SECURITY
AGREEMENT , dated as of September 12, 2008 (this “
Agreement ”) made by STINGER SYSTEMS, INC., a Nevada
corporation (the “ Company ”), in favor of DEBT
OPPORTUNITY FUND, LLLP, a limited liability limited partnership
organized under the laws of the State of Florida, in its capacity
as collateral agent (in such capacity, the “ Collateral
Agent ”) for the “Buyers” (as defined below)
party to the Securities Purchase Agreement (defined
below).
WHEREAS, the
Company and each party listed as a “Buyer” on the
Schedule of Buyers attached thereto (collectively, the “
Buyers ”) are parties to the Securities Purchase
Agreement, dated as of September 12, 2008 (as amended,
restated or otherwise modified from time to time, the “
Securities Purchase Agreement ”), pursuant to which
the Company sold, and the Buyers purchased certain
“Notes” (as defined therein) (as such Notes may be
amended, restated, replaced or otherwise modified from time to time
in accordance with the terms thereof, collectively, the “
Notes ”);
WHEREAS, it is a
condition precedent to the Buyers purchasing the Notes pursuant to
the Securities Purchase Agreement that the Company shall have
executed and delivered to the Collateral Agent this Agreement
providing for the grant to the Collateral Agent for the benefit of
the Buyers of a security interest in all personal property of the
Company to secure all of the Company’s obligations under the
Securities Purchase Agreement, the Notes and the “Transaction
Documents” (as defined in the Securities Purchase Agreement)
(the “ Transaction Documents ”); and
WHEREAS, the
Company has determined that the execution, delivery and performance
of this Agreement directly benefits, and is in the best interest
of, the Company.
NOW, THEREFORE, in
consideration of the premises and the agreements herein and in
order to induce the Buyers to perform under the Securities Purchase
Agreement, the Company agrees with the Collateral Agent, for the
benefit of the Buyers, as follows:
(a) Reference
is hereby made to the Securities Purchase Agreement and the Notes
for a statement of the terms thereof. All terms used in this
Agreement and the recitals hereto which are defined in the
Securities Purchase Agreement, the Notes or in Articles 8 or 9 of
the Uniform Commercial Code as in effect from time to time in the
State of New York (the “ Code ”), and which are
not otherwise defined herein shall have the same meanings herein as
set forth therein; provided that terms used herein which are
defined in the Code as in effect in the State of New York on the
date hereof shall continue to have the same meaning notwithstanding
any replacement or amendment of such statute except as the
Collateral Agent may otherwise determine.
(b) The
following terms shall have the respective meanings provided for in
the Code: “Accounts”, “Cash Proceeds”,
“Chattel Paper”, “Commercial Tort Claim”,
“Commodity Account”, “Commodity Contracts”,
“Deposit Account”, “Documents”,
“Equipment”, “Fixtures”, “General
Intangibles”, “Goods”, “Instruments”,
“Inventory”, “Investment Property”,
“Letter-of-Credit Rights”, “Noncash
Proceeds”, “Payment Intangibles”,
“Proceeds”, “Promissory Notes”,
“Security”, “Record”, “Security
Account”, “Software”, and “Supporting
Obligations”.
(c) As used
in this Agreement, the following terms shall have the respective
meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:
“
Additional Requirements ” means (i) with respect
to Deposit Accounts, and all cash and other property from time to
time deposited therein, for the execution of a control agreement
with the depository institution with which such account is
maintained, as provided in Section 5(i) ,
(ii) with respect to Commodity Contracts, for the execution of
a control agreement with the commodity intermediary with which such
commodity contract is carried, as provided in Section 5(i) ,
(iii) with respect to the perfection of the security interest
created hereby in any Letter-of-Credit Rights, for the consent of
the issuer of the applicable letter of credit to the assignment of
proceeds as provided in the Uniform Commercial Code as in effect in
the applicable jurisdiction, (iv) with respect to any action
that may be necessary to obtain control of Collateral constituting
Deposit Accounts, Commodity Contracts, Electronic Chattel Paper,
Investment Property or Letter-of-Credit Rights, the taking of such
actions, and (v) the Collateral Agent having possession of all
Documents, Chattel Paper, Instruments and cash constituting
Collateral.
“ Capital
Stock ” means (i) with respect to any Person that is
a corporation, any and all shares, interests, participations or
other equivalents (however designated and whether or not voting) of
corporate stock, and (ii) with respect to any Person that is
not a corporation, any and all partnership, membership or other
equity interests of such Person.
“
Copyright Licenses ” means all licenses, contracts or
other agreements, whether written or oral, naming the Company as
licensee or licensor and providing for the grant of any right to
use or sell any works covered by any copyright (including, without
limitation, all Copyright Licenses set forth in
Schedule II hereto).
“
Copyrights ” means all domestic and foreign
copyrights, whether registered or not, including, without
limitation, all copyright rights throughout the universe (whether
now or hereafter arising) in any and all media (whether now or
hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by the
Company (including, without limitation, all copyrights described in
Schedule II hereto), all applications, registrations
and recordings thereof (including, without limitation,
applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United
States or any other country or any political subdivision thereof),
and all reissues, divisions, continuations, continuations in part
and extensions or renewals thereof.
“ Event
of Default ” shall have the meaning set forth in the
Notes.
“
Governmental Authority ” means any nation or
government, any Federal, state, city, town, municipality, county,
local or other political subdivision thereof or thereto and any
department, commission, board, bureau, instrumentality, agency or
other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining
to government.
“
Insolvency Proceeding ” means any proceeding commenced
by or against any Person under any provision of the Bankruptcy Code
(Chapter 11 of Title 11 of the United States Code) or under
any other bankruptcy or insolvency law, assignments for the benefit
of creditors, formal or informal moratoria, compositions, or
extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
“
Intellectual Property ” means the Copyrights,
Trademarks and Patents.
2
“
Licenses ” means the Copyright Licenses, the Trademark
Licenses and the Patent Licenses.
“
Lien ” means any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or
assets (including accounts and contract rights).
“ Patent
Licenses ” means all licenses, contracts or other
agreements, whether written or oral, naming the Company as licensee
or licensor and providing for the grant of any right to
manufacture, use or sell any invention covered by any Patent
(including, without limitation, all Patent Licenses set forth in
Schedule II hereto).
“
Patents ” means all domestic and foreign letters
patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how, formulae,
rights of publicity and other general intangibles of like nature,
now existing or hereafter acquired (including, without limitation,
all domestic and foreign letters patent, design patents, utility
patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information,
technology, know-how and formulae described in Schedule II
hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office, or in
any similar office or agency of the United States or any other
country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or
renewals thereof.
“
Person ” means an individual, corporation, limited
liability company, partnership, association, joint-stock company,
trust, unincorporated organization, joint venture or other
enterprise or entity or Governmental Authority.
“
Trademark Licenses ” means all licenses, contracts or
other agreements, whether written or oral, naming the Company as
licensor or licensee and providing for the grant of any right
concerning any Trademark, together with any goodwill connected with
and symbolized by any such trademark licenses, contracts or
agreements and the right to prepare for sale or lease and sell or
lease any and all Inventory now or hereafter owned by the Company
and now or hereafter covered by such licenses (including, without
limitation, all Trademark Licenses described in Schedule II
hereto).
“
Trademarks ” means all domestic and foreign
trademarks, service marks, collective marks, certification marks,
trade names, business names, d/b/a’s, Internet domain names,
trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or
hereafter owned, adopted, acquired or used by the Company
(including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks,
trade names, business names, d/b/a’s, Internet domain names,
trade styles, designs, logos and other source or business
identifiers described in Schedule II hereto), all
applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings 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), and all
reissues, extensions or renewals thereof, together with all
goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of the Company relating to the
distribution of products and services in connection with which any
of such marks are used.
3
SECTION 2.
Grant of Security Interest. As collateral security for all
of the “Obligations” (as defined in
Section 3 hereof), the Company hereby pledges and
assigns to the Collateral Agent for the benefit of the Buyers, and
grants to the Collateral Agent for the benefit of the Buyers a
continuing security interest in, all personal property of the
Company, wherever located and whether now or hereafter existing and
whether now owned or hereafter acquired, of every kind and
description, tangible or intangible (collectively, the “
Collateral ”), including, without limitation, the
following:
(b) all
Chattel Paper (whether tangible or electronic);
(c) the
Commercial Tort Claims specified on Schedule VI
hereto;
(d) all
Deposit Accounts, all cash and other property from time to time
deposited therein and the monies and property in the possession or
under the control of the Collateral Agent or Buyer or any
affiliate, representative, agent or correspondent of the Collateral
Agent or Buyer;
(h) all
General Intangibles (including, without limitation, all Payment
Intangibles);
(j) all
Instruments (including, without limitation, Promissory Notes and
each certificated Security);
(l) all
Investment Property;
(m) all
Copyrights, Patents and Trademarks, and all Licenses;
(n) all
Letter-of-Credit Rights;
(o) all
Supporting Obligations;
(p) all other
tangible and intangible personal property of the Company (whether
or not subject to the Code), including, without limitation, all
bank and other accounts and all cash and all investments therein,
all proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions and replacements of and to any of
the property of the Company described in the preceding clauses of
this Section 2 (including, without limitation, any
proceeds of insurance thereon and all causes of action, claims and
warranties now or hereafter held by the Company in respect of any
of the items listed above), and all books, correspondence, files
and other Records, including, without limitation, all tapes, desks,
cards, Software, data and computer programs in the possession or
under the control of the Company or any other Person from time to
time acting for the Company, in each case, to the extent of the
Company’s rights therein, that at any time evidence or
contain information relating to any of the property described in
the preceding clauses of this Section 2 or are
otherwise necessary or helpful in the collection or realization
thereof; and
4
(q) all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and
products of any and all of the foregoing Collateral;
in each case
howsoever the Company’s interest therein may arise or appear
(whether by ownership, security interest, claim or
otherwise).
Notwithstanding
anything herein to the contrary, the term “ Collateral
” shall not include in the case of a Subsidiary of the
Company organized under the laws of a jurisdiction other than the
United States, any of the states thereof or the District of
Columbia (a “ Foreign Subsidiary ”), more than
65% (or such greater percentage that, due to a change in applicable
law after the date hereof, (A) would not reasonably be
expected to cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax
purposes to be treated as a deemed dividend to such Foreign
Subsidiary’s United States parent and (B) would not
reasonably be expected to cause any material adverse tax
consequences) of the issued and outstanding shares of Capital Stock
entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) (it being understood and agreed that
the Collateral shall include 100% of the issued and outstanding
shares of Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) or other equity interest of
such Foreign Subsidiary).
The Company
agrees that the pledge of the shares of Capital Stock acquired by
the Company of any and all Persons now or hereafter existing who is
a Foreign Subsidiary may be supplemented by one or more separate
pledge agreements, deeds of pledge, share charges, or other similar
agreements or instruments, executed and delivered by the Company in
favor of the Collateral Agent, which pledge agreements will provide
for the pledge of such shares of Capital Stock in accordance with
the laws of the applicable foreign jurisdiction. With respect to
such shares of Capital Stock, the Collateral Agent may, at any time
and from time to time, in its sole discretion, take actions in such
foreign jurisdictions that will result in the perfection of the
Lien created in such shares of Capital Stock.
SECTION 3.
Security for Obligations . The security interest created
hereby in the Collateral constitutes continuing collateral security
for all of the following obligations, whether now existing or
hereafter incurred (collectively, the “ Obligations
”):
(a) for so
long as the Notes are outstanding, (i) the payment by the
Company, as and when due and payable (by scheduled maturity,
required prepayment, acceleration, demand or otherwise), of all
amounts from time to time owing by it in respect of the Securities
Purchase Agreement, the Notes and the other Transaction Documents,
and (ii) in the case of any Guarantors, the payment by such
Guarantors, as and when due and payable of all “Guaranteed
Obligations” under (and as defined in) the Guaranty,
including, without limitation, in both cases, (A) all
principal of and interest on the Notes (including, without
limitation, all interest that accrues after the commencement of any
Insolvency Proceeding of the Company, whether or not the payment of
such interest is unenforceable or is not allowable due to the
existence of such Insolvency Proceeding), and (B) all fees,
commissions, expense reimbursements, indemnifications and all other
amounts due or to become due under any of the Transaction
Documents; and
(b) for so
long as the Notes are outstanding, the due performance and
observance by the Company of all of its other obligations from time
to time existing in respect of any of the Transaction Documents,
including without limitation, with respect to any conversion or
redemption rights of the Buyers under the Notes.
5
SECTION 4.
Representations and Warranties . The Company represents and
warrants as of the date of this Agreement as follows:
(a)
Schedule I hereto sets forth (i) the exact legal
name of the Company, and (ii) the state of incorporation,
organization or formation and the organizational identification
number of the Comapny in such state.
(b) There is
no pending or, to its knowledge, written notice threatening any
action, suit, proceeding or claim affecting the Company before any
governmental authority or any arbitrator, or any order, judgment or
award issued by any governmental authority or arbitrator, in each
case, that may adversely affect the grant by the Company, or the
perfection, of the security interest purported to be created hereby
in the Collateral, or the exercise by the Collateral Agent of any
of its rights or remedies hereunder.
(c) All
Federal, state and local tax returns and other reports required by
applicable law to be filed by the Company have been filed, or
extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon the Company or any property of
the Company (including, without limitation, all federal income and
social security taxes on employees’ wages) and which have
become due and payable on or prior to the date hereof have been
paid, except to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof in
accordance with generally accepted accounting principles
consistently applied (“ GAAP ”).
(d) All
Equipment, Fixtures, Goods and Inventory of the Company now
existing are, and all Equipment, Fixtures, Goods and Inventory of
the Company hereafter existing will be, located and/or based at the
addresses specified therefor in Schedule III hereto,
except that the Company will give the Collateral Agent written
notice of any change in the location of any such Collateral within
20 days of such change, other than to locations set forth on
Schedule III hereto (or a new Schedule III
delivered by the Company to the Collateral Agent from time to time)
and with respect to which the Collateral Agent has filed financing
statements and otherwise fully perfected its Liens thereon. The
Company’s chief place of business and chief executive office,
the place where the Company keeps its Records concerning Accounts
and all originals of all Chattel Paper are located at the addresses
specified therefor in Schedule III hereto. None of the
Accounts is evidenced by Promissory Notes or other Instruments. Set
forth in Schedule IV hereto is a complete and accurate
list, as of the date of this Agreement, of (i) each Promissory
Note, Security and other Instrument owned by the Company and
(ii) each Deposit Account, Securities Account and Commodities
Account of the Company, together with the name and address of each
institution at which each such account is maintained, the account
number for each such account and a description of the purpose of
each such account. Set forth in Schedule II hereto is a
complete and correct list of each trade name used by the Company
and the name of, and each trade name used by, each person from
which the Company has acquired any substantial part of the
Collateral.
(e) The
Company has delivered to the Collateral Agent complete and correct
copies of each License described in Schedule II hereto,
including all schedules and exhibits thereto, which represents all
of the Licenses existing on the date of this Agreement. Each such
License sets forth the entire agreement and understanding of the
parties thereto relating to the subject matter thereof, and there
are no other agreements, arrangements or understandings, written or
oral, relating to the matters covered thereby or the rights of the
Company or any of its affiliates in respect thereof. Each material
License now existing is, and any material License entered into in
the future will be, the legal, valid and binding obligation of the
parties thereto, enforceable against such parties in accordance
with its terms. No default under any material License by any such
party has occurred, nor does any defense, offset, deduction or
counterclaim exist thereunder in favor of any such
party.
6
(f) The
Company owns and controls, or otherwise possesses adequate rights
to use, all Trademarks, Patents and Copyrights, which are the only
trademarks, patents, copyrights, inventions, trade secrets,
proprietary information and technology, know-how, formulae, rights
of publicity necessary to conduct its business in substantially the
same manner as conducted as of the date hereof.
Schedule II hereto sets forth a true and complete list
of all registered copyrights, issued Patents, Trademarks, and
Licenses annually owned or used by the Company as of the date
hereof. To the best knowledge of the Company, all such Intellectual
Property of the Company is subsisting and in full force and effect,
has not been adjudged invalid or unenforceable, is valid and
enforceable and has not been abandoned in whole or in part. Except
as set forth in Schedule II , no such Intellectual
Property is the subject of any licensing or franchising agreement.
The Company has no knowledge of any conflict with the rights of
others to any such Intellectual Property and, to the best knowledge
of the Company, the Company is not now infringing or in conflict
with any such rights of others in any material respect, and to the
best knowledge of the Comapny, no other Person is now infringing or
in conflict in any material respect with any such properties,
assets and rights owned or used by the Compnay. The Company has not
received any notice that it is violating or has violated the
trademarks, patents, copyrights, inventions, trade secrets,
proprietary information and technology, know-how, formulae, rights
of publicity or other intellectual property rights of any third
party.
(g) The
Company is and will be at all times the sole and exclusive owner
of, or otherwise has and will have adequate rights in, the
Collateral free and clear of any Liens, except for Permitted Liens.
No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any
recording or filing office except such as (i) may have been
filed in favor of the Collateral Agent and/or the Buyers relating
to this Agreement and (ii) are described on
Schedule 4(g) hereto.
(h) The
exercise by the Collateral Agent of any of its rights and remedies
hereunder will not contravene any law or any contractual
restriction binding on or otherwise affecting the Company or any of
its properties and will not result in or require the creation of
any Lien, upon or with respect to any of its properties.
(i) No
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body,
is required for (i) the grant by the Company, or the
perfection, of the security interest purported to be created hereby
in the Collateral, or (ii) the exercise by the Collateral
Agent of any of its rights and remedies hereunder, except
(A) for the filing under the Uniform Commercial Code as in
effect in the applicable jurisdiction of the financing statements
described in Schedule V hereto (or a new
Schedule V delivered the Company to Collateral Agent
from time to time), all of which financing statements have been
duly filed and are in full force and effect or will be duly filed
and in full force and effect, (B) with respect to the
perfection of the security interest created hereby in the United
States Intellectual Property and Licenses, for the recording of the
appropriate Assignment for Security, substantially in the form of
Exhibit A hereto in the United States Patent and
Trademark Office or the United States Copyright Office, as
applicable, (C) with respect to the perfection of the security
interest created hereby in foreign Intellectual Property and
Licenses, for registrations and filings in jurisdictions located
outside of the United States and covering rights in such
jurisdictions relating to such foreign Intellectual Property and
Licenses, and (D) with respect to the perfection of the security
interest created hereby in Titled Collateral, for the submission of
an appropriate application requesting that the Lien of the
Collateral Agent be noted on the Certificate of Title or
certificate of ownership, completed and authenticated by the
Company, together with the Certificate of Title or certificate of
ownership, with respect to such Titled Collateral, to the
appropriate governmental authority (subclauses (A), (B),
(C) and (D), together with the Additional Requirements, each a
“ Perfection Requirement ” and collectively, the
“ Perfection Requirements ”).
7
(j) This
Agreement creates in favor of the Collateral Agent a legal, valid
and enforceable security interest in the Collateral, as security
for the Obligations. The Perfection Requirements result in the
perfection of such security interests. Such security interests are,
or in the case of Collateral in which the Company obtains rights
after the date hereof, will be, perfected, first priority security
interests, subject only to Permitted Liens and the Perfection
Requirements and the financing statements described in
Schedule 4(g) . Such recordings and filings and all
other action necessary to perfect and protect such security
interest have been duly taken, and, in the case of Collateral in
which the Company obtains rights after the date hereof, will be
duly taken, except for the Collateral Agent’s having
possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral after the date hereof and the other
actions, filings and recordations described above, including the
Perfection Requirements.
(k) As of the
date hereof, the Company does not hold any Commercial Tort Claims
nor have knowledge of any pending Commercial Tort Claims, except
for such Commercial Tort Claims described in
Schedule VI .
SECTION 5.
Covenants as to the Collateral . So long as any of the
Obligations shall remain outstanding, unless the Collateral Agent
shall otherwise consent in writing:
(a)
Further Assurances . The Company will, at its expense, at
any time and from time to time, promptly execute and deliver all
further instruments and documents and take all further action that
the Collateral Agent may reasonably request in order to:
(i) perfect and protect the security interest purported to be
created hereby; (ii) enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder in respect of the
Collateral; or (iii) otherwise effect the purposes of this
Agreement, including, without limitation: (A) marking
conspicuously all Chattel Paper and each License and, at the
request of the Collateral Agent, each of its Records pertaining to
the Collateral with a legend, in form and substance satisfactory to
the Collateral Agent, indicating that such Chattel Paper, License
or Collateral is subject to the security interest created hereby,
(B) delivering and pledging to the Collateral Agent pursuant
to the Pledge Agreement each Promissory Note, Security, Chattel
Paper or other Instrument, now or hereafter owned by the Company,
duly endorsed and accompanied by executed instruments of transfer
or assignment, all in form and substance satisfactory to the
Collateral Agent, (C) executing and filing (to the extent, if
any, that the Company’s signature is required thereon) or
authenticating the filing of, such financing or continuation
statements, or amendments thereto, as may be necessary or that the
Collateral Agent may reasonably request in order to perfect and
preserve the security interest purported to be created hereby,
(D) furnishing to the Collateral Agent from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral
in each case as the Collateral Agent may reasonably request, all in
reasonable detail, (E) if any Collateral shall be in the
possession of a third party, notifying such Person of the
Collateral Agent’s security interest created hereby and
obtaining a written acknowledgment from such Person that such
Person holds possession of the Collateral for the benefit of the
Collateral Agent, which such written acknowledgement shall be in
form and substance reasonably satisfactory to the Collateral Agent,
(F) if at any time after the date hereof, the Company acquires
or holds any Commercial Tort Claim, promptly notifying the
Collateral Agent in a writing signed by the Company setting forth a
brief description of such Commercial Tort Claim and granting to the
Collateral Agent a security interest therein and in the proceeds
thereof, which writing shall incorporate the provisions hereof and
shall be in form and substance satisfactory to the Collateral
Agent, (G) upon the acquisition after the date hereof by the
Company of any motor vehicle or other Equipment subject to a
certificate of title or ownership (other than a Motor Vehicle or
Equipment that is subject to a purchase money security interest),
causing the Collateral Agent to be listed as the lienholder on such
certificate of title or ownership and delivering evidence of the
same to the Collateral Agent in accordance with
Section 5(j) hereof; and (H) taking all actions
required by any earlier versions of the Uniform Commercial Code or
by other law, as applicable, in any relevant Uniform Commercial
Code jurisdiction, or by other law as applicable in any foreign
jurisdiction.
8
(b)
Location of Equipment and Inventory . The Company will keep
the Equipment and Inventory (i) at the locations specified
therefor on Schedule III hereto, or (ii) at such
other locations set forth on Schedule III (or a new
Schedule III delivered by the Company to Collateral
Agent from time to time) and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected
its Liens thereon, or (iii) at such other locations in the
United States, provided that within 20 days following the
relocation of Equipment or Inventory to such other location or the
acquisition of Equipment or Inventory, the Company shall deliver to
the Collateral Agent a new Schedule III indicating such
new locations.
(c)
Condition of Equipment . The Company will maintain or cause
the Equipment (necessary or useful to its business) to be
maintained and preserved in good condition, repair and working
order, ordinary wear and tear excepted, and will forthwith, or in
the case of any loss or damage to any Equipment of the Company
within a commercially reasonable time after the occurrence thereof,
make or cause to be made all repairs, replacements and other
improvements in connection therewith which are necessary or
desirable, consistent with past practice, or which the Collateral
Agent may request to such end. The Company will promptly furnish to
the Collateral Agent a statement describing in reasonable detail
any such loss or damage in excess of $250,000 per occurrence to any
Equipment.
(d)
Taxes, Etc. The Company agrees to pay promptly when due all
property and other taxes, assessments and governmental charges or
levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Equipment and Inventory,
except to the extent the valid
|
