IN WHICH A SECURITY INTEREST IS PURPORTED
TO BE GRANTED HEREUNDER, AS FOLLOWS:
(I)
OWNERSHIP OF COLLATERAL.
BORROWER HAS THE POWER TO GRANT A LIEN AND
SECURITY INTEREST IN EACH ITEM OF COLLATERAL UPON WHICH IT PURPORTS TO GRANT A
LIEN OR SECURITY INTEREST HEREUNDER AND THE GRANT OF SUCH SECURITY INTEREST
SHALL NOT CONSTITUTE OR RESULT IN (A) THE ABANDONMENT, INVALIDATION OR
UNENFORCEABILITY OF ANY RIGHT, TITLE OR INTEREST OF BORROWER UNDER ANY LEASE,
LICENSE OR CONTRACT TO WHICH IT IS A PARTY OR (B) A BREACH OR TERMINATION
PURSUANT TO THE TERMS OF, OR A DEFAULT UNDER, ANY SUCH LEASE, LICENSE, CONTRACT
OR AGREEMENT (OTHER THAN TO THE EXTENT THAT ANY SUCH TERM WOULD BE RENDERED
INEFFECTIVE PURSUANT TO SECTIONS 9-406, 9-407, 9-408 OR 9-409 OF THE UCC).
OTHER THAN SUCH AS MAY HAVE BEEN FILED IN FAVOR OF INVESTOR RELATING TO THIS
AGREEMENT, THE ORIGINAL SECURITY AGREEMENT OR AS CONTEMPLATED BY THE LOAN
AGREEMENT, NO EFFECTIVE UCC FINANCING STATEMENT OR OTHER INSTRUMENT SIMILAR IN
EFFECT COVERING ALL OR ANY PART OF THE COLLATERAL OR THE LFRP PATENTS IS ON FILE
IN ANY FILING OR RECORDING OFFICE.
(II)
VALIDITY.
THIS AGREEMENT CREATES A VALID SECURITY INTEREST IN THE
COLLATERAL, AND UPON THE FILING OF THE APPROPRIATE UCC FINANCING STATEMENTS
NAMING INVESTOR AS SECURED PARTY AND DESCRIBING THE COLLATERAL IN THE APPLICABLE
FILING OFFICE(S) IN THE JURISDICTION(S) LISTED IN SCHEDULE 11(B), SUCH SECURITY
INTEREST WILL BE PERFECTED IN ALL COLLATERAL IN WHICH A SECURITY INTEREST CAN BE
PERFECTED BY THE FILING OF A UCC-1 UNIFORM COMMERCIAL CODE FINANCING STATEMENT.
OTHER THAN PERMITTED LIENS WHICH HAVE PRIORITY
Confidential materials omitted and filed separately with the Securities and
Exchange Commission.
Asterisks denote such omission.
5
UNDER LAW, THE SECURITY INTEREST IN THE COLLATERAL GRANTED HEREIN IS PRIOR TO
ANY AND ALL OTHER LIENS.
AS OF THE DATE HEREOF, THERE ARE NO LIENS OTHER THAN
PERMITTED LIENS ON OR WITH RESPECT TO THE COLLATERAL.
(III)
AUTHORIZATION, APPROVAL.
NO AUTHORIZATION, APPROVAL, OR OTHER ACTION
BY, AND NO NOTICE TO OR FILING WITH, ANY GOVERNMENT OR AGENCY OF ANY GOVERNMENT
OR OTHER PERSON IS REQUIRED EITHER (A) FOR THE ASSIGNMENT, PLEDGE AND GRANT BY
BORROWER OF THE SECURITY INTEREST GRANTED HEREBY OR FOR THE EXECUTION, DELIVERY
AND PERFORMANCE OF THIS AGREEMENT BY BORROWER; OR (B) FOR THE PERFECTION OF, THE
PLEDGE, ASSIGNMENT AND GRANT OF THE SECURITY INTEREST CREATED HEREBY OR THE
EXERCISE BY INVESTOR OF ITS RIGHTS AND REMEDIES HEREUNDER (PROVIDED, HOWEVER,
THAT THE EXERCISE BY INVESTOR OF CERTAIN RIGHTS AND REMEDIES RELATING TO CERTAIN
LICENSES OR LEASES OF THE BORROWER MAY REQUIRE THE CONSENT OF THE OTHER PARTIES
TO SUCH LICENSES OR LEASES), OTHER THAN (X) THE FILING OF FINANCING STATEMENTS
IN THE APPROPRIATE OFFICE(S) LOCATED IN THE JURISDICTION(S) LISTED ON SCHEDULE
11(B) AND (Y) THE FILING OF THE PATENT SECURITY AGREEMENT WITH THE UNITED STATES
PATENT AND TRADEMARK OFFICE AND THE FILING OF THE COPYRIGHT SECURITY AGREEMENT
IN THE UNITED STATES COPYRIGHT OFFICE AND ANY SUPPLEMENTS OR AMENDMENTS THERETO.
(IV)