Common use of Collateral Clause in Contracts

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. (a) Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewithherewith or as disclosed to Bank pursuant to Section 6.8(b), or of which Borrower has given Bank notice and taken such actions as are necessary other than deposit accounts not required to give Bank a perfected security interest thereinbe disclosed pursuant to Section 6.8(b). The Accounts are bona fide, existing obligations of the Account Debtors. . (b) The Collateral is not in the possession of any third party bailee (such as a warehouse) ), except as otherwise provided in the Perfection Certificatefor Permitted Locations. None of the components of the Collateral with an aggregate value in excess of $500,000 shall be maintained at locations other than as provided in the Perfection Certificate Permitted Locations or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 500,000 to a baileeany one or more bailees, and such bailee and then Borrower shall, promptly upon Bank’s request therefor, use commercially reasonable efforts to deliver to Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement (in form and substance satisfactory to Bank in its sole discretiongood faith business judgment) duly executed by such bailee. The provisions In the event that Bank requests such a bailee agreement and Borrower uses such efforts but does not succeed in delivering such a bailee agreement, Bank may (in its good faith business judgment) maintain a Reserve with respect to the Collateral located with such bailee. (c) With respect to any leased premises of this paragraph Borrower at which Collateral with an aggregate value of more than $500,000 is located, Borrower shall, promptly upon Bank’s request therefor, use commercially reasonable efforts to deliver to Bank a landlord agreement (in form and substance satisfactory to Bank in its good faith business judgment) duly executed by the lessor of such leased premises. Without limiting the generality of the foregoing, Borrower shall use such efforts to obtain from the applicable landlord, no later than 60 days following the Effective Date, landlord agreements (in form and substance satisfactory to Bank) duly executed by such landlords in favor of Bank in respect of the following leased locations of Borrower: (1) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; (2) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. (▇ ▇▇▇▇▇▇▇▇), ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and (3) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇., ▇▇▇▇▇ ▇▇▇ (▇ ▇▇▇▇▇▇▇▇), ▇▇▇▇▇, ▇▇ ▇▇▇▇▇. In the event that Bank requests such a landlord agreement and Borrower uses such efforts but does not apply succeed in delivering such a landlord agreement, Bank may (in its good faith business judgment) maintain a Reserve with respect to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. such leased premises. (d) All Inventory is in all material respects of good and marketable quality, free from material defects. , except for Inventory for which adequate reserves are maintained in accordance with GAAP. (e) Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (ai) non-exclusive licenses granted by Borrower as licensor to its customers in the ordinary course of business, (b) overthird-the-counter software that is commercially available to the publicparties, and (cii) material Intellectual Property such intellectual property as is licensed to by Borrower and noted on the Perfection Certificateas a licensee. Each Patent which it owns or purports to own and which patent owned by Borrower that is material to Borrower’s business, taken as a whole, business is valid and enforceable, and and, to Borrower’s knowledge, no part of the Intellectual Property which Borrower owns or purports to own and which intellectual property that is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of , and to Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates intellectual property that is material to Borrower’s business violates, in any material respect, the rights of any third party party, except to the extent such claim would could not have reasonably be expected to result in a material adverse effect on Borrower’s business, taken as a whole. Material Adverse Change. (f) Except as noted on the Perfection CertificateCertificate (or as disclosed to Bank in written updates of the Perfection Certificate with respect to the following), Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (other than over-the-counter or shrink-wrap software licenses generally available to the public) relating to any material product lines of Borrower or Guarantor (i) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property (to the extent such prohibition is enforceable), or (ii) for which a default under or termination of could interfere in any material respect with Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Upon Bank’s request, Borrower shall use commercially reasonable efforts to promptly obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in the same that is otherwise restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents. If Borrower is unsuccessful in obtaining any such consent or waiver requested by Bank, then Borrower shall notify Bank in writing of same.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects, except normal and customary quality issues occurring in the ordinary course of business, in amounts consistent with past practices. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part, except to the extent in each of the above such invalidity or unenforceability would not have a material adverse effect on Borrower’s business, taken as a whole. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. (a) Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderunder the Loan Documents, free and clear of any and all Liens except Permitted Liens. , and Borrower has no deposit does not have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the deposit accounts with Bank, Collateral Accounts or the deposit other investment accounts, if any any, described in the Perfection Certificate delivered to Bank Collateral Agent in connection herewith, or herewith with respect of which Borrower has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The . (b) On the Effective Date, the Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided disclosed in the Perfection CertificateCertificate or as permitted pursuant to Section 7.2, and, as of the Effective Date, no such third party bailee possesses components of the Collateral in excess of Fifty Thousand Dollars ($50,000). None of the components of the Collateral shall be maintained at locations other than as provided disclosed in the Perfection Certificate on the Effective Date or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereofEffective Date, intends to store or otherwise deliver any portion of the Collateral with an aggregate value to a bailee in excess of Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored50,000), then Borrower will first receive the written consent of Bank Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. Collateral Agent. (c) All Inventory is in all material respects of good and marketable quality, free from material defects. . (d) Borrower is the sole owner of the Intellectual Property which it owns or purports to own own, except for (ai) non-exclusive licenses granted to its customers in the ordinary course of businessbusiness and licenses for the use of the Intellectual Property of Borrower or its Subsidiaries that are approved by Borrower’s Board of Directors and which could not result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States, (bii) over-the-counter software that is commercially available to the public, and (ciii) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to To the best of Borrower’s business, taken as a whole, knowledge (i) each of Borrower’s patents is valid and enforceable, enforceable and no part of the Borrower’s Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and (ii) no claim has been made that any part of the Intellectual Property or any practice by Borrower violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that (i) prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (ii) for which a default under or termination of which could interfere with Collateral Agent’s right to sell any Collateral. Borrower shall provide written notice to Collateral Agent within ten (10) days of entering into or becoming bound by any license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such commercially reasonable steps as Collateral Agent requests to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for (i) all licenses or agreements to be deemed “Collateral” and for Collateral Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (ii) Collateral Agent to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s rights and remedies under this Agreement and the other Loan Documents. Without limiting the foregoing, Borrower shall, within one hundred eighty (180) days of the Effective Date, take such commercially reasonable steps to obtain the consent of, or waiver by, the licensors under the licenses identified on Annex I (attached to Exhibit A hereto) for such licenses to be deemed “Collateral” and for Collateral Agent to have a security interest therein. For greater certainty, failure of Borrower to obtain the consent or waiver described in the immediately preceding sentences, after taking such commercially reasonable steps, shall not constitute an Event of Default.

Collateral. Each Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. As of the Effective Date, each Borrower has no deposit accounts account other than (a) the deposit accounts with BankUnion Bank of California specified in the Union Bank Control Agreement, (b) the deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, herewith and (c) other deposit accounts located in the United States so long as the aggregate cash balances contained therein do not exceed $25,000 per account or of which Borrower has given Bank notice and taken $100,000 in the aggregate with respect to all such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtorsaccounts. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by Borrowers, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that any Borrower, after the date hereof, intends to store or otherwise deliver any material portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and then such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Each Borrower is the sole owner of the its Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of each Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificate, no Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which such Borrower is the licensee that prohibits or otherwise restricts such Borrower from granting a security interest in such Borrower’s interest in such license or agreement or any other property. Each Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on such Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Each Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. 6.1.1 Borrower has good title towill, has rights inon demand of CNB, make available to CNB, shipping and delivery receipts evidencing the shipment of the goods which gave rise to an Account; completion certificates or other proof of the satisfactory performance of services which gave rise to an Account; a copy of the invoice for each Account; and Borrower’s copy of any written contract or order from which an Account arose. Unless previously requested by Borrower in writing to return such documents, CNB will be authorized to destroy any such documentation six (6) months after its receipt by CNB; 6.1.2 Borrower will advise CNB within ten (10) days whenever an Account Debtor refuses to retain, or returns, any goods from the sale of which an Account arose, when the sale exceeds $50,000.00; 6.1.3 Upon the occurrence and during the continuance of an Event of Default, Borrower will give CNB, upon request, specific assignments of Accounts after they come into existence, and schedules of Accounts, the power form and content of such assignments and schedules to transfer each item be satisfactory to CNB; but, despite this provision for express assignments to CNB, CNB will have a continuing security interest in all Accounts irrespective of whether some Accounts are omitted from such assignments or whether any assignments are ever given; and Borrower will execute and deliver to CNB any instrument, document, financing statement, assignment or other writing which CNB may deem necessary or desirable to carry out on the terms of this Agreement, to perfect CNB’s security interest in the Accounts, and any other Collateral for the Obligations, or to enable CNB to enforce its security interest in any of the Collateral foregoing; 6.1.4 Borrower will maintain, in accord with sound accounting practices, accurate records and books of account showing, among other things, all Inventory and Accounts, the proceeds of the sale or other disposition thereof and the collections therefrom. Borrower will not change the accounting method used to determine Borrower’s Inventory cost without CNB’s prior written approval. Borrower will permit representative(s) of CNB, at any reasonable time, to inspect, audit, examine and make extracts or copies from all books, records and other data relating to the Collateral, to inspect any of Borrower’s properties and to confirm balances due on Accounts by direct inquiry to Account Debtors, and will give CNB, promptly upon which it purports to ▇request, all information regarding the business or finances of Borrower reasonably requested by CNB; 6.1.5 Borrower will, if requested by CNB, ▇▇▇▇ ▇ ▇▇▇▇ hereunder, free its records concerning its Inventory and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described Accounts in the Perfection Certificate delivered a manner satisfactory to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary CNB to give Bank a perfected show CNB’s security interest therein. The Accounts are bona fide; 6.1.6 Borrower will, existing obligations if requested by CNB, provide CNB with a current physical count of the Account Debtors. The Collateral is not its Inventory in the possession manner specified by CNB; 6.1.7 Borrower will, if requested by CNB, endorse to the order of and deliver to CNB any negotiable instrument accepted by Borrower in lieu of payment in accord with the original terms of sale; 6.1.8 Borrower will pay CNB, upon demand, the cost, including, but not limited to reasonable attorneys’ fees and expenses (which counsel may be CNB employees) expended or incurred by CNB (or allocable to CNB’s in-house counsel) during the continuance of an Event of Default in the collection or enforcement of any third party bailee Accounts or other Collateral if CNB itself undertakes such collection or enforcement, together with all taxes, charges and expenses of every kind or description paid or incurred by CNB under or with respect to loans hereunder or any Collateral therefor and Borrower authorizes CNB to charge the same to any deposit account of Borrower or Borrower’s Loan Account maintained with CNB; 6.1.9 Borrower will promptly notify CNB of any occurrence or discovery of any event which would cause or has caused a previously Eligible Account to become ineligible; 6.1.10 Borrower will maintain the tangible Collateral in good condition (such as a warehouseordinary wear and tear excepted) except as otherwise provided in the Perfection Certificate. None and promptly notify CNB of the components any event causing material loss or reduction of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion value of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be storedamount of such loss or reduction; and 6.1.11 Borrower will, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver upon request by CNB, but in no event less than once every six (6) months, supply CNB with a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner current list of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course names and addresses of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseall Account Debtors.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankAgent, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Agent and Lenders in connection herewith, or of which Borrower has given Bank Agent notice and taken such actions as are necessary to give Bank Lenders a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) ), except as otherwise provided for Inventory in the Perfection CertificateUnited States, held by Extron, ▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the “U.S. Fulfillment Center”), and Inventory outside the United States held by a foreign fulfillment center, which Borrower shall identify by written notice to Agent within 30 days after the date it is selected by Borrower (the “Non-U.S. Fulfillment Center”). None Within 60 days after the date hereof, Borrower shall cause the U.S. Fulfillment Center and the Non-U.S. Fulfillment Center to execute and deliver a Bailee Agreement in the form previously provided by ▇▇▇▇ to Borrower. Except as hereafter disclosed to Agent in writing by Borrower, and other than Collateral which by its very nature is intended to be used at places other than the Borrowers place of business (such as manufacturing test equipment, laptop computers, marketing materials, cell phones, and the like), none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Agent and such bailee must execute acknowledge in writing that the bailee is holding such Collateral for the benefit of Lenders, provided that such consent and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph acknowledgement shall not apply be required with respect to Demonstration Systems delivered to Borrower’s customers or prospective customers (i) Collateral having an aggregate value, for all locations in the ordinary course of businessUnited States, not exceeding the Threshold Amount, or (ii) Collateral having an aggregate value, for all locations outside the United States, not exceeding $500,000. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the its Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available and except for licenses granted to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificateby third parties. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would is not have reasonably expected to cause a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Change. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Agent within thirty (30) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Agent and Lenders to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Agent if Agent determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The To Borrower’s knowledge, the Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection CertificateCertificate or as otherwise permitted under this Agreement. None of the components of the Collateral with a value in excess of One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate a value in excess of One Hundred Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties 150,000.00) in the aggregate to a bailee agreement covering both other than those listed on the Collateral and the location where the Collateral will be storedPerfection Certificate, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which patent that is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which intellectual property that is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the- counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, herewith or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtorspursuant to documentation reasonably acceptable to Bank. The Collateral is not in the possession of any third party bailee (such as a warehouse) except other than OneSource Distributors (from whom the Bank is not requiring a written acknowledgment that it is holding Collateral for the benefit of Bank). Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. For the purposes hereof, xChange Point sites do not constitute a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessbailee. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the its Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Change. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within thirty days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in the same that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.” and inserting in lieu thereof the following:

Collateral. US Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by US Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that US Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then US Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Net Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the its Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, US Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the deposit accounts Collateral Accounts with Bank, Borrower’s Account Banks or the deposit other investment accounts, if any any, described in the Perfection Certificate delivered to Bank Collateral Agent in connection herewith, or herewith with respect of which Borrower has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fideOn the Effective Date, existing obligations of the Account Debtors. The Collateral (other than raw materials or unfinished products that may be in transit or located at third party manufacturing sites) is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided disclosed in the Perfection Certificate. None of the components of the Collateral (other than raw materials or unfinished products that may be in transit or located at third party manufacturing sites) shall be maintained at locations other than as provided disclosed in the Perfection Certificate on the Effective Date or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereofEffective Date, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will (other than raw materials or unfinished products that may be storedin transit or located at third party manufacturing sites), then Borrower will first receive the written consent of Bank Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Collateral Agent in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable (although not necessarily approved for sale to the public as regulated by the FDA) quality, free from material defects. Borrower is the sole owner of the its Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers permitted by the terms of Section 7.1 hereof and those licenses described in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, Perfection Certificate. Schedule 5.2 sets forth all patents and (c) material Intellectual Property patent applications owned or exclusively licensed to Borrower and noted on indicates which of such patents and patent applications are owned by Borrower and which are licensed by Borrower from third parties (the Perfection Certificate“Licensed IP”). The Licensed IP is not necessary for the conduct of Borrower’s Ataluren (PTC124), PTC299 and GEMS research and development programs nor the manufacture, sale and marketing of products, if any, which may be developed from such programs. Each issued Patent which it owns or purports owned by Borrower is, to own and which is material to the best of Borrower’s businessknowledge, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is a licensee that (a) prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Collateral Agent’s right to sell any Collateral. Borrower shall provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). In respect of such licenses or agreements, Borrower shall take such steps as Collateral Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Collateral Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Collateral Agent to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s rights and remedies under this Agreement and the other Loan Documents. Notwithstanding the foregoing, the terms of the preceding sentence shall not apply to exclusive and non-exclusive license agreements solely for the use of the intellectual property of a third party in which Borrower is licensee.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.”

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third third-party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third third-party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankSVB, the Clearing Account, the Trust Account, the Borrower Account, the Investor Account, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Administrative Agent in connection herewith, or of which Borrower has given Bank Lenders notice and taken such actions as are necessary to give Bank Administrative Agent and Lenders a perfected security interest therein. The Accounts Eligible Loans are bona fide, existing obligations of the Account Loan Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Lenders notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lenders and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Lenders in its their sole discretion. The provisions Upon any Transfer permitted under Section 7.1(e) hereof prior to an Event of this paragraph Default, Administrative Agent’s and Lenders’ Lien in such assets shall not apply to Demonstration Systems delivered to be released without any further act of Administrative Agent, Lenders or Borrower. Administrative Agent shall take all actions reasonably requested by Borrower, at Borrower’s customers or prospective customers in expense, to evidence such release. Administrative Agent, Lenders and Borrower hereby acknowledge and agree that, notwithstanding anything set forth to the ordinary course of business. All Inventory is in all material respects of good and marketable qualitycontrary herein, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted the Collateral shall include all amounts deposited into the Clearing Account, to its customers in the ordinary course extent that such amounts are proceeds of businessFinanced Loans, and (b) over-the-counter software that is commercially available the first priority security interest granted by Borrower to Administrative Agent and Lenders pursuant to the publicLoan Agreement shall at all times remain in full force and effect with respect to all proceeds of, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s businessany other amounts received in connection with, taken as a whole, is valid and enforceable, and no part all Financed Loans regardless of the Intellectual Property which Borrower owns or purports to own locations of such proceeds and which is material to Borrower’s businessamounts, taken as a wholeincluding, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound bywithout limitation, any Restricted Licensesuch proceeds and amounts deposited into the Clearing Account.

Collateral. Borrower has and each Guarantor have good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderits Collateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of obligations, and the Account Debtorsservice or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. The Collateral is maintained at the locations set forth in the Perfection Certificate. The Collateral is not in the possession of any third party bailee (such as at a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that BorrowerBorrower or any Guarantor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, then Borrower and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first Guarantor shall receive the prior written consent of Bank (such consent not to be unreasonably withheld), and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is and Guarantors are the sole owner of the its respective Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to To Borrower’s businessknowledge, taken as a whole, each Patent is valid and enforceable, and no material part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent for any such claim that would not have be expected to result in a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Change. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower hereby grants to Holder a security interest in all inventory, machinery, equipment, stocks, bonds, notes, accounts receivable, any rights or claims that they may have against any other person, firm, or corporation for monies, choses in action, any bank accounts, checking accounts, certificates of deposit or any financial instrument, patents and intellectual property rights or any other assets owned by Borrower as of the date of this agreement, or hereafter acquired. Borrower hereby represents that none of the collateral encumbered hereunder has good title tobeen sold or assigned since the original promissory note of Borrower to Holder of January 26, has 1999 and that the lien of the holder of this note is uninterrupted from January 26, 1999 and shall continue until this note is paid or otherwise disposed of in accordance with its terms and conditions. All collateral rights inin intellectual property is subordinated to the Borrower's current licenses and future licenses provided, that with respect to future licenses, the consent of the Holder must be obtained, but such consent will not be unreasonably withheld. The patents and intellectual property which are licensed under the cross license agreement dated September 27, 1997, among NXT plc, New Transducers Limited, being related companies, the Borrower and NCT Audio Products, Inc. (or any successor agreements) are specifically excluded from the collateral. There are approximately 20 pieces of intellectual property in which, under the cross license agreement, Borrower may not, and hence does not herein, grant a security interest. In addition, all agreements between NCT Audio Products, Inc. and the Borrower that relate to such agreement, and the power stock of NCT Audio Products, Inc. owned by the Borrower, shall similarly be excluded from the security interest granted in this Note. If Borrower does not pay the debt or other obligations under this Note when due, the collateral may be sold in order to transfer each item pay such debt and obligations, or same may be transferred to the name of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderHolder, free and clear of any and as Holder in her discretion decides. Holder may inspect the collateral at all Liens except Permitted Liensreasonable times. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described further agrees that it will do anything reasonably requested by Holder in order to make Holder's security interest in the Perfection Certificate delivered to Bank in connection herewith, or collateral legally effective including the execution of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseUCC-1.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate, unless Borrower has given Bank written notice of such other locations. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Except as described in its Perfection Certificate, Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Other than laptop computers and other mobile Equipment in the possession of employees, consultants or agents of Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of One Hundred Thousand Dollars ($50,000 100,000.00) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement (other than over-the-counter software that is commercially available to the public) or any other property, or (b) for which a default under or termination of which could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein, to the extent required by Section 6.6(b). The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Other than mobile equipment in the possession of Borrower’s employees or agents, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Five Hundred Thousand Dollars ($50,000 500,000.00) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and use its commercially reasonable efforts to cause such bailee must to execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall forgoing is not apply intended to Demonstration Systems delivered to limit Borrower’s customers obligations set forth in Section 6.13 hereof. With respect to such locations or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner warehouse space leased or owned as of the Intellectual Property which it owns Effective Date and thereafter, if Bank has not received a landlord’s agreement or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken bailee letter as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns Effective Date (or, if later, as of the date such location is acquired or purports to own and which is material to Borrower’s businessleased), taken as a whole, has been judged invalid or unenforceablethen the Eligible Fixed Assets at that location shall, in whole Bank’s Permitted Discretion, be excluded from the Borrowing Base or be subject to such Reserves as may be established by Bank in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeits Permitted Discretion. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The To Borrower’s knowledge (provided, however, such knowledge qualifier shall not apply to Eligible Accounts which are Financed Receivables), the Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection CertificateCertificate or as otherwise permitted under this Agreement. None of the components of the Collateral with a value in excess of One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate a value in excess of One Hundred Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties 150,000.00) in the aggregate to a bailee agreement covering both other than those listed on the Collateral and the location where the Collateral will be storedPerfection Certificate, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which patent that is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which intellectual property that is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except (x) as otherwise provided in the Perfection CertificateCertificate and (y) Equipment or Inventory in the possession of third party carriers in the ordinary course of business for delivery to Borrower or to customers of Borrower and its Subsidiaries. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future. Notwithstanding the foregoing, the terms of the preceding sentence shall not apply to, and the Collateral shall not include, license agreements solely for the use of Intellectual Property of a third party, with respect to which license Borrower is the licensee.

Collateral. Borrower has good (i) Upon delivery to the Collateral Agent of the certificates or instruments representing or evidencing the Collateral in accordance with the Collateral Agreements and, in the case of Collateral not constituting certificated securities or instruments, the filing of Uniform Commercial Code financing statements in the appropriate filing office, the Collateral Agent will obtain a valid and perfected security interest in such Collateral, subject only to Permitted Liens, to the extent that a security interest in such Collateral may be perfected by such filings. (ii) Upon filing by the Collateral Agent of (A) financing statements, (B) any filings required with the United States Patent and Trademark Office and (C) any filings required with the United States Copyright Office, the Collateral Agent will obtain valid and perfected security interests in the Collateral, subject only to Permitted Liens, to the extent that a security interest in such Collateral may be perfected by such filings. (iii) The Mortgages will be effective to grant a legal and valid mortgage lien on all of the mortgagor’s right, title and interest in each of the properties mortgaged thereunder. When the Mortgages are duly recorded in the proper recorders’ offices or appropriate public records and the mortgage recording fees and taxes in respect thereof are paid and compliance is otherwise had with the formal requirements of state or local law applicable to the recording of real estate mortgages generally, the Collateral Agent will obtain a valid, perfected and enforceable security interest in the related property, subject only to the encumbrances and exceptions to title expressly set forth in the commitments for mortgage title insurance and except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance, fraudulent transfer, or other similar laws relating to, has or affecting generally, the enforcement of creditors’ rights in, and remedies. (iv) All information certified by the power to transfer each item Chief Financial Officer of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described Company in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions dated as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (Closing Date and delivered by such as a warehouse) except as otherwise provided in the Perfection Certificate. None officer on behalf of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral Company will be stored, then Borrower will first receive the written consent of Bank true and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is correct in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner as of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseClosing Date.

Collateral. (a) Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. . (b) The Collateral is not in the possession of any third party bailee (such as a warehouse), except for (i) except as otherwise provided Inventory in the Perfection Certificatepossession of third-party processors or subcontractors in the ordinary course of business, (ii) Inventory at customer locations in the ordinary course of business, and (iii) Inventory stored with other third parties in the ordinary course of business, in an aggregate amount not to exceed $500,000 at any time. None Except as hereafter disclosed to Bank in writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate Certificate, or as permitted pursuant to Section 7.2set forth above. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored(other than as set forth above), then Borrower will first receive the written consent of Bank and such bailee must execute and acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. (c) With respect to any leased premises of Borrower, Borrower shall, promptly upon Bank’s request therefor, use commercially reasonable efforts to deliver to Bank a bailee landlord agreement (in form and substance satisfactory to Bank) duly executed by the lessor of such leased premises. In the event that Bank requests such a landlord agreement and Borrower uses such efforts but does not succeed in delivering such a landlord agreement, Bank may (in its sole discretion. The provisions of this paragraph shall not apply good faith business judgment) maintain a Reserve with respect to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. such leased premises. (d) All Inventory is in all material respects of good and marketable quality, free from material defects. . (e) Borrower is the sole owner of the its Intellectual Property, except for licenses otherwise allowed under Section 7.1 and for such Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that as is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificateby Borrower. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent owned by Borrower is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of , and to Borrower’s knowledge, no claim has been made in writing that any part of the Intellectual Property violates violates, in any material respect, the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. party. (f) Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (i) that prohibits or otherwise restricts, in a manner enforceable under applicable law, Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (ii) for which a default under or termination of could interfere with Bank’s right to sell any Collateral. (g) The second proviso set forth in Exhibit A states that, if and to the extent that a perfected security interest in the underlying Excluded IP is required under applicable law (including without limitation pursuant to applicable judicial authority) to have a perfected security interest in the Included Proceeds of Excluded IP, then in such circumstance the Collateral shall include the underlying Excluded IP only to the extent necessary under applicable law to permit perfection of Bank’s security interest in such Included Proceeds of Excluded IP.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, herewith or of which Borrower has given Bank notice (any such notice shall be deemed to automatically update the disclosure regarding deposit accounts in the Perfection Certificate) and taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to documentation reasonably acceptable to Bank. The Accounts are bona fide, existing obligations of the Account Debtors. The Except for any Inventory with third party contract manufacturers or customers outside of the United States, the Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate or as permitted pursuant to Section 7.2 (such notice shall be deemed to automatically update such disclosure in the Perfection Certificate). None of the components of the Collateral shall be maintained at locations other than (i) as provided in the Perfection Certificate or Certificate, (ii) as permitted pursuant to Section 7.27.2 (any such notice shall be deemed to automatically update such disclosure in the Perfection Certificate) or (iii) and with respect to Inventory, with third party contract manufacturers or customers outside of the United States or in transit. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral (other than Inventory with an aggregate value in excess third party contract manufacturers or customers outside of $50,000 the United States) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten ( 10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such reasonable steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankSenior Lender, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Agent in connection herewith, or of which Borrower has given Bank Agent notice and taken such actions as are necessary to give Bank Agent a perfected security interest thereintherein (subject to the Required Foreign Filings). The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of One Hundred Thirty Thousand Dollars ($50,000 130,000) in the aggregate to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Agent in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s businessbusiness is to the knowledge of Borrower, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Effect. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. (a) Borrower has and Guarantor have good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderor any other security interest under the Loan Documents, free and clear of any and all Liens except Permitted Liens. , and, except for (i) the securities account in which the Pledged ARS are held and (ii) the Trust and Escrow Accounts, neither Borrower nor Guarantor has no deposit any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the deposit accounts with Bank, Collateral Accounts or the deposit other investment accounts, if any any, described in the Perfection Certificate Certificates delivered to Bank Collateral Agent in connection herewith, or herewith with respect of which Borrower or Guarantor has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The . (b) On the Effective Date, the Collateral is not in the possession of any third party bailee (such as a warehouse) ), except as otherwise provided disclosed in the Perfection CertificateCertificates. None of the components of the Collateral shall be maintained at locations other than as provided disclosed in the Perfection Certificate Certificates on the Effective Date or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereofEffective Date, intends to store or otherwise deliver to a bailee any portion of the Collateral with an aggregate having a value in excess of Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored50,000) or greater, then Borrower or Guarantor, as applicable, will first receive the written consent of Bank Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. Collateral Agent. (c) All Inventory is in all material respects of good and marketable quality, free from material defects. . (d) Borrower is and Guarantor are the sole owner owners of the Intellectual Property which it owns or each respectively purports to own own, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each of Borrower’s and Guarantor’s Patents is valid and enforceable and no part of Borrower’s or Guarantor’s Intellectual Property has been judged invalid or unenforceable, in whole or in part, and to the best of Borrower’s and Guarantor’s knowledge, no claim has been made that the Intellectual Property or any practice by Borrower or Guarantor violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on Borrower’s or Guarantor’s business. Except as noted on the Perfection Certificates, neither Borrower nor Guarantor is a party to, nor is bound by, any material license or other agreement with respect to which Borrower or Guarantor is the licensee that (bi) prohibits or otherwise restricts Borrower or Guarantor from granting a security interest in Borrower’s or Guarantor’s interest in such license or agreement or any other property, or (ii) for which a default under or termination of could interfere with Collateral Agent’s right to sell any Collateral. Borrower and Guarantor shall provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower and Guarantor shall take such steps as Collateral Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) all such licenses or agreements to be deemed “Collateral” and for Collateral Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (cii) material Intellectual Property licensed to Borrower and noted on Collateral Agent shall have the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as ability in the event of a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights liquidation of any third party except Collateral to dispose of such Collateral in accordance with Collateral Agent’s rights and remedies under this Agreement and the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseother Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph ; provided, however, that notwithstanding the foregoing, Borrower shall not apply be required to Demonstration Systems obtain the consent of Bank and shall not be required to obtain a bailee agreement with respect to (i) any demonstration equipment that is delivered to any of Borrower’s customers or prospective customers in the ordinary course of businessbusiness provided that the value of such equipment does not exceed Three Million Five Hundred Dollars ($3,500,000) in the aggregate and (ii) any raw materials and inventory located at various vendor and contract manufacturer sites pursuant to supply and/or manufacturing agreements. All Inventory is Except as otherwise disclosed to Bank in all material respects of good and marketable qualitywriting, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (ai) intellectual property licensed from third parties, (ii) non-exclusive licenses granted to its distributors and customers in the ordinary course of businessbusiness and licenses that may be exclusive in some respects other than territory (and/or that may be exclusive as to territory only in discreet geographical areas outside of the United States), (b) over-the-counter software but that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to could not result in a legal transfer of Borrower’s businesstitle in the licensed property. To the best of Borrower’s knowledge, taken as a whole, each patent is valid and enforceable, and except for patents in re-examination proceedings in the U.S. Patent and Trademark Office, no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other material agreement with respect to which Borrower is the licensee of intellectual property that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and or the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. As of the Effective Date, Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection CertificateCertificate or with respect to any location for which the Borrower has complied with the provisions of Section 7.2. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, as of the Effective Date, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account, other than the deposit accounts with Bank, the Lenders and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank Agent in connection herewith, herewith or of which Borrower has given Bank Agent written notice and taken such actions as are necessary to give Bank Agent a perfected security interest thereinfor the benefit of Lenders. The To the extent claimed as Eligible Accounts in any Borrowing Base Certificate, the Accounts are bona fide, existing obligations obligations, and the service or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has no knowledge of the any actual or imminent Insolvency Proceeding of any Account DebtorsDebtor whose accounts are an Eligible Account in any Borrowing Base Certificate. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to the Lenders in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2(except Collateral may be maintained at customer locations in the ordinary course of business). Borrower may maintain Inventory and Equipment with third parties provided that (i) the value of such Inventory and Equipment does not exceed $500,000 in aggregate at any time (not including Inventory and Equipment at customer locations in the ordinary course of business), and (ii) Borrower provides Agent, within thirty (30) days of the end of each quarter, a written summary of the location of such Inventory and Equipment (not including Inventory and Equipment at customer locations in the ordinary course of business). In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lenders and such bailee must execute acknowledge in writing that the bailee is holding such Collateral for the benefit of Agent and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defectsLenders. Borrower is the sole owner of the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to To Borrower’s businessknowledge, taken as a whole, each Patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensebusiness or operations.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply All Financed Equipment is new, except for such Financed Equipment that has been disclosed in writing to Demonstration Systems delivered Bank by Borrower as “used” and that Bank, in its sole discretion, has agreed to Borrower’s customers or prospective customers in the ordinary course of businessfinance. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) ), except that which is in transit. Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers or entered into with licensors in the ordinary course of business, (b) overand except for intellectual property that Borrower has licensed from others on a non-theexclusive basis, or except where there is a co-counter software inventor that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificateshares Borrower’s patent rights. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseparty.

Collateral. Borrower has good title to, has rights inThe repayment of the Loan and all extensions and renewals thereof, and the power performance of all obligations of Borrower hereunder, including the obligations under the Promissory Note, shall be secured by the following: a) A first lien on the asphalt terminal, blending and emulsion facility including all buildings, storage tanks and improvements referred to transfer each item above, to be more fully described in a security agreement (the "SECURITY AGREEMENT") from Borrower to Lender perfected by a U.C.C.- 1 Financing Statement and Fixture Filing to be filed with the public officials deemed necessary by Lender. Although Borrower will be leasing the land on which said collateral will be located, the lease shall provide that such collateral does not become the property of the Collateral landlord when it is placed on the land, and it may be removed therefrom by Borrower, or by Lender upon which it purports a loan default. b) A lien, evidenced by a blanket security agreement (also know as the "SECURITY AGREEMENT") on all furniture, supplies, inventory, equipment, machinery, fixtures, accounts, accounts receivable, contract rights, instruments, documents, chattel paper, chases in action, intellectual property and general intangibles presently or hereafter owned by Borrower, and perfected by a blanket U.C.C.- 1 Financing Statement to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and be filed with the public officials deemed necessary by Lender. The lien shall be a first lien with respect to all Liens except Permitted Liens. Borrower has no deposit accounts such property other than the deposit accounts with Bankreceivable and the inventory. With respect to the accounts receivable and the inventory, the deposit accountslien shall be second only to a revolving line of credit in the sum not to exceed $3,000,000 (the "Line Limit"). The Borrower shall give the Lender written notice each quarter identifying the lender on the line of credit and stating the average balance of the line of credit over that quarter. If the lender on the line of credit changes, if any the Borrower shall give the prior written notice of such change. The level of borrowing against the accounts receivable and the inventory shall not be greater than the Line Limit without the prior written consent of the Lender, which consent will not be unreasonably withheld. c) An assignment (the "LEASE ASSIGNMENT") of all of Borrower's right, title and interest in and to the lease between the Union Pacific Railroad Company (or related entity) as Lessor, and the Borrower, as Lessee, (hereafter the "U.P. LEASE") covering the land (the "REAL PROPERTY") where the Borrower's emulsion plant is located, as more fully described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest thereinAssignment. The Accounts Security Agreements and Lease Assignment shall collectively be known as the "COLLATERAL DOCUMENTS." The property secured by or otherwise subject to the Collateral Documents shall be collectively known as the "COLLATERAL". All loans from the lender to the Borrower, now or hereafter shall be, and hereby are bona fideagreed to be, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components cross-collateralized, whereby all of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion secure all of the Collateral with an aggregate value in excess of $50,000 Borrower's obligations to a baileeLender under each and all loans, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be storedall future advanced thereunder, then Borrower will first receive the written consent as well as any renewals, modifications or substitutions of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered all loans made by Lender to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value Collateral, in excess of $50,000 100,000 in the aggregate, to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Except as disclosed by Borrower to Bank in the Perfection Certificate, (bi) each patent owned by Borrower is valid and enforceable, (ii) no part of Borrower’s intellectual property has been judged invalid or unenforceable, in whole or in part, and (iii) to the best of Borrower’s knowledge, no written claim has been made that any part of its intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on Borrower’s business. Except: (i) as noted on the Perfection Certificate, and (ii) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns public or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificatepublicly available software, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses (other than over-the-counter software that is commercially available to the public or publicly available software) to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its reasonable judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item To secure payment of the Collateral upon which Primary Credit Facility and performance of all other Loan, obligations and duties owed by Borrower to Lender, Borrower (end others, it purports required) shall grant to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free Lender Security interests in such property and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described assets as Lender may require Lender's Security Interests in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations continuing hens and shall include the proceeds and products of the Collateral, including without limitation the proceeds of any insurance With respect to the Collateral, Borrower agrees and represents and warrants to Lender: Perfection of Security interests, Borrower agrees to execute financing statements and all documents perfecting Lender's Security Interest and to take whatever other than as provided actions era requested by Lender to perfect and continue Lender's Security Interests in the Perfection Certificate Collateral. Upon request of Lender, Borrower will deliver to Lender any and oil of the documents evidencing or constituting the Collateral, and Borrower will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender Contemporaneous with the execution of this Agreement, Borrower will execute one or more UCC financing statements and any similar statements as permitted pursuant may be required by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to Section 7.2. In the event that perfect or to continue any Security Interest Lender may at any time, and without further authorization from Borrower, after file a carbon, photograph, facsimile, or other reproduction of any financing statement for use as a financing statement Borrower will reimburse Lender for all expenses for the date hereofperfection, intends to store or otherwise deliver any portion termination, and the continuation of the perfection of Lender's security interest in the Collateral. Borrower promptly will notify Lender before any change in Borrower's name including any change to the assumed business names of Borrower. Borrower also promptly will notify Lender before any change in Borrower's Social Security Number or Employer Identification Number. Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower's principal governance office or should Borrower merge or consolidate with any other entity Collateral with an aggregate value in excess of $50,000 to a baileeRecords. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records shall be available to Lender or Lender's representative upon demand for inspection and copying at any reasonable time. With respect to the Accounts, Borrower agrees to keep and maintain such bailee records as Lender may require, including without limitation information concerning Eligible Accounts and Bank Account balances and agings Records related to Accounts (Receivables) are not already parties or will be located at Borrower's headquarters. With respect to a bailee agreement covering both the Collateral inventory, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning Eligible inventory and records itemizing and describing the kind, type, quality, and quantity of Inventory, Borrower's Inventory costs and selling prices, and the location where the Collateral daily withdrawals and additions to Inventory Records related to Inventory are or will be storedlocated at Borrower's headquarters The above is an accurate and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower's collateral Collateral Schedules. Concurrently with the execution and delivery of this Agreement, then Borrower will first receive the written consent of Bank and such bailee must shall execute and deliver a bailee agreement to Lender schedules of Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to Bank in its sole discretionthe Lender. The provisions of this paragraph Thereafter supplemental schedules shall not apply to Demonstration Systems be delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available according to the publicfollowing schedule With respect to Eligible Accounts, and (c) material Intellectual Property licensed schedules shall be delivered with the Borrowing Base certificate With respect to Borrower and noted on Eligible Inventory, schedules shall be delivered with the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.Borrowing Base certificate

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph Without prior consent from Bank, Borrower shall not apply to Demonstration Systems delivered to Borrower’s customers enter into, or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it become bound by, any Restricted Licensesuch license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and or the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Except as permitted under Section 6.8, Borrower has no deposit accounts domestic Deposit Accounts other than the deposit accounts Deposit Accounts with Bank, Bank or the deposit accountsDeposit Accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and and, to the extent required herein, taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of One Million Dollars ($50,000 1,000,000) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, 's business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, 's business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property included in the Collateral violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s 's business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower (a) Each Issuer has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderhereunder and under the other Note Documents, free and clear of any and all Liens except Permitted Liens. Borrower has The Issuers have no deposit accounts Deposit Accounts, Securities Accounts or Commodities Accounts other than the deposit accounts with BankDeposit Accounts, the deposit accounts, if any Securities Accounts and Commodities Accounts described in the Perfection Certificate Certificates delivered to Bank Note Agent in connection herewith. From and after the date that is 30 days after the date of this Agreement (or such later date as extended by Note Agent in its sole discretion pursuant to Section 6.15(b)), or of which Borrower has given Bank notice and the Issuers will have taken such actions as are necessary to give Bank grant Note Agent for the benefit of itself and the Purchasers a perfected security interest thereinin all Deposit Accounts, Securities Accounts or Commodities Accounts, except for Excluded Accounts. The Accounts are bona fide, existing obligations of the Account Debtors. The Indebtedness related to that certain UCC-1 financing statement filed with the Delaware Department of State on January 10, 2007 with the initial filing number of 2007 0136019 by General Electric Capital Corporation against Comverge has been paid in full, no letters of credit issued in connection therewith remain outstanding and all commitments to extend credit related to such Indebtedness have been permanently terminated. (b) The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection CertificateCertificates. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate Certificates or as permitted pursuant to Section 7.2. In the event that Borrowerany Issuer, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Five Hundred Thousand Dollars ($50,000 500,000) to a bailee, and then such bailee and Bank are not already parties to Issuer will obtain a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and executed by such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply Note Agent and deliver the same to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower Note Agent. (c) Each Note Party is the sole owner of the Intellectual Property which it owns or purports all intellectual property that is material to own its business, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each patent owned by any Note Party is valid and enforceable, and no part of the intellectual property owned by each Note Party has been judged invalid or unenforceable, in whole or in part, and to the best of the Issuers’ knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to the extent such invalidity, unenforceability or claim could not reasonably be expected to cause a Material Adverse Change. Except as noted on the applicable Perfection Certificate, each Issuer is not a party to, nor is bound by, any material license or other agreement with respect to which any Issuer is the licensee (bi) that prohibits or otherwise restricts any Issuer from granting a security interest in such Issuer’s interest in such license or agreement or any other property, or (ii) for which a default under or termination of could interfere with the Note Agent’s right to sell any Collateral. The Issuers shall provide written notice to Note Agent within thirty (30) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). The Issuers shall take such steps as Note Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (y) all such licenses or agreements to be deemed “Collateral” and for Note Agent (for the benefit of itself and the Purchasers) to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (cz) material Intellectual Property licensed Note Agent to Borrower and noted on have the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as ability in the event of a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights liquidation of any third party except Collateral to dispose of such Collateral in accordance with Note Agent’s and the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on Purchasers’ rights and remedies under this Agreement and the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseother Note Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer ▇▇▇▇▇ ▇ ▇▇▇▇ to Lender in each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderunder the Loan Documents to which it is a party, free and clear of any and all Liens except Permitted Liens. Borrower has no does not have any deposit accounts other than the deposit accounts with Silicon Valley Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Lender in connection herewith, or of which Borrower has given Bank Lender notice and taken such actions as are necessary to give Bank Lender a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate; and the book value of any such Collateral does not exceed $250,000. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with (having an aggregate book value in excess of $50,000 250,000) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lender and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Lender in its sole discretion. The provisions None of this paragraph shall the Collateral (other than office equipment and furniture having an aggregate book value not apply to Demonstration Systems delivered to in excess of $10,000) is now, or will at any time during the term hereof, be located at or in Borrower’s customers or prospective customers leased premises in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defectsNew Jersey. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) (i) non-exclusive licenses of Intellectual Property granted to its customers third parties in the ordinary course of business, and (ii) licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas outside of the United States, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and and, to the extent constituting material Intellectual Property, as noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to13.3.1. Filene’s agrees that upon receipt of written notice from Supplier’s Lender referring to this Section 13, has rights inFilene’s will hold Supplier’s Proceeds from the Collateral for the account of Supplier’s Lender and subject to Supplier’s Lender’s instructions and shall release such proceeds only to Supplier’s Lender or as otherwise directed by a court. Any such payments shall be made free of any set-off, reduction, or counterclaim, (including, without limitation, any set-off, reduction or counterclaim based upon any alleged breach by Supplier of this Agreement). Supplier agrees to indemnify and hold harmless Filene’s for complying with any notice purporting to be the written notice of Supplier’s Lender. 13.3.2. Upon receipt of Lender’s Default Notice (as defined below), Filene’s agrees to provide Supplier’s Lender with all reasonably requested reporting regarding the Collateral that it would otherwise provide to Supplier. 13.3.3. Filene’s agrees that, in addition to its obligations under this Section 13, upon receipt of written notice from Supplier’s Lender (“Lender’s Default Notice”) referring to this Section 13.3 that represents to Filene’s that there is the occurrence and continuance of a default under the financing arrangements between Supplier and Supplier’s Lender and stating the intent of Supplier’s Lender to exercise its remedies as a result of the occurrence of such default, such Lender’s Default Notice shall constitute a termination of the Supply Right and Filene’s shall hold the Supplier’s Proceeds for the account of Supplier’s Lender and subject to the instructions of Supplier’s Lender. In that regard, Supplier’s Lender may elect to immediately remove the Collateral or it may sell the then existing inventory of Collateral Merchandise subject to Section 7.5 for a period of up to ninety (90) days after Filene’s receipt of Lender’s Default Notice (but in no event later than the then current termination date of this Agreement) and in connection with such sale, Filene’s shall comply with its obligations under this Agreement to the same extent as if Supplier’s Lender were the Supplier. At the end of such sale, and subject to the power provisions of Section 5 hereof, the Supplier’s Lender may repossess and remove any remaining Collateral from the Filene’s locations, as Supplier’s Lender in its discretion may elect; provided, however, that Supplier’s Lender agrees to transfer each item the removal of such Collateral only in accordance with such reasonable limitations on the time and manner of such removal as Filene’s shall require which limitations are intended to avoid disruption of Filene’s normal operations or any possible confusion in the mind of the public as to whether any of Filene’s assets are being removed. In connection with any sale of the Collateral upon Merchandise from Filene’s premises, all advertising with respect to such sale shall be subject to the prior approval of Filene’s (which it purports approval shall not be unreasonably withheld and given promptly so as not to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderunreasonably delay the exercise of Supplier’s Lender’s rights). Filene’s shall not be deemed to have failed to have acted in good faith or unreasonably withheld approval by refusing to approve any advertising which refers to any “going out of business sale”, free “liquidation” or similar terms or which could create any possible confusion in the mind of the public as to whether any of Filene’s assets are being liquidated. Upon any removal of the Collateral in accordance with this Agreement, Supplier’s Lender shall not be liable for any diminution in the value of Filene’s business which is caused by the termination of the Supply Right or the removal or absence of the Collateral; provided however, Supplier’s Lender does hereby agree to indemnify and clear hold harmless Filene’s from (i) all damages and costs of defense (including reasonable attorneys’’ fees) arising from the claims of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts third parties, including, without limitation, Supplier, against Filene’s for complying with Bankany directions of Supplier’s Lender, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not Filene’s is finally determined by a court of competent jurisdiction to have committed willful misconduct or to have acted in a material adverse effect on Borrowergrossly negligent manner or in actual bad faith; and (ii) any costs, damages or expenses to Filene’s business, taken tangible property or third party claims for personal injury arising as a wholeresult of Supplier’s Lender exercising its rights hereunder. 13.3.4. Except as noted on the Perfection Certificate, Borrower is not a party toNothing contained herein shall obligate Supplier’s Lender to undertake any such action, nor is it bound byshall anything contained herein constitute the Supplier’s Lender’s assumption of any obligations of the Supplier under this Agreement. However, to the extent and during the period of Supplier’s Lender’s exercise of control over the Collateral while in Filene’s stores, Supplier’s Lender agrees to abide by the terms hereof as they relate to the Collateral and Filene’s right to its 20% split of the Net Sales. 13.3.5. Filene’s will provide to the Supplier’s Lender, as and when forwarded or furnished to the Supplier, a copy of any Restricted Licenseformal notice of any breach by Supplier (with the same degree of particularity as Filene’s provides Supplier) of this Agreement given by Filene’s to the Supplier and any notice of termination of this Agreement. Filene’s acknowledges that Supplier’s Lender shall have the right but not the obligation to cure any such breach within the time frames and/or conditions set forth in this Agreement which are otherwise applicable to Supplier.

Collateral. Borrower has good title to(a) Except as set forth on Schedule 3.16(a), has rights inno financing statement, and the power to transfer each item mortgage, notice of judgment or any other similar instrument covering all or any part of the Collateral upon which it purports and naming the Company or any Company Subsidiary or any predecessor in title with respect to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderthe Collateral as debtor is on file in any applicable public office except those that may have been filed by the Company and the Company Subsidiaries in favor of Purchasers pursuant to this Agreement or those that relate to Permitted Liens. (b) The Company and the Company Subsidiaries are the sole and lawful owners of all Collateral, free and clear of any and all Liens, except for the Liens except granted or allowed under this Agreement and Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described . (c) Upon appropriate financing statements having been filed in the Perfection Certificate delivered jurisdictions listed on Schedule 3.16(c) attached hereto, this Agreement is and will be effective to Bank in connection herewith, or of which Borrower has given Bank notice create a valid and taken such actions as are necessary to give Bank a perfected first priority Lien on and first priority perfected security interest thereinin (subject to any Permitted Liens) the Collateral as to which filing is a permitted method of perfection, securing the payment to Purchasers and performance of the Subordinated Obligations. Assuming the filing of appropriate financing statements in the jurisdictions listed on Schedule 3.16(c) attached hereto, all filings and other actions necessary to perfect and protect Purchasers' security interests have been duly taken, and those security interests are enforceable against creditors and purchasers from the Company and the Company Subsidiaries. The Company agrees to cooperate fully with Purchasers and to take all actions reasonably necessary to assist Purchasers in the filing and perfection of the security interests created pursuant to this Agreement. (d) The Company and each Company Subsidiary's principal place of business, chief executive office and the place where its records concerning the Collateral are kept is located at its address as set forth on Schedule 3.16(d) attached hereto. (e) The Accounts are bona fide, fide existing obligations created by the rendition of the services to Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers Debtors in the ordinary course of the applicable Borrower's business. All Inventory is in all material respects , unconditionally owed to the Company or the Company Subsidiary, as applicable, without defenses, disputes, offsets, counterclaims or rights of good and marketable quality, free from material defects. Borrower is return or cancellation that are not generally granted within the sole owner industry of the Intellectual Property which it owns Company or purports to own except for (a) non-exclusive licenses granted to its customers in such Company Subsidiary. Neither the ordinary course Company nor any Company Subsidiary has received notice of businessactual or imminent bankruptcy, (b) over-the-counter software that is commercially available to the public, and (c) insolvency or material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part impairment of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights financial condition of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, Account Debtor regarding any Restricted LicenseAccount.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection CertificateCertificate or as permitted pursuant to Section 7.2. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value to a bailee valued in excess of Two Hundred Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored250,000), then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the publicpublic and other immaterial Intellectual Property licensed to Borrower, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made in writing that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as previously disclosed to Bank or noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account, other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to the Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of obligations, and the Account Debtorsservice or property has been performed or delivered to the account debtor or its agent for immediate shipment to the account debtor. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to the Bank in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Bank, not to be unreasonably withheld, and such bailee must execute and deliver a acknowledge in writing that the bailee agreement is also holding such Collateral for the benefit of Bank (in form and substance satisfactory addition to Bank the Borrower). Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defectsany Borrowing Base Certificate. Borrower is the sole owner of or has all necessary rights and interests to the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses (or exclusive licenses for a particular field of use or geographic area) granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and beginning not later than the 91st day after the Effective Date (in accordance with the provisions set forth in Section 6.8(a) hereof), Borrower has taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The As of the Closing Date, the Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Certificate and as set forth in the following sentence, provided that in connection with any such third party bailee locations Borrower shall, within 90 days of the components date hereof, use all commercially reasonable efforts to obtain third party bailee letter agreements from the owners/operators of such locations, which shall be in form and substance acceptable to Bank. Other than inventory located, in the ordinary course of business, at locations for the purpose of testing thereof, none of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or and as otherwise permitted pursuant to this Agreement, including, without limitation, Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered Inventory that has been shipped, but as to Borrower’s customers or prospective customers which title has not yet passed to the buyer thereof, but which is intended, in the ordinary course of business, to result in having title to such Inventory pass to such buyer. All Inventory is in all material respects of good and marketable quality, free from material defects, taking into account all Inventory write-downs and reserves. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to business consistent with the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificatepast business practices of Borrower. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no No part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To the best of , and, to Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party party, except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon in which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2; provided, however, the foregoing restriction with respect to the location of Collateral shall not apply to (i) portable items of Equipment (e.g. laptop computers and the like) that at any time may be in possession of Borrower’s employees and may be relocated in the ordinary course of Borrower’s business; or (ii) any other item of Equipment (e.g. demonstration equipment at sales offices of Borrower and its Subsidiaries, with sales representatives or at customer locations) that at any time may be located by Borrower in the ordinary course of its business at a location other than Borrower’s place of business specified in the Perfection Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s 's business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank's right to sell any Collateral. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material impact on Borrower's business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed "Collateral" and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title If checked here, this Note is secured by and Maker pledges to Bank and grants a security interest in the following: Unsecured Maker and any endorser, surety, guarantor or other party signing this Note or otherwise guaranteeing or ensuring the performance or payment by Maker (the "Obligor") pledges to Bank and grants a security interest in all other property of Maker and of each other Obligor now or hereafter in the possession, custody or control of Bank, whether held expressly as collateral, security or otherwise including, but not limited to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear any balance or share of any and all Liens except Permitted Liensdeposit, trust or agency or special account in which any Obligor has an interest. Borrower has no deposit accounts other than the deposit accounts All of such property, together with Bank, the deposit accounts, if any described in the Perfection Certificate delivered specific property listed above as pledged to Bank in connection herewithby Maker(s), or of which Borrower has given Bank notice and taken such actions shall be referred to as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors"Collateral". The Collateral is also pledged as security for all other liabilities or obligations of each Maker to Bank (primary, secondary, direct, contingent, sole, joint or several), due or to become due or which may be hereafter contracted or acquired. Bank may, at its option, transfer at any time to itself or to its nominee any Collateral and receive the income thereon and hold the same as security herefor, or apply it on the principal or interest due hereon or due on any liability or obligation secured hereby. Notwithstanding the surrender of this Note upon payment or otherwise, Bank may nevertheless retain the Collateral for any other liabilities. Additions to, releases, reductions or exchanges of, or substitutions for the Collateral, payment on account of this loan or increases of the same, or other loans made partially or wholly upon the Collateral, may from time to time be made without affecting the provisions of this Note or the liabilities of any party hereto. Bank shall not be bound to take any steps necessary to preserve any rights in the possession Collateral against prior parties and each Obligor shall take necessary steps for such purposes. Bank or its nominees need not collect interest or principal of any third party bailee (Collateral or give any notice with respect thereto. Maker shall at all times keep the Collateral insured in such forms, and in such amounts, as a warehouse) except as otherwise provided shall be acceptable to Bank, and shall keep the Collateral in good maintenance, repair and condition, if appropriate to the Perfection Certificate. None nature of the components of Collateral. If the Collateral shall be maintained any time become unsatisfactory to Bank or if Bank shall at locations other than any time deem itself insecure, Maker shall, within five days after demand, deposit with Bank as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borroweradditional Collateral, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance property which is satisfactory to Bank in its sole discretion. The provisions undersigned agrees to pay a late charge equal to 5% of this paragraph shall each payment of principal and/or interest which is not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in paid within 10 days on which it is due. THE TERMS OF THE REVERSE SIDE OF THIS DOCUMENT AND OF ANY SEPARATE SECURITY AGREEMENT OR MORTGAGE GRANTING A SECURITY INTEREST ARE MADE A PART OF THIS PROMISSORY NOTE AND SECURITY AGREEMENT. PREFERRED HEALTHCARE STAFFING, INC. Preferred Healthcare Staffing, Inc. a Delaware corporation ---------------------------------- ----------------------------------- Mailing Address ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ PH BY: Execution Date ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ------------------------------------ ----------------------------------- City State Zip Code ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Execution Date Sr. Vice President Upon the ordinary course happening of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner any of the Intellectual Property following events, each of which it owns shall constitute a default, all liabilities of each Maker or purports to own except for Bank shall become due and payable at once without notice or demand: (a) non-exclusive licenses granted failure of any Obligor to its customers perform any agreement hereunder or to pay in the ordinary course of businessfull, when due, this Note or any other liability whatsoever to Bank or any installment thereof or interest thereon, or failure to pay when due any premium on any life insurance policy held as Collateral hereunder; (b) over-the-counter software that is commercially available to the public, and death of any Obligor; (c) material Intellectual Property licensed to Borrower and noted on filing of any petition under the Perfection Certificate. Each Patent which it owns Bankruptcy Act, or purports to own and which is material to Borrower’s businessany similar federal or state statute, taken as by or against any Obligor; (d) application for the appointment of a wholereceiver for, is valid and enforceablethe making of a general assignment for the benefit of creditors by, and no or the insolvency of, any Obligor; (e) taking possession of any substantial part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights property of any third party except to Obligor at the extent such claim would not have insistence of any government authority; (f) dissolution, merger, consolidation, or reorganization of any Obligor; (g) a material adverse effect on Borrower’s businesschange has occurred in the financial condition of any Obligor from the conditions set forth in the most recent financial statement of such Obligor furnished to bank, taken or from a condition of such Obligor as a whole. Except as noted on most recently disclosed to Bank in any manner; (h) that any warranty, representation, certificate, or statement of any Obligor (whether nor not contained herein) pertaining to or in connection with the Perfection Certificate, Borrower loan evidenced hereby is not a party totrue; (i) assignment by any Maker of any equity in any of the Collateral without the written consent of Bank. The principal of the Note, nor is it bound byand any part thereof, any Restricted Licenseshall bear interest at the maximum legal rate of interest chargeable under the laws of the State of Florida after default until paid.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Other than demo or loaner equipment with an aggregate book value of up to $500,000 that is used in the sales and clinical trial process, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceablevalid, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no written claim has been made is pending that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate; provided, however, that Borrower shall have the right to deliver possession of completed products to its customers before such customers have purchased such products, either for evaluation purposes or pursuant to an advance-delivery “kan-ban” arrangement. Borrower shall give Bank notice of all such kan-ban arrangements and shall report on the amount of product held in such arrangements in its monthly reports. Bank shall not require Bailee’s Waivers from Borrower’s customers who are party to kan-ban arrangements. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee (other than a kan-ban arrangement) with an aggregate value in excess of One Hundred Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored100,000.00), then Borrower will first receive the a written consent of Bank and acknowledgement from such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee, other than (i) licenses or agreements for software that Borrower incorporates into products for distribution to its customers, (ii) software licensed for internal use by Borrower and (iii) shrink-wrap, freeware and open source software licenses (collectively “Excluded Licenses”) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement, other than Excluded Licenses, which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights, other than Excluded Licenses to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankLender, the deposit accounts, if any any, described in the Perfection Diligence Certificate delivered to Bank Lender in connection herewith, or of which Borrower has given Bank Lender notice and taken such actions as are necessary to give Bank Lender a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Diligence Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Diligence Certificate or as permitted Borrower has given Lender notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate a fair market value in excess of greater than $50,000 250,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lender and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Lender in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Diligence Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Lender’s right to sell any Collateral. Borrower shall provide written notice to Lender within thirty (30) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Lender requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for Lender to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Lender’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each patent, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to best of Borrower’s business, taken as a wholeknowledge, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (which consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is reasonably necessary), whether now existing or entered into in the future.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. All Inventory is in all material respects of good and marketable quality, free from material defects. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Bank’s right to sell any Collateral. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property comprising Collateral, except for (ai) non-exclusive licenses granted to its customers in the ordinary course of business, (bii) over-the-counter software that is commercially available exclusive licenses granted to its customers in the publicordinary course of business, which are exclusive only as to specific channels of trade, and (ciii) material Intellectual Property licensed to Borrower and noted on the Perfection CertificateValeant License. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title toIf, has rights in, and in any jurisdiction where the power Ceding Company is authorized to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bankdo business, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral Reinsurer a. is not in the possession of any third party bailee (such as authorized, admitted, approved, accredited, or b. has a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank change in its sole discretion. The provisions of this paragraph shall licensing, approval or accreditations, or c. has its authority to do business revoked by any regulatory authority; or the Ceding Company is not apply permitted to Demonstration Systems delivered to Borrower’s customers take Reserve Credit on its statutory financial statement in any jurisdiction for all or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports reinsurance ceded to own the Reinsurer, the Reinsurer shall provide the Ceding Company with “Collateral” in the form of either 1. clean, irrevocable unconditional and “evergreen” letter(s) of credit, or 2. assets in trust held under an agreement acceptable under applicable insurance laws and regulations, or 3. other form of collateral agreeable to the Ceding Company, that will allow the Ceding Company to take Reserve Credit. No later than [ ], the Ceding Company will notify the Reinsurer of the [ ] that the Reinsurer must provide the Ceding Company in the form of the agreed-upon Collateral by the final day of the year. The Ceding Company reserves the right to provide the [ ] days before each quarter in order to receive the proper reserve credit on a quarterly basis. The Reinsurer will bear the cost of the Collateral. The Ceding Company and the Reinsurer shall cooperate in good faith in connection with any such steps taken by the Reinsurer (including in connection with preparing and negotiating any amendment to this Agreement and/or creation of a trust agreement). If a letter of credit is provided, the letter of credit will be issued by a bank which is material to Borrower’s businessneither a parent, taken as a wholesubsidiary, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part nor an affiliate of the Intellectual Property violates Parties (hereinafter referred to as the rights of any third party except “designated bank”) in an amount equal to the extent such claim reserves ceded to the Reinsurer for which the Company would not have a material adverse effect on Borrower’s business, taken as a wholebe permitted to take Reserve Credit. Except as noted The designated bank must be organized or licensed in the United States and must appear on the Perfection Certificate, Borrower list of approved banks published by the Securities Valuation Office of the National Association of Insurance Commissioners. “[ ]” is not a party to, nor is it bound by, any Restricted Licensedefined as the [ ].

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than (i) the deposit accounts with Bank, (ii) the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or (iii) the deposit accounts of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Without the prior consent of the Bank, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to reasonable determination after consultation with Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to(a) The due and punctual payment of the Obligations, has rights inincluding payment of the principal of, premium on, if any, and interest on, the power Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium on, if any, and interest on the Notes, according to transfer each item the terms hereunder or thereunder, and all other obligations of the Issuers and the Guarantors to the Holders or the Trustee under this Indenture, the Notes, the Note Guarantees, the Security Documents and the Pari Passu Intercreditor Agreement are secured as provided in the Security Documents which the Issuers and Guarantors have entered into simultaneously with the execution of this Indenture and will be secured by Security Documents hereafter delivered as required by the Indenture. The Trustee and the Issuers hereby acknowledge and agree that the Notes Collateral upon which Agent holds the Collateral in trust for the benefit of the Holders and the Trustee, in each case pursuant and subject to the terms of the Security Documents and the Pari Passu Intercreditor Agreement. (b) Each Holder, by its acceptance of a Note, consents and agrees to the terms of the Security Documents and the Pari Passu Intercreditor Agreement (including, without limitation, the provisions providing for possession, use, release and foreclosure of Collateral and the terms of the Pari Passu Intercreditor Agreement) as the same may be in effect or may be amended from time to time in accordance with its terms and the terms of this Indenture and agrees that it purports will not contest or support any other person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any other holder of First-Priority Obligations in all or any part of the Collateral. Each Holder, by its acceptance of a Note, (i) authorizes the Trustee to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderappoint the Notes Authorized Representative to act on its behalf as the Notes Authorized Representative under this Indenture and the Security Documents, free (ii) authorizes the Trustee and clear the Notes Authorized Representative to appoint the Notes Collateral Agent to act on its behalf as the Notes Collateral Agent under this Indenture, the Security Agreement and under each of the other Security Documents and the Pari Passu Intercreditor Agreement, (iii) authorizes and directs the Notes Collateral Agent to enter into the Security Documents and the Pari Passu Intercreditor Agreement and to perform its obligations and exercise its rights thereunder in accordance therewith and (iv) authorizes the Trustee and the Notes Authorized Representative to authorize the Notes Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Notes Collateral Agent by the terms of the Security Agreement and the other Security Documents and the Pari Passu Intercreditor Agreement, including for purposes of acquiring, holding and enforcing any and all Liens except Permitted Liens. Borrower has no deposit accounts other than on Collateral granted by any grantor thereunder to secure any of the deposit accounts First-Priority Obligations, together with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice such powers and taken such actions discretion as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and reasonably incidental thereto. (c) material Intellectual Property licensed Each Holder, by its acceptance of a Note, authorizes the Notes Collateral Agent, the Notes Authorized Representative and the Trustee, as applicable, to Borrower and noted enter into the Pari Passu Intercreditor Agreement (or, if such agreement is terminated, any substantially identical intercreditor agreement on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceablebehalf of, and no part binding with respect to, the Holders and their interest in designated assets, in connection with the incurrence of any First-Priority Obligations). The Notes Collateral Agent or the Notes Authorized Representative, as applicable, will enter into any such future intercreditor agreement at the request of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s businessIssuers, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To provided that the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except Issuers will have delivered to the extent Notes Collateral Agent or the Notes Authorized Representative, as the case may be, an Officer’s Certificate and Opinion of Counsel to the effect that such claim would not other intercreditor agreement is authorized or permitted by this Indenture and the Security Documents and that all conditions precedent thereto have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensebeen met or waived.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Other than as described in Section 6.8(a), Borrower has no deposit accounts other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to . To the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to best of Borrower’s businessactual knowledge, taken as a whole, each patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public) which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. The Borrower has good title to, has rights in, and the power to transfer each item owns all of the Franchisee Notes and all the other Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens liens, encumbrances, claims or interests of any kind whatsoever, except Permitted Liens. Borrower has no deposit accounts other than for the deposit accounts with security interest of Chase Manhattan Bank, the deposit accounts, if any described in successor by merger to Chemical Bank (to be released at the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice Closing) and taken such actions as are necessary to give Bank a perfected the security interest therein. The Accounts are bona fide, existing obligations of the Account DebtorsLender created by this Agreement. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Each of the components Franchisee Notes is genuine and in all respects what it purports to be; has been, to the best of the Collateral shall Borrower's knowledge, duly executed by all the parties whose signatures purport to appear thereon; and is a valid and binding obligation of each such party, fully enforceable in accordance with its written terms, except to the extent that enforcement may be maintained at locations limited by applicable bankruptcy, insolvency, reorganization, moratorium or other than as provided in similar laws relating to or affecting the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion enforcement of the Collateral with an aggregate value in excess of $50,000 to a baileecreditors' rights generally, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent by principles of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in partequity. To the best of the Borrower’s 's knowledge, no claim has been made that any part none of the Intellectual Property violates the rights Franchisee Notes are subject to any defenses, offsets, counterclaims or adjustments of any third party kind. No event of default present exists under any of the Initial Notes. The amount due as of the date of this Agreement under each of the Franchisee Notes and the date of the next scheduled payment due under each Franchisee Note is accurately set forth in Schedule 1 to this Agreement. The Borrower has received no prepayments (payments due more than thirty (30) days after the date of such payment) of any amounts due under any of the Franchisee Notes except as disclosed in Schedule 1. All of the Franchisee Notes and the Franchisee Documents will, on or before the Closing, be delivered to the extent such claim would not have a material adverse effect on Borrower’s business, taken Lender and will set forth all the terms and provisions thereof; and there are no agreements or understandings of any kind between the Borrower and the obligors under the Franchisee Notes regarding the Franchisee Notes except as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseset forth in those instruments and documents.

Collateral. (a) Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. . (b) The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the a written consent of Bank and acknowledgment from such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. . (c) All Inventory is in all material respects of good and marketable quality, free from material defects. . (d) Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. . (e) Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License, other than (i) licenses or agreements for software that Borrower incorporates into products for distribution to its customers, (ii) software licensed for internal use by Borrower and (iii) shrink-wrap, freeware and open source software licenses (collectively “Excluded Licenses”).

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The All Inventory is in all material respects of good and marketable quality, free from material defects. No Collateral with an aggregate value in excess of Twenty-Five Thousand Dollars ($25,000.00) per location is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Twenty-Five Thousand Dollars ($50,000 25,000.00) per location to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeBank. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.27.1. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply All Financed Equipment is new, except for such Financed Equipment that has been disclosed in writing to Demonstration Systems delivered Bank by Borrower as “used” and that Bank, in its sole discretion, has agreed to Borrower’s customers or prospective customers in the ordinary course of businessfinance. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports has sufficient rights to own use its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title totitle, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts in the United States other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within 30 days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or wavier by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) ), except as otherwise provided set forth on Schedule 1 hereto. Except as hereafter disclosed to Bank in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Material Adverse Change. (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s business's interest in such license or agreement or any other property, taken or (b) for which a default under or termination of could interfere with the Bank's right to sell any Collateral. Borrower shall provide written notice to Bank within thirty days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as a whole. Except as noted on Bank requests to obtain the Perfection Certificateconsent of, Borrower is not a party to, nor is it bound or waiver by, any Restricted Licenseperson whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed "Collateral" and for Bank to have a security interest in the same that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank's rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary required by Bank to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a landlord or bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and and, at Bank’s request, shall use commercially reasonable efforts to have such landlord or bailee must execute and deliver a landlord’s consent or bailee agreement waiver, as applicable, in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each To the best of Borrower’s knowledge, (i) each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, (ii) there are no facts which would render any Patent application within the Intellectual Property which it owns or purports to own and which is material to Borrower’s business, taken as a wholeif and when issued, is valid and enforceableinvalid or unenforceable, and (iii) no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, as of the Effective Date and as and when required by Section 3.2 hereof, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer g▇▇▇▇ ▇ ▇▇▇▇ to Lender in each item of the Collateral upon which it purports to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunderunder the Loan Documents to which it is a party, free and clear of any and all Liens except Permitted Liens. Borrower has no does not have any deposit accounts other than the deposit accounts with Silicon Valley Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Lender in connection herewith, or of which Borrower has given Bank Lender notice and taken such actions as are necessary to give Bank Lender a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate; and the book value of any such Collateral does not exceed $250,000. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with (having an aggregate book value in excess of $50,000 250,000) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lender and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Lender in its sole discretion. The provisions None of this paragraph shall the Collateral (other than office equipment and furniture having an aggregate book value not apply to Demonstration Systems delivered to in excess of $10,000) is now, or will at any time during the term hereof, be located at or in Borrower’s customers or prospective customers leased premises in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defectsNew Jersey. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) (i) non-exclusive licenses of Intellectual Property granted to its customers third parties in the ordinary course of business, and (ii) licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas outside of the United States, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and and, to the extent constituting material Intellectual Property, as noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Each Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has Borrowers have no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has Borrowers have given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that any Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Five Hundred Thousand Dollars ($50,000 500,000) to a bailee, and then such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Each Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each patent is valid and enforceable, and no part of the intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of Borrowers’ knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on the business of Comverge, Enerwise or PES or on the business of the Borrowers taken as a whole. Except as noted on the Perfection Certificate, each Borrower is not a party to, nor is bound by, any material license or other agreement with respect to which any Borrower is the licensee (a) that prohibits or otherwise restricts any Borrower from granting a security interest in Borrowers’ interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrowers shall provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrowers shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (cy) material Intellectual Property licensed Bank to Borrower and noted on have the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as ability in the event of a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights liquidation of any third party except Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseother Loan Documents.

Collateral. Borrower has good title toThe Banks acknowledge that all collateral is held pursuant to Security Documents which name PNC, has rights inas Agent, as the secured party and that PNC is holding such collateral as Agent for the power Banks under the Amended Credit Agreement. The Banks agree that to transfer each item avoid the cost of assigning the Security Documents, PNC will continue to hold such collateral as Agent for the Banks under the Amended Credit Agreement, but that the relationship between the Banks as to the collateral shall be revised in the manner set forth below. From and after the date of this Agreement, PNC and Bank One, equally, shall have, as security for the Borrowers’ obligations under Term Loan A, the first priority lien and security interest in all real property and equipment which is collateral for the Loans under the Amended Credit Agreement and a second priority lien and security interest in all other collateral for the Loans under the Amended Credit Agreement and Fifth Third will have, as security for the Borrowers’ obligations under the Revolving Credit Loan, a second priority lien and security interest in all real property and equipment which is collateral for the Loans under the Amended Credit Agreement and a first priority lien and security interest in all other collateral for the Loans under the Amended Credit Agreement. Upon the occurrence of an Event of Default under the Amended Credit Agreement, PNC and Bank One shall share equally in the proceeds of any sale or other disposition of all real property and equipment collateral for the Loans under the Amended Credit Agreement, until such time they are paid in full all amounts due to them under Term Loan A. Any proceeds in excess of the Collateral upon which it purports amount due to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free PNC and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than One as provided in the Perfection Certificate proceeding sentence shall be payable to Fifth Third, if necessary, to pay amounts due to Fifth Third under the Revolving Credit Loan. Upon the occurrence of an Event of Default under the Amended Credit Agreement, Fifth Third shall be entitled to the proceeds of any sale or as permitted pursuant other disposition of all collateral, other than the real property and equipment collateral, which is security for the Loans under the Amended Credit Agreement, until Fifth Third is paid in full all amounts due to Section 7.2Fifth Third under the Revolving Credit Loan. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value Any proceeds in excess of $50,000 the amounts due to a baileeFifth Third as provided in the preceding sentence shall be payable equally to PNC and Bank One, if necessary to pay amounts due to them under Term Loan A. To the extent that the foregoing terms are inconsistent with the terms of the Amended Credit Agreement, and such bailee in particular Section 7.2(d) and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner (e) of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in Amended Credit Agreement, the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part terms of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseAmended Credit Agreement are hereby amended.

Collateral. Borrower has good title to, has rights in, to the Collateral and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderIntellectual Property, free and clear of any and all Liens except Permitted LiensLiens and Borrower has Rights to each asset that is Collateral. Borrower has no other deposit accounts account, other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest thereinSchedule. The Accounts are bona fide, existing obligations of obligations, and the Account Debtorsservice or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. The Collateral is not in the possession of any third party bailee (such as at a warehouse) ), except as otherwise provided to the extent that purchased components of inventory are located, in the Perfection Certificate. None ordinary course of business, at the components sites of contract manufacturers and with the Collateral further understanding that no inventory that is located at such a third party site shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2considered Eligible Inventory hereunder. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to such a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the prior written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement is holding such Collateral for the benefit of Bank. Borrower has no notice of any actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessany Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of of, or a licensee of, the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable (subject to the ability of the Borrower to abandon rights to certain Intellectual Property as set forth in Section 6.8 hereof) and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseMaterial Adverse Change.

Collateral. Borrower Guarantor has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower Guarantor has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower Guarantor has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account DebtorsGuarantors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.25.2. In the event that BorrowerGuarantor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of One Hundred Thirty Thousand Dollars ($50,000 130,000.00) for all Loan Parties, to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower Guarantor will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower Guarantor is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower Guarantor and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to BorrowerGuarantor’s businessbusiness is, taken as a wholeto the knowledge of Guarantor, is valid and enforceable, and no part of the Intellectual Property which Borrower Guarantor owns or purports to own and which is material to Borrower’s business, the Loan Parties’ business taken as a whole, whole has been judged invalid or unenforceable, in whole or in part. To the best of BorrowerGuarantor’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, the Loan Parties’ business taken as a whole. Except as noted on the Perfection Certificate, Borrower Guarantor is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has Borrowers have good title to, has have rights in, and the power to transfer each item of the Collateral upon which it purports they purport to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has Borrowers have no deposit accounts other than the deposit accounts with Bank, Bank and the deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) ), except as otherwise provided in the Perfection CertificateCertificate and fully insured goods in transit in the ordinary course of business. None Except as hereafter disclosed to Bank in writing by Borrowers, none of the components of the Collateral shall be maintained at locations other than (a) as provided in the Perfection Certificate Certificate, (b) fully insured components of the Collateral that may be located in transit between Borrower’s locations in Belgium, Italy and Hong Kong or as permitted (c) the following locations at which no more than $100,000 in the aggregate of Collateral may be located at any time: (i) mobile equipment, including computers with employees and consultants at various locations, (ii) Collateral at locations Bank has been notified of pursuant to Section 7.2, (iii) Collateral at temporary locations for sales, testing or demonstration purposes and (iv) other locations. In the event that BorrowerBorrowers, after the date hereof, intends intend to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower Borrowers will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretionis holding such Collateral for the benefit of Bank. The provisions of this paragraph foregoing requirement for a written acknowledgement shall not apply with respect to Demonstration Systems delivered any bailee that (i) does not have an established course of business with any Borrower and (ii) holds Collateral solely as part of a “start-up” testing regimen to establish such bailee as a regular part of the Borrower’s customers supply chain, provided that the exception to the written acknowledgement requirement contained in this sentence shall only apply until such bailee has entered into a formal agreement with one or prospective customers in more of the ordinary course Borrowers. The Accounts are bona fide, existing obligations of businessthe Account Debtors. All Except for Inventory with an aggregate value, at any time, of not more than $200,000, all Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is Borrowers are the sole owner legal and beneficial owners of the their Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses of Intellectual Property granted to its customers third parties in the ordinary course of business, (b) over-the-counter software exclusive licenses of Intellectual Property that is commercially available could not result in a legal transfer of title of the licensed property that are exclusive only in respects other than territory or exclusive as to territory only as to discreet geographical areas outside of the public, and United States or (c) material other non-exclusive licenses of Intellectual Property that could not result in a legal transfer of title of the licensed to Borrower and noted on the Perfection Certificateproperty. Each Patent which it owns or purports to own and which patent that is material to Borrower’s business, taken as a whole, Borrowers’ business is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which that is material to Borrower’s business, taken as a whole, Borrowers’ business has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s Borrowers knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseparty.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph ; provided, however, that notwithstanding the foregoing, Borrower shall not apply be required to Demonstration Systems obtain the consent of Bank and shall not be required to obtain a bailee agreement with respect to (i) any demonstration equipment that is delivered to any of Borrower’s customers or prospective customers in the ordinary course of businessbusiness provided that the value of such equipment does not exceed Three Million Five Hundred Dollars ($3,500,000) in the aggregate and (ii) any raw materials and inventory located at various vendor and contract manufacturer sites pursuant to supply and/or manufacturing agreements. All Inventory is Except as otherwise disclosed to Bank in all material respects of good and marketable qualitywriting, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (ai) intellectual property licensed from third parties, (ii) non-exclusive licenses granted to its distributors and customers in the ordinary course of businessbusiness and licenses that may be exclusive in some respects other than territory (and/or that may be exclusive as to territory only in discreet geographical areas outside of the United States), (b) over-the-counter software but that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to could not result in a legal transfer of Borrower’s businesstitle in the licensed property. To the best of Borrower’s knowledge, taken as a whole, each patent is valid and enforceable, and except for patents in re-examination proceedings in the U.S. Patent and Trademark Office, no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other material agreement with respect to which Borrower is the licensee of intellectual property that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. (a) Borrower has and each its Subsidiaries have good title to, has have rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderunder the Loan Documents, free and clear of any and all Liens except Permitted Liens. Liens and, prior to the Funding Date of the initial Credit Extension, Liens securing Existing Indebtedness, and neither Borrower has no deposit nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the deposit accounts with Bank, Collateral Accounts or the deposit other investment accounts, if any any, described in the Perfection Certificate Certificates delivered to Bank Collateral Agent in connection herewith, or herewith with respect of which Borrower or such Subsidiary has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. (b) The Eligible Accounts are bona fide existing obligations. The property or services giving rise to such Eligible Accounts has been delivered or rendered to the Account Debtor or its agent for immediate shipment to and unconditional acceptance by the Account Debtor. Borrower has not received notice of an actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are included in any Borrowing Base Certificate as an Eligible Account. No licenses or agreements giving rise to such Eligible Accounts is with any Prohibited Territory or with any Person organized under or doing business in a Prohibited Territory. All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. (c) The security interest granted herein, which shall become effective as of the Funding Date of the first Credit Extension made under this Agreement, once effective shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent’s Lien. (d) On the Effective Date, and except as disclosed on the Perfection Certificate (i) the Collateral is not in the possession of any third party bailee, and (ii) no such third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the possesses components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Two Hundred Fifty Thousand Dollars ($50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. 250,000.00). (e) All Inventory and Equipment is in all material respects of good and marketable quality, free from material defects. . (f) Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property which it owns or each respectively purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course own, free and clear of businessall Liens other than Permitted Liens and, (b) over-the-counter software that is commercially available prior to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part Funding Date of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s businessinitial Credit Extension, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeLiens securing Existing Indebtedness. Except as noted on the Perfection CertificateCertificates delivered to Collateral Agent as of the Effective Date, and as updated from time to time with respect hereto in accordance with the terms hereof, neither Borrower nor any of its Subsidiaries is not a party to, nor is it bound by, any Restricted Licensematerial license or other Material Agreement.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no other deposit accounts account, other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered Representations or Schedule 2. Each Account with respect to Bank in connection herewithwhich Advances are requested by Borrower shall, or of which Borrower has given Bank notice on the date each Advance is requested and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are made, represent an undisputed bona fide, fide existing obligations unconditional obligation of the Account Debtorsaccount debtor created by the sale, delivery, and acceptance of goods or the rendition of services in the ordinary course of Borrower's business. The Collateral is not in the possession of any third party bailee (such as at a warehouse) ), except as otherwise provided for Collateral consisting of Inventory located at the following warehouse in Memphis, Tennessee: 4638 E. Shelby Drive, Memphis, Tennessee 38118 (the Perfection Certificate"Tennessee Wareh▇▇▇▇"). None of ▇▇▇▇▇▇er shall cause the components of Tennessee Warehouse to execute and deliver to Bank an agreement pursuant to which the Tennessee Warehouse waives any liens on the Collateral shall be maintained at locations other than as provided stored with it and acknowledges that it is holding such Collateral for the benefit of Bank in form acceptable to the Perfection Certificate or as permitted pursuant to Section 7.2Bank. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to such a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the prior written consent of Bank and such bailee must execute acknowledge in writing that the bailee waives any liens on the Collateral and deliver a acknowledges that the bailee agreement is holding such Collateral for the benefit of Bank in form and substance satisfactory acceptable to Bank the Bank. Borrower has no notice of any actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessany Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, business and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificatepermitted under this Agreement. Each Patent which it owns or purports is, to own and which is material to the best of Borrower’s business's knowledge, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseMaterial Adverse Change.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s 's business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower's business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed "Collateral" and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor's agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower ▇▇▇▇▇▇▇▇ has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None Other than laptop computers and other mobile Equipment in the possession of employees, consultants or agents of Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of Fifty Thousand Dollars ($50,000 50,000.00) to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole reasonable discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit and securities accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewithCertificate, or of which Borrower has given Bank Lender notice and taken such actions as are necessary to give Bank Lender a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral in excess of $25,000 per location shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Lender notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 25,000 per location to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lender and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessLender. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is a licensee that (a) prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Lender's right to sell any Collateral. Borrower shall provide written notice to Lender within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower's business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Lender requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed "Collateral" and for Lender and each Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or, whether now existing or entered into in the future, and (y) Lender shall have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Lender's rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. As of the date hereof, and as of the date of any future request for a Credit Extension, or Compliance Certificate, Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral valued in excess of Fifty Thousand Dollars ($50,000.00), in the aggregate, shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value to a bailee in excess of Fifty Thousand Dollars ($50,000 to a bailee50,000.00), and such bailee and Bank are not already parties to a bailee agreement covering both in the Collateral and the location where the Collateral will be storedaggregate, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower's business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed "Collateral" and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licenser's agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future. Notwithstanding the foregoing, the terms of this paragraph shall not apply to, and the Collateral shall not include, license agreements solely for the use of intellectual property of a third party, with respect to which license Borrower is the licensee.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ grant a Lien hereunder, free and clear of any and all Liens except Permitted LiensP▇▇▇▇▇▇▇▇ ▇▇▇ns. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank's right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed "Collateral" and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank's rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Collateral Agent in connection herewith, or of which Borrower has given Bank Lenders notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations No Collateral in excess of $50,000 in the Account Debtors. The Collateral aggregate is not in the possession of any third third-party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral in excess of $50,000 in the aggregate shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Lenders notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 in the aggregate to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Lenders and such bailee must execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank Collateral Agent in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects, normal wear and tear excepted. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software business which do not result in a legal transfer of title of the licensed property but that is commercially available may be exclusive in respects other than territory and that may be exclusive as to territory only as to discreet geographical areas outside of the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection CertificateUnited States. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To the best of , and to Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Collateral Agent’s right to sell any Collateral. Borrower shall provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Collateral Agent reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Collateral Agent to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in Except as disclosed on the ordinary course of business. All Inventory is in all material respects of good and marketable qualityPerfection Certificate, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted LiensLiens or Borrower has Rights to each asset that is Collateral. Borrower has no other deposit accounts account, other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest thereinSchedule. The Accounts are bona fide, existing obligations of obligations, and the Account Debtorsservice or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. The Collateral is not in the possession of any third party bailee (such as at a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2). In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to such a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the prior written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement is holding such Collateral for the benefit of Bank. Borrower has no notice of any actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessany Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to business and in instances in which the public, and (c) material Borrower develops Intellectual Property licensed for a particular end user and grants an exclusive license to Borrower and noted on such end user to use the Perfection CertificateIntellectual Property as so developed. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Change. Except as noted on the Perfection CertificateSchedule to Loan and Security Agreement, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other material agreement with respect to which the Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower will provide written notice to Bank within ten days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, authorization by, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if the Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Each Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. No Borrower has no any deposit accounts other than the deposit accounts with BankBank (other than those not prohibited under Section 6.8(b) hereof) and, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which such Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except ). Except as otherwise provided hereafter disclosed to Bank in the Perfection Certificate. None writing by such Borrower, none of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2Certificate. In the event that any Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and then such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions is holding such Collateral for the benefit of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank. All Inventory is in all material respects of good and marketable quality, free from material defects. Each Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of such Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the its Perfection Certificate, no Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which such Borrower is the licensee (a) that prohibits or otherwise restricts such Borrower from granting a security interest in such Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Each Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Each Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankCollateral Agent, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Collateral Agent in connection herewith, or of which Borrower has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Collateral Agent. All Financed Equipment is new, except for such Financed Equipment that has been disclosed in its sole writing to Collateral Agent by Borrower as “used” and that Lenders, in their reasonable discretion. The provisions of this paragraph shall not apply , in accordance with standard business practices, have agreed to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessfinance. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is a licensee that (a) prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Collateral Agent’s right to sell any Collateral. Borrower shall provide written notice to Collateral Agent within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Collateral Agent reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Collateral Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or, whether now existing or entered into in the future, and (y) Collateral Agent shall have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title A. Except as otherwise provided herein, the terms of the Loan Documents remain in full force. In the event of a conflict, the terms of this Settlement Agreement shall prevail over the terms of the Loan Documents. B. The Defendants further acknowledge the continued effectiveness and validity of any and all security interests granted to UBS Bank under the Loan Documents, including, but not limited to, has rights inUBS Bank’s first priority lien and security interest in the assets held in Account Nos. XL-02340 and XL-09158, and including, but not limited to, the power to transfer each item LIQD Stock that Ferdinand Holdings, LLC maintains at UBS Financial Services Inc. C. Simultaneously with the execution of the Collateral upon which it purports to this Settlement Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall execute and deliver to UBS Bank the Security Agreement attached hereto as EXHIBIT K, pursuant to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ hereundershall assign, free transfer and clear of pledge to UBS Bank, and grant to UBS Bank a first priority lien and security interest in, any and all Liens except Permitted Liensassets held in any and all accounts that she maintains at UBS Financial Services Inc., including, but not limited to, any assets held in Account No. Borrower has no deposit accounts EX-03407, including, but not limited to, the AAPL Stock. D. Subject to and pending the Defendants’ satisfaction of their payment obligations under Paragraph 1 of this Settlement Agreement, UBS Bank agrees from the Effective Date of this Settlement Agreement to July 6, 2015 (the “Forbearance Period”) to forbear from exercising its rights and remedies under the Loan Documents, including, but not limited to, its right to liquidate the LIQD Stock and the AAPL Stock and set-off the proceeds of the liquidation against the outstanding Loan Balance. The Defendants shall not withdraw any assets held in Account Nos. XL-02340, XL-09158 and/or EX-03407 during the Forbearance Period. If the Defendants fail to timely satisfy any of the payment obligations set forth in Paragraph 1 of this Settlement Agreement, the Forbearance Period shall terminate immediately, and UBS Bank shall have the right, in its sole and absolute discretion, to, among other than things, liquidate the deposit accounts LIQD Stock and the AAPL Stock and set-off the proceeds of the liquidation against the outstanding Loan Balance, in the manner set forth below in Paragraph 3(G). E. Notwithstanding Paragraph 3(D) of this Settlement Agreement, and irrespective of whether the Defendants have complied with their payment obligations under Paragraph 1 of this Settlement Agreement, in the event that the intra-day and/or opening or closing per-share price of Liquid Holdings Group, Inc., as listed on the NASDAQ stock market, is at or below $1.10, the Forbearance Period shall terminate immediately, and UBS Bank shall have the right, in its sole and absolute discretion, to, among other things, liquidate the LIQD Stock and the AAPL Stock and set-off the proceeds of the liquidation against the outstanding Loan Balance, in the manner set forth below in Paragraph 3(G). F. Simultaneously with the execution of this Settlement Agreement, the Defendants shall execute and deliver to UBS Bank documents to effect any sale of the stock of Liquid Holdings Group, Inc. pursuant to this Settlement Agreement, in the forms collectively attached hereto as EXHIBIT L. Following the execution of this Settlement Agreement, and upon the request of UBS Bank, the deposit accountsDefendants shall execute and deliver to UBS Bank any further documentation, if including, but not limited to, stock powers and any described in documentation required to be executed and/or filed with the Perfection Certificate delivered Securities and Exchange Commission pursuant to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations Rule 144 of the Account Debtors. The Collateral is not in the possession Securities Act of 1933, that UBS Bank may deem required to effect any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None sale of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. stock Liquid Holdings Group, Inc. G. In the event that Borrower, after (i) the date hereof, intends to store or otherwise deliver Defendants default on any portion of the Collateral with an aggregate value in excess payment obligations required by Paragraph 1 of this Settlement Agreement, or (ii) the intra-day and/or opening or closing per-share price of Liquid Holdings Group, Inc., as listed on the NASDAQ stock market, is at or below $50,000 to a bailee1.10, and such bailee and UBS Bank are not already parties exercises its rights under the Loan Documents and/or herein to a bailee agreement covering both liquidate the Collateral and the location where the Collateral will be storedassets held in Account Nos. XL-02340, then Borrower will XL-09158 and/or EX-03407, UBS Bank shall first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank attempt, in its sole and absolute discretion, to satisfy the outstanding Loan Balance through the liquidation of the LIQD Stock and application of the proceeds to the outstanding Loan Balance. If, within five (5) business days following the date of the Defendants’ payment default under this Settlement Agreement, UBS Bank is unable to fully satisfy the outstanding Loan Balance through the liquidation of the LIQD Stock, UBS Bank, in its sole and absolute discretion, may at that time liquidate the AAPL Stock and apply the proceeds towards the satisfaction of the outstanding Loan Balance. All rights and remedies of UBS Bank under this Settlement Agreement are cumulative, and nothing contained in this Paragraph 3(G) shall limit and/or restrict UBS Bank’s right to file and record the Judgments as set forth in Paragraph 2 of this Settlement Agreement. The provisions Defendants represent that Liquid Holdings Group, Inc. has imposed upon them, during the period beginning on April 18, 2014 through and including April 17, 2015, certain restrictions with respect to the transfer and/or sale of any of the Defendants’ shares of Liquid Holdings Group, Inc., including, but not limited to, the LIQD Shares (the “Lock-Up”). As set forth in the letter from Liquid Holdings Group, Inc. attached hereto as EXHIBIT M, Liquid Holdings Group, Inc. has agreed, as of September 16, 2014, to exempt 771,000 shares from the Lock-Up. H. In the event that, on or before April 17, 2015, (i) the Defendants default on any of the payment obligations required by Paragraph 1 of this paragraph Settlement Agreement, or (ii) the intra-day and/or opening or closing per-share price of Liquid Holdings Group, Inc., as listed on the NASDAQ stock market, is at or below $1.10, and UBS Bank exercises its rights under the Loan Documents and/or herein to liquidate the assets held in Account Nos. XL-02340, XL-09158 and/or EX-03407, the Defendants shall use their best efforts to have the remainder of their shares released from the Lock-Up. In connection with any sale of any of the assets held in Account Nos. XL-02340, XL-09158 and/or EX-03407, including, but not apply limited to, the LIQD Stock and/or the AAPL Stock, by UBS Bank pursuant to Demonstration Systems delivered this Settlement Agreement, neither UBS Bank nor any of its affiliates shall be liable to Borrowerany of the Defendants in any way for any adverse consequences (for tax effect or otherwise) resulting from the liquidation of appreciated or depreciated assets. Without limiting the generality of the foregoing, the sale may be made in UBS Bank’s customers sole and absolute discretion by public sale on any exchange or prospective customers market where business is then usually transacted or by private sale, and UBS Bank or any of its affiliates may be the purchaser at any public or private sale. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ hereby represents and warrants that he has obtained the prior consent of Liquid Holdings Group, Inc., if necessary, for UBS Bank to take any action contemplated by this Settlement Agreement, subject to the remaining Lock-Up restrictions, which are addressed above and which Ferdinand shall use best efforts to have released as necessary to effectuate any liquidation required to meet the payment obligations in this Settlement Agreement. I. Tax Payment Carve-Out: Upon the ordinary course Defendants’ timely satisfaction of businessall of the payments set forth in Paragraphs 1(A) through 1(D) of this Settlement Agreement, the Defendants shall have the right to sell up to (but no more than) 200,000 shares of Liquid Holdings Group, Inc. stock held in Account No. All Inventory is in all material respects XL-02340 and/or XL-09158 and withdraw the proceeds of good and marketable qualitysaid sale, free from material defects. Borrower is net of any applicable sales commission, for the sole owner purpose of paying any outstanding taxes, provided however, no such sale shall be permitted herein unless, at the Intellectual Property which it owns or purports to own except for (a) nontime the sale is requested by the Defendants, the intra-exclusive licenses granted to its customers in the ordinary course day per-share price of businessLiquid Holdings Group, (b) over-the-counter software that is commercially available to the publicInc., and (c) material Intellectual Property licensed to Borrower and noted as listed on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a wholeNASDAQ stock market, is valid and enforceable, and no part of the Intellectual Property which Borrower owns at or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenseabove $1.25.

Collateral. Borrower has good title to, has rights in, and has the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with BankSVB, the deposit accounts, if any described in the Perfection Certificate delivered to Bank Agent in connection herewith, or of which Borrower has given Bank Agent notice and taken such actions as are necessary Agent has requested to give Bank Agent, for the ratable benefit of the Secured Parties, a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Agent in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to All Inventory included in Borrower’s Books and intended for sale to its customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph ; provided, however, that notwithstanding the foregoing, Borrower shall not apply be required to Demonstration Systems obtain the consent of Bank and shall not be required to obtain a bailee agreement with respect to (i) any demonstration equipment that is delivered to any of Borrower’s customers or prospective customers in the ordinary course of businessbusiness provided that the value of such equipment does not exceed Four Million Five Hundred Dollars ($4,500,000) in the aggregate and (ii) any raw materials and inventory located at various vendor and contract manufacturer sites pursuant to supply and/or manufacturing agreements. All Inventory is Except as otherwise disclosed to Bank in all material respects of good and marketable qualitywriting, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (ai) intellectual property licensed from third parties, (ii) non-exclusive licenses granted to its distributors and customers in the ordinary course of businessbusiness and licenses that may be exclusive in some respects other than territory (and/or that may be exclusive as to territory only in discreet geographical areas outside of the United States), (b) over-the-counter software but that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to could not result in a legal transfer of Borrower’s businesstitle in the licensed property. To the best of Borrower’s knowledge, taken as a whole, each patent is valid and enforceable, and except for patents in re-examination proceedings in the U.S. Patent and Trademark Office, no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other material agreement with respect to which Borrower is the licensee of intellectual property that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, and has rights in, and in or the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. As of the Effective Date, Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Except as noted on Borrower’s Perfection Certificate, Borrower is not, as of the date hereof, a party to, nor is bound by, any license or other agreement with respect to which Borrower is the sole owner licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of the Intellectual Property entering or becoming bound by any such license or agreement which it owns is reasonably likely to have a material impact on Borrower’s business or purports to own except for financial condition (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound waiver by, any Restricted Licenseperson whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the deposit accounts Collateral Accounts with Bank, SVB and Royal Bank of Canada or the deposit other investment accounts, if any any, described in the Perfection Certificate delivered to Bank Collateral Agent in connection herewith, or herewith in respect of which Borrower has given Bank Collateral Agent notice and taken such actions as are necessary to give Bank Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank Collateral Agent and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessCollateral Agent. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers by Borrower in connection with joint ventures and corporate collaborations in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, issued patent is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To the best of , and to Borrower’s 's knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not reasonably be expected to have a material adverse effect on Borrower’s 's business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is a licensee that (a) prohibits or otherwise restricts Borrower from granting a security interest in Borrower's interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Collateral Agent's and Lenders' right to sell any Collateral. Borrower shall provide written notice to Collateral Agent and Lenders within ten (10) days of entering into or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Collateral Agent requests to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed "Collateral" and for Collateral Agent and each Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or, whether now existing or entered into in the future, and (y) Collateral Agent shall have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent's rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Each Borrower and Guarantor has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Neither Borrower nor Guarantor has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which such Borrower or Guarantor has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrowers have given Bank notice pursuant to Section 7.2. In the event that Borrowerany Borrower or any Guarantor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and then such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower or Guarantor will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Each Borrower and Guarantor is the licensee or sole owner of the Intellectual Property which it owns or purports to own its respective intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each of Borrowers’ and Guarantors’ patents are valid and enforceable, and no part of the intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of such Borrower’s and Guarantor’s knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on such Borrower’s or Guarantor’s business. Except as noted on the Disclosure Schedule, (a) the granting of a security interest in any Borrower’s or Guarantor’s property is not prohibited by any Requirement of Law of a Governmental Authority and (b) no Borrower or Guarantor is a party to, nor is bound by, any material license or other agreement with respect to which such Borrower or Guarantor is the licensee that prohibits or otherwise restricts such Borrower or Guarantor from granting a security interest in such Borrower’s or Guarantor’s interest in such license or agreement or any other property. Each Borrower shall, and shall cause each Guarantor to provide written notice to Bank within thirty (30) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on such Borrower’s or Guarantor’s business or financial condition (other than over-the-counter software that is commercially available to the public). Each Borrower shall, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party shall cause each Guarantor to, nor is it bound (1) take commercially reasonable efforts to obtain the consent of, or waiver by, any Restricted Licenseperson whose consent or waiver is necessary for all such licenses or contract rights and (2) use their best efforts to obtain the certificate, authorization, permit, consent, approval, order, license, exemption from, or filing or registration or qualification with, any Requirement of Law or Governmental Authority, in each case, necessary for Bank to have a security interest in any Borrower’s or Guarantor’s property that might otherwise be restricted or prohibited by any Requirement of Law or Governmental Authority or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, and to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderCollateral, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts account other than the deposit accounts with Bank, the Bank and deposit accounts, if any accounts described in the Perfection Certificate delivered to Bank in connection herewith, herewith or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to documentation reasonably acceptable to Bank. The Accounts are bona fide, existing obligations of the Account Debtors. The Except for Inventory with third party contract manufacturers outside the United States, the Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property violates the rights of any third party except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a wholeMaterial Adverse Change. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licensematerial license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral. Borrower shall provide written notice to Bank within thirty days of entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (x) all such licenses or agreements to be deemed “Collateral” and for Bank to have a security interest in the same that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (y) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has and each Guarantor have no deposit accounts Deposit Accounts other than the deposit accounts Deposit Accounts with Bank, the deposit accounts, if any Bank and Deposit Accounts described in the applicable Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the applicable Perfection Certificate. None of the material components of the Collateral shall be are maintained at locations other than as provided in the applicable Perfection Certificate or as permitted pursuant to Section 7.2unless Borrower has notified Bank of such other locations. In the event that BorrowerBorrower or any Guarantor, after the date hereof, intends to store or otherwise deliver any material portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower and each Guarantor is a licensee or the sole owner of the Intellectual Property which it owns or purports to own its respective intellectual property, except for (a) non-exclusive licenses granted to Affiliates or its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to To Borrower’s businessknowledge, taken as a whole, each patent is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, intellectual property has been judged invalid or unenforceable, in whole or in part. To , and to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property intellectual property owned by Borrower violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a wholeparty. Except as noted on the Perfection Certificatedisclosed to Bank in writing, neither Borrower nor any Guarantor is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower or any Guarantor is the licensee that prohibits or otherwise restricts Borrower or such Guarantor from granting a security interest in Borrower’s or such Guarantor’s interest in such license or agreement or any other property.

Collateral. Borrower has good title to, and has rights in, and in or the power to transfer each item of the Collateral upon which it purports to ▇g▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. As of the Effective Date, Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions Except for any Financed Equipment which is the subject of this paragraph shall not apply the prior financing arrangements with Comerica Bank and which is being refinanced hereunder, all Financed Equipment is new, except for such Financed Equipment that has been disclosed in writing to Demonstration Systems delivered Bank by Borrower as “used” and that Bank, in its sole discretion, has agreed to Borrower’s customers or prospective customers in the ordinary course of businessfinance. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted Licenselicense or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

Collateral. Borrower has good title to, has rights in, to the Collateral and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderIntellectual Property, free and clear of any and all Liens except Permitted Liens. As of the Effective Date, Borrower has no other deposit accounts account, other than the deposit accounts described on Schedule 1. Each Account with Bankrespect to which Advances are requested by Borrower shall, on the date each Advance is requested and made, represent an undisputed bona fide existing unconditional obligation of the account debtor created by the sale, delivery, and acceptance of goods or the rendition of services in the ordinary course of Borrower’s business, subject to any such account debtor’s right to return any goods that are defective. Except as set forth on Schedule 1 hereto, the deposit accounts, if any described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as at a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2). In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to such a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the prior written consent of Bank and such bailee must execute acknowledge in writing that the bailee is holding such Collateral for the benefit of Bank. Borrower has no notice as of the Effective Date, and deliver a bailee agreement shall have no notice as of the date any Borrowing Base Certificate is delivered, of any actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessany Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects, except for Inventory for which adequate reserves have been made in accordance with GAAP. Borrower is the sole owner of the Intellectual Property which it owns or purports to own Property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed licenses granted to Borrower and noted on the Perfection Certificateby third parties with respect to intellectual property owned by such third parties. Each Patent which it owns or purports is, to own and which is material to the best of Borrower’s businessknowledge, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseMaterial Adverse Change.

Collateral. Borrower has good title to, has rights into the Collateral, and good and marketable title to the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunderTempe Property, free and clear of any and all Liens except Permitted Liens. Borrower has no other deposit accounts account, other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate delivered Schedule (which Schedule Borrower may update from time to Bank time by written notice to Bank). Except as set forth in connection herewiththe Schedule (which Schedule Borrower may update from time to time by written notice to Bank), or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The (a) the Accounts are bona fide, existing obligations of obligations, and the Account Debtors. The service or property has been performed or delivered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor, and (b) the Collateral is not in the possession of any third party bailee (such as at a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2). In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to such a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower will first receive the prior written consent of Bank and such bailee must execute and deliver a acknowledge in writing that the bailee agreement in form and substance satisfactory to Bank in its sole discretionis holding such Collateral for the benefit of Bank. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers Except as set forth in the ordinary course Schedule (which Schedule Borrower may update from time to time by written notice to Bank), Borrower has no notice of businessany actual or imminent Insolvency Proceeding of any account debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower is the sole owner of the Intellectual Property which it owns or purports to own Property, except for (a) exclusive and non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, enforceable and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, and no claim has been made that any part of the Intellectual Property violates the rights of any third party party, except to the extent such invalidity, unenforceability, judgment, or claim would could not have reasonably be expected to cause a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted LicenseMaterial Adverse Change.

Collateral. Each Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no None of the Borrowers, Parent or any of Parent’s Domestic Subsidiaries have any deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any any, described in the Perfection Certificate Certificates of Borrowers and Parent that were delivered to Bank in connection herewith, or of which Borrower has Borrowers have given Bank notice and taken such actions as are necessary to give Bank a perfected security interest thereintherein (subject to Section 6.6 hereof). The Accounts are bona fide, existing obligations of the Account Debtors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral (other than Inventory in the possession of consignees of such Inventory and Trunk Inventory) shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2new locations of Borrowers within the United States for which Borrowers have given Bank 30 days’ prior written notice. In the event that any Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of $50,000 to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower Borrowers will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. The provisions of this paragraph shall not apply All Financed Equipment is new, except for such Financed Equipment that has been disclosed in writing to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of businessBank by Borrowers as “used”. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower Each Borrower, Parent and each of Parent’s Subsidiaries is the sole owner of the Intellectual Property which it owns or purports to own its intellectual property, except for (a) non-exclusive licenses granted to its customers in the ordinary course of business. Each patent is valid and enforceable to the best of each Borrower’s knowledge, and no part of such intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of each Borrower’s knowledge, except as may be set forth in a schedule hereto, no claim has been made that any part of such intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on any Borrower’s or Parent’s business. Except as noted on the Perfection Certificate, neither any Borrower nor Parent nor any Subsidiary of Parent is a party to, nor is bound by, any material license or other agreement with respect to which such Person is the licensee, including without limitation any material license or agreement (a) for which a default under or termination could interfere with the right to sell Collateral, or (b) that prohibits or otherwise restricts such Person from granting a security interest in such Person’s interest in such license or agreement or any other property. Borrowers shall provide written notice to Bank within ten (10) days of any such Person entering or becoming bound by any such license or agreement (other than over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate). Each Patent which it owns Borrower shall take such steps as Bank requests to obtain the consent of, or purports to own and which is material to Borrower’s business, taken as a whole, is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business, taken as a whole, has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, taken as a whole. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound waiver by, any Restricted Licenseperson whose consent or waiver is necessary for Bank to have the ability in the event of a liquidation of the Collateral to dispose of the Collateral in accordance with Bank’s rights and remedies under this Agreement and the Loan Documents.

Collateral. Borrower Guarantor has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to ▇▇▇▇▇ ▇ ▇▇▇▇ hereunder, free and clear of any and all Liens except Permitted Liens. Borrower Guarantor has no deposit accounts other than the deposit accounts with BankPurchaser, the deposit accounts, if any any, described in the Perfection Certificate delivered to Bank Purchaser in connection herewith, or of which Borrower Guarantor has given Bank Purchaser notice and taken such actions as are necessary to give Bank Purchaser a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account DebtorsGuarantors. The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.25.2. In the event that BorrowerGuarantor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral with an aggregate value in excess of One Hundred Thirty Thousand Dollars ($50,000 130,000.00) for all Note Parties, to a bailee, and such bailee and Bank are not already parties to a bailee agreement covering both the Collateral and the location where the Collateral will be stored, then Borrower Guarantor will first receive the written consent of Bank Purchaser and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank Purchaser in its sole discretion. The provisions of this paragraph shall not apply to Demonstration Systems delivered to Borrower’s customers or prospective customers in the ordinary course of business. All Inventory is in all material respects of good and marketable quality, free from material defects. Borrower Guarantor is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower Guarantor and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to BorrowerGuarantor’s businessbusiness is, taken as a wholeto the knowledge of Guarantor, is valid and enforceable, and no part of the Intellectual Property which Borrower Guarantor owns or purports to own and which is material to Borrower’s business, the Note Parties’ business taken as a whole, whole has been judged invalid or unenforceable, in whole or in part. To the best of BorrowerGuarantor’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not have a material adverse effect on Borrower’s business, the Note Parties’ business taken as a whole. Except as noted on the Perfection Certificate, Borrower Guarantor is not a party to, nor is it bound by, any Restricted License.