ADDITION, THE SECURED
PARTY SHALL HAVE THE RIGHT AT ANY TIME TO EXCHANGE CERTIFICATES REPRESENTING OR
EVIDENCING COLLATERAL FOR CERTIFICATES OF SMALLER OR LARGER DENOMINATIONS.
(B)
THE PLEDGOR AGREES TO TAKE ALL OTHER ACTIONS
WHICH MAY BE NECESSARY UNDER THE LAWS OF THE STATE OF ILLINOIS OR MAY BE
REQUESTED BY THE SECURED PARTY TO PROTECT AND PERFECT THE INTEREST OF THE
SECURED PARTY IN THE COLLATERAL CREATED HEREBY AND TO ENSURE THAT SUCH INTEREST
IS SENIOR IN RANK TO THE CLAIMS OF ANY OTHER CREDITOR OF THE PLEDGOR CLAIMING AN
INTEREST IN AND TO THE COLLATERAL, INCLUDING THE FILING OF UCC-1 FINANCING
STATEMENTS (INCLUDING ANY CONTINUATION STATEMENTS WITH RESPECT TO SUCH FINANCING
STATEMENTS WHEN APPLICABLE) IDENTIFYING THE SURPLUS NOTES AND NAMING THE PLEDGOR
AS DEBTOR AND THE SECURED PARTY AS SECURED PARTY.
THE PLEDGOR SHALL DELIVER TO
THE SECURED PARTY FILE-STAMPED COPIES OR OTHER EVIDENCE OF SUCH FILINGS.
NOTWITHSTANDING THE AGREEMENTS SET FORTH IN THIS SECTION 1.2, THE PLEDGOR HEREBY
AUTHORIZES THE SECURED PARTY TO TAKE, AND APPOINTS THE SECURED PARTY AS ITS
ATTORNEY-IN-FACT FOR THE PURPOSE OF TAKING, ANY ACTION NECESSARY UNDER THE UCC
TO PERFECT, AND TO MAINTAIN THE PERFECTION AND PRIORITY OF, THE SECURED PARTY'S
INTEREST IN THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, THE FILING OF ANY
SUCH FINANCING AND CONTINUATION STATEMENTS.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.1
REPRESENTATIONS, WARRANTIES AND
COVENANTS AS TO THE PLEDGOR.
THE PLEDGOR HEREBY REPRESENTS, WARRANTS AND
COVENANTS TO THE SECURED PARTY:
(A)
TITLE TO COLLATERAL.
THE SURPLUS NOTES AND
ALL OF THE OTHER COLLATERAL IN EXISTENCE ON THE DATE HEREOF ARE, AND ALL SURPLUS
NOTES AND ALL OF THE OTHER COLLATERAL ISSUED SUBSEQUENT TO THE DATE HEREOF WILL
BE, OWNED BY THE PLEDGOR FREE AND CLEAR OF ANY LIEN OR ENCUMBRANCE.
THE PLEDGOR
HAS NOT (I) FILED OR CONSENTED TO THE FILING WITH ANY GOVERNMENTAL AUTHORITY OF
ANY FINANCING STATEMENT OR ANALOGOUS DOCUMENT UNDER THE UCC OR ANY OTHER
APPLICABLE LAWS COVERING ANY COLLATERAL, (II) MADE ANY ASSIGNMENT TO ANY OTHER
PERSON OF ANY INTEREST IN THE COLLATERAL OR (III) ENTERED INTO ANY SECURITY
AGREEMENT OR SIMILAR INSTRUMENT OR ARRANGEMENT COVERING ALL OR ANY PART OF THE
COLLATERAL WITH ANY OTHER PERSON, WHICH FINANCING STATEMENT OR ANALOGOUS
DOCUMENT, ASSIGNMENT, SECURITY AGREEMENT OR SIMILAR INSTRUMENT IS STILL IN
EFFECT.
(B)
ORGANIZATION.
THE PLEDGOR IS A CORPORATION
ORGANIZED UNDER THE LAWS OF THE STATE OF DELAWARE.
(C)
PRINCIPAL OFFICE.
THE PLEDGOR MAINTAINS
ITS CHIEF EXECUTIVE OFFICE AT 42 READ'S WAY, SUITE 124, NEW CASTLE, DELAWARE
19720-1642.
(D)
NO LIENS.
PLEDGOR IS AS OF THE DATE HEREOF,
AND AT THE TIME OF ANY DELIVERY OF ANY COLLATERAL TO THE SECURED PARTY PURSUANT
TO ARTICLE I OF THIS PLEDGE AGREEMENT, PLEDGOR
2
WILL BE, THE SOLE LEGAL AND BENEFICIAL OWNER OF THE COLLATERAL.
ALL COLLATERAL
IS ON THE DATE HEREOF, AND WILL BE, SO OWNED BY PLEDGOR FREE AND CLEAR OF ANY
LIEN EXCEPT FOR THE LIEN CREATED BY THIS PLEDGE AGREEMENT.
(E)
DUE AUTHORIZATION.
THE EXECUTION AND
DELIVERY TO THE SECURED