Document:

Blueprint

Exhibit
10.3

 

 

 

 

 

 

GENERAL
SECURITY AGREEMENT

 

made
by

 

AEMETIS,
INC.,

 

as a
Grantor

 

THE
OTHER GRANTORS FROM TIME TO TIME PARTY HERETO

 

in
favor of

 

THIRD
EYE CAPITAL CORPORATION,

 

as
Agent

 

Dated
as of July 10, 2017

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	

ARTICLE
I DEFINED TERMS

	

1

	

Section
1.01. Definitions

	

1

	

Section
1.02. Other Definitional Provisions

	

5

	

ARTICLE
II [RESERVED]

	

5

	

ARTICLE
III GRANT OF SECURITY INTEREST

	

5

	

Section
3.01. Grant of Security

	

5

	

ARTICLE
IV REPRESENTATIONS AND WARRANTIES

	

6

	

Section
4.01. Title; No Other Liens

	

6

	

Section
4.02. Perfected First Priority Liens

	

7

	

Section
4.03. Chief Executive Office; Etc

	

7

	

Section
4.04. Inventory and Equipment

	

8

	

Section
4.05. Farm Products

	

8

	

Section
4.06. Investment Property

	

8

	

Section
4.07. Receivables

	

9

	

Section
4.08. Intellectual Property

	

9

	

Section
4.09. Securities Accounts, Commodities Accounts and Deposit
Accounts

	

10

	

Section
4.10. Commercial Tort Claims

	

10

	

Section
4.11. Letters of Credit

	

10

	

Section
4.12. Independent Investigation; Etc

	

10

	

Section
4.13. Assigned Agreements

	

10

	

ARTICLE
V COVENANTS

	

12

	

Section
5.01. Delivery and Control of Instruments, Investment Property,
Negotiable Documents, Chattel Paper, Letter-of-Credit Rights, and
Transferable Records

	

12

	

Section
5.02. Maintenance of Insurance

	

14

	

Section
5.03. Payment of Guaranteed Obligations

	

14

	

Section
5.04. Maintenance of Perfected Security Interest; Limitation on
Dispositions; Further Documentation; Inspection; Etc

	

14

	

Section
5.05. Changes in Locations; Name; Jurisdiction of Incorporation;
Etc

	

15

	

Section
5.06. Notices

	

15

	

Section
5.07. Investment Property

	

16

	

Section
5.08. Inventory and Equipment

	

16

	

Section
5.09. Receivables

	

17

	

Section
5.10. Intellectual Property

	

17

	

Section
5.11. Commercial Tort Claims

	

19

	

Section
5.12. Assigned Agreements

	

19

	

Section
5.13. Covenants in Note Purchase Agreement.

	

20

	

ARTICLE
VI REMEDIAL PROVISIONS

	

20

	

Section
6.01. Certain Matters Relating to Receivables

	

20

	

Section
6.02. Communications with Obligors; Grantors Remain
Liable

	

20

	

Section
6.03. Voting Rights; Dividends; Etc

	

21

	

Section
6.04. Proceeds to be Turned Over To Agent

	

22

	

Section
6.05. Application of Proceeds

	

22

	

Section
6.06. Remedies

	

23

 

 

ii

 

 

TABLE OF CONTENTS

(continued)

 

 

Page

  

	

Section
6.07. Registration Rights

	

24

	

Section
6.08. Deficiency

	

25

	

Section
6.09. Sales on Credit

	

25

	

ARTICLE
VII THE AGENT

	

25

	

Section
7.01. Agent’s Appointment as Attorney-in-Fact;
Etc

	

25

	

Section
7.02. Duty of Agent

	

27

	

Section
7.03. Financing Statements

	

27

	

Section
7.04. Authority of Agent

	

27

	

ARTICLE
VIII MISCELLANEOUS

	

27

	

Section
8.01. Amendments in Writing

	

27

	

Section
8.02. Notices

	

27

	

Section
8.03. Security Interest Absolute

	

28

	

Section
8.04. No Waiver by Course of Conduct; Cumulative
Remedies

	

28

	

Section
8.05. Indemnity and Expenses

	

28

	

Section
8.06. Successors and Assigns

	

28

	

Section
8.07. Set-Off

	

29

	

Section
8.08. Counterparts

	

29

	

Section
8.09. Severability

	

29

	

Section
8.10. Headings

	

29

	

Section
8.11. Governing Law

	

29

	

Section
8.12. Submission To Jurisdiction

	

30

	

Section
8.13. Acknowledgements

	

30

	

Section
8.14. Additional Grantors

	

30

	

Section
8.15. Release

	

31

	

Section
8.16. WAIVER OF JURY TRIAL

	

31

	

Section
8.17. INTEGRATION

	

31

	

Section
8.18. Time is of the Essence

	

31

	

Section
8.19. Survival

	

31

 

 

iii

 

 

SCHEDULES

 

Schedule
1

Assigned
Agreements

Schedule
2

Investment
Property

Schedule
3

Perfection
Matters

Schedule
4

Jurisdictions of
Organization and Chief Executive Offices

Schedule
5

Inventory and
Equipment Locations

Schedule
6

Intellectual
Property

Schedule
7

Commercial Tort
Claims

Schedule
8 

Equipment Subject
to Certificate of Title Statutes

Schedule
9

Letters of
Credit

Schedule10

Existing Prior
Liens

 

ANNEXES

 

Annex
1

Form of Assumption
Agreement

Annex
2

Form of
Intellectual Property Security Agreement

Annex
3  

Form of
Intellectual Property Security Agreement Supplement

Annex
4   

Form of Consent and
Agreement

 

 

iv

 

 

GENERAL
SECURITY AGREEMENT

 

This
GENERAL SECURITY AGREEMENT, (the “Agreement”) dated as of
July 10, 2017, is made by Aemetis, Inc., a Nevada corporation (the
“Company”), as a grantor,
and each other Person that may from time to time become party
hereto as a grantor (collectively with the Company, the
“Grantors”), in favor of
THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (as defined
in the Note Purchase Agreement referred to below) (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

RECITALS

 

A.           Goodland
Advanced Fuels, Inc., the Noteholders from time to time party
thereto, and the Agent have entered into that certain Note Purchase
Agreement of even date herewith (as amended, varied, supplemented,
restated, renewed or replaced at any time and from time to time,
the "Note Purchase
Agreement");

 

B.           Each
Grantor has entered into that certain Limited Guaranty of even date
herewith (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Limited Guaranty") to guarantee
the Guaranteed Obligations (as defined in the Limited
Guaranty);

 

C.           Each
Grantor will derive substantial direct and indirect benefit from
the making of the Loans under the Note Purchase Agreement;
and

 

D.           It
is a condition precedent to the obligation of the Noteholders to
make Loans under the Note Purchase Agreement that each Grantor
shall have executed and delivered this Agreement to the Agent, for
the benefit of the Agent, the Noteholders from time to time party
to the Note Purchase Agreement and any other holder of any Note
Indebtedness (collectively with the Agent and the Noteholders, the
“Secured
Parties”).

 

NOW,
THEREFORE, in consideration of the premises and to induce the
Noteholders to make the Loans pursuant to the Note Purchase
Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each
Grantor hereby agrees with the Agent, for the benefit of the
Secured Parties, as follows:

 

ARTICLE I

 

DEFINED
TERMS

 

Section
1.01.  Definitions. Unless otherwise
defined herein, terms defined in the Note Purchase Agreement and
used herein shall have the meanings given to them in the Note
Purchase Agreement. Furthermore, unless otherwise defined in this
Agreement or in the Note Purchase Agreement, terms defined in
Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or
9.

 

(a)              The
following terms shall have the following meanings:

 

"Accounts" means all "accounts"
as such term is defined in Article 9 of the UCC.

 

"Agreement" means this General
Security Agreement, as amended, varied, supplemented, restated,
renewed or replaced at any time and from time to time.

 

 

 

 

"Assigned Agreements" means the
contracts and agreements listed in Schedule 1, as the same may be
amended, restated, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor
to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of any Grantor to receive
proceeds of any insurance, indemnity, warranty, or guaranty
thereunder or in connection therewith, (iii) all rights of any
Grantor to damages arising thereunder or in connection therewith
and (iv) all rights of any Grantor to perform thereunder and to
compel performance and otherwise exercise rights and remedies
thereunder.

 

"Assumption Agreement" means an
Assumption Agreement in substantially the form of Annex 1 to this
Agreement.

 

“Capital Stock” means,
with respect to any Person, (a) any and all of the shares,
interests, rights, participations or other equivalents (however
designated) of capital stock of (or other ownership or profit
interests in) such Person, (b) any and all of the warrants, options
or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests
in) such Person, and (c) all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or
profit interests in) such Person or warrants, rights or options for
the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust
interests therein), in the case of clauses (a) through (c) above,
whether voting or nonvoting, and whether or not such shares,
participations, warrants, options, rights or other interests are
outstanding on any date of determination.

 

"Collateral" has the meaning
specified in Section 3.01.

 

"Collateral Accounts" means any
collateral account established by the Agent pursuant to this
Agreement or the Note Purchase Agreement. Each Collateral Account
shall be in the name of the Agent and shall be under the sole
dominion and control of the Agent.

 

"Commodity Account Control
Agreement" has the meaning specified in Section
5.01(e).

 

"Company" has the meaning
specified in the opening paragraph of this Agreement.

 

"Computer Software" means all
computer software, programs and databases (including, without
limitation, source code, object code and all related applications
and data files), firmware and documentation and materials relating
thereto, together with any and all maintenance rights, service
rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and
any substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing.

 

"Consent to Assignment of Letter of
Credit Rights" has the meaning specified in Section
5.01(g).

 

"Control Agreement" means a
Deposit Account Control Agreement, Securities Account Control
Agreement, Commodity Account Control Agreement or Uncertificated
Security Control Agreement.

 

"Copyright Licenses" means any
written agreement naming any Grantor as licensor or licensee
(including, without limitation, those listed in Schedule 6), granting any right
under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.

 

"Copyrights" means (i) all
copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations
and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office,
and (ii) the right to obtain all renewals thereof.

 

 

 

2

 

 

"Deposit Account Control
Agreement" has the meaning specified in Section
5.01(f).

 

"Equipment" means all
"equipment" as such term is defined in Article 9 of the UCC and, in
any event, includes, without limitation, all machinery, tools,
office equipment, furniture, furnishings, and fixtures (including
trade fixtures and business fixtures) and all parts thereof and all
accessions thereto and all software related thereto.

 

"General Intangibles" means all
"general intangibles" as such term is defined in Article 9 of the
UCC and, in any event, includes, without limitation, with respect
to each Grantor, (i) all tax refunds, claims for tax refunds,
and tax credits, (ii) all permits, licenses, approvals,
authorizations, consents, variances, and certifications of any
Governmental Authority, (iii) all judgments, claims, tort
claims, and causes of action, (iv) all property, casualty,
liability, business interruption, and other insurance of any kind
or character, and all insurance claims and insurance refund claims,
(v) all letters of credit and letter-of-credit rights,
(vi) all payment intangibles, (vii) all lists, customer
lists, books, records, recorded knowledge, goodwill, ledgers, files
(whether in printed form or stored electronically), designs,
blueprints, data, specifications, engineering reports, and manuals,
computer programs and software, and (viii) all contracts,
agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor
or any property of such Grantor is subject, as the same may from
time to time be amended, supplemented, replaced or otherwise
modified, including, without limitation, (A) all rights of such
Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (B) all rights of such Grantor to damages
arising thereunder and (C) all rights of such Grantor to perform
and to exercise all remedies thereunder.

 

"Indemnified Party" has the
meaning specified in Section 8.05(a).

 

"Intellectual Property" means
the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including,
without limitation, all Copyrights, Patents, Trademarks, IP
Agreements, Trade Secrets, Computer Software, and internet domain
names, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

 

"Intellectual Property Security
Agreement" has the meaning specified in Section
5.10(f).

 

"Intercompany Note" means each
Revolving Intercompany Note and any other promissory note
evidencing loans, advances or other extensions of credit made by
any Grantor to any other Obligor or any of such Grantor’s
Subsidiaries.

 

"Inventory" means all
"inventory" as such term is defined in Article 9 of the UCC and, in
any event, includes, without limitation, (i) all goods held
for sale or lease or to be furnished under contracts of service or
so leased or furnished, all raw materials, component materials,
work in process, finished goods, supplies and other materials used
or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in any Grantor’s business,
(ii) all goods in which any Grantor has an interest in mass or
a joint or other interest or right of any kind, (iii) all goods
that are returned to or repossessed by or on behalf of any Grantor,
(iv) all computer programs embedded in any goods and all
accessions thereto and products thereof and (v) all documents
therefor and all software relating to any of the
foregoing.

 

 

 

3

 

 

"Investment Property" means the
collective reference to (i) all "investment property" as such term
is defined in Section 9-102(a)(49) of the UCC, and (ii) whether or
not constituting "investment property" as so defined, all Pledged
Securities.

 

"IP Agreements" means all
Copyright Licenses, Patent Licenses, Trademark Licenses and all
other agreements, permits, consents, orders, and franchises
relating to the license, development or use of any Copyright,
Patent, Trademark, Computer Software or Trade Secret.

 

"Issuers" means the collective
reference to each issuer of any Investment Property.

 

"Patent Licenses" means all
agreements, whether written or oral, providing for the grant by or
to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in
Schedule
6.

 

"Patents" means (i) all letters
patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without limitation, any
of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing
referred to in Schedule
6, and (iii) all rights to obtain any reissues or extensions
of the foregoing.

 

"Pledged Commodity Contracts"
means all commodity contracts listed on Schedule 2 and all other
commodity contracts to which any Grantor is party from time to
time.

 

"Pledged Debt Securities" means
all debt securities now owned or hereafter acquired by any Grantor,
including, without limitation, the debt securities listed on
Schedule 2,
together with any certificates, options, rights or security
entitlements of any nature whatsoever in respect of the debt
securities of any Person that may at any time be issued or granted
to, or held by, any Grantor.

 

"Pledged Equity Interests" shall
mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership
Interests and Pledged Trust Interests.

 

"Pledged LLC Interests" means
all interests of any Grantor now owned or hereafter acquired in any
limited liability company including, without limitation, all
limited liability company interests listed on Schedule 2 hereto under the
heading "Pledged LLC Interests" and the certificates, if any,
representing such limited liability company interests and any
interest of such Grantor on the books and records of such limited
liability company and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
limited liability company interests and any other warrant, right or
option to acquire any of the foregoing.

 

"Pledged Notes" means all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor, including,
without limitation, the Pledged Notes described on Schedule 2.

 

"Pledged Partnership Interests"
means all interests of any Grantor now owned or hereafter acquired
in any general partnership, limited partnership, limited liability
partnership or other partnership including, without limitation, all
partnership interests listed on Schedule 2 hereto under the
heading "Pledged Partnership Interests" and the certificates, if
any, representing such partnership interests and any interest of
such Grantor on the books and records of such partnership and all
dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such partnership interests and any
other warrant, right or option to acquire any of the
foregoing.

 

 

 

4

 

 

"Pledged Securities" means the
collective reference to the Pledged Debt Securities, the Pledged
Notes and the Pledged Equity Interests.

 

"Pledged Security Entitlements"
means all security entitlements with respect to the financial
assets listed on Schedule
2 and all other security entitles of any
Grantor.

 

"Pledged Stock" means all shares
of Capital Stock now owned or hereafter acquired by any Grantor,
including, without limitation, all shares of Capital Stock
described on Schedule 2 hereto under
the heading "Pledged Stock", and the certificates, if any,
representing such shares and any interest of such Grantor in the
entries on the books of the issuer of such shares and all
dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares and any other warrant,
right or option to acquire any of the foregoing.

 

"Pledged Trust Interests" means
all interests of any Grantor now owned or hereafter acquired in a
Delaware business trust or other trust including, without
limitation, all trust interests listed on Schedule 2 hereto under the
heading "Pledged Trust Interests" and the certificates, if any,
representing such trust interests and any securities intermediary
pertaining to such interests and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such trust interests and any other warrant, right or option to
acquire any of the foregoing.

 

"Proceeds" shall mean all
"proceeds" as defined in Article 9 of the UCC and, in any event,
includes, without limitation, (i) all payments, dividends or
distributions made with respect to any Investment Property,
(ii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary, and (iii) all
insurance proceeds.

 

"Receivable" means any right to
payment for goods sold or leased or for services rendered, whether
or not such right is evidenced by an instrument or chattel paper
and whether or not it has been earned by performance (including,
without limitation, any Account).

 

"Secured Parties" has the
meaning specified in the recitals hereto.

 

"Securities Account Control
Agreement" has the meaning specified in Section
5.01(d).

 

"Securities Act" means the
Securities Act of 1933, as amended.

 

"Trademark Licenses" means any
agreement, whether written or oral, providing for the grant by or
to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in
Schedule
6.

 

"Trademarks" means (i) all
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) the right
to obtain all renewals thereof.

 

"Trade Secrets" means all
confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production
processes and techniques, inventions, research and development
information, databases and data, including, without limitation,
technical data, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and
supplier lists and information.

 

"UETA" means the Uniform
Electronic Transactions Act, as in effect in any applicable
jurisdiction.

 

"UCC" means the Uniform
Commercial Code as in effect from time to time in the State of New
York; provided, that if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York,
“UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection
or non-perfection or priority.

 

"Uncertificated Security Control
Agreement" has the meaning specified in Section
5.01(c).

 

Section
1.02. Other Definitional
Provisions. The rules of
construction specified in Sections 1.2, 1.3 and 1.4 of the Note
Purchase Agreement shall apply to this Agreement, mutatis mutandis.

 

(a)              The
expressions "payment in full," "paid in full" and any other similar
terms or phrases when used herein with respect to the Guaranteed
Obligations shall mean the unconditional, final, indefeasible and
irrevocable payment in full, in immediately available funds, of all
of the Guaranteed Obligations.

 

(b)              Where
the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such
Grantor’s Collateral or the relevant part
thereof.

 

ARTICLE
II

 

[RESERVED]

 

ARTICLE
III

 

GRANT
OF SECURITY INTEREST

 

Section
3.01.  Grant of
Security. Each Grantor
hereby assigns and transfers to the Agent, and hereby grants to the
Agent, for the benefit of the Secured Parties, a security interest
in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise)
of the Guaranteed Obligations (as defined in the Limited
Guaranty):

 

(a)              all
Accounts;

 

(b)              all
as-extracted collateral;

 

(c)              all
chattel paper;

 

 

 

5

 

 

(d)            
all commercial tort claims, including those described on
Schedule 7;

 

(e)            
all deposit accounts;

 

(f)              all
documents;

 

(g)            
all Equipment;

 

(h)            
all fixtures;

 

(i)              all
General Intangibles;

 

(j)              all
goods;

 

(k)            
all instruments;

 

(l)              all
Intellectual Property;

 

(m)           
all Inventory;

 

(n)            
all Investment Property;

 

(o)            
all money;

 

(p)            
all supporting obligations;

 

(q)            
all real property and all other personal property of any kind or
character, whether tangible or intangible;

 

(r)             
all books and records pertaining to the Collateral;
and

 

(s)              to
the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the
foregoing.

 

ARTICLE
IV

 

REPRESENTATIONS
AND WARRANTIES

 

To
induce the Noteholders to make the Loans under the Note Purchase
Agreement, each Grantor hereby represents and warrants, to the
Agent and each other Secured Party that as of the date of this
Agreement (and such other times that Grantors are required to make
these representations and warranties under this Agreement or
another Note Purchase Document):

 

Section
4.01. Title; No Other
Liens. Except for the
security interest granted to the Agent, for the benefit of the
Secured Parties, pursuant to this Agreement or any other Note
Purchase Document and the other Liens expressly permitted to exist
on the Collateral pursuant to the Note Purchase Agreement, such
Grantor is the legal and beneficial owner of each item of the
Collateral free and clear of any and all Liens, claims, or other
encumbrances. No financing statement, fixture filing or other
public notice with respect to all or any part of the Collateral is
on file or of record in any filing or recording office, except such
as have been filed in favor of the Agent, for the benefit of the
Secured Parties, pursuant to this Agreement or any other Note
Purchase Document or as are otherwise expressly permitted under the
Note Purchase Agreement.

 

 

 

6

 

 

 

Section
4.02.  Perfected
Priority Liens

 

(a)              The
security interests granted pursuant to this Agreement (i) upon
completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Agent in completed and
duly executed form and may be filed by the Agent at any time) will
constitute valid perfected security interests in all of the
Collateral in favor of the Agent, for the benefit of the Secured
Parties, as collateral security for the Guaranteed Obligations,
enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase
any Collateral from such Grantor and (ii) are prior to all other
Liens on the Collateral except for (A) unrecorded Liens expressly
permitted by the Note Purchase Agreement which have priority over
the Liens on the Collateral by operation of law and (B) Liens
described on Schedule 10.

 

(b)              Without
limiting Section 4.02(a), each Grantor has taken all actions
necessary or desirable, to the extent required by the Note Purchase
Documents or requested by the Agent, including without limitation
those specified in Section 5.01 of this Agreement to: (i) establish
the Agent’s "control" (within the meanings of Sections 8-106
and 9-106 of the UCC) over any portion of the Investment Property
of such Grantor constituting certificated securities,
uncertificated securities, securities accounts, security
entitlements, or commodity accounts or commodity contracts, (ii)
establish the Agent’s "control" (within the meaning of
Section 9-104 of the UCC) over all deposit accounts of such
Grantor, (iii) establish the Agent’s "control" (within the
meaning of Section 9-107 of the UCC) over all letter-of-credit
rights of such Grantor, (iv) establish the Agent’s "control"
(within the meaning of Section 9-105 of the UCC) over all
electronic chattel paper of such Grantor and (v) establish the
Agent’s "control" within the meaning of Section 16 of the
UETA over all "transferable records" (as defined in UETA) of such
Grantor.

 

(c)              All
tangible chattel paper, instruments and negotiable documents of
each Grantor has been delivered to the Agent.

 

Section
4.03.           
Chief Executive Office;
Etc

 

(a)           Each
Grantor’s type of organization, jurisdiction of organization,
organizational identification number, taxpayer identification
number and the location of each Grantor’s chief executive
office or sole place of business, as the case may be, are specified
on Schedule
4.

 

(b)              Such
Grantor’s exact legal name is set forth on Schedule 4 and such Grantor has
not conducted business in the last five (5) years, and does not
conduct business, under any other name (including any trade-name or
fictitious business name) except for those names listed on
Schedule
4.

 

(c)            
Except as provided in Schedule 4, such Grantor has
not changed its name, jurisdiction of organization, organizational
identification number, type of organization, taxpayer
identification number, chief executive office or sole place of
business or its organizational structure in any way (e.g., by
merger, consolidation, change in organizational form or otherwise)
within the past five (5) years.

 

(d)              Such
Grantor has not within the last five (5) years become bound
(whether by merger or otherwise) as a debtor under a security
agreement entered into by another Person, which has not been
terminated other than security agreements identified on
Schedule
4.

 

(e)              With
respect to each security agreement identified on Schedule 4 pursuant to Section
4.04(d), such Grantor has set forth on Schedule 4 the information
required pursuant to clauses (a), (b) and (c) of this Section for
the debtor under each such security agreement.

 

 

 

7

 

 

(f)              All
actions and consents, filings, notices, registrations, and
recordings necessary or desirable for the exercise by the Agent of
the voting or other rights provided for in this Agreement or the
exercise of remedies in respect of the Collateral have been taken,
made or obtained or, in the case of filings or recordings,
authorized.

 

(g)              The
information on Schedule
4 with respect to such Grantor is true and correct in all
respects.

 

(h)              All
information supplied by such Grantor to the Agent with respect to
the Collateral is accurate and complete.

 

Section
4.04. Inventory and
Equipment

 

(a)              All
of the Inventory and the Equipment of such Grantor is kept at the
locations listed on Schedule 5.

 

(b)              None
of the Inventory or Equipment of such Grantor is in the possession
of an issuer of a negotiable document (as defined in Section 7-104
of the UCC) therefor or otherwise in the possession of a bailee or
warehouseman.

 

(c)              All
Equipment of such Grantor that is subject to a certificate of title
statute is described on Schedule 8.

 

Section
4.05. Farm
Products. None of the
Collateral constitutes, or is the Proceeds of, farm
products.

 

Section
4.06. Investment
Property

 

(a)              Schedule
2 hereto sets forth under the headings "Pledged Stock,"
"Pledged LLC Interests," "Pledged Partnership Interests" and
"Pledged Trust Interests," respectively, all of the Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests owned by each Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding
shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial or ownership
interests of the respective Issuers thereof indicated on such
Schedule.

 

(b)              Schedule
2 hereto sets forth under the heading "Pledged Debt
Securities" or "Pledged Notes" all of the Pledged Debt Securities
and Pledged Notes owned by each Grantor and (i) each such Pledged
Debt Security and Pledged Note has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and
binding obligation of the Issuer thereof enforceable against such
Issuer in accordance with its terms, and (ii) the Issuer of each
such Pledged Debt Security is not in default of any of its
obligations thereunder.

 

(c)              Each
of the Pledged Equity Interests owned by such Grantor has been duly
authorized and validly issued and is fully paid and
nonassessable.

 

(d)              Such
Grantor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Equity Interests pledged by it
hereunder, free and clear of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest
created by this Agreement, and there are no outstanding preemptive
rights, warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with
respect to, or property that is convertible into, or that requires
the issuance or sale of, Pledged Equity Interests.

 

 

 

8

 

 

(e)           
No consent of any Person, including any other general or limited
partner, any other member of a limited liability company, any other
shareholder or any other trust beneficiary is necessary or
desirable in connection with the creation, perfection or first
priority status of the security interest of the Agent hereunder in
any Pledged Equity Interests or the exercise by the Agent of the
voting or other rights provided for in this Agreement or the
exercise of remedies in respect thereof.

 

(f)              All
certificated securities owned by such Grantor have been delivered
to the Agent.

 

(g)              The
terms of each Pledged Partnership Interest and Pledged LLC Interest
expressly provide that they are securities governed by Article 8 of
the Uniform Commercial Code.

 

Section
4.07. Receivables

 

(a)            
Each Receivable (i) is and will be the legal, valid and binding
obligation of the account debtor in respect thereof, (ii) is and
will be enforceable in accordance with its terms, (iii) is and will
not be subject to any setoffs, defenses, taxes or counterclaims
(except with respect to disputes, refunds, returns, discounts and
allowances in the ordinary course of business) and (iv) is and will
be in compliance with all Requirements of Law.

 

(b)            
No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any certificated security, instrument or
tangible chattel paper that has not been delivered to the Agent or
constitutes electronic chattel paper that has not been subjected to
the control (within the meaning of Section 9-105 of the UCC) of the
Agent.

 

(c)              None
of the obligors on any of the Receivables is a Governmental
Authority.

 

(d)              The
amounts represented by such Grantor to the Agent from time to time
as owing to such Grantor in respect of the Receivables will at such
times be accurate.

 

Section
4.08.   Intellectual
Property.

 

(a)           
The operation of such Grantor’s business as currently
conducted or as contemplated to be conducted and the use of the
Intellectual Property in connection therewith do not conflict with,
infringe, misappropriate, dilute, misuse or otherwise violate the
intellectual property rights of any third party.

 

(b)              
Such Grantor is the exclusive owner of all right, title and
interest in and to the Intellectual Property, and is entitled to
use all Intellectual Property subject only to the terms of the IP
Agreements.

 

(c)              The
Intellectual Property set forth on Schedule 6 hereto includes
all of the patents, patent applications, domain names, trademark
registrations and applications, copyright registrations and
applications and IP Agreements owned by such Grantor.

 

(d)              The
Intellectual Property is subsisting and has not been adjudged
invalid or unenforceable in whole or part, and to the best of such
Grantor’s knowledge, is valid and enforceable. Such Grantor
is not aware of any uses of any item of Intellectual Property that
could be expected to lead to such item becoming invalid or
unenforceable.

 

 

 

9

 

 

(e)              Such
Grantor has made or performed all filings, recordings and other
acts and has paid all required fees and taxes to maintain and
protect its interest in each and every item of Intellectual
Property in full force and effect throughout the world, and to
protect and maintain its interest therein including, without
limitation, recordations of any of its interests in the Patents and
Trademarks with the United States Patent and Trademark Office and
in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the
United States Copyright Office and in corresponding national and
international copyright offices. Such Grantor has used proper
statutory notice in connection with its use of each patent,
trademark and copyright in the Intellectual Property.

 

(f)              No
claim, action, suit, investigation, litigation or proceeding has
been asserted or is pending or threatened against such Grantor (i)
based upon or challenging or seeking to deny or restrict the
Grantor’s rights in or use of any of the Intellectual
Property, (ii) alleging that the Grantor’s rights in or use
of the Intellectual Property or that any services provided by,
processes used by, or products manufactured or sold by, such
Grantor infringe, misappropriate, dilute, misuse or otherwise
violate any patent, trademark, copyright or any other proprietary
right of any third party, or (iii) alleging that the Intellectual
Property is being licensed or sublicensed in violation or
contravention of the terms of any license or other agreement. To
the best of Grantor’s knowledge, no Person is engaging in any
activity that infringes, misappropriates, dilutes, misuses or
otherwise violates the Intellectual Property or the Grantor’s
rights in or use thereof. Except as set forth on Schedule 6 hereto, such
Grantor has not granted any license, release, covenant not to sue,
non-assertion assurance, or other right to any Person with respect
to any part of the Intellectual Property. The consummation of the
transactions contemplated by the Note Purchase Documents will not
result in the termination or impairment of any of the Intellectual
Property.

 

(g)              To
the best of Grantor’s knowledge, with respect to each IP
Agreement: (i) such IP Agreement is valid and binding and in full
force and effect and represents the entire agreement between the
respective parties thereto with respect to the subject matter
thereof; (ii) such IP Agreement will not cease to be valid and
binding and in full force and effect on terms identical to those
currently in effect as a result of the rights and interest granted
herein, nor will the grant of such rights and interest constitute a
breach or default under such IP Agreement or otherwise give any
party thereto a right to terminate such IP Agreement; (iii) such
Grantor has not received any notice of termination or cancellation
under such IP Agreement; (iv) such Grantor has not received any
notice of a breach or default under such IP Agreement, which breach
or default has not been cured; (v) such Grantor has not granted to
any other third party any rights, adverse or otherwise, under such
IP Agreement; and (vi) neither such Grantor nor any other party to
such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of
time or both, would constitute such a breach or default or permit
termination, modification or acceleration under such IP
Agreement.

 

(h)              To
the best of such Grantor’s knowledge, (A) none of the Trade
Secrets of such Grantor has been used, divulged, disclosed or
appropriated to the detriment of such Grantor for the benefit of
any other Person other than such Grantor; (B) no employee,
independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (C) no employee,
independent contractor or agent of such Grantor is in default or
breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement
or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual
Property.

 

(i)              No
Grantor or Intellectual Property is subject to any outstanding
consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property or that would
impair the validity or enforceability of such Intellectual
Property.

 

Section
4.09.  Securities
Accounts, Commodities Accounts and Deposit
Accounts

 

.

 

 

 

10

 

 

(a)              Schedule
2 sets forth under the headings "Securities Accounts" and
"Commodities Accounts," respectively, all of the securities
accounts and commodities accounts in which each Grantor has an
interest. Each Grantor is the sole entitlement holder of each such
securities account and commodity account shown opposite its name on
Schedule 2, and such Grantor has not consented, to, and is not
otherwise aware of, any Person (other than the Agent pursuant
hereto) having "control" (within the meanings of Sections 8-106 and
9-106 of the UCC) over, or any other interest in or claim against,
any such securities account or commodity account or any securities,
commodities or other property credited thereto.

 

(b)              Schedule
2 sets forth under the heading "Deposit Accounts" all of the
deposit accounts in which each Grantor has an interest. Each
Grantor is the sole account holder of each such deposit account
shown opposite its name on Schedule 2 and such Grantor has
not consented to, and is not otherwise aware of, any Person (other
than the Agent pursuant hereto) having "control" (within the
meaning of Section 9-104 of the UCC) over, or any other interest in
or claim against, any such deposit account or any money or other
property deposited therein.

 

Section
4.10. Commercial Tort
Claims. Such Grantor has
no commercial tort claims other than (a) those listed on
Schedule 7, or (b)
as to which the actions required by Section 5.11 have been
taken.

 

Section
4.11. Letters of
Credit. Such Grantor is
not a beneficiary or assignee under any letter of credit, other
than the letters of credit described in Schedule 9, and legal,
binding and enforceable consents, in substantially the form of the
Consent to Assignment of Letter of Credit Rights, are in effect for
each letter of credit in which such Grantor has rights. Such
Grantor has instructed all issuers and nominated Persons under
letters of credit in which such Grantor is the beneficiary or
assignee to make all payments thereunder to a Collateral
Account.

 

Section
4.12.  Independent
Investigation; Etc. Such Grantor has,
independently and without reliance upon any Secured Party and based
on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Such Grantor will benefit directly and indirectly from
its execution and delivery of this Agreement and from the making of
the Loans by the Noteholders under the Note Purchase Agreement.
There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.

 

Section
4.13. Assigned
Agreements.

 

(a)              No
consent of any party (other than such Grantor) to any Assigned
Agreement is required, or purports to be required, in connection
with the execution, delivery and performance of this
Agreement.

 

(b)              Each
Assigned Agreement has been duly authorized, executed and delivered
by each of the parties thereto, is in full force and effect, and
constitutes a valid and legally enforceable obligation of the
parties thereto, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at
law).

 

(c)              No
consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection
with the execution, delivery, performance, validity or
enforceability of any of the Assigned Agreements by any party
thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the
scope of any such Assigned Agreement to any limitation, either
specific or general in nature.

 

 

 

11

 

 

(d)              Neither
such Grantor nor (to the best of such Grantor’s knowledge)
any of the other parties to the Assigned Agreements is in default
in the performance or observance of any of the terms thereof in any
manner that, in the aggregate, could reasonably be expected to have
a Material Adverse Effect.

 

(e)              The
right, title and interest of such Grantor in, to and under the
Assigned Agreements are not subject to any defenses, offsets,
recoupments, counterclaims or claims that, in the aggregate, could
reasonably be expected to have a Material Adverse
Effect.

 

(f)              Such
Grantor has delivered to the Agent a complete and correct copy of
each Assigned Agreement, including all amendments, supplements and
other modifications thereto.

 

(g)              No
amount payable to such Grantor under or in connection with any
Assigned Agreement is evidenced by any instrument or chattel paper
that has not been delivered to the Agent.

 

(h)              None
of the parties to any Assigned Agreement is a Governmental
Authority.

 

(i)              If
requested by the Agent, each party to the Assigned Agreements
(other than a Grantor) has executed and delivered to the Agent a
consent in substantially the form of Annex 4 hereto, to the
assignment of the Assigned Agreements to the Agent, for the benefit
of the Secured Parties, pursuant to this Agreement.

 

ARTICLE
V

 

COVENANTS

 

Each
Grantor covenants and agrees with the Secured Parties that, from
and after the date of this Agreement until the Guaranteed
Obligations shall have been paid and performed in
full:

 

Section
5.01. Delivery and Control
of Instruments, Investment Property, Negotiable Documents, Chattel
Paper, Letter-of-Credit Rights, and Transferable
Records.

 

(a)           If
any of the Collateral is or shall become evidenced by any
instrument, certificated security, negotiable document or tangible
chattel paper, such Grantor shall immediately deliver such
instrument, certificated security, negotiable document or tangible
chattel paper to the Agent, duly indorsed in a manner satisfactory
to the Agent, to be held as Collateral pursuant to this
Agreement.

 

(b)              If
any of the Collateral is or shall become electronic chattel paper,
such Grantor shall ensure that (i) a single authoritative copy
exists which is unique, identifiable, and unalterable (except as
provided in clauses (iii), (iv) and (v) of this Section 5.01(b)),
(ii) such authoritative copy identifies the Agent as the assignee
and is communicated to and maintained by the Agent or its designee,
(iii) copies or revisions that add or change the assignee of the
authoritative copy can only be made with the participation of the
Agent, (iv) each copy of the authoritative copy and any copy of a
copy is readily identifiable as a copy and not the authoritative
copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized
revision.

 

(c)              If
any of the Collateral is or shall become evidenced or represented
by an uncertificated security, such Grantor shall immediately cause
the Issuer thereof either (i) to register the Agent as the
registered owner of such uncertificated security, upon original
issue or registration of transfer or (ii) to agree in writing with
such Grantor and the Agent that such Issuer will comply with
instructions with respect to such uncertificated security
originated by the Agent without further consent of such Grantor,
such agreement to be in form and substance satisfactory to the
Agent (each such agreement being an "Uncertificated Security Control
Agreement").

 

 

12

 

 

(d)              With
respect to any Investment Property of such Grantor consisting of a
securities account or security entitlement, such Grantor shall, at
the request of the Agent, enter into, and shall cause the
securities intermediary maintaining such securities account or
security entitlement to enter into, a control agreement with the
Agent in form and substance satisfactory to the Agent pursuant to
which such securities intermediary shall agree to comply with the
entitlement orders and other instructions originated by the Agent
without further consent of such Grantor (each such agreement being
a "Securities Account
Control Agreement").

 

(e)              With
respect to any Investment Property of such Grantor consisting of a
commodity account or commodity contract, such Grantor shall, at the
request of the Agent, enter into, and shall cause the commodity
intermediary maintaining such commodity account or commodity
contract to enter into, a control agreement with the Agent in form
and substance satisfactory to the Agent, pursuant to which such
commodity intermediary shall agree to comply with the Agent’s
instructions to apply any value distributed on account of any
commodity contract carried in the commodity account or other
directions concerning the commodity account originated by the
Agent, in each case without further consent by such Grantor (each
such agreement being a "Commodity Account Control
Agreement").

 

(f)              With
respect to each deposit account of such Grantor, such Grantor
shall, at the request of the Agent, enter into, and shall cause the
bank maintaining such deposit account to enter into, a control
agreement with the Agent in form and substance satisfactory to the
Agent pursuant to which such bank shall agree to comply with
instructions originated by the Agent directing the disposition of
funds in such deposit account without further consent by such
Grantor (such agreement being a "Deposit Account Control
Agreement").

 

(g)              With
respect to any letter-of-credit rights of such Grantor, such
Grantor shall, at the request of the Agent, obtain the consent of
the issuer thereof and any nominated Person thereon to the
assignment of the proceeds of the related letter of credit to the
Agent in accordance with Section 5-114(c) of the UCC, such consent
to be in form and substance satisfactory to the Agent (each such
consent being a "Consent
to Assignment of Letter of Credit Rights").

 

(h)              Each
Grantor shall, at the request of the Agent, enter into Control
Agreements with respect to any securities accounts, security
entitlements, commodity contracts, commodity accounts, and deposit
accounts that are created or acquired after the Closing Date, as of
or prior to the deposit or transfer of any such security
entitlements, commodity contracts or funds into such securities
accounts, commodity accounts or deposit accounts.

 

(i)              Such
Grantor will maintain all transferable records (as such term is
defined in the UETA) so that the Agent has control of the
transferable records in the manner specified in Section 16 of
the UETA.

 

(j)              Upon
the request of the Agent, such Grantor will notify each Issuer of
Investment Property that such Investment Property is subject to the
security interest granted hereunder.

 

(k)              In
addition to and not in lieu of the foregoing, if any Issuer of any
Investment Property is organized under the law of, or has its chief
executive office in, a jurisdiction outside of the United States,
each Grantor shall take such additional actions, including, without
limitation, causing the Issuer to register the pledge on its books
and records, as may be necessary or as may be requested by the
Agent, under the laws of such jurisdiction to ensure the validity,
perfection and priority of the security interest of the
Agent.

 

 

 

13

 

 

Section
5.02. Maintenance of
Insurance.

 

(a)           Each
Grantor will maintain (or cause to be maintained), with financially
sound and reputable companies, insurance policies (i) insuring its
Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the
Agent and (ii) insuring such Grantor, the Agent and the other
Secured Parties against liability for personal injury and property
damage relating to such Inventory and Equipment, such policies to
be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Agent. Such Grantor shall, if so
requested by the Agent, deliver to the Agent original or duplicate
copies of such policies of insurance.

 

(b)            
Each such policy of insurance shall (i) provide that no
cancellation, lapse, expiration, reduction in amount or change in
coverage thereof shall be effective until at least 30 days after
receipt by the Agent of written notice thereof; provided that the
foregoing shall be satisfied if such Grantor uses commercially
reasonable efforts to obtain such terms, (ii) in the case of
liability insurance, provide for all losses to be paid to such
Grantor and the Secured Parties as their interests may appear, and
(iii) be reasonably satisfactory in all other respects to the
Agent.

 

(c)              If
an Event of Default shall have occurred and be continuing, the
Agent shall have the sole right, in the name of the Grantor or in
its own name, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements,
receipts, releases, assignments, reassignments or other documents
may be necessary to effect the collection, compromise or settlement
of any claims under any such insurance policies.

 

Section
5.03. Payment of
Indebtedness. Each Grantor will
pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as
all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the
sale, forfeiture or loss of any portion of the Collateral or any
interest therein.

 

Section
5.04. Maintenance of
Perfected Security Interest; Limitation on Dispositions; Further
Documentation; Inspection; Etc.

 

(a)              Such
Grantor shall, at its sole cost and expense, maintain the security
interest created under this Agreement as a perfected security
interest having at least the priority described in Section 4.02 and shall defend
such security interest against the claims and demands of all
Persons whomsoever.

 

(b)          
  Such Grantor shall not sell, assign, transfer, lease, or
otherwise dispose of, or abandon or permit a lapse of, or grant or
permit any Lien on, any of the Collateral or any interest therein,
except as expressly permitted by the Note Purchase
Agreement.

 

(c)            
Such Grantor will furnish to the Agent from time to time statements
and schedules further identifying and describing the Collateral and
other assets and property of such Grantor and such other reports in
connection therewith as the Agent may reasonably request, all in
such detail as the Agent may specify.

 

 

 

14

 

 

(d)              At
any time and from time to time, upon the written request of the
Agent, and at the sole cost and expense of such Grantor, such
Grantor will promptly and duly authorize, execute and deliver, and
have recorded, all further instruments and documents and take all
further actions as may be necessary or desirable or that the Agent
may request for the purpose of perfecting or protecting the
assignments and security interests granted hereunder and obtaining
or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation,
(i) executing and filing any financing or continuation
statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security
interests created hereby, (ii) delivering and pledging to the Agent
for the benefit of the Secured Parties certificates representing
the Pledged Equity Interests that constitute certificated
securities, accompanied by undated stock powers executed in blank,
(iii) complying with any Requirement of Law (including the
Federal Assignment of Claims Act) as to any Collateral if such
compliance is deemed necessary or advisable by the Agent for the
attachment, perfection or priority of, or the ability of the Agent
to enforce, the Agent’s security interest in such Collateral,
(iv) obtaining consents and approvals from any Governmental
Authority or other Person, including without limitation any consent
of any licensor, lessor or other Person obligated on Collateral,
and (v) obtaining waivers from mortgagees, lessors, landlords,
warehousemen, and repairmen in form and substance satisfactory to
the Agent.

 

(e)              Such
Grantor shall permit the Agent, or its designee, to inspect and
audit the Collateral at any reasonable time or times, wherever
located; provided, however, that unless an Event of Default has
occurred and is continuing, Agent shall provide at least three (3)
business days’ notice. Such Grantor shall reimburse the Agent
on demand for all reasonable and necessary costs and expenses
incurred by the Agent in connection with inspections and audits of
Collateral; provided, however, that Grantor shall not be obligated
to reimburse the Agent for such costs and expenses for more than
two (2) such inspections and audits during each fiscal year unless
an Event of Default has occurred and is continuing.

 

(f)              Such
Grantor shall not take or permit any action that could impair the
Agent’s rights in the Collateral or the perfection or
priority of the security interests created hereunder.

 

Section
5.05. Changes in
Locations; Name; Jurisdiction of Incorporation;
Etc. Such Grantor will
not, except upon thirty (30) days’ prior written notice to
the Agent and (a) taking all action required by the Agent to
maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, delivery to
the Agent of a written supplement to Schedule 5 showing any
additional location at which Inventory or Equipment shall be kept
(which supplement may be attached to Schedule 5 by the
Agent):

 

(i)              permit
any of the Inventory or Equipment to be kept at a location other
than those listed on Schedule 5; or

 

(ii)            
change its name, type of organization, jurisdiction of
organization, organizational identification number, federal
taxpayer identification number, or the location of its chief
executive office or sole place of business from that referred to in
Schedule
4.

 

Section
5.06. Notices. Such Grantor will
advise the Agent immediately, in reasonable detail,
of:

 

(a)              any
Lien (other than security interests created hereby or Liens
permitted under the Note Purchase Agreement) on any of the
Collateral which would adversely affect the ability of the Agent to
exercise any of its remedies hereunder; and

 

(b)              the
occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the
Collateral or on the security interests created
hereunder.

 

 

 

15

 

 

Section
5.07.  Investment
Property.

 

(a)              Without
the prior written consent of the Agent, such Grantor will not (i)
vote to enable, or take any other action to permit, any Issuer to
issue any Capital Stock of any nature or to issue any other
securities, obligations, rights, or other interests convertible
into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect
to, any of the Investment Property or Proceeds thereof (except, in
each case, pursuant to a transaction expressly permitted by the
Note Purchase Agreement), (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for the security interests created by
this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Agent to
sell, assign or transfer any of the Investment Property or Proceeds
thereof.

 

(b)              In
the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will
notify the Agent promptly in writing of the occurrence of any of
the events described in clause (A), (B) or (C) of Section
6.03(a)(ii) with respect to the Investment Property issued by it
and (iii) the terms of Sections 6.03(d) and 6.06 shall apply to it,
mutatis mutandis, with
respect to all actions that may be required of it pursuant to
Section 6.03(d) or 6.06 with respect to the Investment Property
issued by it. In addition, each Grantor which is either an Issuer
or an owner of any Investment Property consents to the grant by
each other Grantor of the security interest hereunder in favor of
the Agent and to the transfer of any Investment Property to the
Agent or its nominee upon the occurrence or during the continuation
of an Event of Default and to the substitution of the Agent or its
nominee as a partner, member or shareholder of the Issuer of the
related Investment Property.

 

(c)              Such
Grantor shall comply with all of its obligations under each Organic
Document governing or relating to Pledged Securities and shall
enforce all of its rights with respect to any Investment
Property.

 

Section
5.08. Inventory and
Equipment.

 

(a)              In
producing its Inventory, such Grantor will comply with all
Requirements of Law, including, without limitation, the Fair Labor
Standards Act. Such Grantor shall maintain all of its Inventory in
good saleable and usable condition

 

(b)            
Such Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working
order as when new, ordinary wear and tear excepted, and in
accordance with any manufacturer’s manual relating thereto,
and will forthwith, or in the case of any loss or damage to any of
such Equipment as soon as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or
desirable to such end.

 

(c)              Such
Grantor shall not deliver any document evidencing any Equipment or
Inventory to any Person other than the issuer of such document to
claim the goods evidenced thereby or the Agent.

 

(d)            
If any Equipment or Inventory having a value in excess of $25,000
individually or $100,000 in the aggregate is in the possession or
control of a third party, including, without limitation, any
warehouseman, bailee or agent, such Grantor shall immediately
notify the Agent thereof and shall join with the Agent in promptly
notifying the third party of the Agent’s security interest
and obtaining a written acknowledgment from the third party that it
is holding the Equipment or Inventory for the benefit, and subject
to the security interest, of the Agent. Such acknowledgment must be
satisfactory in form and substance to the Agent.

 

 

 

16

 

 

(e)              With
respect to any item of Equipment that is covered by a certificate
of title or ownership under a statute of any jurisdiction under the
law of which indication of a security interest on such certificate
is required as a condition of perfection thereof, such Grantor
shall, at the request of the Agent, promptly (i) provide to the
Agent information with respect to any such Equipment, (ii) execute
and file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document
requesting the notation or other indication of the security
interest created hereunder on each such certificate of title, and
(iii) deliver to the Agent copies of all such applications or other
documents so filed and copies of all such certificates of title
issued indicating the security interests created hereunder in the
items of Equipment covered thereby.

 

Section
5.09. Receivables.

 

(a)              Other
than in the ordinary course of business consistent with its past
practice, such Grantor will not (i) grant any extension of the time
of payment of any Receivable, (ii) adjust, compromise or settle any
Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value thereof.

 

(b)              Such
Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Receivables, including,
but not limited to, the originals of all documentation with respect
to all Receivables and records of all payments received and all
credits granted on the Receivables, all merchandise returned and
all other dealings therewith.

 

(c)              Such
Grantor shall perform in all material respects all of its
obligations with respect to the Receivables.

 

(d)              Such
Grantor shall use its best efforts to keep in full force and effect
any supporting obligation relating to any Receivable.

 

(e)              Such
Grantor will deliver to the Agent a copy of each demand, notice or
document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount
of the then outstanding Receivables.

 

Section
5.10. Intellectual
Property.

 

(a)           With
respect to each item of its Intellectual Property, each Grantor
agrees to take, at its expense, all necessary steps, including,
without limitation, in the United States Patent and Trademark
Office, the United States Copyright Office and any other
Governmental Authority, to (i) maintain the validity and
enforceability of such Intellectual Property and maintain such
Intellectual Property in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or
copyright registration or application, now or hereafter included in
such Intellectual Property of such Grantor, including, without
limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the United States Patent and
Trademark Office, the United States Copyright Office or other
Governmental Authorities, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the
United States Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation proceedings. No
Grantor shall, without the written consent of the Agent,
discontinue use of or otherwise abandon any Intellectual Property,
or abandon any right to file an application for patent, trademark,
or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual
Property is no longer desirable in the conduct of such
Grantor’s business and that the loss thereof would not be
reasonably likely to have a Material Adverse Effect, in which case,
such Grantor will give prompt notice of any such abandonment to the
Agent.

 

 

 

17

 

 

(b)              Each
Grantor agrees promptly to notify the Agent if such Grantor becomes
aware (i) that any item of the Intellectual Property may have
become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development
regarding such Grantor’s ownership of any of the Intellectual
Property or its right to register the same or to keep and maintain
and enforce the same, or (ii) of any adverse determination or the
institution of any proceeding (including, without limitation, the
institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any item of the
Intellectual Property.

 

(c)              In
the event that any Grantor becomes aware that any item of the
Intellectual Property is being infringed or misappropriated by a
third party, such Grantor shall promptly notify the Agent and shall
take such actions, at its expense, as such Grantor or the Agent
deems reasonable and appropriate under the circumstances to protect
or enforce such Intellectual Property, including, without
limitation, suing for infringement or misappropriation and for an
injunction against such infringement or
misappropriation.

 

(d)              Each
Grantor shall use proper statutory notice in connection with its
use of each item of its Intellectual Property. No Grantor shall do
or permit any act or knowingly omit to do any act whereby any of
its Intellectual Property may lapse or become invalid or
unenforceable or placed in the public domain.

 

(e)              Each
Grantor shall take all steps which it or the Agent deems reasonable
and appropriate under the circumstances to preserve and protect
each item of its Intellectual Property, including, without
limitation, maintaining the quality of any and all products or
services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the
date hereof, and taking all steps necessary to ensure that all
licensed users of any of the Trademarks use such consistent
standards of quality.

 

(f)              With
respect to its Intellectual Property, to the extent requested by
the Agent on the date hereof or, if applicable, at such later date
on which a Grantor becomes party hereto, such Grantor agrees to
execute and deliver to the Agent an agreement, in substantially the
form set forth in Annex
2 hereto or otherwise in form and substance satisfactory to
the Agent (an "Intellectual Property Security
Agreement"), for recording the security interest granted
hereunder to the Agent in such Intellectual Property with the
United States Patent and Trademark Office, the United States
Copyright Office and any other domestic or foreign Governmental
Authorities requested by the Agent to perfect the security interest
hereunder in such Intellectual Property.

 

(g)              Such
Grantor agrees that should it obtain an ownership interest in any
new or acquired item of Intellectual Property that is not on the
date hereof listed on Schedule 6 ("After-Acquired Intellectual
Property") (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired
Intellectual Property and, in the case of Trademarks, the goodwill
symbolized thereby, shall automatically become part of the
Collateral subject to the terms and conditions of this Agreement
with respect thereto. Within thirty (30) days after the end of each
fiscal quarter of such Grantor, each Grantor shall give written
notice to the Agent identifying all After-Acquired Intellectual
Property acquired during such Fiscal Quarter, if any, and such
Grantor shall execute and deliver to the Agent with such written
notice, an Intellectual Property Security Agreement, or if such
Grantor has already executed an Intellectual Property Security
Agreement, Annex 3
hereto or otherwise in form and substance satisfactory to the Agent
(an "IP Security Agreement
Supplement"), covering such After-Acquired Intellectual
Property which Intellectual Property Security Agreement or IP
Security Agreement Supplement, as applicable, shall be recorded
with the United States Patent and Trademark Office, the United
States Copyright Office and any other Governmental Authorities as
may be requested by the Agent to evidence and perfect the security
interest hereunder in such After-Acquired Intellectual Property.
Upon the execution and delivery to the Agent of an Intellectual
Property Security Agreement or IP Security Agreement Supplement in
accordance with this Section, Schedule 6 shall
automatically be deemed amended to include the After-Acquired
Intellectual Property covered by such IP Security Agreement
Supplement.

 

 

 

18

 

 

(h)              Such
Grantor shall take all steps reasonably necessary to protect the
secrecy of all Trade Secrets, including, without limitation,
entering into confidentiality agreements with employees and
labeling and restricting access to secret information and
documents.

 

Section
5.11. Commercial Tort
Claims. If such Grantor
shall at any time hold or acquire an interest in any commercial
tort claim, then such Grantor shall within fifteen (15) days of
obtaining such interest sign and deliver documentation acceptable
to the Agent granting a security interest to the Agent in and to
such commercial tort claim under the terms and provisions of this
Agreement.

 

Section
5.12.  Assigned
Agreements.

 

(a)              Such
Grantor shall at its expense:

 

(i)              perform
and observe all the terms and provisions of the Assigned Agreements
to be performed or observed by it, maintain Assigned Agreements to
which it is a party in full force and effect, enforce Assigned
Agreements to which it is a party in accordance with their
respective terms, and take all such action to such end as may be
from time to time reasonably requested by the Agent;
and

 

(ii)              furnish
to the Agent promptly upon receipt thereof copies of all notices,
requests and other documents received by such Grantor under or
pursuant to the Assigned Agreements to which it is a party, and
from time to time (A) furnish to the Agent such information and
reports regarding the Assigned Agreements and the other Collateral
of such Grantor as the Agent may reasonably request and (B) upon
reasonable request of the Agent make to each other party to any
Assigned Agreement to which it is a party such demands and requests
for information and reports or for action as such Grantor is
entitled to make thereunder.

 

(b)              Such
Grantor shall not, except to the extent otherwise expressly
permitted under the Note Purchase Agreement:

 

(i)              cancel
or terminate any Assigned Agreement to which it is a party or
consent to or accept any cancellation or termination
thereof;

 

(ii)            
amend, restate, supplement or otherwise modify any such Assigned
Agreement or give any consent, waiver or approval
thereunder;

 

(iii)            
waive any default under or breach of any such Assigned
Agreement;

 

(iv)            
consent to or permit or accept any prepayment of amounts to become
due under or in connection with any such Assigned Agreement, except
as expressly provided therein; or

 

 

 

19

 

 

 

 

(v)              take
any other action in connection with any such Assigned Agreement
that would impair the value of the interest or rights of such
Grantor thereunder or which would impair the interest or rights of
the Agent.

 

Section
5.13. Covenants in Note
Purchase Agreement.

 

  In the
case of each Grantor, such Grantor shall take, or shall refrain
from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or to
refrain from taking such action by such Grantor or any of its
Subsidiaries.

 

ARTICLE
VI

 

REMEDIAL
PROVISIONS

 

Section
6.01.  Certain
Matters Relating to Receivables.

 

(a)              The
Agent shall have the right to verify the Receivables at any time
and from time to time in any manner and through any medium that it
considers advisable, and each Grantor shall furnish all such
assistance and information as the Agent may require in connection
with such test verifications. At any time and from time to time,
upon the Agent’s request and at the expense of the relevant
Grantor, such Grantor shall furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial
balances for, the Receivables. Each Grantor shall provide such
information as the Agent may from time to time request regarding
the Receivables, including agings and trial balances.

 

(b)              The
Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, subject to the Agent’s direction
and control, and the Agent may curtail or terminate said authority
at any time after the occurrence and during the continuance of an
Event of Default. If required by the Agent at any time after the
occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed
by such Grantor to the Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Agent,
subject to withdrawal by the Agent for the account of the Secured
Parties in accordance with this Agreement and the other Note
Purchase Documents, and (ii) until so turned over, shall be held by
such Grantor in trust for the Agent and the Secured Parties,
segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the
payments included in the deposit.

 

(c)              At
the Agent’s request, each Grantor shall deliver to the Agent
all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and
shipping receipts.

 

Section
6.02.  Communications
with Obligors; Grantors Remain Liable.

 

(a)           The
Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables to verify with them
to the Agent’s satisfaction the existence, amount and terms
of any Receivables.

 

(b)         
Upon the request of the Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Assigned
Agreements that the Receivables and the Assigned Agreements have
been assigned to the Agent for the benefit of the Secured Parties
and that payments in respect thereof shall be made directly to the
Agent.

 

 

 

20

 

 

 

 

(c)              Anything
herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and the Assigned Agreements to
observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the
terms of any agreement giving rise thereto. Neither the Agent nor
any other Secured Party shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) or
Assigned Agreement by reason of or arising out of this Agreement or
the receipt by the Agent or any other Secured Party of any payment
relating thereto, nor shall the Agent or any other Secured Party be
obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or Assigned Agreement, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled
at any time or times.

 

Section
6.03. Voting Rights;
Dividends; Etc.

 

(a)              So
long as no Event of Default shall have occurred and be
continuing:

 

(i)              Each
Grantor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the
Investment Property of such Grantor or any part thereof for any
purpose not inconsistent with terms of this Agreement or any other
Note Purchase Document.; provided, however, that such Grantor
shall not exercise or refrain from exercising any such right, if
such action would have a material adverse effect on the value of
the Investment Property or any part thereof.

 

(ii)              Each
Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the
Investment Property of such Grantor if and to the extent that the
payment thereof is not otherwise prohibited by the terms of this
Agreement or any of the other Note Purchase Documents; provided, however, that any and
all

 

(A)              dividends,
interest and other distributions paid or payable other than in cash
in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Investment Property,

 

(B)              dividends
and other distributions paid or payable in cash in respect of any
Investment Property in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and

 

(C)              cash
paid, payable or otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any Investment Property
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by such Grantor, be received in
trust for the benefit of the Agent and the other Secured Parties,
be segregated from the other property or funds of such Grantor, and
be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary endorsement or
assignment).

 

(iii)              The
Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments
as such Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to Section 6.03(a)(i) above and to
receive the dividends or interest payments that it is authorized to
receive and retain pursuant to Section 6.03(a)(ii)
above.

 

 

 

21

 

 

(b)              If
an Event of Default shall have occurred and be
continuing:

 

(i)              All
rights of each Grantor (x) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 6.03(a)(i) shall, upon
notice to such Grantor by the Agent, cease and (y) to receive the
dividends, interest and other distributions that it would otherwise
be authorized to receive and retain pursuant to Section 6.03(a)(ii)
shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole
right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Collateral such
dividends, interest and other distributions.

 

(ii)              All
dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of Section 6.03(b)(i) shall
be received in trust for the benefit of the Agent and the other
Secured Parties, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Agent as Collateral
in the same form as so received (with any necessary endorsement or
assignment).

 

(c)              The
Agent shall have the right at any time to exchange any certificates
or instruments representing any Investment Property for
certificates or instruments of smaller or larger denominations. In
order to permit the Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends, interest and other
distributions which it may be entitled to receive hereunder, each
Grantor shall promptly execute and deliver (or cause to be executed
and delivered) to the Agent all proxies, dividend payment orders
and other instruments as the Agent may from time to time reasonably
request and each Grantor acknowledges that the Agent may utilize
the power of attorney set forth herein.

 

(d)              Each
Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Agent in writing that
(x) states that an Event of Default or Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends, distributions or other
payments with respect to the Investment Property directly to the
Agent.

 

(e)              If
an Event of Default shall have occurred and be continuing, the
Agent shall be authorized to send to each securities intermediary,
commodity intermediary, bank or Issuer of an uncertificated
security that is party to a Control Agreement, a notice that the
Agent has exclusive control and dominion under such Control
Agreement (or any comparable notice permitted under such Control
Agreement).

 

Section
6.04.  Proceeds to be
Turned Over To Agent. In addition to
the rights of the Agent specified in Section 6.01 with respect to
payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of
cash, checks and other near-cash items shall be held by such
Grantor in trust for the Agent, segregated from other funds of such
Grantor, and shall, immediately upon receipt by such Grantor, be
turned over to the Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Agent, if required). All
Proceeds received by the Agent hereunder shall be held by the Agent
in a Collateral Account and shall not constitute payment thereof
until applied as provided in Section 6.05.

 

Section
6.05. Application of
Proceeds. If an Event of
Default shall have occurred and be continuing, at any time at the
Agent’s election, the Agent may apply all or any part of
Proceeds constituting Collateral, whether or not held in any
Collateral Account, in payment of the Guaranteed Obligations in
such order and manner as required pursuant to the Limited Guaranty
or as the Agent may elect in its sole discretion.

 

 

 

22

 

 

Section
6.06.  Remedies. If any Event of
Default shall have occurred and be continuing:

 

(a)              The
Agent, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or
relating to the Guaranteed Obligations, all rights and remedies of
a secured party under the UCC (whether or not the UCC applies to
the affected Collateral) or any other applicable law or in equity.
Without limiting the generality of the foregoing, the Agent,
without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, license, assign, give an option or options to
purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange,
broker’s board or office of the Agent or any other Secured
Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit
risk. Each Secured Party shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in
any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Agent’s request, to
assemble the Collateral and make it available to the Agent at
places which the Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. The Agent shall have no
obligation to clean-up or otherwise prepare the Collateral for
sale. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefore, and any such
sale may, without further notice, be made at the time and place to
which it was adjourned. Each Grantor agrees that it would not be
commercially unreasonable for the Agent to dispose of the
Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or
that match buyers and sellers of assets. Each Grantor hereby waives
any claims against the Agent arising by reason of the fact that the
price at which any Collateral may have been sold at a private sale
was less than the price which might have been obtained at a public
sale, even if the Agent accepts the first offer received and does
not offer such Collateral to more than one offeree. To the extent
permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Agent or any other
Secured Party arising out of the exercise by them of any rights or
remedies hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least ten (10)
days before any public sale of Collateral or of the time after
which any private sale or other disposition of Collateral is
intended to be made.

 

(b)              The
Agent may sell the Collateral without giving any warranties as to
the Collateral. The Agent may disclaim or modify any warranties of
title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.

 

(c)              The
Agent and its agents may enter upon and occupy any real property
owned or leased by any Grantor in order to exercise any of the
Agent’s rights and remedies under this Agreement, without any
obligation to such Grantor in respect of such entry or
occupation.

 

(d)              For
the purpose of enabling the Agent to exercise its rights and
remedies hereunder, each Grantor hereby grants to the Agent an
irrevocable, non-exclusive worldwide license (exercisable without
payment of royalty or other compensation to such Grantor) to use,
operate under, assign, license or sublicense any of the
Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.

 

 

 

23

 

 

(e)              The
Agent may comply with any applicable Requirement of Law in
connection with a disposition of the Collateral or any part thereof
and such compliance will not be considered adversely to affect any
sale of the Collateral or any part thereof.

 

(f)              In
the event of any sale or other disposition of any of the
Intellectual Property of any Grantor, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be
included therein, and such Grantor shall supply to the Agent or its
designee such Grantor’s know-how and expertise, and documents
and things relating to any Intellectual Property subject to such
sale or other disposition, and such Grantor’s customer lists
and other records and documents relating to such Intellectual
Property and to the manufacture, distribution, advertising and sale
of products and services of such Grantor.

 

(g)              The
Agent may apply the balance from any deposit account or instruct
the bank at which any deposit account is maintained to pay the
balance of any deposit account to or for the benefit of the Agent
and the other Secured Parties.

 

(h)              The
Agent shall have no duty to marshal any of the
Collateral.

 

Section
6.07.  Registration
Rights. If the Agent
shall determine to exercise its right to sell any or all of the
Pledged Equity Interests or Pledged Debt Securities pursuant to
Section 6.06, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Equity Interests or Pledged Debt
Securities, or that portion thereof to be sold, registered under
the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers (or equivalent managers) of such Issuer to
execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of
the Agent, necessary or advisable to register the Pledged Equity
Interests or Pledged Debt Securities, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Equity
Interests or Pledged Debt Securities, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities
and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities
or "Blue Sky" laws of any and all jurisdictions which the Agent
shall designate and to make available to its security holders, as
soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.

 

Each
Grantor recognizes that the Agent may be unable to effect a public
sale of any or all the Pledged Equity Interests or Pledged Debt
Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise,
and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. The Agent shall
be under no obligation to delay a sale of any of the Pledged Equity
Interests or Pledged Debt Securities for the period of time
necessary to permit the Issuer thereof to register such securities
for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do
so.

 

 

 

24

 

 

Each
Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales
of all or any portion of the Pledged Equity Interests or Pledged
Debt Securities pursuant to this Section valid and binding and in
compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the
Agent and the other Secured Parties, that the Agent and the other
Secured Parties have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to
assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has
occurred under the Note Purchase Agreement.

 

Section
6.08.  Deficiency. Each Grantor
shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay in
full its Guaranteed Obligations and the fees and disbursements of
any attorneys employed by any Secured Party to collect such
deficiency.

 

Section
6.09.  Sales on
Credit. If the Agent
sells any of the Collateral on credit, the applicable Grantor will
be credited only with cash payments actually made by the purchaser
and received by the Agent and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the
Collateral, the Agent may resell the Collateral and the applicable
Grantor shall be credited with the proceeds of the
sale.

 

ARTICLE
VII

 

THE
AGENT

 

Section
7.01. Agent’s
Appointment as Attorney-in-Fact; Etc.

 

(a)              Each
Grantor hereby irrevocably constitutes and appoints the Agent and
any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of such Grantor and in the
name of such Grantor or in its own name, from time to time during
the existence of an Event of Default, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which
the Agent may deem necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of
the foregoing, each Grantor hereby gives the Agent the power and
right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:

 

(i)              in
the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments or chattel paper for the payment
of moneys due under any Receivable or Assigned Agreement or with
respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Receivable or
Assigned Agreement or with respect to any other Collateral whenever
payable;

 

(ii)              in
the case of any Intellectual Property, prepare, sign, deliver, and
file for recordation in any Intellectual Property registry any and
all agreements, instruments, documents and papers as the Agent may
request to evidence and perfect the Agent’s security interest
in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented
thereby;

 

 

 

25

 

 

(iii)              pay
or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or obtain any insurance
called for by the terms of this Agreement and pay all or any part
of the premiums therefore and the costs thereof;

 

(iv)              execute,
in connection with any sale provided for in Section 6.06 or
6.07, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;
and

 

(v)              (1)
direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (2)
ask or demand for, collect, recover and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence
and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Agent
may deem appropriate; (7) assign any Intellectual Property (along
with the goodwill of the business to which any such Intellectual
Property pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Agent shall in its sole
discretion determine; (8) exercise any and all rights, powers,
privileges and remedies of such Grantor under or with respect to
the Assigned Agreements or any other Collateral (including all
rights of performance, termination, and enforcement); (9) operate,
maintain, and repair the Collateral; (10) receive, open and
dispose of any and all mail addressed to any Grantor and notify
postal authorities to change the address for delivery thereof to
such address as the Agent may designate; and (11) generally, sell,
transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely
as though the Agent were the absolute owner thereof for all
purposes, and do, at the Agent’s option and such
Grantor’s expense, at any time, or from time to time, all
acts and things which the Agent deems necessary to protect,
preserve or realize upon the Collateral and the Agent’s
security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might
do.

 

Anything in this
Section 7.01(a) to the contrary notwithstanding, the Agent agrees
that it will not exercise any rights under the power of attorney
provided for in this Section 7.01(a) unless an Event of Default
shall have occurred and be continuing.

 

(b)              If
any Grantor fails to perform or comply with any of its agreements
contained herein or in any other Note Purchase Document, the Agent
may, but without any obligation so to do, perform or comply, or
otherwise cause performance or compliance, with such
agreement.

 

(c)              The
expenses of the Agent incurred in connection with actions
undertaken as provided in this Section 7.01, together with interest
thereon at a rate per annum equal to the Default Rate (which rate
shall not exceed the maximum non-usurious rate permitted by
applicable law), from the date of payment by the Agent to the date
reimbursed by the relevant Grantor, shall be payable on demand by
such Grantor to the Agent.

 

(d)              Each
Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.

 

 

 

26

 

 

Section
7.02.  Duty of
Agent. The Agent’s
sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession (if any), under
Section 9-207 of the UCC or otherwise, shall be to deal with such
Collateral in a manner substantially similar to that which the
Agent deals with similar property for its own account. Neither the
Agent, any other Secured Party nor any of their respective
officers, directors, partners, employees, agents, advisors,
attorneys, attorneys-in-fact or affiliates shall be liable for
failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any
Grantor or any other Person or to take any other action whatsoever
with regard to the Collateral or any part thereof. The powers
conferred on the Agent pursuant to this Agreement are solely to
protect the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Agent to exercise any such
powers. The Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and
neither the Agent nor any of its officers, directors, employees,
agents, advisors, attorneys, attorneys-in-fact or affiliates shall
be responsible to any Grantor for any act or failure to act
hereunder, except for its or their own gross negligence or willful
misconduct.

 

Section
7.03.  Financing
Statements. Each Grantor
hereby authorizes the Agent to file or record financing statements,
continuation statements, and assignments and amendments thereto,
and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such
form and in such offices as the Agent determines appropriate to
perfect or maintain the perfection of the security interests of the
Agent under this Agreement. Each Grantor agrees that such financing
statements may describe the Collateral in the same manner as
described in the Security Documents or as all assets or all
personal property whether now owned or hereafter acquired and
wherever located (or use words of similar effect) of such Grantor,
or contain such other description as the Agent, in its sole
judgment, determines is necessary or advisable, including any real
property or fixtures description. Each Grantor hereby ratifies each
such financing statement and any and all other financing statements
filed prior to the date hereof by the Agent.

 

Section
7.04.  Authority of
Agent. Each Grantor
acknowledges that the rights and responsibilities of the Agent
under this Agreement with respect to any action taken by the Agent
or the exercise or non-exercise by the Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Agent and the other Secured Parties, be governed by the
Note Purchase Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between
the Agent and the Grantors, the Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

 

ARTICLE
VIII

 

MISCELLANEOUS

 

Section
8.01.  Amendments in
Writing. None of the terms
or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except pursuant to a written
instrument signed by the Agent and each Grantor.

 

Section
8.02.   Notices. All notices,
requests and demands and other communications to or upon the Agent
or any Grantor hereunder shall be effected in the manner provided
for in Section 8.2 of the Note Purchase Agreement.

 

 

 

27

 

 

Section
8.03.  Security
Interest Absolute. All rights of the
Agent and each other Secured Party hereunder, each grant of a
security interest in the Collateral and all obligations of each
Grantor hereunder shall be absolute and unconditional irrespective
of (a) any lack of validity or enforceability of the Note Purchase
Agreement, the Limited Guaranty or any other Note Purchase
Document, any agreement with respect to any of the Guaranteed
Obligations or any other agreement or instrument relating to any of
the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to
any departure from the Note Purchase Agreement, the Limited
Guaranty or any other Note Purchase Document or any other agreement
or instrument, (c) any exchange, release or non-perfection of any
Lien on other collateral, or any release or amendment or waiver of
or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Guaranteed Obligations, or (d) any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor in respect of the
Guaranteed Obligations or this Agreement.

 

Section
8.04.   No
Waiver by Course of Conduct; Cumulative
Remedies. Neither the Agent
nor any other Secured Party shall by any act (except by a written
instrument pursuant to Section 8.01), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of
the Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Agent or any other
Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the
Agent or such other Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by
law.

 

Section
8.05.  Indemnity and
Expenses.

 

(a)              Each
Grantor agrees to indemnify, defend and save and hold harmless each
Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an
"Indemnified
Party") from and against, and shall pay on demand, any and
all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except to the extent such claim,
damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence
or willful misconduct.

 

(b)              Each
Grantor will upon demand pay to the Agent the amount of any and all
costs and expenses, including, without limitation, the reasonable
fees and expenses of its counsel and of any experts and agents,
that the Agent may incur in connection with (i) the custody,
preservation, use or operation of, or the sale of, collection from
or other realization upon, any of the Collateral of such Grantor,
(ii) the exercise or enforcement of any of the rights of the Agent
or the other Secured Parties hereunder or (iii) the failure by such
Grantor to perform or observe any of the provisions
hereof.

 

(c)              The
agreements in this Section 8.05 shall survive repayment of the
Guaranteed Obligations and all other amounts payable under the Note
Purchase Agreement, the Limited Guaranty and the other Note
Purchase Documents.

 

Section
8.06. Successors and
Assigns. This Agreement
shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Agent and the other Secured
Parties and their successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the
Agent.

 

 

 

28

 

 

Section
8.07.  Set-Off. Each Grantor
hereby irrevocably authorizes each Secured Party at any time and
from time to time while an Event of Default shall have occurred and
be continuing, without notice to such Grantor or any other Grantor,
any such notice being expressly waived by each Grantor, to set-off
and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or
for the credit or the account of such Grantor, or any part thereof
in such amounts as such Secured Party may elect, against and on
account of the obligations and liabilities of such Grantor to such
Secured Party hereunder and claims of every nature and description
of such Secured Party against such Grantor, in any currency,
whether arising hereunder, under the Note Purchase Agreement, any
other Note Purchase Document or otherwise, as such Secured Party
may elect, whether or not such Secured Party has made any demand
for payment and although such obligations, liabilities and claims
may be contingent or unmatured. Each Secured Party shall notify
such Grantor promptly of any such set-off and the application made
by such Secured Party of the proceeds thereof, provided that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of the Secured Parties under this Section
are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Secured Party may
have.

 

Section
8.08.  Counterparts. This Agreement
may be executed by one or more of the parties to this Agreement on
any number of separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by
facsimile shall be effective as delivery of an original executed
counterpart of this Agreement.

 

Section
8.09.  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.

 

Section
8.10.  Headings. The Article and
Section headings used in this Agreement are for convenience of
reference only and are not to affect the construction hereof or be
taken into consideration in the interpretation hereof.

 

Section
8.11. Governing
Law. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE GRANTORS AND SECURED PARTIES
HEREUNDER AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

 

29

 

 

Section
8.12.  Submission To
Jurisdiction.

 

(a)              EACH
GRANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR
DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN
TORT OR OTHERWISE, AGAINST THE AGENT, ANY NOTEHOLDER, ANY OTHER
SECURED PARTY OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY
RELATING TO THIS AGREEMENT OR ANY OTHER NOTE PURCHASE DOCUMENT OR
THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER
THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION,
LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER NOTE
PURCHASE DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER NOTE PURCHASE DOCUMENT AGAINST THE COMPANY
OR ANY OTHER GRANTOR OR OBLIGOR OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

(b)              Each
Grantor irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement or any
other Note Purchase Document in any court referred to in Section
8.12(a). Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

(c)              Each
party hereto irrevocably consents to service of process in the
manner provided for notices in Section 8.02. Nothing in this
Agreement will affect the right of any party hereto to serve
process in any other manner permitted by applicable
law

 

(d)              Each
Grantor agrees (i) to not assert any claim against the Agent, any
Noteholder or any of their Related Parties, for special, indirect,
consequential or punitive damages arising out of or otherwise
relating to or alleged in connection with this Agreement or any of
the other Note Purchase Documents or any of the transactions
contemplated herein and (ii) that the Agent, the Noteholders or
their respective Related Parties shall have no responsibility or
liability to any other party or any of its Related Parties for any
such damages.

 

Section
8.13.  Acknowledgements.
Each party hereby acknowledges and agrees that:

 

(a)              it
has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Note Purchase Documents to
which it is a party, and this Agreement shall be construed as if
jointly drafted by the parties hereto;

 

(b)              no
Secured Party has any fiduciary relationship with or duty to any
Grantor arising out of or in connection with this Agreement or any
of the other Note Purchase Documents, and the relationship between
the Grantors, on the one hand, and the Secured Parties, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and

 

(c)              no
joint venture is created hereby or by the other Note Purchase
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors
and the Secured Parties.

 

Section
8.14. Additional
Grantors. If the Company
shall create or acquire any direct or indirect Subsidiary after the
date hereof, the Company shall immediately cause such Subsidiary to
become a party to this Agreement and to be a Grantor for all
purposes of this Agreement by execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.

 

 

 

30

 

 

Section
8.15.  Release

 

(a)           At
such time as the Guaranteed Obligations shall have been paid in
full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Agent and each
Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights
to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the
Agent shall deliver to such Grantor any Collateral held by the
Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

 

(b)         
Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with
respect to any financing statement originally filed in connection
herewith without the prior written consent of the Agent subject to
such Grantor’s rights under Section 9-509(d)(2) of the
UCC.

 

Section
8.16.  WAIVER OF JURY
TRIAL.
EACH GRANTOR WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY SECURED
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH SECURED
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE SECURED PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

Section
8.17. INTEGRATION. THIS WRITTEN
AGREEMENT REPRESENTS THE FINAL AGREEMENT OF THE GRANTORS AND THE
SECURED PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO PROMISES,
UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE ADMNISTRATIVE
AGENT OR ANY OTHER SECURED PARTY RELATIVE TO THE SUBJECT MATTER
HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

Section
8.18.  Time is of the
Essence. Time is of the
essence of this Agreement.

 

Section
8.19.  Survival. All covenants,
agreements, representations and warranties made by the Grantors
herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Secured Parties and shall survive
the execution and delivery of this Agreement and the making of the
Loans, regardless of any investigation made by any Secured Party or
on its behalf and notwithstanding that any Secured Party may have
had notice or knowledge of any Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or
any accrued interest on the Loans or any other Guaranteed
Obligations are outstanding and unpaid.

 

[Signature Page
Follows]

 

 

 

 

31

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above
written.

 

GRANTOR:

 

AEMETIS,
INC.

 

By:         
/s/ Eric A.
McAfee

Name:
Eric A. McAfee

Title:
President and CEO

 

AGENT:

 

THIRD
EYE CAPITAL CORPORATION

 

By:   
      /s/ Arif N.
Bhalwani

Name:
Arif N. Bhalwani

Title:
Managing Director

 

 

 

[Signature
Page – General Security Agreement]

 

Schedule 1

 

ASSIGNED
AGREEMENTS

 

 

 

Schedule
2

 

DESCRIPTION
OF INVESTMENT PROPERTY

 

	

Pledged
Stock:

	
 

 

	

Pledged
Notes:

	
 

 

	

Pledged
Debt Securities

	
 

 

	

Pledged
Partnership Interests:

	
 

 

	

Pledged
LLC Interests:

	
 

 

	

Pledged
Trust Interests:

	
 

 

	

Pledged
Security Entitlements:

	
 

 

	

Pledged
Commodity Contracts:

	
 

 

	

Other
Investment Property:

	
 

 

	

Deposit
Accounts:

 

	Grantor	Deposit Account

Number and
Location	Depository Bank

(Name and
Address)	Depositary Bank’s

Jurisdiction under

UCC
9-304

 

 

Schedule 3

 

FILINGS
AND OTHER ACTIONS

REQUIRED TO PERFECT
SECURITY INTERESTS

 

Uniform Commercial Code Filings

 

	

Grantor

	

UCC
Filing Office

	
 

	
 

 

Patent and Trademark Filings

 

Recordation of any
Intellectual Property Security Agreement or IP Security Agreement
Supplement with the United States Patent and Trademark Office
and/or the United States Copyright Office, as applicable, with
respect to Grantor’s registered Intellectual Property, if
any.

 

Actions with respect to Investment Property

 

Deliver
to the Agent all certificated securities (if any) described on
Schedule 2, as such schedule may be updated from time to
time.

 

Other Actions

 

Enter
into a Control Agreements with respect to any deposit account
described on Schedule 2 or any other securities accounts, security
entitlements, commodity contracts, commodity accounts, and deposit
accounts that are created or acquired after the Closing
Date.

 

 

 

 

Schedule 4

 

JURISDICTIONS
OF ORGANIZATION AND CHIEF EXECUTIVE OFFICES

 

A.            

Exact
legal name, jurisdiction of organization, type of organization,
location of chief executive office or sole place of business,
taxpayer identification number and organizational identification
number of each Grantor:

 

	

Legal Name of Each Grantor

	

Jurisdiction of Organization

	

Type of Organization

	

Location of

Chief Executive

Office/Sole Place

of Business

	

Federal

Taxpayer I.D.

	

Organizational I.D. #

	
 

	
 

	
 

	
 

	
 

	
 

 

 

B.            

Other
names (including trade names and fictitious business names) under
which each Grantor has done business for the past five (5)
years:

 

 

 

C.            

Changes
in name, jurisdiction of organization, type of organization,
organizational identification number, taxpayer identification
number, chief executive office or sole place of business, or
corporate or organizational structure for the past five (5)
years:

 

	
 

	
 

	
 

 

D.            

Security
agreements pursuant to which any Grantor is bound as a debtor
within the past five (5) years:

 

 

 

 

 

Schedule 5

 

LOCATION
OF INVENTORY AND EQUIPMENT

 

 

 

Schedule 6

 

INTELLECTUAL
PROPERTY

 

A.            

Patents

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

B.            

Trademarks

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

C.            

Trade
Names

	
 

	
 

D.            

Copyrights

 

 

E.            

IP
Agreements

 

 

F.            

Internet
Domain Names

 

 

 

 

 

 

Schedule 7

 

COMMERCIAL
TORT CLAIMS

 

 

 

Schedule 8

 

EQUIPMENT
SUBJECT TO CERTIFICATE OF TITLE STATUTES

 

	

Make

	

Model

	

Certificate of
Title #

(Specify State)

	
 

	
 

	
 

 

 

 

 

 

Schedule 9

 

LETTERS
OF CREDIT

 

	

Account
Party

	

Issuer

	

Nominated

Person

	

Beneficiary

	

Face
Amount

	

Date

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

Schedule 10

 

EXISTING
PRIOR LIENS

 

 

Annex 1
to

Security
Agreement

 

 

ASSUMPTION
AGREEMENT, dated as of ________________, 201__, made by
_______________, a _____________ (the "Additional Grantor"), in favor
of THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

WITNESSETH:

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation, the Noteholders from
time to time party thereto, and the Agent have entered into that
certain Note Purchase Agreement, dated as of ____, 2017 (as
amended, varied, supplemented, restated, renewed or replaced at any
time and from time to time, the "Note Purchase
Agreement");

 

WHEREAS, in
connection with the Note Purchase Agreement, Aemetis, Inc., a
Nevada corporation (the “Company”) has entered
into that certain General Security Agreement, dated as of ____,
2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties;

 

WHEREAS, the Note
Purchase Agreement and/or the Security Agreement requires the
Additional Grantor to become a party to the Security Agreement;
and

 

WHEREAS, the
Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Security
Agreement;

 

NOW,
THEREFORE, IT IS AGREED:

 

1.              Security
Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.14 of
the Security Agreement, hereby becomes a party to the Security
Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The Additional
Grantor hereby further agrees, as of the date first above written,
that each reference in the Security Agreement to a "Grantor" shall
also mean and be a reference to such Additional Grantor. The
information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Security
Agreement and the Additional Grantor hereby certifies, as of the
date first above written, that such supplemental schedules have
been prepared by the undersigned in substantially the form of the
equivalent Schedules to the Security Agreement and are complete and
correct. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Article IV
of the Security Agreement is true and correct on and as of the date
hereof (after giving effect to this Assumption Agreement) as if
made on and as of such date.

 

2.              Grant
of Security. Without limiting the generality of Section 1 of
this Assumption Agreement, as security for the prompt and complete
payment and performance when due of all of the Guaranteed
Obligations, the Additional Grantor hereby assigns and transfers to
the Agent, and hereby grants to the Agent, for the benefit of the
Secured Parties, a security interest in, all of its right, title
and interest in and to all of the Collateral, whether now owned or
hereafter acquired by the Additional Grantor, wherever located and
whether now or hereafter existing or arising, including, without
limitation, the property and assets of the undersigned set forth on
the attached supplemental schedules to the Schedules to the
Security Agreement.

 

 

 

 

 

 

3.              Counterparts.
This Assumption Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto were upon the same instrument.
Delivery of an executed signature page of this Assumption Agreement
by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

 

4.              Governing
Law. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE ADDITIONAL GRANTOR AND THE AGENT HEREUNDER AND
ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS ASSUMPTION AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

5.              INTEGRATION.
THIS WRITTEN ASSUMPTION AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREOF AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

 

 

[Signature Pages
Follow]

 

 

 

 

2

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first
above written.

 

[NAME
OF ADDITIONAL GRANTOR]

 

By:                                                                  

Name:                                                             

Title:                                                             

 

Accepted and agreed
to by:

 

THIRD
EYE CAPITAL CORPORATION,

as
Agent

 

 

By:        
                 
                 
             
  

Name:                                                       

Title:                                                       

 

By:        
                 
                 
           
  

Name:                                                       

Title:                                                       

 

 

Annex
1-A to

Assumption
Agreement

 

Supplement to Schedule 1

 

Supplement to Schedule 2

 

Supplement to Schedule 3

 

Supplement to Schedule 4

 

Supplement to Schedule 5

 

Supplement to Schedule 6

 

Supplement to Schedule 7

 

Supplement to Schedule 8

 

Supplement to Schedule 9

 

Supplement to Schedule 10

 

 

Annex 2
to

Security Agreement

 

FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, the
"IP Security
Agreement") dated as of ____________________, 201__, is made
by the Persons listed on the signature pages hereof (collectively,
the "Grantors") in
favor of THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation, the Noteholders from
time to time party thereto, and the Agent have entered into that
certain Note Purchase Agreement, dated as of ____, 2017 (as
amended, varied, supplemented, restated, renewed or replaced at any
time and from time to time, the "Note Purchase
Agreement").

 

WHEREAS, in
connection with the Note Purchase Agreement, Aemetis, Inc. (the
“Company”) has entered
into that certain General Security Agreement, dated as of ____,
2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties.

 

WHEREAS, under the
terms of the Security Agreement, the Grantors have granted to the
Agent, for the benefit of the Secured Parties, a security interest
in, among other property, all Intellectual Property of the
Grantors, and have agreed as a condition thereof to execute this IP
Security Agreement for recording with the United States Patent and
Trademark Office, the United States Copyright Office and other
Governmental Authorities.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees
as follows:

 

SECTION
1.  Grant of
Security. Each Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of such
Grantor’s right, title and interest in and to the following
(the "Collateral"):

 

(i)           the
patents and patent applications set forth in Schedule A hereto (the
"Patents");

 

(ii)           the
trademark and service mark registrations and applications set forth
in Schedule B
hereto, together with the goodwill symbolized thereby (the
"Trademarks");

 

(iii)       
all copyrights, whether registered or unregistered, now owned or
hereafter acquired by such Grantor, including, without limitation,
the copyright registrations and applications and copyright licenses
set forth in Schedule C hereto (the
"Copyrights");

 

(iv)       
all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing,
all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;

 

 

 

 

(v)           any
and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the
right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and

 

(vi)           any
and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral
of or arising from any of the foregoing.

 

SECTION
2.  Security for
Guaranteed Obligations. The grant of a security interest in,
the Collateral by each Grantor under this IP Security Agreement
secures the prompt and complete payment and performance when due of
all Guaranteed Obligations, whether direct or indirect, now
existing or hereafter arising, absolute or contingent, and whether
for principal, reimbursement obligations, interest, premiums,
penalties, fees, guarantee obligations, indemnifications, contract
causes of action, costs, expenses or otherwise.

 

SECTION
3.  Recordation. Each Grantor
authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and
any other applicable Governmental Authority record this IP Security
Agreement.

 

SECTION
4. Execution in
Counterparts. This IP Security Agreement may be executed in
any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

SECTION
5. Grants, Rights and
Remedies. This IP Security Agreement has been entered into
in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the
security interest hereunder to, and the rights and remedies of, the
Agent with respect to the Collateral are more fully set forth in
the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth
herein.

 

SECTION
6.  Governing
Law. THIS IP SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE GRANTORS AND SECURED PARTIES HEREUNDER AND ANY
CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS IP SECURITY AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

IN
WITNESS WHEREOF, each Grantor has caused this IP Security Agreement
to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

 

[Signature Pages
Follow]

 

 

2

 

[NAME
OF GRANTOR]

 

 

By:                                                                 

Name:                                                               

Title:                                                               

 

Address
for Notices:

 

 

 

 

 

 

 

 

 

[NAME
OF GRANTOR]

 

 

By:                                                                  

Name:                                                               

Title:                                                               

 

Address
for Notices:

 

 

 

 

 

 

 

 

 

 

 

 

Annex 3
to

Security Agreement

 

 

FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT

 

This
INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this
"IP Security Agreement
Supplement") dated as of ________, 201_, is made by the
Person listed on the signature page hereof (the "Grantor") in favor of THIRD EYE
CAPITAL CORPORATION, as administrative agent and collateral agent
for and on behalf of the Noteholders (in such aforesaid capacities,
or any successor or assign in such capacities, the
“Agent”).

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation (the
“Company”), the
Noteholders from time to time party thereto, and the Agent have
entered into that certain Note Purchase Agreement, dated as of
____, 2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Note Purchase
Agreement").

 

WHEREAS, in
connection with the Note Purchase Agreement, the Company has
entered into that certain General Security Agreement, dated as of
____, 2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties.

 

WHEREAS, under the
terms of the Security Agreement, the Grantor has granted to the
Agent, for the benefit of the Secured Parties, a security interest
in the Collateral (as defined in Section 1 below) of the
Grantor and has agreed as a condition thereof to execute this IP
Security Agreement Supplement for recording with the United States
Patent and Trademark Office, the United States Copyright Office and
other Governmental Authorities.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as
follows:

 

SECTION
1.  Grant of
Security. The Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of the
Grantor’s right, title and interest in and to the following
(the "Collateral"):

 

(i)           the
patents and patent applications set forth in Schedule A hereto (the
"Patents");

 

(ii)         
the trademark and service mark registrations and applications set
forth in Schedule B hereto,
together with the goodwill symbolized thereby (the "Trademarks");

 

(iii)        
the copyright registrations and applications and copyright licenses
set forth in Schedule C hereto (the
"Copyrights");

 

(iv)       
all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing,
all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;

 

 

 

2

 

 

(v)           all
any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation,
violation, misuse or breach with respect to any of the foregoing,
with the right, but not the obligation, to sue for and collect, or
otherwise recover, such damages; and

 

(vi)           any
and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the foregoing or
arising from any of the foregoing.

 

SECTION
2.  Supplement to
Security Agreement. Schedule 6 to the Security
Agreement is, effective as of the date hereof, hereby supplemented
to add to such Schedule the Collateral described in Section 1
above.

 

SECTION
3. Security for Guaranteed
Obligations. The grant of a security interest in the
Collateral by the Grantor under this IP Security Agreement
Supplement secures the prompt and complete payment and performance
when due of all Guaranteed Obligations, whether direct or indirect,
absolute or contingent, now existing or hereafter arising, and
whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, guarantee obligations, indemnifications,
contract causes of action, costs, expenses or
otherwise.

 

SECTION
4. Recordation. The
Grantor authorizes and requests that the Register of Copyrights,
the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable Governmental Authority to record this IP
Security Agreement Supplement.

 

SECTION
5.  Grants, Rights
and Remedies. This IP Security Agreement Supplement has been
entered into in conjunction with the provisions of the Security
Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and
remedies of, the Agent with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions
of which are incorporated herein by reference as if fully set forth
herein.

 

SECTION
6.  Governing
Law. THIS IP SECURITY AGREEMENT SUPPLEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE GRANTOR AND SECURED PARTIES HEREUNDER AND
ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS IP SECURITY AGREEMENT SUPPLEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

[Signature Pages
Follow]

 

 

3

 

IN
WITNESS WHEREOF, the Grantor has caused this IP Security Agreement
Supplement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above
written.

 

[NAME
OF GRANTOR]

 

 

By:                                                                  

Name:                                                                  

Title:                                                                  

 

Address
for Notices:

 

 

 

 

 

 

Annex 4
to

Security Agreement

 

 

FORM
OF CONSENT AND AGREEMENT

 

The
undersigned hereby (a) acknowledges notice of, and consents to the
terms and provisions of, that certain General Security Agreement
dated as of ____, 2017 (as amended, varied, supplemented, restated,
renewed or replaced at any time and from time to time, the
"Security
Agreement", the terms defined therein being used herein as
therein defined) from ____________________ (the "Grantor") and certain other
grantors from time to time party thereto to THIRD EYE CAPITAL
CORPORATION, as administrative agent and collateral agent for and
on behalf of the Noteholders (in such aforesaid capacities, or any
successor or assign in such capacities, the “Agent”), (b) consents in
all respects to the pledge and assignment to the Agent of all of
the Grantor’s right, title and interest in, to and under the
Assigned Agreement (as defined below) pursuant to the Security
Agreement, (c) consents to any and all filings made or required by
the Agent to perfect the security interest in the Assigned
Agreement created by the Security Agreement, (d) agrees that the
Agent shall be entitled to exercise any and all rights and remedies
of the undersigned under the Assigned Agreement in accordance with
the terms of the Security Agreement, and (e) agrees with the Agent
that:

 

(i)           A
true copy of the agreement between the undersigned and the Grantor
dated ____________, ____ (the "Assigned Agreement"),
including, without limitation, all amendments, modifications,
restatements and supplements is attached hereto as Schedule 1. The Assigned
Agreement is in full force and effect, and the undersigned is not
aware of any default under the Assigned Agreement or any event that
would give any party the right to terminate or rescind the Assigned
Agreement. No prepayments have been made of any amounts to become
due under the Assigned Agreement.

 

(ii)           The
undersigned will make all payments to be made by it under or in
connection with the Assigned Agreement in accordance with the
instructions of the Agent.

 

(iii)           All
payments referred to in paragraph (ii) above shall be made by the
undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set off and shall be final,
and the undersigned will not seek to recover from any Secured Party
for any reason any such payment once made.

 

(iv)           The
Agent or its designee shall be entitled to exercise any and all
rights and remedies of the Grantor under the Assigned Agreement in
accordance with the terms of the Security Agreement, and the
undersigned shall comply in all respects with such
exercise.

 

(v)           The
undersigned will not, without the prior written consent of the
Agent, (A) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof, (B) amend, amend
and restate, supplement or otherwise modify the Assigned Agreement,
or (C) make any prepayment of amounts to become due under or in
connection with the Assigned Agreement.

 

(vi)           The
undersigned shall deliver to the Agent, concurrently with the
delivery thereof to the Grantor, a copy of each notice, request or
demand given by the undersigned pursuant to the Assigned
Agreement.

 

(vii)           Neither
the Agent nor any other Secured Party shall have any liability or
obligation under the Assigned Agreement as a result of this Consent
and Agreement, the Security Agreement or otherwise.

 

 

 

2

 

 

(viii)        
Upon the enforcement of the Security Agreement by the Agent and the
transfer of the Assigned Agreement to a transferee, the undersigned
will recognize the transferee as the counterparty to the Assigned
Agreement in the place and stead of the Grantor.

 

(ix)           The
undersigned shall not sell, assign, convey or grant a security
interest in, or otherwise transfer any of its right, title or
interest in or to, the Assigned Agreement without the prior written
consent of the Agent.

 

(x)           The
undersigned will not commence, or join with any other person or
entity in commencing, any proceeding against the Grantor [or any of
Grantor’s affiliates] under any bankruptcy, reorganization,
liquidation, or insolvency law or statute now or hereafter in
effect in any jurisdiction.

 

In
order to induce the Noteholders to make the Loans under the Note
Purchase Agreement, the undersigned repeats and reaffirms for the
benefit of the Secured Parties the representations and warranties
made by it in the Assigned Agreement.

 

This
Consent and Agreement shall be binding upon the undersigned and its
successors and assigns, and shall inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. THIS CONSENT
AND AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER OF THE
PARTIES HERETO, THE GRANTOR AND SECURED PARTIES, AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

 

IN
WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.

 

 

3

 

Dated:
_______________, 201__.

 

 

 

[NAME
OF COUNTERPARTY TO ASSIGNED AGREEMENT]

 

 

By:         
                 
                 
                 
 

Name:                                                          

Title:                                                             

 

 

 

 

ACKNOWLEDGEMENT AND CONSENT***

 

The
undersigned hereby acknowledges receipt of a copy of the General
Security Agreement dated as of ____, 2017 (the "Agreement"), made by Goodland
Advanced Fuels, Inc. and the other Grantors parties thereto from
time to time, for the benefit of THIRD EYE CAPITAL CORPORATION, as
Agent. The undersigned agrees for the benefit of the Agent and the
other Secured Parties as follows:

 

1. The
undersigned irrevocably and unconditionally consents to the
execution, delivery and performance of the Agreement by each of the
Grantors and to the exercise and enforcement by the Agent of its
rights and remedies thereunder.

 

2. The
undersigned will be bound by the terms of the Agreement and will
comply with such term insofar as such terms are applicable to the
undersigned.

 

3. The
undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in clause (A), (B) or (C)
of Section 6.03(a)(ii) of the Agreement.

 

The
terms of Sections 6.03(d) and 6.06 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to 6.03(d) or 6.06 of the
Agreement.

 

[Name
of Issuer]

 

By:                                                                            

Name:                                                                            

Title:                                                                            

 

Address
for Notices:

 

 

 

 

Fax:
________________________________

 

 

 

 

 

 

 

 

*** This consent is
necessary only with respect to any Issuer which is not also a
Grantor. This consent may be modified or eliminated with respect to
any Issuer that is not controlled by a Grantor.Blueprint

Exhibit
10.4

 

 

 

 

 

 

GENERAL
SECURITY AGREEMENT

 

made
by

 

AEMETIS
ADVANCED PRODUCTS KEYES, INC.,

 

as a
Grantor

 

THE
OTHER GRANTORS FROM TIME TO TIME PARTY HERETO

 

in
favor of

 

THIRD
EYE CAPITAL CORPORATION,

 

as
Agent

 

Dated
as of July 10, 2017

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	

ARTICLE
I DEFINED TERMS

	

1

	

Section
1.01. Definitions

	

1

	

Section
1.02. Other Definitional Provisions

	

5

	

ARTICLE
II [RESERVED]

	

5

	

ARTICLE
III GRANT OF SECURITY INTEREST

	

5

	

Section
3.01. Grant of Security

	

5

	

ARTICLE
IV REPRESENTATIONS AND WARRANTIES

	

6

	

Section
4.01. Title; No Other Liens

	

6

	

Section
4.02. Perfected First Priority Liens

	

7

	

Section
4.03. Chief Executive Office; Etc

	

7

	

Section
4.04. Inventory and Equipment

	

8

	

Section
4.05. Farm Products

	

8

	

Section
4.06. Investment Property

	

8

	

Section
4.07. Receivables

	

9

	

Section
4.08. Intellectual Property

	

9

	

Section
4.09. Securities Accounts, Commodities Accounts and Deposit
Accounts

	

10

	

Section
4.10. Commercial Tort Claims

	

10

	

Section
4.11. Letters of Credit

	

10

	

Section
4.12. Independent Investigation; Etc

	

10

	

Section
4.13. Assigned Agreements

	

10

	

ARTICLE
V COVENANTS

	

12

	

Section
5.01. Delivery and Control of Instruments, Investment Property,
Negotiable Documents, Chattel Paper, Letter-of-Credit Rights, and
Transferable Records

	

12

	

Section
5.02. Maintenance of Insurance

	

14

	

Section
5.03. Payment of Guaranteed Obligations

	

14

	

Section
5.04. Maintenance of Perfected Security Interest; Limitation on
Dispositions; Further Documentation; Inspection; Etc

	

14

	

Section
5.05. Changes in Locations; Name; Jurisdiction of Incorporation;
Etc

	

15

	

Section
5.06. Notices

	

15

	

Section
5.07. Investment Property

	

16

	

Section
5.08. Inventory and Equipment

	

16

	

Section
5.09. Receivables

	

17

	

Section
5.10. Intellectual Property

	

17

	

Section
5.11. Commercial Tort Claims

	

19

	

Section
5.12. Assigned Agreements

	

19

	

Section
5.13. Covenants in Note Purchase Agreement.

	

20

	

ARTICLE
VI REMEDIAL PROVISIONS

	

20

	

Section
6.01. Certain Matters Relating to Receivables

	

20

	

Section
6.02. Communications with Obligors; Grantors Remain
Liable

	

20

	

Section
6.03. Voting Rights; Dividends; Etc

	

21

	

Section
6.04. Proceeds to be Turned Over To Agent

	

22

	

Section
6.05. Application of Proceeds

	

22

	

Section
6.06. Remedies

	

23

 

 

ii

 

 

TABLE OF CONTENTS

(continued)

 

 

Page

  

	

Section
6.07. Registration Rights

	

24

	

Section
6.08. Deficiency

	

25

	

Section
6.09. Sales on Credit

	

25

	

ARTICLE
VII THE AGENT

	

25

	

Section
7.01. Agent’s Appointment as Attorney-in-Fact;
Etc

	

25

	

Section
7.02. Duty of Agent

	

27

	

Section
7.03. Financing Statements

	

27

	

Section
7.04. Authority of Agent

	

27

	

ARTICLE
VIII MISCELLANEOUS

	

27

	

Section
8.01. Amendments in Writing

	

27

	

Section
8.02. Notices

	

27

	

Section
8.03. Security Interest Absolute

	

28

	

Section
8.04. No Waiver by Course of Conduct; Cumulative
Remedies

	

28

	

Section
8.05. Indemnity and Expenses

	

28

	

Section
8.06. Successors and Assigns

	

28

	

Section
8.07. Set-Off

	

29

	

Section
8.08. Counterparts

	

29

	

Section
8.09. Severability

	

29

	

Section
8.10. Headings

	

29

	

Section
8.11. Governing Law

	

29

	

Section
8.12. Submission To Jurisdiction

	

30

	

Section
8.13. Acknowledgements

	

30

	

Section
8.14. Additional Grantors

	

30

	

Section
8.15. Release

	

31

	

Section
8.16. WAIVER OF JURY TRIAL

	

31

	

Section
8.17. INTEGRATION

	

31

	

Section
8.18. Time is of the Essence

	

31

	

Section
8.19. Survival

	

31

 

 

iii

 

 

SCHEDULES

 

Schedule
1

Assigned
Agreements

Schedule
2

Investment
Property

Schedule
3

Perfection
Matters

Schedule
4

Jurisdictions of
Organization and Chief Executive Offices

Schedule
5

Inventory and
Equipment Locations

Schedule
6

Intellectual
Property

Schedule
7

Commercial Tort
Claims

Schedule
8 

Equipment Subject
to Certificate of Title Statutes

Schedule
9

Letters of
Credit

Schedule10

Existing Prior
Liens

 

ANNEXES

 

Annex
1

Form of Assumption
Agreement

Annex
2

Form of
Intellectual Property Security Agreement

Annex
3  

Form of
Intellectual Property Security Agreement Supplement

Annex
4   

Form of Consent and
Agreement

 

 

iv

 

 

GENERAL
SECURITY AGREEMENT

 

This
GENERAL SECURITY AGREEMENT, (the “Agreement”) dated as of
July 10, 2017, is made by Aemetis Advanced Products Keyes, Inc., a
Delaware corporation (the “Company”), as a grantor,
and each other Person that may from time to time become party
hereto as a grantor (collectively with the Company, the
“Grantors”), in favor of
THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (as defined
in the Note Purchase Agreement referred to below) (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

RECITALS

 

A.           Goodland
Advanced Fuels, Inc., the Noteholders from time to time party
thereto, and the Agent have entered into that certain Note Purchase
Agreement of even date herewith (as amended, varied, supplemented,
restated, renewed or replaced at any time and from time to time,
the "Note Purchase
Agreement");

 

B.           Each
Grantor has entered into that certain Limited Guaranty of even date
herewith (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Limited Guaranty") to guarantee
the Guaranteed Obligations (as defined in the Limited
Guaranty);

 

C.           Each
Grantor will derive substantial direct and indirect benefit from
the making of the Loans under the Note Purchase Agreement;
and

 

D.           It
is a condition precedent to the obligation of the Noteholders to
make Loans under the Note Purchase Agreement that each Grantor
shall have executed and delivered this Agreement to the Agent, for
the benefit of the Agent, the Noteholders from time to time party
to the Note Purchase Agreement and any other holder of any Note
Indebtedness (collectively with the Agent and the Noteholders, the
“Secured
Parties”).

 

NOW,
THEREFORE, in consideration of the premises and to induce the
Noteholders to make the Loans pursuant to the Note Purchase
Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each
Grantor hereby agrees with the Agent, for the benefit of the
Secured Parties, as follows:

 

ARTICLE I

DEFINED
TERMS

 

Section
1.01.  Definitions. Unless otherwise
defined herein, terms defined in the Note Purchase Agreement and
used herein shall have the meanings given to them in the Note
Purchase Agreement. Furthermore, unless otherwise defined in this
Agreement or in the Note Purchase Agreement, terms defined in
Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or
9.

 

(a)              The
following terms shall have the following meanings:

 

"Accounts" means all "accounts"
as such term is defined in Article 9 of the UCC.

 

"Agreement" means this General
Security Agreement, as amended, varied, supplemented, restated,
renewed or replaced at any time and from time to time.

 

 

 

"Assigned Agreements" means the
contracts and agreements listed in Schedule 1, as the same may be
amended, restated, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor
to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of any Grantor to receive
proceeds of any insurance, indemnity, warranty, or guaranty
thereunder or in connection therewith, (iii) all rights of any
Grantor to damages arising thereunder or in connection therewith
and (iv) all rights of any Grantor to perform thereunder and to
compel performance and otherwise exercise rights and remedies
thereunder.

 

"Assumption Agreement" means an
Assumption Agreement in substantially the form of Annex 1 to this
Agreement.

 

“Capital Stock” means,
with respect to any Person, (a) any and all of the shares,
interests, rights, participations or other equivalents (however
designated) of capital stock of (or other ownership or profit
interests in) such Person, (b) any and all of the warrants, options
or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests
in) such Person, and (c) all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or
profit interests in) such Person or warrants, rights or options for
the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust
interests therein), in the case of clauses (a) through (c) above,
whether voting or nonvoting, and whether or not such shares,
participations, warrants, options, rights or other interests are
outstanding on any date of determination.

 

"Collateral" has the meaning
specified in Section 3.01.

 

"Collateral Accounts" means any
collateral account established by the Agent pursuant to this
Agreement or the Note Purchase Agreement. Each Collateral Account
shall be in the name of the Agent and shall be under the sole
dominion and control of the Agent.

 

"Commodity Account Control
Agreement" has the meaning specified in Section
5.01(e).

 

"Company" has the meaning
specified in the opening paragraph of this Agreement.

 

"Computer Software" means all
computer software, programs and databases (including, without
limitation, source code, object code and all related applications
and data files), firmware and documentation and materials relating
thereto, together with any and all maintenance rights, service
rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and
any substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing.

 

"Consent to Assignment of Letter of
Credit Rights" has the meaning specified in Section
5.01(g).

 

"Control Agreement" means a
Deposit Account Control Agreement, Securities Account Control
Agreement, Commodity Account Control Agreement or Uncertificated
Security Control Agreement.

 

"Copyright Licenses" means any
written agreement naming any Grantor as licensor or licensee
(including, without limitation, those listed in Schedule 6), granting any right
under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.

 

"Copyrights" means (i) all
copyrights arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations
and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office,
and (ii) the right to obtain all renewals thereof.

 

 

2

 

 

"Deposit Account Control
Agreement" has the meaning specified in Section
5.01(f).

 

"Equipment" means all
"equipment" as such term is defined in Article 9 of the UCC and, in
any event, includes, without limitation, all machinery, tools,
office equipment, furniture, furnishings, and fixtures (including
trade fixtures and business fixtures) and all parts thereof and all
accessions thereto and all software related thereto.

 

"General Intangibles" means all
"general intangibles" as such term is defined in Article 9 of the
UCC and, in any event, includes, without limitation, with respect
to each Grantor, (i) all tax refunds, claims for tax refunds,
and tax credits, (ii) all permits, licenses, approvals,
authorizations, consents, variances, and certifications of any
Governmental Authority, (iii) all judgments, claims, tort
claims, and causes of action, (iv) all property, casualty,
liability, business interruption, and other insurance of any kind
or character, and all insurance claims and insurance refund claims,
(v) all letters of credit and letter-of-credit rights,
(vi) all payment intangibles, (vii) all lists, customer
lists, books, records, recorded knowledge, goodwill, ledgers, files
(whether in printed form or stored electronically), designs,
blueprints, data, specifications, engineering reports, and manuals,
computer programs and software, and (viii) all contracts,
agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor
or any property of such Grantor is subject, as the same may from
time to time be amended, supplemented, replaced or otherwise
modified, including, without limitation, (A) all rights of such
Grantor to receive moneys due and to become due to it thereunder or
in connection therewith, (B) all rights of such Grantor to damages
arising thereunder and (C) all rights of such Grantor to perform
and to exercise all remedies thereunder.

 

"Indemnified Party" has the
meaning specified in Section 8.05(a).

 

"Intellectual Property" means
the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including,
without limitation, all Copyrights, Patents, Trademarks, IP
Agreements, Trade Secrets, Computer Software, and internet domain
names, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

 

"Intellectual Property Security
Agreement" has the meaning specified in Section
5.10(f).

 

"Intercompany Note" means each
Revolving Intercompany Note and any other promissory note
evidencing loans, advances or other extensions of credit made by
any Grantor to any other Obligor or any of such Grantor’s
Subsidiaries.

 

"Inventory" means all
"inventory" as such term is defined in Article 9 of the UCC and, in
any event, includes, without limitation, (i) all goods held
for sale or lease or to be furnished under contracts of service or
so leased or furnished, all raw materials, component materials,
work in process, finished goods, supplies and other materials used
or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in any Grantor’s business,
(ii) all goods in which any Grantor has an interest in mass or
a joint or other interest or right of any kind, (iii) all goods
that are returned to or repossessed by or on behalf of any Grantor,
(iv) all computer programs embedded in any goods and all
accessions thereto and products thereof and (v) all documents
therefor and all software relating to any of the
foregoing.

 

 

3

 

 

"Investment Property" means the
collective reference to (i) all "investment property" as such term
is defined in Section 9-102(a)(49) of the UCC, and (ii) whether or
not constituting "investment property" as so defined, all Pledged
Securities.

 

"IP Agreements" means all
Copyright Licenses, Patent Licenses, Trademark Licenses and all
other agreements, permits, consents, orders, and franchises
relating to the license, development or use of any Copyright,
Patent, Trademark, Computer Software or Trade Secret.

 

"Issuers" means the collective
reference to each issuer of any Investment Property.

 

"Patent Licenses" means all
agreements, whether written or oral, providing for the grant by or
to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in
Schedule
6.

 

"Patents" means (i) all letters
patent of the United States, any other country or any political
subdivision thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without limitation, any
of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing
referred to in Schedule
6, and (iii) all rights to obtain any reissues or extensions
of the foregoing.

 

"Pledged Commodity Contracts"
means all commodity contracts listed on Schedule 2 and all other
commodity contracts to which any Grantor is party from time to
time.

 

"Pledged Debt Securities" means
all debt securities now owned or hereafter acquired by any Grantor,
including, without limitation, the debt securities listed on
Schedule 2,
together with any certificates, options, rights or security
entitlements of any nature whatsoever in respect of the debt
securities of any Person that may at any time be issued or granted
to, or held by, any Grantor.

 

"Pledged Equity Interests" shall
mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership
Interests and Pledged Trust Interests.

 

"Pledged LLC Interests" means
all interests of any Grantor now owned or hereafter acquired in any
limited liability company including, without limitation, all
limited liability company interests listed on Schedule 2 hereto under the
heading "Pledged LLC Interests" and the certificates, if any,
representing such limited liability company interests and any
interest of such Grantor on the books and records of such limited
liability company and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
limited liability company interests and any other warrant, right or
option to acquire any of the foregoing.

 

"Pledged Notes" means all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor, including,
without limitation, the Pledged Notes described on Schedule 2.

 

"Pledged Partnership Interests"
means all interests of any Grantor now owned or hereafter acquired
in any general partnership, limited partnership, limited liability
partnership or other partnership including, without limitation, all
partnership interests listed on Schedule 2 hereto under the
heading "Pledged Partnership Interests" and the certificates, if
any, representing such partnership interests and any interest of
such Grantor on the books and records of such partnership and all
dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such partnership interests and any
other warrant, right or option to acquire any of the
foregoing.

 

 

4

 

 

"Pledged Securities" means the
collective reference to the Pledged Debt Securities, the Pledged
Notes and the Pledged Equity Interests.

 

"Pledged Security Entitlements"
means all security entitlements with respect to the financial
assets listed on Schedule
2 and all other security entitles of any
Grantor.

 

"Pledged Stock" means all shares
of Capital Stock now owned or hereafter acquired by any Grantor,
including, without limitation, all shares of Capital Stock
described on Schedule 2 hereto under
the heading "Pledged Stock", and the certificates, if any,
representing such shares and any interest of such Grantor in the
entries on the books of the issuer of such shares and all
dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares and any other warrant,
right or option to acquire any of the foregoing.

 

"Pledged Trust Interests" means
all interests of any Grantor now owned or hereafter acquired in a
Delaware business trust or other trust including, without
limitation, all trust interests listed on Schedule 2 hereto under the
heading "Pledged Trust Interests" and the certificates, if any,
representing such trust interests and any securities intermediary
pertaining to such interests and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such trust interests and any other warrant, right or option to
acquire any of the foregoing.

 

"Proceeds" shall mean all
"proceeds" as defined in Article 9 of the UCC and, in any event,
includes, without limitation, (i) all payments, dividends or
distributions made with respect to any Investment Property,
(ii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary, and (iii) all
insurance proceeds.

 

"Receivable" means any right to
payment for goods sold or leased or for services rendered, whether
or not such right is evidenced by an instrument or chattel paper
and whether or not it has been earned by performance (including,
without limitation, any Account).

 

"Secured Parties" has the
meaning specified in the recitals hereto.

 

"Securities Account Control
Agreement" has the meaning specified in Section
5.01(d).

 

"Securities Act" means the
Securities Act of 1933, as amended.

 

"Trademark Licenses" means any
agreement, whether written or oral, providing for the grant by or
to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in
Schedule
6.

 

"Trademarks" means (i) all
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) the right
to obtain all renewals thereof.

 

 

5

 

 

"Trade Secrets" means all
confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production
processes and techniques, inventions, research and development
information, databases and data, including, without limitation,
technical data, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and
supplier lists and information.

 

"UETA" means the Uniform
Electronic Transactions Act, as in effect in any applicable
jurisdiction.

 

"UCC" means the Uniform
Commercial Code as in effect from time to time in the State of New
York; provided, that if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of New York,
“UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection
or non-perfection or priority.

 

"Uncertificated Security Control
Agreement" has the meaning specified in Section
5.01(c).

 

Section
1.02. Other Definitional
Provisions. The rules of
construction specified in Sections 1.2, 1.3 and 1.4 of the Note
Purchase Agreement shall apply to this Agreement, mutatis mutandis.

 

(a)              The
expressions "payment in full," "paid in full" and any other similar
terms or phrases when used herein with respect to the Guaranteed
Obligations shall mean the unconditional, final, indefeasible and
irrevocable payment in full, in immediately available funds, of all
of the Guaranteed Obligations.

 

(b)              Where
the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such
Grantor’s Collateral or the relevant part
thereof.

 

ARTICLE
II

[RESERVED]

 

 

ARTICLE
III

GRANT
OF SECURITY INTEREST

 

Section
3.01.  Grant of
Security. Each Grantor
hereby assigns and transfers to the Agent, and hereby grants to the
Agent, for the benefit of the Secured Parties, a security interest
in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise)
of the Guaranteed Obligations (as defined in the Limited
Guaranty):

 

(a)              all
Accounts;

 

(b)              all
as-extracted collateral;

 

(c)              all
chattel paper;

 

 

6

 

 

(d)            
all commercial tort claims, including those described on
Schedule 7;

 

(e)            
all deposit accounts;

 

(f)              all
documents;

 

(g)            
all Equipment;

 

(h)            
all fixtures;

 

(i)              all
General Intangibles;

 

(j)              all
goods;

 

(k)            
all instruments;

 

(l)              all
Intellectual Property;

 

(m)           
all Inventory;

 

(n)            
all Investment Property;

 

(o)            
all money;

 

(p)            
all supporting obligations;

 

(q)            
all real property and all other personal property of any kind or
character, whether tangible or intangible;

 

(r)             
all books and records pertaining to the Collateral;
and

 

(s)              to
the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the
foregoing.

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES

 

To
induce the Noteholders to make the Loans under the Note Purchase
Agreement, each Grantor hereby represents and warrants, to the
Agent and each other Secured Party that as of the date of this
Agreement (and such other times that Grantors are required to make
these representations and warranties under this Agreement or
another Note Purchase Document):

 

Section
4.01. Title; No Other
Liens. Except for the
security interest granted to the Agent, for the benefit of the
Secured Parties, pursuant to this Agreement or any other Note
Purchase Document and the other Liens expressly permitted to exist
on the Collateral pursuant to the Note Purchase Agreement, such
Grantor is the legal and beneficial owner of each item of the
Collateral free and clear of any and all Liens, claims, or other
encumbrances. No financing statement, fixture filing or other
public notice with respect to all or any part of the Collateral is
on file or of record in any filing or recording office, except such
as have been filed in favor of the Agent, for the benefit of the
Secured Parties, pursuant to this Agreement or any other Note
Purchase Document or as are otherwise expressly permitted under the
Note Purchase Agreement.

 

 

7

 

 

Section
4.02.  Perfected
Priority Liens

 

(a)              The
security interests granted pursuant to this Agreement (i) upon
completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Agent in completed and
duly executed form and may be filed by the Agent at any time) will
constitute valid perfected security interests in all of the
Collateral in favor of the Agent, for the benefit of the Secured
Parties, as collateral security for the Guaranteed Obligations,
enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase
any Collateral from such Grantor and (ii) are prior to all other
Liens on the Collateral except for (A) unrecorded Liens expressly
permitted by the Note Purchase Agreement which have priority over
the Liens on the Collateral by operation of law and (B) Liens
described on Schedule 10.

 

(b)              Without
limiting Section 4.02(a), each Grantor has taken all actions
necessary or desirable, to the extent required by the Note Purchase
Documents or requested by the Agent, including without limitation
those specified in Section 5.01 of this Agreement to: (i) establish
the Agent’s "control" (within the meanings of Sections 8-106
and 9-106 of the UCC) over any portion of the Investment Property
of such Grantor constituting certificated securities,
uncertificated securities, securities accounts, security
entitlements, or commodity accounts or commodity contracts, (ii)
establish the Agent’s "control" (within the meaning of
Section 9-104 of the UCC) over all deposit accounts of such
Grantor, (iii) establish the Agent’s "control" (within the
meaning of Section 9-107 of the UCC) over all letter-of-credit
rights of such Grantor, (iv) establish the Agent’s "control"
(within the meaning of Section 9-105 of the UCC) over all
electronic chattel paper of such Grantor and (v) establish the
Agent’s "control" within the meaning of Section 16 of the
UETA over all "transferable records" (as defined in UETA) of such
Grantor.

 

(c)              All
tangible chattel paper, instruments and negotiable documents of
each Grantor has been delivered to the Agent.

 

Section
4.03.           
Chief Executive Office;
Etc

 

(a)           Each
Grantor’s type of organization, jurisdiction of organization,
organizational identification number, taxpayer identification
number and the location of each Grantor’s chief executive
office or sole place of business, as the case may be, are specified
on Schedule
4.

 

(b)              Such
Grantor’s exact legal name is set forth on Schedule 4 and such Grantor has
not conducted business in the last five (5) years, and does not
conduct business, under any other name (including any trade-name or
fictitious business name) except for those names listed on
Schedule
4.

 

(c)            
Except as provided in Schedule 4, such Grantor has
not changed its name, jurisdiction of organization, organizational
identification number, type of organization, taxpayer
identification number, chief executive office or sole place of
business or its organizational structure in any way (e.g., by
merger, consolidation, change in organizational form or otherwise)
within the past five (5) years.

 

(d)              Such
Grantor has not within the last five (5) years become bound
(whether by merger or otherwise) as a debtor under a security
agreement entered into by another Person, which has not been
terminated other than security agreements identified on
Schedule
4.

 

(e)              With
respect to each security agreement identified on Schedule 4 pursuant to Section
4.04(d), such Grantor has set forth on Schedule 4 the information
required pursuant to clauses (a), (b) and (c) of this Section for
the debtor under each such security agreement.

 

 

8

 

 

(f)              All
actions and consents, filings, notices, registrations, and
recordings necessary or desirable for the exercise by the Agent of
the voting or other rights provided for in this Agreement or the
exercise of remedies in respect of the Collateral have been taken,
made or obtained or, in the case of filings or recordings,
authorized.

 

(g)              The
information on Schedule
4 with respect to such Grantor is true and correct in all
respects.

 

(h)              All
information supplied by such Grantor to the Agent with respect to
the Collateral is accurate and complete.

 

Section
4.04. Inventory and
Equipment

 

(a)              All
of the Inventory and the Equipment of such Grantor is kept at the
locations listed on Schedule 5.

 

(b)              None
of the Inventory or Equipment of such Grantor is in the possession
of an issuer of a negotiable document (as defined in Section 7-104
of the UCC) therefor or otherwise in the possession of a bailee or
warehouseman.

 

(c)              All
Equipment of such Grantor that is subject to a certificate of title
statute is described on Schedule 8.

 

Section
4.05. Farm
Products. None of the
Collateral constitutes, or is the Proceeds of, farm
products.

 

Section
4.06. Investment
Property

 

(a)              Schedule
2 hereto sets forth under the headings "Pledged Stock,"
"Pledged LLC Interests," "Pledged Partnership Interests" and
"Pledged Trust Interests," respectively, all of the Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests and Pledged
Trust Interests owned by each Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding
shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial or ownership
interests of the respective Issuers thereof indicated on such
Schedule.

 

(b)              Schedule
2 hereto sets forth under the heading "Pledged Debt
Securities" or "Pledged Notes" all of the Pledged Debt Securities
and Pledged Notes owned by each Grantor and (i) each such Pledged
Debt Security and Pledged Note has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and
binding obligation of the Issuer thereof enforceable against such
Issuer in accordance with its terms, and (ii) the Issuer of each
such Pledged Debt Security is not in default of any of its
obligations thereunder.

 

(c)              Each
of the Pledged Equity Interests owned by such Grantor has been duly
authorized and validly issued and is fully paid and
nonassessable.

 

(d)              Such
Grantor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Equity Interests pledged by it
hereunder, free and clear of any and all Liens or options in favor
of, or claims of, any other Person, except the security interest
created by this Agreement, and there are no outstanding preemptive
rights, warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with
respect to, or property that is convertible into, or that requires
the issuance or sale of, Pledged Equity Interests.

 

 

9

 

 

(e)           
No consent of any Person, including any other general or limited
partner, any other member of a limited liability company, any other
shareholder or any other trust beneficiary is necessary or
desirable in connection with the creation, perfection or first
priority status of the security interest of the Agent hereunder in
any Pledged Equity Interests or the exercise by the Agent of the
voting or other rights provided for in this Agreement or the
exercise of remedies in respect thereof.

 

(f)              All
certificated securities owned by such Grantor have been delivered
to the Agent.

 

(g)              The
terms of each Pledged Partnership Interest and Pledged LLC Interest
expressly provide that they are securities governed by Article 8 of
the Uniform Commercial Code.

 

Section
4.07. Receivables

 

(a)            
Each Receivable (i) is and will be the legal, valid and binding
obligation of the account debtor in respect thereof, (ii) is and
will be enforceable in accordance with its terms, (iii) is and will
not be subject to any setoffs, defenses, taxes or counterclaims
(except with respect to disputes, refunds, returns, discounts and
allowances in the ordinary course of business) and (iv) is and will
be in compliance with all Requirements of Law.

 

(b)            
No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any certificated security, instrument or
tangible chattel paper that has not been delivered to the Agent or
constitutes electronic chattel paper that has not been subjected to
the control (within the meaning of Section 9-105 of the UCC) of the
Agent.

 

(c)              None
of the obligors on any of the Receivables is a Governmental
Authority.

 

(d)              The
amounts represented by such Grantor to the Agent from time to time
as owing to such Grantor in respect of the Receivables will at such
times be accurate.

 

Section
4.08.   Intellectual
Property.

 

(a)           
The operation of such Grantor’s business as currently
conducted or as contemplated to be conducted and the use of the
Intellectual Property in connection therewith do not conflict with,
infringe, misappropriate, dilute, misuse or otherwise violate the
intellectual property rights of any third party.

 

(b)              
Such Grantor is the exclusive owner of all right, title and
interest in and to the Intellectual Property, and is entitled to
use all Intellectual Property subject only to the terms of the IP
Agreements.

 

(c)              The
Intellectual Property set forth on Schedule 6 hereto includes
all of the patents, patent applications, domain names, trademark
registrations and applications, copyright registrations and
applications and IP Agreements owned by such Grantor.

 

(d)              The
Intellectual Property is subsisting and has not been adjudged
invalid or unenforceable in whole or part, and to the best of such
Grantor’s knowledge, is valid and enforceable. Such Grantor
is not aware of any uses of any item of Intellectual Property that
could be expected to lead to such item becoming invalid or
unenforceable.

 

 

10

 

 

(e)              Such
Grantor has made or performed all filings, recordings and other
acts and has paid all required fees and taxes to maintain and
protect its interest in each and every item of Intellectual
Property in full force and effect throughout the world, and to
protect and maintain its interest therein including, without
limitation, recordations of any of its interests in the Patents and
Trademarks with the United States Patent and Trademark Office and
in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the
United States Copyright Office and in corresponding national and
international copyright offices. Such Grantor has used proper
statutory notice in connection with its use of each patent,
trademark and copyright in the Intellectual Property.

 

(f)              No
claim, action, suit, investigation, litigation or proceeding has
been asserted or is pending or threatened against such Grantor (i)
based upon or challenging or seeking to deny or restrict the
Grantor’s rights in or use of any of the Intellectual
Property, (ii) alleging that the Grantor’s rights in or use
of the Intellectual Property or that any services provided by,
processes used by, or products manufactured or sold by, such
Grantor infringe, misappropriate, dilute, misuse or otherwise
violate any patent, trademark, copyright or any other proprietary
right of any third party, or (iii) alleging that the Intellectual
Property is being licensed or sublicensed in violation or
contravention of the terms of any license or other agreement. To
the best of Grantor’s knowledge, no Person is engaging in any
activity that infringes, misappropriates, dilutes, misuses or
otherwise violates the Intellectual Property or the Grantor’s
rights in or use thereof. Except as set forth on Schedule 6 hereto, such
Grantor has not granted any license, release, covenant not to sue,
non-assertion assurance, or other right to any Person with respect
to any part of the Intellectual Property. The consummation of the
transactions contemplated by the Note Purchase Documents will not
result in the termination or impairment of any of the Intellectual
Property.

 

(g)              To
the best of Grantor’s knowledge, with respect to each IP
Agreement: (i) such IP Agreement is valid and binding and in full
force and effect and represents the entire agreement between the
respective parties thereto with respect to the subject matter
thereof; (ii) such IP Agreement will not cease to be valid and
binding and in full force and effect on terms identical to those
currently in effect as a result of the rights and interest granted
herein, nor will the grant of such rights and interest constitute a
breach or default under such IP Agreement or otherwise give any
party thereto a right to terminate such IP Agreement; (iii) such
Grantor has not received any notice of termination or cancellation
under such IP Agreement; (iv) such Grantor has not received any
notice of a breach or default under such IP Agreement, which breach
or default has not been cured; (v) such Grantor has not granted to
any other third party any rights, adverse or otherwise, under such
IP Agreement; and (vi) neither such Grantor nor any other party to
such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of
time or both, would constitute such a breach or default or permit
termination, modification or acceleration under such IP
Agreement.

 

(h)              To
the best of such Grantor’s knowledge, (A) none of the Trade
Secrets of such Grantor has been used, divulged, disclosed or
appropriated to the detriment of such Grantor for the benefit of
any other Person other than such Grantor; (B) no employee,
independent contractor or agent of such Grantor has misappropriated
any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (C) no employee,
independent contractor or agent of such Grantor is in default or
breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement
or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual
Property.

 

(i)              No
Grantor or Intellectual Property is subject to any outstanding
consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property or that would
impair the validity or enforceability of such Intellectual
Property.

 

Section
4.09.  Securities
Accounts, Commodities Accounts and Deposit Accounts
.

 

 

11

 

 

(a)              Schedule
2 sets forth under the headings "Securities Accounts" and
"Commodities Accounts," respectively, all of the securities
accounts and commodities accounts in which each Grantor has an
interest. Each Grantor is the sole entitlement holder of each such
securities account and commodity account shown opposite its name on
Schedule 2, and such Grantor has not consented, to, and is not
otherwise aware of, any Person (other than the Agent pursuant
hereto) having "control" (within the meanings of Sections 8-106 and
9-106 of the UCC) over, or any other interest in or claim against,
any such securities account or commodity account or any securities,
commodities or other property credited thereto.

 

(b)              Schedule
2 sets forth under the heading "Deposit Accounts" all of the
deposit accounts in which each Grantor has an interest. Each
Grantor is the sole account holder of each such deposit account
shown opposite its name on Schedule 2 and such Grantor has
not consented to, and is not otherwise aware of, any Person (other
than the Agent pursuant hereto) having "control" (within the
meaning of Section 9-104 of the UCC) over, or any other interest in
or claim against, any such deposit account or any money or other
property deposited therein.

 

Section
4.10. Commercial Tort
Claims. Such Grantor has
no commercial tort claims other than (a) those listed on
Schedule 7, or (b)
as to which the actions required by Section 5.11 have been
taken.

 

Section
4.11. Letters of
Credit. Such Grantor is
not a beneficiary or assignee under any letter of credit, other
than the letters of credit described in Schedule 9, and legal,
binding and enforceable consents, in substantially the form of the
Consent to Assignment of Letter of Credit Rights, are in effect for
each letter of credit in which such Grantor has rights. Such
Grantor has instructed all issuers and nominated Persons under
letters of credit in which such Grantor is the beneficiary or
assignee to make all payments thereunder to a Collateral
Account.

 

Section
4.12.  Independent
Investigation; Etc. Such Grantor has,
independently and without reliance upon any Secured Party and based
on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Such Grantor will benefit directly and indirectly from
its execution and delivery of this Agreement and from the making of
the Loans by the Noteholders under the Note Purchase Agreement.
There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.

 

Section
4.13. Assigned
Agreements.

 

(a)              No
consent of any party (other than such Grantor) to any Assigned
Agreement is required, or purports to be required, in connection
with the execution, delivery and performance of this
Agreement.

 

(b)              Each
Assigned Agreement has been duly authorized, executed and delivered
by each of the parties thereto, is in full force and effect, and
constitutes a valid and legally enforceable obligation of the
parties thereto, subject to the effects of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at
law).

 

(c)              No
consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection
with the execution, delivery, performance, validity or
enforceability of any of the Assigned Agreements by any party
thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the
scope of any such Assigned Agreement to any limitation, either
specific or general in nature.

 

 

12

 

 

(d)              Neither
such Grantor nor (to the best of such Grantor’s knowledge)
any of the other parties to the Assigned Agreements is in default
in the performance or observance of any of the terms thereof in any
manner that, in the aggregate, could reasonably be expected to have
a Material Adverse Effect.

 

(e)              The
right, title and interest of such Grantor in, to and under the
Assigned Agreements are not subject to any defenses, offsets,
recoupments, counterclaims or claims that, in the aggregate, could
reasonably be expected to have a Material Adverse
Effect.

 

(f)              Such
Grantor has delivered to the Agent a complete and correct copy of
each Assigned Agreement, including all amendments, supplements and
other modifications thereto.

 

(g)              No
amount payable to such Grantor under or in connection with any
Assigned Agreement is evidenced by any instrument or chattel paper
that has not been delivered to the Agent.

 

(h)              None
of the parties to any Assigned Agreement is a Governmental
Authority.

 

(i)              If
requested by the Agent, each party to the Assigned Agreements
(other than a Grantor) has executed and delivered to the Agent a
consent in substantially the form of Annex 4 hereto, to the
assignment of the Assigned Agreements to the Agent, for the benefit
of the Secured Parties, pursuant to this Agreement.

 

ARTICLE
V

COVENANTS

 

Each
Grantor covenants and agrees with the Secured Parties that, from
and after the date of this Agreement until the Guaranteed
Obligations shall have been paid and performed in
full:

 

Section
5.01. Delivery and Control
of Instruments, Investment Property, Negotiable Documents, Chattel
Paper, Letter-of-Credit Rights, and Transferable
Records.

 

(a)           If
any of the Collateral is or shall become evidenced by any
instrument, certificated security, negotiable document or tangible
chattel paper, such Grantor shall immediately deliver such
instrument, certificated security, negotiable document or tangible
chattel paper to the Agent, duly indorsed in a manner satisfactory
to the Agent, to be held as Collateral pursuant to this
Agreement.

 

(b)              If
any of the Collateral is or shall become electronic chattel paper,
such Grantor shall ensure that (i) a single authoritative copy
exists which is unique, identifiable, and unalterable (except as
provided in clauses (iii), (iv) and (v) of this Section 5.01(b)),
(ii) such authoritative copy identifies the Agent as the assignee
and is communicated to and maintained by the Agent or its designee,
(iii) copies or revisions that add or change the assignee of the
authoritative copy can only be made with the participation of the
Agent, (iv) each copy of the authoritative copy and any copy of a
copy is readily identifiable as a copy and not the authoritative
copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized
revision.

 

(c)              If
any of the Collateral is or shall become evidenced or represented
by an uncertificated security, such Grantor shall immediately cause
the Issuer thereof either (i) to register the Agent as the
registered owner of such uncertificated security, upon original
issue or registration of transfer or (ii) to agree in writing with
such Grantor and the Agent that such Issuer will comply with
instructions with respect to such uncertificated security
originated by the Agent without further consent of such Grantor,
such agreement to be in form and substance satisfactory to the
Agent (each such agreement being an "Uncertificated Security Control
Agreement").

 

 

13

 

 

(d)              With
respect to any Investment Property of such Grantor consisting of a
securities account or security entitlement, such Grantor shall, at
the request of the Agent, enter into, and shall cause the
securities intermediary maintaining such securities account or
security entitlement to enter into, a control agreement with the
Agent in form and substance satisfactory to the Agent pursuant to
which such securities intermediary shall agree to comply with the
entitlement orders and other instructions originated by the Agent
without further consent of such Grantor (each such agreement being
a "Securities Account
Control Agreement").

 

(e)              With
respect to any Investment Property of such Grantor consisting of a
commodity account or commodity contract, such Grantor shall, at the
request of the Agent, enter into, and shall cause the commodity
intermediary maintaining such commodity account or commodity
contract to enter into, a control agreement with the Agent in form
and substance satisfactory to the Agent, pursuant to which such
commodity intermediary shall agree to comply with the Agent’s
instructions to apply any value distributed on account of any
commodity contract carried in the commodity account or other
directions concerning the commodity account originated by the
Agent, in each case without further consent by such Grantor (each
such agreement being a "Commodity Account Control
Agreement").

 

(f)              With
respect to each deposit account of such Grantor, such Grantor
shall, at the request of the Agent, enter into, and shall cause the
bank maintaining such deposit account to enter into, a control
agreement with the Agent in form and substance satisfactory to the
Agent pursuant to which such bank shall agree to comply with
instructions originated by the Agent directing the disposition of
funds in such deposit account without further consent by such
Grantor (such agreement being a "Deposit Account Control
Agreement").

 

(g)              With
respect to any letter-of-credit rights of such Grantor, such
Grantor shall, at the request of the Agent, obtain the consent of
the issuer thereof and any nominated Person thereon to the
assignment of the proceeds of the related letter of credit to the
Agent in accordance with Section 5-114(c) of the UCC, such consent
to be in form and substance satisfactory to the Agent (each such
consent being a "Consent
to Assignment of Letter of Credit Rights").

 

(h)              Each
Grantor shall, at the request of the Agent, enter into Control
Agreements with respect to any securities accounts, security
entitlements, commodity contracts, commodity accounts, and deposit
accounts that are created or acquired after the Closing Date, as of
or prior to the deposit or transfer of any such security
entitlements, commodity contracts or funds into such securities
accounts, commodity accounts or deposit accounts.

 

(i)              Such
Grantor will maintain all transferable records (as such term is
defined in the UETA) so that the Agent has control of the
transferable records in the manner specified in Section 16 of
the UETA.

 

(j)              Upon
the request of the Agent, such Grantor will notify each Issuer of
Investment Property that such Investment Property is subject to the
security interest granted hereunder.

 

(k)              In
addition to and not in lieu of the foregoing, if any Issuer of any
Investment Property is organized under the law of, or has its chief
executive office in, a jurisdiction outside of the United States,
each Grantor shall take such additional actions, including, without
limitation, causing the Issuer to register the pledge on its books
and records, as may be necessary or as may be requested by the
Agent, under the laws of such jurisdiction to ensure the validity,
perfection and priority of the security interest of the
Agent.

 

 

14

 

 

Section
5.02. Maintenance of
Insurance.

 

(a)           Each
Grantor will maintain (or cause to be maintained), with financially
sound and reputable companies, insurance policies (i) insuring its
Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the
Agent and (ii) insuring such Grantor, the Agent and the other
Secured Parties against liability for personal injury and property
damage relating to such Inventory and Equipment, such policies to
be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Agent. Such Grantor shall, if so
requested by the Agent, deliver to the Agent original or duplicate
copies of such policies of insurance.

 

(b)            
Each such policy of insurance shall (i) provide that no
cancellation, lapse, expiration, reduction in amount or change in
coverage thereof shall be effective until at least 30 days after
receipt by the Agent of written notice thereof; provided that the
foregoing shall be satisfied if such Grantor uses commercially
reasonable efforts to obtain such terms, (ii) in the case of
liability insurance, provide for all losses to be paid to such
Grantor and the Secured Parties as their interests may appear, and
(iii) be reasonably satisfactory in all other respects to the
Agent.

 

(c)              If
an Event of Default shall have occurred and be continuing, the
Agent shall have the sole right, in the name of the Grantor or in
its own name, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be
payable thereunder, and to execute any and all endorsements,
receipts, releases, assignments, reassignments or other documents
may be necessary to effect the collection, compromise or settlement
of any claims under any such insurance policies.

 

Section
5.03. Payment of
Indebtedness. Each Grantor will
pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as
all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the
sale, forfeiture or loss of any portion of the Collateral or any
interest therein.

 

Section
5.04. Maintenance of
Perfected Security Interest; Limitation on Dispositions; Further
Documentation; Inspection; Etc.

 

(a)              Such
Grantor shall, at its sole cost and expense, maintain the security
interest created under this Agreement as a perfected security
interest having at least the priority described in Section 4.02 and shall defend
such security interest against the claims and demands of all
Persons whomsoever.

 

(b)          
  Such Grantor shall not sell, assign, transfer, lease, or
otherwise dispose of, or abandon or permit a lapse of, or grant or
permit any Lien on, any of the Collateral or any interest therein,
except as expressly permitted by the Note Purchase
Agreement.

 

(c)            
Such Grantor will furnish to the Agent from time to time statements
and schedules further identifying and describing the Collateral and
other assets and property of such Grantor and such other reports in
connection therewith as the Agent may reasonably request, all in
such detail as the Agent may specify.

 

 

15

 

 

(d)              At
any time and from time to time, upon the written request of the
Agent, and at the sole cost and expense of such Grantor, such
Grantor will promptly and duly authorize, execute and deliver, and
have recorded, all further instruments and documents and take all
further actions as may be necessary or desirable or that the Agent
may request for the purpose of perfecting or protecting the
assignments and security interests granted hereunder and obtaining
or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation,
(i) executing and filing any financing or continuation
statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security
interests created hereby, (ii) delivering and pledging to the Agent
for the benefit of the Secured Parties certificates representing
the Pledged Equity Interests that constitute certificated
securities, accompanied by undated stock powers executed in blank,
(iii) complying with any Requirement of Law (including the
Federal Assignment of Claims Act) as to any Collateral if such
compliance is deemed necessary or advisable by the Agent for the
attachment, perfection or priority of, or the ability of the Agent
to enforce, the Agent’s security interest in such Collateral,
(iv) obtaining consents and approvals from any Governmental
Authority or other Person, including without limitation any consent
of any licensor, lessor or other Person obligated on Collateral,
and (v) obtaining waivers from mortgagees, lessors, landlords,
warehousemen, and repairmen in form and substance satisfactory to
the Agent.

 

(e)              Such
Grantor shall permit the Agent, or its designee, to inspect and
audit the Collateral at any reasonable time or times, wherever
located; provided, however, that unless an Event of Default has
occurred and is continuing, Agent shall provide at least three (3)
business days’ notice. Such Grantor shall reimburse the Agent
on demand for all reasonable and necessary costs and expenses
incurred by the Agent in connection with inspections and audits of
Collateral; provided, however, that Grantor shall not be obligated
to reimburse the Agent for such costs and expenses for more than
two (2) such inspections and audits during each fiscal year unless
an Event of Default has occurred and is continuing.

 

(f)              Such
Grantor shall not take or permit any action that could impair the
Agent’s rights in the Collateral or the perfection or
priority of the security interests created hereunder.

 

Section
5.05. Changes in
Locations; Name; Jurisdiction of Incorporation;
Etc. Such Grantor will
not, except upon thirty (30) days’ prior written notice to
the Agent and (a) taking all action required by the Agent to
maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, delivery to
the Agent of a written supplement to Schedule 5 showing any
additional location at which Inventory or Equipment shall be kept
(which supplement may be attached to Schedule 5 by the
Agent):

 

(i)              permit
any of the Inventory or Equipment to be kept at a location other
than those listed on Schedule 5; or

 

(ii)            
change its name, type of organization, jurisdiction of
organization, organizational identification number, federal
taxpayer identification number, or the location of its chief
executive office or sole place of business from that referred to in
Schedule
4.

 

Section
5.06. Notices. Such Grantor will
advise the Agent immediately, in reasonable detail,
of:

 

(a)              any
Lien (other than security interests created hereby or Liens
permitted under the Note Purchase Agreement) on any of the
Collateral which would adversely affect the ability of the Agent to
exercise any of its remedies hereunder; and

 

(b)              the
occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the
Collateral or on the security interests created
hereunder.

 

 

16

 

 

Section
5.07.  Investment
Property.

 

(a)              Without
the prior written consent of the Agent, such Grantor will not (i)
vote to enable, or take any other action to permit, any Issuer to
issue any Capital Stock of any nature or to issue any other
securities, obligations, rights, or other interests convertible
into or granting the right to purchase or exchange for any Capital
Stock of any nature of any Issuer, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect
to, any of the Investment Property or Proceeds thereof (except, in
each case, pursuant to a transaction expressly permitted by the
Note Purchase Agreement), (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for the security interests created by
this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Agent to
sell, assign or transfer any of the Investment Property or Proceeds
thereof.

 

(b)              In
the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will
notify the Agent promptly in writing of the occurrence of any of
the events described in clause (A), (B) or (C) of Section
6.03(a)(ii) with respect to the Investment Property issued by it
and (iii) the terms of Sections 6.03(d) and 6.06 shall apply to it,
mutatis mutandis, with
respect to all actions that may be required of it pursuant to
Section 6.03(d) or 6.06 with respect to the Investment Property
issued by it. In addition, each Grantor which is either an Issuer
or an owner of any Investment Property consents to the grant by
each other Grantor of the security interest hereunder in favor of
the Agent and to the transfer of any Investment Property to the
Agent or its nominee upon the occurrence or during the continuation
of an Event of Default and to the substitution of the Agent or its
nominee as a partner, member or shareholder of the Issuer of the
related Investment Property.

 

(c)              Such
Grantor shall comply with all of its obligations under each Organic
Document governing or relating to Pledged Securities and shall
enforce all of its rights with respect to any Investment
Property.

 

Section
5.08. Inventory and
Equipment.

 

(a)              In
producing its Inventory, such Grantor will comply with all
Requirements of Law, including, without limitation, the Fair Labor
Standards Act. Such Grantor shall maintain all of its Inventory in
good saleable and usable condition

 

(b)            
Such Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working
order as when new, ordinary wear and tear excepted, and in
accordance with any manufacturer’s manual relating thereto,
and will forthwith, or in the case of any loss or damage to any of
such Equipment as soon as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or
desirable to such end.

 

(c)              Such
Grantor shall not deliver any document evidencing any Equipment or
Inventory to any Person other than the issuer of such document to
claim the goods evidenced thereby or the Agent.

 

(d)            
If any Equipment or Inventory having a value in excess of $25,000
individually or $100,000 in the aggregate is in the possession or
control of a third party, including, without limitation, any
warehouseman, bailee or agent, such Grantor shall immediately
notify the Agent thereof and shall join with the Agent in promptly
notifying the third party of the Agent’s security interest
and obtaining a written acknowledgment from the third party that it
is holding the Equipment or Inventory for the benefit, and subject
to the security interest, of the Agent. Such acknowledgment must be
satisfactory in form and substance to the Agent.

 

 

17

 

 

(e)              With
respect to any item of Equipment that is covered by a certificate
of title or ownership under a statute of any jurisdiction under the
law of which indication of a security interest on such certificate
is required as a condition of perfection thereof, such Grantor
shall, at the request of the Agent, promptly (i) provide to the
Agent information with respect to any such Equipment, (ii) execute
and file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other document
requesting the notation or other indication of the security
interest created hereunder on each such certificate of title, and
(iii) deliver to the Agent copies of all such applications or other
documents so filed and copies of all such certificates of title
issued indicating the security interests created hereunder in the
items of Equipment covered thereby.

 

Section
5.09. Receivables.

 

(a)              Other
than in the ordinary course of business consistent with its past
practice, such Grantor will not (i) grant any extension of the time
of payment of any Receivable, (ii) adjust, compromise or settle any
Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value thereof.

 

(b)              Such
Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Receivables, including,
but not limited to, the originals of all documentation with respect
to all Receivables and records of all payments received and all
credits granted on the Receivables, all merchandise returned and
all other dealings therewith.

 

(c)              Such
Grantor shall perform in all material respects all of its
obligations with respect to the Receivables.

 

(d)              Such
Grantor shall use its best efforts to keep in full force and effect
any supporting obligation relating to any Receivable.

 

(e)              Such
Grantor will deliver to the Agent a copy of each demand, notice or
document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount
of the then outstanding Receivables.

 

Section
5.10. Intellectual
Property.

 

(a)           With
respect to each item of its Intellectual Property, each Grantor
agrees to take, at its expense, all necessary steps, including,
without limitation, in the United States Patent and Trademark
Office, the United States Copyright Office and any other
Governmental Authority, to (i) maintain the validity and
enforceability of such Intellectual Property and maintain such
Intellectual Property in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or
copyright registration or application, now or hereafter included in
such Intellectual Property of such Grantor, including, without
limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the United States Patent and
Trademark Office, the United States Copyright Office or other
Governmental Authorities, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the
United States Trademark Act, the filing of divisional,
continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation proceedings. No
Grantor shall, without the written consent of the Agent,
discontinue use of or otherwise abandon any Intellectual Property,
or abandon any right to file an application for patent, trademark,
or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual
Property is no longer desirable in the conduct of such
Grantor’s business and that the loss thereof would not be
reasonably likely to have a Material Adverse Effect, in which case,
such Grantor will give prompt notice of any such abandonment to the
Agent.

 

 

18

 

 

(b)              Each
Grantor agrees promptly to notify the Agent if such Grantor becomes
aware (i) that any item of the Intellectual Property may have
become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development
regarding such Grantor’s ownership of any of the Intellectual
Property or its right to register the same or to keep and maintain
and enforce the same, or (ii) of any adverse determination or the
institution of any proceeding (including, without limitation, the
institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any item of the
Intellectual Property.

 

(c)              In
the event that any Grantor becomes aware that any item of the
Intellectual Property is being infringed or misappropriated by a
third party, such Grantor shall promptly notify the Agent and shall
take such actions, at its expense, as such Grantor or the Agent
deems reasonable and appropriate under the circumstances to protect
or enforce such Intellectual Property, including, without
limitation, suing for infringement or misappropriation and for an
injunction against such infringement or
misappropriation.

 

(d)              Each
Grantor shall use proper statutory notice in connection with its
use of each item of its Intellectual Property. No Grantor shall do
or permit any act or knowingly omit to do any act whereby any of
its Intellectual Property may lapse or become invalid or
unenforceable or placed in the public domain.

 

(e)              Each
Grantor shall take all steps which it or the Agent deems reasonable
and appropriate under the circumstances to preserve and protect
each item of its Intellectual Property, including, without
limitation, maintaining the quality of any and all products or
services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the
date hereof, and taking all steps necessary to ensure that all
licensed users of any of the Trademarks use such consistent
standards of quality.

 

(f)              With
respect to its Intellectual Property, to the extent requested by
the Agent on the date hereof or, if applicable, at such later date
on which a Grantor becomes party hereto, such Grantor agrees to
execute and deliver to the Agent an agreement, in substantially the
form set forth in Annex
2 hereto or otherwise in form and substance satisfactory to
the Agent (an "Intellectual Property Security
Agreement"), for recording the security interest granted
hereunder to the Agent in such Intellectual Property with the
United States Patent and Trademark Office, the United States
Copyright Office and any other domestic or foreign Governmental
Authorities requested by the Agent to perfect the security interest
hereunder in such Intellectual Property.

 

(g)              Such
Grantor agrees that should it obtain an ownership interest in any
new or acquired item of Intellectual Property that is not on the
date hereof listed on Schedule 6 ("After-Acquired Intellectual
Property") (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such After-Acquired
Intellectual Property and, in the case of Trademarks, the goodwill
symbolized thereby, shall automatically become part of the
Collateral subject to the terms and conditions of this Agreement
with respect thereto. Within thirty (30) days after the end of each
fiscal quarter of such Grantor, each Grantor shall give written
notice to the Agent identifying all After-Acquired Intellectual
Property acquired during such Fiscal Quarter, if any, and such
Grantor shall execute and deliver to the Agent with such written
notice, an Intellectual Property Security Agreement, or if such
Grantor has already executed an Intellectual Property Security
Agreement, Annex 3
hereto or otherwise in form and substance satisfactory to the Agent
(an "IP Security Agreement
Supplement"), covering such After-Acquired Intellectual
Property which Intellectual Property Security Agreement or IP
Security Agreement Supplement, as applicable, shall be recorded
with the United States Patent and Trademark Office, the United
States Copyright Office and any other Governmental Authorities as
may be requested by the Agent to evidence and perfect the security
interest hereunder in such After-Acquired Intellectual Property.
Upon the execution and delivery to the Agent of an Intellectual
Property Security Agreement or IP Security Agreement Supplement in
accordance with this Section, Schedule 6 shall
automatically be deemed amended to include the After-Acquired
Intellectual Property covered by such IP Security Agreement
Supplement.

 

 

19

 

 

(h)              Such
Grantor shall take all steps reasonably necessary to protect the
secrecy of all Trade Secrets, including, without limitation,
entering into confidentiality agreements with employees and
labeling and restricting access to secret information and
documents.

 

Section
5.11. Commercial Tort
Claims. If such Grantor
shall at any time hold or acquire an interest in any commercial
tort claim, then such Grantor shall within fifteen (15) days of
obtaining such interest sign and deliver documentation acceptable
to the Agent granting a security interest to the Agent in and to
such commercial tort claim under the terms and provisions of this
Agreement.

 

Section
5.12.  Assigned
Agreements.

 

(a)              Such
Grantor shall at its expense:

 

(i)              perform
and observe all the terms and provisions of the Assigned Agreements
to be performed or observed by it, maintain Assigned Agreements to
which it is a party in full force and effect, enforce Assigned
Agreements to which it is a party in accordance with their
respective terms, and take all such action to such end as may be
from time to time reasonably requested by the Agent;
and

 

(ii)              furnish
to the Agent promptly upon receipt thereof copies of all notices,
requests and other documents received by such Grantor under or
pursuant to the Assigned Agreements to which it is a party, and
from time to time (A) furnish to the Agent such information and
reports regarding the Assigned Agreements and the other Collateral
of such Grantor as the Agent may reasonably request and (B) upon
reasonable request of the Agent make to each other party to any
Assigned Agreement to which it is a party such demands and requests
for information and reports or for action as such Grantor is
entitled to make thereunder.

 

(b)              Such
Grantor shall not, except to the extent otherwise expressly
permitted under the Note Purchase Agreement:

 

(i)              cancel
or terminate any Assigned Agreement to which it is a party or
consent to or accept any cancellation or termination
thereof;

 

(ii)            
amend, restate, supplement or otherwise modify any such Assigned
Agreement or give any consent, waiver or approval
thereunder;

 

(iii)            
waive any default under or breach of any such Assigned
Agreement;

 

(iv)            
consent to or permit or accept any prepayment of amounts to become
due under or in connection with any such Assigned Agreement, except
as expressly provided therein; or

 

 

20

 

 

(v)              take
any other action in connection with any such Assigned Agreement
that would impair the value of the interest or rights of such
Grantor thereunder or which would impair the interest or rights of
the Agent.

 

Section
5.13. Covenants in Note
Purchase Agreement.

 

  In the
case of each Grantor, such Grantor shall take, or shall refrain
from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or to
refrain from taking such action by such Grantor or any of its
Subsidiaries.

 

ARTICLE
VI

REMEDIAL
PROVISIONS

 

Section
6.01.  Certain
Matters Relating to Receivables.

 

(a)              The
Agent shall have the right to verify the Receivables at any time
and from time to time in any manner and through any medium that it
considers advisable, and each Grantor shall furnish all such
assistance and information as the Agent may require in connection
with such test verifications. At any time and from time to time,
upon the Agent’s request and at the expense of the relevant
Grantor, such Grantor shall furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial
balances for, the Receivables. Each Grantor shall provide such
information as the Agent may from time to time request regarding
the Receivables, including agings and trial balances.

 

(b)              The
Agent hereby authorizes each Grantor to collect such
Grantor’s Receivables, subject to the Agent’s direction
and control, and the Agent may curtail or terminate said authority
at any time after the occurrence and during the continuance of an
Event of Default. If required by the Agent at any time after the
occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed
by such Grantor to the Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Agent,
subject to withdrawal by the Agent for the account of the Secured
Parties in accordance with this Agreement and the other Note
Purchase Documents, and (ii) until so turned over, shall be held by
such Grantor in trust for the Agent and the Secured Parties,
segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the
payments included in the deposit.

 

(c)              At
the Agent’s request, each Grantor shall deliver to the Agent
all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and
shipping receipts.

 

Section
6.02.  Communications
with Obligors; Grantors Remain Liable.

 

(a)           The
Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables to verify with them
to the Agent’s satisfaction the existence, amount and terms
of any Receivables.

 

(b)         
Upon the request of the Agent at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Assigned
Agreements that the Receivables and the Assigned Agreements have
been assigned to the Agent for the benefit of the Secured Parties
and that payments in respect thereof shall be made directly to the
Agent.

 

 

21

 

 

(c)              Anything
herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and the Assigned Agreements to
observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the
terms of any agreement giving rise thereto. Neither the Agent nor
any other Secured Party shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) or
Assigned Agreement by reason of or arising out of this Agreement or
the receipt by the Agent or any other Secured Party of any payment
relating thereto, nor shall the Agent or any other Secured Party be
obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) or Assigned Agreement, to make any payment, to
make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled
at any time or times.

 

Section
6.03. Voting Rights;
Dividends; Etc.

 

(a)              So
long as no Event of Default shall have occurred and be
continuing:

 

(i)              Each
Grantor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the
Investment Property of such Grantor or any part thereof for any
purpose not inconsistent with terms of this Agreement or any other
Note Purchase Document.; provided, however, that such Grantor
shall not exercise or refrain from exercising any such right, if
such action would have a material adverse effect on the value of
the Investment Property or any part thereof.

 

(ii)              Each
Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the
Investment Property of such Grantor if and to the extent that the
payment thereof is not otherwise prohibited by the terms of this
Agreement or any of the other Note Purchase Documents; provided, however, that any and
all

 

(A)              dividends,
interest and other distributions paid or payable other than in cash
in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Investment Property,

 

(B)              dividends
and other distributions paid or payable in cash in respect of any
Investment Property in connection with a partial or total
liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and

 

(C)              cash
paid, payable or otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any Investment Property
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by such Grantor, be received in
trust for the benefit of the Agent and the other Secured Parties,
be segregated from the other property or funds of such Grantor, and
be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary endorsement or
assignment).

 

(iii)              The
Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments
as such Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to Section 6.03(a)(i) above and to
receive the dividends or interest payments that it is authorized to
receive and retain pursuant to Section 6.03(a)(ii)
above.

 

 

22

 

 

(b)              If
an Event of Default shall have occurred and be
continuing:

 

(i)              All
rights of each Grantor (x) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 6.03(a)(i) shall, upon
notice to such Grantor by the Agent, cease and (y) to receive the
dividends, interest and other distributions that it would otherwise
be authorized to receive and retain pursuant to Section 6.03(a)(ii)
shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole
right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Collateral such
dividends, interest and other distributions.

 

(ii)              All
dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of Section 6.03(b)(i) shall
be received in trust for the benefit of the Agent and the other
Secured Parties, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Agent as Collateral
in the same form as so received (with any necessary endorsement or
assignment).

 

(c)              The
Agent shall have the right at any time to exchange any certificates
or instruments representing any Investment Property for
certificates or instruments of smaller or larger denominations. In
order to permit the Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends, interest and other
distributions which it may be entitled to receive hereunder, each
Grantor shall promptly execute and deliver (or cause to be executed
and delivered) to the Agent all proxies, dividend payment orders
and other instruments as the Agent may from time to time reasonably
request and each Grantor acknowledges that the Agent may utilize
the power of attorney set forth herein.

 

(d)              Each
Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Agent in writing that
(x) states that an Event of Default or Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully
protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends, distributions or other
payments with respect to the Investment Property directly to the
Agent.

 

(e)              If
an Event of Default shall have occurred and be continuing, the
Agent shall be authorized to send to each securities intermediary,
commodity intermediary, bank or Issuer of an uncertificated
security that is party to a Control Agreement, a notice that the
Agent has exclusive control and dominion under such Control
Agreement (or any comparable notice permitted under such Control
Agreement).

 

Section
6.04.  Proceeds to be
Turned Over To Agent. In addition to
the rights of the Agent specified in Section 6.01 with respect to
payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of
cash, checks and other near-cash items shall be held by such
Grantor in trust for the Agent, segregated from other funds of such
Grantor, and shall, immediately upon receipt by such Grantor, be
turned over to the Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Agent, if required). All
Proceeds received by the Agent hereunder shall be held by the Agent
in a Collateral Account and shall not constitute payment thereof
until applied as provided in Section 6.05.

 

Section
6.05. Application of
Proceeds. If an Event of
Default shall have occurred and be continuing, at any time at the
Agent’s election, the Agent may apply all or any part of
Proceeds constituting Collateral, whether or not held in any
Collateral Account, in payment of the Guaranteed Obligations in
such order and manner as required pursuant to the Limited Guaranty
or as the Agent may elect in its sole discretion.

 

 

23

 

 

Section
6.06.  Remedies. If any Event of
Default shall have occurred and be continuing:

 

(a)              The
Agent, on behalf of the Secured Parties, may exercise, in addition
to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or
relating to the Guaranteed Obligations, all rights and remedies of
a secured party under the UCC (whether or not the UCC applies to
the affected Collateral) or any other applicable law or in equity.
Without limiting the generality of the foregoing, the Agent,
without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, license, assign, give an option or options to
purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or
more parcels at public or private sale or sales, at any exchange,
broker’s board or office of the Agent or any other Secured
Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit
risk. Each Secured Party shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in
any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Agent’s request, to
assemble the Collateral and make it available to the Agent at
places which the Agent shall reasonably select, whether at such
Grantor’s premises or elsewhere. The Agent shall have no
obligation to clean-up or otherwise prepare the Collateral for
sale. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefore, and any such
sale may, without further notice, be made at the time and place to
which it was adjourned. Each Grantor agrees that it would not be
commercially unreasonable for the Agent to dispose of the
Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or
that match buyers and sellers of assets. Each Grantor hereby waives
any claims against the Agent arising by reason of the fact that the
price at which any Collateral may have been sold at a private sale
was less than the price which might have been obtained at a public
sale, even if the Agent accepts the first offer received and does
not offer such Collateral to more than one offeree. To the extent
permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Agent or any other
Secured Party arising out of the exercise by them of any rights or
remedies hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least ten (10)
days before any public sale of Collateral or of the time after
which any private sale or other disposition of Collateral is
intended to be made.

 

(b)              The
Agent may sell the Collateral without giving any warranties as to
the Collateral. The Agent may disclaim or modify any warranties of
title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.

 

(c)              The
Agent and its agents may enter upon and occupy any real property
owned or leased by any Grantor in order to exercise any of the
Agent’s rights and remedies under this Agreement, without any
obligation to such Grantor in respect of such entry or
occupation.

 

(d)              For
the purpose of enabling the Agent to exercise its rights and
remedies hereunder, each Grantor hereby grants to the Agent an
irrevocable, non-exclusive worldwide license (exercisable without
payment of royalty or other compensation to such Grantor) to use,
operate under, assign, license or sublicense any of the
Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.

 

 

24

 

 

(e)              The
Agent may comply with any applicable Requirement of Law in
connection with a disposition of the Collateral or any part thereof
and such compliance will not be considered adversely to affect any
sale of the Collateral or any part thereof.

 

(f)              In
the event of any sale or other disposition of any of the
Intellectual Property of any Grantor, the goodwill symbolized by
any Trademarks subject to such sale or other disposition shall be
included therein, and such Grantor shall supply to the Agent or its
designee such Grantor’s know-how and expertise, and documents
and things relating to any Intellectual Property subject to such
sale or other disposition, and such Grantor’s customer lists
and other records and documents relating to such Intellectual
Property and to the manufacture, distribution, advertising and sale
of products and services of such Grantor.

 

(g)              The
Agent may apply the balance from any deposit account or instruct
the bank at which any deposit account is maintained to pay the
balance of any deposit account to or for the benefit of the Agent
and the other Secured Parties.

 

(h)              The
Agent shall have no duty to marshal any of the
Collateral.

 

Section
6.07.  Registration
Rights. If the Agent
shall determine to exercise its right to sell any or all of the
Pledged Equity Interests or Pledged Debt Securities pursuant to
Section 6.06, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Equity Interests or Pledged Debt
Securities, or that portion thereof to be sold, registered under
the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers (or equivalent managers) of such Issuer to
execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of
the Agent, necessary or advisable to register the Pledged Equity
Interests or Pledged Debt Securities, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year
from the date of the first public offering of the Pledged Equity
Interests or Pledged Debt Securities, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of
the Securities Act and the rules and regulations of the Securities
and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities
or "Blue Sky" laws of any and all jurisdictions which the Agent
shall designate and to make available to its security holders, as
soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.

 

Each
Grantor recognizes that the Agent may be unable to effect a public
sale of any or all the Pledged Equity Interests or Pledged Debt
Securities, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise,
and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. The Agent shall
be under no obligation to delay a sale of any of the Pledged Equity
Interests or Pledged Debt Securities for the period of time
necessary to permit the Issuer thereof to register such securities
for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do
so.

 

 

25

 

 

Each
Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales
of all or any portion of the Pledged Equity Interests or Pledged
Debt Securities pursuant to this Section valid and binding and in
compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the
Agent and the other Secured Parties, that the Agent and the other
Secured Parties have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to
assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has
occurred under the Note Purchase Agreement.

 

Section
6.08.  Deficiency. Each Grantor
shall remain liable for any deficiency if the proceeds of any sale
or other disposition of the Collateral are insufficient to pay in
full its Guaranteed Obligations and the fees and disbursements of
any attorneys employed by any Secured Party to collect such
deficiency.

 

Section
6.09.  Sales on
Credit. If the Agent
sells any of the Collateral on credit, the applicable Grantor will
be credited only with cash payments actually made by the purchaser
and received by the Agent and applied to the indebtedness of the
purchaser. In the event the purchaser fails to pay for the
Collateral, the Agent may resell the Collateral and the applicable
Grantor shall be credited with the proceeds of the
sale.

 

ARTICLE
VII

THE
AGENT

 

Section
7.01. Agent’s
Appointment as Attorney-in-Fact; Etc.

 

(a)              Each
Grantor hereby irrevocably constitutes and appoints the Agent and
any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of such Grantor and in the
name of such Grantor or in its own name, from time to time during
the existence of an Event of Default, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which
the Agent may deem necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of
the foregoing, each Grantor hereby gives the Agent the power and
right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:

 

(i)              in
the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments or chattel paper for the payment
of moneys due under any Receivable or Assigned Agreement or with
respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Receivable or
Assigned Agreement or with respect to any other Collateral whenever
payable;

 

(ii)              in
the case of any Intellectual Property, prepare, sign, deliver, and
file for recordation in any Intellectual Property registry any and
all agreements, instruments, documents and papers as the Agent may
request to evidence and perfect the Agent’s security interest
in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented
thereby;

 

 

26

 

 

(iii)              pay
or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or obtain any insurance
called for by the terms of this Agreement and pay all or any part
of the premiums therefore and the costs thereof;

 

(iv)              execute,
in connection with any sale provided for in Section 6.06 or
6.07, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;
and

 

(v)              (1)
direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (2)
ask or demand for, collect, recover and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence
and prosecute any suits, actions or proceedings at law or in equity
in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of
any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Agent
may deem appropriate; (7) assign any Intellectual Property (along
with the goodwill of the business to which any such Intellectual
Property pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Agent shall in its sole
discretion determine; (8) exercise any and all rights, powers,
privileges and remedies of such Grantor under or with respect to
the Assigned Agreements or any other Collateral (including all
rights of performance, termination, and enforcement); (9) operate,
maintain, and repair the Collateral; (10) receive, open and
dispose of any and all mail addressed to any Grantor and notify
postal authorities to change the address for delivery thereof to
such address as the Agent may designate; and (11) generally, sell,
transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely
as though the Agent were the absolute owner thereof for all
purposes, and do, at the Agent’s option and such
Grantor’s expense, at any time, or from time to time, all
acts and things which the Agent deems necessary to protect,
preserve or realize upon the Collateral and the Agent’s
security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might
do.

 

Anything in this
Section 7.01(a) to the contrary notwithstanding, the Agent agrees
that it will not exercise any rights under the power of attorney
provided for in this Section 7.01(a) unless an Event of Default
shall have occurred and be continuing.

 

(b)              If
any Grantor fails to perform or comply with any of its agreements
contained herein or in any other Note Purchase Document, the Agent
may, but without any obligation so to do, perform or comply, or
otherwise cause performance or compliance, with such
agreement.

 

(c)              The
expenses of the Agent incurred in connection with actions
undertaken as provided in this Section 7.01, together with interest
thereon at a rate per annum equal to the Default Rate (which rate
shall not exceed the maximum non-usurious rate permitted by
applicable law), from the date of payment by the Agent to the date
reimbursed by the relevant Grantor, shall be payable on demand by
such Grantor to the Agent.

 

(d)              Each
Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.

 

 

27

 

 

Section
7.02.  Duty of
Agent. The Agent’s
sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession (if any), under
Section 9-207 of the UCC or otherwise, shall be to deal with such
Collateral in a manner substantially similar to that which the
Agent deals with similar property for its own account. Neither the
Agent, any other Secured Party nor any of their respective
officers, directors, partners, employees, agents, advisors,
attorneys, attorneys-in-fact or affiliates shall be liable for
failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any
Grantor or any other Person or to take any other action whatsoever
with regard to the Collateral or any part thereof. The powers
conferred on the Agent pursuant to this Agreement are solely to
protect the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Agent to exercise any such
powers. The Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and
neither the Agent nor any of its officers, directors, employees,
agents, advisors, attorneys, attorneys-in-fact or affiliates shall
be responsible to any Grantor for any act or failure to act
hereunder, except for its or their own gross negligence or willful
misconduct.

 

Section
7.03.  Financing
Statements. Each Grantor
hereby authorizes the Agent to file or record financing statements,
continuation statements, and assignments and amendments thereto,
and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such
form and in such offices as the Agent determines appropriate to
perfect or maintain the perfection of the security interests of the
Agent under this Agreement. Each Grantor agrees that such financing
statements may describe the Collateral in the same manner as
described in the Security Documents or as all assets or all
personal property whether now owned or hereafter acquired and
wherever located (or use words of similar effect) of such Grantor,
or contain such other description as the Agent, in its sole
judgment, determines is necessary or advisable, including any real
property or fixtures description. Each Grantor hereby ratifies each
such financing statement and any and all other financing statements
filed prior to the date hereof by the Agent.

 

Section
7.04.  Authority of
Agent. Each Grantor
acknowledges that the rights and responsibilities of the Agent
under this Agreement with respect to any action taken by the Agent
or the exercise or non-exercise by the Agent of any option, voting
right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as
between the Agent and the other Secured Parties, be governed by the
Note Purchase Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between
the Agent and the Grantors, the Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

 

ARTICLE
VIII

MISCELLANEOUS

 

Section
8.01.  Amendments in
Writing. None of the terms
or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except pursuant to a written
instrument signed by the Agent and each Grantor.

 

Section
8.02.   Notices. All notices,
requests and demands and other communications to or upon the Agent
or any Grantor hereunder shall be effected in the manner provided
for in Section 8.2 of the Note Purchase Agreement.

 

 

28

 

 

Section
8.03.  Security
Interest Absolute. All rights of the
Agent and each other Secured Party hereunder, each grant of a
security interest in the Collateral and all obligations of each
Grantor hereunder shall be absolute and unconditional irrespective
of (a) any lack of validity or enforceability of the Note Purchase
Agreement, the Limited Guaranty or any other Note Purchase
Document, any agreement with respect to any of the Guaranteed
Obligations or any other agreement or instrument relating to any of
the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to
any departure from the Note Purchase Agreement, the Limited
Guaranty or any other Note Purchase Document or any other agreement
or instrument, (c) any exchange, release or non-perfection of any
Lien on other collateral, or any release or amendment or waiver of
or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Guaranteed Obligations, or (d) any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor in respect of the
Guaranteed Obligations or this Agreement.

 

Section
8.04.   No
Waiver by Course of Conduct; Cumulative
Remedies. Neither the Agent
nor any other Secured Party shall by any act (except by a written
instrument pursuant to Section 8.01), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of
the Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Agent or any other
Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the
Agent or such other Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by
law.

 

Section
8.05.  Indemnity and
Expenses.

 

(a)              Each
Grantor agrees to indemnify, defend and save and hold harmless each
Secured Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an
"Indemnified
Party") from and against, and shall pay on demand, any and
all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except to the extent such claim,
damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party’s gross negligence
or willful misconduct.

 

(b)              Each
Grantor will upon demand pay to the Agent the amount of any and all
costs and expenses, including, without limitation, the reasonable
fees and expenses of its counsel and of any experts and agents,
that the Agent may incur in connection with (i) the custody,
preservation, use or operation of, or the sale of, collection from
or other realization upon, any of the Collateral of such Grantor,
(ii) the exercise or enforcement of any of the rights of the Agent
or the other Secured Parties hereunder or (iii) the failure by such
Grantor to perform or observe any of the provisions
hereof.

 

(c)              The
agreements in this Section 8.05 shall survive repayment of the
Guaranteed Obligations and all other amounts payable under the Note
Purchase Agreement, the Limited Guaranty and the other Note
Purchase Documents.

 

Section
8.06. Successors and
Assigns. This Agreement
shall be binding upon the successors and assigns of each Grantor
and shall inure to the benefit of the Agent and the other Secured
Parties and their successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the
Agent.

 

 

29

 

 

Section
8.07.  Set-Off. Each Grantor
hereby irrevocably authorizes each Secured Party at any time and
from time to time while an Event of Default shall have occurred and
be continuing, without notice to such Grantor or any other Grantor,
any such notice being expressly waived by each Grantor, to set-off
and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or
for the credit or the account of such Grantor, or any part thereof
in such amounts as such Secured Party may elect, against and on
account of the obligations and liabilities of such Grantor to such
Secured Party hereunder and claims of every nature and description
of such Secured Party against such Grantor, in any currency,
whether arising hereunder, under the Note Purchase Agreement, any
other Note Purchase Document or otherwise, as such Secured Party
may elect, whether or not such Secured Party has made any demand
for payment and although such obligations, liabilities and claims
may be contingent or unmatured. Each Secured Party shall notify
such Grantor promptly of any such set-off and the application made
by such Secured Party of the proceeds thereof, provided that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of the Secured Parties under this Section
are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Secured Party may
have.

 

Section
8.08.  Counterparts. This Agreement
may be executed by one or more of the parties to this Agreement on
any number of separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument. Delivery
of an executed counterpart of a signature page to this Agreement by
facsimile shall be effective as delivery of an original executed
counterpart of this Agreement.

 

Section
8.09.  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.

 

Section
8.10.  Headings. The Article and
Section headings used in this Agreement are for convenience of
reference only and are not to affect the construction hereof or be
taken into consideration in the interpretation hereof.

 

Section
8.11. Governing
Law. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE GRANTORS AND SECURED PARTIES
HEREUNDER AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

30

 

 

Section
8.12.  Submission To
Jurisdiction.

 

(a)              EACH
GRANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR
DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN
TORT OR OTHERWISE, AGAINST THE AGENT, ANY NOTEHOLDER, ANY OTHER
SECURED PARTY OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY
RELATING TO THIS AGREEMENT OR ANY OTHER NOTE PURCHASE DOCUMENT OR
THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER
THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION,
LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER NOTE
PURCHASE DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER NOTE PURCHASE DOCUMENT AGAINST THE COMPANY
OR ANY OTHER GRANTOR OR OBLIGOR OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

(b)              Each
Grantor irrevocably and unconditionally waives, to the fullest
extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of venue of any action or
proceeding arising out of or relating to this Agreement or any
other Note Purchase Document in any court referred to in Section
8.12(a). Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding
in any such court.

 

(c)              Each
party hereto irrevocably consents to service of process in the
manner provided for notices in Section 8.02. Nothing in this
Agreement will affect the right of any party hereto to serve
process in any other manner permitted by applicable
law

 

(d)              Each
Grantor agrees (i) to not assert any claim against the Agent, any
Noteholder or any of their Related Parties, for special, indirect,
consequential or punitive damages arising out of or otherwise
relating to or alleged in connection with this Agreement or any of
the other Note Purchase Documents or any of the transactions
contemplated herein and (ii) that the Agent, the Noteholders or
their respective Related Parties shall have no responsibility or
liability to any other party or any of its Related Parties for any
such damages.

 

Section
8.13.  Acknowledgements.
Each party hereby acknowledges and agrees that:

 

(a)              it
has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Note Purchase Documents to
which it is a party, and this Agreement shall be construed as if
jointly drafted by the parties hereto;

 

(b)              no
Secured Party has any fiduciary relationship with or duty to any
Grantor arising out of or in connection with this Agreement or any
of the other Note Purchase Documents, and the relationship between
the Grantors, on the one hand, and the Secured Parties, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and

 

(c)              no
joint venture is created hereby or by the other Note Purchase
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors
and the Secured Parties.

 

Section
8.14. Additional
Grantors. If the Company
shall create or acquire any direct or indirect Subsidiary after the
date hereof, the Company shall immediately cause such Subsidiary to
become a party to this Agreement and to be a Grantor for all
purposes of this Agreement by execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.

 

 

31

 

 

Section
8.15.  Release

 

(a)           At
such time as the Guaranteed Obligations shall have been paid in
full, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Agent and each
Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights
to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the
Agent shall deliver to such Grantor any Collateral held by the
Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

 

(b)         
Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with
respect to any financing statement originally filed in connection
herewith without the prior written consent of the Agent subject to
such Grantor’s rights under Section 9-509(d)(2) of the
UCC.

 

Section
8.16.  WAIVER OF JURY
TRIAL.
EACH GRANTOR WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY SECURED
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH SECURED
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE SECURED PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

Section
8.17. INTEGRATION. THIS WRITTEN
AGREEMENT REPRESENTS THE FINAL AGREEMENT OF THE GRANTORS AND THE
SECURED PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO PROMISES,
UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE ADMNISTRATIVE
AGENT OR ANY OTHER SECURED PARTY RELATIVE TO THE SUBJECT MATTER
HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

Section
8.18.  Time is of the
Essence. Time is of the
essence of this Agreement.

 

Section
8.19.  Survival. All covenants,
agreements, representations and warranties made by the Grantors
herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Secured Parties and shall survive
the execution and delivery of this Agreement and the making of the
Loans, regardless of any investigation made by any Secured Party or
on its behalf and notwithstanding that any Secured Party may have
had notice or knowledge of any Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall
continue in full force and effect as long as the principal of or
any accrued interest on the Loans or any other Guaranteed
Obligations are outstanding and unpaid.

 

[Signature Page
Follows]

 

 

32

 

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above
written.

 

GRANTOR:

 

AEMETIS
ADVANCED PRODUCTS KEYES, INC.

 

By:         
/s/ Eric A.
McAfee

Name:
Eric A McAfee

Title:
President and CEO

 

AGENT:

 

THIRD
EYE CAPITAL CORPORATION

 

By:   
      /s/ Arif N.
Bhalwani

Name:
Arif N. Bhalwani

Title:
Managing Director

 

 

 

[Signature
Page – General Security Agreement]

 

 

Schedule 1

 

ASSIGNED
AGREEMENTS

 

 

 

 

 

 

 

 

 

Schedule
2

 

DESCRIPTION
OF INVESTMENT PROPERTY

 

	

Pledged
Stock:

	
 

 

	

Pledged
Notes:

	
 

 

	

Pledged
Debt Securities

	
 

 

	

Pledged
Partnership Interests:

	
 

 

	

Pledged
LLC Interests:

	
 

 

	

Pledged
Trust Interests:

	
 

 

	

Pledged
Security Entitlements:

	
 

 

	

Pledged
Commodity Contracts:

	
 

 

	

Other
Investment Property:

	
 

 

	

Deposit
Accounts:

 

	Grantor	Deposit Account

Number and
Location	Depository Bank

(Name and
Address)	Depositary Bank’s

Jurisdiction under

UCC
9-304

 

 

 

Schedule 3

 

FILINGS
AND OTHER ACTIONS

REQUIRED TO PERFECT
SECURITY INTERESTS

 

Uniform Commercial Code Filings

 

	

Grantor

	

UCC
Filing Office

	
 

	
 

 

Patent and Trademark Filings

 

Recordation of any
Intellectual Property Security Agreement or IP Security Agreement
Supplement with the United States Patent and Trademark Office
and/or the United States Copyright Office, as applicable, with
respect to Grantor’s registered Intellectual Property, if
any.

 

Actions with respect to Investment Property

 

Deliver
to the Agent all certificated securities (if any) described on
Schedule 2, as such schedule may be updated from time to
time.

 

Other Actions

 

Enter
into a Control Agreements with respect to any deposit account
described on Schedule 2 or any other securities accounts, security
entitlements, commodity contracts, commodity accounts, and deposit
accounts that are created or acquired after the Closing
Date.

 

 

 

Schedule 4

 

JURISDICTIONS
OF ORGANIZATION AND CHIEF EXECUTIVE OFFICES

 

A.            

Exact
legal name, jurisdiction of organization, type of organization,
location of chief executive office or sole place of business,
taxpayer identification number and organizational identification
number of each Grantor:

 

	

Legal Name of Each Grantor

	

Jurisdiction of Organization

	

Type of Organization

	

Location of

Chief Executive

Office/Sole Place

of Business

	

Federal

Taxpayer I.D.

	

Organizational I.D. #

	
 

	
 

	
 

	
 

	
 

	
 

 

 

B.            

Other
names (including trade names and fictitious business names) under
which each Grantor has done business for the past five (5)
years:

 

 

C.            

Changes
in name, jurisdiction of organization, type of organization,
organizational identification number, taxpayer identification
number, chief executive office or sole place of business, or
corporate or organizational structure for the past five (5)
years:

 

	
 

	
 

	
 

 

D.            

Security
agreements pursuant to which any Grantor is bound as a debtor
within the past five (5) years:

 

 

 

 

Schedule 5

 

LOCATION
OF INVENTORY AND EQUIPMENT

 

 

 

 

 

 

 

 

 

Schedule 6

 

INTELLECTUAL
PROPERTY

 

A.            

Patents

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

B.            

Trademarks

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

C.            

Trade
Names

	
 

	
 

D.            

Copyrights

 

 

E.            

IP
Agreements

 

 

F.            

Internet
Domain Names

 

 

 

 

Schedule 7

 

COMMERCIAL
TORT CLAIMS

 

 

 

 

 

 

 

 

 

 

 

Schedule 8

 

EQUIPMENT
SUBJECT TO CERTIFICATE OF TITLE STATUTES

 

	

Make

	

Model

	

Certificate of
Title #

(Specify State)

	
 

	
 

	
 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 9

 

LETTERS
OF CREDIT

 

	

Account
Party

	

Issuer

	

Nominated

Person

	

Beneficiary

	

Face
Amount

	

Date

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 10

 

EXISTING
PRIOR LIENS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex 1
to

Security
Agreement

 

 

ASSUMPTION
AGREEMENT, dated as of ________________, 201__, made by
_______________, a _____________ (the "Additional Grantor"), in favor
of THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

WITNESSETH:

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation, the Noteholders from
time to time party thereto, and the Agent have entered into that
certain Note Purchase Agreement, dated as of ____, 2017 (as
amended, varied, supplemented, restated, renewed or replaced at any
time and from time to time, the "Note Purchase
Agreement");

 

WHEREAS, in
connection with the Note Purchase Agreement, Aemetis Advanced
Products Keyes, Inc., a Delaware corporation (the
“Company”) has entered
into that certain General Security Agreement, dated as of ____,
2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties;

 

WHEREAS, the Note
Purchase Agreement and/or the Security Agreement requires the
Additional Grantor to become a party to the Security Agreement;
and

 

WHEREAS, the
Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Security
Agreement;

 

NOW,
THEREFORE, IT IS AGREED:

 

1.              Security
Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.14 of
the Security Agreement, hereby becomes a party to the Security
Agreement as a Grantor thereunder with the same force and effect as
if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The Additional
Grantor hereby further agrees, as of the date first above written,
that each reference in the Security Agreement to a "Grantor" shall
also mean and be a reference to such Additional Grantor. The
information set forth in Annex 1-A hereto is hereby
added to the information set forth in the Schedules to the Security
Agreement and the Additional Grantor hereby certifies, as of the
date first above written, that such supplemental schedules have
been prepared by the undersigned in substantially the form of the
equivalent Schedules to the Security Agreement and are complete and
correct. The Additional Grantor hereby represents and warrants that
each of the representations and warranties contained in Article IV
of the Security Agreement is true and correct on and as of the date
hereof (after giving effect to this Assumption Agreement) as if
made on and as of such date.

 

2.              Grant
of Security. Without limiting the generality of Section 1 of
this Assumption Agreement, as security for the prompt and complete
payment and performance when due of all of the Guaranteed
Obligations, the Additional Grantor hereby assigns and transfers to
the Agent, and hereby grants to the Agent, for the benefit of the
Secured Parties, a security interest in, all of its right, title
and interest in and to all of the Collateral, whether now owned or
hereafter acquired by the Additional Grantor, wherever located and
whether now or hereafter existing or arising, including, without
limitation, the property and assets of the undersigned set forth on
the attached supplemental schedules to the Schedules to the
Security Agreement.

 

 

 

3.              Counterparts.
This Assumption Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto were upon the same instrument.
Delivery of an executed signature page of this Assumption Agreement
by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

 

4.              Governing
Law. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE ADDITIONAL GRANTOR AND THE AGENT HEREUNDER AND
ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS ASSUMPTION AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

5.              INTEGRATION.
THIS WRITTEN ASSUMPTION AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREOF AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

 

 

[Signature Pages
Follow]

 

 

 

 

2

 

 

IN
WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first
above written.

 

[NAME
OF ADDITIONAL GRANTOR]

 

By:                                                                  

Name:                                                             

Title:                                                             

 

Accepted and agreed
to by:

 

THIRD
EYE CAPITAL CORPORATION,

as
Agent

 

 

By:        
                 
                 
             
  

Name:                                                       

Title:                                                       

 

By:        
                 
                 
           
  

Name:                                                       

Title:                                                       

 

 

 

Annex
1-A to

Assumption
Agreement

 

Supplement to Schedule 1

 

Supplement to Schedule 2

 

Supplement to Schedule 3

 

Supplement to Schedule 4

 

Supplement to Schedule 5

 

Supplement to Schedule 6

 

Supplement to Schedule 7

 

Supplement to Schedule 8

 

Supplement to Schedule 9

 

Supplement to Schedule 10

 

 

 

Annex 2
to

Security Agreement

 

FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This
INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, the
"IP Security
Agreement") dated as of ____________________, 201__, is made
by the Persons listed on the signature pages hereof (collectively,
the "Grantors") in
favor of THIRD EYE CAPITAL CORPORATION, as administrative agent and
collateral agent for and on behalf of the Noteholders (in such
aforesaid capacities, or any successor or assign in such
capacities, the “Agent”).

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation, the Noteholders from
time to time party thereto, and the Agent have entered into that
certain Note Purchase Agreement, dated as of ____, 2017 (as
amended, varied, supplemented, restated, renewed or replaced at any
time and from time to time, the "Note Purchase
Agreement").

 

WHEREAS, in
connection with the Note Purchase Agreement, Aemetis, Advanced
Products Keyes, Inc. (the “Company”) has entered
into that certain General Security Agreement, dated as of ____,
2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties.

 

WHEREAS, under the
terms of the Security Agreement, the Grantors have granted to the
Agent, for the benefit of the Secured Parties, a security interest
in, among other property, all Intellectual Property of the
Grantors, and have agreed as a condition thereof to execute this IP
Security Agreement for recording with the United States Patent and
Trademark Office, the United States Copyright Office and other
Governmental Authorities.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees
as follows:

 

SECTION
1.  Grant of
Security. Each Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of such
Grantor’s right, title and interest in and to the following
(the "Collateral"):

 

(i)           the
patents and patent applications set forth in Schedule A hereto (the
"Patents");

 

(ii)           the
trademark and service mark registrations and applications set forth
in Schedule B
hereto, together with the goodwill symbolized thereby (the
"Trademarks");

 

(iii)       
all copyrights, whether registered or unregistered, now owned or
hereafter acquired by such Grantor, including, without limitation,
the copyright registrations and applications and copyright licenses
set forth in Schedule C hereto (the
"Copyrights");

 

(iv)       
all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing,
all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;

 

 

 

(v)           any
and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the
right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and

 

(vi)           any
and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the Collateral
of or arising from any of the foregoing.

 

SECTION
2.  Security for
Guaranteed Obligations. The grant of a security interest in,
the Collateral by each Grantor under this IP Security Agreement
secures the prompt and complete payment and performance when due of
all Guaranteed Obligations, whether direct or indirect, now
existing or hereafter arising, absolute or contingent, and whether
for principal, reimbursement obligations, interest, premiums,
penalties, fees, guarantee obligations, indemnifications, contract
causes of action, costs, expenses or otherwise.

 

SECTION
3.  Recordation. Each Grantor
authorizes and requests that the Register of Copyrights, the
Commissioner for Patents and the Commissioner for Trademarks and
any other applicable Governmental Authority record this IP Security
Agreement.

 

SECTION
4. Execution in
Counterparts. This IP Security Agreement may be executed in
any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

SECTION
5. Grants, Rights and
Remedies. This IP Security Agreement has been entered into
in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the
security interest hereunder to, and the rights and remedies of, the
Agent with respect to the Collateral are more fully set forth in
the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth
herein.

 

SECTION
6.  Governing
Law. THIS IP SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE GRANTORS AND SECURED PARTIES HEREUNDER AND ANY
CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS IP SECURITY AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

IN
WITNESS WHEREOF, each Grantor has caused this IP Security Agreement
to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

 

[Signature Pages
Follow]

 

 

2

 

 

[NAME
OF GRANTOR]

 

 

By:                                                                 

Name:                                                               

Title:                                                               

 

Address
for Notices:

 

 

 

 

 

 

 

 

 

[NAME
OF GRANTOR]

 

 

By:                                                                  

Name:                                                               

Title:                                                               

 

Address
for Notices:

 

 

 

 

Annex 3
to

Security Agreement

 

 

FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT

 

This
INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this
"IP Security Agreement
Supplement") dated as of ________, 201_, is made by the
Person listed on the signature page hereof (the "Grantor") in favor of THIRD EYE
CAPITAL CORPORATION, as administrative agent and collateral agent
for and on behalf of the Noteholders (in such aforesaid capacities,
or any successor or assign in such capacities, the
“Agent”).

 

WHEREAS, Goodland
Advanced Fuels, Inc., a Delaware corporation (the
“Company”), the
Noteholders from time to time party thereto, and the Agent have
entered into that certain Note Purchase Agreement, dated as of
____, 2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Note Purchase
Agreement").

 

WHEREAS, in
connection with the Note Purchase Agreement, the Company has
entered into that certain General Security Agreement, dated as of
____, 2017 (as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time, the "Security Agreement"; terms
defined in the Security Agreement and not defined herein are used
herein as defined in the Security Agreement) in favor of the Agent
for the benefit of the Secured Parties.

 

WHEREAS, under the
terms of the Security Agreement, the Grantor has granted to the
Agent, for the benefit of the Secured Parties, a security interest
in the Collateral (as defined in Section 1 below) of the
Grantor and has agreed as a condition thereof to execute this IP
Security Agreement Supplement for recording with the United States
Patent and Trademark Office, the United States Copyright Office and
other Governmental Authorities.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as
follows:

 

SECTION
1.  Grant of
Security. The Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of the
Grantor’s right, title and interest in and to the following
(the "Collateral"):

 

(i)           the
patents and patent applications set forth in Schedule A hereto (the
"Patents");

 

(ii)         
the trademark and service mark registrations and applications set
forth in Schedule B hereto,
together with the goodwill symbolized thereby (the "Trademarks");

 

(iii)        
the copyright registrations and applications and copyright licenses
set forth in Schedule C hereto (the
"Copyrights");

 

(iv)       
all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing,
all rights in the foregoing provided by international treaties or
conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;

 

 

2

 

 

(v)           all
any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation,
violation, misuse or breach with respect to any of the foregoing,
with the right, but not the obligation, to sue for and collect, or
otherwise recover, such damages; and

 

(vi)           any
and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the foregoing or
arising from any of the foregoing.

 

SECTION
2.  Supplement to
Security Agreement. Schedule 6 to the Security
Agreement is, effective as of the date hereof, hereby supplemented
to add to such Schedule the Collateral described in Section 1
above.

 

SECTION
3. Security for Guaranteed
Obligations. The grant of a security interest in the
Collateral by the Grantor under this IP Security Agreement
Supplement secures the prompt and complete payment and performance
when due of all Guaranteed Obligations, whether direct or indirect,
absolute or contingent, now existing or hereafter arising, and
whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, guarantee obligations, indemnifications,
contract causes of action, costs, expenses or
otherwise.

 

SECTION
4. Recordation. The
Grantor authorizes and requests that the Register of Copyrights,
the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable Governmental Authority to record this IP
Security Agreement Supplement.

 

SECTION
5.  Grants, Rights
and Remedies. This IP Security Agreement Supplement has been
entered into in conjunction with the provisions of the Security
Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and
remedies of, the Agent with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions
of which are incorporated herein by reference as if fully set forth
herein.

 

SECTION
6.  Governing
Law. THIS IP SECURITY AGREEMENT SUPPLEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE GRANTOR AND SECURED PARTIES HEREUNDER AND
ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR
RELATING TO THIS IP SECURITY AGREEMENT SUPPLEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

[Signature Pages
Follow]

 

 

3

 

 

IN
WITNESS WHEREOF, the Grantor has caused this IP Security Agreement
Supplement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above
written.

 

[NAME
OF GRANTOR]

 

 

By:                                                                  

Name:                                                                  

Title:                                                                  

 

Address
for Notices:

 

 

 

 

 

 

 

 

 

Annex 4
to

Security Agreement

 

 

FORM
OF CONSENT AND AGREEMENT

 

The
undersigned hereby (a) acknowledges notice of, and consents to the
terms and provisions of, that certain General Security Agreement
dated as of ____, 2017 (as amended, varied, supplemented, restated,
renewed or replaced at any time and from time to time, the
"Security
Agreement", the terms defined therein being used herein as
therein defined) from ____________________ (the "Grantor") and certain other
grantors from time to time party thereto to THIRD EYE CAPITAL
CORPORATION, as administrative agent and collateral agent for and
on behalf of the Noteholders (in such aforesaid capacities, or any
successor or assign in such capacities, the “Agent”), (b) consents in
all respects to the pledge and assignment to the Agent of all of
the Grantor’s right, title and interest in, to and under the
Assigned Agreement (as defined below) pursuant to the Security
Agreement, (c) consents to any and all filings made or required by
the Agent to perfect the security interest in the Assigned
Agreement created by the Security Agreement, (d) agrees that the
Agent shall be entitled to exercise any and all rights and remedies
of the undersigned under the Assigned Agreement in accordance with
the terms of the Security Agreement, and (e) agrees with the Agent
that:

 

(i)           A
true copy of the agreement between the undersigned and the Grantor
dated ____________, ____ (the "Assigned Agreement"),
including, without limitation, all amendments, modifications,
restatements and supplements is attached hereto as Schedule 1. The Assigned
Agreement is in full force and effect, and the undersigned is not
aware of any default under the Assigned Agreement or any event that
would give any party the right to terminate or rescind the Assigned
Agreement. No prepayments have been made of any amounts to become
due under the Assigned Agreement.

 

(ii)           The
undersigned will make all payments to be made by it under or in
connection with the Assigned Agreement in accordance with the
instructions of the Agent.

 

(iii)           All
payments referred to in paragraph (ii) above shall be made by the
undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set off and shall be final,
and the undersigned will not seek to recover from any Secured Party
for any reason any such payment once made.

 

(iv)           The
Agent or its designee shall be entitled to exercise any and all
rights and remedies of the Grantor under the Assigned Agreement in
accordance with the terms of the Security Agreement, and the
undersigned shall comply in all respects with such
exercise.

 

(v)           The
undersigned will not, without the prior written consent of the
Agent, (A) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof, (B) amend, amend
and restate, supplement or otherwise modify the Assigned Agreement,
or (C) make any prepayment of amounts to become due under or in
connection with the Assigned Agreement.

 

(vi)           The
undersigned shall deliver to the Agent, concurrently with the
delivery thereof to the Grantor, a copy of each notice, request or
demand given by the undersigned pursuant to the Assigned
Agreement.

 

(vii)           Neither
the Agent nor any other Secured Party shall have any liability or
obligation under the Assigned Agreement as a result of this Consent
and Agreement, the Security Agreement or otherwise.

 

 

 

2

 

 

(viii)        
Upon the enforcement of the Security Agreement by the Agent and the
transfer of the Assigned Agreement to a transferee, the undersigned
will recognize the transferee as the counterparty to the Assigned
Agreement in the place and stead of the Grantor.

 

(ix)           The
undersigned shall not sell, assign, convey or grant a security
interest in, or otherwise transfer any of its right, title or
interest in or to, the Assigned Agreement without the prior written
consent of the Agent.

 

(x)           The
undersigned will not commence, or join with any other person or
entity in commencing, any proceeding against the Grantor [or any of
Grantor’s affiliates] under any bankruptcy, reorganization,
liquidation, or insolvency law or statute now or hereafter in
effect in any jurisdiction.

 

In
order to induce the Noteholders to make the Loans under the Note
Purchase Agreement, the undersigned repeats and reaffirms for the
benefit of the Secured Parties the representations and warranties
made by it in the Assigned Agreement.

 

This
Consent and Agreement shall be binding upon the undersigned and its
successors and assigns, and shall inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. THIS CONSENT
AND AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER OF THE
PARTIES HERETO, THE GRANTOR AND SECURED PARTIES, AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR
TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

 

IN
WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.

 

 

3

 

 

Dated:
_______________, 201__.

 

 

 

[NAME
OF COUNTERPARTY TO ASSIGNED AGREEMENT]

 

 

By:         
                 
                 
                 
 

Name:                                                          

Title:                                                             

 

 

 

 

 

 

 

ACKNOWLEDGEMENT AND CONSENT***

 

The
undersigned hereby acknowledges receipt of a copy of the General
Security Agreement dated as of ____, 2017 (the "Agreement"), made by Goodland
Advanced Fuels, Inc. and the other Grantors parties thereto from
time to time, for the benefit of THIRD EYE CAPITAL CORPORATION, as
Agent. The undersigned agrees for the benefit of the Agent and the
other Secured Parties as follows:

 

1. The
undersigned irrevocably and unconditionally consents to the
execution, delivery and performance of the Agreement by each of the
Grantors and to the exercise and enforcement by the Agent of its
rights and remedies thereunder.

 

2. The
undersigned will be bound by the terms of the Agreement and will
comply with such term insofar as such terms are applicable to the
undersigned.

 

3. The
undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in clause (A), (B) or (C)
of Section 6.03(a)(ii) of the Agreement.

 

The
terms of Sections 6.03(d) and 6.06 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to 6.03(d) or 6.06 of the
Agreement.

 

[Name
of Issuer]

 

By:                                                                            

Name:                                                                            

Title:                                                                            

 

Address
for Notices:

 

 

 

 

Fax:
________________________________

 

 

 

 

*** This consent is
necessary only with respect to any Issuer which is not also a
Grantor. This consent may be modified or eliminated with respect to
any Issuer that is not controlled by a Grantor.

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