GENERAL SECURITY AGREEMENT
In
consideration of SILVERBIRCH INC. ,
an Ontario corporation having an office at Suite 500, 150
Ferrand Drive, Toronto, Ontario M3C 3E5, Canada, (the
“Secured Party”) heretofore or hereafter
(1) extending or agreeing to extend any credit or other
financial accommodation to or relying on any guaranty,
endorsement or other assurance of payment of RED MILE ENTERTAINMENT,
INC. , a corporation organized under the law of
Delaware and having its chief executive office at 223 San
Anselmo Avenue, Suite #3, San Anselmo, California 94960,
U.S.A., (the “Debtor”) or (2) agreeing to any
direct or indirect extension, renewal, refinancing or other
modification or replacement of or waiving or forbearing from
exercising any right, remedy or power relating to any
obligation heretofore or hereafter arising or accruing as a
result of any such credit or other financial accommodation,
and for other valuable consideration, the receipt of which is
acknowledged, the Debtor agrees with the Secured Party as
follows:
1.
DEFINITIONS. In this Agreement:
a.
Collateral. The “Collateral” means
collectively all right, title and interest of the Debtor in and to,
wherever located, whether now owned or hereafter acquired or now
existing or hereafter arising or accruing and whether or not
subject to Article 9 of the Uniform Commercial Code or
described in any schedule heretofore or hereafter delivered to the
Secured Party by the Debtor, (i) Accounts (including, but not
limited to, Health-Care-Insurance Receivables), Chattel Paper,
Deposit Accounts, Documents, General Intangibles (including, but
not limited to, Intellectual Property, Payment Intangibles,
Software, licenses, franchises and customer information), Goods
(including, but not limited to, Equipment, Farm Products, Fixtures
and Inventory), Instruments (including, but not limited to,
Promissory Notes), Investment Property, Letter-of-Credit Rights
(whether or not the related letter of credit is in writing),
letters of credit (whether or not in writing), money and other
personal property regardless of kind or nature (including, but not
limited to, agreements, instruments and other Records not
constituting Chattel Paper or a Document, General Intangible or
Instrument, tort claims not constituting a Commercial Tort Claim,
contract rights not constituting an Account or General Intangible,
rights to payment of any money not constituting or evidenced by an
Account, Commercial Tort Claim, Deposit Account, General
Intangible, Investment Property, Letter-of-Credit Right, letter of
credit, Chattel Paper or Instrument and insurance policies, claims
and proceeds not constituting a Health-Care-Insurance Receivable or
Proceeds) and (ii) to the extent not referred to in clause (i)
of this sentence, (A) Supporting Obligations and Incidental
Property Rights incident to, arising or accruing pursuant to or
otherwise relating to any of the things referred to in clause
(i) of this sentence, whether arising or accruing from any
action taken by the Debtor or the Secured Party or otherwise,
(B) Proceeds, other proceeds and Products of any of the things
referred to in clauses (i) and (ii)(A) of this sentence
and (C) Records relating to any of the things referred to in
clauses (i) and (ii)(A) and (B) of this sentence.
b.
Control . “Control” means, with
respect to any Deposit Account, Electronic Chattel Paper,
Investment Property or Letter-of-Credit Right, control as described
in Article 9 of the Uniform Commercial Code with respect to
collateral of its type.
c.
Control Agreement. “Control
Agreement” means an agreement, instrument or other Record
heretofore or hereafter entered into among the Debtor, the Secured
Party and a Bank, Securities Intermediary or Commodity Intermediary
for the purpose of giving the Secured Party Control of any Deposit
Account or Investment Property included in the
Collateral.
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d.
Event of Default. An “Event of
Default” occurs or exists if (i) the Debtor or any Other
Obligor defaults in the payment or other performance when due,
whether by acceleration or otherwise, of any of the Obligations or
the payment or other performance when due of any other obligation
(including, but not limited to, any obligation to pay any money),
whether now existing or hereafter arising or accruing and whether
arising or accruing pursuant to this Agreement or any Control
Agreement or otherwise, to the Secured Party or any other Person,
the maturity of any of the Obligations or any such other obligation
is accelerated or there occurs or exists any event or condition
that, whether immediately or after notice, lapse of time or both
notice and lapse of time and whether or not waived by any Person
other than the Secured Party, would constitute a default with
respect to or permit the acceleration of the maturity of any of the
Obligations or any such other obligation, (ii) the Debtor or
any Other Obligor is dissolved, ceases to exist, participates or
agrees to participate in any merger, consolidation or other
absorption, assigns or otherwise transfers all or substantially all
of his, her or its assets, makes any bulk sale, sends any notice of
any intended bulk sale, dies, becomes incompetent or insolvent
(however evidenced), generally fails to pay his, her or its debts
as they become due, fails to pay, withhold or collect any tax as
required by applicable law, suspends or ceases his, her or its
present business or has entered, served, filed or recorded against
him, her or it or any of his, her or its assets any judgment or
order of any court, agency or other governmental body or any lien
other than a Permitted Lien, (iii) the Debtor or any Other
Obligor has any receiver, trustee, custodian or similar Person for
him, her or it or any of his, her or its assets appointed (whether
with or without his, her or its consent), makes any assignment for
the benefit of creditors or commences or has commenced against him,
her or it any case or other proceeding pursuant to any bankruptcy,
insolvency or similar statute or any formal or informal proceeding
for the dissolution, liquidation or winding up of his, her or its
affairs or the settlement of claims against him, her or it,
(iv) any representation or warranty made in this Agreement or
any Control Agreement or any other representation or warranty
heretofore or hereafter made, or any financial statement heretofore
or hereafter provided, to the Secured Party by or on behalf of the
Debtor or any Other Obligor proves, as of the date thereof, to have
been incorrect or misleading in any material respect or before the
execution and delivery to the Secured Party by the Debtor of this
Agreement there occurred and was not disclosed to the Secured Party
any material adverse change in any information disclosed in any
such representation or warranty heretofore so made or any financial
statement heretofore so provided, (v) there occurs any loss,
theft or destruction of or damage to any substantial portion of the
Collateral or any substantial decrease in the value of the
Collateral or (vi) the Secured Party deems itself insecure with
respect to the Obligations or is of the opinion that the Collateral
is or may not be sufficient or has decreased or may decrease in
value, whether or not the Secured Party has sought any Other
Collateral from the Debtor or any Other Obligor.
e.
Intellectual Property. “Intellectual
Property” means, regardless of kind or nature and wherever in
the world existing, used, issued or pending, (i) any patent or
invention disclosed or claimed in any patent, (ii) any copyright,
copyright registration or tangible personal property embodying any
copyright, (iii) any trademark, service mark, trade style or trade
dress (including, but not limited to, any trade, company,
fictitious or other business or other name, logo or other source or
business identifier), whether registered in any public office or
not so registered, (iv) any trade secret (including, but not
limited to, any know-how, technology, procedure, product
formulation or other product or manufacturing specification or
standard) or other confidential or proprietary business or
technical data or other information, (v) any unpatented invention,
whether or not patentable, (vi) any industrial or other design or
design application or (vii) any registration or recording of,
application for, reissue, renewal, continuation or extension of,
goodwill symbolized by, incident to, associated with or otherwise
relating to or Incidental Property Right, Record or license
relating to any of the things referred to in clauses (i) through
(vi) of this sentence.
f.
Incidental Property Right. “Incidental
Property Right” means, whether arising or accruing pursuant
to applicable law or any agreement, instrument or other Record or
otherwise, (i) any direct or indirect addition to, extension,
renewal, refinancing or other modification or replacement of,
increase in or earnings, profit, interest, dividend or distribution
of cash or other property or other income or payment on account of
any property, (ii) any direct or indirect Proceeds or other
proceeds of any replacement, release, surrender, discharge,
exchange, conversion, redemption, assignment or other transfer,
collection or sale, lease or other disposition of any property,
whether voluntary or involuntary or arising or accruing pursuant to
any dissolution, liquidation or merger, consolidation or other
absorption or otherwise, or (iii) any direct or indirect right,
privilege, power or claim relating to any property (including, but
not limited to, any right to any of the things referred to in
clauses (i) and (ii) of this sentence, any option or warrant, any
right of subscription, registration, conversion or redemption, any
management right or any right to vote or give any consent,
ratification or other approval or authorization (including, but not
limited to, any right to vote or give any consent, ratification or
other approval or authorization for any replacement of any of the
directors, officers and managers of, amendment of any certificate
or articles of incorporation or organization, by-laws, operating or
partnership agreement or other charter, organizational or other
governing document of, dissolution, liquidation or merger,
consolidation or other absorption of or sale, lease or other
disposition of all or substantially all of the assets of any Issuer
of any General Intangible or Investment Property)).
g.
Obligations. The “Obligations” means
collectively, whether now existing or hereafter arising or accruing
and whether or not arising or accrued subsequent to any
commencement of or made, proved, voted or allowed as a claim in any
case or other proceeding pursuant to any bankruptcy, insolvency or
similar statute, all obligations to the Secured Party in any
capacity for (i) the payment of any money, however
evidenced, regardless of kind or nature, whether for the payment of
any principal, interest, fee, charge, cost or expense or otherwise,
incurred for any business, commercial or agricultural purpose or
otherwise, created directly or by any assignment or other transfer,
direct or indirect, absolute or contingent (whether pursuant to any
guaranty, endorsement or other assurance of payment or otherwise),
similar or dissimilar or related or unrelated, or (ii) the
performance of any other obligation that have been heretofore or
are hereafter incurred by, in any capacity (including, but not
limited to, as a debtor-in-possession after the commencement of any
case or other proceeding pursuant to any bankruptcy, insolvency or
similar statute) and whether alone or otherwise, the Debtor or any
direct or indirect successor of the Debtor or direct or indirect
assignee or other transferee of all or substantially all of the
assets of the Debtor (including, but not limited to, any estate
created by the commencement of any case or other proceeding
pursuant to any bankruptcy, insolvency or similar statute and any
receiver, trustee, custodian or similar Person for the Debtor or
any of the assets of the Debtor) (including, but not limited to,
all obligations of the Debtor to the Secured Party pursuant to
Section 8 of this Agreement).
h.
Other Collateral. “Other Collateral”
means, other than the Collateral, (i) any collateral,
subordination, guaranty, endorsement or other security or assurance
of payment, whether now existing or hereafter arising or accruing,
that now or hereafter secures the payment or other performance of
or is otherwise applicable to any of the Obligations or
(ii) any obligation of the Secured Party, whether pursuant to
any Deposit Account or Instrument or otherwise, that is now or
hereafter available for setoff against any of the
Obligations.
i.
Other Obligor. “Other Obligor”
means, other than the Debtor, any Person who or that is now or
hereafter liable, whether directly or indirectly or absolutely or
contingently, for the payment or other performance of any of the
Obligations.
j.
Permitted Lien. “Permitted Lien”
means (i) whether now existing or hereafter arising or accruing,
any security interest in or other lien on any of the Collateral in
favor of the Secured Party or (ii) any security interest in or
other lien on any of the Collateral fully and accurately described
under the heading “Permitted Liens” on Exhibit A
attached to and made a part of this Agreement.
k.
Person. “Person” means (i) any
individual, corporation, partnership, limited liability company,
joint venture, trust, unincorporated association, government,
political subdivision or other taxing authority, (ii) any court,
agency or other governmental body or (iii) any other entity, body,
organization or group.
l.
Security Interest. “Security
Interest” means any security interest or other lien granted
or otherwise created pursuant to the first sentence of
Section 2 of this Agreement.
m.
Uniform Commercial Code. “Uniform
Commercial Code” means at any time the Uniform Commercial
Code of the State of California as in effect at such
time.
n.
Other Terms. Each of the following terms has at
any time the meaning given it at such time for purposes of Article
9 of the Uniform Commercial Code: (i) Accession,
(ii) Account, (iii) Account Debtor, (iv) Bank, (v)
Certificated Security, (vi) Chattel Paper, (vii) Commercial Tort
Claim, (viii) Commodity Account, (ix) Commodity Intermediary,
(x) Deposit Account, (xi) Document, (xii) Electronic
Chattel Paper, (xiii) Equipment, (xiv) Farm Product, (xv)
Financing Statement, (xvi) Fixture, (xvii) General
Intangible, (xviii) Goods, (xix) Health-Care-Insurance
Receivable, (xx) Instrument, (xxi) Inventory, (xxii) Investment
Property, (xxiii) Issuer, (xxiv) Letter-of-Credit Right, (xxv)
Payment Intangible, (xxvi) Proceeds, (xxvii) Products,
(xxviii) Promissory Note, (xxix) Record, (xxx) Registered
Organization, (xxxi) Securities Account, (xxxii) Securities
Intermediary, (xxxiii) Security, (xxxiv) Software, (xxxv)
Supporting Obligation, (xxxvi) Tangible Chattel Paper and (xxxvii)
Uncertificated Security.
2.
GRANT OF SECURITY INTEREST. To secure the
payment and other performance of the Obligations, the Debtor grants
to the Secured Party a security interest in and assigns, pledges
and hypothecates to the Secured Party the Collateral except that,
with respect to any portion of the Collateral that would be
rendered void or voidable under applicable law by such grant,
assignment, pledge and hypothecation without the consent of a
Person other than the Debtor that has not been or is not obtained,
such grant, assignment, pledge and hypothecation shall not be
effective until such consent is obtained. In addition,
the security interests granted in this Agreement do not apply or
extend to: (a) any real property or interests therein of the
Debtor, (b) the last day of any term created by any lease or
agreement therefor now held or hereafter acquired by the Debtor by
the Debtor will stand possessed of the reversion thereby remaining
in the Debtor of any leasehold premises upon trust for the Secured
Party to assign and dispose thereof as the Secured Party or any
purchaser of such leasehold premises directs; and (c) any consumer
goods of the Debtor. Each Security Interest is a
continuing, absolute and unconditional security interest or other
lien.
3.
REINSTATEMENT OF OBLIGATIONS . Each
portion of the Obligations heretofore or hereafter paid or
satisfied by any of the Collateral, or any money or Other
Collateral, heretofore or hereafter received, applied or retained
by the Secured Party and later recovered from the Secured Party as
a result of any claim (including, but not limited to, any claim
involving any allegation that any money constituted trust funds or
that the receipt, application or retention of any of the Collateral
or any money or Other Collateral or the grant, perfection or other
creation or protection of any security interest in or other lien on
any of the Collateral or any Other Collateral constituted a
preference or fraudulent conveyance or transfer), however asserted
and whether now existing or hereafter arising or accruing, shall be
reinstated as part of the Obligations for purposes of this
Agreement as of the date it originally arose or
accrued.
4.
COVENANTS.
a.
Affirmative Covenants . The Debtor shall
(i) maintain complete and accurate Records relating to the
Collateral, (ii) before the end of any applicable grace period, pay
each tax, assessment, fee and charge imposed by any government,
political subdivision or other taxing authority upon any
of the Collateral, any manufacture, purchase or other acquisition,
ownership, possession, control, use, operation, advertising or
other promotion or sale, lease or other disposition of any of the
Collateral, this Agreement or any agreement, instrument or other
Record evidencing any of the Collateral or any of the Obligations,
(iii) obtain and maintain in full force and effect each
authorization, certification, certificate, approval, permit,
consent, franchise and license necessary for any manufacture,
purchase or other acquisition, ownership, possession, control, use,
operation, advertising or other promotion or sale, lease or other
disposition of any of the Collateral, (iv) defend the
Collateral against each demand, claim, counterclaim, setoff and
defense asserted by any Person (including, but not limited to, any
Account Debtor, Issuer, Bank, Securities Intermediary or
Commodity Intermediary) other than the Secured Party, (v) keep
all Goods included in the Collateral insured against each risk to
which any of such Goods may be subject (including, but not limited
to, risks covered by all risks coverage) and maintain insurance
against liability on account of any damage to any Person or
property arising out of any manufacture, purchase or other
acquisition, ownership, possession, control, use, operation,
advertising or other promotion or sale, lease or other disposition
of any of such Goods, with all insurance maintained pursuant to
this clause (v) to be issued in such amounts, for such periods, on
such terms, with such special endorsements (including, but not
limited to, an endorsement naming the Secured Party as a mortgagee,
lender loss payee or additional insured) and by such companies as
are satisfactory to the Secured Party, and deliver to the Secured
Party a copy of each policy providing any such insurance,
(vi) cause all Goods included in the Collateral to be properly
titled and registered to the extent required by applicable law,
cause the interest of the Secured Party to be properly indicated on
any certificate of title relating to any of such Goods and deliver
to the Secured Party each such certificate, (vii) maintain all
Goods included in the Collateral in good condition except for
ordinary wear and tear, (viii) cultivate, store, preserve and
care for all Farm Products and Inventory included in the Collateral
in accordance with commonly accepted methods, (ix) diligently
prosecute each application constituting Intellectual Property
included in the Collateral and not abandon such application before
exhausting all reasonable administrative and judicial
remedies,
Continued-
(x)
take each action (including, but not limited to, the filing of any
required application for reissue, renewal, continuation or
extension or any required affidavit, the payment of any required
fee and the commencement and prosecution of any necessary action or
other legal proceeding) required to maintain in full force and
effect each registration of or preserve in full force and effect
each right (including, but not limited to, any right as a licensor
or licensee) of the Debtor in any Intellectual Property included in
the Collateral, (xi) use each item of Intellectual Property
included in the Collateral with appropriate notice of registration
or application for registration, (xii) maintain the quality of
products and services offered under any Intellectual Property
included in the Collateral, (xiii) upon receiving any certificate
or other evidence of any Intellectual Property included in the
Collateral from any public office, promptly deliver a copy thereof
to the Secured Party, (xiv) promptly sue to stop and recover
damages for any infringement, misappropriation or dilution of any
Intellectual Property included in the Collateral, (xv) provide to
the Secured Party a complete and accurate copy of each statement,
confirmation, notice, proxy statement, proxy and other
communication relating to any Deposit Account, General Intangible
or Investment Property included in the Collateral and received by
the Debtor from any Person (including, but not limited to, any
Account Debtor, Issuer, Bank, Securities Intermediary or Commodity
Intermediary) obligated with respect to such Deposit Account,
General Intangible or Investment Property, (xvi) take each action
(including, but not limited to, increasing the value of the
Collateral and reducing the amount of the Obligations) necessary to
maintain any value of any of the Collateral or ratio of the value
of any of the Collateral to the amount of any of the Obligations
required by applicable law or any contract between the Secured
Party and the Debtor or any Other Obligor, (xvii) promptly
notify the Secured Party if any of the Collateral arises out of any
contract with any government, political subdivision or other taxing
authority, (xviii) promptly notify the Secured Party if any of the
Collateral arises out of any contract that gives rise to any
requirement under applicable law that the Debtor receive, hold or
apply any money advanced by the Secured Party with respect to any
of the Collateral as a trust fund and receive, hold and apply such
money in accordance with such requirement, (xix) promptly notify
the Secured Party of (A) any Goods included in the Collateral being
affixed to or installed in or on any real property or any Goods not
included in the Collateral, (B) any loss, destruction or theft
of or damage to any of the Collateral, (C) any threat or
commencement of any action or other legal proceeding, any entry of
any judgment or order of any court, agency or other governmental
body, or any assertion by any Person (including, but not limited
to, any Account Debtor, Issuer, Bank, Securities Intermediary or
Commodity Intermediary) other than the Secured Party of any demand,
claim, counterclaim, setoff or defense, relating to any of the
Collateral, (D) any infringement, misappropriation, dilution
or other violation of any right (including, but not limited to, as
a licensor or licensee) of the Debtor in any Intellectual Property
included in the Collateral, (E) any claim by any Person that the
use by the Debtor (including, but not limited to, as a licensee) of
any Intellectual Property that the Debtor uses infringes,
misappropriates, dilutes or otherwise violates any right of such
Person in such Intellectual Property, (F) any abandonment of or
adverse claim, determination or development with respect to the
ownership, license or maintenance in full force and effect of any
registration of or the preservation in full force and effect of any
right (including, but not limited to, as a licensor or licensee) of
the Debtor in any Intellectual Property included in the Collateral,
(G) any occurrence or existence of any Event of Default, any event
or condition that, after notice, lapse of time or both notice and
lapse of time, would constitute any Event of Default or any event
or condition that has or will or might have any material adverse
effect on (I) any of the Collateral, (II) the Debtor,
(III) any Other Obligor or (IV) the business, operations,
assets, affairs or condition (financial or other) of the Debtor or
any Other Obligor, (H) any change in (I) the location of
the residence or chief executive office of the Debtor,
(II) any company, trade, fictitious or other business or other
name under which the Debtor conducts his, her or its business,
operations or affairs, (III) the location of any of the
Collateral not in the possession or control of or en route to or
from the Secured Party other than mobile Equipment or the addition
of any new such location or
Continued -
(IV)
the primary location at which any mobile Equipment included in the
Collateral is kept or the addition of any new such location,
(I) the obtaining of any organizational identification number
by the Debtor if he, she or it does not have one, (J) any removal
of any mobile Equipment included in the Collateral for more than
thirty days at a time from the primary location at which such
mobile Equipment is kept and (K) the existence of any Commercial
Tort Claim of the Debtor and (xx) to the extent that any portion of
the Collateral would be rendered void or voidable under applicable
law by the grant to the Secured Party of a security interest
therein or the assignment, pledge or hypothecation thereof to the
Secured Party without the consent of a Person other than the Debtor
that has not been or is not obtained, hold such portion of the
Collateral in trust for the Secured Party until such consent is
obtained and take each action (including, but not limited to,
obtaining such consent and assigning or selling or otherwise
disposing of such portion of the Collateral) requested by the
Secured Party to assure that such portion of the Collateral inures
and is realized upon for the benefit of the Secured
Party.
b.
Negative Covenants. Without the prior written
consent of the Secured Party, the Debtor shall not (i) without
giving the Secured Party at least 30 days’ prior written
notice (other than Section (C)(iv), which will only require 48
hours notice to Secured Party) (A) change his, her or its location
for purposes of Article 9 of the Uniform Commercial Code
(including, but not limited to, its jurisdiction of organization if
it is a Registered Organization), (B) change his, her or its
organizational identification number if he, she or it has one, (C)
make any change in his, her or its name, identity or structure or
(D) participate in any merger, consolidation or other absorption,
(ii) grant or otherwise create, permit to exist or agree or
otherwise incur any obligation to grant or otherwise create or
permit to exist any security interest in or other lien on any of
the Collateral other than Permitted Liens, (iii) authorize the
filing of or permit to be filed or remain on file in any public
office any Financing Statement, execute or otherwise authenticate
any application for any certificate of title or notice of lien, or
permit to exist any certificate of title, relating to any of the
Collateral and naming any Person other than the Secured Party as a
secured party, except for any Financing Statement, certificate of
title or notice of lien heretofore consented to by the Secured
Party in writing or relating solely to any Permitted Lien,
(iv) sell, lease or otherwise dispose of any of the Collateral
or any interest or right in any of the Collateral, except for,
until any occurrence or existence of any Event of Default or any
giving by the Secured Party to the Debtor of any notice to the
contrary and provided that no Event of Default occurs thereby or
exists immediately thereafter, in the ordinary course of the
business of the Debtor, (A) any sale, lease or other
disposition of any Inventory, Farm Product or worn-out or obsolete
Equipment included in the Collateral, (B) any sale, lease or
other disposition of any Equipment included in the Collateral in
connection with the acquisition by the Debtor of Equipment of equal
or greater value that is not subject to any security interest or
other lien other than Permitted Liens, (C) other than the
co-publishing licenses for “Heroes of Europe” and
“Sin City” (for which 48 hours prior written notice
will be required), any written nonexclusive license of any
Intellectual Property included in the Collateral provided that such
license is expressly subject and subordinate to each Security
Interest, by its terms will terminate upon enforcement of any
Security Interest and does not materially interfere with the
conduct of the business of the Debtor or (D) any use of any
money included in the Collateral, funds in any Deposit Account
included in the Collateral or funds represented by any certificate
of deposit included in the Collateral in partial or complete
satisfaction of any obligation of the Debtor incurred in the
ordinary course of the business of the Debtor,
(v) manufacture, use, operate, advertise or otherwise promote,
permit the manufacture, use, operation or advertising or other
promotion of or sell, lease or otherwise dispose of any of the
Collateral in any manner that would or might violate or result in
any violation of applicable law (including, but not limited to, the
Fair Labor Standards Act and any environmental or criminal statute)
or any policy providing any insurance on any of the
Collateral,
Continued -
(vi) change
or permit any change in the location of any of the Collateral not
in the possession or control of or en route to or from the Secured
Party other than mobile Equipment, (vii) remove or permit any
removal of any mobile Equipment included in the Collateral for more
than thirty days at a time from the primary location at which such
mobile Equipment is kept, (viii) cause or permit any Goods
included in the Collateral to become an Accession to any Goods not
included in the Collateral, (ix) cause or permit any Goods
included in the Collateral to be subject to any negotiable
Document, (x) use any Intellectual Property included in the
Collateral for any use for which registration or application for
registration of such Intellectual Property has not been made, (xi)
abandon, permit the abandonment by any licensee of or take, fail to
take or permit any licensee to take or fail to take any action
(including, but not limited to, sufficient use) that would or might
result in the invalidation or abandonment of any Intellectual
Property included in the Collateral, (xii) modify, terminate or
attempt or agree or otherwise incur any obligation to modify or
terminate any Control Agreement or any contract with a Securities
Intermediary or Commodity Intermediary under which any Securities
Account or Commodity Account included in the Collateral is
established or maintained, (xiii) give Control of any Deposit
Account, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Right included in the Collateral to any Person
other than the Secured Party, whether by entering into any
agreement, instrument or other Record with a Bank, Securities
Intermediary or Commodity Intermediary for the purpose of giving a
Person other than the Secured Party Control of any Deposit Account
or Investment Property included in the Collateral or otherwise,
(xiv) withdraw any money or other property from any Securities
Account or Commodity Account included in the Collateral, (xv)
exercise any Incidental Property Right included in the Collateral,
or take any other action, that would or might impair or otherwise
adversely affect the validity, perfection or priority of any
Security Interest or the value of any of the Collateral, cause any
Event of Default or any event or condition that, after notice,
lapse of time or both notice and lapse of time, would constitute
any Event of Default, impair or otherwise adversely affect any
right, remedy or power of the Secured Party pursuant to this
Agreement or arising or accruing as a result of this Agreement or
authorize or permit the dissolution, liquidation or sale of any
Person (including, but not limited to, any Account Debtor, Issuer,
Bank, Securities Intermediary or Commodity Intermediary) obligated
with respect to any of the Collateral, (xvi) provide to the Secured
Party or permit to be provided to the Secured Party on his, her or
its behalf any certificate, financial statement or other Record
that contains any statement of fact that is incorrect or misleading
in any material respect or omits to state any fact necessary to
make any statement of fact contained therein not incorrect or
misleading in any material respect or (xvii) upon or at any
time after any occurrence or existence of any Event of Default or
any giving by the Secured Party to the Debtor of any notice to the
contrary, (A) enforce, extend, renew, refinance or otherwise
modify or replace, request, demand, accept, collect or otherwise
realize upon, compromise, cancel, release, discharge, subordinate,
accelerate, give any receipt, release or discharge relating to,
commence, prosecute or settle any action or other legal proceeding
relating to, waive or forbear from exercising any right, remedy or
power relating to or adversely affect any obligation of any Person
(including, but not limited to, any Account Debtor, Issuer, Bank,
Securities Intermediary or Commodity Intermediary) obligated with
respect to any of the Collateral relating to any of the Collateral,
(B) agree or otherwise incur any obligation to do anything
described in clause (xvii)(A) of this sentence, (C) make any trade
in any Securities Account or Commodity Account included in the
Collateral or (D) exercise any Incidental Property Right included
in the Collateral.
c.
Additional Covenants Triggered by Request of Secured Party
. Promptly upon the request of the Secured Party, the
Debtor shall (i) execute or otherwise authenticate and deliver to
the Secured Party each application for any certificate of title,
notice of lien, instrument of assignment, proxy and other Record,
and take each other action (including, but not limited to, making
any endorsement), requested by the Secured Party to perfect,
maintain the validity, perfection or priority of or enforce any
Security Interest (including, but not limited to, (A) giving
Control of any Deposit Account, Electronic Chattel Paper,
Investment Property or Letter-of-Credit Right included in the
Collateral to the Secured Party, whether by providing to the
Secured Party for execution or other authentication by the Secured
Party a Control Agreement, in form and substance satisfactory to
the Secured Party, that is executed or otherwise authenticated by
the Debtor and any Bank, Securities Intermediary or Commodity
Intermediary establishing or maintaining a Deposit Account included
in the Collateral or a Securities Account or Commodity Account to
which any Investment Property included in the Collateral is
credited or otherwise, (B) providing to the Secured Party an
agreement, instrument or other Record, in form and substance
satisfactory to the Secured Party, executed or otherwise
authenticated by any bailee of any portion of the Collateral,
acknowledging that such bailee holds such portion of the Collateral
for the benefit of the Secured Party and agreeing to act with
respect to such portion of the Collateral in accordance with the
instructions of the Secured Party without any need for any
authorization of the Debtor and (C) registering with the
appropriate public office or offices any Intellectual Property
included in the Collateral), otherwise protect the interest of the
Secured Party in or collect, sell, lease or otherwise dispose of or
otherwise realize upon any of the Collateral, whether under
applicable law (including, but not limited to, the Federal
Assignment of Claims Act) or otherwise, verify any of the
Collateral or any insurance on any of the Collateral or otherwise
accomplish any purpose of this Agreement, (ii) execute or otherwise
authenticate and deliver to the Secured Party a security agreement,
in form and substance satisfactory to the Secured Party granting to
the Secured Party a security interest in any Commercial Tort Claim
or Intellectual Property of the Debtor to secure the payment and
other performance of the Obligations, (iii) execute or otherwise
authenticate and deliver to the Secured Party a certificate or
other Record updating or confirming the continued completeness and
accuracy of all information contained in any certificate or other
Record submitted by or on behalf of the Debtor to the Secured Party
in connection with this Agreement, (iv) deliver to the Secured
Party each Tangible Chattel Paper, Document, Instrument,
Certificated Security and tangible Record included in the
Collateral, together with each endorsement, instrument of
assignment and other Record that the Secured Party requests to
accomplish the assignment or other transfer of such Tangible
Chattel Paper, Document, Instrument, Certificated Security or
tangible Record to the Secured Party (with all signatures
guaranteed by such Person and in such manner as are satisfactory to
the Secured Party), and, until such delivery, hold such Tangible
Chattel Paper, Document, Instrument, Certificated Security or
tangible Record in trust for the Secured Party, (v) deliver to
any Securities Intermediary designated by the Secured Party any
Certificated Security included in the Collateral, together with
each endorsement, instrument of assignment and other Record that
such Securities Intermediary requests to accomplish the assignment
or other transfer of such Certificated Security to such Securities
Intermediary (with all signatures guaranteed by such Person and in
such manner as are satisfactory to such Securities Intermediary),
instruct such Securities Intermediary to hold such Certificated
Security for the account of the Secured Party and, until such
delivery, hold such Certificated Security in trust for the Secured
Party, (vi) cause any Security Interest in any General
Intangible or Investment Property included in the Collateral that
is not represented by a Certificated Security to be registered to
or otherwise reflected in the name of the Secured Party or any
Person designated by the Secured Party, (vii) cause a
Certificated Security to be issued to represent any Uncertificated
Security included in the Collateral,
Continued -
(viii)
cause any Person (including, but not limited to, any Account
Debtor, Issuer, Bank, Securities Intermediary or Commodity
Intermediary) obligated with respect to any Deposit Account,
General Intangible or Investment Property included in the
Collateral to provide to the Secured Party a complete and accurate
copy of each statement, confirmation, notice, proxy statement,
proxy and other communication relating to such Deposit Account,
General Intangible or Investment Property, (ix) cause each
Instrument representing Proceeds or other proceeds of any of the
Collateral to be made payable, at the option of the Secured Party,
to the Secured Party alone or the Secured Party and the Debtor
jointly, (x) provide to the Secured Party all information
requested by the Secured Party and relating to (A) any of the
Collateral (including, but not limited to, information requested by
the Secured Party to monitor the market value of any of the
Collateral), (B) any Person (including, but not limited to,
any Account Debtor, Issuer, Bank, Securities Intermediary or
Commodity Intermediary) obligated with respect to any of the
Collateral, (C) the Debtor, (D) any Other Obligor or
(E) the business, operations, assets, affairs or condition
(financial or other) of the Debtor or any Other Obligor (including,
but not limited to, financial statements prepared in a form
satisfactory to the Secured Party and, if requested by the Secured
Party, audited, reviewed or compiled by an independent certified
public accountant satisfactory to the Secured Party),
(xi) enter into each warehousing, lockbox or other custodial
arrangement with respect to any of the Collateral requested by the
Secured Party, (xii) permit each director, officer, employee,
accountant, attorney
