New Jersey (the "Code").
Section 1.4.
Other Definitions.
As used in this Agreement, the
following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of such
terms:
"Event of Default" shall be deemed to have occurred under this Agreement upon
the failure by the Company to perform, observe, or comply with any of the
covenants, agreements, terms or conditions set forth herein or the occurrance
of an Event of Default under and as defined in the Convertible Debentures.
ARTICLE 2.
PLEDGED PROPERTY
SECTION 2.1.
GRANT OF SECURITY INTEREST.
(A)
AS COLLATERAL SECURITY FOR ALL OF THE OBLIGATIONS (AS DEFINED IN
SECTION 2.2 HEREOF), EACH GRANTOR HEREBY PLEDGES AND ASSIGNS TO THE SECURED
PARTY, AND GRANTS TO THE SECURED PARTY FOR ITS BENEFIT, A CONTINUING SECURITY
INTEREST IN AND TO ALL PERSONAL PROPERTY OF EACH GRANTOR, WHEREVER LOCATED AND
WHETHER NOW OR HEREINAFTER EXISTING AND WHETHER NOW OWNED OR HEREAFTER ACQUIRED,
OF EVERY KIND AND DESCRIPTION, TANGIBLE OR INTANGIBLE, INCLUDING WITHOUT
LIMITATION, ALL GOODS, INVENTORY, EQUIPMENT, FIXTURES, INSTRUMENTS (INCLUDING
PROMISSORY NOTES), DOCUMENTS, ACCOUNTS (INCLUDING HEALTH-CARE-INSURANCE
RECEIVABLES, AND LICENSE FEES), CONTRACTS, CONTRACT RIGHTS, CHATTEL PAPER
(WHETHER TANGIBLE OR ELECTRONIC), DEPOSIT ACCOUNTS (AND IN AND TO ANY DEPOSITS
OR OTHER SUMS AT ANY TIME CREDITED TO EACH SUCH DEPOSIT ACCOUNT), MONEY, LETTERS
OF CREDIT AND LETTER-OF-CREDIT RIGHTS (WHETHER OR NOT THE LETTER OF CREDIT IS
EVIDENCED BY A WRITING), COMMERCIAL TORT CLAIMS, SECURITIES AND ALL OTHER
INVESTMENT PROPERTY, GENERAL INTANGIBLES (INCLUDING PAYMENT INTANGIBLES AND
SOFTWARE), FARM PRODUCTS, ALL BOOKS AND RECORDS RELATING TO ANY OF THE
FOREGOING, AND ALL SUPPORTING OBLIGATIONS, AND ANY AND ALL PROCEEDS AND PRODUCTS
OF ANY THEREOF, INCLUDING PROCEEDS OF INSURANCE COVERING ANY OR ALL OF THE
FOREGOING, WHEREVER LOCATED, WHETHER NOW OWNED, OR NOW DUE, IN WHICH A GRANTOR
HAS AN INTEREST OR THE POWER TO TRANSFER RIGHTS, OR HEREAFTER ACQUIRED, ARISING,
OR TO BECOME DUE, OR IN WHICH A GRANTOR OBTAINS AN INTEREST, OR THE POWER TO
TRANSFER RIGHTS, AND AS MORE PARTICULARLY DESCRIBED ON EXHIBIT A ATTACHED HERETO
(COLLECTIVELY, THE PLEDGED PROPERTY).
(B)
SIMULTANEOUSLY WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH GRANTOR SHALL MAKE, EXECUTE, ACKNOWLEDGE, FILE, RECORD AND DELIVER TO THE
SECURED
PARTY SUCH DOCUMENTS, INSTRUMENTS, AND AGREEMENTS, INCLUDING, WITHOUT
LIMITATION, FINANCING STATEMENTS, CERTIFICATES, AFFIDAVITS AND FORMS AS MAY, IN
THE SECURED PARTY'S REASONABLE JUDGMENT, BE NECESSARY TO EFFECTUATE, COMPLETE OR
PERFECT, OR TO CONTINUE AND PRESERVE, THE SECURITY INTEREST OF THE SECURED PARTY
IN THE PLEDGED PROPERTY.
SECTION 2.2
SECURITY FOR OBLIGATIONS.
THE SECURITY INTEREST CREATED
HEREBY IN THE PLEDGED PROPERTY CONSTITUTES CONTINUING COLLATERAL SECURITY FOR
ALL OF THE FOLLOWING OBLIGATIONS, WHETHER NOW EXISTING OR HEREINAFTER INCURRED
(COLLECTIVELY, THE "OBLIGATIONS"):
(A)
(I) THE PAYMENT BY THE COMPANY, AS AND WHEN DUE AND PAYABLE (BY SCHEDULED
MATURITY, ACCELERATION, DEMAND OR OTHERWISE), OF ALL AMOUNTS FROM TIME TO TIME
OWING BY IT IN RESPECT OF THE CONVERTIBLE DEBENTURES, THE OTHER TRANSACTION
DOCUMENTS, OR ANY OTHER AMOUNTS OWING BY IT TO THE