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Exhibit 10.2
SECURITY AGREEMENT
This
SECURITY AGREEMENT, dated as of June 12, 2008 (this “
Agreement ”), is among Blink Logic Inc., a Nevada
corporation (the “ Company ”), all of the
Subsidiaries of the Company (such
subsidiaries , the “ Guarantors ” and together with the Company , the “
Debtors ”) and the holders of the Company’s
Original Issue Discount Senior Secured Convertible Debentures due
June 12, 2010 and issued on June 12, 2008 in the original aggregate
Principal Amount of $444,400 (collectively, the “
Debentures ”) signatory hereto, their endorsees,
transferees and assigns (collectively, the “ Secured
Parties ”).
W I T N E S S E T H:
WHEREAS,
pursuant to the Purchase Agreement (as defined in the Debentures),
the Secured Parties have severally agreed to extend the loans to
the Company evidenced by the Debentures;
WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date
hereof (the “ Guarantee ”), th e Guarantors have jointly and severally agreed to guarantee and
act as surety for payment of such Debentures; and
WHEREAS,
in order to induce the Secured Parties to extend the loans
evidenced by the Debentures, each Debtor has agreed to execute and
deliver to the Secured Parties this Agreement and to grant the
Secured Parties, pari passu with each other Secured
Party and through the Agent (as defined in Section 18 hereof) a
security interest in certain property of such Debtor to secure the
prompt payment, performance and discharge in full of all of the
Company’s obligations under the Debentures and the
Guarantors’ obligations under the Guarantee.
NOW,
THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1.
Certain Definitions . As used in this
Agreement, the following terms shall have the meanings set forth in
this Section 1. Terms used but not otherwise defined in this
Agreement that are defined in Article 9 of the UCC (such as
“account”, “chattel paper”,
“commercial tort claim”, “deposit account”,
“document”, “equipment”,
“fixtures”, “general intangibles”,
“goods”, “instruments”,
“inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and
“supporting obligations”) shall have the respective
meanings given such terms in Article 9 of the UCC.
(a)
“ Collateral ” means the
collateral in which the Secured Parties are granted a security
interest by this Agreement and which shall include the following
personal property of the Debtors, whether presently owned or
existing or hereafter acquired or coming into existence,
wherever situated, and all additions and accessions thereto and
all substitutions and replacements thereof, and all proceeds,
products and accounts thereof, including, without limitation,
all proceeds from the sale or transfer of the Collateral and of
insurance covering the same and of any tort claims in connection
therewith , and all dividends, interest,
cash, notes, securities, equity interest or other property at
any time and from time to time acquired, receivable or otherwise
distributed in respect of, or in exchange for, any or all of the
Pledged Securities (as defined below)
:
(i) All goods, including, without
limitation, (A) all machinery, equipment, computers, motor
vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and
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general tools, fixtures, test and quality
control devices and other equipment of every kind and nature and
wherever situated, together with all documents of title and
documents representing the same, all additions and accessions
thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used
and useful in connection with any Debtor’s businesses and
all improvements thereto; and (B) all inventory;
(ii)
All contract rights and other general
intangibles, including, without limitation, all partnership
interests, membership interests, stock or other securities,
rights under any of the Organizational
Documents, agreements related to the Pledged Securities, licenses, distribution and other agreements,
computer software (whether “off-the-shelf”, licensed
from any third party or developed by any Debtor), computer
software development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill,
trademarks, service marks, trade styles, trade names, patents,
patent applications, copyrights, and income tax refunds;
(iii)
All accounts, together with all instruments, all
documents of title representing any of the foregoing, all rights
in any merchandising, goods, equipment, motor vehicles and
trucks which any of the same may represent, and all right,
title, security and guaranties with respect to each account,
including any right of stoppage in transit;
(iv)
All documents, letter-of-credit rights,
instruments and chattel paper;
(v)
All commercial tort claims;
(vi)
All deposit accounts and all cash (whether or
not deposited in such deposit accounts);
(vii)
All investment property;
(viii)
All supporting obligations; and
(ix)
All files, records, books of account, business
papers, and computer programs; and
(x)
the products and proceeds of all of the
foregoing Collateral set forth in clauses (i)-(ix) above.
Without limiting the generality of the
foregoing, the “ Collateral ” shall include
all investment property and general intangibles respecting
ownership and/or other equity interests in each Guarantor,
including, without limitation, the shares of capital stock and
the other equity interests listed on Schedule H hereto
(as the same may be modified from time to time pursuant to the
terms hereof), and any other shares of capital stock and/or
other equity interests of any other direct or indirect
subsidiary of any Debtor obtained in the future, and, in each
case, all certificates representing such shares and/or equity
interests and, in each case, all rights, options, warrants,
stock, other securities and/or equity interests that may
hereafter be received, receivable or distributed in respect of,
or exchanged for, any of the foregoing and all rights arising
under or in connection with the Pledged Securities, including,
but not limited to, all dividends, interest and cash.
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Notwithstanding the foregoing, nothing herein
shall be deemed to constitute an assignment of any asset which,
in the event of an assignment, becomes void by operation of
applicable law or the assignment of which is otherwise
prohibited by applicable law (in each case to the extent that
such applicable law is not overridden by Sections 9-406, 9-407
and/or 9-408 of the UCC or other similar applicable law);
provided , however , that to the extent permitted
by applicable law, this Agreement shall create a valid security
interest in such asset and, to the extent permitted by
applicable law, this Agreement shall create a valid security
interest in the proceeds of such asset.
(b)
“ Intellectual Property ”
means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise,
including, without limitation, (i) all copyrights arising under
the laws of the United States, any other country or any
political subdivision thereof, whether registered or
unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all
registrations, recordings and applications in the United States
Copyright Office, (ii) all letters patent of the United States,
any other country or any political subdivision thereof, all
reissues and extensions thereof, and all applications for
letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof,
(iii) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade dress,
service marks, logos, domain names and other source or business
identifiers, and all goodwill associated therewith, now existing
or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States,
any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common law rights
related thereto, (iv) all trade secrets arising under the laws
of the United States, any other country or any political
subdivision thereof, (v) all rights to obtain any reissues,
renewals or extensions of the foregoing, (vi) all licenses for
any of the foregoing, and (vii) all causes of action for
infringement of the foregoing.
(c)
“ Majority in Interest ”
means, at any time of determination, the majority in interest
(based on then-outstanding Principal Amounts of Debentures at
the time of such determination) of the Secured Parties.
(d)
“ Necessary Endorsement ”
means undated stock powers endorsed in blank or other proper
instruments of assignment duly executed and such other
instruments or documents as the Agent (as that term is defined
below) may reasonably request.
( e )
“ Obligations ” means all of
the liabilities and obligations (primary, secondary, direct,
contingent, sole, joint or several) due or to become due, or
that are now or may be hereafter contracted or acquired, or
owing to, of any Debtor to the Secured Parties, including,
without limitation, all obligations under this Agreement, the
Debentures, the Guarantee and any other instruments, agreements
or other documents executed and/or delivered in connection
herewith or therewith, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute
or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such
payment is avoided or recovered directly or indirectly from any
of the Secured Parties as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time. Without
limiting the generality of the foregoing, the term
“Obligations” shall include, without limitation:
(i)
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principal of, and interest on the Debentures and
the loans extended pursuant thereto; (ii) any and all other
fees, indemnities, costs, obligations and liabilities of the
Debtors from time to time under or in connection with this
Agreement, the Debentures, the Guarantee and any other
instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith; and (iii) all
amounts (including but not limited to post-petition interest) in
respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or
not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Debtor.
( f )
“ Organizational Documents ”
means with respect to any Debtor, the documents by which such
Debtor was organized (such as a certificate of incorporation,
certificate of limited partnership or articles of organization,
and including, without limitation, any certificates of
designation for preferred stock or other forms of preferred
equity) and which relate to the internal governance of such
Debtor (such as bylaws, a partnership agreement or an operating,
limited liability or members agreement).
( g )
“ Pledged 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)
“ September Purchasers ”
means the purchasers of the debentures and warrants pursuant to
the Securities Purchase Agreement by and among the Company and
those purchasers signatory thereto, dated September 28,
2007.
(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, each Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Secured Parties
a security interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of
whatsoever kind and nature in and to, the Collateral (a “
Security Interest ” and, collectively, the “
Security Interests ”).
3.
Delivery of Certain Collateral .
Contemporaneously or prior to the execution of this
Agreement, each Debtor shall deliver or cause to be delivered to
the Agent (a) any and all certificates and other instruments
representing or evidencing the Pledged Securities, and (b) any and
all certificates and other instruments or documents representing
any of the other Collateral, in each case, together with all
Necessary Endorsements. The Debtors are, contemporaneously
with the execution hereof, delivering to Agent, or have previously
delivered to Agent, a true and correct copy of each Organizational
Document governing any of the Pledged Securities. Throughout the
term of this Agreement, so long as no Event of Default is incurred
and continuing, the Debtors shall have the right to vote the
Pledged Securities in all matters presented to the stockholders of
the Pledge Securities for vote thereon, except in a
manner
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inconsistent with the terms of this Agreement or
detrimental to the interests of the Secured Parties. The
Secured Parties shall hold the Pledged Securities in the
form in which the same are delivered herewith, unless there
shall occur an Event of Default. To the extent that the Secured
Party shall not previously have taken, acquired, sold,
transferred, disposed of or otherwise realized value on the
Pledged Securities in accordance with this Agreement, on
the date on which the Obligations have been indefeasibly
discharged or satisfied in full, any remaining security interest
in the Pledged Securities shall automatically terminate, cease
to exist and be released, and the Secured Parties shall
forthwith return any remaining Pledged Securities to the Company
and irrevocably release such Pledge Securities.
4.
Representations, Warranties, Covenants and
Agreements of the Debtors . Except as set forth under the
corresponding section of the disclosure schedules delivered to the
Secured Parties concurrently herewith (the “ Disclosure
Schedules ”), which Disclosure Schedules shall be deemed
a part hereof, each Debtor represents and warrants to, and
covenants and agrees with, the Secured Parties as follows:
(a) Each Debtor has the requisite
corporate, partnership, limited liability company or other power
and authority to enter into this Agreement and otherwise to
carry out its obligations hereunder. The execution, delivery and
performance by each Debtor of this Agreement and the filings
contemplated therein have been duly authorized by all necessary
action on the part of such Debtor and no further action is
required by such Debtor. This Agreement has been duly
executed by each Debtor. This Agreement constitutes the
legal, valid and binding obligation of each Debtor, enforceable
against each Debtor in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general
application relating to or affecting the rights and remedies of
creditors and by general principles of equity.
(b)
The Debtors have no place of business or offices
where their respective books of account and records are kept
(other than temporarily at the offices of its attorneys or
accountants) or places where Collateral is stored or located,
except as set forth on Schedule A attached hereto.
Except as specifically set forth on Schedule A ,
each Debtor is the record owner of the real property where such
Collateral is located, and there exist no mortgages or other
liens on any such real property except for Permitted Liens (as
defined in the Debentures). Except as disclosed on
Schedule A , none of such Collateral is in the possession
of any consignee, bailee, warehouseman, agent or processor.
(c)
Except for Permitted Liens (as defined in the
Debentures) and any Liens held by the September Purchasers and
except as set forth on Schedule B attached hereto, the
Debtors are the sole owner of the Collateral (except for
non-exclusive licenses granted by any Debtor in the ordinary
course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and are fully
authorized to grant the Security Interests. Except as set
forth on Schedule C attached hereto, there is not on file
in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other
than those that will be filed in favor of the Secured Parties
pursuant to this Agreement) covering or affecting any of the
Collateral. Except as set forth on Schedule C
attached hereto and except pursuant to this Agreement, as long
as this Agreement shall be in effect, the Debtors shall not
execute and shall not knowingly permit to be on file in any such
office or agency any other financing statement or other document
or instrument (except to the extent filed or recorded in favor
of the Secured Parties pursuant to the terms of this
Agreement).
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(d)
No written claim has been received that any
Collateral or any Debtor's use of any Collateral violates the
rights of any third party. There has been no adverse decision to
any Debtor's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to any Debtor's right
to keep and maintain such Collateral in full force and effect,
and there is no proceeding involving said rights pending or, to
the best knowledge of any Debtor, threatened before any court,
judicial body, administrative or regulatory agency, arbitrator
or other governmental authority.
(e)
Each Debtor shall at all times maintain its
books of account and records relating to the Collateral at its
principal place of business and its Collateral at the locations
set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Parties at least 30
days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within
the United States) and (ii) evidence that appropriate financing
statements under the UCC and other necessary documents have been
filed and recorded and other steps have been taken to perfect
the Security Interests to create in favor of the Secured Parties
a valid, perfected and continuing perfected first priority lien
in the Collateral.
(f)
This Agreement creates in favor of the Secured
Parties a valid security interest in the Collateral, subject
only to Permitted Liens (as defined in the Debentures) securing
the payment and performance of the Obligations. Upon
making the filings described in the immediately following
paragraph, all security interests created hereunder in any
Collateral which may be perfected by filing Uniform Commercial
Code financing statements shall have been duly perfected.
Except for the filing of the Uniform Commercial Code
financing statements referred to in the immediately following
paragraph, the recordation of the Intellectual Property Security
Agreement (as defined 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 Debtors, and the delivery of the
certificates and other instruments provided in Section 3,
no action is necessary to create, perfect
or protect the security interests created hereunder.
Without limiting the generality of the foregoing, except
for the filing of said financing statements, the recordation of
said Intellectual Property Security Agreement, and the execution
and delivery of said deposit account control agreements, no
consent of any third parties and no authorization, approval or
other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for (i)
the execution, delivery and performance of this Agreement, (ii)
the creation or perfection of the Security Interests created
hereunder in the Collateral or (iii) the enforcement of the
rights of the Agent and the Secured Parties hereunder.
(g)
Each Debtor hereby authorizes the Agent to file
one or more financing statements under the UCC, with respect to
the Security Interests, with the proper filing and recording
agencies in any jurisdiction deemed proper by it.
(h)
The execution, delivery and performance of this
Agreement by the Debtors does not (i) violate any of the
provisions of any Organizational Documents of any Debtor or any
judgment, decree, order or award of any court, governmental body
or arbitrator or any applicable law, rule or regulation
applicable to any Debtor or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing any Debtor's debt
or otherwise) or other understanding to which any Debtor is a
party or by which any
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property or asset of any Debtor is bound or
affected. If any, all required consents (including, without
limitation, from stockholders or creditors of any Debtor)
necessary for any Debtor to enter into and perform its
obligations hereunder have been obtained.
(i)
The capital stock and other equity interests
listed on Schedule H hereto (the “ Pledged
Securities ”) represent all of the capital stock and
other equity interests of the Guarantors, and represent all
capital stock and other equity interests owned, directly or
indirectly, by the Company. All of the Pledged Securities
are validly issued, fully paid and nonassessable, and the
Company is the legal and beneficial owner of the Pledged
Securities, free and clear of any lien, security interest or
other encumbrance except for the security interests created by
this Agreement and other Permitted Liens (as defined in the
Debentures).
(j)
The ownership and other equity interests in
partnerships and limited liability companies (if any) included in the Collateral
(the “ Pledged Interests
”) by their express terms do not provide that they are
securities governed by Article 8 of the UCC and are not held in
a securities account or by any financial intermediary.
(k)
Except for Permitted Liens (as defined in the
Debentures), each Debtor shall at all times maintain the liens
and Security Interests provided for hereunder as valid and
perfected first priority liens and security interests in the
Collateral in favor of the Secured Parties until this Agreement
and the Security Interest hereunder shall be terminated pursuant
to Section 14 hereof. Each Debtor hereby agrees to defend
the same against the claims of any and all persons and entities.
Each Debtor shall safeguard and protect all Collateral for the
account of the Secured Parties. At the request of the
Agent, each Debtor will sign and deliver to the Agent on behalf
of the Secured Parties at any time or from time to time one or
more financing statements pursuant to the UCC in form reasonably
satisfactory to the Agent and will pay the cost of filing the
same in all public offices wherever filing is, or is deemed by
the Agent to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the generality
of the foregoing, each Debtor shall pay all fees, taxes and
other amounts necessary to maintain the Collateral and the
Security Interests hereunder, and each Debtor shall obtain and
furnish to the Agent from time to time, upon demand, such
releases and/or subordinations of claims and liens which may be
required to maintain the priority of the Security Interests
hereunder.
( l )
No Debtor will transfer, pledge, hypothecate,
encumber, license, sell or otherwise dispose of any of the
Collateral (except for non-exclusive licenses granted by a
Debtor in its ordinary course of business and sales of inventory
by a Debtor in its ordinary course of business) without the
prior written consent of a Majority in
Interest .
( m )
Each Debtor shall keep and preserve its
equipment, inventory and other tangible Collateral in good
condition, repair and order and shall not operate or locate any
such Collateral (or cause to be operated or located) in any area
excluded from insurance coverage.
(
n)
Each Debtor shall maintain with financially
sound and reputable insurers, insurance with respect to the
Collateral, including Collateral hereafter acquired, against
loss or damage of the kinds and in the amounts customarily
insured against by entities of established reputation having
similar properties similarly situated and in such amounts as are
customarily carried under similar circumstances by other such
entities and otherwise as is prudent for entities engaged in
similar businesses but in any event sufficient to cover the full
replacement cost thereof. Each Debtor shall cause each
insurance policy issued in connection herewith to provide, and
the insurer issuing such policy to certify to the Agent, that
(a) the Agent will be named as lender loss payee and additional
insured under each such insurance policy; (b) if such
insurance
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be proposed to be cancelled or materially
changed for any reason whatsoever, such insurer will promptly
notify the Agent and such cancellation or change shall not be
effective as to the Agent for at least thirty (30) days after
receipt by the Agent of such notice, unless the effect of such
change is to extend or increase coverage under the policy; and
(c) the Agent will have the right (but no obligation) at its
election to remedy any default in the payment of premiums within
thirty (30) days of notice from the insurer of such default.
If no Event of Default (as defined in the Debenture s)
exists and if the proceeds arising out of any claim or series of
related claims do not exceed $100,000, loss payments in each
instance will be applied by the applicable Debtor to the repair
and/or replacement of property with respect to which the loss
was incurred to the extent reasonably feasible, and any loss
payments or the balance thereof remaining, to the extent not so
applied, shall be payable to the applicable Debtor;
provided , however , that payments received by any
Debtor after an Event of Default occurs and is continuing or in
excess of $100,000 for any occurrence or series of related
occurrences shall be paid to the Agent on behalf of the Secured
Parties and, if received by such Debtor, shall be held in trust
for the Secured Parties and immediately paid over to the Agent
unless otherwise directed in writing by the Agent.
Copies of such policies or the related certificates,
in each case, naming the Agent as lender loss payee and
additional insured shall be delivered to the Agent at least
annually and at the time any new policy of insurance is
issued.
(o)
Each Debtor shall, within ten (10) days of
obtaining knowledge thereof, advise the Secured Parties
promptly, in sufficient detail, of any material adverse change
in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the
Collateral or on the Secured Parties’ security interest,
through the Agent, therein.
( p )
Each Debtor shall promptly execute and deliver
to the Agent such further deeds, mortgages, assignments,
security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further
action as the Agent may from time to time request and may in its
sole discretion deem necessary to perfect, protect or enforce
the Secured Parties’ security interest in the Collateral
including, without limitation, if applicable, the execution and
delivery of a separate security agreement with respect to each
Debtor’s Intellectual Property (“ Intellectual
Property Security Agreement ”) in which the Secured
Parties have been granted a security interest hereunder,
substantially in a form reasonably acceptable to the Agent,
which Intellectual Property Security Agreement, other than as
stated therein, shall be subject to all of the terms and
conditions hereof.
( q )
Each Debtor shall permit the Agent and its
representatives and agents to inspect the Collateral during
normal business hours and upon reasonable prior notice, and to
make copies of records pertaining to the Collateral as may be
reasonably requested by the Agent from time to time.
( r )
Each Debtor shall take all steps reasonably
necessary to diligently pursue and seek to preserve, enforce and
collect any rights, claims, causes of action and accounts
receivable in respect of the Collateral.
( s )
Each Debtor shall promptly notify the Secured
Parties in sufficient detail upon becoming aware of any
attachment, garnishment, execution or other legal process levied
against any Collateral and of any other information received by
such Debtor that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies of
the Secured Parties hereunder.
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( t )
All information heretofore, herein or hereafter
supplied to the Secured Parties by or on behalf of any Debtor
with respect to the Collateral is accurate and complete in all
material respects as of the date furnished.
( u )
The Debtors shall at all times preserve and keep
in full force and effect their respective valid existence and
good standing and any rights and franchises material to its
business.
( v )
No Debtor will change its name, type of
organization, jurisdiction of organization, organizational
identification number (if it has one), legal or corporate
structure, or identity, or add any new fictitious name unless it
provides at least 30 days prior written notice to the Secured
Parties of such change and, at the time of such written
notification, such Debtor provides any financing statements or
fixture filings necessary to perfect and continue the perfection
of the Security Interests granted and evidenced by this
Agreement.
( w )
Except in the ordinary course of business, no
Debtor may consign any of its inventory or sell any of its
inventory on bill and hold, sale or return, sale on approval, or
other conditional terms of sale without the consent of the Agent which shall not be unreasonably
withheld.
( x )
No Debtor may relocate its chief executive
office to a new location without providing 30 days prior written
notification thereof to the Secured Parties and so long as, at
the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and
continue the perfection of the Security Interests granted and
evidenced by this Agreement.
( y )
Each Debtor was organized and remains organized
solely under the laws of the state set forth next to such
Debtor’s name in Schedule D attached hereto, which
Schedule D sets forth each Debtor’s organizational
identification number or, if any Debtor does not have one,
states that one does not exist.
( z )
(i) The actual name of each Debtor is the
name set forth in Schedule D attached hereto; (ii) no
Debtor has any trade names except as set forth on Schedule
E attached hereto; (iii) no Debtor has used any name other
than that stated in the preamble hereto or as set forth on
Schedule E for the preceding five years; and (iv) no
entity has merged into any Debtor or been acquired by any Debtor
within the past five years except as set forth on Schedule
E .
( aa )
At any time and from time to time that any
Collateral consists of instruments, certificated securities or
other items that require or permit possession by the secured
party to perfect the security interest created hereby, the
applicable Debtor shall deliver such Collateral to the
Agent.
(bb)
Each Debtor, in its capacity as issuer, hereby
agrees to comply with any and all orders and instructions of
Agent regarding the Pledged Interests consistent with the terms
of this Agreement without the further consent of any Debtor as
contemplated by Section 8-106 (or any successor section) of the
UCC. Further, each Debtor agrees that it shall not enter
into a similar agreement (or one that would confer
“control” within the meaning of Article 8 of the
UCC) with any other person or entity.
( cc )
Each Debtor shall cause all tangible chattel
paper constituting Collateral to be delivered to the Agent, or,
if such delivery is not possible, then to cause such tangible
chattel
9
paper to contain a legend noting that it is
subject to the security interest created by this Agreement.
To the extent that any Collateral consists of electronic
chattel paper, the applicable Debtor shall cause the underlying
chattel paper to be “marked” within the meaning of
Section 9-105 of the UCC (or successor section thereto).
( dd )
If there is any investment property or deposit
account included as Collateral that can be perfected by
“control” through an account control agreement, the
applicable Debtor shall cause such an account control agreement,
in form and substance in each case satisfactory to the Agent, to
be entered into and delivered to the Agent for the benefit of
the Secured Parties.
( ee )
To the extent that any Collateral consists of
letter-of-credit rights, the applicable Debtor shall cause the
issuer of each underlying letter of credit to consent to an
assignment of the proceeds thereof to the Secured Parties.
( ff )
To the extent that any Collateral is in the
possession of any third party, the applicable Debtor shall join
with the Agent in notifying such third party of the Secured
Parties’ security interest in such Collateral and shall
use its best efforts to obtain an acknowledgement and agreement
from such third party with respect to the Collateral, in form
and substance reasonably satisfactory to the Agent.
( gg )
If any Debtor shall at any time hold or acquire
a commercial tort claim, such Debtor shall promptly notify the
Secured Parties in a writing signed by such Debtor of the
particulars thereof and grant to the Secured Parties in such
writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in
form and substance satisfactory to the Agent.
( hh )
Each Debtor shall immediately provide written
notice to the Secured Parties of any and all accounts which
arise out of contracts with any governmental authority and, to
the extent necessary to perfect or continue the perfected status
of the Security Interests in such accounts and proceeds thereof,
shall execute and deliver to the Agent an assignment of claims
for such accounts and cooperate with the Agent in taking any
other steps required, in its judgment, under the Federal
Assignment of Claims Ac
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