proceeds (including Stock Rights), insurance proceeds and products thereof, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto; provided, however that notwithstanding any provision herein to the contrary, the Collateral shall not include any Excluded Property.

 

“ Commercial Tort Claims ” means those certain currently existing commercial tort claims, as defined in the Delaware UCC of the Grantor, including each commercial tort claim specifically described in Exhibit “F” .

 

“ Control ” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Delaware UCC.

 

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:  (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all extensions of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

 

“ Delaware UCC ” means the Delaware Uniform Commercial Code as in effect from time to time .

 

“ Deposit Accounts ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Documents ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Equipment ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Excluded Property ” means (a) (i) all “Collateral” as defined in the Master Security Agreement between General Electric Capital Corporation and the Grantor dated as of April 16, 2004, as amended prior to the date hereof, (ii) all “Collateral” as defined in the Master Security Agreement between Oxford Finance Corporation and the Grantor dated as of June 20, 2005, as amended prior to the date hereof and (iii) all “Property” as defined in the Leasehold Mortgage and Security Agreement between the Grantor and Massachusetts Development Finance Agency dated as of March 24, 2005, as amended prior to the date hereof, and (b) any Intellectual Property, license, permit, contract or agreement to the extent that, but only to the extent that and for so long as, a grant of a security interest therein constitutes (or would constitute) or results (or would result) in the abandonment, invalidation or unenforceability of any right, title or interest of the Grantor in such Intellectual Property or results (or would result) in a breach of the terms of, or constitutes (or would constitute) a default under, any such license, permit, contract or agreement.

 

“ Exhibit ” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.

 

“ Farm Products ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

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“ Fixtures ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ GAAP ” means generally accepted accounting principles in the United States and applied on a consistent basis

 

“ General Intangibles ” shall have the meaning set forth in Article 9 of the Delaware UCC and, in any event, includes payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill (including the goodwill associated with any Trademark), Patents, Trademarks, Copyrights, URLs and domain names, Industrial Designs, other industrial or Intellectual Property or rights therein or applications therefor, whether under license or otherwise, programs, programming materials, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Delaware UCC, and any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, Goods, Investment Property, negotiable Collateral, and oil, gas, or other minerals before extraction.

 

“ Goods ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Industrial Designs ” means (i) registered industrial designs and industrial design applications, and also includes registered industrial designs and industrial design applications listed in Exhibit “ B” , (ii) all renewals, divisions and any industrial design registrations issuing thereon and any and all foreign applications corresponding thereto, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements thereof, (iv) the right to sue for past, present and future infringements thereof, and (v) all of the Grantor’s rights corresponding thereto throughout the world.

 

“ Instruments ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Intellectual Property ” means all Patents, Trademarks, Copyrights and any other intellectual property.

 

“ Inventory ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Investment Property ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Letter of Credit Rights ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents,

 

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Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

 

“ Lien ” means any mortgage, pledge, deed of trust, assignment, lien, charge, encumbrance or security interest of any kind, or the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement, but excluding easements, rights of way or similar encumbrances on real property which are in the ordinary course and which do not materially affect the value, use and insurability of title of such real property.

 

“ Material Adverse Effect ” means with respect to the Grantor, a material adverse change in or affecting the business, properties, assets, liabilities, operations, results of operations (financial or otherwise), conditions or prospects of the Grantor and its subsidiaries taken as a whole, or upon the ability of the Grantor to perform its obligations under this Agreement or the Note.

 

“ Note Purchase Agreement ” means that certain Note Purchase Agreement dated as of October 24, 2008, as amended or otherwise modified from time to time, between the Secured Party and the Grantor.

 

“ Other Collateral ” means any property of the Grantor, not included within the defined terms Accounts, Chattel Paper, Commercial Tort Claims, Copyrights, Deposit Accounts, Documents, Equipment, Fixtures, Farm Products, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting Obligations and Trademarks, including, without limitation, all cash on hand, letters of credit, Stock Rights or any other deposits (general or special, time or demand, provisional or final) with any bank or other financial institution, it being intended that the Collateral include all real and personal property of the Grantor other than Excluded Property.

 

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

 

“ Person ” means any natural person, corporation, division of a corporation, business trust, joint venture, association, company, partnership, unincorporated organization or other legal entity, or a government or any agency or political subdivision thereof.

 

“ Pledged Deposits ” means all time deposits of money (other than Deposit Accounts and Instruments), whether or not evidenced by certificates, which the Grantor may from time to time designate as pledged to Secured Party as security for any Secured Obligations, and all rights to receive interest on said deposits.

 

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“ Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments or Pledged Deposits, and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

 

“ Section ” means a numbered section of this Security Agreement, unless another document is specifically referenced.

 

“ Secured Obligations ” means all the payment, performance and indemnification obligations, covenants and duties of the Grantor now or hereafter existing under this Security Agreement, the Note or any other “Transaction Agreement” (as defined in the Note Purchase Agreement), whether for principal, interest, fees, expenses, reimbursement, indemnification, performance or otherwise.  Secured Obligations shall include all interest which accrues after the commencement of any case or proceeding in bankruptcy after the insolvency of, or for the reorganization of the Grantor, whether or not allowed in such proceeding.

 

“ Security ” shall have the meaning set forth in Article 8 of the Delaware UCC.

 

“ Stock Rights ” means any securities, dividends or other distributions and any other right or property which the Grantor shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any securities or other ownership interests in a corporation, partnership, joint venture or limited liability company constituting Collateral and any securities, any right to receive securities and any right to receive earnings, in which the Grantor now has or hereafter acquires any right, issued by an issuer of such securities.

 

“ Supporting Obligation ” shall have the meaning set forth in Article 9 of the Delaware UCC.

 

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:  (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

 

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

 

ARTICLE II

GRANT OF SECURITY INTEREST

 

Thee Grantor hereby pledges, collaterally assigns and grants to Secured Party, a security interest in all of the Grantor’s right, title and interest, whether now owned or hereafter acquired,

 

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in and to the Collateral to secure the prompt and complete payment and performance of the Secured Obligations.  For the avoidance of doubt, the grant of a security interest herein shall not be deemed to be an assignment of any intellectual property rights owned by the Grantor.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

The Grantor represents and warrants to Secured Party as of the date hereof, that:

 

3.1.                               Title, Authorization, Validity and Enforceability .  The Grantor has good and valid rights in or the power to transfer the Collateral owned by it and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Permitted Liens, and has full corporate power and authority to grant to Secured Party the security interest in such Collateral pursuant hereto.  The execution and delivery by the Grantor of this Security Agreement have been duly authorized by proper corporate proceedings, and this Security Agreement constitutes a legal, valid and binding obligation of the Grantor and creates a security interest which is enforceable against the Grantor in all Collateral it now owns or hereafter acquires, except as enforceability may be limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law), and (iii) requirements of reasonableness, good faith and fair dealing.  When financing statements have been filed in the appropriate offices against the Grantor in the locations listed in Exhibit “ E” , the Secured Party will have a fully perfected first priority security interest in the Collateral owned by the Grantor in which a security interest may be perfected by filing of a financing statement under the Delaware UCC, subject only to Permitted Liens.

 

3.2.                               Conflicting Laws and Contracts .  Neither the execution and delivery by the Grantor of this Security Agreement, the creation and perfection of the security interest in the Collateral granted hereunder, nor compliance by the Grantor with the terms and provisions hereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Grantor, or (ii) the Grantor’s certificate of incorporation or by-laws, or (iii) the provisions of any material indenture, instrument or agreement to which the Grantor is a party or is subject, or by which it, or its property may be bound or affected, or conflict with or constitute a default thereunder, or result in or require the creation or imposition of any Lien in, of or on the property of the Grantor pursuant to the terms of any such indenture, instrument or agreement (other than any Lien of Secured Party).

 

3.3.                               Principal Location .  The Grantor’s mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), is disclosed in Exhibit “A” ; the Grantor has no other places of business except those set forth in Exhibit “A” .

 

3.4.                               Property Locations .  The Inventory, Equipment and Fixtures of the Grantor are located solely at the locations of the Grantor described in Exhibit “A” .  All of said locations are owned by the Grantor except for locations (i) which are leased by the Grantor as lessee and designated in Part B of Exhibit “A” and (ii) at which Inventory is held in a public warehouse or

 

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is otherwise held by a bailee or on consignment by the Grantor as designated in Part C of Exhibit “A” , with respect to which Inventory the Grantor has delivered bailment agreements, warehouse receipts, financing statements or other documents satisfactory to Secured Party to protect Secured Party’s security interest in such Inventory.

 

3.5.                               No Other Names; Etc. .  Within the five-year period preceding the date hereof, the Grantor has not conducted business under any name, changed its jurisdiction of formation, merged with or into or consolidated with any other Person, except as disclosed in Exhibit “A” .  The name in which the Grantor has executed this Security Agreement is the exact name as it appears in the Grantor’s organizational documents, as amended, as filed with the Grantor’s jurisdiction of organization as of the date hereof.

 

3.6.                               No Default .  No Event of Default or event which with the passage of time or giving of notice, or both, would constitute an Event of Default, exists.

 

3.7.                               Accounts and Chattel Paper .  The names of the obligors, amounts owing, due dates and other information with respect to the Accounts and Chattel Paper owned by the Grantor are and will be correctly stated in all records of the Grantor relating thereto and in all invoices and reports with respect thereto furnished to Secured Party by the Grantor from time to time.  As of the time when each Account or each item of Chattel Paper arises, the Grantor shall be deemed to have represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are genuine and in all respects what they purport to be.

 

3.8.                               Filing Requirements .  None of the Equipment owned by the Grantor and constituting part of the Collateral is covered by any certificate of title, except for the vehicles described in Part A of Exhibit “B” .  None of the Collateral owned by the Grantor is of a type for which security interests or liens may be perfected by filing under any federal statute except for (i) the vehicles described in Part B of Exhibit “B” and (ii) Patents, Trademarks and Copyrights held by the Grantor and described in Part C of Exhibit “B” .  The legal description, county and street address of the property on which any Fixtures owned by the Grantor are located is set forth in Exhibit “C” together with the name and address of the record owner of each such property.

 

3.9.                               No Financing Statements .  No financing statement describing all or any portion of the Collateral which has not lapsed or been terminated naming the Grantor as debtor has been filed in any jurisdiction except financing statements (i) naming Secured Party as Secured Party and (ii) in respect of Permitted Liens.

 

3.10.                         Federal Employer Identification Number; State Organization Number; Jurisdiction of Organization .  The Grantor’s federal employer identification number is, and if the Grantor is a registered organization, the Grantor’s State of organization, type of organization and State of organization identification number are, listed in Exhibit “G” .

 

3.11.                         Pledged Securities and Other Investment Property .  Exhibit “D ” sets forth a complete and accurate list of the Instruments, Securities and other Investment Property delivered to Secured Party.  The Grantor is the direct and beneficial owner of each Instrument, Security and other type of Investment Property listed in Exhibit “D” as being owned by it, free and clear of any Liens, except for the security interest granted to the Secured Party hereunder.  The

 

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Grantor further represents and warrants that (i) all such Instruments, Securities or other types of Investment Property which are shares of stock in a corporation or ownership interests in a partnership or limited liability company have been (to the extent such concepts are relevant with respect to such Instrument, Security or other type of Investment Property) duly and validly issued, are fully paid and non-assessable and constitute the percentage of the issued and outstanding shares of stock (or other equity interests) of the respective issuers thereof indicated in Exhibit  “D” hereto and (ii) with respect to any certificates delivered to the Secured Party representing an ownership interest in a partnership or limited liability company, either such certificates are Securities as defined in Article 8 of the Delaware UCC of the applicable jurisdiction as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, the Grantor has so informed the Secured Party so that the Secured Party may take steps to perfect its security interest therein as a General Intangible.

 

3.12.                         Intellectual Property .

 

3.12.1  Exhibit “B” contains a complete and accurate listing as of the date hereof of all Intellectual Property, including, but not limited to the following: (i) state, U.S. and foreign trademark registrations, and applications for trademark registration, (ii) U.S. and foreign patents and patents applications, together with all reissuances, continuations, continuations in part, revisions, extensions, and reexaminations thereof, (iii) U.S. and foreign copyright registrations and applications for registration, (iv) foreign industrial design registrations and industrial design applications, (v) domain names, (vi) proprietary computer software, (vii) all forms of Intellectual Property described in clauses (i)-(iii) above that are owned by a third party and licensed to the Grantor or otherwise used by the Grantor under contract, and (viii) the names of any Person who has been granted rights in respect thereof outside of the ordinary course of business.  All of the U.S. registrations, applications for registration or applications for issuance of the Intellectual Property are valid and subsisting, in good standing and are recorded or is in the process of being recorded in the name of the Grantor.

 

3.12.2  Such Intellectual Property’s valid, subsisting, unexpired (where registered) and enforceable and has not been abandoned or adjudged invalid or unenforceable, in whole or in part except as could not be reasonably expected to result in a Material Adverse Effect.

 

3.12.3  Except as set forth on Exhibit I , no Person other than the Grantor has any right or interest of any kind or nature in or to the Intellectual Property, including any right to sell, license, lease, transfer, distribute, use or otherwise exploit the Intellectual Property or any portion thereof outside of the ordinary course of the Grantor’s business.  Except as set forth on Exhibit I , the Grantor has good, marketable and exclusive title to, and the valid and enforceable power and right to sell, license, transfer, distribute, use and otherwise exploit, its Intellectual Property.

 

3.12.4  The Grantor has taken or caused to be taken steps so that none of its Intellectual Property, the value of which to the Grantor is contingent upon maintenance of the confidentiality thereof, have been disclosed by the Grantor to any Person other than employees, contractors, customers, representatives and agents of the Grantor who are

 

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parties to customary confidentiality and nondisclosure agreements with the Grantor or are otherwise bound to maintain the confidentiality of such Intellectual Property.

 

3.12.5  To the Grantor’s knowledge, no Person has violated, infringed upon or breached, or is currently violating, infringing upon or breaching, any of the rights of the Grantor to the Intellectual Property or has breached or is breaching any duty or obligation owed to the Grantor in respect of the Intellectual Property except where those breaches, individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect.

 

3.12.6  Except as set forth on Exhibit I , no settlement or consents, covenants not to sue, nonassertion assurances, or releases have been entered into by the Grantor or to which the Grantor is bound that adversely affects its rights to own or use any Intellectual Property except as could not be reasonably expected to result in a Material Adverse Effect, in each case individually or in the aggregate.

 

3.12.7  The Grantor has not received any written notice that remains outstanding challenging the validity, enforceability, or ownership of any Intellectual Property except where those challenges could not reasonably be expected to result in a Material Adverse Effect, and to the Grantor’s knowledge at the date hereof there are no facts upon which such a challenge could validly be made.

 

3.12.8  The Grantor owns directly or is entitled to use, by license or otherwise, all Intellectual Property necessary for the conduct of the Grantor’s business as conducted as of the date of this Agreement.

 

3.12.9  The Grantor uses adequate standards of quality in the manufacture, distribution, and sale of all products sold and in the provision of all services rendered under or in connection with all trademarks and has taken all commercially reasonable action necessary to insure that all licensees of the trademarks owned or licensed by the Grantor use such adequate standards of quality, except where the failure to use adequate standards of quality could not reasonably be expected to result in a Material Adverse Effect.

 

3.12.10  The consummation of the transactions contemplated by the Note and this Security Agreement will not result in the termination or material impairment of any of the Intellectual Property.

 

3.13.                        Insurance .                                          Exhibit “H” contains a description of all insurance which the Grantor maintains or has maintained on its behalf.  All of such insurance is in full force and effect.

 

ARTICLE IV

COVENANTS

 

From the date of this Security Agreement and thereafter until this Security Agreement is terminated, the Grantor agrees:

 

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4.1.                               General .

 

4.1.1  Inspection .  The Grantor will permit the Secured Party, by its representatives and agents (i) to inspect the Collateral, (ii) to examine and make copies of the records of the Grantor relating to the Collateral and (iii) to discuss the Collateral and the related records of the Grantor with, and to be advised as to the same by, the Grantor’s officers and employees (and, in the case of any Receivable after the occurrence and during the continuance of an Event of Default, with any person or entity which is or may be obligated thereon), all at such reasonable times and intervals during Grantor’s regular business hours as the Secured Party may determine, upon reasonable prior notice and all at the Grantor’s expense.

 

4.1.2  Taxes .  The Grantor will pay when due all taxes, assessments and governmental charges and levies upon the Collateral owned by the Grantor, except (i) those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with GAAP and with respect to which no Lien exists, and (ii) those which by reason of the amount involved or the remedies available to the taxing authority could not reasonably be expected to have a Material Adverse Effect.

 

4.1.3  Records and Reports; Notification of Event of Default .  The Grantor shall keep and maintain complete, accurate and proper books and records with respect to the Collateral owned by the Grantor, and furnish to the Secured Party such reports relating to the Collateral as the Secured Party shall from time to time reasonably request.  The Grantor will give prompt notice in writing to the Secured Party of the occurrence of any Event of Default or event which with the giving of notice or passage of time or both would constitute an Event of Default.

 

4.1.4  Financing Statements and Other Actions; Defense of Title .  The Grantor hereby authorizes the Secured Party to file, and if requested will execute and deliver to the Secured Party, all financing statements describing the Collateral owned by the Grantor and other documents and take such other actions as may from time to time reasonably be requested by the Secured Party in order to maintain a first priority, perfected security interest in and, if applicable, Control of, the Collateral owned by the Grantor, subject to Permitted Liens.  Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Secured Party may determine, in its sole discretion, is necessary, advisable or prudent to ensure that the perfection of the security interest in the Collateral granted to the Secured Party herein, including, without limitation, describing such property as “all assets” or “all personal property, whether now owned or hereafter acquired.”  The Grantor will take any and all actions necessary to defend title to the Collateral owned by the Grantor against all persons and to defend the security interest of the Secured Party in such Collateral and the priority thereof against any Lien not expressly permitted hereunder.

 

4.1.5  Disposition of Collateral .  The Grantor will not sell, lease or otherwise dispose of the Collateral owned by the Grantor except for (i) sales of inventory in the

 

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ordinary course of business, (ii) the disposition of obsolete, worn-out or surplus Collateral in the ordinary course of business, (iii) the license in the ordinary course of the Grantor’s business of its Intellectual Property and (iv) the abandonment or disposition by the Grantor of Intellectual Property that is not used or useful in the conduct of the Grantor’s business.

 

4.1.6  Liens .  The Grantor will not, incur, or suffer to exist any Lien on the Collateral owned by the Grantor except Permitted Liens.

 

4.1.7  Change in Corporate Existence, Type or Jurisdiction of Organization, Location, Name .  The Grantor will:

 

(i)                                     preserve its existence and corporate structure as in effect on the date hereof;

 

(ii)                                 not change its jurisdiction of organization;

 

(iii)                              not maintain its place of business (if it has only one) or its chief executive office (if it has more than one place of business) at a location other than a location specified in Exhibit “ A” ; and

 

(iv)                              not (i) have any Inventory, Equipment or Fixtures or proceeds or products thereof (other than Inventory and proceeds thereof disposed of as permitted by Section 4.1.5 ) at a location other than a location specified in Exhibit “A” , (ii) change its name or taxpayer identification number or (iii) change its mailing address,

 

unless, in each such case, the Grantor shall have given the Secured Party not less than thirty (30) days’ prior written notice of such event or occurrence and the Secured Party shall have either (x) determined that such event or occurrence will not adversely affect the validity, perfection or priority of the Secured Party’s security interest in the Collateral, or (y) taken such steps (with the cooperation of the Grantor to the extent necessary or advisable) as are necessary or advisable to properly maintain the validity, perfection and priority of the Secured Party’s security interest in the Collateral owned by the Grantor.

 

4.1.8  Other Financing Statements .  The Grantor will not suffer to exist or authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by the Grantor, except any financing statement authorized under Section 4.1.4 hereof.

 

4.2.                               Receivables .

 

4.2.1  Certain Agreements on Receivables .  During the occurrence and continuation of an Event of Default, the Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof.  Prior to the occurrence and continuation of an Event of Default, the Grantor may reduce the amount of Accounts arising from the sale of Inventory or the rendering of services in accordance with its present policies and in the ordinary course of business.

 

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4.2.2  Collection of Receivables .  Except as otherwise provided in this Security Agreement, the Grantor will collect and enforce, at the Grantor’s sole expense, all amounts due or hereafter due to the Grantor under the Receivables owned by the Grantor.

 

4.2.3  Delivery of Invoices .  The Grantor will deliver to the Secured Party immediately upon its request after the occurrence and during the continuance of an Event of Default duplicate invoices with respect to each Account owned by the Grantor bearing such language of assignment as the Secured Party shall specify.

 

4.2.4  Disclosure of Counterclaims on Receivables .  If (i) any discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on a Receivable owned by the Grantor exists or (ii) if, to the knowledge of the Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been asserted or threatened in writing with respect to a Receivable, in either case, in excess of $25,000, the Grantor will disclose such fact to the Secured Party in writing in connection with the inspection by the Secured Party of any record of the Grantor relating to such Receivable and in connection with any invoice or report furnished by the Grantor to the Secured Party relating to such Receivable.

 

4.3.                               Maintenance of Goods .  The Grantor will do all things necessary to maintain, preserve, protect and keep the Inventory and the Equipment owned by the Grantor in good repair, working order and saleable condition (ordinary wear and tear excepted) and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

4.4.                               Instruments, Securities, Chattel Paper, Documents and Pledged Deposits .  The Grantor will (i) deliver to the Secured Party immediately upon execution of this Security Agreement the originals of all Chattel Paper, Securities (to the extent certificated) and Instruments constituting Collateral (if any then exist), (ii) hold in trust for the Secured Party upon receipt and immediately thereafter deliver to the Secured Party any Chattel Paper, Securities and Instruments constituting Collateral, (iii) upon the designation of any Pledged Deposits (as set forth in the definition thereof), deliver to the Secured Party such Pledged Deposits which are evidenced by certificates included in the Collateral endorsed in blank, marked with such legends and assigned as the Secured Party shall specify, and (iv) upon the Secured Party’s request, after the occurrence and during the continuance of an Event of Default, deliver to the Secured Party (and thereafter hold in trust for the Secured Party upon receipt and immediately deliver to the Secured Party) any Document evidencing or constituting Collateral.

 

4.5.                               Uncertificated Securities and Certain Other Investment Property .  The Grantor will permit the Secured Party from time to time to use commercially reasonable efforts to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Investment Property not represented by certificates which are Collateral owned by the Grantor to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Investment Property not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the

 

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Secured Party granted pursuant to this Security Agreement.  The Grantor will use all commercially reasonable efforts, with respect to Investment Property constituting Collateral owned by the Grantor and held with a financial intermediary, to cause such financial intermediary to enter into a control agreement with the Secured Party in form and substance reasonably satisfactory to the Secured Party, not later than sixty days after the Issuance Date with respect to any financial intermediary in possession of such Collateral on the Issuance Date and promptly after the deposit of any such Collateral with a new financial intermediary after the Issuance Date.

 

4.6.                               Stock and Other Ownership Interests .

 

4.6.1  Changes in Capital Structure of Issuers .  The Grantor will neither (i) permit or suffer any issuers of privately held corporate securities or other ownership interests in a corporation, partnership, joint venture or limited liability company constituting Collateral owned by the Grantor, which such issuers are wholly-owned “Subsidiaries” (as defined in the Note Purchase Agreement) of the Grantor, to dissolve, liquidate, retire any of its capital stock or other Instruments or Securities evidencing ownership, reduce its capital or merge or consolidate with any other entity other than the Grantor, nor (ii) vote any of the Instruments, Securities or other Investment Property in favor of any of the foregoing.

 

4.6.2  Issuance of Additional Securities . The Grantor will not permit or suffer any issuers of privately held corporate securities or other ownership interests in a corporation, partnership, joint venture or limited liability company constituting Collateral, which such issuers are wholly-owned Subsidiaries of the Grantor, to issue any such securities or other ownership interests, any right to receive the same or any right to receive earnings, except to the Grantor.

 

4.6.3  Registration of Pledged Securities and other Investment Property .  The Grantor will permit any registrable Investment Property Collateral owned by the Grantor to be registered in the name of the Secured Party or its nominee at any time at the op