Document:

Blueprint

Exhibit
10.9

 

 

 

 

 

 

 

 

 

 

 

 

GENERAL SECURITY AGREEMENT

 

made
by

 

AEMETIS
PROPERTY 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 December 3, 2018

 

 

 

 

 

 

 

 

 

 

 

i

TABLE OF CONTENTS

 

Page

 

	

ARTICLE I DEFINED TERMS

	

1

	

Section 1.01.

	

Definitions

	

1

	

Section 1.02.

	

Other Definitional Provisions

	

6

	

ARTICLE II [RESERVED]

	

6

	

ARTICLE III GRANT OF SECURITY INTEREST

	

6

	

Section 3.01.

	

Grant of Security

	

6

	

ARTICLE IV REPRESENTATIONS AND WARRANTIES

	

7

	

Section 4.01.

	

Title; No Other Liens

	

8

	

Section 4.02.

	

Perfected First Priority Liens

	

8

	

Section 4.03.

	

Chief Executive Office; Etc

	

8

	

Section 4.04.

	

Inventory and Equipment

	

9

	

Section 4.05.

	

Farm Products

	

9

	

Section 4.06.

	

Investment Property

	

9

	

Section 4.07.

	

Receivables

	

10

	

Section 4.08.

	

Intellectual Property

	

10

	

Section 4.09.

	

Securities Accounts, Commodities Accounts and Deposit
Accounts

	

12

	

Section 4.10.

	

Commercial Tort Claims

	

12

	

Section 4.11.

	

Letters of Credit

	

12

	

Section 4.12.

	

Independent Investigation; Etc

	

12

	

Section 4.13.

	

Assigned Agreements

	

12

	

ARTICLE V COVENANTS

	

13

	

Section 5.01.

	

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

	

13

	

Section 5.02.

	

Maintenance of Insurance

	

15

	

Section 5.03.

	

Payment of Guaranteed Obligations

	

15

	

Section 5.04.

	

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

	

15

	

Section 5.05.

	

Changes in Locations; Name; Jurisdiction of Incorporation;
Etc

	

16

	

Section 5.06.

	

Notices

	

17

	

Section 5.07.

	

Investment Property

	

17

	

Section 5.08.

	

Inventory and Equipment

	

18

	

Section 5.09.

	

Receivables

	

18

	

Section 5.10.

	

Intellectual Property

	

19

	

Section 5.11.

	

Commercial Tort Claims

	

20

	

Section 5.12.

	

Assigned Agreements

	

20

	

Section 5.13.

	

Covenants in Note Purchase Agreement.

	

21

 

 i

TABLE OF
CONTENTS(continued)

 

Page

 

	

ARTICLE VI REMEDIAL PROVISIONS

	

21

	

Section 6.01.

	

Certain Matters Relating to Receivables

	

21

	

Section 6.02.

	

Communications with Obligors; Grantors Remain Liable

	

22

	

Section 6.03.

	

Voting Rights; Dividends; Etc

	

22

	

Section 6.04.

	

Proceeds to be Turned Over To Agent

	

24

	

Section 6.05.

	

Application of Proceeds

	

24

	

Section 6.06.

	

Remedies

	

25

	

Section 6.07.

	

Registration Rights

	

26

	

Section 6.08.

	

Deficiency

	

26

	

Section 6.09.

	

Sales on Credit

	

26

	

ARTICLE VII THE AGENT

	
 

	

27

	

Section 7.01.

	

Agent’s Appointment as Attorney-in-Fact; Etc

	

27

	

Section 7.02.

	

Duty of Agent

	

28

	

Section 7.03.

	

Financing Statements

	

28

	

Section 7.04.

	

Authority of Agent

	

29

	

ARTICLE VIII MISCELLANEOUS

	
 

	

29

	

Section 8.01.

	

Amendments in Writing

	

29

	

Section 8.02.

	

Notices

	

29

	

Section 8.03.

	

Security Interest Absolute

	

29

	

Section 8.04.

	

No Waiver by Course of Conduct; Cumulative Remedies

	

29

	

Section 8.05.

	

Indemnity and Expenses

	

30

	

Section 8.06.

	

Successors and Assigns

	

30

	

Section 8.07.

	

Set-Off

	

30

	

Section 8.08.

	

Counterparts

	

31

	

Section 8.09.

	

Severability

	

31

	

Section 8.10.

	

Headings

	

31

	

Section 8.11.

	

Governing Law

	

31

	

Section 8.12.

	

Submission To Jurisdiction

	

31

	

Section 8.13.

	

Acknowledgements

	

32

	

Section 8.14.

	

Additional Grantors

	

32

	

Section 8.15.

	

Release

	

32

	

Section 8.16.

	

WAIVER OF JURY TRIAL

	

33

	

Section 8.17.

	

INTEGRATION

	

33

	

Section 8.18.

	

Time is of the Essence

	

33

	

Section 8.19.

	

Survival

	

33

 

ii

 

 

SCHEDULES

 

Schedule
4.01  

Title; No Other
Liens

Schedule
4.02

Perfected Priority
Liens

Schedule
4.03    

Chief Executive
Office; Etc.

Schedule
4.04  

Inventory and
Equipment

Schedule
4.06 

Investment
Property

Schedule
4.08

Intellectual
Property

Schedule
4.09     

Securities
Accounts; Commodities Accounts and Deposit Accounts

Schedule
4.10 

Commercial Tort
Claims

Schedule
4.11

Letters of
Credit

Schedule
4.13

Assigned
Agreements

 

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

 

 
iii

 

GENERAL SECURITY AGREEMENT

 

This
GENERAL SECURITY AGREEMENT, (the “Agreement”) dated as of
December 3, 2018, is made by Aemetis Property Keyes, Inc., a
Delaware corporation (the “Company”), as a grantor,
and any subsidiary of the Company that may from time to time become
party hereto (in accordance with Section 8.14 hereof) 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 dated as of June 30, 2017 (as amended by the Amendment
No. 1 to Note Purchase Agreement dated June 28, 2018, the Amendment
No. 2 to Note Purchase Agreement dated December 3, 2018 and 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 a guaranty (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 4.13, 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 4.08), granting any
right under any Copyright, including, without limitation, the grant
of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.

 

 

 

2

 

 

 

 

"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 4.08), 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.

 

"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
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
4.08.

 

"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 4.08, (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
4.08, and (iii) all rights to obtain any reissues or
extensions of the foregoing.

 

"Pledged Commodity Contracts"
means all commodity contracts listed on Schedule 4.06 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 4.06,
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 4.06 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 4.06.

 

 

 

4

 

 

 

 

"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 4.06 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.

 

"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
4.06 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
4.06 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 4.06 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
4.08.

 

 

 

5

 

 

 

 

"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 4.08, 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 II

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):

 

 

 

6

 

 

 

 

(a)              all
Accounts;

 

(b)              all
as-extracted collateral;

 

(c)              all
chattel paper;

 

(d)              all
commercial tort claims, including those described on Schedule 4.10;

 

(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):

 

 

 

7

 

 

 

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.

 

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 4.01
(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
4.02.

 

(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 4.03.

 

(b)              Such
Grantor’s exact legal name is set forth on Schedule 4.03 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
4.03.

 

(c)              Except
as provided in Schedule
4.03, 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.

 

 

 

8

 

 

 

 

(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
4.03.

 

(e)              With
respect to each security agreement identified on Schedule 4.03 pursuant to
Section 4.04(d), such Grantor has set forth on Schedule 4.03 the information
required pursuant to clauses (a), (b) and (c) of this Section for
the debtor under each such security agreement.

 

(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 4.03
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 4.04.

 

(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 4.04.

 

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

 

Section
4.06.            
Investment
Property

(a)              Schedule
4.06 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
4.06 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.

 

 

 

9

 

 

 

(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.

 

(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)              
Except as set forth on Schedule 4.08, 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.

 

 

 

10

 

 

 

 

(c)              The
Intellectual Property set forth on Schedule 4.06 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.

 

(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 4.06 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.

 

 

 

11

 

 

 

 

(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.

 

(a)              Schedule
4.09 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 4.09, 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
4.09 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 4.09 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 4.10, 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 4.11, 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.

 

 

 

12

 

 

 

 

(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.

 

(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.

 

 

 

13

 

 

(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").

 

(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.

 

 

 

14

 

 

 

(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.

 

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.

 

 

15

 

 

 

 

(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.

 

(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 4.03 showing any
additional location at which Inventory or Equipment shall be kept
(which supplement may be attached to Schedule 4.03 by the
Agent):

 

 

 

16

 

 

 

 

(i)              permit
any of the Inventory or Equipment to be kept at a location other
than those listed on Schedule 4.04; 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
4.03.

 

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.

 

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.

 

 

 

17

 

 

 

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.

 

(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.

 

 

 

18

 

 

 

 

(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.

 

(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.

 

 

 

19

 

 

 

 

(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 4.08 ("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 4.08 shall
automatically be deemed amended to include the After-Acquired
Intellectual Property covered by such IP Security Agreement
Supplement.

 

(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

 

 

 

20

 

 

 

 

(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

 

(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.

 

 

 

21

 

 

 

 

(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.

 

(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.

 

 

 

22

 

 

 

(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.

 

(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).

 

 

 

23

 

 

 

(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 Agen. 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.

 

 

 

24

 

 

 

 

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.

 

(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.

 

 

 

25

 

 

 

 

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.

 

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.

 

 

 

26

 

 

 

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;

 

(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

 

 

 

27

 

 

 

 

(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.

 

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.

 

 

 

28

 

 

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.

 

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.

 

 

 

29

 

 

 

 

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.

 

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.

 

 

 

30

 

 

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.

 

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.

 

 

 

31

 

 

(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.

 

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.

 

 

 

32

 

 

 

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]

 

 

 

 

33

 

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
PROPERTY KEYES, INC.

 

 By:     
/s/ Eric
A. McAfee

Name:
Eric McAfee

Title:
CEO

 

AGENT:

 

THIRD
EYE CAPITAL CORPORATION

 

 By:    
/s/ Arif
N. Bhalwani

Name:
Arif N. Bhalwani

Title:
Managing Director

 

 [Signature
Page – General Security Agreement]

 

 

 

  34Blueprint

Exhibit
10.10

 

INTERCOMPANY REVOLVING PROMISSORY NOTE

 

	

December
3, 2018

 

	

$3,500,000.00

 

 

FOR
VALUE RECEIVED, and subject to the terms and conditions set forth
herein, Aemetis Property Keyes, Inc., a Delaware corporation (the
“Borrower”),
hereby unconditionally promises to pay to the order of Goodland
Advanced Fuels, Inc., a Delaware corporation, or its assigns (the
“Holder”,
and together with the Borrower, the “Parties”),
the principal amount of Three
Million Five Hundred Thousand Dollars ($3,500,000) (the
“Loan”)
or, if less, then the aggregate of such amounts the Holder has
disbursed to the Borrower pursuant to Section 2.2,
together with all accrued interest thereon, as provided in this
Intercompany Revolving Promissory Note (the “Note”).

 

1.       

Definitions. Capitalized terms
used herein shall have the meanings set forth in this Section 1.

 

“Advance” means
each disbursement made by the Holder to the Borrower pursuant to
Section
2.2.

 

“Borrowing
Notice” has the meaning set forth in Section 2.2.

 

“Business
Day” means a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are
authorized or required by law to close.

 

“Commitment
Period” means the period from the date hereof to
the earlier of (a) the Maturity Date, or (b) the date, if any, on
which the Noteholders have no further obligation to make loans
under the Note Purchase Agreement.

 

“Debt” of
the Borrower, means all (a) indebtedness for borrowed money; (b)
obligations secured by a Lien on property (to the extent of the
fair market value of the related property), whether or not the
obligation secured thereby shall have been assumed and whether or
not the obligation secured is the obligation of the owner or
another party, except trade accounts payable arising in the
ordinary course of business secured by a purchase money security
interest (c) any obligation on account of deposits or advances, (d)
obligations for the deferred purchase price of property or
services, except trade payables arising in the ordinary course of
business; (e) obligations evidenced by notes, bonds, debentures or
other similar instruments; (f) obligations as lessee under capital
leases; (g) obligations in respect of any interest rate swaps,
currency exchange agreements, commodity swaps, caps, collar
agreements or similar arrangements entered into by the Borrower
providing for protection against fluctuations in interest rates,
currency exchange rates or commodity prices or the exchange of
nominal interest obligations, either generally or under specific
contingencies; (h) obligations under acceptance facilities and
letters of credit; (i) guaranties, endorsements (other than for
collection or deposit in the ordinary course of business), and
other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss, in each case, in respect of
indebtedness set out in clauses (a) through (h) of a Person other
than the Borrower; and (j) indebtedness set out in clauses (a)
through (i) of any Person other than Borrower secured by any lien
on any asset of the Borrower, whether or not such indebtedness has
been assumed by the Borrower.

 

 

1

 

 

“Default” means
any of the events specified in Section 8 which constitutes an
Event of Default or which, upon the giving of notice, the lapse of
time, or both pursuant to Section 8 would, unless cured
or waived, become an Event of Default.

 

“Default Rate” means a
rate of interest per annum equal to the Interest Rate plus six
percent (6%) per annum.

 

“Event of
Default” has the meaning set forth in
Section
8.

 

“GAAP” means
generally accepted accounting principles in the United States of
America as in effect from time to time.

 

“Interest Rate” for each
Advance shall be equal to the interest rate payable as of the date
of such Advance to the Noteholders pursuant to the Note Purchase
Agreement or, if the Note Purchase Agreement shall not be in
effect, a rate of interest per annum equal to twelve percent
(12%).

 

“Lien” means
any mortgage, pledge, hypothecation, encumbrance, lien (statutory
or other), charge or other security interest.

 

“Loan” has
the meaning set forth in the introductory paragraph.

 

“Material Adverse
Effect” means any condition or circumstance which
has had, or could reasonably be expected to have, a material
adverse effect on (i) the property, nature of assets, business,
results of operations, prospects, performance, liabilities or
condition (financial or otherwise) of the Borrower; (ii) the rights
or remedies of the Holder hereunder, (iii) the ability of the
Borrower to perform its obligations hereunder or otherwise in
connection with the Loan, or (v) the validity or enforceability of
any of this Note.

 

“Maturity
Date” means the Maturity Date (as such term is
defined in the Note Purchase Agreement).

 

“Note Purchase Agreement”
means that certain Note Purchase Agreement entered into as of June
30, 2017 (including all exhibits and schedules hereto, as amended
by the Amendment No. 1 to Note Purchase Agreement dated as of June
28, 2018, the Amendment No. 2 to Note Purchase Agreement dated as
of December 3, 2018, and as the same may be amended, supplemented,
modified and/or restated from time to time, by and among the
Holder, as borrower, the noteholders party thereto or which
thereafter become parties thereto by means of assignment and
assumption as described therein (the “Noteholders”), and Third
Eye Capital Corporation, as administrative agent and collateral
agent for the Noteholders (the “Agent”).

 

“Outstanding Amount” means
the sum of the outstanding principal amount of the Revolving
Advances, the unpaid
interest thereon, and all other Note Indebtedness relating to the
Revolving Line under the Note Purchase Agreement. All defined terms
used in this definition of “Outstanding Amounts” shall
have the meaning ascribed thereto under the Note Purchase
Agreement.

 

 

2

 

 

 

“Parties” has
the meaning set forth in the introductory paragraph.

 

“Person” means
any individual, corporation, limited liability company, trust,
joint venture, association, company, limited or general
partnership, unincorporated organization, governmental authority or
other entity.

 

2.       

Loan Disbursement
Mechanics.

 

2.1        Commitment.
Subject to Section
2.2, the Holder shall make available to the Borrower one or
more Advances during the Commitment Period in an aggregate amount
not to exceed the Loan less the Outstanding Amount. During the
Commitment Period the Borrower may repay and reborrow in accordance
with the provisions hereof.

 

2.2        Advances.
As a condition to the disbursement of any Advance, the Borrower
shall, at least seven (7) Business Days prior to the requested
disbursement date, deliver to the Holder and to Agent a written
notice (the “Borrowing
Notice”) in substantially in the form set out in
Schedule A hereto
setting out (a) that no Default has occurred and is continuing; (b)
the amount of the Advance and a description of how the Advance will
be used by the Borrower; and (c) the date on which the Advance is
to be disbursed. Each Borrowing Notice shall be deemed to repeat
the Borrower's representations and warranties in Section 6 as of the date of
such Borrowing Notice. Upon receipt of the Borrowing Notice, the
Holder may, but is under no obligation to, make available to the
Borrower on the disbursement date the amount set out in the notice
in immediately available funds.

 

3.       

Final Payment Date; Optional
Prepayments.

 

3.1        Final
Payment Date. The aggregate unpaid principal amount of the
Loan, all accrued unpaid interest and all other amounts payable
under this Note shall be due and payable on the Maturity Date,
unless otherwise provided in Section 9.

 

3.2        Optional
Prepayment. The Borrower may prepay the Loan in whole or in
part at any time or from time to time without penalty or premium by
paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Subject to the other
terms and conditions hereof, amounts borrowed may be repaid and
reborrowed from time to time.

 

4.       

Interest.

 

4.1        Interest
Rate. The outstanding principal of the Advances made
hereunder (including, to the extent permitted by law, on interest
thereon not paid when due) shall from the date made or incurred
until indefeasibly paid in full in cash shall bear interest at a
per annum rate equal to the Interest Rate, but not to exceed the
maximum rate described in Section 4.4
hereof.

 

 

3

 

 

 

4.2        Default
Rate. If an Event of Default
shall have occurred and be continuing, all outstanding principal of
and, to the fullest extent permitted by law, all past due interest
on the Advances shall bear interest at a rate per annum equal to
the Default Rate. Interest payable at the Default Rate shall be
payable from time to time on demand.

 

4.3        Interest
Payment Dates. Interest on
the Advances shall be payable
on the outstanding principal of the Advances in arrears for the
preceding calendar month on the first Business Day of each calendar
month, commencing on first Business Day of the calendar month
following the disbursement of an Advance under Section 2.2
hereunder.

 

4.4        Interest
Rate Limitation. If at any time and for any reason
whatsoever, the interest rate payable on any Advance shall exceed
the maximum rate of interest permitted to be charged by the Holder
to the Borrower under applicable law, such interest rate shall be
reduced automatically to the maximum rate of interest permitted to
be charged under applicable law.

 

5.       

Payment Mechanics.

 

5.1        Manner
of Payments. All payments of interest and principal shall be
made in lawful money of the United States of America no later than
3:00 PM Pacific Time on the date on which such payment is due by
wire transfer of immediately available funds to the Holder's
account at a bank specified by the Holder in writing to the
Borrower from time to time.

 

5.2        Application
of Payments. All payments made hereunder shall be applied
first to the payment of any fees or charges outstanding hereunder,
second to accrued interest, and third to the payment of the
principal amount outstanding under the Note.

 

5.3        Business
Day Convention. Whenever any payment to be made hereunder
shall be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such
extension will be taken into account in calculating the amount of
interest payable under this Note.

 

5.4        Evidence
of Debt. The Holder is authorized to record on its books and
records each Advance made to the Borrower and each payment or
prepayment thereof. The entries made by the Holder shall, to the
extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein
recorded; provided, however,
that the failure of the Holder to record such payments or
prepayments, or any inaccuracy therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable
interest) the Advances in accordance with the terms of this
Note.

 

5.5        Rescission
of Payments. If at any time any payment made by the Borrower
under this Note is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, the Borrower's obligation to make such
payment shall be reinstated as though such payment had not been
made.

 

6.       

Representations and Warranties.
The Borrower hereby represents and warrants to the Holder on the
date hereof as follows:

 

 

4

 

 

6.1        Existence;
Compliance With Laws. The Borrower is (a) a company duly
formed, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority, and
the legal right, to own, lease and operate its properties and
assets and to conduct its business as it is now being conducted and
(b) in compliance with all laws.

 

6.2        Power
and Authority. The Borrower has the power and authority, and
the legal right, to execute and deliver this Note and to perform
its obligations hereunder.

 

6.3        Authorization;
Execution and Delivery. The execution and delivery of this
Note by the Borrower and the performance of its obligations
hereunder have been duly authorized by all necessary corporate
action in accordance with all applicable laws. The Borrower has
duly executed and delivered this Note.

 

6.4        No
Approvals. No consent or authorization of, filing with,
notice to or other act by, or in respect of, any governmental
authority or any other Person is required in order for the Borrower
to execute, deliver, or perform any of its obligations under this
Note.

 

6.5        No
Violations. The execution and delivery of this Note and the
consummation by the Borrower of the transactions contemplated
hereby do not and will not (a) violate any provision of the
Borrower's organizational documents; (b) violate any law applicable
to the Borrower or by which any of its properties or assets may be
bound; or (c) constitute a default under any material agreement or
contract by which the Borrower may be bound.

 

6.6        Enforceability.
The Note is a valid, legal and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its
terms.

 

6.7        No
Litigation. No action, suit, litigation, investigation or
proceeding of, or before, any arbitrator or governmental authority
is pending or threatened by or against the Borrower or any of its
property or assets (a) with respect to the Note or any of the
transactions contemplated hereby or (b) that would be expected to
materially adversely affect the Borrower's financial condition or
the ability of the Borrower to perform its obligations under the
Note.

 

7.       

Affirmative Covenants. Until
all amounts outstanding in this Note have been paid in full, the
Borrower shall:

 

7.1        Maintenance
of Existence. (a) Preserve, renew and maintain in full force
and effect its corporate or organizational existence and (b) take
all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business, except, in each case, where the failure to do so would
not reasonably be expected to have a Material Adverse
Effect.

 

7.2        Compliance.
Comply with (a) all of the terms and provisions of its
organizational documents; (b) its obligations under its material
contracts and agreements; and (c) all laws applicable to it and its
business, in each case, except where the failure to do so would not
reasonably be expected to have a Material Adverse
Effect.

 

 

5

 

 

7.3        Payment
Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where
the amount or validity thereof is currently being contested in good
faith by appropriate proceedings, and reserves in conformity with
GAAP with respect thereto have been provided on its
books.

 

7.4        Notice
of Events of Default. As soon as possible and in any event
within two (2) Business Days after it becomes aware that a Default
or an Event of Default has occurred, notify the Holder in writing
of the nature and extent of such Default or Event of Default and
the action, if any, it has taken or proposes to take with respect
to such Default or Event of Default.

 

7.5        Further
Assurances. Upon the request of the Holder, promptly execute
and deliver such further instruments and do or cause to be done
such further acts as may be necessary or advisable to carry out the
intent and purposes of this Note.

 

8.   
Events of Default.
The occurrence and continuance of any of the following shall
constitute an Event of Default hereunder:

 

8.1        Failure
to Pay. The Borrower fails to pay any principal amount of
the Loan when due or interest or any other amount when
due.

 

8.2        Breach
of Representations and Warranties. Any representation or
warranty made or deemed made by the Borrower to the Holder herein
is incorrect in any material respect on the date as of which such
representation or warranty was made or deemed made.

 

8.3        Breach
of Covenants. The Borrower fails to observe or perform any
covenant, condition or agreement contained in this Note other than
those specified in Section
8.1 and such failure continues for 10 days.

 

8.4        Cross-Defaults.
The Borrower fails to pay when due any of its Debt in excess of
$100,000 at any time outstanding (other than Debt arising under
this Note) or any interest or premium thereon when due (whether by
scheduled maturity, acceleration, demand or otherwise) and such
failure continues after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Debt.

 

8.5        Bankruptcy.
 

 

(a)       the
Borrower commences any case, proceeding or other action (i) under
any existing or future law relating to bankruptcy, insolvency,
reorganization, or other relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts or (ii)
seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part
of its assets, or the Borrower makes a general assignment for the
benefit of its creditors;

 

 

6

 

 

(b)       there
is commenced against the Borrower any case, proceeding or other
action of a nature referred to in Section 8.5(a) above which (i)
results in the entry of an order for relief or any such
adjudication or appointment or (ii) remains undismissed,
undischarged or unbonded for a period of 90 days;

 

(c)       there
is commenced against the Borrower any case, proceeding or other
action seeking issuance of a warrant of attachment, execution or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which
has not been vacated, discharged, or stayed or bonded pending
appeal within 90 days from the entry thereof;

 

(d)       the
Borrower takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set
forth in Section
8.5(a), Section
8.5(b) or Section
8.5(c) above; or

 

(e)       the
Borrower is generally not, or shall be unable to, or admits in
writing its inability to, pay its debts as they become
due.

 

8.6        Judgments.
One or more judgments for an amount in excess of $100,000 at any
time or decrees shall be entered against the Borrower and all of
such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within ninety (90) days from the
entry thereof. Notwithstanding the foregoing, the outstanding
judgment against Borrower resulting from the case by Cordillera
Fund and The Industrial Company shall not result in an Event of
Default.

 

9.    
Remedies. Upon the
occurrence of any Event of Default and at any time thereafter
during the continuance of such Event of Default, the Holder may at
its option, by written notice to the Borrower (a) terminate its
commitment to make any Advances hereunder; (b) declare the entire
principal amount of this Note, together with all accrued interest
thereon and all other amounts payable hereunder, immediately due
and payable; and/or (c) exercise any or all of its rights, powers
or remedies under applicable law; provided, however that, if an Event of
Default described in Section 8.5 shall occur, the
principal of and accrued interest on the Loan shall become
immediately due and payable without any notice, declaration or
other act on the part of the Holder.

 

10.  
Miscellaneous.

 

10.1                 Governing
Law. This Note and any claim, controversy, dispute or cause
of action (whether in contract or tort or otherwise) based upon,
arising out of or relating to this Note, and the transactions
contemplated hereby shall be governed by the laws of the State of
New York.

 

10.2                 Submission
to Jurisdiction.

 

(a)       The
Borrower hereby irrevocably and unconditionally (i) agrees that any
legal action, suit or proceeding arising out of or relating to this
Note may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York
and (ii) submits to the jurisdiction of any such court in any such
action, suit or proceeding. Final judgment against the Borrower in
any action, suit or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the
judgment.

 

 

7

 

 

(b)       Nothing
in this Section
10.2 shall
affect the right of the Holder to (i) commence legal proceedings or
otherwise sue the Borrower in any other court having jurisdiction
over the Borrower or (ii) serve process upon the Borrower in any
manner authorized by the laws of any such
jurisdiction.

 

10.3                 Venue.
The Borrower 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 Note in any court
referred to in Section
10.2(a) and the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such
court.

 

10.4                 Waiver
of Jury Trial. THE BORROWER HEREBY IRREVOCABLY 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 RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY.

 

10.5                 Counterparts;
Integration; Effectiveness. This Note and any amendments,
waivers, consents or supplements hereto may be executed in
counterparts, each of which shall constitute an original, but all
taken together shall constitute a single contract. This Note
constitutes the entire contract between the Parties with respect to
the subject matter hereof and supersede all previous agreements and
understandings, oral or written, with respect thereto. Delivery of
an executed counterpart of a signature page to this Note by
facsimile or in electronic (i.e., “pdf” or
“tif”) format shall be effective as delivery of a
manually executed counterpart of this Note.

 

10.6                 Successors
and Assigns. This Note may be assigned or transferred by the
Holder to any Person. The Borrower may not assign or transfer this
Note or any of its rights hereunder without the prior written
consent of the Holder. This Note shall inure to the benefit of, and
be binding upon, the Parties and their permitted
assigns.

 

10.7                 Waiver
of Notice. The Borrower hereby waives demand for payment,
presentment for payment, protest, notice of payment, notice of
dishonor, notice of nonpayment, notice of acceleration of maturity
and diligence in taking any action to collect sums owing
hereunder.

 

10.8                 Amendments
and Waivers. No term of this Note may be waived, modified or
amended except by an instrument in writing signed by both of the
parties hereto. Any waiver of the terms hereof shall be effective
only in the specific instance and for the specific purpose
given.

 

10.9                 Headings.
The headings of the various Sections and subsections herein are for
reference only and shall not define, modify, expand or limit any of
the terms or provisions hereof.

 

10.10                 No
Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising on the part of the Holder, of any right,
remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.

 

10.11                 Severability.
If any term or provision of this Note is invalid, illegal or
unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of
this Note or invalidate or render unenforceable such term or
provision in any other jurisdiction.

 

10.12                 Agent
Rights. This Note is a Revolving Intercompany Note referred
to in the Note Purchase Agreement, and, constitutes a Pledged Note
(as defined in the General Security Agreement) of the Holder. The
Holder and the Borrower hereunder hereby acknowledge and agree that
the Agent, for the benefit of the Noteholders, may exercise all
rights provided in the Note Purchase Agreement and the General
Security Agreement with respect to this Note.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

8

 

IN
WITNESS WHEREOF, the Parties have executed this Note as of the date
first set forth above.

 

	
 

	

BORROWER:

 

AEMETIS
PROPERTY KEYES, INC.

 

 

	
 

	

By: /s/ Eric A.
McAfee                                                

Name:
Eric McAfee

Title:
CEO

 

 

 

	

HOLDER:

 

GOODLAND
ADVANCED FUELS, INC.

 

	
 

	

By: /s/ Michael
Peterson                                                 

Name:
Michael Peterson

Title:

	
 

 

 

 

9

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