GENERAL SECURITY
AGREEMENT
Dated as of June 9, 2008
between
T HE G
RANTORS R EFERRED
T O H
EREIN
as Grantors
and
T ANG C
APITAL P ARTNERS ,
L.P.
as Agent
GENERAL SECURITY
AGREEMENT
T HIS G ENERAL S ECURITY A GREEMENT dated as of June 9, 2008 (the
“
Agreement
” ) between G ENTA
I NCORPORATED , a
Delaware corporation (the “ Company ” ),
the other Persons listed on the signature pages hereof as Grantors
and the Additional Grantors (as defined in Section 18) (the
Company, the Persons so listed and the Additional Grantors being,
collectively, the “ Grantors ” )
and T ANG C
APITAL P ARTNERS ,
L.P., as agent (together
with any successor agent, the “ Agent ”) for the Purchasers (as defined in the
Securities Purchase Agreement).
P RELIMINARY S TATEMENTS
A. The Company has entered into a Securities Purchase
Agreement dated as of June 5, 2008 (as amended, amended and
restated, supplemented or otherwise modified from time to time,
being the “
Securities Purchase
Agreement ” )
with the Purchasers pursuant to which, subject to the terms and
conditions set forth therein, the Purchasers have agreed to
purchase from the Company, and the Company has agreed to sell to
the Purchasers, the Company’s Senior Secured Convertible
Promissory Notes in an aggregate original principal amount not to
exceed $40,000,000 (the “ Notes ” ).
B. The Grantors are entering into this Agreement in
order to grant to the Agent for the ratable benefit of the
Purchasers a security interest in all of their right, title and
interest in and to the Collateral (as defined herein) now owned or
hereafter acquired.
C. Each Grantor is the owner of the shares
(the “
Initial Pledged
Shares ” )
of stock set forth opposite such Grantor’s name on and as
otherwise described in Part I of Schedule I hereto and issued by
the corporations and entities named therein and of the indebtedness
(the “
Initial Pledged
Debt ” )
set forth opposite such Grantor’s name on and as otherwise
described in Part II of Schedule I hereto and issued by the issuers
named therein.
D. It is a condition precedent to the purchase of the
Notes by the Purchasers pursuant to the Securities Purchase
Agreement that the Grantors shall have granted the assignment and
security interest and made the pledge and assignment contemplated
by this Agreement.
E. Each Grantor will derive substantial direct and
indirect benefit from the transactions contemplated by the Note
Purchase Documents (as defined below).
NOW, THEREFORE,
in consideration of the premises and
in order to induce the Purchasers to purchase the Notes from the
Company as set forth in the Securities Purchase Agreement and for
other good and valuable consideration, each Grantor hereby agrees
with the Agent for the ratable benefit of the Purchasers as
follows:
D EFINITIONS
As used in this Agreement, the
following terms shall have the meanings set forth below. Terms used
herein and not otherwise defined herein are used in this Agreement
as defined in the Securities Purchase Agreement and the Notes.
Further, unless otherwise defined in this
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Agreement or in the Securities
Purchase Agreement, terms defined in the UCC are used in this
Agreement as such terms are defined in the UCC.
“
Debtor Relief
Laws ” means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief
Laws of the United States of America or other applicable
jurisdictions from time to time in effect affecting the rights of
creditors generally.
“
Governmental
Authority ” means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality,
central bank or public body, or (c) any court, administrative
tribunal or public utility.
“
Laws
” or “ Law ” means all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof
by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any
Governmental Authority, in each case whether or not having the
force of law.
“
Liabilities
” means all advances to, and debts, liabilities,
obligations, covenants and duties of, Company or any other Grantor
arising under any Note Purchase Document, whether direct or
indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement of any
proceeding under any Debtor Relief Laws by or against Company or
any other Grantor or any Subsidiary or Affiliate of Company or any
other Grantor.
“Lien” means any mortgage, pledge, hypothecation,
assignment, deposit arrangement (including in the nature of, cash
collateral accounts or security interests), encumbrance, lien
(statutory or other), fixed or floating charge, or other security
interest of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction),
including the interest of a purchaser of accounts
receivable.
“
Note Purchase
Documents ” means the Securities Purchase Agreement, the Notes
and the Security Documents, and each certificate, fee letter, and
other instrument or agreement from time to time executed by Company
or any of its Subsidiaries and delivered in connection with the
Securities Purchase Agreement.
“
Requisite
Purchasers ” means, as of any date of determination, Purchasers
holding Notes aggregating more than 66 2 / 3 % of such Notes in aggregate principal amount then
outstanding.
“
Security
Documents ” means this Agreement and the Intellectual Property
Security Agreement (as defined below).
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“
UCC
” means the Uniform Commercial Code as in effect,
from time to time, in the State of New York, provided that ,
if perfection or the effect of perfection or non-perfection or the
priority of any security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “ UCC ” means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of
the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.
SECTION 1. Grant of
Security. Each Grantor
hereby assigns and pledges to the Agent for the ratable benefit of
the Purchasers, and hereby grants to the Agent for the ratable
benefit of the Purchasers a security interest in, such
Grantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether
now owned or hereafter acquired by such Grantor, wherever located,
and whether now or hereafter existing or arising (collectively,
the “
Collateral
” ):
(a) all equipment in all of its forms, all fixtures
and all parts thereof and all accessions thereto (any and all such
equipment, fixtures, parts and accessions being the
“
Equipment
” );
(b) all inventory in all of its forms (including, but
not limited to raw materials and work in process therefor, finished
goods thereof and materials used or consumed in the manufacture,
production, preparation or shipping thereof, goods in which such
Grantor has an interest in mass or a joint or other interest or
right of any kind (including, without limitation, goods in which
such Grantor has an interest or right as consignee) and goods that
are returned to or repossessed or stopped in transit by such
Grantor), and all accessions thereto and products thereof and
documents therefor (any and all such inventory, accessions,
products and documents being the “ Inventory ” );
(c) all goods other than Equipment and Inventory and
all accessions thereto (any and all such goods and accessions being
the “
Other Goods
” );
(d) all accounts, chattel paper, instruments, deposit
accounts, documents, letter-of-credit rights, general intangibles
and other obligations of any kind, whether or not arising out of or
in connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights
now or hereafter existing in and to all security agreements, leases
and other contracts securing or otherwise relating to any such
accounts, chattel paper, instruments, deposit accounts, documents,
letter-of-credit rights, general intangibles or obligations (any
and all such accounts, chattel paper, instruments, deposit
accounts, documents, letter-of-credit rights, general intangibles
and obligations, to the extent not referred to in clause (e) or (f)
below, being the “ Receivables ” ,
and any and all such security agreements, leases and other
contracts being the “ Related Contracts ” );
(e) the following (the “ Security Collateral ” ):
(i) the Initial Pledged Shares and the certificates,
if any, representing the Initial Pledged Shares, and all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of the Initial Pledged Shares;
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(ii) the Initial Pledged Debt and the instruments, if
any, evidencing the Initial Pledged Debt, and all interest, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of the Initial Pledged Debt;
(iii) all additional shares of stock from time to time
acquired by such Grantor in any manner (such shares, together with
the Initial Pledged Shares, being the “ Pledged Shares ” ),
and the certificates, if any, representing such additional shares,
and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such shares;
(iv) all additional indebtedness from time to time owed
to such Grantor (such indebtedness, together with the Initial
Pledged Debt, being the “ Pledged Debt ” )
and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(v) all other investment property (including, without
limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities accounts,
(D) commodity contracts and (E) commodity accounts) in which such
Grantor has now, or acquires from time to time hereafter, any
right, title or interest in any manner, and the certificates or
instruments, if any, representing or evidencing such investment
property, and all dividends, interest, distributions, value, cash,
instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such investment property;
(f) the following (collectively, the
“
Account
Collateral ” ):
(i) any cash collateral account of such Grantor, all
financial assets from time to time credited thereto (including,
without limitation, all investments from time to time credited
thereto), and all dividends, interest, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
financial assets;
(ii) all deposit accounts or any other cash collateral
of such Grantor from time to time, all funds held therein and all
certificates and instruments, if any, from time to time
representing or evidencing such deposit accounts;
(iii) all notes, certificates of deposit, checks and
other instruments from time to time delivered to or otherwise
possessed by the Agent for or on behalf of such Grantor, including,
without limitation, those delivered or possessed in substitution
for or in addition to any or all of the then existing Account
Collateral; and
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(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(g) the following (collectively, the
“
Intellectual Property
Collateral ” ):
(i) all United States, international and foreign
patents, patent applications and statutory invention registrations,
including, without limitation, the patents and patent applications
set forth in Schedule IV hereto (as such Schedule IV may be
supplemented from time to time by supplements to this Agreement,
each such supplement being in substantially the form of Exhibit C
hereto (an “ IP Security Agreement Supplement
” ), executed and delivered by such Grantor to the
Agent from time to time), together with all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations
thereof, all inventions therein, all rights therein provided by
international treaties or conventions and all improvements thereto,
and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto (the
“
Patents
” );
(ii) all trademarks (including, without limitation,
service marks), certification marks, collective marks, trade dress,
logos, domain names, product configurations, trade names, business
names, corporate names and other source identifiers, whether or not
registered, whether currently in use or not, including, without
limitation, all common law rights and registrations and
applications for registration thereof, including, without
limitation, the trademark registrations and trademark applications
set forth in Schedule IV hereto (as such Schedule IV may be
supplemented from time to time by IP Security Agreement Supplements
executed and delivered by such Grantor to the Agent from time to
time), and all other marks registered in the U.S. Patent and
Trademark Office or in any office or agency of any State or
Territory of the United States or any foreign country, and all
rights therein provided by international treaties or conventions,
all reissues, extensions and renewals of any of the foregoing,
together in each case with the goodwill of the business connected
therewith and symbolized thereby, and all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining
thereto (the “ Trademarks ” );
(iii) all copyrights, copyright applications, copyright
registrations and like protections in each work of authorship,
whether statutory or common law, whether published or unpublished,
any renewals or extensions thereof, all copyrights of works based
on, incorporated in, derived from, or relating to works covered by
such copyrights, including, without limitation, the copyright
registrations and copyright applications set forth in Schedule IV
hereto (as such Schedule IV may be supplemented from time to time
by IP Security Agreement Supplements executed and delivered by such
Grantor to the Agent from time to time), together with all rights
corresponding thereto throughout the world and all other rights of
any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto (the “ Copyrights ” );
(iv) all confidential and proprietary information,
including, without limitation, know-how, trade secrets,
manufacturing and production processes and techniques, inventions,
research and development information, technical data, financial,
marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information
(the “
Trade Secrets
” );
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(v) all computer software programs and databases
(including, without limitation, source code, object code and all
related applications and data files), firmware, and documentation
and materials relating thereto, and all rights with respect to the
foregoing, together with any and all options, warranties, service
contracts, program services, test rights, maintenance rights,
improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any
of the foregoing (the “ Computer Software ” );
(vi) all license agreements, permits, authorizations
and franchises, whether with respect to the Patents, Trademarks,
Copyrights, Trade Secrets or Computer Software, or with respect to
the patents, trademarks, copyrights, trade secrets, computer
software or other proprietary right of any other Person, including,
without limitation, the material license agreements set forth in
Schedule IV hereto (as such Schedule IV may be supplemented from
time to time by IP Security Agreement Supplements executed and
delivered by such Grantor to the Agent from time to time), and all
income, royalties and other payments now or hereafter due and/or
payable with respect thereto, subject, in each case, to the terms
of such license agreements, permits, authorizations and franchises,
(the “
Licenses
” ); and
(vii) any and all claims for damages for past, present
and future infringement, misappropriation or breach with respect to
the Patents, Trademarks, Copyrights, Trade Secrets, Computer
Software or Licenses, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages;
(h) any commercial tort claims of such Grantor more
particularly described on Schedule V hereto (the
“
Existing Commercial Tort
Claims ” );
and
(i) all proceeds of, collateral for and supporting
obligations relating to, any and all of the Collateral (including,
without limitation, proceeds, collateral and supporting obligations
that constitute property of the types described in clauses (a)
through (h) of this Section 1 and this clause (i)) and, to the
extent not otherwise included, all (i) payments under insurance
(whether or not the Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral and (ii) money.
Notwithstanding the foregoing
provisions of this Section 1, the grant of a security interest as
provided herein shall not extend to, and the term
“Collateral” shall not include, as to any Grantor, (i)
any intent to use application at the U.S. Patent and Trademark
Office with respect to intellectual property to the extent an
assignment for security purposes would void the same and (ii) the
collateral described in that certain financing statement No.
63105681 filed on September 7, 2006 with the Delaware Department of
State (as in effect on the date hereof) naming the Company as
debtor and Dell Financial Services, L.P. as secured party so long
as such financing statement remains in effect (provided that the
grant of a security interest as provided herein shall extend to,
and the term “Collateral” shall include, such
collateral from and after such time as such financing statement is
no longer in effect).
6
If any Grantor shall at any time
acquire a commercial tort claim, such Grantor shall immediately
notify the Agent in a writing signed by such Grantor of the brief
details thereof and grant to the Agent for the ratable benefit of
the Purchasers 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.
SECTION 2. Security for
Obligations. This Agreement
secures the payment and performance of all Liabilities, together
with the prompt payment of all expenses, including, without
limitation, reasonable attorney costs and disbursements incurred by
the Agent or the Purchasers incidental to the collection of the
Liabilities and the enforcement or protection of the Agent’s
security interest in the Collateral (collectively, the
“
Secured
Obligations ” ).
SECTION 3. Grantors Remain
Liable. Anything herein to
the contrary notwithstanding, (a) each Grantor shall remain liable
under the contracts and agreements included in such Grantor’s
Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of
any of the rights hereunder shall not release any Grantor from any
of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Purchaser shall have any
obligation or liability under the contracts and agreements included
in the Collateral by reason of this Agreement or any other Note
Purchase Document or any other agreement, nor shall any Purchaser
be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
SECTION 4. Delivery and Control of
Security Collateral.
(a) All certificates or instruments representing or
evidencing Security Collateral shall be delivered to and held by or
on behalf of the Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in
form and substance satisfactory to the Agent. The Agent shall have
the right, upon the occurrence and during the continuance of an
Event of Default, to transfer to or to register in the name of the
Agent or any of its nominees any or all of the Security Collateral,
subject only to the revocable rights specified in Section 11(a). In
addition, the Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, to exchange
certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger
denominations.
(b) With respect to any Security Collateral in which
any Grantor has any right, title or interest and that constitutes
an uncertificated security issued by a Subsidiary of such Grantor,
such Grantor will cause the issuer thereof either (i) to register
the Agent as the registered owner, for the purpose of security, of
such security or (ii) to agree in an authenticated record with such
Grantor and the Agent that such issuer will comply with
instructions with respect to such security originated by the Agent
without further consent of such Grantor, such authenticated record
to be in form and substance reasonably satisfactory to the Agent.
The Agent shall not provide any directions to, or deliver any
instructions or entitlement orders to any issuer pursuant to this
Section 4(b) unless an Event of Default has occurred and is
continuing.
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Furthermore, the Agent shall promptly
rescind such direction, instruction or entitlement order and notify
such parties at any time when no Event of Default has occurred and
is continuing.
SECTION 5. Representations and
Warranties. Each Grantor
represents and warrants as follows:
(a) Such Grantor’s exact legal name, as defined
in Section 9-503(a) of the UCC, is correctly set forth on the
signature pages of this Agreement. Such Grantor is an organization
of the type specified on the signature pages of this Agreement and
is organized under the laws of the jurisdiction specified on the
signature pages of this Agreement.
(b) All of the Equipment and Inventory (other than
Equipment and Inventory constituting mobile goods and Equipment and
Inventory in transit in the ordinary course of business) of such
Grantor are located at the places specified therefor in Schedule II
hereto, as such Schedule II may be amended from time to time
pursuant to Section 7(a). The chief executive office of such
Grantor and the original copies of each Related Contract to which
such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor, are located at the address
specified therefor in Schedule III hereto, as such Schedule III may
be amended from time to time pursuant to Section 9(a). The Grantor
is located (within the meaning of Section 9-307 of the UCC) in the
state or jurisdiction set forth in Schedule III hereto. Such
Grantor’s federal tax identification number is set forth
opposite such Grantor’s name in Schedule III hereto. All
Security Collateral consisting of certificated securities and
instruments have been delivered to the Agent. All originals of all
chattel paper that evidence Receivables have been delivered to the
Agent, in each case to the extent that delivery thereof to the
Agent is required under Section 4. None of the Receivables are
evidenced by a promissory note or other instrument that has not
been delivered to the Agent.
(c) Such Grantor is the legal and beneficial owner of
the Collateral of such Grantor free and clear of any Lien, claim,
option or right of others, except for the security interests
created under this Agreement and Permitted Liens (as defined in the
Note). No effective financing statement or other instrument similar
in effect covering all or any part of such Collateral or listing
such Grantor or any trade name of such Grantor as debtor is on file
in any recording office, except such as may have been filed in
favor of the Agent relating to the Note Purchase Documents and
Permitted Liens. Such Grantor has the trade names listed on
Schedule IV hereto.
(d) Such Grantor has exclusive possession and control
of the Equipment and Inventory other than Inventory or Equipment
stored at any leased premises or warehouse (which leased premises
or warehouse is so indicated by an asterisk on Schedule II hereto,
as such Schedule II may be amended from time to time pursuant to
Section 7(a)).
(e) The Pledged Shares pledged by such Grantor
hereunder have been duly authorized and validly issued and are
fully paid and non assessable. The Pledged Debt issued to any
Grantor and pledged by such Grantor hereunder has been duly
authorized, authenticated or issued and delivered, is the legal,
valid and binding obligation of the obligor, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in
a
8
proceeding in equity or at law, is
evidenced by one or more promissory notes (which notes have been
delivered to the Agent), and is not in default.
(f) The Initial Pledged Shares constitute the
percentage of the issued and outstanding shares of stock of the
issuers thereof indicated on Schedule I hereto as of the date
hereof. The Initial Pledged Debt constitutes all of the outstanding
indebtedness owed to such Grantor by the issuers thereof and is
outstanding, as of the date hereof, in the principal amount
indicated on Schedule I hereto as of the date hereof.
(g) All of the investment property owned by such
Grantor as of the date hereof is listed on Schedule I
hereto.
(h) Other than the execution and delivery of deposit
account control agreements and securities account control
agreements, and the delivery of the original title certificates to
motor vehicles, all filings and other actions necessary or
reasonably desirable to perfect and protect the security interest
in the Collateral of such Grantor created under this Agreement have
been or are concurrently herewith being duly made or taken and are
in full force and effect, and this Agreement creates in favor of
the Agent for the benefit of the Purchasers a valid and, together
with such filings and other actions, perfected first priority
security interest in the Collateral of such Grantor, securing the
payment of the Secured Obligations.
(i) Other than the execution and delivery of deposit
account control agreements and securities account control
agreements, and the delivery of the original title certificates to
motor vehicles, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for (i) the
grant by such Grantor of the assignment, pledge and security
interest granted hereunder or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) the perfection
or maintenance of the assignment, pledge and security interest
created hereunder (including the first priority nature of such
assignment, pledge or security interest), except for the filing of
financing and continuation statements under the UCC, which
financing statements upon due filing will be in full force and
effect, the recordation of the Intellectual Property Security
Agreements referred to in Section 10(f) with the U.S. Patent and
Trademark Office and the U.S. Copyright Office, and the actions
described in Section 4 with respect to the Security Collateral, or
(iii) for the exercise by the Agent of its voting or other rights
provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities
generally.
(j) The Inventory that has been produced or
distributed by such Grantor has been produced in compliance with
all material requirements of applicable law, including, without
limitation, the Fair Labor Standards Act.
(k) As to itself and its Intellectual Property
Collateral:
(i) To the best of such Grantor’s knowledge, the
rights of such Grantor in or to the Intellectual Property
Collateral do not conflict with, misappropriate or infringe upon
the intellectual property rights of any third party, and no written
claim has been asserted that the use of such Intellectual Property
Collateral does or may infringe upon the intellectual property
rights of any third party.
9
(ii) Such Grantor is the exclusive owner or
non-exclusive licensee of the entire and unencumbered right, title
and interest in and to the Intellectual Property Collateral and is
entitled to use all such Intellectual Property Collateral without
limitation, subject only to the license terms of the
Licenses.
(iii) The Intellectual Property Collateral set forth on
Schedule IV hereto includes all of the patents, patent
registrations, patent applications, trademark registrations and
applications, copyright registrations and applications and Licenses
owned by such Grantor.
(iv) The Intellectual Property Collateral is subsisting
and has not been adjudged invalid or unenforceable in whole or
part, and to the best of such Grantor’s knowledge, is valid
and enforceable. Such Grantor is not aware of any uses of any item
of Intellectual Property Collateral that would reasonably be
expected to lead to such item becoming invalid or
unenforceable.
(v) Such Grantor has made or performed all filings,
recordings and other acts and has paid all required fees and taxes
to maintain and protect its interest in each and every item of
Intellectual Property Collateral in full force and effect, and to
protect and maintain its interest therein including, without
limitation, recordations of any of its interests in the Patents and
Trademarks with the U.S. Patent and Trademark Office, except with
respect to any items of Intellectual Property Collateral which such
Grantor, in the reasonable exercise of its business judgment, deems
not to be material to the ongoing business of such Grantor. Such
Grantor has used proper statutory notice in connection with its use
of each patent, trademark and copyright of the Intellectual
Property Collateral.
(vi) No action, suit, investigation, litigation or
proceeding has been asserted or is pending or threatened against
such Grantor (i) based upon or challenging or seeking to deny or
restrict the use of any of the Intellectual Property Collateral, or
(ii) alleging that any services provided by, processes used by, or
products manufactured or sold by, such Grantor infringe upon or
misappropriate any material item of patent, trademark, copyright or
any other proprietary right of any third party. To the best of such
Grantor’s knowledge, no Person is engaging in any activity
that infringes upon or misappropriates the Intellectual Property
Collateral or upon the rights of such Grantor therein. Except as
set forth on Schedule IV hereto, such Grantor has not granted any
license, release, covenant not to sue, non-assertion assurance, or
other right to any Person with respect to any material part of the
Intellectual Property Collateral. The consummation of the
transactions contemplated by the Note Purchase Documents and other
related documents will not result in the termination or material
impairment of any material item of the Intellectual Property
Collateral.
(vii) With respect to each License material to the
business of such Grantor: (A) such License is valid and binding and
in full force and effect against such Grantor and represents the
entire agreement between the respective licensor and licensee with
respect to the subject matter of such License; (B) such Grantor has
not received any notice of termination or cancellation under such
License; (C) such Grantor has not received any notice of a breach
or
10
default under such License, which
breach or default has not been cured; (D) such Grantor has not
granted to any other third party any rights, adverse or otherwise,
under such License, other than pursuant to a License set forth in
Schedule IV hereto; and (E) neither such Grantor nor to the best of
such Grantor’s knowledge, any other party to such License is
in breach or default of such License in any material respect, and
no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination,
modification or acceleration under such License.
SECTION 6. Further
Assurances.
(a) Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and
documents, and take all further action, that may be necessary or
reasonably desirable, or that the Agent may request, in order to
perfect and protect any pledge, assignment or security interest
granted or purported to be granted by such Grantor hereunder or to
enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will
promptly with respect to Collateral of such Grantor: (i) at the
reasonable request of the Agent, mark conspicuously each chattel
paper included in Receivables and each of its records pertaining to
such Collateral with a legend, in form and substance reasonably
satisfactory to the Agent, indicating that such chattel paper or
Collateral is subject to the security interest granted hereby;
provided that no such legend shall be required if such Collateral
is delivered to the Agent pursuant to clause (ii) below; (ii) if
any such Collateral shall be evidenced by a promissory note or
other instrument or chattel paper, deliver and pledge to the Agent
hereunder such note or instrument or chattel paper duly indorsed
and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to
the Agent; (iii) execute or authenticate and file such financing or
continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or reasonably
desirable, or as the Agent may reasonably request, in order to
perfect and preserve the security interest granted or purported to
be granted by such Grantor hereunder; (iv) deliver and pledge to
the Agent for benefit of the Purchasers certificates representing
Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; and
(v) deliver to the Agent evidence that all other action that the
Agent may deem reasonably necessary or reasonably desirable in
order to perfect and protect the security interest created by such
Grantor under this Agreement has been taken. Without limiting the
generality of the foregoing, each Grantor will, within 10 days
after the date hereof, enter into deposit account control
agreements and securities account control agreements in form and
substance satisfactory to the Agent relating to any Collateral of
such Grantor.
(b) Each Grantor hereby authorizes the Agent to file
one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral of such
Grantor without the signature of such Grantor where permitted by
law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by
law.
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(c) Each Grantor will furnish to the Agent from time
to time statements and schedules further identifying and describing
the Collateral of such Grantor and such other reports in connection
with such Collateral as the Agent may reasonably request, all in
reasonable detail.
(d) With respect to any Related Contracts entered into
after the date hereof, with respect to which the account debtor is
the United States or any department, agency, or instrumentality of
the United States, each Grantor party to such Related Contract
agrees to cause the security interest granted to the Agent in such
Related Contract to be duly acknowledged under the Assignment of
Claims Act of 1940 (31 U.S.C. 3727).
SECTION 7. As to Equipment and
Inventory.
(a) Each Grantor will keep the Equipment and Inventory
of such Grantor (other than Inventory sold in the ordinary course
of business, Equipment and Inventory constituting mobile goods or
Equipment and Inventory in transit in the ordinary course of such
Grantor’s business) at the places therefor specified in
Section 5(a) or, upon 30 days’ prior written notice to the
Agent, at such other places in a jurisdiction where all action
required by Section 6 shall have been taken with respect to such
Equipment and Inventory (and, upon the taking of such action in
such jurisdiction, Schedule II hereto shall be automatically
amended to include such other places).
(b) Each Grantor will cause the Equipment of such
Grantor (other than any Equipment not material to the business of
such Grantor) to be maintained and preserved in the same condition,
repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer’s manual,
and will forthwith, or in the case of any loss or damage to any of
such Equipment as soon as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or
reasonably desirable to such end.
(c) Each Grantor will pay promptly when due all
property and other taxes, assessments and governmental charges or
levies imposed upon, and all claims (including, without limitation,
claims for labor, materials and supplies) against, the Equipment
and Inventory of such Grantor, except to the extent payment thereof
is not required by the Securities Purchase Agreement. In producing
its Inventory, each Grantor will comply with all requirements of
applicable law, including, without limitation, the Fair Labor
Standards Act.
SECTION 8.
Insurance.
(a) Each Grantor will, at its own expense, maintain
insurance with respect to the Equipment and Inventory of such
Grantor in such amounts, against such risks, in such form and with
such insurers, as is customary with companies of a similar size
a
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