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EXHIBIT E
SECURITY AGREEMENT
This
SECURITY AGREEMENT, dated as of July 31, 2007 (this “
Agreement ”), is among Guangzhou Global Telecom,
Inc., a Florida corporation (the “ Company
”), all of the Subsidiaries of the Company (such
subsidiaries, the “ Guarantors ” and
together with the Company, the “ Debtors ”)
and the holders of the Company’s 8% Senior
Secured Convertible Debentures due issued on July __,
2007 in the original aggregate principal amount of
$_________ (collectively, the “ Debenture
s ”) signatory hereto, their endorsees,
transferees and assigns (collectively, the “ Secured
Parties ”).
W I T N E S S E T H:
WHEREAS,
pursuant to the Purchase Agreement (as defined in the
Debentures), the Secured Parties have severally agreed to
extend the loans to the Company evidenced by the
Debentures;
WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of
the date hereof (the “ Guarant ee
”), the Guarantors have jointly and severally agreed to
guarantee and act as surety for payment of such Debentures;
and
WHEREAS,
in order to induce the Secured Parties to extend the loans
evidenced by the Debentures, each Debtor has agreed to execute
and deliver to the Secured Parties this Agreement and to grant
the Secured Parties, pari passu
with each other Secured Party and through the Agent, a
security interest in certain property of such Debtor to secure
the prompt payment, performance and discharge in full of all
of the Company’s obligations under the Debentures and
the Guarantors’ obligations under the
Guarantee.
NOW,
THEREFORE, in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1.
Certain Definitions . As used in this
Agreement, the following terms shall have the meanings set
forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in
Article 9 of the UCC (such as “account”,
“chattel paper”, “commercial tort
claim”, “deposit account”,
“document”, “equipment”,
“fixtures”, “general intangibles”,
“goods”, “instruments”,
“inventory”, “investment property”,
“letter-of-credit rights”, “proceeds”
and “supporting obligations”) shall have the
respective meanings given such terms in Article 9 of the
UCC.
(a) “
Collateral ” means the collateral in which the
Secured Parties are granted a security interest by this
Agreement and which shall include the following personal
property of the Debtors, whether presently owned or existing
or hereafter acquired or coming into existence, wherever
situated, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds,
products and accounts thereof, including, without
limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort
claims in connection therewith, and all dividends, interest,
cash, notes, securities, equity interest or other property at
any time and from time to time acquired, receivable or
otherwise distributed in respect of, or in exchange for, any
or all of the Pledged Securities (as defined
below):
(i) All
goods, including, without limitation, (A) all machinery,
equipment, computers, motor vehicles, trucks, tanks, boats,
ships, appliances, furniture, special and general tools,
fixtures, test and quality control devices and other equipment
of every kind and nature and wherever situated, together with
all documents of title and documents representing the same,
all additions and accessions thereto, replacements therefor,
all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection
with any Debtor’s businesses and all improvements
thereto; and (B) all inventory;
(ii)
All
contract rights and other general intangibles, including,
without limitation, all partnership interests, membership
interests, stock or other securities, rights under any of the
Organizational Documents, agreements related to the Pledged
Securities, licenses, distribution and other agreements,
computer software (whether “off-the-shelf”,
licensed from any third party or developed by any Debtor),
computer software development rights, leases, franchises,
customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade
names, patents, patent applications, copyrights, and income
tax refunds;
(iii) All
accounts, together with all instruments, all documents of
title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks
which any of the same may represent, and all right, title,
security and guaranties with respect to each account,
including any right of stoppage in transit;
(iv) All
documents, letter-of-credit rights, instruments and chattel
paper;
(v)
All commercial tort claims;
(vi) All
deposit accounts and all cash (whether or not deposited in
such deposit accounts);
(vii) All
investment property;
(viii) All
supporting obligations; and
(ix)
All files, records, books of account, business papers, and
computer programs; and
(x) the
products and proceeds of all of the foregoing Collateral set
forth in clauses (i)-(ix) above.
Without
limiting the generality of the foregoing, the “
Collateral ” shall include all investment
property and general intangibles respecting ownership and/or
other equity interests in each Guarantor, including, without
limitation, the shares of capital stock and the other equity
interests listed on Schedule H hereto (as the same may
be modified from time to time pursuant to the terms hereof),
and any other shares of capital stock and/or other equity
interests of any other direct or indirect subsidiary of any
Debtor obtained in the future, and, in each case, all
certificates representing such shares and/or equity interests
and, in each case, all rights, options, warrants, stock, other
securities and/or equity interests that may hereafter be
received, receivable or distributed in respect of, or
exchanged for, any of the foregoing and all rights arising
under or in connection with the Pledged Securities, including,
but not limited to, all dividends, interest and
cash.
Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an
assignment of any asset which, in the event of an assignment,
becomes void by operation of applicable law or the assignment
of which is otherwise prohibited by applicable law (in each
case to the extent that such applicable law is not overridden
by Sections 9-406, 9-407 and/or 9-408 of the UCC or other
similar applicable law); provided , however ,
that to the extent permitted by applicable law, this Agreement
shall create a valid security interest in such asset and, to
the extent permitted by applicable law, this Agreement shall
create a valid security interest in the proceeds of such
asset.
(b) “
Intellectual Property ” means the collective
reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without
limitation, (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings
thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings
and applications in the United States Copyright Office, (ii)
all letters patent of the United States, any other country or
any political subdivision thereof, all reissues and extensions
thereof, and all applications for letters patent of the United
States or any other country and all divisions, continuations
and continuations-in-part thereof, (iii) all trademarks, trade
names, corporate names, company names, business names,
fictitious business names, trade dress, service marks, logos,
domain names and other source or business identifiers, and all
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 or
any other country or any political subdivision thereof, or
otherwise, and all common law rights related thereto, (iv) all
trade secrets arising under the laws of the United States, any
other country or any political subdivision thereof, (v) all
rights to obtain any reissues, renewals or extensions of the
foregoing, (vi) all licenses for any of the foregoing, and
(vii) all causes of action for infringement of the
foregoing.
(c) “
Majority in Interest ” means, at any time of
determination, the majority in interest (based on
then-outstanding principal amounts of Debentures at the time
of such determination) of the Secured Parties.
(d) “
Necessary Endorsement ” means undated stock
powers endorsed in blank or other proper instruments of
assignment duly executed and such other instruments or
documents as the Agent (as that term is defined below) may
reasonably request.
(e) “
Obligations ” means all of the liabilities
and obligations (primary, secondary, direct, contingent,
sole, joint or several) due or to become due, or that are now
or may be hereafter contracted or acquired, or owing to, of
any Debtor to the Secured Parties, including, without
limitation, all obligations under this Agreement, the
Debentures, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in
connection herewith or therewith, in each case, whether now
or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated,
whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent
all or any part of such payment is avoided or recovered
directly or indirectly from any of the Secured Parties as a
preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended
or modified from time to time. Without limiting
the generality of the foregoing, the term
“Obligations” shall include, without limitation:
(i) principal of, and interest on the Debentures and the
loans extended pursuant thereto; (ii) any and all other fees,
indemnities, costs, obligations and liabilities of the
Debtors from time to time under or in connection with this
Agreement, the Debentures, the Guarantee and any other
instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith; and (iii) all
amounts (including but not limited to post-petition interest)
in respect of the foregoing that would be payable but for the
fact that the obligations to pay such amounts are
unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving
any Debtor.
(f)
“ Organizational Documents ” means with
respect to any Debtor, the documents by which such Debtor was
organized (such as a certificate of incorporation,
certificate of limited partnership or articles of
organization, and including, without limitation, any
certificates of designation for preferred stock or other
forms of preferred equity) and which relate to the internal
governance of such Debtor (such as bylaws, a partnership
agreement or an operating, limited liability or members
agreement).
(g) “
Pledged Securities ” shall have the meaning
ascribed to such term in Section 4(i).
(h) “
UCC ” means the Uniform Commercial Code of the
State of New York and or any other applicable law of any state
or states which has jurisdiction with respect to all, or any
portion of, the Collateral or this Agreement, from time to
time. It is the intent of the parties that defined
terms in the UCC should be construed in their broadest sense
so that the term “Collateral” will be construed in
its broadest sense. Accordingly if there are, from
time to time, changes to defined terms in the UCC that broaden
the definitions, they are incorporated herein and if existing
definitions in the UCC are broader than the amended
definitions, the existing ones shall be
controlling.
2.
Grant of Security
Interest in Collateral . As
an inducement for the Secured Parties to extend the loans as
evidenced by the Debentures and to secure the complete and
timely payment, performance and discharge in full, as the case
may be, of all of the Obligations, each Debtor hereby
unconditionally and irrevocably pledges, grants and
hypothecates to the Secured Parties a security interest in and
to, a lien upon and a right of set-off against all of their
respective right, title and interest of whatsoever kind and
nature in and to, the Collateral (a “ Security
Interest ” and, collectively, the “
Security Interests ”).
3.
Delivery of Certain Collateral
. Contemporaneously or prior to the execution of
this Agreement, each Debtor shall deliver or cause to be
delivered to the Agent (a) any and all certificates and other
instruments representing or evidencing the Pledged Securities,
and (b) any and all certificates and other instruments or
documents representing any of the other Collateral, in
each case, together with all Necessary
Endorsements. The Debtors are, contemporaneously
with the execution hereof, delivering to Agent, or have
previously delivered to Agent, a true and correct copy of each
Organizational Document governing any of the Pledged
Securities.
4.
Representations, Warranties, Covenants and Agreements
of the Debtors . Except as set forth under the
corresponding section of the disclosure schedules delivered to
the Secured Parties concurrently herewith (the “
Discl osure Schedules ”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor
represents and warrants to, and covenants and agrees with, the
Secured Parties as follows:
(a) Each
Debtor has the requisite corporate, partnership, limited
liability company or other power and authority to enter into
this Agreement and otherwise to carry out its obligations
hereunder. The execution, delivery and performance by each
Debtor of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part
of such Debtor and no further action is required by such
Debtor. This Agreement has been duly executed by
each Debtor. This Agreement constitutes the legal,
valid and binding obligation of each Debtor, enforceable
against each Debtor in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general
application relating to or affecting the rights and remedies
of creditors and by general principles of equity.
(b) The
Debtors have no place of business or offices where their
respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or
places where Collateral is stored or located, except as set
forth on Schedule A attached hereto. Except
as specifically set forth on Schedule A , each Debtor
is the record owner of the real property where such Collateral
is located, and there exist no mortgages or other liens on any
such real property except for Permitted Liens (as defined in
the Debentures). Except as disclosed on Schedule
A , none of such Collateral is in the possession of any
consignee, bailee, warehouseman, agent or
processor.
(c) Except
for Permitted Liens (as defined in the Debentures) and except
as set forth on Schedule B attached hereto, the Debtors
are the sole owner of the Collateral (except for non-exclusive
licenses granted by any Debtor in the ordinary course of
business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to
grant the Security Interests. Except as set forth
on Schedule B attached hereto, there is not on file in
any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing
(other than those that will be filed in favor of the Secured
Parties pursuant to this Agreement) covering or affecting any
of the Collateral. Except as set forth on
Schedule B attached hereto and except pursuant to this
Agreement, as long as this Agreement shall be in effect, the
Debtors shall not execute and shall not knowingly permit to be
on file in any such office or agency any other financing
statement or other document or instrument (except to the
extent filed or recorded in favor of the Secured Parties
pursuant to the terms of this Agreement).
(d) No
written claim has been received that any Collateral or
Debtor's use of any Collateral violates the rights of any
third party. There has been no adverse decision to any
Debtor's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to any Debtor's
right to keep and maintain such Collateral in full force
and effect, and there is no proceeding involving said
rights pending or, to the best knowledge of any Debtor,
threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental
authority.
(e) Each
Debtor shall at all times maintain its books of account and
records relating to the Collateral at its principal place of
business and its Collateral at the locations set forth on
Schedule A attached hereto and may not relocate such
books of account and records or tangible Collateral unless it
delivers to the Secured Parties at least 30 days prior to such
relocation (i) written notice of such relocation and the new
location thereof (which must be within the United States) and
(ii) evidence that appropriate financing statements under the
UCC and other necessary documents have been filed and recorded
and other steps have been taken to perfect the Security
Interests to create in favor of the Secured Parties a valid,
perfected and continuing perfected first priority lien in the
Collateral.
(f) This
Agreement creates in favor of the Secured Parties a
valid security interest in the Collateral, subject only
to Permitted Liens (as defined in the Debentures) securing the
payment and performance of the Obligations. Upon
making the filings described in the immediately following
paragraph, all security interests created hereunder in any
Collateral which may be perfected by filing Uniform Commercial
Code financing statements shall have been duly
perfected.
Except
for the filing of the Uniform Commercial Code financing
statements referred to in the immediately following paragraph,
the recordation of the Intellectual Property Security
Agreement (as defined below) with respect to copyrights and
copyright applications in the United States Copyright Office
referred to in paragraph (m), the execution and delivery of
deposit account control agreements satisfying the requirements
of Section 9-104(a)(2) of the UCC with respect to each deposit
account of the Debtors, and the delivery of the certificates
and other instruments provided in Section 3, no action is
necessary to create, perfect or protect the security interests
created hereunder. Without limiting the generality
of the foregoing, except for the filing of said financing
statements, the recordation of said Intellectual Property
Security Agreement, and the execution and delivery of said
deposit account control agreements, no consent of any third
parties and no authorization, approval or other action by, and
no notice to or filing with, any governmental authority
or regulatory body is required for (i) the execution, delivery
and performance of this Agreement, (ii) the creation or
perfection of the Security Interests created hereunder in the
Collateral or (iii) the enforcement of the rights of the Agent
and the Secured Parties hereunder.
(g) Each
Debtor hereby authorizes the Agent to file one or more
financing statements under the UCC, with respect to the
Security Interests, with the proper filing and recording
agencies in any jurisdiction deemed proper by it.
(h) The
execution, delivery and performance of this Agreement by the
Debtors does not (i) violate any of the provisions of any
Organizational Documents of any Debtor or any judgment, decree,
order or award of any court, governmental body or arbitrator or any
applicable law, rule or regulation applicable to any Debtor or (ii)
conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing any Debtor's debt or otherwise) or other understanding
to which any Debtor is a party or by which any property or
asset of any Debtor is bound or affected. If any, all required
consents (including, without limitation, from stockholders or
creditors of any Debtor) necessary for any Debtor to enter into and
perform its obligations hereunder have been obtained.
(i) The
capital stock and other equity interests listed on Schedule
H hereto (the “ Pledged Securities ”)
represent all of the capital stock and other equity interests
of the Guarantors, and represent all capital stock and other
equity interests owned, directly or indirectly, by the
Company. All of the Pledged Securities are validly
issued, fully paid and nonassessable, and the Company is the
legal and beneficial owner of the Pledged Securities, free and
clear of any lien, security interest or other encumbrance
except for the security interests created by this Agreement
and other Permitted Liens (as defined in the
Debentures).
(j) The
ownership and other equity interests in partnerships and
limited liability companies (if any) included in the
Collateral (the “ Pledged Interests ”) by
their express terms do not provide that they are securities
governed by Article 8 of the UCC and are not held in a
securities account or by any financial
intermediary.
(k) Except
for Permitted Liens (as defined in the Debentures), each
Debtor shall at all times maintain the liens and Security
Interests provided for hereunder as valid and perfected first
priority liens and security interests in the Collateral in
favor of the Secured Parties until this Agreement and the
Security Interest hereunder shall be terminated pursuant to
Section 11 hereof. Each Debtor hereby agrees to
defend the same against the claims of any and all persons and
entities. Each Debtor shall safeguard and protect all
Collateral for the account of the Secured
Parties. At the request of the Agent, each Debtor
will sign and deliver to the Agent on behalf of the Secured
Parties at any time or from time to time one or more financing
statements pursuant to the UCC in form reasonably satisfactory
to the Agent and will pay the cost of filing the same in all
public offices wherever filing is, or is deemed by the Agent
to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the
generality of the foregoing, each Debtor shall pay all fees,
taxes and other amounts necessary to maintain the Collateral
and the Security Interests hereunder, and each Debtor shall
obtain and furnish to the Agent from time to time, upon
demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the
Security Interests hereunder.
(l)
No Debtor will transfer, pledge, hypothecate, encumber,
license, sell or otherwise dispose of any of the Collateral
(except for non-exclusive licenses granted by a Debtor in its
ordinary course of business and sales of inventory by a Debtor
in its ordinary course of business) without the prior written
consent of a Majority in Interest.
(m)
Each Debtor shall keep and preserve its equipment, inventory
and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or
cause to be operated or located) in any area excluded from
insurance coverage.
(n) Each
Debtor shall maintain with financially sound and reputable
insurers, insurance with respect to the Collateral, including
Collateral hereafter acquired, against loss or damage of the
kinds and in the amounts customarily insured against by
entities of established reputation having similar properties
similarly situated and in such amounts as are customarily
carried under similar circumstances by other such entities
and otherwise as is prudent for entities engaged in similar
businesses but in any event sufficient to cover the full
replacement cost thereof. Each Debtor shall cause
each insurance policy issued in connection herewith to
provide, and the insurer issuing such policy to certify to
the Agent, that (a) the Agent will be named as lender loss
payee and additional insured under each such insurance
policy; (b) if such insurance be proposed to be cancelled or
materially changed for any reason whatsoever, such insurer
will promptly notify the Agent and such cancellation or
change shall not be effective as to the Agent for at least
thirty (30) days after receipt by the Agent of such notice,
unless the effect of such change is to extend or increase
coverage under the policy; and (c) the Agent will have the
right (but no obligation) at its election to remedy any
default in the payment of premiums within thirty (30) days of
notice from the insurer of such
default.
If
no Event of Default (as defined in the Debentures) exists and
if the proceeds arising out of any claim or series of related
claims do not exceed $100,000, loss payments in each instance
will be applied by the applicable Debtor to the repair and/or
replacement of property with respect to which the loss was
incurred to the extent reasonably feasible, and any loss
payments or the balance thereof remaining, to the extent not
so applied, shall be payable to the applicable Debtor;
provided , however , that payments received by
any Debtor after an Event of Default occurs and is continuing
or in excess of $100,000 for any occurrence or series of
related occurrences shall be paid to the Agent on behalf of
the Secured Parties and, if received by such Debtor, shall be
held in trust for the Secured Parties and immediately paid
over to the Agent unless otherwise directed in writing by the
Agent. Copies of such policies or the related
certificates, in each case, naming the Agent as lender loss
payee and additional insured shall be delivered to the Agent
at least annually and at the time any new policy of insurance
is issued.
(o) Each
Debtor shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Parties promptly, in sufficient
detail, of any material adverse change in the Collateral, and
of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the
Secured Parties’ security interest, through the Agent,
therein.
(p) Each
Debtor shall promptly execute and deliver to the Agent such
further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents,
certificates and assurances and take such further action as
the Agent may from time to time request and may in its sole
discretion deem necessary to perfect, protect or enforce the
Secured Parties’ security interest in the Collateral
including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to
each Debtor’s Intellectual Property (“
Intellectual Property Security Agreement ”) in
which the Secured Parties have been granted a security
interest hereunder, substantially in a form reasonably
acceptable to the Agent, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to
all of the terms and conditions hereof.
(q) Each
Debtor shall permit the Agent and its representatives and
agents to inspect the Collateral during normal business hours
and upon reasonable prior notice, and to make copies of
records pertaining to the Collateral as may be reasonably
requested by the Agent from time to time.
(r) Each
Debtor shall take all steps reasonably necessary to diligently
pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of
the Collateral.
(s) Each
Debtor shall promptly notify the Secured Parties in sufficient
detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral
and of any other information received by such Debtor that may
materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties
hereunder.
(t) All
information heretofore, herein or hereafter supplied to the
Secured Parties by or on behalf of any Debtor with respect to
the Collateral is accurate and complete in all material
respects as of the date furnished.
(u) The
Debtors shall at all times preserve and keep in full force and
effect their respective valid existence and good standing and
any rights and franchises material to its
business.
(v) No
Debtor will change its name, type of organization,
jurisdiction of organization, organizational identification
number (if it has one), legal or corporate structure, or
identity, or add any new fictitious name unless it provides at
least 30 days prior written notice to the Secured Parties of
such change and, at the time of such written notification,
such Debtor provides any financing statements or fixture
filings necessary to perfect and continue the perfection of
the Security Interests granted and evidenced by this
Agreement.
(w) Except
in the ordinary course of business, no Debtor may consign any
of its inventory or sell any of its inventory on bill and
hold, sale or return, sale on approval, or other conditional
terms of sale without the consent of the Agent which shall not
be unreasonably withheld.
(x) No
Debtor may relocate its chief executive office to a new
location without providing 30 days prior written notification
thereof to the Secured Parties and so long as, at the time of
such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and
continue the perfection of the Security Interests granted and
evidenced by this Agreement.
(y) Each
Debtor was organized and remains organized solely under the
laws of the state set forth next to such Debtor’s name
in Schedule D attached hereto, which Schedule D
sets forth each Debtor’s organizational identification
number or, if any Debtor does not have one, states that one
does not exist.
(z)
(i) The actual name of each Debtor is the name set forth
in Schedule D attached hereto; (ii) no Debtor has
any trade names except as set forth on Schedule E
attached hereto; (iii) no Debtor has used any name other than
that stated in the preamble hereto or as set forth on
Schedule E for the preceding five years; and (iv) no
entity has merged into any Debtor or been acquired by any
Debtor within the past five years except as set forth on
Schedule E .
(aa) At
any time and from time to time that any Collateral consists of
instruments, certificated securities or other items that
require or permit possession by the secured party to perfect
the security interest created hereby, the applicable Debtor
shall deliver such Collateral to the Agent.
(bb) Each
Debtor, in its capacity as issuer, hereby agrees to comply
with any and all orders and instructions of Agent regarding
the Pledged Interests consistent with the terms of this
Agreement without the further consent of any Debtor as
contemplated by Section 8-106 (or any successor section) of
the UCC. Further, each Debtor agrees that it shall
not enter into a similar agreement (or one that would confer
“control” within the meaning of Article 8 of the
UCC) with any other person or entity.
(cc) Each
Debtor shall cause all tangible chattel paper constituting
Collateral to be delivered to the Agent, or, if such delivery
is not possible, then to cause such tangible chattel paper to
contain a legend noting that it is subject to the security
interest created by this Agreement. To the extent
that any Collateral consists of electronic chattel paper, the
applicable Debtor shall cause the underlying chattel paper to
be “marked” within the meaning of Section 9-105
of the UCC (or successor section thereto).
(dd) If
there is any investment property or deposit account included
as Collateral that can be perfected by “control”
through an account control agreement, the applicable Debtor
shall cause such an account control agreement, in form and
substance in each case satisfactory to the Agent, to be
entered into and delivered to the Agent for the benefit of the
Secured Parties.
(ee) To
the extent that any Collateral consists of letter-of-credit
rights, the applicable Debtor shall cause the issuer of each
underlying letter of credit to consent to an assignment of the
proceeds thereof to the Secured Parties.
(ff) To
the extent that any Collateral is in the possession of any
third party, the applicable Debtor shall join with the Agent
in notifying such third party of the Secured Parties’
security interest in such Collateral and shall use its best
efforts to obtain an acknowledgement and agreement from such
third party with respect to the Collateral, in form and
substance reasonably satisfactory to the Agent.
(gg) If
any Debtor shall at any time hold or acquire a commercial tort
claim, such Debtor shall promptly notify the Secured Parties
in a writing signed by such Debtor of the particulars thereof
and grant to the Secured Parties in such writing a security
interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and
substance satisfactory to the Agent.
(hh) Each
Debtor shall immediately provide written notice to the Secured
Parties of any and all accounts which arise out of contracts
with any governmental authority and, to the extent necessary
to perfect or continue the perfected status of the Security
Interests in such accounts and proceeds thereof, shall execute
and deliver to the Agent an assignment of claims for such
accounts and cooperate with the Agent in taking any other
steps required, in its judgment, under the Federal Assignment
of Claims Act or any similar federal, state or local statute
or rule to perfect or continue the perfected status of the
Security Interests in such accounts and proceeds
thereof.
(ii)
Each Debtor shall cause each subsidiary of such Debtor to
immediately become a party hereto (an “ Additional
Debtor ”), by executing and delivering an Additional
Debtor Joinder in substantially the form of Annex A
attached hereto and comply with the provisions hereof
applicable to the Debtors. Concurrent therewith,
the Additional Debtor shall deliver replacement schedules for,
or supplements to all other Schedules to (or referred to in)
this Agreement, as applicable, which replacement schedules
shall supersede, or supplements shall modify, the Schedules
then in effect. The Additional Debtor shall also
deliver such opinions of counsel, authorizing resolutions,
good standing certificates, incumbency certificates,
organizational documents, financing statements and other
information and documentation as the Agent may reasonably
request. Upon delivery of the foregoing to the
Agent
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