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GUARANTEE AND COLLATERAL AGREEMENT

Guarantee Agreement

GUARANTEE AND COLLATERAL AGREEMENT | Document Parties: VOYANT INTERNATIONAL CORP | ROCKETSTREAM, INC | ZEROS & ONES TECHNOLOGIES, INC You are currently viewing:
This Guarantee Agreement involves

VOYANT INTERNATIONAL CORP | ROCKETSTREAM, INC | ZEROS & ONES TECHNOLOGIES, INC

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Title: GUARANTEE AND COLLATERAL AGREEMENT
Governing Law: California     Date: 4/9/2009
Law Firm: Thompson Knight    

GUARANTEE AND COLLATERAL AGREEMENT, Parties: voyant international corp , rocketstream  inc , zeros & ones technologies  inc
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Exhibit 10.41

Execution Version

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

each of the Grantors (as defined herein)

in favor of

 

The Brown Family Trust, an Alaskan trust,

as Secured Party

 

 

Dated as of March 31, 2009

 



 

 

TABLE OF CONTENTS

ARTICLE I Definitions

1

Section 1.01

Definitions

1

Section 1.02

Other Definitional Provisions; References

6

ARTICLE II Guarantee

7

Section 2.01

Guarantee

7

Section 2.02

Payments

7

ARTICLE III Grant of Security Interest

7

Section 3.01

Grant of Security Interest

7

Section 3.02

Transfer of Pledged Securities

9

Section 3.03

Grantors Remains Liable under Accounts, Chattel Paper and Payment Intangibles  9

ARTICLE IV Acknowledgments, Waivers and Consents

9

Section 4.01

Acknowledgments, Waivers and Consents

9

Section 4.02

No Subrogation, Contribution or Reimbursement

11

ARTICLE V Representations and Warranties

12

Section 5.01

Representations in Loan Agreements

12

Section 5.02

Benefit to the Grantors.

12

Section 5.03

Solvency

12

Section 5.04

Title; No Other Liens

12

Section 5.05

Perfected First Priority Liens

12

Section 5.06

Legal Name, Organizational Status, Chief Executive Office

13

Section 5.07

Prior Names, Addresses, Locations of Tangible Assets

13

Section 5.08

Pledged Securities

13

Section 5.09

Instruments and Chattel Paper

13

Section 5.10

Truth of Information; Accounts

13

Section 5.11

Governmental Obligors

14

Section 5.12

Intellectual Property

14

ARTICLE VI Covenants

14

Section 6.01

Covenants in Loan Agreements

14

Section 6.02

Maintenance of Perfected Security Interest; Further Documentation

14

Section 6.03

Maintenance of Records

15

Section 6.04

Right of Inspection

15

Section 6.05

Further Identification of Collateral

15

Section 6.06

Changes in Locations, Name, etc.

16

Section 6.07

Compliance with Contractual Obligations

16

Section 6.08

Limitations on Dispositions of Collateral

16

Section 6.09

Pledged Securities

16

Section 6.10

Limitations on Modifications, Waivers, Extensions of Agreements Giving
Rise to Accounts

17

Section 6.11

Analysis of Accounts, Etc

17

 

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Section 6.12

Instruments and Tangible Chattel Paper

18

Section 6.13

Maintenance of Equipment

18

Section 6.14

Intellectual Property

18

Section 6.15

Commercial Tort Claims

19

Section 6.16

Prohibition on Indebtedness

20

Section 6.17

Prohibition on Liens

20

Section 6.18

Compensation of Principals, Affiliates, and Advisers.

20

Section 6.19

Operation of Business

20

Section 6.20

Financial Information

20

Section 6.21

Notice of Certain Events

21

ARTICLE VII Remedial Provisions

21

Section 7.01

Pledged Securities

21

Section 7.02

Collections on Accounts, Etc

22

Section 7.03

Proceeds

22

Section 7.04

UCC and Other Remedies

23

Section 7.05

Private Sales of Pledged Securities

24

Section 7.06

Waiver; Deficiency

24

Section 7.07

Non-Judicial Enforcement

24

ARTICLE VIII The Secured Party

25

Section 8.01

Secured Party’s Appointment as Attorney-in-Fact, Etc

25

Section 8.02

Duty of Secured Party

26

Section 8.03

Execution/Filing of Financing Statements

27

ARTICLE IX Subordination of Indebtedness

27

Section 9.01

Subordination of All Grantor Claims

27

Section 9.02

Claims in Bankruptcy

27

Section 9.03

Payments Held in Trust

27

Section 9.04

Liens Subordinate

28

Section 9.05

Notation of Records

28

Section 9.06

Contribution

28

ARTICLE X Miscellaneous

28

Section 10.01

Waiver

28

Section 10.02

Notices

29

Section 10.03

Payment of Expenses, Indemnities, Etc

29

Section 10.04

Amendments in Writing

29

Section 10.05

Successors and Assigns

29

Section 10.06

Invalidity

30

Section 10.07

Counterparts

30

Section 10.08

Survival

30

Section 10.09

Captions

30

Section 10.10

No Oral Agreements

30

Section 10.11

Governing Law; Submission to Jurisdiction

30

Section 10.12

Acknowledgments

31

Section 10.13

Releases

32

 

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Section 10.14

Reinstatement

32

Section 10.15

Acceptance

33

 

SCHEDULES:

1.

Notice Addresses of Secured Party and Grantors

2.

Description of Pledged Securities

3.

Filings and Other Actions Required to Perfect Security Interests

4.

Correct Legal Name, Location of Jurisdiction of Organization, Organizational Identification Number, Taxpayor Identification Number and Chief Executive Office

5.

Prior Names, Prior Chief Executive Office, Location of Tangible Assets

6.

Intellectual Property

7.

Interests of Other Persons in Property of the Grantors

 

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This GUARANTEE AND COLLATERAL AGREEMENT, dated as of March 31, 2009, is made by Voyant International Corporation , a Nevada corporation (the “ Maker ”), and each of the other signatories hereto other than the Secured Party (the Maker and each of the other signatories hereto other than the Secured Party, being sometimes referred to herein collectively as the “ Grantors ”), in favor of The Brown Family Trust , an Alaskan trust, as Secured Party (the “ Secured Party ”).

A.

The Secured Party has heretofore made various loans to the Maker under the Loan Agreements (as such term is hereinafter defined) and, pursuant to the terms of the Amendment (as such term is hereinafter defined), the Secured Party has agreed to extend the maturity date of a portion of the Loans (as such term is hereinafter defined), subject to the execution and delivery by the Maker and the other Grantors of this Guarantee and Collateral Agreement.

B.

Pursuant to the terms of the Amendment, each of the Grantors (other than Maker) has agreed to guaranty the indebtedness and obligations of the Maker to the Secured Party, and each of the Grantors has agreed to grant a lien and security interest to the Secured Party in, to and covering the Collateral (as such term is hereinafter defined) owned by such Grantor, as security for the Obligations (as such term is hereinafter defined).

NOW, THEREFORE, in consideration of the premises and to induce the Secured Party to enter into the Loan Agreement, the parties hereto agree as follows:

ARTICLE I

Definitions

Section 1.01 Definitions

.

(a)

As used in this Guarantee and Collateral Agreement, each term defined above shall have the meaning indicated above.  Unless otherwise defined herein, terms defined in the Notes and used herein shall have the meanings given to them in the Notes, and the following terms (as well as all terms which are not capitalized herein, but which are defined in the UCC on the date hereof) are used herein as so defined:  Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Supporting Obligations, and Tangible Chattel Paper.

(b)

The following terms shall have the following meanings:

$1,000,000 Note ” shall mean that certain Secured Promissory Note, in the original principal amount of $1,000,000, dated as of October 14, 2008, executed and delivered by the Maker and payable to the order of the Lender, pursuant to the terms of the $1,000,000 Loan Agreement, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

 

$1,000,000 Loan Agreement ” shall mean that certain Loan Agreement, dated as of October 14, 2008, between the Maker and the Lender, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

 

 

 

 



 

 

$2,000,000 Note ” shall mean that certain Second Amended and Restated Secured Promissory Note, in the original principal amount of $2,000,000, dated as of February 29, 2008, executed and delivered by the Maker and payable to the order of the Lender, pursuant to the terms of the $2,000,000 Loan Agreement, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

 

$2,000,000 Loan Agreement ” shall mean that certain Second Amended and Restated Loan Agreement, dated as of February 29, 2008, between the Maker and the Lender, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

 

$702,703 Note ” shall mean that certain Amended and Restated Secured Promissory Note, in the original principal amount of $702,703, dated as of June 9, 2008, executed and delivered by the Maker and payable to the order of the Lender, pursuant to the terms of the $702,703 Loan Agreement, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

 

$702,703 Loan Agreement ” shall mean that certain Amended and Restated Loan Agreement, dated as of June 9, 2008, between the Maker and the Lender, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

Account Debtor ” shall mean a Person (other than any Grantor) obligated on an Account, Chattel Paper, or General Intangible.

Agreement ” shall mean this Guarantee and Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

Amendment ” shall mean that certain Amendment to Second Amended and Restated Secured Promissory Note and Second Amended and Restated Loan Agreement, dated as of February 20, 2009, between the Maker and the Secured Party, in connection with the $2,000,000 Note and the $2,000,000 Loan Agreement.

Business Day ” shall mean a day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required by law to close.

 “ Collateral ” shall have the meaning assigned such term in Section 3.01.

Copyrights ” shall mean any and copyrights, rights and/or interests in copyrights, works protectable by copyrights, copyright registrations and/or copyright applications, including, without limitation, the copyright registrations and applications (if any) listed on Schedule 6 attached hereto and made a part hereof, and all renewals of any of the foregoing, all income, royalties, damages and payments now and hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and the right to sue for past, present and future infringements of any of the foregoing.

 

 

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 “ Grantor Claims ” shall mean all debts and obligations of the Maker or of any other Grantor to any Grantor, whether such debts and obligations now exist or are hereafter incurred or arise, or whether the obligation of the debtor thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or obligations be evidenced by note contract, open account, or otherwise, and irrespective of the Person or Persons in whose favor such debts or obligations may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by.

Guarantors ” shall mean, collectively, RocketStream, Inc., a Nevada corporation, and Zeros & Ones Technologies, Inc., a Delaware corporation.

Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)

all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)

the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)

all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than 90 days after the date on which such trade account payable was created or which are being disputed in good faith);

(d)

Indebtedness secured by a Lien on property owned or being purchased by such Person (including Indebtedness arising under conditional sales or other title retention agreements), whether or not such Indebtedness shall have been assumed by such Person or is limited in recourse;

(e)

all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any equity interest in such Person or any other Person or any warrant, right or option to acquire such equity interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(f)

all guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership for which such Person is liable either by agreement or by operation of applicable law, but only to the extent of such liability.

Intellectual Property ” shall mean, collectively, all Copyrights, all Trademarks, all Trademark Licenses, all Patents, all Patent Licenses, and all rights, claims, and benefits associated therewith or attributable thereto.

 

 

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Issuers ” shall mean, collectively, each issuer of a Pledged Security.

Liens ” shall mean any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes.  The term “Lien” shall include easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations.  For the purposes of this Agreement, each Grantor shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the property has been retained by or vested in some other Person in a transaction intended to create a financing. Ê

Loans ” shall mean, collectively, the loans and extensions of credit by under, or as evidenced by, the $1,000,000 Note, the $1,000,000 Loan Agreement, the $2,000,000 Note, the $2,000,000 Loan Agreement, the $702,703 Note, and the $702,703 Loan Agreement.

Loan Agreements ” shall mean, collectively, the $1,000,000 Loan Agreement, the $2,000,000 Loan Agreement, and the $702,703 Loan Agreement, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated.

Loan Documents ” shall mean, collectively, the Loan Agreements, the Notes, this Agreement, and any other or additional documents, instruments, and/or agreements, whether now existing or hereafter arising, evidencing, securing, or otherwise relating to any of the Notes and/or the indebtedness evidenced thereby, as each of same may, from time to time, be amended, supplemented, modified, and/or restated.

Notes ” shall mean, collectively, the $1,000,000 Note, the $2,000,000 Note, and the $702,703 Note, as same may, from time to time, be amended, modified, supplemented, renewed, extended, and/or restated, together with any other or additional promissory notes that may, from time to time, evidence the indebtedness, or any portion thereof, currently evidenced by any of such notes.

Obligations ” shall mean, collectively, all indebtedness, liabilities and obligations of the Maker and/or each Guarantor to the Secured Party, of whatsoever nature and howsoever evidenced, due or to become due, now existing or hereafter arising, whether direct or indirect, absolute or contingent, including, without limitation, any of same which may arise under, out of, or in connection with any of the Loan Agreements, any of the Notes, any of the other Loan Agreements, and all other agreements, guarantees, notes and other documents entered into by any party in connection therewith, and any amendment, restatement or modification of any of the foregoing, including, but not limited to, the full and punctual payment when due of any unpaid principal under the Notes, interest (including, without limitation, interest accruing at any post-default rate and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, reimbursement obligations, guaranty obligations, penalties, indemnities, legal and other fees, charges and

 

 

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expenses, and amounts advanced by and expenses incurred in order to preserve any collateral or security interest, whether due after acceleration or otherwise.

Patents ” shall mean: (i) all letters patent of the United States and all reissues and extensions thereof, including, without limitation, any thereof referred to in Schedule 6 hereto, and (ii) all applications for letters patent of the United States and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to in Schedule 6 hereto.  

Patent License ” shall mean all agreements, whether written or oral, providing for the grant by any Grantor of any right to manufacture, use or sell any invention covered by a Patent, including, without limitation, any thereof referred to in Schedule 6 hereto.  

Permitted Liens ” shall mean the (i) Liens in favor of the Secured Party, (ii) Liens for taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves are maintained by the applicable Grantor(s) in accordance with GAAP, (iii) statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the ordinary course of business each of which is in respect of obligations that are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves are maintained by the applicable Grantor(s) in accordance with GAAP, (iv) Liens in favor of WAA, LLC, securing loans (in the aggregate principal amount not to exceed $350,000) heretofore made by WAA, LLC to the Maker and/or certain of the other Grantors, to the extent that such Liens are contractually subordinated to the Liens in favor of the Secured Party pursuant to a written subordination or intercreditor agreement in form and substance acceptable to the Secured Party, and (v) Liens in favor of Mueller Trading L.P. (as collateral agent for itself, White Star LLC, Jason Lyons, and SRZ Trading, LLC), securing loans (in the aggregate principal amount not to exceed $300,000) heretofore made by such parties to the Maker and/or certain of the other Grantors, to the extent that such Liens are contractually subordinated to the Liens in favor of the Secured Party pursuant to a written subordination or intercreditor agreement in form and substance acceptable to the Secured Party.  

Person ” shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental body or authority, or other entity.

 “ Pledged Securities ” shall mean: (i) all of the equity or ownership interests of Grantors, and/or each or any of them, in, to, or with respect to each Guarantor, whether now owned or hereafter acquired and whether now existing or hereafter arising, including, without limitation, the equity interests or ownership interests described or referred to in Schedule 2; and (ii) (a) the certificates or instruments, if any, representing such equity or ownership interests, (b) all dividends (cash, stock or otherwise), cash, instruments, rights to subscribe, purchase or sell and all other rights and property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such equity or ownership interests, (c) all replacements, additions to and substitutions for any of the property referred to in this definition, including, without limitation, claims against third parties, (d) the proceeds, interest, profits and

 

 

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other income of or on any of the property referred to in this definition and (e) all books and records relating to any of the property referred to in this definition.

Securities Act ” shall mean the Securities Act of 1933, as amended.

Trademarks ” shall mean:  (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof, including, without limitation, any thereof referred to in Schedule 6 hereto, and (ii) all renewals thereof.

Trademark License ” shall mean  any agreement, written or oral, providing for the grant by any Grantor of any right to use any Trademark, including, without limitation, any thereof referred to in Schedule 6 hereto.

UCC ” shall mean the Uniform Commercial Code as from time to time in effect in the State of California; provided, however, that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the security interests of the Secured Party in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of California, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection, the effect thereof or priority and for purposes of definitions related to such provisions.

ARTICLE I

Definitions

Section 1.02 Other Definitional Provisions; References

.  The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.  The gender of all words shall include the masculine, feminine, and neuter, as appropriate.  The words “herein,” “hereof,” “hereunder” and other words of similar import when used in this Agreement refer to this Agreement as a whole, and not to any particular article, section or subsection.  Any reference herein to a Section shall be deemed to refer to the applicable Section of this Agreement unless otherwise stated herein.  Any reference herein to an exhibit, schedule or annex shall be deemed to refer to the applicable exhibit, schedule or annex attached hereto unless otherwise stated herein.  Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.  

 

 

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ARTICLE II

Guarantee

Section 2.01 Guarantee

.

(c)

Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Secured Party and its successors, endorsees, transferees and assigns, the prompt and complete payment and performance by the Maker and the Guarantors when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.  This is a guarantee of payment and not collection and the liability of each Guarantor is primary and not secondary.

(d)

Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors.

(e)

Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Article II or affecting the rights and remedies of the Secured Party hereunder.

(f)

Each Guarantor agrees that if the maturity of any of the Obligations is accelerated by bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this guarantee without demand or notice to such Guarantor.  The guarantee contained in this Article II shall remain in full force and effect until all the Obligations are indefeasibly paid in full in cash.

(g)

No payment made by the Maker, any of the Guarantors, any other guarantor or any other Person or received or collected by the Secured Party from the Maker, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until all the Obligations are indefeasibly paid in full in cash.

Section 2.02 Payments

.

  Each Guarantor hereby agrees and guarantees that payments hereunder will be paid to the Secured Party without set-off or counterclaim in Dollars at the location specified in the Notes for the making of payments to Secured Party under the applicable Note.

 

ARTICLE III

Grant of Security Interest

Section 3.01 Grant of Security Interest

.   Each Grantor hereby pledges, assigns and transfers to the Secured Party, and grants to the Secured Party a security interest in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor

 

 

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now has or at any time in the future may acquire any right, title or interest and whether now existing or hereafter coming into existence (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations:

(1)

all Accounts of the Maker and/or each Guarantor;

(2)

all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper) of the Maker and/or each Guarantor;

(3)

all Commercial Tort Claims of the Maker and/or each Guarantor;

(4)

all Deposit Accounts other than payroll, withholding tax and other fiduciary Deposit Accounts, of the Maker and/or each Guarantor;

(5)

all Documents of the Maker and/or each Guarantor;

(6)

all General Intangibles of the Maker and/or each Guarantor (including, without limitation, all domain names and similar property described or referred to in Schedule 6 hereto);

(7)

all Goods (including, without limitation, all Inventory and all Equipment, but excluding all Fixtures) of the Maker and/or each Guarantor;

(8)

all Instruments of the Maker and/or each Guarantor;

(9)

all Intellectual Property of the Maker and/or each Guarantor;

(10)

all Investment Property of the Maker and/or each Guarantor;

(11)

all Letter-of-Credit Rights (whether or not the letter of credit is evidenced by a writing) of the Maker and/or each Guarantor;

(12)

all Patent Licenses of the Maker and/or each Guarantor;

(13)

all Supporting Obligations of the Maker and/or each Guarantor;

(14)

all of the Pledged Securities;

(15)

any and all other or additional property, rights, interests, and/or assets, of any type, kind, or nature, whether now owned or hereafter acquired and wherever located, of the Maker and/or each Guarantor;

(16)

all books and records pertaining to the Collateral; and

(17)

to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security, guarantees and other Supporting Obligations given with respect to any of the foregoing.

 

 

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Section 3.02 Transfer of Pledged Securities

.  All certificates and instruments representing or evidencing the Pledged Securities shall be delivered to and held pursuant hereto by the Secured Party or a Person designated by the Secured Party and, in the case of an instrument or certificate in registered form, shall be duly indorsed to the Secured Party or in blank by an effective indorsement (whether on the certificate or instrument or on a separate writing), and accompanied by any required transfer tax stamps to effect the pledge of the Pledged Securities to the Secured Party.  Notwithstanding the preceding sentence, all Pledged Securities must be delivered or transferred in such manner, and each Grantor shall take all such further action as may be requested by the Secured Party, as to permit the Secured Party to be a “protected purchaser” to the extent of its security interest as provided in Section 8-303 of the UCC (if the Secured Party otherwise qualifies as a protected purchaser).

   Section 3.03 Grantors Remains Liable under Accounts, Chattel Paper and Payment Intangibles

.  Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Accounts, Chattel Paper and Payment Intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account, Chattel Paper or Payment Intangible.  The Secured Party shall not have any obligation or liability under any Account, Chattel Paper or Payment Intangible (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Secured Party of any payment relating to such Account, Chattel Paper or Payment Intangible, pursuant hereto, nor shall the Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account, Chattel Paper or Payment Intangible (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account, Chattel Paper or Payment Intangible (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

ARTICLE IV

Acknowledgments, Waivers and Consents

Section 4.01 Acknowledgments, Waivers and Consents

.  

(h)

Each Grantor acknowledges and agrees that the obligations undertaken by it under this Agreement involve the guarantee and the provision of collateral security for the obligations of Persons other than such Grantor and that such Grantor’s guarantee and provision of collateral security for the Obligations are absolute, irrevocable and unconditional under any and all circumstances.  In full recognition and furtherance of the foregoing, each Grantor understands and agrees, to the fullest extent permitted under applicable law and except as may otherwise be expressly and specifically provided in the Loan Documents, that each Grantor shall remain obligated hereunder (including, without limitation, with respect to the guarantee made by such Grantor hereby and the collateral security provided by such Grantor herein) and the enforceability and effectiveness of this Agreement and the liability of such Grantor, and the rights, remedies, powers and privileges of the Secured Party under this Agreement and the other Loan Documents shall not be affected, limited, reduced, discharged or terminated in any way:

 

 

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(i)

notwithstanding that, without any reservation of rights against any Grantor and without notice to or further assent by any Grantor, (A) any demand for payment of any of the Obligations made by the Secured Party may be rescinded by the Secured Party and any of the Obligations continued; (B) the Obligations, the liability of any other Person upon or for any part thereof or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by, or any indulgence or forbearance in respect thereof granted by, the Secured Party; (C) the Notes and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Secured Party and the Maker may deem advisable from time to time; (D) the Maker, any Grantor or any other Person may from time to time accept or enter into new or additional agreements, security documents, guarantees or other instruments in addition to, in exchange for or relative to, the Notes, all or any part of the Obligations, or any Collateral now or in the future serving as security for the Obligations; (E) any collateral security, guarantee or right of offset at any time held by the Secured Party for the payment of the Obligations may be sold, exchanged, waived, surrendered or released; and (F) any other event shall occur which constitutes a defense or release of sureties generally; and

(ii)

without regard to, and each Grantor hereby expressly waives to the fullest extent permitted by law, any defense now or in the future arising by reason of, (A) the illegality, invalidity or unenforceability of any Loan Agreement, any Note, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Secured Party, (B) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Grantor or any other Person against the Secured Party, (C) the insolvency, bankruptcy arrangement, reorganization, adjustment, composition, liquidation, disability, dissolution or lack of power of any Grantor or any other Person at any time liable for the payment of all or part of the Obligations or the failure of the Secured Party to file or enforce a claim in bankruptcy or other proceeding with respect to any Person; or any sale, lease or transfer of any or all of the assets of any Grantor, or any changes in the shareholders of any Grantor; (D) the fact that any Collateral or Lien contemplated or intended to be given, created or granted as security for the repayment of the Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other Lien, it being recognized and agreed by each of the Grantors that it is not entering into this Agreement in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectability or value of any of the Collateral for the Obligations; (E) any failure of the Secured Party to marshal assets in favor of any Grantor or any other Person, to exhaust any collateral for all or any part of the Obligations, to pursue or exhaust any right, remedy, power or privilege it may have against any Grantor or any other Person or to take any action whatsoever to mitigate or reduce any Grantor’s liability under this Agreement, any of the Notes, or any other document, instrument, or agreement relating thereto; (F) any law which provides that the obligation of a surety or guarantor must neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to the principal obligation; (G) the possibility that the Obligations may at any time and from time to time exceed the aggregate liability of such Grantor under this Agreement; or (H) any other circumstance, act or omission whatsoever (with or without notice to or knowledge of any Grantor), which constitutes, or might be construed to constitute, an equitable or legal discharge or defense of the Maker for the Obligations, or of such Grantor under the guarantee contained in Article II or with respect to the collateral security provided by such Grantor herein, or which might be available to a surety or guarantor, in bankruptcy or in any other instance.

 

 

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(i)

Each Grantor hereby waives to the extent permitted by law:  (i) except as expressly provided otherwise in any Loan Document, all notices to such Grantor, or to any other Person, including but not limited to, notices of the acceptance of this Agreement, the guarantee contained in Article II or the provision of collateral security provided herein, or the creation, renewal, extension, modification, accrual of any Obligations, or notice of or proof of reliance by the Secured Party upon the guarantee contained in Article II or upon the collateral security provided herein, or of default in the payment or performance of any of the Obligations owed to the Secured Party and enforcement of any right or remedy with respect thereto; or notice of any other matters relating thereto; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in Article II and the collateral security provided herein and no notice of creation of the Obligations or any extension of credit already or hereafter contracted by or extended to the Maker need be given to any Grantor; and all dealings between the Maker and any of the Grantors, on the one hand, and the Secured Party, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in Article II and on the collateral security provided herein; (ii) diligence and demand of payment, presentment, protest, dishonor and notice of dishonor; (iii) any statute of limitations affecting any Grantor’s liability hereunder or the enforcement thereof; (iv) all rights of revocation with respect to the Obligations, the guarantee contained in Article II and the provision of collateral security herein; and (v) all principles or provisions of law which conflict with the terms of this Agreement and which can, as a matter of law, be waived.

(j)

When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Grantor, the Secured Party may, but shall be under no obligation to, join or make a similar demand on or otherwise pursue or exhaust such rights and remedies as it may have against the Maker, any other Grantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Maker, any other Grantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Maker, any Grantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Grantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Secured Party against any Grantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.  The Secured Party shall not have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for the guarantee contained in Article II or any property subject thereto.

Section 4.02 No Subrogation, Contribution or Reimbursement

.  Notwithstanding any payment made by any Grantor hereunder or any set-off or application of funds of any Grantor by the Secured Party, no Grantor shall be entitled to be subrogated to any of the rights of the Secured Party against the Maker or any other Grantor or any collateral security or guarantee or right of offset held by the Secured Party for the payment of the Obligations, nor shall any Grantor seek or be entitled to seek any indemnity, exoneration, participation, contribution or reimbursement from the Maker or any other Grantor in respect of payments made by such Grantor hereunder, and each Grantor hereby expressly waives, releases, and agrees not to exercise any such rights of subrogation, reimbursement, indemnity and contribution.  Each Grantor further agrees that to the

 

 

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extent that such waiver and release set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement, indemnity and contribution such Grantor may have against the Maker, any other Grantor or against any collateral or security or guarantee or right of offset held by the Secured Party shall be junior and subordinate to any rights the Secured Party may have against the Maker and such Grantor and to all right, title and interest the Secured Party may have in any collateral or security or guarantee or right of offset.  The Secured Party may use, sell or dispose of any item of Collateral or security pursuant to the terms hereof as it sees fit without regard to any subrogation rights any Grantor may have, and upon any disposition or sale, any rights of subrogation any Grantor may have shall terminate.

ARTICLE V

Representations and Warranties

To induce the Secured Party to enter into the Amendment, each Grantor hereby represents and warrants to the Secured Party that:

Section 5.01 Representations in Loan Agreements

.  Each of the representations and warranties set forth in Article 4 of each of the Loan Agreements is hereby incorporated into this Agreement, with the substitution of the name of each Grantor in lieu of the name of the “Company”, and each such representation and warranty, as so incorporated herein, is true and correct in all material respects as applied to each Grantor and its respective properties and business(es) as though the name of such Grantor was used therein instead of the “Company”.

Section 5.02 Benefit to the Grantors .

Each Grantor is a direct or indirect subsidiary of the Maker and its guaranty and surety obligations pursuant to this Agreement reasonably may be expected to benefit, directly or indirectly, it; and it has determined that this Agreement is necessary and convenient to the conduct, promotion and attainment of the business(es) of such Grantor and the Maker.

Section 5.03 Solvency

.  As of the date hereof, and after giving effect to this Agreement, such Grantor is Solvent.

Section 5.04 Title; No Other Liens

.  Except for Permitted Liens, such Grantor is the legal and beneficial owner of its respective items of the Collateral free and clear of any and all Liens.  As of the date hereof, no financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Secured Party pursuant to this Agreement. Except as set forth on Schedule 7 hereto, the Grantors, collectively, are the legal and beneficial owners of, and hold absolute title, free and clear of any and all Liens, to, all property, rights, and assets that are necessary for the continued conduct and operation of their respective businesses, as currently conducted by such Grantors, and no Person other than the Grantors owns or holds any right, title, claim, interest, or Lien in, to, or with respect to any of such property, rights, or assets.  

Section 5.05 Perfected First Priority Liens

.  The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on said Schedule, have been delivered to

 

 

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the Secured Party in completed and duly executed form) will constitute valid perfected security interests in all of the Collateral in favor of the Secured Party to the extent a security interest in the Collateral can be perfected by filing of UCC-1 financing statements, the filing of a security interest in the United States Patent and Trademark Office, the filing of a security interest in the United States Copyright Office, and/or delivery of stock certificates and Instruments, as collateral security for such Grantor’s obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other Liens on the Collateral.

Section 5.06 Legal Name, Organizational Status, Chief Executive Office

.  On the date hereof, the correct legal name of such Grantor, such Grantor’s jurisdiction of organization, organizational number, taxpayor identification number and the location of such Grantor’s chief executive office or sole place of business are specified on Schedule 4.

Section 5.07 Prior Names, Addresses, Locations of Tangible Assets

.  Schedule 5 correctly sets forth (a) all names that such Grantor has used in the last five years and (b) the chief executive office of such Grantor over the last five years (if different from that which is set forth in Section 5.06 above).

Section 5.08 Pledged Securities

.  As of the date hereof, the shares (or such other equity interests) included in the definition of Pledged Securities pledged by such Grantor hereunder constitute all the issued and outstanding shares (or such other equity interests) of all classes of the capital stock or other equity interests of each Issuer owned by such Grantor.  All the shares (or such other equity interests) of the Pledged Securities have been duly and validly issued and are fully paid and non-assessable; and such Grantor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement. As of the date hereof, no Grantor owns, directly, indirectly, beneficially, or otherwise any shares (or other equity interests) in any Person, other than the shares (or other equity interests) included in the definition of Pledged Securities pledged by such Grantor hereunder.

Section 5.9 Instruments and Chattel Paper

.  Such Grantor has delivered to the Secured Party all Collateral constituting Instruments and Chattel Paper.  No Collateral constituting Chattel Paper or Instruments contains any statement therein to the effect that such Collateral has been assigned to an identified party other than the Secured Party, and the grant of a security interest in such Collateral in favor of the Secured Party hereunder does not violate the rights of any other Person as a secured party.

Section 5.10 Truth of Information; Accounts

.  All information with respect to the Collateral set forth in any schedule, certificate or other writing at any time heretofore or hereafter furnished by such Grantor to the Secured Party, and all other written information heretofore or hereafter furnished by such Grantor to the Secured Party is and will be true and correct in all material respects as of the date furnished.  The place where each Grantor keeps its records concerning the Accounts, Chattel Paper and Payment Intangibles is: 444 Castro Street, Suite 318, Mountain View, California, 94041.

 

 

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Section 5.11 Governmental Obligors

.  Unless otherwise notified to the Secured Party, none of the Account Debtors on such Grantor’s Accounts, Chattel Paper or Payment Intangibles is a Governmental Authority.

Section 5.12 Intellectual Property

.  Schedule 6 hereto includes all Patents and Patent Licenses, all Copyrights, and all Trademarks and Trademark Licenses owned by such Grantor in its own name as of the date hereof.  Each Patent, Copyright, and Trademark is valid, subsisting, unexpired, enforceable and has not been abandoned.  As of the date hereof, except as set forth in Schedule 6 hereto, none of such Patents, Copyrights, and/or Trademarks is the subject of any licensing or franchise agreement.  As of the date hereof, no holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any such Patent, Copyright, or Trademark.  As of the date hereof, no action or proceeding is pending (i) seeking to limit, cancel or question the validity of any such Patent, Copyright, or Trademark, or (ii) which, if adversely determined, would have a material adverse effect on the value of any such Patent, Copyright, or Trademark.

ARTICLE VI

Covenants

Each Grantor covenants and agrees with the Secured Party that, with respect to such Grantor and the Collateral owned or claimed by such Grantor, from and after the date of this Agreement until all the Obligations are indefeasibly paid in full in cash:

Section 6.01 Covenants in Loan Agreements

.  Each Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no breach, violation, default, and/or Event of Default (howsoever designated) occurs or arises under any Loan Agreement.

Section 6.02 Maintenance of Perfected Security Interest; Further Documentation

.

(k)

Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 5.05 and shall defend such security interest against the claims and demands of all Persons whomsoever.  

(l)

At any time and from time to time, upon the written request of the Secured Party, and at the sole expense of such Grantor, such Grantor will promptly and duly give, execute, deliver, indorse, file or record any and all financing statements, continuation statements, amendments, notices (including, without limitation, notifications to financial institutions and any other Person), contracts, agreements, assignments, certificates, stock powers or other instruments, obtain any and all governmental approvals and consents and take or cause to be taken any and all steps or acts that may be necessary or advisable or as the Secured Party may reasonably request to create, perfect, establish the priority of, or to preserve the validity, perfection or priority of, the Liens granted by this Agreement or to enable the Secured Party to enforce its rights, remedies, powers and privileges under this Agreement with respect to such Liens or to otherwise obtain or preserve the full benefits of this Agreement and the rights, powers and privileges herein granted; provided that notwithstanding anything herein to the contrary, so long as no Event of Default has occurred and is continuing, no Grantor shall be required to execute any control agreement with respect to any

 

 

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Deposit Account or Investment Property (other than any Pledged Securities that are not maintained in a Securities Account).

(m)

Without limiting the obligations of the Grantors under Section 6.02(b):  (i) upon the written request of the Secured Party, such Grantor shall take or cause to be taken all actions (other than any actions required to be taken by the Secured Party) requested by the Secured Party to cause the Secured Party to (A) have “control” (within the meaning of Sections 9-105, 9-106 and 9-107 of the UCC) over any Collateral constituting Electronic Chattel Paper, Pledged Securities that are not maintained in a Securities Account, or Letter-of-Credit Rights, and (B) be a “protected purchaser” (as defined in Section 8-303 of the UCC); (ii) upon the written request of the Secured Party, with respect to Collateral with a value in excess of $50,000 other than certificated securities and goods covered by a document in the possession of a Person other than such Grantor or the Secured Party, such Grantor shall obtain written acknowledgment that such Person holds possession for the Secured Party’s benefit; and (iii) with respect to any Collateral constituting Goods with a value in excess of $50,000 that are in the possession of a bailee, such Grantor shall provide prompt notice to the Secured Party of any such Collateral then in the possession of such bailee, and such Grantor shall upon the written request of the Secured Party, take or cause to be taken all actions (other than


 
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