
complete payment, performance and observance when due (whether at
stated maturity, by acceleration or otherwise) of all of the
Secured Obligations, the Debtor hereby grants, assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Collateral
Agent, for itself and the benefit of the Secured Parties, security
interests in all of its right, title and interest in, to and under
all personal property and other assets described below, whether now
owned by or owing to, or hereafter acquired by or arising in favor
of the Debtor, and whether owned or consigned by or to, or leased
from or to, the Debtor, and regardless of where located (all of
which being hereinafter collectively referred to as the “
Collateral ”): (i) all Accounts;
(ii) all General Intangibles; (iii) all goods, including,
without
limitation, Inventory and Equipment;
(v) all Chattel Paper; (vi) all Instruments (including
all promissory notes); (vii) all documents; (viii) all
Deposit Accounts, including all deposits therein; (ix) all
money, cash or cash equivalents of the Debtor; (x) all books
and records pertaining to the Collateral; (xi) all investment
property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements,
commodity contracts or commodity accounts); (xii) all
Trademarks, Patents or Copyrights or other Intellectual Property;
(xiii) to the extent not otherwise included, all Proceeds,
tort claims, insurance claims and other rights to payments not
otherwise included in the foregoing and products of the foregoing
and all accessions to, substitutions and replacements for, and
rents and profits of, each of the foregoing.
(b) In addition, to secure the
prompt and complete payment, performance and observance of the
Secured Obligations and in order to induce the Secured Parties as
aforesaid, the Debtor hereby grants to the Collateral Agent, for
the benefit of the Secured Parties, a right of setoff against the
property of the Debtor held by the Secured Parties, consisting of
property described above in Section 2(a) now or
hereafter in the possession or custody of or in transit to the
Secured Parties, for any purpose, including safekeeping, collection
or pledge, for the account of the Debtor, or as to which the Debtor
may have any right or power.
3. Representations and
Warranties . Except as set forth in the Schedule of Exceptions
(as defined in the Purchase Agreement), the Debtor represents and
warrants, as of the date hereof, that:
(a) The Debtor has rights in and the
power to transfer, and is the sole beneficial owner of, each item
of the Collateral upon which it purport to grant a Lien hereunder
free and clear of any and all Liens other than Permitted
Encumbrances.
(b) Subject to the pay-off of the
Triple Ring and the concomitant release of its lien, which shall be
released upon the Closing, no effective security agreement,
financing statement, equivalent security or Lien instrument or
continuation statement covering all or any part of the Collateral
is on file or of record in any public office, except such as may
have been filed by the Debtor in favor of the Collateral Agent
pursuant to this Security Agreement or the other Note
Documents.
(c) This Security Agreement is
effective to create a valid and continuing Lien on and, upon the
filing of appropriate financing statements with the governmental
offices listed on Schedule I hereto, a perfected Lien
in favor of the Collateral Agent, for the benefit of the Secured
Parties, on the Collateral with respect to which a Lien may be
perfected by filing pursuant to Article 9 of the Code. As of the
Closing, such Lien will be prior to all other Liens, except
Permitted Encumbrances and is enforceable as such as against any
and all creditors of and purchasers from the Debtor (other than
purchasers of Inventory in the ordinary course of
business).
(d) The Debtor’s name as it
appears in official filings in the jurisdiction of its
incorporation or other organization, the type of entity of the
Debtor (including corporation, partnership, limited partnership or
limited liability company), organizational identification number
issued by the Debtor’s jurisdiction of incorporation or
organization or a statement that no such number has been issued,
the Debtor’s jurisdiction of organization or incorporation,
the
2
location of the Debtor’s chief executive
office, principal place of business, offices and premises where
Collateral is stored or located, and the locations of its books and
records concerning the Collateral are set forth on Schedule
II hereto. The Debtor has only one state of incorporation
or organization. The Debtor has not, during the five years prior to
the date of this Security Agreement, been known by or used any
other corporate or fictitious name or been party to any merger or
consolidation, or acquired all or substantially all of the assets
of any Person, or acquired any of its property or assets out of the
ordinary course of business, except as set forth on Schedule
II hereto. The Debtor has not (i) within the period of
four months prior to the date hereof, changed its location (as
defined in Section 9-307 of the Code), (ii) except as
specified on Schedule II hereto, heretofore changed
its name, or (iii) except as specified on Schedule
II hereto, heretofore became “new debtor” (as
defined in Section 9-102(a)(56) of the Code) with respect to a
currently effective security agreement previously entered into by
any other Person.
4. Covenants . The Debtor
covenants and agrees with the Collateral Agent, for the benefit of
the Secured Parties, that from and after the date of this Security
Agreement and until the Termination Date:
(a) Further Assurances
.
(i) At any time and from time to
time, upon any written request of the Collateral Agent, at the sole
expense of the Debtor, the Debtor shall promptly and duly execute
and deliver any and all such further instruments and documents and
take such further actions as may be necessary or desirable or
reasonably requested by the Collateral Agent to obtain the full
benefits of this Security Agreement and of the rights and powers
herein granted, including (A) using all reasonable efforts to
secure all consents and approvals necessary or appropriate to
enforce the security interests granted hereunder; and
(B) filing any financing statements, mortgages, continuation
statements, assignments and amendments with respect to the Liens
granted hereunder as to those jurisdictions that are not Uniform
Commercial Code jurisdictions.
(ii) The Debtor hereby irrevocably
and unconditionally authorizes the Collateral Agent at any time and
from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements,
continuation statements, assignments and amendments thereto that
(a) indicate the Collateral, and (b) contain any other
information required by Article 9 of the Code for the sufficiency
or filing office acceptance of any financing statement or
amendment. The Debtor agrees to furnish any such information to the
Collateral Agent promptly upon request. The Debtor also ratifies
its authorization for the Collateral Agent to have filed in any
Uniform Commercial Code jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof
and ratifies and confirms the authorization of the Collateral Agent
to file such financing statements (and amendments, if any). The
Debtor hereby authorizes the Collateral Agent to adopt on behalf of
the Debtor any symbol required for authenticating any electronic
filing. In the event that the description of the collateral in any
financing statement naming the Collateral Agent or its designee as
the secured party and the Debtor as debtor includes assets and
properties of the Debtor that do not at any time constitute
Collateral, whether hereunder, under any of the other Note
Documents or otherwise, the filing of such financing statement
shall nonetheless be deemed authorized by the Debtor to the extent
of the Collateral included in such description and it shall not
render the financing statement ineffective as to any of the
Collateral or otherwise affect the financing statement as
it
3
applies to any of the Collateral. In no event
shall the Debtor at any time file, or permit or cause to be filed,
any correction statement or termination statement with respect to
any financing statement (or amendment or continuation with respect
thereto) naming the Collateral Agent or its designee as secured
party and the Debtor as debtor.
(iii) Upon the occurrence and during
the continuance of any Event of Default, the Debtor shall take all
steps necessary to grant the Collateral Agent control of and a
perfected Lien on all Chattel Paper, Instruments, Deposit Accounts,
Investment Property, investment accounts, security accounts,
commodity accounts, letters of credit or banker’s acceptance
constituting Collateral (including, without limitation, the
delivery to the Collateral Agent of all such Collateral,
accompanied by such instruments of transfer or assignment duly
executed in black, the delivery of a deposit or investment property
control agreement executed by the Debtor and any applicable
financial institution).
(iv) The Debtor shall, upon the
occurrence and during the continuance of any Event of Default, upon
request of the Collateral Agent, promptly notify (and the Debtor
hereby authorizes the Collateral Agent so to notify) each Account
Debtor in respect of any Accounts of the Debtor that such
Collateral has been assigned to the Collateral Agent hereunder, and
that any payments due or to become due in respect thereof are to be
made directly to the Collateral Agent.
(b) Maintenance of Records .
The Debtor shall keep and maintain, at its own cost and expense,
satisfactory and complete records of the Collateral, including a
record of any and all payments received and any and all credits
granted with respect to the Collateral in the same manner such
records are presently kept and maintained.
(c) Limitation on Liens on
Collateral . The Debtor will not create, permit or suffer to
exist, and the Debtor will defend the Collateral against, and take
such other action as is necessary to remove, any Lien on the
Collateral except Permitted Encumbrances, and will defend the
right, title and interest of the Secured Parties in and to any of
the Debtor’s rights under the Collateral against the claims
and demands of all Persons whomsoever.
(d) Limitations on
Disposition. The Debtor will not sell, license, lease, transfer
or otherwise dispose of any of the Collateral (other than Inventory
in the ordinary course of business), or attempt or contract to do
so except as permitted by the Purchase Agreement.
(e) Further Identification of
Collateral . The Debtor will, if so requested by the Collateral
Agent, furnish to the Collateral Agent, as often as the Collateral
Agent reasonably requests, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may
reasonably request, all in such detail as the Collateral Agent may
reasonably specify.
(f) Notices . The Debtor will
advise the Collateral Agent promptly, in reasonable detail,
(i) of any Lien (other than Permitted Encumbrances) or written
claim made or asserted against any of the Collateral, and
(ii) of the occurrence of any other event which could have a
material adverse effect on the value of the Collateral or on the
Liens created hereunder.
4
(g) No Reincorporation; No Name
Change . The Debtor shall not reincorporate or reorganize
itself under the laws of any jurisdiction other than the
jurisdictions in which they are incorporated or organized as of the
date hereof without the prior written consent of the Collateral
Agent. The Debtor shall not change its legal name without first
giving 30 days prior written notice of its intent to do so to the
Collateral Agent.
5. Collateral Agent’s
Appointment As Attorney-in-fact . On the Closing Date, the
Debtor shall execute and deliver to the Collateral Agent a power of
attorney (the “ Power of Attorney ”)
substantially in the form attached hereto as Exhibit
A . The power of attorney granted pursuant to the Power of
Attorney is a power coupled with an interest and shall be
irrevocable until the Termination Date. The powers conferred on the
Collateral Agent, for the benefit of the Secured Parties, under the
Power of Attorney are solely to protect the Collateral
Agent’s interests (for the benefit of the Secured Parties) in
the Collateral and shall not impose any duty upon the Secured
Parties to exercise any such powers. The Collateral Agent agrees
with the Secured Parties and the Company that (a) except for
the powers granted in clause (h) of the Power of Attorney, it
shall not exercise any power or authority granted under the Power
of Attorney unless an Event of Default has occurred and is
continuing, (b) it shall not exercise any power or authority
under the Power of Attorney unless such action has been approved in
writing by the holders of a majority in principal amount of the
Notes outstanding (the “ Required Holders
” ), and (c) the Collateral Agent shall account for
any moneys received by the Collateral Agent in respect of any
foreclosure on or disposition of Collateral pursuant to the Power
of Attorney provided that the Secured Parties shall not have any
duty as to any Collateral, and the Secured Parties shall be
accountable only for amounts that they actually receive as a result
of the exercise of such powers. NONE OF THE SECURED PARTIES OR
THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
OR REPRESENTATIVES SHALL BE RESPONSIBLE TO THE DEBTOR FOR ANY ACT
OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT
IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT
OF COMPETENT JURISDICTION.
6. Remedies: Rights Upon
Default .
(a) In addition to all other rights
and remedies granted to it under this Security Agreement, the other
Note Documents and under any other instrument or agreement
securing, evidencing or relating to any of the Secured Obligations,
if any Event of Default shall have occurred and be continuing, the
Collateral Agent may exercise all rights and remedies of a secured
party under the Code. Without limiting the generality of the
foregoing, the Debtor expressly agrees that in any such event the
Collateral Agent, on behalf of the Secured Parties, 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 the 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 forthwith enter upon the premises of the
Debtor where any Collateral is located through self-help, without
judicial process, without first obtaining a final judgment or
giving the Debtor or any other Person notice and opportunity for a
hearing on the Secured Parties’ claim or action and may
collect, receive, assemble, process, appropriate and realize upon
the Collateral, or any part
5
thereof, and may forthwith sell, lease, license,
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 a public or private
sale or sales, at any exchange at such prices as it may deem
acceptable, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent 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
for the benefit of the Secured Parties, the whole or any part of
said Collateral so sold, free of any right or equity of redemption,
which equity of redemption the Debtor hereby releases. Such sales
may be adjourned and continued from time to time with or without
notice. The Collateral Agent shall have the right to conduct such
sales on the Debtor’s premises or elsewhere and shall have
the right to use the Debtor’s premises without charge for
such time or times as the Collateral Agent deems necessary or
advisable.
If any Event of Default shall have
occurred and be continuing, the Debtor further agrees, at the
Collateral Agent’s request, to assemble the Collateral and
make it available to the Collateral Agent at a place or places
designated by the Collateral Agent which are reasonably convenient
to the Collateral Agent and the Debtor, whether at the
Debtor’s premises or elsewhere. Until the Collateral Agent is
able to affect a sale, lease, or other disposition of Collateral,
the Collateral Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value
or for any other purpose deemed appropriate by the Collateral
Agent. The Collateral Agent shall have no obligation to the Debtor
to maintain or preserve the rights of the Debtor as against third
parties with respect to Collateral while Collateral is in the
possession of the Collateral Agent. The Collateral Agent may, if it
so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of the Secured
Parties’ or Collateral Agent’s remedies, with respect
to such appointment without prior notice or hearing as to such
appointment. The Collateral Agent shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization
or sale to the Secured Obligations as provided in the Note
Documents, and only after so paying over such net proceeds, and
after the payment by the Collateral Agent of any other amount
required by any provision of law, need the Collateral Agent account
for the surplus, if any, to the Debtor. To the maximum extent
permitted by applicable law, the Debtor hereby waives all claims,
damages, and demands against the Secured Parties and the Collateral
Agent arising out of the repossession, retention or sale of the
Collateral except such as arise solely out of the gross negligence
or willful misconduct of such Secured Party or Collateral Agent as
finally determined by a court of competent jurisdiction. The Debtor
agrees that ten (10) days prior notice by the Collateral Agent
of the time and place of any public sale or of the time after which
a private sale may take place is reasonable notification of such
matters. The Debtor shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are
insufficient to pay all Secured Obligations, including any
attorneys’ fees and other expenses incurred by the Collateral
Agent to collect such deficiency.
(b) Except as otherwise specifically
provided herein, the Debtor hereby waives presentment, demand,
protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Security
Agreement or any Collateral.
(c) To the extent that applicable
law imposes duties on Secured Parties or the Collateral Agent to
exercise remedies in a commercially reasonable manner, the
Debtor
6
acknowledges and agrees that it is not
commercially unreasonable for the Secured Parties or Collateral
Agent (i) to fail to incur expenses reasonably deemed
significant by the Secured Parties or Collateral Agent to prepare
Collateral for disposition or otherwise to complete raw material or
work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to
be collected or disposed of, (iii) to fail to exercise
collection remedies against Account Debtors or other Persons
obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral
directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature,
(vi) to contact other Persons, whether or not in the same
business as the Debtor, for expressions of interest in acquiring
all or any portion of such Collateral, (vii) to hire one or
more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized
nature, (viii) to dispose of Collateral by utilizing internet
sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so,
or that match buyers and sellers of assets, (ix) to dispose of
assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet
enjoyment, (xi) to purchase insurance or credit enhancements
to insure the Secured Parties and/or the Collateral Agent against
risks of loss, collection or disposition of Collateral or to
provide to the Secured Parties a guaranteed return from the
collection or disposition of Collateral, or (xii) to the
extent deemed appropriate by the Collateral Agent, to obtain the
services of other brokers, investment bankers, consultants and
other professionals to assist the Collateral Agent in the
collection or disposition of any of the Collateral. The Debtor
acknowledges that the purpose of this
Section 6(c) is to provide non-exhaustive
indications of what actions or omissions by the Secured Parties or
Collateral Agent would not be commercially unreasonable in the
Secured Parties’ or Collateral Agent’s exercise of
remedies against the Collateral and that other actions or omissions
by the Secured Parties or Collateral Agent shall not be deemed
commercially unreasonable solely on account of not being indicated
in this Section 6(c) . Without limitation upon
the foregoing, nothing contained in this
Section 6(c) shall be construed to grant any
rights to the Debtor or to impose any duties on the Secured Parties
or Collateral Agent that would not have been granted or imposed by
this Security Agreement or by applicable law in the absence of this
Section 6(c) .
(d) The Secured Parties and
Collateral Agent shall not be required to make any demand upon, or
pursue or exhaust any of their rights or remedies against, the
Debtor, any other obligor, guarantor, pledgor or any other Person
with respect to the payment of the Secured Obligations or to pursue
or exhaust any of their rights or remedies with respect to any
Collateral therefor or any direct or indirect guarantee thereof.
The Secured Parties and Collateral Agent shall not be required to
marshal the Collateral or any guarantee of the Secured Obligations
or to resort to the Collateral or any such guarantee in any
particular order, and all of its and their rights hereunder or
under any other Document shall be cumulative. To the extent it may
lawfully do so, the Debtor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to
assert against the Secured Parties or the Collateral Agent, any
valuation, stay, appraisement, extension, redemption or similar
laws and any and all rights or defenses it may have as sureties now
or hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment,
order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise.
7
7. Grant Of Licenses To Use
Intellectual Property Collateral . For the purpose of enabling
the Collateral Agent to exercise rights and remedies under
Section 6 hereof (including, without limiting
the terms of Section 6 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale,
market for sale, sell or otherwise dispose of Collateral) at such
time as the Collateral Agent shall be lawfully entitled to exercise
such rights and remedies, the Debtor hereby grants to the
Collateral Agent, irrevocable, nonexclusive licenses (exercisable
without payment of royalty or other compensation to the Debtor) to
use, license or sublicense any Intellectual Property now owned or
hereafter acquired by the Debtor, and wherever the same may be
located, and including in such licenses access to all media in
which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or
printout thereof.
8. Indemnity; Expenses;
Limitation On Secured Parties’ and Collateral Agent’s
Duty In Respect Of Collateral .
(a) Whether or not the transactions
contemplated hereby are consummated, the Debtor shall indemnify and
hold the Secured Parties, the Collateral Agent, their respective
Affiliates, and each of their directors, officers, agents and
employees (collectively, the “ Indemnified
Persons ”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, charges, expenses and
disbursements (including reasonable attorneys fees and expenses) of
any kind or nature whatsoever which may at any time (including at
any time following the termination of the Secured Obligations and
the termination, resignation or replacement of the Collateral Agent
or any assignment by a Secured Party) be imposed on, incurred by or
asserted against any such Indemnified Person in any way relating to
or arising out of or in connection with the execution, delivery,
enforcement, performance or administration of this Security
Agreement, the other Note Documents or any other agreement, letter
or instrument delivered in connection with the transactions
contemplated hereby or the consummation of the transactions
contemplated hereby or any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnified Person is a party thereto
(all the foregoing, collectively, the “ Indemnified
Liabilities ”), in all cases, whether or not caused
by or arising, in whole or in part, out of the negligence of any
Indemnified Person; provided that such indemnity shall not, as to
any Indemnified Person, be available to the extent that such
Indemnified Liabilities are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnified
Person. In the case of an investigation, litigation or other
proceeding to which the indemnity in this
Section 8 applies, such indemnity shall be
effective whether or not such investigation, litigation or
proceeding is brought by the Debtor, its directors, shareholders or
creditors or an Indemnified Party or any other Person, whether or
not an Indemnified Person is otherwise a party thereto and whether
or not any of the transactions contemplated hereunder or under any
of the other Note Documents are consummated. All amounts due under
this Section 8 shall be payable within five Business
Days after demand therefor. The agreements in this
8
Section 8 shall survive the resignation of the Collateral
Agent, the assignment by a Secured Party and the repayment,
satisfaction or discharge of all the other Secured Obligations. In
the event that any investigation, litigation or proceeding is
asserted or threatened in writing or instituted against any
Indemnified Person, or any remedial, removal or response action
which is requested of it or any other Indemnified Person, for which
such Indemnified Person may desire indemnity or defense hereunder,
such Indemnified Person shall notify the Debtor in writing of such
event; provided that failure to so notify the Debtor shall not
affect the right
