EXHIBIT 10.41
SECURITY AGREEMENT
This
SECURITY AGREEMENT, dated as of May __, 2008 (this
“
Agreement ”),
is among QPC
Lasers, Inc., a Nevada corporation (the
“
Debtor ”)
and the holders of the Debtor’s 10% Original Issue Discount
Secured Convertible Debentures due three years following their
issuance (collectively, the “
Debentures ”)
signatory hereto, their endorsees, transferees and assigns
(collectively, the “
Secured Parties ”).
WITNESSETH:
WHEREAS,
pursuant to the Purchase Agreement (as defined in the
Debentures), the Secured Parties have severally agreed to
extend the loans to the Debtor evidenced by the
Debentures;
WHEREAS,
in order to induce the Secured Parties to extend the loans
evidenced by the Debentures, the Debtor has agreed to execute
and deliver to the Secured Parties this Agreement and to grant
the Secured Parties,
pari
passu with
each other Secured Party and through the Agent (as defined in
Section 18 hereof), a security interest in certain property of
Debtor to secure the prompt payment, performance and discharge in
full of all of its obligations under the Debentures.
NOW,
THEREFORE, in consideration of the agreements herein contained
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1.
Certain Definitions .
As used in this Agreement, the following terms shall have the
meanings set forth in this Section 1. Terms used but not otherwise
defined in this Agreement that are defined in Article 9 of the UCC
(such as “account”, “chattel paper”,
“commercial tort claim”, “deposit account”,
“document”, “equipment”,
“fixtures”, “general intangibles”,
“goods”, “instruments”,
“inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and
“supporting obligations”) shall have the respective
meanings given such terms in Article 9 of the UCC.
(a)
“
Collateral ”
means the collateral in which the Secured Parties are granted a
security interest by this Agreement and which shall include the
following personal property of the Debtor, whether presently owned
or existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and all
substitutions and replacements thereof, and all proceeds, products
and accounts thereof, including, without limitation, all proceeds
from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection
therewith ,
and all dividends, interest, cash, notes, securities, equity
interest or other property at any time and from time to time
acquired, receivable or otherwise distributed in respect of, or in
exchange for, any or all of the Pledged Securities (as defined
below) :
(i)
All goods, including, without limitation, (A) all machinery,
equipment, computers, motor vehicles, trucks, tanks, boats,
ships, appliances, furniture, special and general tools,
fixtures, test and quality control devices and other equipment
of every kind and nature and wherever situated, together with
all documents of title and documents representing the same,
all additions and accessions thereto, replacements therefor,
all parts therefor, and all substitutes for any of the
foregoing and all other items used and useful in connection
with the Debtor’s business and all improvements thereto;
and (B) all inventory;
(ii)
All
contract rights and other general intangibles, including,
without limitation, all partnership interests, membership
interests, stock or other securities, rights
under any of the Organizational Documents, agreements related
to the Pledged Securities, licenses,
distribution and other agreements, computer software (whether
“off-the-shelf”, licensed from any third party or
developed by the Debtor), computer software development
rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, trademarks, service
marks, trade styles, trade names, patents, patent
applications, copyrights, and income tax refunds;
(iii)
All
accounts, together with all instruments, all documents of
title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks
which any of the same may represent, and all right, title,
security and guaranties with respect to each account,
including any right of stoppage in transit;
(iv)
All
documents, letter-of-credit rights, instruments and chattel
paper;
(v)
All
commercial tort claims;
(vi)
All
deposit accounts and all cash (whether or not deposited in
such deposit accounts);
(vii)
All
investment property;
(viii)
All
supporting obligations; and
(ix)
All
files, records, books of account, business papers, and
computer programs; and
(x)
the
products and proceeds of all of the foregoing Collateral set
forth in clauses (i)-(ix) above.
Without
limiting the generality of the foregoing, the “
Collateral ”
shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each
subsidiary of Debtor, including, without limitation, the
Debtor’s equity interest in QPC, the shares of capital stock
and the other equity interests listed on
Schedule H hereto
(as the same may be modified from time to time pursuant to the
terms hereof) and any other shares of capital stock and/or other
equity interests of any other direct or indirect subsidiary of the
Debtor obtained in the future, and, in each case, all certificates
representing such shares and/or equity interests and, in each case,
all rights, options, warrants, stock, other securities and/or
equity interests that may hereafter be received, receivable or
distributed in respect of, or exchanged for, any of the foregoing
and all rights arising under or in connection with the Pledged
Securities, including, but not limited to, all dividends, interest
and cash.
Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an
assignment of any asset which, in the event of an assignment,
becomes void by operation of applicable law or the assignment
of which is otherwise prohibited by applicable law (in each
case to the extent that such applicable law is not overridden
by Sections 9-406, 9-407 and/or 9-408 of the UCC or other
similar applicable law);
provided ,
however ,
that to the extent permitted by applicable law, this Agreement
shall create a valid security interest in such asset and, to the
extent permitted by applicable law, this Agreement shall create a
valid security interest in the proceeds of such asset.
(b)
“
Intellectual Property ”
means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under
United States, multinational or foreign laws or otherwise,
including, without limitation, (i) all copyrights arising under the
laws of the United States, any other country or any political
subdivision thereof, whether registered or unregistered and whether
published or unpublished, all registrations and recordings thereof,
and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the
United States Copyright Office, (ii) all letters patent of the
United States, any other country or any political subdivision
thereof, all reissues and extensions thereof, and all applications
for letters patent of the United States or any other country and
all divisions, continuations and continuations-in-part thereof,
(iii) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress, service
marks, logos, domain names and other source or business
identifiers, and all goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or otherwise,
and all common law rights related thereto, (iv) all trade secrets
arising under the laws of the United States, any other country or
any political subdivision thereof, (v) all rights to obtain any
reissues, renewals or extensions of the foregoing, (vi) all
licenses for any of the foregoing, and (vii) all causes of action
for infringement of the foregoing.
(c)
“
Majority in Interest ”
means, at any time of determination, the majority in interest
(based on then-outstanding principal amounts of Debentures at the
time of such determination) of the Secured Parties.
(d)
“
Necessary Endorsement ”
means undated stock powers endorsed in blank or other proper
instruments of assignment duly executed and such other instruments
or documents as the Agent (as that term is defined below) may
reasonably request.
(
e
)
“
Obligations ”
means all of the liabilities
and obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due, or that are now or may be
hereafter contracted or acquired, or owing to, of the Debtor to the
Secured Parties, including, without limitation, all
obligations
under this Agreement, the Debentures, and any other instruments,
agreements or other documents executed and/or delivered in
connection herewith or therewith, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from any of the Secured Parties as
a preference, fraudulent transfer or otherwise as such obligations
may be amended, supplemented, converted, extended or modified from
time to time. Without limiting the generality of the foregoing, the
term “Obligations” shall include, without limitation:
(i) principal of, and interest on the Debentures and the loans
extended pursuant thereto; (ii) any and all other fees,
indemnities, costs, obligations and liabilities of the Debtor from
time to time under or in connection with this Agreement, the
Debentures, and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to
post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts
are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Debtor.
(
f
)
“
Organizational Documents ”
means with respect to the Debtor or QPC, the documents by which the
Debtor or QPC was organized (such as a certificate of
incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates
of designation for preferred stock or other forms of preferred
equity) and which relate to the internal governance of the Debtor
or QPC (such as bylaws, a partnership agreement or an operating,
limited liability or members agreement).
(
g
)
“
Pledged Interests ”
shall have the meaning ascribed to such term in Section
4(j).
(
h
)
“
Pledged Securities ”
shall have the meaning ascribed to such term in Section
4(i).
(i)
“
QPC ”
means Quintessence Photonics Corporation, a Delaware
corporation.
(j)
“
UCC ”
means the Uniform Commercial Code of the State of New York and or
any other applicable law of any state or states which has
jurisdiction with respect to all, or any portion of, the Collateral
or this Agreement, from time to time. It is the intent of the
parties that defined terms in the UCC should be construed in their
broadest sense so that the term “Collateral” will be
construed in its broadest sense. Accordingly if there are, from
time to time, changes to defined terms in the UCC that broaden the
definitions, they are incorporated herein and if existing
definitions in the UCC are broader than the amended definitions,
the existing ones shall be controlling.
2.
Grant of Security Interest in Collateral
.
As an inducement for the Secured Parties to extend the loans as
evidenced by the Debentures and to secure the complete and timely
payment, performance and discharge in full, as the case may be, of
all of the Obligations, the Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Secured Parties
a security interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of
whatsoever kind and nature in and to, the Collateral (a
“
Security Interest ”
and, collectively, the “
Security Interests ”).
The
Security Interests granted hereby shall be subordinated and subject
to all Existing Liens. For purposes of this Agreement,
“
Existing Liens ”
means all Liens granted in favor of (a) the holders of the
Debtor’s 10% Secured Convertible Debentures due May 22, 2009
and (b) the holders of the Debtor’s 10% Secured Convertible
Debentures due April 16, 2009.
3.
Delivery of Certain Collateral .
Contemporaneously or prior to the execution of this Agreement, the
Debtor shall deliver or cause to be delivered to the Agent (a) any
and all certificates and other instruments representing or
evidencing the Pledged Securities, and (b) any and all certificates
and other instruments or documents representing any of the other
Collateral, in each case, together with all Necessary Endorsements.
The Debtor is, contemporaneously with the execution hereof,
delivering to Agent, or has previously delivered to Agent, a true
and correct copy of each Organizational Document governing any of
the Pledged Securities.
4.
Representations, Warranties, Covenants and Agreements of the
Debtor .
Except as set forth under the corresponding section of the
disclosure schedules delivered to the Secured Parties concurrently
herewith (the “
Disclosure Schedules ”),
which Disclosure Schedules shall be deemed a part hereof, the
Debtor represents and warrants to, and covenants and agrees with,
the Secured Parties as follows:
(a)
The Debtor has the requisite corporate, partnership, limited
liability company or other power and authority to enter into
this Agreement and otherwise to carry out its obligations
hereunder. The execution, delivery and performance by the
Debtor of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part
of Debtor and no further action is required by Debtor. This
Agreement has been duly executed by the Debtor. This Agreement
constitutes the legal, valid and binding obligation of the
Debtor, enforceable against the Debtor in accordance with its
terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and similar
laws of general application relating to or affecting the
rights and remedies of creditors and by general principles of
equity.
(b)
The
Debtor has no place of business or offices where its books of
account and records are kept (other than temporarily at the
offices of its attorneys or accountants) or places where
Collateral is stored or located, except as set forth on
Schedule A attached
hereto. Except as specifically set forth on
Schedule A ,
the Debtor is the record owner of the real property where such
Collateral is located, and there exist no mortgages or other liens
on any such real property except for Permitted Liens. Except as
disclosed on
Schedule A ,
none of such Collateral is in the possession of any consignee,
bailee, warehouseman, agent or processor.
(c)
Except
for Permitted Liens and except as set forth on
Schedule B attached
hereto, the Debtor is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Debtor in the ordinary course
of business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to grant
the Security Interests. Except as set forth on
Schedule C attached
hereto or in connection with a Permitted Lien, there is not on file
in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other
than those that will be filed in favor of the Secured Parties
pursuant to this Agreement) covering or affecting any of the
Collateral. Except as set forth on
Schedule C attached
hereto or in connection with a Permitted Lien and except pursuant
to this Agreement, without the written consent of the Secured
Parties holding at least 67% of the principal amount of the
Debentures then outstanding, as long as this Agreement shall be in
effect, the Debtor shall not execute and shall not knowingly permit
to be on file in any such office or agency any other financing
statement or other document or instrument (except to the extent
filed or recorded in favor of the Secured Parties pursuant to the
terms of this Agreement).
(d)
No
written claim has been received that any Collateral or the
Debtor's use of any Collateral violates the rights of any
third party. There has been no adverse decision to the
Debtor's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Debtor's
right to keep and maintain such Collateral in full force and
effect, and there is no proceeding involving said rights
pending or, to the best knowledge of the Debtor, threatened
before any court, judicial body, administrative or regulatory
agency, arbitrator or other governmental
authority.
(e)
Debtor
shall at all times maintain its books of account and records
relating to the Collateral at its principal place of business
and its Collateral at the locations set forth on
Schedule A attached
hereto and may not relocate such books of account and records or
tangible Collateral unless it delivers to the Secured Parties at
least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the
United States) and (ii) evidence that appropriate financing
statements under the UCC and other necessary documents have been
filed and recorded and other steps have been taken to perfect the
Security Interests to create in favor of the Secured Parties a
valid, perfected and continuing perfected first priority lien in
the Collateral (subject only to Permitted Liens).
(f)
This
Agreement creates in favor of the Secured Parties a valid
security interest in the Collateral, subject only to Permitted
Liens securing the payment and performance of the Obligations.
Upon making the filings described in the immediately following
paragraph, all security interests created hereunder in any
Collateral which may be perfected by filing Uniform Commercial
Code financing statements shall have been duly perfected.
Except for the filing of the Uniform Commercial Code financing
statements referred to in the immediately following paragraph,
the recordation of the Intellectual Property Security
Agreement (as defined in Section 4(p) hereof) with respect to
copyrights and copyright applications in the United States
Copyright Office referred to in paragraph (m),
the
execution and delivery of deposit account control agreements
satisfying the requirements of Section 9-104(a)(2) of the UCC
with respect to each deposit account of the Debtor,
and
the delivery of the certificates and other instruments
provided in Section 3, no
action is necessary to create, perfect or protect the security
interests created hereunder. Without limiting the generality
of the foregoing, except for the filing of said financing
statements, the recordation of said Intellectual Property
Security Agreement, and the execution and delivery of said
deposit account control agreements, no consent of any third
parties and no authorization, approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body is required for (i) the execution, delivery
and performance of this Agreement, (ii) the creation or
perfection of the Security Interests created hereunder in the
Collateral or (iii) the enforcement of the rights of the Agent
and the Secured Parties hereunder.
(g)
Debtor
hereby authorizes the Agent to file one or more financing
statements under the UCC, with respect to the Security
Interests, with the proper filing and recording agencies in
any jurisdiction deemed proper by it.
(h)
The
execution, delivery and performance of this Agreement by the
Debtor does not (i) violate any of the provisions of any
Organizational Documents of the Debtor or any judgment,
decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation
applicable to the Debtor or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument
(evidencing the Debtor's debt or otherwise) or other
understanding to which the Debtor is a party or by which any
property or asset of the Debtor is bound or affected. If any,
all required consents (including, without limitation, from
stockholders or creditors of the Debtor) necessary for the
Debtor to enter into and perform its obligations hereunder
have been obtained.
(i)
The
capital stock and other equity interests listed on
Schedule H hereto
(the “
Pledged Securities ”)
represent all of the capital stock and other equity interests of
the QPC, and represent all capital stock and other equity interests
owned, directly or indirectly, by the Debtor. All of the Pledged
Securities are validly issued, fully paid and nonassessable, and
the Debtor is the legal and beneficial owner of the Pledged
Securities, free and clear of any lien, security interest or other
encumbrance except for the security interests created by this
Agreement and other Permitted Liens .
(j)
The
ownership and other equity interests in partnerships and
limited liability companies (if any) included
in the Collateral (the
“
Pledged Interests ”)
by their express terms do not provide that they are securities
governed by Article 8 of the UCC and are not held in a securities
account or by any financial intermediary.
(k)
Except
for Permitted Liens, the Debtor shall at all times maintain
the liens and Security Interests provided for hereunder as
valid and perfected first priority liens (to the extent such
perfection and priority can be achieved with the filing of
financing statements under the UCC or the delivery of the
certificates representing the Pledged Interests) and security
interests in the Collateral in favor of the Secured Parties
until this Agreement and the Security Interest hereunder shall
be terminated pursuant to Section 14 hereof. Debtor hereby
agrees to defend the same against the claims of any and all
persons and entities. Debtor shall safeguard and protect all
Collateral for the account of the Secured Parties. At the
request of the Agent, the Debtor will sign and deliver to the
Agent on behalf of the Secured Parties at any time or from
time to time one or more financing statements pursuant to the
UCC in form reasonably satisfactory to the Agent and will pay
the cost of filing the same in all public offices wherever
filing is, or is deemed by the Agent to be, necessary or
desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, the
Debtor shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interests
hereunder, and the Debtor shall obtain and furnish to the
Agent from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to
maintain the priority of the Security Interests
hereunder.
(
l
)
The
Debtor will not transfer, pledge, hypothecate, encumber,
license, sell or otherwise dispose of any of the Collateral
(except for non-exclusive licenses granted by a Debtor in its
ordinary course of business and sales of inventory by a Debtor
in its ordinary course of business) without the prior written
consent of a Majority
in Interest .
(
m
)
Debtor
shall keep and preserve its equipment, inventory and other
tangible Collateral in good condition, repair and order and
shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance
coverage.
(
n)
INTENTIONALLY
OMITTED.
(o)
Debtor
shall, within ten (10) days of obtaining knowledge thereof,
advise the Secured Parties promptly, in sufficient detail, of
any material adverse change in the Collateral, and of the
occurrence of any event which would have a material adverse
effect on the value of the Collateral or on the Secured
Parties’ security interest, through the Agent,
therein.
(
p
)
Debtor
shall promptly execute and deliver to the Agent such further
deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and
assurances and take such further action as the Agent may from
time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce the Secured
Parties’ security interest in the Collateral including,
without limitation, if applicable, the execution and delivery
of a separate security agreement with respect to the
Debtor’s Intellectual Property (“
Intellectual Property Security Agreement ”)
in which the Secured Parties have been granted a security interest
hereunder, substantially in a form reasonably acceptable to the
Agent, which Intellectual Property Security Agreement, other than
as stated therein, shall be subject to all of the terms and
conditions hereof.
(
q
)
Debtor
shall permit the Agent and its representatives and agents to
inspect the Collateral during normal business hours and upon
reasonable prior notice, and to make copies of records
pertaining to the Collateral as may be reasonably requested by
the Agent from time to time.
(
r
)
Debtor
shall take all steps reasonably necessary to diligently pursue
and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the
Collateral.
(
s
)
Debtor
shall promptly notify the Secured Parties in sufficient detail
upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of
any other information received by Debtor that may materially
affect the value of the Collateral, the Security Interest or
the rights and remedies of the Secured Parties
hereunder.
(
t
)
All
information heretofore, herein or hereafter supplied to the
Secured Parties by or on behalf of the Debtor with respect to
the Collateral is accurate and complete in all material
respects as of the date furnished.
(
u
)
The
Debtor shall at all times preserve and keep in full force and
effect its valid existence and good standing and any rights
and franchises material to its business.
(
v
)
The
Debtor will not change its name, type of organization,
jurisdiction of organization, organizational identification
number (if it has one), legal or corporate structure, or
identity, or add any new fictitious name unless it provides at
least 30 days prior written notice to the Secured Parties of
such change and, at the time of such written notification,
Debtor provides any financing statements or fixture filings
necessary to perfect and continue the perfection of the
Security Interests granted and evidenced by this
Agreement.
(
w
)
Except
in the ordinary course of business, the Debtor may not consign
any of its inventory or sell any of its inventory on bill and
hold, sale or return, sale on approval, or other conditional
terms of sale without the consent of the
Agent which shall not be unreasonably withheld.
(
x
)
The
Debtor may not relocate its chief executive office to a new
location without providing 30 days prior written notification
thereof to the Secured Parties and so long as, at the time of
such written notification, Debtor provides any financing
statements or fixture filings necessary to perfect and
continue the perfection of the Security Interests granted and
evidenced by this Agreement.
(
y
)
Debtor
was organized and remains organized solely under the laws of
the state set forth next to Debtor’s name in
Schedule D attached
hereto, which
Schedule D sets
forth the Debtor’s organizational identification number or,
if the Debtor does not have one, states that one does not
exist.
(
z
)
(i)
The actual name of the Debtor is the name set forth in
Schedule D attached
hereto; (ii) the Debtor does not have any trade names except as set
forth on
Schedule E attached
hereto; (iii) the Debtor has not used any name other than that
stated in the preamble hereto or as set forth on
Schedule E for
the preceding five years; and (iv) no entity has merged into the
Debtor or been acquired by the Debtor within the past five years
except as set forth on
Schedule E .
(
aa
)
At
any time and from time to time that any Collateral consists of
instruments, certificated securities or other items that
require or permit possession by the secured party to perfect
the security interest created hereby, the Debtor shall deliver
such Collateral to the Agent upon the Agent’s reasonable
request.
(bb)
Debtor,
in its capacity as issuer, hereby agrees to comply with any
and all orders and instructions of Agent regarding the Pledged
Interests consistent with the terms of this Agreement without
the further consent of the Debtor as contemplated by Section
8-106 (or any successor section) of the UCC. Further, the
Debtor agrees that it shall not enter into a similar agreement
(or one that would confer “control” within the
meaning of Article 8 of the UCC) with any other person or
entity.
(
cc
)
Upon
the Agent’s reasonable request, the Debtor shall cause
all tangible chattel paper constituting Collateral to be
delivered to the Agent, or, if such delivery is not possible,
then to cause such tangible chattel paper to contain a legend
noting that it is subject to the security interest created by
this Agreement. To the extent that any Collateral consists of
electronic chattel paper, upon the Agent’s written
request, the Debtor shall cause the underlying chattel paper
to be “marked” within the meaning of Section 9-105
of the UCC (or successor section thereto).
(
dd
)
If
there is any investment property or deposit account included
as Collateral that can be perfected by “control”
through an account control agreement, upon the Agent’s
reasonable request, the Debtor shall cause such an account
control agreement, in form and substance in each case
satisfactory to the Agent, to be entered into and delivered to
the Agent for the benefit of the Secured Parties; provided
that the parties agree that the Debtor shall not be required
to deliver an account control agreement with respect to any
deposit account with an average daily closing balance of less
than $10,000.
(
ee
)
To
the extent that any Collateral consists of letter-of-credit
rights, the Debtor shall cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds
thereof to the Secured Parties.
(
ff
)
To
the extent that any Collateral is in the possession of any
third party, the Debtor shall join with the Agent in notifying
such third party of the Secured Parties’ security
interest in such Collateral and shall use its best efforts to
obtain an acknowledgement and agreement from such third party
with respect to the Collateral, in form and substance
reasonably satisfactory to the Agent.
(
gg
)
If
the Debtor shall at any time hold or acquire a commercial tort
claim, Debtor shall promptly notify the Secured Parties in a
writing signed by Debtor of the particulars thereof and grant
to the Secured Parties in such writing a security interest
therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance
satisfactory to the Agent.
(
hh
)
The
Debtor shall immediately provide written notice to the Secured
Parties of any and all accounts which arise out of contracts
with any governmental authority and, to the extent necessary
to perfect or continue the perfected status of the Security
Interests in such accounts and proceeds thereof, shall execute
and deliver to the Agent an assignment of claims for such
accounts and cooperate with the Agent in taking any other
steps required, in its judgment, under the Federal Assignment
of Claims Act or any similar federal, state or local statute
or rule to perfect or continue the perfected status of the
Security Interests in such accounts and proceeds
thereof.
(
ii
)
The
Debtor shall cause each subsidiary
of
Debtor to immediately become a party hereto (an “
Additional Debtor ”),
by executing and delivering an Additional Debtor Joinder in
substantially the form of
Annex A attached
hereto and comply with the provisions hereof applicable to the
Debtor;
provided ,
however ,
this Section 4(ii) shall not apply to QPC and any subsidiary that
is created solely through a contribution of assets by QPC,
including, but not limited to, QPC Medical Lasers, Inc. Concurrent
therewith, the Additional Debtor shall deliver replacement
schedules for, or supplements to all other Schedules to (or
referred to in) this Agreement, as applicable, which replacement
schedules shall supersede, or supplements shall modify, the
Schedules then in effect. The Additional Debtor shall also deliver
such opinions of counsel, authorizing resolutions, good standing
certificates, incumbency certificates, organizational documents,
financing statements and other information and documentation as the
Agent may reasonably request. Upon delivery of the foregoing to the
Agent, the Additional Debtor shall be and become a party to this
Agreement with the same rights and obligations as the Debtor, for
all purposes hereof as fully and to the same extent as if it were
an original signatory hereto and shall be deemed to have made the
representations, warranties and covenants set forth herein as of
the date of execution and delivery of such Additional Debtor
Joinder, and all references herein to the “Debtor”
shall be deemed to include each Additional Debtor.
(
jj)
Debtor
shall vote the Pledged Securities to comply with the covenants
and agreements set forth he
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