Exhibit 10.2

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT, dated as of December 21, 2010 (as the same
may from time to time be further amended, restated, supplemented or otherwise
modified, this "Agreement"), is entered into by and between IGI Laboratories,
Inc a corporation organized and existing under the laws of the State of Delaware
(the “Borrower” or the “Grantor” or the “Company”), and Amzak Capital
Management, LLC, a limited liability company organized and existing under the
laws of the State of Nevada (the “Lender” or “Amzak”).

 

RECITALS:

 

(1)    Reference is made to that certain Credit Agreement, dated as of even date
herewith, between Amzak and the Borrower, as it may be amended and restated or
modified from time to time (the "Credit Agreement").

 

(2)    The obligation of the Lender to make the Advances under the Credit
Agreement is subject to the condition, among others, that the Grantor has
entered into this Pledge and Security Agreement to secure the obligations of the
Borrower (as defined in the Credit Agreement) to the Lender under the Credit
Agreement and the other Loan Documents (as defined in the Credit Agreement) and
otherwise as more fully described herein in the manner set forth herein.

 

(3)    The Grantor will obtain benefits from the Credit Agreement and,
accordingly, desires to execute this Agreement to satisfy the conditions
described in the preceding paragraph and to induce the Lender to extend credit
pursuant to the Credit Agreement and the other Loan Documents.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the foregoing and the other benefits
accruing to the Grantor, the receipt and sufficiency of which are hereby
acknowledged, the Grantor hereby: (i) makes the following representations and
warranties to the Lender and (ii) covenants and agrees with the Lender (as
defined below) as follows:

 

1. DEFINITIONS AND TERMS

 

1.1 Defined Terms. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings given to such terms in the Credit
Agreement. Unless otherwise defined herein, all terms used herein and defined in
the UCC shall have the same definitions herein as specified therein; provided,
however, that if a term is defined in Article 9 of the UCC differently than in
another Article of the UCC, the term shall have the meaning specified in Article
9 of the UCC.

1.2 Additional Defined Terms. The following terms shall have the meanings
specified herein unless the context otherwise requires:

 

"Account" means any "account," as such term is now or hereafter defined in the
UCC.

 

"Account Debtor" means any "account debtor," as such term is now or hereafter
defined in the UCC.

 

"Accounts Receivable" means (a) all Accounts, now existing or hereafter arising;
and (b) without limitation of the foregoing, in any event includes, without
limitation, (i) all right to a payment, whether or not earned by performance,
for Goods or other property (other than Money) that has been or is to be sold,
consigned, leased, licensed, assigned or otherwise disposed of, for services
rendered or to be rendered, for a policy of insurance issued or to be issued,
for a suretyship obligation incurred or to be incurred, for energy provided or
to be provided, or for the use or hire of a vessel under a charter or other
contract whether due or to become due, whether or not it has been earned by
performance, and whether now existing or hereafter acquired or arising in the
future, including Accounts Receivable from employees and Affiliates of Grantor,
(ii) all rights evidenced by an Account, invoice, purchase order, requisition,
bill of exchange, note, contract, security agreement, lease, chattel paper, or
any evidence of indebtedness or security related to the foregoing, (iii) all
security pledged, assigned, hypothecated or granted to or held by a Grantor to
secure the foregoing, (iv) all guarantees, letters of credit, banker's
acceptances, drafts, endorsements, credit insurance and indemnifications on, for
or of, any of the foregoing, including all rights to make drawings, claims or
demands for payment thereunder, and (v) all powers of attorney for the execution
of any evidence of indebtedness, guaranty, letter of credit or security or other
writing in connection therewith.

 

"Agreement" has the meaning provided in the first paragraph of this Agreement.

 

“As-Extracted Collateral" means any "as-extracted collateral," as such term is
now or hereafter defined in the UCC.

 

"Chattel Paper" means any "chattel paper," as such term is now or hereafter
defined in the UCC.

 

"Collateral" has the meaning provided in Section 2.1.

 

"Collateral Account" means any Controlled Deposit Account.

 

"Collateral Concentration Account" means a cash collateral Deposit Account
established in trust for the Lender, and under the sole dominion and control of
the Borrower, for the benefit of the Lender.

 

"Collateral Documents" shall mean the Security Documents, together with all
other documents, instrument or agreements executed in connection with the
Security Documents, or in connection with any security interest or Lien granted,
or otherwise obtained, on or in connection with the Collateral, or any part
thereof.

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"Commercial Tort Claim" means any "commercial tort claim," as such term is now
or hereafter defined in the UCC.

 

"Company" has the meaning provided in the first paragraph of this Agreement.

 

"Contract Rights" means all rights of the Grantor under or in respect of a
Contract, including, without limitation, all rights to payment, damages,
liquidated damages, and enforcement.

 

"Contracts" means all contracts, agreements or other writings between a Grantor
and one or more additional parties.

 

"Control" or "control" means (a) when used with respect to any Security or
Security Entitlement, the meaning specified in Section 8-106 of the UCC, and (b)
when used with respect to any Deposit Account, the meaning specified in Section
9-104 of the UCC.

 

"Control Agreement" means a Deposit Account Control Agreement.

 

"Controlled Deposit Account" means a Deposit Account that is subject to a
Deposit Account Control Agreement.

 

"Copyrights" means any U.S. copyright rights to which the Grantor now or
hereafter has title, as well as any application for a U.S. copyright hereafter
made by the Grantor.

 

"Credit Agreement" has the meaning provided in the Recitals of this Agreement.

 

"Deposit Account" means any "deposit account," as such term is now or hereafter
defined in the UCC.

 

"Deposit Account Control Agreement" means, with respect to a Deposit Account of
a Grantor, a Deposit Account Control Agreement, in such form as may have been
agreed to by the Lender, among the Grantor, the Lender and the relevant
Depositary Bank, as each may be amended, restated or modified from time to time.

 

"Depositary Bank" means a bank at which a Deposit Account is maintained.

 

"Document" means any "document," as such term is now or hereafter defined in the
UCC.

 

"Equipment" means any "equipment," as such term is now or hereafter defined in
the UCC.

 

"Equity Interests" means (a) all of the issued and outstanding shares of all
classes of capital stock of any corporation at any time directly owned by the
Grantor and the certificates representing such capital stock, (b) all of the
membership interests in a limited liability company at any time owned or held by
the Grantor, and (c) all of the equity interests in any other form of
organization at any time owned or held by the Grantor.

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"Financial Assets" means any "financial asset," as such term is now or hereafter
defined in the UCC.

 

"Fixtures" means any "fixtures," as such term is now or hereafter defined in the
UCC.

 

“Foreign Subsidiary” means any Subsidiary not organized under the laws of a
jurisdiction located in the United States.

 

"General Intangibles" means any "general intangibles," as such term is now or
hereafter defined in the UCC.

 

"Goods" means any "goods," as such term is now or hereafter defined in the UCC.

 

"Governing Documents” means all agreements and instruments evidencing or
relating to investments in, ownership, voting or disposition of, any of the
Pledged Collateral.

 

"Grantor” has the meaning provided in the first paragraph of this Agreement.

 

"Grantor Customer" means any retail or other customer of a Grantor, together
with any subsidiary of such customer.

 

"Instrument" means any "instrument," as such term is now or hereafter defined in
the UCC.

 

"Intellectual Property" means (a) all Trademarks; (b) all Patents; (c) all
Copyrights; and (d) all computer programs and software applications and source
code of the Grantor and all intellectual property rights therein and all other
Proprietary Information of the Grantor, including, but not limited to, Trade
Secrets.

 

"Inventory" means (a) any "inventory," as such term is now or hereafter defined
in the UCC; and (b) without limitation of the foregoing, and in all cases shall
include, but shall not be limited to, all merchandise and other Goods held for
sale or lease, or furnished or to be furnished under contracts for service,
including, without limitation, (i) raw materials, (ii) works in process, (iii)
finished goods, (iv) products made or processed, (v) intermediates, (vi) packing
materials, (vii) shipping materials, (viii) labels, (ix) semi-finished
inventory, (x) scrap inventory, (xi) spare parts inventory, (xii) manufacturing
supplies, (xiii) consumable supplies, (xiv) other substances commingled
therewith or added thereto, and (xv) all such Goods that have been returned,
reclaimed, repossessed or exchanged.

 

"Investment Property" means any "investment property," as such term is now or
hereafter defined in the UCC.

 

"Issuer" means the issuer of any Pledged Collateral.

 

"Lender" has the meaning provided in the Recitals of this Agreement.

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"Letter of Credit Rights" means any "letter of credit rights," as such term is
now or hereafter defined in the UCC.

 

"Minerals" means any "minerals," as such term is now or hereafter defined in the
UCC.

 

"Money" means any "money," as such term is now or hereafter defined in the UCC.

 

"Patents" means any U.S. patent to which the Grantor now or hereafter has title,
as well as any application, registrations and recordings for a U.S. patent now
or hereafter made by a Grantor.

 

"Payment Intangible" means any "payment intangible," as such term is now or
hereafter defined in the UCC.

 

"Permits" means, to the extent permitted to be assigned, pledged or otherwise
disposed of by the terms thereof or by applicable Law, all licenses, permits,
rights, orders, variances, franchises or authorizations of or from any
Governmental Authority.

 

"Pledged Collateral" means the Pledged Equity Interests.

 

"Pledged Entity" means the Issuer of any Pledged Equity Interests.

 

"Pledged Equity Interests" means, all of the Equity Interests now owned or
hereafter acquired by the Grantor, and all of Grantor's other rights, title and
interests in, or in any way related to, the Pledged Entity to which any of such
Equity Interests relate, including, without limitation: (a) all additional
Equity Interests hereafter from time to time acquired by the Grantor in any
manner, together with all dividends, cash, instruments and other property
hereafter from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Equity Interests and in all
profits, losses and other distributions to which the Grantor shall at any time
be entitled in respect of any such Equity Interests; (b) all other payments due
or to become due to the Grantor in respect of any such Equity Interest, whether
under any partnership agreement, limited liability company agreement, other
agreement or otherwise, whether as contractual obligations, damages, insurance
proceeds or otherwise; (c) all of its claims, rights, powers, privileges,
authority, puts, calls, options, security interests, liens and remedies, if any,
under any partnership agreement, limited liability company agreement, other
agreement or at law or otherwise in respect of any such Equity Interests; (d)
all present and future claims, if any, of the Grantor against any such Pledged
Entity for moneys loaned or advanced, for services rendered or otherwise; (e)
all of the Grantor's rights under any partnership agreement, limited liability
company agreement, other agreement or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of the Grantor relating to
any such Equity Interests; (f) all other property hereafter delivered in
substitution for or in addition to any of the foregoing; (g) all certificates
and instruments representing or evidencing any of the foregoing; and (h) all
cash, securities, interest, distributions, dividends, rights and other property
at any time and from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all thereof.

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"Proceeds" means (a) any "proceeds," as such term is now or hereafter defined in
the UCC; and (b) without limitation of the foregoing and in all cases, and
includes, but is not limited to, (i) whatever is acquired upon the sale, lease,
license, exchange, or other disposition of any Collateral, (ii) whatever is
collected on, or distributed on account of, any Collateral, (iii) rights arising
out of any Collateral, (iv) claims arising out of the loss or nonconformity of,
defects in, or damage to any Collateral, (v) claims and rights to any proceeds
of any insurance, indemnity, warranty or guaranty payable to the Grantor (or the
Lender, as assignee, loss payee or an additional insured) with respect to any of
the Collateral, (vi) claims and rights to payments (in any form whatsoever) made
or due and payable to the Grantor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any Person acting under
color of governmental authority), (vii) all cash, Money, checks and negotiable
instruments received or held on behalf of the Lender pursuant to any lockbox or
similar arrangement relating to the payment of Accounts Receivable or other
Collateral, and (viii) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

 

"Products" means any "products," as such term is now or hereafter defined in the
UCC.

 

"Promissory Notes" means any "promissory note," as such term is now or hereafter
defined in the UCC.

 

"Proprietary Information" means all information and know-how worldwide,
including, without limitation, technical data; manufacturing data; research and
development data; data relating to compositions, processes and formulations,
manufacturing and production know-how and experience; management know-how;
training programs; manufacturing, engineering and other drawings;
specifications; performance criteria; operating instructions; maintenance
manuals; technology; technical information; software; computer programs;
engineering and computer data and databases; design and engineering
specifications; catalogs; promotional literature; financial, business and
marketing plans; and inventions and invention disclosures.

 

"Reporting Date" has the meaning provided in Section 4.8(a).

 

"Scan-Based Inventory" means all Inventory of the Grantor delivered to, or
otherwise physically located on the premises owned, leased, controlled, occupied
and/or otherwise used by, the Grantor Customer on a consignment or similar basis
for the purpose of the ultimate sale of such Inventory to the Grantor Customer
or by Grantor Customer to its customers on behalf of Grantor. Scan-Based
Inventory shall include all Inventory sold by a Grantor to a Grantor Customer
that was repurchased by a Grantor in order to convert the relationship with
Grantor Customer to a scan-based trading relationship where such repurchased
Inventory was thereafter intended to be held by Grantor Customer on a
consignment basis as contemplated by the immediately preceding sentence.

 

"Secured Creditor Documents" means, collectively, the Loan Documents, together
with all other documents, instruments or agreements executed and delivered in
connection with the foregoing, in the case as the same may from time to time be
amended, restated, supplemented or otherwise modified.

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"Secured Creditor" means the Lender and the respective successors and assigns of
the of the foregoing.

 

"Secured Obligations" mean the Obligations (as defined in the Credit Agreement)
of the Borrower.

 

"Security" means any "security," as such term is now or hereafter defined in the
UCC.

 

"Security Agreement Joinder" means a joinder supplement to this Agreement in a
form acceptable to the Lender.

 

"Security Entitlement" means any "security entitlement," as such term is now or
hereafter defined in the UCC.

 

"Security Interest" means the security interest granted by a Grantor and/or by
all Grantors, as applicable, pursuant to Section 2.1.

 

"Supporting Obligations" means any "supporting obligation," as such term is now
or hereafter defined in the UCC.

 

"Trademarks" means any trademarks and service marks now held or hereafter
acquired by a Grantor to which a Grantor has title, which are registered in the
United States Patent and Trademark Office, as well as any unregistered marks
used by a Grantor in the United States, including logos and/or designs that are
incorporated as part of any of these registered or unregistered marks, and with
the applications, registrations and recordings, together with the goodwill of
the business of Grantor connected with or symbolized by any of the foregoing.

 

"Trade Secrets" means any secretly held existing engineering and other data,
information, production procedures, techniques, and other know-how or other
general intangibles of like nature relating to the design, manufacture,
assembly, installation, use, operation, marketing, sale and servicing of any
products or business of a Grantor worldwide whether written or not written.

 

"UCC" means, unless the context indicates otherwise, the Uniform Commercial
Code, as at any time adopted and in effect in the State of New York,
specifically including and taking into account all amendments, supplements,
revisions and other modifications thereto.

 

2. SECURITY INTERESTS

 

2.1 Grant of Security Interests. As security for the prompt and complete payment
and performance when due of the Secured Obligations, the Grantor does hereby
pledge and collaterally assign unto the Lender, and does hereby grant for the
benefit of the Secured Creditor, a continuing security interest in, all of the
right, title and interest of the Grantor in, to and under all of the following
of the Grantor, whether now existing or hereafter from time to time arising or
acquired and wherever located (collectively, the "Collateral"):

7

 

(i)    all Accounts, including, without limitation, each and every Account
Receivable;

 

 

 

(ii)    all Goods;

 

 

 

(iii)    all Inventory;

 

 

 

(iv)    all Equipment;

 

 

 

(v)    all Documents;

 

 

 

(vi)    all Instruments;

 

 

 

(vii)    all Chattel Paper;

 

 

 

(viii)    all Money;

 

 

 

(ix)    all Deposit Accounts, including, but not limited to, the Collateral
Concentration Account and all Controlled Deposit Accounts, together with all
monies, securities and instruments at any time deposited in any such Deposit
Account or otherwise held for the credit thereof;

 

 

 

(x)    all Financial Assets credited therein from time to time, and all
Financial Assets, monies, securities, cash and other property held therein or
credited thereto;

 

 

 

(xi)    all Investment Property;

 

 

 

(xii)    all Fixtures;

 

 

 

(xiii)    all As-Extracted Collateral, including, without limitation, all
Minerals;

 

 

 

(xiv)    all General Intangibles, including, but not limited to, all Contract
Rights;

 

 

 

(xv)    all Commercial Tort Claims;

 

 

 

(xvi)    all Letter of Credit Rights;

 

 

 

(xvii)    all Payment Intangibles;

 

 

 

(xviii)    all Promissory Notes;

 

 

 

(xix)    all Supporting Obligations;

 

 

 

(xx)    all Permits;

8

 

(xxi)    all other items, kinds and types of personal property, tangible or
intangible, of whatever nature, and regardless of whether the creation or
perfection or effect of perfection or non-perfection of a security interest
therein is governed by the UCC of any particular jurisdiction or by any other
applicable law;

 

 

 

(xxii)    all additions, modifications, alterations, improvements, upgrades,
accessions, components, parts, appurtenances, substitutions and/or replacements
of, to or for any of the foregoing; and

 

 

 

(xxiii)    Proceeds and Products of any and all of the foregoing.

 

(b) Excluded Property. Notwithstanding anything in Section 2.1 or elsewhere in
this Agreement to the contrary, there is specifically excluded from the Security
Interest, and the term Collateral shall not include: (i) any Equipment or Goods
that is subject to a "purchase money security interest," as such term is now or
hereafter defined in the UCC, which (x) constitutes a Permitted Lien under the
Credit Agreement and (y) prohibits the creation by the Grantor of a security
interest therein, unless the holder thereof has consented to the creation of
such a security interest; (ii) any lease, license, contract, property rights or
agreement to which Grantor is a party or any of its rights or interests
thereunder, or assets related thereto, if and for so long as the grant of such
security interest or lien shall constitute or result in (A) the abandonment,
invalidation or unenforceability of any right, title or interest of the Grantor
therein or (B) in a breach or termination pursuant to the terms of, or a default
under, any such lease, license, contract, property rights or agreement of any
relevant jurisdiction or any other applicable law (including the U. S.
Bankruptcy Code) or principles of equity), provided, however, that such security
interest or lien shall attach immediately at such time as the condition causing
such abandonment, invalidation or unenforceability shall be remedied and to the
extent severable, shall attach immediately to any portion of such lease,
license, contract, property rights or agreement, or such asset related thereto,
that does not result in any of the consequences specified in (A) or (B) above;
(iii) any Inventory owned by the Grantor that contains or utilizes a patent,
trademark or copyright the use of which has been licensed to Grantor under a
license described under clause (ii), which license prohibits Liens on such
Inventory, provided, however, that such security interest or lien shall attach
to such Inventory immediately at such time as the condition prohibiting such
Lien shall be waived by the licensor of such license or otherwise remedied; and
(iv) any Intellectual Property.

 

2.2 No Assumption of Liability. The Security Interest of the Grantor is granted
as security only and shall not subject the Secured Creditor to, or in any way
alter or modify, any obligation or liability of the Grantor with respect to or
arising out of any of the Collateral.

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2.3 Power of Attorney. The Grantor hereby irrevocably constitutes and appoints
the Lender its true and lawful agent and attorney-in-fact, and in such capacity
the Lender shall have, without any further action required by or on behalf of
the Grantor, the right, with full power of substitution, in the name of the
Grantor or otherwise, for the use and benefit of the Lender as the Secured
Creditor, after the occurrence of and during the continuance of a Event of
Default: (i) to receive, endorse, present, assign, deliver and/or otherwise deal
with any and all notes, acceptances, letters of credit, checks, drafts, money
orders, or other evidences of payment relating to the Collateral of the Grantor
or any part thereof; (ii) to demand, collect, receive payment of, and give
receipt for and give credits, allowances, discounts, discharges, releases and
acquittances of and for any or all of the Collateral of Grantor; (iii) to sign
the name of the Grantor on any invoice or bill of lading relating to any of the
Collateral of the Grantor; (iv) to send verifications of any or all of the
Accounts Receivable of the Grantor to its Account Debtors; (v) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in or
before any court or other tribunal (including any arbitration proceedings) to
collect or otherwise realize on all or any of the Collateral of the Grantor, or
to enforce any rights of the Grantor in respect of any of its Collateral; (vi)
to settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to any or all of the Collateral of the Grantor; (vii) to
notify, or require the Grantor to notify or cause to be notified, its Account
Debtors to make payment directly to the Lender or to a Controlled Deposit
Account; or (viii) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with any or all of the Collateral of the
Grantor, and to do all other acts and things necessary or appropriate to carry
out the intent and purposes of this Agreement, as fully and completely as though
the Lender were the absolute owner of the Collateral of the Grantor for all
purposes; provided, however, that nothing herein contained shall be construed as
requiring or obligating the Lender to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Lender, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted to be
taken by the Lender with respect to the Collateral or any part thereof shall
give rise to any defense, counterclaim or offset in favor of the Grantor or to
any claim or action against the Lender. It is understood and agreed that the
appointment of the Lender as the agent and attorney-in-fact of the Grantors for
the purposes set forth above is a presently effective appointment, is coupled
with an interest sufficient at law and is irrevocable. The provisions of this
Section shall in no event relieve the Grantor of any of its obligations under
this Agreement with respect to the Collateral or any part thereof or impose any
obligation on the Lender to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by the Lender
of any other or further right it may have on the date of this Agreement or
hereafter, whether hereunder, by law or otherwise.

 

3. REPRESENTATIONS AND WARRANTIES

 

The Grantor represents and warrants to the Lender, which representations and
warranties shall survive the execution and delivery of this Agreement until the
termination of this Agreement in accordance with Section 10.09, as follows:

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3.1 Title and Authority. The Grantor has (i) good, valid and unassailable title
to all tangible items owned by it and constituting any portion of the Collateral
with respect to which it has purported to grant the Security Interest, and good,
valid and unassailable rights in all other Collateral with respect to which it
has purported to grant the Security Interest, in the case, subject to Permitted
Liens provided, however, that to the extent Grantor owns Scan-Based Inventory,
such Scan-Based Inventory is subject to the rights of the applicable Grantor
Customers and their respective secured creditors (if any), and (ii) full power
and authority to grant to the Lender the Security Interest in such Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other Person other than any consent or approval that has been obtained.

 

3.2 Absence of Other Liens.

 

 

(a) There is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind of the Grantor in the Collateral, except for any
filings or recordings covering any Permitted Liens.

 

 

 

(b) The Grantor is, and as to any Collateral acquired by it from time to time
after the date hereof the Grantor will be, the owner of all of its Collateral
free and clear of any Lien, other than Permitted Liens, and the Security
Interest of the Grantor in its Collateral is and will be superior and prior to
any other security interest or other Lien, except, in the case, for Permitted
Liens.

 

3.3 Validity of Security Interest. As of the Initial Funding Date, the Security
Interest of the Grantor in all of the Collateral of the Grantor constitutes a
legal, valid and enforceable (with respect to any licenses where a Grantor is
the licensee, only as against the Grantor) first priority security interest
securing the payment and performance of the Secured Obligations, subject only to
Permitted Liens.

 

3.4 Perfection of Security Interest under UCC. All notifications and other
actions, including, without limitation, (i) all deliveries of certificates and
instruments evidencing any Collateral (duly endorsed or accompanied by
appropriate instruments of transfer) to the extent required by this Agreement,
(ii) all notices to and acknowledgments of any bailee or other Person, to the
extent required under this Agreement, (iii) all acknowledgments and agreements
respecting the right of the Lender to obtain control with respect to any
Collateral, to the extent required under this Agreement, and (iv) all filings,
registrations and recordings, which are (y) required by the terms of this
Agreement to have been given, made, obtained, done and accomplished, and (z)
necessary to create, preserve, protect and perfect the Security Interest granted
by the Grantor to the Lender hereby in respect of its portion of the Collateral
(other than motor vehicles), have been given, made, obtained, done and
accomplished.

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3.5 Places of Business, Jurisdiction Where Organized, Locations of Collateral,
etc. The Grantor represents and warrants that on the Effective Date: (a) the
principal place of business of Grantor, or its chief executive office, if it has
more than one place of business, is located at the address 105 Lincoln Avenue,
Buena, New Jersey 08310; (ii) the jurisdiction of formation or organization of
Grantor is Delaware (iii) the U.S. Federal Tax I.D. Number and, if applicable,
the organizational I.D. Number of the Grantor is 01-0355758 and 0842746,
respectively; and (iv) all Inventory (other than Scan-Based Inventory in the
possession of a Grantor Customer) and Equipment of Grantor with an aggregate
value in excess of $100,000 is located at 105 Lincoln Avenue, Buena, New Jersey
08310.

 

3.6 Pledged Collateral. A true and complete list of all of the Pledged
Collateral owned by the Grantor as of the Effective Date and, thereafter, the
most recent Reporting Date is set forth on Schedule 3.6.

 

3.7 Status of Pledged Collateral. All of the Pledged Equity Interests of the
Grantor hereunder have been duly and validly issued and are fully paid and
nonassessable (solely with respect to such nonassessability of those Pledged
Equity Interests issued by Persons that are not Subsidiaries of the Company, to
Grantor's knowledge). No Grantor is in default in the payment of any portion of
any mandatory capital contribution, cash call, or other funding, if any,
required to be made under any Governing Document relating to any of the Pledged
Equity Interests of the Grantor. No Grantor is in violation or default in any
material respect of any other provisions of any such Governing Document. No
Pledged Collateral of Grantor is subject to any defense, offset or counterclaim
to the Grantor's knowledge, nor have any of the foregoing been asserted or
alleged against the Grantor by any Person.

 

4. GENERAL COVENANTS

 

4.1 No Other Liens; Defense of Title, etc. The Grantor will not make or grant,
or suffer or permit to exist, any Lien on any of its Collateral, other than the
Permitted Liens. The Grantor, at its sole cost and expense, will take any and
all actions reasonably necessary and appropriate to defend title to its
Collateral against any and all Persons and to defend the validity,
enforceability, perfection, effectiveness and priority of the Security Interest
of the Lender therein against any Lien other than Permitted Liens.

12

4.2 Further Assurances; Filings and Recordings, etc.

 

 

(a) The Grantor, at its sole cost and expense, will duly execute, acknowledge
and deliver all such agreements, instruments and other documents and take all
such actions reasonably requested by the Lender and not inconsistent with this
Agreement or the Credit Agreement, including, without limitation, (i) subject to
Section 4.4 below, physically delivering Instruments, Documents, Promissory
Notes, Chattel Paper and certificates evidencing any Investment Property or any
of the Pledged Collateral, to the Lender, (ii) obtaining Control Agreements in
accordance with this Agreement, (iii) obtaining from other Persons such lien
waivers and bailee letters, (iv) obtaining from other Persons agreements
evidencing the exclusive control and dominion of the Lender over any of the
Collateral, in instances where obtaining control over such Collateral is the
only or best method of perfection, and (v) making filings, recordings and
registrations, as the Lender may from time to time reasonably instruct to better
assure, preserve, protect and perfect the Security Interest of the Lender in the
Collateral of the Grantor, and the rights and remedies of the Lender hereunder,
or otherwise to further effectuate the intent and purposes of this Agreement and
to carry out the terms hereof.

 

 

 

(b) The Grantor, at its sole cost and expense, will (i) take such actions as the
Lender requests to at all times cause this Agreement (and/or proper notices,
financing statements or other registrations or filings in respect hereof, and
supplemental collateral assignments or collateral security agreements in respect
of any portion of the Collateral) to be duly filed, recorded, registered and
published, and re-filed, re-recorded, re-registered and re-published in such
manner and in such places as may be required under the UCC or other applicable
law to establish, perfect, preserve and protect the rights, remedies and
Security Interest of the Lender in or with respect to the Collateral of Grantor,
and (ii) pay all taxes, fees and charges and comply with all statutes and
regulations, applicable to such filing, recording, registration and publishing
and such re-filing, re-recording, re-registration and re-publishing.

 

4.3 Use and Disposition of the Collateral.

 

 

(a) Unless and until an Event of Default shall have occurred and be continuing
and the Lender shall have notified the Grantor thereof in writing that the
rights of any or all of the Grantor under this Section 4.3(a) are suspended
during the continuance of such Event of Default, the Grantor may use and dispose
of its Collateral in any lawful manner not inconsistent with the provisions of
this Agreement, the Credit Agreement or any other Secured Creditor Document.

 

 

 

(b) Grantor will not consign any of its Inventory (other than Scan-Based
Inventory) that, individually, or in the aggregate for all such consigned
Inventory, exceeds $100,000, to any Person unless all filings of financing
statements under the UCC and other actions and filings, registrations and
recordings required under other applicable Laws have been made to perfect the
rights and interests of Grantor in the consigned Inventory against creditors of
and purchasers from the consignee.

13

 

(c) Grantor will not permit any of its Inventory or Equipment having a cost or
market value (whichever is higher), individually, or in the aggregate for all
such Inventory and Equipment, in excess of $1,000,000 (or such larger amount as
shall be acceptable to the Lender, in its discretion) to be in the possession or
control of any single warehouseman, bailee, processor, supplier or agent at any
time, unless such warehouseman, bailee, processor, supplier or agent shall have
been notified of the Security Interest and shall have agreed in writing to hold
such Collateral subject to the Security Interest and the instructions of the
Lender and to waive and release any Lien held by it with respect to such
Collateral, whether arising by operation of law or otherwise.

 

4.4 Delivery or Marking of Chattel Paper; Assignment of Security From Account
Debtors and Consignments; etc. Without limitation of any of the provisions of
Section 4.2(a):

 

 

(a) If any amount payable to a Grantor under or in connection with any of the
Collateral shall be or become evidenced by any Document, Promissory Note or
Instrument, or any Chattel Paper if in excess of $1,000,000 individually or in
the aggregate, Grantor will cause such Document, Promissory Note or Instrument,
or such Chattel Paper, to be delivered to the Lender and pledged as part of the
Collateral hereunder, accompanied by any appropriate instruments or endorsements
of transfer. In the case of any Chattel Paper, the Lender may require, in lieu
of the delivery thereof to the Lender, that the writings evidencing the Chattel
Paper be legended to reflect the Security Interest of the Lender therein, all in
a manner acceptable to the Lender.

 

 

 

(b) If at any time the Grantor shall take and perfect a security interest in any
property of any Account Debtor, as security for the Accounts owed by such
Account Debtor and/or any of its Affiliates, or take and perfect a security
interest arising out of the consignment to any Person of any Inventory or other
Collateral, Grantor shall, if requested by the Lender (which request may be made
by the Lender in its sole discretion), promptly execute and deliver to the
Lender a separate assignment of all financing statements and other filings made
to perfect the same. Such separate assignment need not be filed of public record
unless necessary to continue the perfected status of the security interest of
Grantor against creditors of any transferees from the Account Debtor or
consignee.

 

4.5 Authorization to File Financing Statements. The Grantor irrevocably
authorizes the Lender at any time and from time to time to file in any
jurisdiction any initial financing statements and all amendments thereto and
continuations thereof that (a) indicate the Collateral (i) as "all assets" or
"all personal property" of Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of the UCC, or (ii) as being of an equal or lesser scope or with greater detail,
and (b) contain any other information required pursuant to the UCC for the
sufficiency or filing office acceptance of any financing statement, amendment or
continuation, including, but not limited to, (i) whether Grantor is an
organization, the type of organization and any organization identification
number, and (ii) in the case of a financing statement that is filed as a fixture
filing or indicating Collateral as As-Extracted Collateral or timber to be cut,
a sufficient description of the real property to which the Collateral relates.

14

4.6 Modification of Terms of Accounts and Contracts, etc. No Grantor will enter
into any material modification of the terms or provisions of any of its Accounts
Receivable or Contracts, or grant any extension of time for the payment of any
of its Accounts Receivable or Contracts, or compromise or settle the same for
less than the full amount thereof, or release, wholly or partially, any person
liable for the payment thereof or any guaranty, letter of credit, collateral or
other obligation supporting or securing the payment thereof, or allow any credit
or discount whatsoever thereon, other than modifications, extensions,
compromises, settlements, credits and discounts granted or made (i) in the
ordinary course of business or (ii) not otherwise prohibited by the terms of the
Credit Agreement or any other Loan Document.

 

4.7 Maintenance of Records, etc. The Grantor will keep and maintain at its own
cost and expense satisfactory and complete records of its Accounts Receivable,
Contracts and other Collateral, including, but not limited to, the originals of
all documentation with respect thereto, records of all payments received, all
credits granted thereon, all merchandise returned and all other dealings
therewith. All billings and invoices issued by a Grantor with respect to its
Accounts Receivable will be in compliance, in all material respects, with, and
conform to, the requirements of all applicable federal, state and local laws and
any applicable laws of any relevant foreign jurisdiction. If an Event of Default
shall have occurred and be continuing and the Lender so directs, the Grantor
shall legend, in form and manner satisfactory to the Lender, its Accounts
Receivable and Contracts, as well as books, records and documents of the Grantor
evidencing or pertaining thereto with an appropriate reference to the fact that
such Accounts Receivable and Contracts have been assigned to the Lender and that
the Lender has a security interest therein.

 

4.8 Schedules; Collateral Reports.

 

 

(a) Schedules. If any information contained in any Schedule to this Agreement
shall become untrue or incorrect in any material respect (other than as to any
of the matters set forth in Section 4.9 which shall be subject to the terms
thereof), or if the Grantor acquires or disposes of any of the Collateral such
that any Schedule to this Agreement is no longer accurate or complete in any
material respect, then on the date on which the Company is required to deliver
to the Lender a Compliance Certificate under the Credit Agreement (the a
"Reporting Date") immediately following the date on which such information
becomes so untrue or incorrect or after such acquisition or disposition occurs,
Grantor shall deliver to the Lender a new Schedule or Schedules to this
Agreement without the need for any amendment to this Agreement pursuant to
Section 10.13, provided that the delivery of such new Schedule or Schedules to
this Agreement after any applicable Reporting Date shall not serve to cure, or
constitute a waiver of, any Event of Default that may have occurred as a result
of such information becoming untrue, incorrect, inaccurate or incomplete in any
material respect.

15

 

(b) Collateral Reports. Whenever requested to do so by the Lender, the Grantor
will promptly, at its own sole cost and expense, deliver to the Lender, in
written hard copy form or, if available, on magnetic tape or other computer or
machine readable form, as specified by the Lender, such listings, agings,
descriptions, schedules and other reports with respect to its Accounts
Receivable, Inventory, Equipment and other Collateral as the Lender may
reasonably instruct, all of the same to be in such scope, categories and detail
as the Lender may have reasonably instructed and to be accompanied by copies of
invoices and other documentation as and to the extent reasonably instructed by
the Lender. Grantor shall not be required to pay for more than one such delivery
in any calendar year.

 

4.9 Legal Status; Location of Inventory and Equipment. The Grantor agrees that
(a) it will not change its name, place of business, type of organization,
jurisdiction of organization or other legal structure, or, if more than one,
chief executive office, or its mailing address or organizational identification
number, if it has one, in the case without providing the Lender at least 30
days' prior written notice thereof and, if and as required by the Credit
Agreement, the consent of the Lender, (b) if Grantor does not have an
organizational identification number and later obtains one, it will promptly
notify the Lender of such organizational identification number, and (c) it will
not maintain any of its Inventory or Equipment with an aggregate value in excess
of $500,000 at a location other than a location set forth on Section 3.5(iv)
hereof, unless it shall have provided the Lender prompt written notice thereof.

 

4.10 Inspections and Verification. The Lender and such Persons as the Lender may
designate shall have the right, at the Grantor's own cost and expense, at any
time or from time to time, on not less than two Business Day's prior notice to
the Company, to inspect the Collateral of the Grantor, all books and records
related thereto (and to make extracts and copies thereof) and the premises upon
which any of such Collateral is located, to discuss the Grantor's affairs with
the officers of the Grantor and its independent accountants, and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, such Collateral, including, in
the case of Accounts or other Collateral in the possession of any third Person,
by contacting Account Debtors or the third Person possessing such Collateral
(after not less than two days' prior notice to the Grantor) for the purpose of
making such verification, provided that, unless an Event of Default has occurred
and is continuing, Grantors shall not be required to pay for more than one such
inspection in any calendar year. Any procedures or actions taken, prior to the
occurrence and continuance of an Event of Default, to verify Accounts by
contacting Account Debtors, shall be effected by the Company's independent
accountants, acting at the direction of the Lender, in such manner (consistent
with their normal auditing procedures) so as not to reveal the identity of the
Lender or the existence of the Security Interest to the Account Debtors. The
Company will instruct its independent accountants to undertake any such
verification when and as requested by the Lender, but no more than once in any
calendar year, so long as no Event of Default has occurred and is continuing.
The results of any such verification by independent accountants shall be
reported by such independent accountants to both the Lender and the Company.

16

4.11 Condition of Collateral. The Grantor will maintain (a) its Equipment in
good condition, ordinary wear and tear excepted (excluding obsolete, excess or
abandoned Equipment) and (b) all other tangible items of its Collateral, taken
as an entirety, in such condition as is consistent with generally accepted
business practices, ordinary wear and tear excepted.

 

4.12 Insurance. The Grantor will at all times keep its business and its
Collateral insured in accordance terms and conditions of the Credit Agreement.

 

4.13 Proceeds of Casualty Insurance, Condemnation or Taking.

 

 

(a) All amounts recoverable under any policy of casualty insurance or any award
for the condemnation or taking by any governmental authority of any portion of
the Collateral are hereby assigned to the Lender.

 

 

 

(b) In the event any portion of the Collateral suffers a casualty loss or is
involved in any proceeding for condemnation or taking by any governmental
authority, then, if an Event of Default has occurred and is continuing, the
Lender is authorized and empowered, at its option, to participate in, control,
direct, adjust, settle and/or compromise any such loss or proceeding, to collect
and receive the proceeds therefrom and, after deducting from such proceeds any
expenses incurred by it in connection with the collection or handling thereof,
to apply the net proceeds thereof to the Secured Obligations.

 

 

 

(c) If any proceeds are received by the Lender as a result of a casualty,
condemnation or taking involving the Collateral and no Event of Default has
occurred and is continuing, then the Lender will promptly release such proceeds
to the Grantor, unless the Credit Agreement provides otherwise.

 

4.14 Protective Advances by the Lender. At its option, but without being
obligated to do so, the Lender may, upon prior notice to the Grantor, after the
occurrence and during the continuance of an Event of Default, (a) pay and
discharge past due taxes, assessments and governmental charges, at any time
levied on or with respect to any of the Collateral of the Grantor which the
Grantor has failed to pay and discharge in accordance with the requirements of
this Agreement or any of the other Secured Creditor Documents, (b) pay and
discharge any claims of other creditors of the Grantor which are secured by any
Lien on any Collateral, other than a Permitted Lien, (c) pay for the
maintenance, repair, restoration and preservation of the Collateral to the
extent the Grantor fails to comply with its obligations in regard thereto under
this Agreement and the other Secured Creditor Documents or the Lender reasonably
believes payment of the same is necessary or appropriate to avoid a material
loss or material diminution in value of the Collateral, and/or (d) obtain and
pay the premiums on insurance for the Collateral which Grantor fails to maintain
in accordance with the requirements of this Agreement and the other Secured
Creditor Documents, and the Grantor agrees to reimburse the Lender on demand for
all payments and expenses incurred by the Lender with respect to the Grantor or
any of its Collateral pursuant to the foregoing authorization, provided,
however, that nothing in this Section shall be construed as excusing Grantor
from the performance of, or imposing any obligation on the Lender to cure or
perform, any covenants or other agreements of Grantor with respect to any of the
foregoing matters as set forth herein or in any of the other Loan Documents.

17

4.15 Commercial Tort Claims. If Grantor shall at any time hold or acquire a
Commercial Tort Claim, the recovery from which could reasonably be expected to
exceed $500,000, Grantor shall promptly notify the Lender thereof in a writing
signed by Grantor, which sets forth the details thereof and grants to the Lender
a Lien thereon and on the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably satisfactory
to the Lender.

 

5.

SPECIAL PROVISIONS CONCERNING ACCOUNTS AND COLLECTION OF ACCOUNTS, ETC.

 

5.1 Deposit Accounts.

 

 

(a) The Grantors shall cause all deposit accounts to be subject at all times to
a fully effective Deposit Account Control Agreement except (i) any payroll
account used exclusively for funding the payroll obligations of Grantor in the
ordinary course of business or payroll tax accounts or (ii) any other deposit
account, so long as at any date of determination the aggregate average monthly
balance for the 12 months ending on such date in any such deposit account is not
in excess of $500,000 (any deposit account that is not required to be subject to
a Deposit Account Control Agreement pursuant to this Section shall be referred
to as an "Excluded Deposit Account").

 

 

 

(b) Immediately upon the creation or acquisition of any new deposit account
(other than any deposit account that would qualify as an Excluded Deposit
Account) or any interest therein by Grantor, shall cause to be in full force and
effect, prior to the deposit of any funds therein, a Deposit Account Control
Agreement duly executed by Grantor, the Lender and the applicable Depositary
Bank.

 

5.2 Operation of Collateral Accounts. Except as expressly permitted pursuant to
this Agreement or the Credit Agreement, the Grantors shall cause all cash and
Cash Equivalents and all securities entitlements to be maintained in Collateral
Accounts. Prior to the occurrence and continuance of an Event of Default, the
Grantors may withdraw, or direct the disposition of, funds and other investments
or financial assets held in the Collateral Accounts. Upon the occurrence and
during the continuance of an Event of Default (but not any other time), upon
written notice to Grantor, the Lender shall be permitted to (i) retain, or
instruct the relevant Securities Intermediary or Depositary Bank to retain, all
cash and investments held in any Collateral Account, (ii) issue a "notice of
exclusive control" or other similar instructions with respect to any Collateral
Account and instruct the Depositary Bank to follow the instructions of the
Lender, and (iii) withdraw any amounts held in any Collateral Account and apply
such amounts in accordance with the terms of this Agreement.

 

5.3 Collection of Accounts.

 

 

(a) The Grantor shall, in a manner consistent with the provisions of this
Section 5, endeavor to cause to be collected from the Account Debtor named in
the of its Accounts, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures), any and all amounts owing under or on
account of such Accounts and shall cause such collections to deposited or held
in a Collateral Account.

18

 

(b) The Grantor shall, and the Lender hereby authorizes the Grantor to, enforce
and collect all amounts owing to it on its Inventory and Accounts, for the
benefit and on behalf of the Lender; provided, however, that upon the occurrence
and during the continuance of any Event of Default, such privilege may be
terminated, at the sole option of the Lender, by notice to the Grantor.

 

5.4 Collateral Concentration Account.

 

 

(a) After the occurrence and during the continuance of an Event of Default, the
Lender shall have the right, upon written notice to the Company, to establish
the Collateral Concentration Account pursuant to which, among other things, the
Lender shall have sole dominion and control over all funds held to the credit
of, and all disbursements from, the Collateral Concentration Account.

 

 

 

(b) Upon the establishment of the Collateral Concentration Account, (i) all of
the funds on deposit in or credited to any Controlled Deposit Account shall,
upon the instruction of the Lender to the appropriate Depositary Banks after the
issuance of a "notice of exclusive control," be transferred to the Collateral
Concentration Account on a daily or other basis specified by the Lender, (ii)
Grantor will have no right of withdrawal from the Collateral Concentration
Account or any of the Collateral Accounts, and (iii) all amounts held in the
Collateral Concentration Account or any of the Collateral Accounts may be
applied, in the Lender's discretion, towards payment of the Secured Obligations
in accordance with the terms of this Agreement.

 

 

 

(c) Upon the establishment of the Collateral Concentration Account and at all
times thereafter, the Grantor agrees (i) to cause all payments by its Account
Debtors to be immediately deposited in a Controlled Deposit Account, if such
Account Debtors have not already been instructed to do so, and (ii) to deposit
promptly all payments received by it from any other sale of any of its
Collateral, whether in the form of cash, checks, notes, drafts, bills of
exchange, money orders or otherwise, in a Controlled Deposit Account in
precisely the form received (but with any endorsements of Grantor necessary for
deposit or collection). Until any such payments are so deposited, such payments
shall be held in trust by Grantor for and as the property of the Lender.

 

6. SPECIAL PROVISIONS CONCERNING PLEDGED COLLATERAL

 

6.1 Delivery of Certificates and Instruments for Pledged Collateral.

 

 

(a) On or prior to the Effective Date, the Grantor shall deliver to the Lender
all certificates or instruments, if any, representing any of the Pledged
Collateral at the time owned by Grantor and subject to the Security Interest
hereof, duly endorsed in blank in the case of any instrument, and accompanied by
undated stock powers duly executed in blank by Grantor or such other instruments
of transfer as are acceptable to the Lender.

19

 

(b) If Grantor shall acquire (by purchase, conversion, exchange, stock dividend
or otherwise) any additional Pledged Collateral, at any time or from time to
time after the date hereof which is or are intended to be subjected to the
Security Interest hereof and which is or are represented by certificates or
instruments, Grantor shall (i) promptly pledge and deposit with the Lender all
such certificates or instruments, duly endorsed in blank, and accompanied by
undated stock powers duly executed in blank by Grantor or such other instruments
of transfer as are acceptable to the Lender, in the case of Equity Interests,
and (ii) promptly thereafter deliver to the Lender a certificate executed by an
authorized officer of Grantor describing such additional Pledged Collateral and
certifying that the same have been duly pledged with the Lender hereunder.

 

 

 

(c) Perfection under Foreign Law. Without limitation of any other provision of
this Agreement, if any of the Equity Interests owned by Grantor (whether or not
now owned or hereafter acquired) that are intended to be subjected to the
Security Interest hereof are issued by an Issuer that is a Foreign Subsidiary or
Person organized under the laws other than under the laws of the United States,
any State thereof or the District of Columbia, at the written request of the
Lender, Grantor shall promptly execute and deliver to the Lender a separate
pledge document covering such Equity Interests, conforming to the requirements
of the law of the jurisdiction in which such Foreign Subsidiary or other Person
is organized and satisfactory in form and substance to the Lender, together with
an opinion of local counsel as to the perfection of the security interest
provided for therein. The Grantor further agrees to take such actions as the
Lender deems reasonably necessary or desirable to effect the foregoing and to
permit the Lender to exercise any of its rights and remedies hereunder in
respect thereof or under such separate pledge agreement.

 

6.2 No Assumption of Liability, etc.

 

 

(a) The Security Interest granted by the Grantors herein is granted as security
only and shall not subject the Lender or any other Secured Creditor to, or in
any way alter or modify, any obligation or liability of Grantor with respect to
or arising out of, any of the Pledged Collateral.

 

 

 

(b) Nothing herein shall be construed to make the Lender liable as a general
partner or limited partner of any Pledged Entity or a shareholder of any
corporation, and the Lender by virtue of this Agreement or any actions taken as
contemplated hereby (except as referred to in the following sentence) shall not
have any of the duties, obligations or liabilities of a general partner or
limited partner of any Pledged Entity or a stockholder of any corporation. The
parties hereto expressly agree that, unless the Lender shall become the absolute
owner of an Equity Interest pursuant hereto, this Agreement shall not be
construed as creating a partnership or joint venture among the Lender and/or
Grantor or any other Person.

20

 

(c) Except as provided in the last sentence of Section 6.2(b), the Lender, by
accepting this Agreement, did not intend to become a general partner, limited
partner or member of any Pledged Entity or a shareholder of any corporation or
otherwise be deemed to be a co-venturer with respect to Grantor or any Pledged
Entity or a shareholder of any corporation either before or after an Event of
Default shall have occurred. The Lender shall have only those powers set forth
herein and shall assume none of the duties, obligations or liabilities of a
general partner, or limited partner or member of any Pledged Entity or of
Grantor.

 

6.3 Registration of Collateral in the Name of the Lender, etc. The Lender shall
have the right, at any time after the occurrence and continuation of an Event of
Default, in its discretion and without notice to Grantor, to transfer to or to
register in the name of the Lender or any of its nominees any or all of the
Pledged Collateral, subject only to the revocable voting and similar rights
specified in this Article VI. In addition, the Lender shall have the right at
any time to exchange certificates or instruments representing or evidencing any
Pledged Collateral for certificates or instruments of smaller or larger
denominations.

 

6.4 Appointment of Sub-agents; Endorsements, etc. The Lender shall have the
right to appoint one or more sub-agents for the purpose of retaining physical
possession of the instruments and certificates evidencing any of the Pledged
Collateral, which may be held (in the sole discretion of the Lender) in the name
of the relevant Grantor, endorsed or assigned in blank or in favor of the Lender
or any nominee or nominees of the Lender or a sub-agent appointed by the Lender.

 

6.5 Voting Rights. Unless and until an Event of Default shall have occurred and
be continuing, the Grantor shall be entitled to exercise all voting rights
attaching to any and all Pledged Collateral owned by it, and to give consents,
waivers or ratifications in respect thereof, provided that no vote shall be cast
or any consent, waiver or ratification given or any action taken which would
violate, result in the breach of any covenant contained in or be inconsistent
with, any of the terms of this Agreement, any other Secured Creditor Document,
or which would have the effect of materially impairing the position or interests
of the Lender. All such rights of Grantor to vote and to give consents, waivers
and ratifications shall cease in case an Event of Default shall occur and be
continuing.

 

6.6 Entitlement of Grantors to Cash Dividends and Distributions. Grantor shall
be entitled to receive all cash dividends or distributions payable in respect of
its Pledged Collateral, except as otherwise provided in this Article VI.

 

6.7 Entitlement of Lender to Dividends and Distributions. The Lender shall be
entitled to receive, and to retain as part of the Pledged Collateral:

 

 

(a) all cash dividends and distributions payable in respect of the Pledged
Collateral at any time when an Event of Default shall have occurred and be
continuing; and

 

 

 

(b) regardless of whether or not an Event of Default shall have occurred and be
continuing at the time of payment or distribution thereof:

21

 

 

(i) all other or additional stock, other securities, partnership interests,
membership interests or property (other than cash to which a Grantor is entitled
under Section 6.6) paid or distributed by way of dividend (including, without
limitation, any payment in kind dividend) or otherwise in respect of the Pledged
Collateral;

 

 

 

 

 

(ii) all other or additional stock, other securities, partnership interests,
membership interests or property (including cash) paid or distributed in respect
of the Pledged Collateral by way of stock-split, spin-off, split-up,
reclassification, combination of shares or similar rearrangement; and

 

 

 

 

 

(iii) all other or additional stock, other securities, partnership interests or
membership interests that may be paid in respect of the Pledged Collateral by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate, partnership or limited liability company
reorganization.

 

6.8 Application of Dividends and Distributions. If an Event of Default shall
have occurred and be continuing, all dividends and distributions received by the
Lender and then held by it pursuant to this Article VI as part of the Pledged
Collateral will be applied as provided in Section 8.4.

 

6.9 Turnover by Grantors. All dividends, distributions or other payments that
are received by Grantor contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Lender, shall be segregated from other
property or funds of Grantor and shall be forthwith paid over to the Lender as
Collateral in the same form as so received (with any necessary endorsement).

22

6.10 Registration under 1933 Act, etc. If an Event of Default shall have
occurred and be continuing and Grantor shall have received from the Lender a
written request or requests that Grantor cause any registration, qualification
or compliance under any Federal or state securities law or laws to be effected
with respect to all or any part of the Pledged Equity Interests of its
Subsidiaries, Grantor as soon as practicable and at its sole expense will use
its best efforts to cause such registration to be effected (and be kept
effective) and will use its best efforts to cause such qualification and
compliance to be effected (and be kept effective) as may be so requested and as
would permit or facilitate the sale and distribution of such stock, including,
without limitation, registration under the Securities Act of 1933, as then in
effect (the "Securities Act") (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with any other governmental requirements,
provided that the Lender shall furnish to Grantor such information regarding the
Lender as Grantor may request in writing and as shall be required in connection
with any such registration, qualification or compliance. The Grantor will advise
the Lender in writing as to the progress of the such registration, qualification
or compliance and as to the completion thereof, will furnish to the Lender such
number of prospectuses, offering circulars and other documents incident thereto
as the Lender from time to time may reasonably request, and will indemnify the
Lender and all others participating in the distribution of such Pledged Equity
Interests against all claims, losses, damages or liabilities caused by any
untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to Grantor by the Lender
expressly for use therein.

 

6.11 Sale of Pledged Equity Interests in Connection with Enforcement. If at any
time when the Lender shall determine to exercise its right to sell all or any
part of the Pledged Equity Interests pursuant to Section 8.1, and such Pledged
Equity Interests or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act, the Lender may,
in its sole and absolute discretion and to the fullest extent permitted by
applicable law now or hereafter in effect, sell such Pledged Equity Interests or
part thereof by private sale in such manner and under such circumstances as the
Lender may deem necessary or advisable in order that such sale may legally be
effected without such registration, provided that at least 10 days' prior notice
of the time and place of any such sale shall be given to Grantor. Without
limiting the generality of the foregoing, in any such event the Lender, in its
sole and absolute discretion, (a) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Equity Interests or part thereof shall have been filed under such
Securities Act, (b) may approach and negotiate with a single possible purchaser
to effect such sale and (c) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Equity Interests or part thereof. In the event of any such sale, the Lender
shall incur no responsibility or liability to Grantor for selling all or any
part of the Pledged Equity Interests at a price which the Lender may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might be realized if the sale were deferred
until the registration as aforesaid.

23

7. [Intentionally omitted.]

 

8. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT

 

8.1 Remedies Generally; Obtaining of the Collateral. The Grantor agrees that, if
an Event of Default shall have occurred and be continuing, then and in every
such case, subject to applicable law then in effect, the Lender, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under the UCC in all relevant jurisdictions and may
exercise any or all of the following rights (all of which the Grantor hereby
agrees is commercially reasonable to the fullest extent permitted under
applicable law now or hereafter in effect):

 

 

(a) personally, or by agents' attorneys or other authorized representatives,
immediately take possession of the Collateral or any part thereof, from Grantor
or any other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon Grantor's or such
other Person's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services, supplies,
aids and other facilities of Grantor;

 

 

 

(b) instruct the obligor or obligors on any Account, agreement, instrument or
other obligation (including, without limitation, Account Debtors) constituting
the Collateral to make any payment required by the terms of such Account,
agreement, instrument or other obligation directly to the Lender and/or directly
to a lockbox under the sole dominion and control of the Lender or to the
Collateral Concentration Account;

 

 

 

(c) sell, assign or otherwise liquidate, or direct Grantor to sell, assign or
otherwise liquidate, any or all of the Collateral or any part thereof, and take
possession of the proceeds of any such sale or liquidation;

 

 

 

(d) issue a "notice of exclusive control" with respect to any or all of the
Controlled Deposit Accounts and issue instructions with respect thereto;

 

 

 

(e) withdraw any or all monies, securities and/or instruments in the Collateral
Concentration Account or any Collateral Account for application to the Secured
Obligations in accordance with Section 8.4;

 

 

 

(f) pay and discharge taxes, Liens or claims on or against any of the
Collateral;

 

 

 

(g) pay, perform or satisfy, or cause to be paid, performed or satisfied, for
the benefit of Grantor, any of the obligations, terms, covenants, provisions or
conditions to be paid, observed, performed or satisfied by Grantor under any
contract, agreement or instrument relating to its Collateral, all in accordance
with the terms, covenants, provisions and conditions thereof, as and to the
extent that Grantor fails or refuses to perform or satisfy the same;

24

 

(h) enter into any extension of, or any other agreement in any way relating to,
any of the Collateral;

 

 

 

(i) make any compromise or settlement the Lender deems desirable or necessary
with respect to any of the Collateral; and/or

 

 

 

(j) take possession of the Collateral or any part thereof, by directing Grantor
or any other Person in possession thereof in writing to deliver the same to the
Lender at any place or places reasonably designated by the Lender, in which
event Grantor shall at its own expense:

 

 

 

 

(i) forthwith cause the same to be moved to the place or places so designated by
the Lender and there delivered to the Lender,

 

 

 

 

 

(ii) store and keep any Collateral so delivered to the Lender at such place or
places pending further action by the Lender as provided in Section 8.2, and

 

 

 

 

 

(iii) while the Collateral shall be so stored and kept, provide such guards and
maintenance services as shall be necessary to protect the same and to preserve
and maintain them in substantially the same condition prior to such action; it
being understood that Grantor's obligation so to deliver the Collateral is of
the essence of this Agreement and that, accordingly, upon application to a court
of equity having jurisdiction, the Lender shall be entitled to a decree
requiring specific performance by Grantor of said obligation.

25

8.2 Disposition of the Collateral. Upon the occurrence and continuance of an
Event of Default, any Collateral repossessed by the Lender under or pursuant to
Section 8.1 and any other Collateral whether or not so repossessed by the
Lender, may be sold, assigned, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale of the property to be sold, and in general in such manner, at such time
or times, at such place or places and on such terms as the Lender may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the Lender
or after any overhaul or repair which the Lender shall determine to be
commercially reasonable. Except in the case of any Collateral that is perishable
or threatens to decline speedily in value or is a of a type customarily sold on
a recognized market, (a) in the case of any such disposition which shall be a
private sale or other private proceedings permitted by such requirements, such
sale shall be made upon not less than 10 days' prior written notice to Grantor
specifying the time at which such disposition is to be made and the intended
sale price or other consideration therefor, and shall be subject, for the 10
days after the giving of such notice, to the right of the Grantor or any nominee
of the Grantor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified, and (b) in the case of any such disposition which shall be a
public sale permitted by such requirements, such sale shall be made upon not
less than 10 days' prior written notice to the Grantor specifying the time and
place of such sale and, in the absence of applicable requirements of law, shall
be by public auction (which may, at the Lender's sole option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in the city where such
Collateral is located. To the extent permitted by any such requirement of law,
the Lender may bid for and become the purchaser (by bidding in Secured
Obligations or otherwise) of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the Grantor
(except to the extent of surplus money received as provided in Section 8.4).
Unless so obligated under mandatory requirements of applicable law, the Lender
shall not be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the Grantor as hereinabove
specified. The Lender need give the Grantor only such notice of disposition as
the Lender shall deem to be reasonably practicable in view of such mandatory
requirements of applicable law.

26

8.3 Waiver of Claims. Except as otherwise provided in this Agreement, THE
GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND
JUDICIAL HEARING IN CONNECTION WITH THE LENDER'S TAKING POSSESSION OR THE
LENDER'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION,
ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND
ANY SUCH RIGHT WHICH THE GRANTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and the Grantor hereby further
waives, to the extent permitted by law: (i) all damages occasioned by such
taking of possession except any damages which are the direct result of the
Lender's gross negligence or willful misconduct, as determined by a final
non-appealable judgment of a court of competent jurisdiction; (ii) all other
requirements as to the time, place and terms of sale or other requirements with
respect to the enforcement of the Lender's rights hereunder; and (iii) all
rights of redemption, appraisement, valuation, stay, extension or moratorium now
or hereafter in force under any applicable law in order to prevent or delay the
enforcement of this Agreement or the absolute sale of the Collateral or any
portion thereof, and the Grantor, for itself and all who may claim under it,
insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws to the fullest extent permitted by applicable law now or
hereafter in effect. Any sale of, or the grant of options to purchase, or any
other realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Grantor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Grantor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the Grantor.

 

8.4 Application of Proceeds. All Collateral and proceeds of Collateral obtained
and realized by the Lender in connection with the enforcement of this Agreement
pursuant to this Article 8 shall be applied as set forth in the Credit
Agreement.

 

8.5 Remedies Cumulative, etc. Every right, power and remedy hereby specifically
given to the Lender shall be in addition to every other right, power and remedy
specifically given under this Agreement or the other Secured Creditor Documents
or now or hereafter existing at law or in equity, or by statute and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Lender. All such rights, powers and remedies
shall be cumulative and the exercise or the beginning of exercise of one shall
not be deemed a waiver of the right to exercise of any other or others. No delay
or omission of the Lender in the exercise of any such right, power or remedy, or
partial or single exercise thereof, and no renewal or extension of any of the
Secured Obligations, shall impair or constitute a waiver of any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on Grantor in any
case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the Lender to
any other or further action in any circumstances without notice or demand. In
the event that the Lender shall bring any suit to enforce any of its rights
hereunder and shall be entitled to judgment, then in such suit the Lender may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.

27

8.6 Discontinuance of Proceedings. In case the Lender shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Lender, then and in every such case the Grantor and the Lender shall be
restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Lender shall continue as if no such
proceeding had been instituted.

 

8.7 Purchasers of Collateral. Upon any sale of any of the Collateral by the
Lender hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Lender or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Lender or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

 

9. [RESERVED]

 

10. MISCELLANEOUS

 

10.1 Notices. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing and delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows: (a) if to the Grantor, as set forth, and at its
address specified, in or pursuant to the Credit Agreement; and (b) if to the
Lender at its address specified pursuant to the Credit Agreement; or in any case
at such other address as any of the Persons listed above may hereafter notify
the others in writing. All such notices and communications shall be mailed,
telecopied, sent by overnight courier or delivered, and shall be effective when
received.

 

10.2 Entire Agreement. This Agreement and the other Secured Creditor Documents
represent the final agreement among the parties with respect to the subject
matter hereof and thereof, supersede any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof, and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements among the parties. There are no unwritten oral
agreements among the parties.

 

10.3 Obligations Absolute. The obligations of the Grantor under this Agreement
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, other than
indefeasible payment in full of, and complete performance of, all of the Secured
Obligations, including, without limitation:

 

 

(a) any renewal, extension, amendment or modification of, or addition or
supplement to or deletion from other Secured Creditor Documents, or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof;

28

 

(b) any waiver, consent, extension, indulgence or other action or inaction under
or in respect of any such agreement or instrument or this Agreement except as
expressly provided in such renewal, extension, amendment, modification,
addition, supplement, assignment or transfer;

 

 

 

(c) any furnishing of any additional security to the Lender or its assignee or
any acceptance thereof or any release of any security by the Lender or its
assignee;

 

 

 

(d) any limitation on any other Person's liability or obligations under any such
instrument or agreement or any invalidity or unenforceability, in whole or in
part, of any such instrument or agreement or any term thereof;

 

 

 

(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Grantor or any
Subsidiary of Grantor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
Grantor shall have notice or knowledge of any of the foregoing; or

 

 

 

(f) to the fullest extent permitted by applicable law now or hereafter in
effect, any other event or circumstance which, but for this provision, might
release or discharge a guarantor or other surety from its obligations as such.

 

10.4 Successors and Assigns. This Agreement shall be binding upon the Grantor
and its successors and assigns and shall inure to the benefit of the Lender and
their respective successors and assigns, provided that Grantor may not transfer
or assign any or all of its rights or obligations hereunder without the written
consent of the Lender. All agreements, statements, representations and
warranties made by the Grantor herein or in any certificate or other instrument
delivered by Grantor or on its behalf under this Agreement shall be considered
to have been relied upon by the Lender and shall survive the execution and
delivery of this Agreement and the other Secured Creditor Documents regardless
of any investigation made by the Lender on its behalf.

 

10.5 Headings Descriptive. The headings of the several Sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

 

10.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT
OF LAWS PRINCIPLES.

29

10.8 Enforcement Expenses, etc. The Grantors hereby jointly and severally agree
to pay, to the extent not paid pursuant to the Credit Agreement, all reasonable
out-of-pocket costs and expenses of the Lender in connection with the
enforcement of this Agreement, the preservation of the Collateral, the
perfection of the Security Interest, and any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel employed by the Lender).

 

10.9 Termination. This Agreement shall terminate the date upon which (i) the
Commitments, the Credit Agreement and all other Loan Documents have been
terminated, (ii) no Promissory Note is outstanding, and (iii) all Advances and
other Secured Obligations (other than unasserted indemnity obligations), owing
to the Lender have been indefeasibly paid in full. Upon such termination, the
Lender, at the request and expense of the Grantor, will execute and deliver to
the Grantor a proper instrument or instruments (including UCC termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Grantor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Lender and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.

 

10.10 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, including via
facsimile transmission or other electronic transmission capable of
authentication, the of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same agreement.
A set of counterparts executed by all the parties hereto shall be lodged with
the Company and the Lender.

 

10.11 Additional Grantors. Additional Grantors may become a party to this
Agreement by execution of a Security Agreement Joinder.

 

10.12 Effectiveness. This Agreement shall be effective as to Grantor upon its
execution and delivery to the Lender of a counterpart of this Agreement manually
executed on behalf of Grantor, regardless of the date of this Agreement or the
date this Agreement is executed and delivered by any other party hereto.

 

10.13 Amendments and Waivers. Neither this Agreement nor any provision hereof
may be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by (a) the Lender and (b) the Grantor or Grantors with
respect to which such change, waiver, modification or variance is to apply,
subject to any consent required in accordance with the Credit Agreement.

30

10.14 WAIVER OF JURY TRIAL. THE GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE
TRANSACTIONS RELATED THERETO, IN THE CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND THE GRANTOR
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 10.14
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

31

[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.

 

 

GRANTOR

 

 

 

 

 

IGI LABORATORIES, INC., a Delaware Corporation

 

 

 

 

 

By:

/s/ Charles Moore

 

 

Name: Charles Moore

 

 

Title: President and Chief
Executive Officer

 

 

 

 

 

LENDER

 

 

 

AMZAK CAPITAL MANAGEMENT, LLC, a Nevada limited liability company

 

 

 

 

 

By:

/s/ Michael David Kazma

 

 

Name: Michael David Kazma

 

 

Title: President

 

 

 

 

 

Lending Office:

 

 

 

1 North Federal Highway Ste. 400

 

Boca Raton, Florida 33432

32

Schedule 3.6

 

IGEN, Inc., a Delaware corporation

33