OR ANY PROVISION OF THE ORGANIZATIONAL DOCUMENTS OF ANY MAKER, (B) CONTRAVENE OR
CONSTITUTE A DEFAULT UNDER ANY COVENANT, INDENTURE OR AGREEMENT OF OR AFFECTING
ANY MAKER OR ANY OF ITS PROPERTY, OR (C) RESULT IN THE CREATION OR IMPOSITION OF
ANY LIEN ON ANY PROPERTY OF ANY MAKER OTHER THAN THE LIENS GRANTED IN FAVOR OF
THE PAYEE PURSUANT TO THE NOTE AND LIENS GRANTED TO THE FIRST LIEN SECURED
PARTY.
(E)
SUBSIDIARIES.
SCHEDULE 10(E) SETS FORTH
FOR EACH SUBSIDIARY OF BIO-KEY (I) ITS NAME AND JURISDICTION OF INCORPORATION,
(II) THE NUMBER OF AUTHORIZED SHARES FOR EACH CLASS OF ITS CAPITAL STOCK AND
(III) THE NUMBER OF ISSUED AND OUTSTANDING SHARES OF EACH CLASS OF ITS CAPITAL
STOCK, THE NAMES AND HOLDERS THEREOF AND THE NUMBER OF SHARES HELD BY SUCH
HOLDER.
(F)
PLEDGE.
(I)
SCHEDULE 10(F) COMPLETELY AND ACCURATELY
IDENTIFIES, AS OF THE DATE HEREOF, (I) THE NUMBER OF ISSUED AND OUTSTANDING
EQUITY INTERESTS OF EACH ISSUER HELD BY THE PLEDGOR AND (II) THE PERCENTAGE OF
THE PLEDGOR'S OWNERSHIP OF THE AGGREGATE ISSUED AND OUTSTANDING EQUITY INTERESTS
OF EACH ISSUER.
EACH PLEDGED SECURITY HAS BEEN DULY AND VALIDLY AUTHORIZED AND
ISSUED TO THE PLEDGOR AND, IF APPLICABLE, IS FULLY PAID AND NON-ASSESSABLE.
11
(II)
THE DELIVERY OF THE PLEDGED SECURITIES TO
THE PAYEE AND THE CONTINUED POSSESSION OF SUCH PLEDGED SECURITIES BY PAYEE (AND,
WITH RESPECT TO PLEDGED SECURITIES CONSISTING OF MEMBERSHIP INTERESTS OR
PARTNERSHIP INTERESTS, THE TIMELY AND PROPER FILING IN THE APPROPRIATE FILING
OFFICE OF A UCC FINANCING STATEMENT DESCRIBING THE SAME AS COLLATERAL) IS
EFFECTIVE TO CREATE A VALID AND PERFECTED FIRST PRIORITY SECURITY INTEREST IN
THE PLEDGED COLLATERAL, FREE OF ANY ADVERSE CLAIM IN FAVOR OF PAYEE, OTHER THAN
THE CLAIMS OF THE FIRST LIEN SECURED PARTY.
SUBJECT ONLY TO (I) THE
CONSUMMATION OF THE DELIVERY DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
(AND, IF APPLICABLE, THE TIMELY AND PROPER FILING OF A FINANCING STATEMENT
DESCRIBED IN SUCH SENTENCE) AND (II) CLAIMS OF THE FIRST LIEN SECURED PARTY, THE
PAYEE HAS A VALID AND PERFECTED SECOND PRIORITY SECURITY INTEREST IN THE PLEDGED
COLLATERAL AND SUCH SECURITY INTEREST IS ENTITLED TO ALL OF THE RIGHTS,
PRIORITIES AND BENEFITS AFFORDED BY THE UCC OR OTHER APPLICABLE LAW AS ENACTED
IN ANY RELEVANT JURISDICTION WHICH RELATES TO PERFECTED SECURITY INTERESTS.
(III)
EXCEPT AS SET FORTH ON THE SCHEDULE 10(F),
NO PLEDGED SECURITY CONSISTING OF EITHER (I) A MEMBERSHIP INTEREST IN AN ISSUER
THAT IS A LIMITED LIABILITY COMPANY OR (II) A PARTNERSHIP INTEREST IN AN ISSUER
THAT IS A PARTNERSHIP PROVIDES BY ITS TERMS THAT IT IS A "SECURITY" GOVERNED BY
ARTICLE 8 OF THE UCC.
(IV)
NONE OF THE PLEDGED SECURITIES CONSTITUTES
MARGIN STOCK, AS DEFINED IN REGULATION U OF THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM.
(G)
FULL DISCLOSURE.
THE STATEMENTS AND
INFORMATION FURNISHED BY OR ON BEHALF OF ANY MAKER TO THE PAYEE IN CONNECTION
WITH THE NEGOTIATION OF THIS NOTE AND THE OTHER DOCUMENTS PROVIDED IN CONNECTION
HEREWITH AND THE COMMITMENTS