SECURITY AGREEMENT
THIS
SECURITY AGREEMENT
(the
“Agreement”), is
entered into and made effective as of March 14, 2008, by and between
HOMELAND
SECURITY CAPITAL CORPORATION, a
Delaware corporation with its principal place of business located at 0000 X.
Xxxxx Xxxx, Xxx. 000, Xxxxxxxxx, XX 00000 (the “Company”),
each
subsidiary and affiliate of the Companies listed on Schedule
1
attached
hereto (the “Guarantors,”
collectively with the Companies, the “Grantors”),
in
favor YA
GLOBAL INVESTMENTS, L.P.
(the
“Secured
Party”).
WHEREAS,
in
connection with the Securities Purchase Agreement by and among the Company
and
the Secured Party of even date herewith (the “Securities
Purchase Agreement”),
the
Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue to the Secured Party (i) an aggregate
original principal amount of $13,060,000 of senior secured notes (the
“Notes”);
and
(ii) warrants (the “Warrants”)
to be
exercisable to acquire shares of common stock of the Company (the “Warrants
Shares”);
WHEREAS,
the
Secured Party is the holder of certain secured convertible debentures issued
by
the Company to the Secured Party, (as may be amended, supplemented and restated
from time to time, the “Convertible
Debentures”),
which
Convertible Debentures are being issued for Notes and other securities of the
Company pursuant to the Securities Purchase Agreement;
WHEREAS,
the
Secured Party and certain of the Grantors are parties to prior security
agreements, guaranty agreements, pledge agreements and other agreements or
documents in connection with the Convertible Debentures (the “Prior
Debt Security Documents”);
WHEREAS,
each of
the Guarantors (other than the Company) has executed and delivered a Guaranty
dated the date hereof (the “Guaranty”)
in
favor of the Secured Party, with respect to the Company’s obligations under the
Securities Purchase Agreement, the Notes, and the Transaction Documents (as
defined below); and
WHEREAS,
each of
the Guarantors shall receive a direct benefit from the Secured Party entering
into the Securities Purchase Agreement, the Notes, and the Transaction
Documents; and
WHEREAS,
it
is a
condition precedent to the Secured Party purchasing the Notes and Warrants
pursuant to the Securities Purchase Agreement that the Grantors shall have
executed and delivered to the Secured Party this Agreement providing for the
grant to the Secured Party of a security interest in all personal property
of
each Grantor, including, without limitation, each Grantor’s ownership interest
of each of its subsidiaries, to secure all of the Company's obligations under
the “Transaction Documents” (as that term is defined in the Securities Purchase
Agreement) (the “Transaction
Documents”)
and
the Guarantors’ obligations under the Guaranty;
NOW,
THEREFORE, in
consideration of the promises and the mutual covenants herein contained, and
for
other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE
1.
DEFINITIONS
AND INTERPRETATIONS
Section
1.1. Recitals.
The
above recitals are true and correct and are incorporated herein, in their
entirety, by this reference.
Section
1.2. Interpretations.
Nothing
herein expressed or implied is intended or shall be construed to confer upon
any
person other than the Secured Party any right, remedy or claim under or by
reason hereof.
Section
1.3. Definitions. Reference
is hereby made to the Securities Purchase Agreement and the Notes for a
statement of the terms thereof. All capitalized terms used in this Agreement
and
the recitals hereto and not defined herein shall have the meanings set forth
in
the Securities Purchase Agreement, the Notes, or in Articles 8 or 9 of the
Uniform Commercial Code as in effect from time to time in the State of New
Jersey (the "Code").
Section
1.4. Other
Definitions.
As used
in this Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the singular
and
plural forms of such terms:
“Event
of Default”
shall
be deemed to have occurred under this Agreement upon an Event of Default under
and as defined in the Notes.
“Permitted
Indebtedness”
means:
(i) indebtedness evidenced by Notes; (ii) indebtedness described on the
Disclosure Schedule to the Securities Purchase Agreement; (iii) indebtedness
incurred solely for the purpose of financing the acquisition or lease of any
equipment by the Company, including capital lease obligations with no recourse
other than to such equipment; (iv) indebtedness (A) the repayment of which
has
been subordinated to the payment of the Notes on terms and conditions acceptable
to the Secured Party, including with regard to interest payments and repayment
of principal, (B) which does not mature or otherwise require or permit
redemption or repayment prior to or on the 91st
day
after the maturity date of any Notes then outstanding; and (C) which is not
secured by any assets of the Company; (v) indebtedness solely between the
Grantor and/or one of its domestic subsidiaries, on the one hand, and the
Grantor and/or one of its domestic subsidiaries, on the other which indebtedness
is not secured by any assets of the Grantor or any of its subsidiaries, provided
that (x) in each case a majority of the equity of any such domestic subsidiary
is directly or indirectly owned by the Grantor, such domestic subsidiary is
controlled by the Grantor and such domestic subsidiary has executed a security
agreement in the form of this Agreement and (y) any such loan shall be evidenced
by an intercompany note that is pledged by the Grantor or its subsidiary, as
applicable, as collateral pursuant to this Agreement; (vi) reimbursement
obligations in respect of letters of credit issued for the account of the
Grantor or any of its subsidiaries for the purpose of securing performance
obligations of the Grantor or its subsidiaries incurred in the ordinary course
of business so long as the aggregate face amount of all such letters of credit
does not exceed $500,000 at any one time; and (vii) renewals, extensions and
refinancing of any indebtedness described in clauses (i) or (iii) of this
subsection.
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“Permitted
Liens” means: (1) the security interest created by this Agreement, (2) any prior
security interest granted to the Secured Party, (3) existing Liens which have
been disclosed by the Company to the Secured Party on Schedule 4.2 attached
hereto; (4) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due, as to which the grace period, if any, related thereto has
not yet expired, or being contested in good faith and by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP;
(5)
Liens of carriers, materialmen, warehousemen, mechanics and landlords and other
similar Liens which secure amounts which are not yet overdue or which are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP; (6) licenses, sublicenses, leases
or subleases granted to other Persons not materially interfering with the
conduct of the business of the Company; (7) Liens securing capitalized lease
obligations and purchase money indebtedness incurred solely for the purpose
of
financing an acquisition or lease; (8) easements, rights-of-way, restrictions,
encroachments, municipal zoning ordinances and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing debt
and
not materially interfering with the conduct of the business of the Company
and
not materially detracting from the value of the property subject thereto; (9)
Liens arising out of the existence of judgments or awards which judgments or
awards do not constitute an Event of Default; (10) Liens incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance, pension liabilities and social security benefits and
Liens securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds, performance
bonds and other obligations of a like nature (other than appeal bonds) incurred
in the ordinary course of business (exclusive of obligations in respect of
the
payment for borrowed money); (11) Liens in favor of a banking institution
arising by operation of law encumbering deposits (including the right of
set-off) and contractual set-off rights held by such banking institution and
which are within the general parameters customary in the banking industry and
only burdening deposit accounts or other funds maintained with a creditor
depository institution; (12) usual and customary set-off rights in leases and
other contracts; and (13) escrows in connection with acquisitions and
dispositions. Except for the Permitted Liens, (i) the security interest granted
to the Secured Party hereunder shall be a first priority security interest
subject to no other Liens, and (ii) no financing statement covering any of
the
Collateral or any proceeds thereof is on file in any public office.
ARTICLE
2.
PLEDGED
PROPERTY
Section
2.1. Grant
of Security Interest.
(a) As
collateral security for all of the Obligations (as defined in Section
2.2
hereof),
each Grantor hereby pledges and assigns to the Secured Party, and grants to
the
Secured Party for its benefit, a continuing security interest in and to all
personal property of each Grantor, wherever located and whether now or
hereinafter existing and whether now owned or hereafter acquired, of every
kind
and description, tangible or intangible, including without limitation, all
Goods, Inventory, Equipment, Fixtures, Instruments (including promissory notes),
Documents, Accounts (including health-care-insurance receivables, and license
fees), Contracts, Contract Rights, Chattel Paper (whether tangible or
electronic), Deposit Accounts (and in and to any deposits or other sums at
any
time credited to each such Deposit Account), Money, Letters of Credit and
Letter-of-Credit Rights (whether or not the letter of credit is evidenced by
a
writing), Commercial Tort Claims, Securities and all other Investment Property,
General Intangibles (including payment intangibles and software), Farm Products,
all books and records relating to any of the foregoing, and all supporting
obligations, and any and all proceeds and products of any thereof, including
proceeds of insurance covering any or all of the foregoing, wherever located,
whether now owned, or now due, in which a Grantor has an interest or the power
to transfer rights, or hereafter acquired, arising, or to become due, or in
which a Grantor obtains an interest, or the power to transfer rights, and as
more particularly described on Exhibit
A
attached
hereto (collectively, the Pledged Property).
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(b) Simultaneously
with the execution and delivery of this Agreement, each Grantor shall make,
execute, acknowledge, file, record and deliver to the Secured Party such
documents, instruments, and agreements, including, without limitation, financing
statements, certificates, affidavits and forms as may, in the Secured Party’s
reasonable judgment, be necessary to effectuate, complete or perfect, or to
continue and preserve, the security interest of the Secured Party in the Pledged
Property.
Section
2.2 Security
for Obligations.
The
security interest created hereby in the Pledged Property constitutes continuing
collateral security for all of the following obligations, whether now existing
or hereinafter incurred (collectively, the “Obligations”):
(a)
(i)
the payment by the Company, as and when due and payable (by scheduled maturity,
acceleration, demand or otherwise), of all amounts from time to time owing
by it
in respect of the Notes, the other Transaction Documents, or any other amounts
owing by it to the Secured Party, whether or not now in existence or hereinafter
incurred, or (ii) in the case of any Guarantor, the payment by such Guarantor,
as and when due and payable of all “Guaranteed Obligations” under (and as
defined in) the Guaranty; and
(b)
the
due performance and observance by the each Grantor of all of its other
obligations from time to time existing in respect of any of the Transaction
Documents.
ARTICLE
3.
ATTORNEY-IN-FACT;
PERFORMANCE
Section
3.1. Secured
Party Appointed Attorney-In-Fact.
The
Grantors hereby appoint the Secured Party as its attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor
or otherwise, exercisable after and during the continuance of an Event of
Default, from time to time in the Secured Party’s discretion to take any action
and to execute any instrument which the Secured Party may reasonably deem
necessary to accomplish the purposes of this Agreement, including, without
limitation, to (a) receive and collect all instruments made payable to the
Grantor representing any payments in respect of the Pledged Property or any
part
thereof and to give full discharge for the same; (b) demand, collect, receipt
for, settle, compromise, adjust, xxx for, foreclose, or realize on the Pledged
Property as and when the Secured Party may determine, and (c) to facilitate
collection, the Secured Party may notify account debtors and obligors on any
Pledged Property to make payments directly to the Secured Party. The foregoing
power of attorney is a power coupled with an interest and shall be irrevocable
until all Obligations are paid and performed in full. The Grantors agree that
the powers conferred on the Secured Party hereunder are solely to protect the
Secured Party’s interests in the Pledged Property and shall not impose any duty
upon the Secured Party to exercise any such powers.
4
Section
3.2. Secured
Party May Perform.
If a
Grantor fails to perform any agreement contained herein, the Secured Party,
at
its option, may itself perform, or cause performance of, such agreement, and
the
expenses of the Secured Party incurred in connection therewith shall be included
in the Obligations secured hereby and payable by such Grantor under
Section 8.3.
ARTICLE
4.
REPRESENTATIONS
AND WARRANTIES
Section
4.1. Authorization;
Enforceability.
Each of
the parties hereto represents and warrants that it has taken all action
necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby; and upon execution and delivery,
this
Agreement shall constitute a valid and binding obligation of the respective
party, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights or by the principles governing the
availability of equitable remedies.
Section
4.2. Ownership
of Pledged Property.
Each
Grantor represents and warrants that it is the legal and beneficial owner of
the
Pledged Property free and clear of any lien, security interest, option or other
charge or encumbrance (each, a “Lien”) except for the security interest created
by this Agreement and other Permitted Liens.
Section
4.3 Location
of Pledged Property.
The
Collateral is or will be kept at the address(es) of each Grantor set forth
on
Schedule
4.3
attached
hereto. Unless otherwise provided herein, the Grantors will not remove any
Collateral from such locations without the prior written consent of the Secured
Party which consent shall not be unreasonably withheld.
Section
4.4 Location,
State of Incorporation and Name of Grantors.
Each
Grantor’s principal place of business; state of incorporation, organization or
formation; organization id; and exact legal name is set forth on Schedule
4.4
attached
hereto.
Section
4.5 Priority
of Security Interest. The
security interest granted to the Secured Party hereunder shall be a first
priority security interest subject to no other Liens. Except for the Permitted
Liens, no financing statement covering any of the Pledged Property or any
proceeds thereof is on file in any public office.
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ARTICLE
5.
DEFAULT;
REMEDIES
Section
5.1 Method
of Realizing Upon the Pledged Property: Other Remedies.
If
any
Event of Default shall have occurred and be continuing:
(a) The
Secured Party may exercise in respect of the Pledged Property, in addition
to
any other rights and remedies provided for herein or otherwise available to
it,
all of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Pledged Property), and also
may
(i) take absolute control of the Pledged Property, including, without
limitation, transfer into the Secured Party's name or into the name of its
nominee or nominees (to the extent the Secured Party has not theretofore done
so) and thereafter receive, for the benefit of the Secured Party, all payments
made thereon, give all consents, waivers and ratifications in respect thereof
and otherwise act with respect thereto as though it were the outright owner
thereof, (ii) require each Grantor to assemble all or part of the Pledged
Property as directed by the Secured Party and make it available to the Secured
Party at a place or places to be designated by the Secured Party that is
reasonably convenient to both parties, and the Secured Party may enter into
and
occupy any premises owned or leased by a Grantor where the Pledged Property
or
any part thereof is located or assembled for a reasonable period in order to
effectuate the Secured Party's rights and remedies hereunder or under law,
without obligation to the Grantor in respect of such occupation, and
(iii) without notice except as specified below and without any obligation
to prepare or process the Pledged Property for sale, (A) sell the Pledged
Property or any part thereof in one or more parcels at public or private sale,
at any of the Secured Party's offices or elsewhere, for cash, on credit or
for
future delivery, and at such price or prices and upon such other terms as the
Secured Party may deem commercially reasonable and/or (B) lease, license or
dispose of the Pledged Property or any part thereof upon such terms as the
Secured Party may deem commercially reasonable. Each Grantor agrees that, to
the
extent notice of sale or any other disposition of the Pledged Property shall
be
required by law, at least ten (10) days' notice to the Grantor of the time
and
place of any public sale or the time after which any private sale or other
disposition of the Pledged Property is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to make any sale or
other
disposition of any Pledged Property regardless of notice of sale having been
given. The Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which the Pledged Property
may
have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Secured Party accepts the first offer received and
does
not offer such Pledged Property to more than one offeree, and waives all rights
that the Grantor may have to require that all or any part of such Pledged
Property be marshaled upon any sale (public or private) thereof. Each Grantor
hereby acknowledges that (i) any such sale of the Pledged Property by the
Secured Party may be made without warranty, (ii) the Secured Party may
specifically disclaim any warranties of title, possession, quiet enjoyment
or
the like, and (iii) such actions set forth in clauses (i) and (ii)
above shall not adversely affect the commercial reasonableness of any such
sale
of Pledged Property.
(b) Any
cash
held by the Secured Party as Pledged Property and all cash proceeds received
by
the Secured Party in respect of any sale of or collection from, or other
realization upon, all or any part of the Pledged Property shall be applied
(after payment of any amounts payable to the Secured Party pursuant to Section
8.3 hereof) by the Secured Party against, all or any part of the Obligations
in
such order as the Secured Party shall elect, consistent with the provisions
of
the Securities Purchase Agreement. Any surplus of such cash or cash proceeds
held by the Secured Party and remaining after the indefeasible payment in full
in cash of all of the Obligations shall be paid over to whomsoever shall be
lawfully entitled to receive the same or as a court of competent jurisdiction
shall direct.
6
(c) In
the
event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Secured Party is legally entitled,
each Grantor shall be liable for the deficiency, together with interest thereon
at the rate specified in the Notes for interest on overdue principal thereof
or
such other rate as shall be fixed by applicable law, together with the costs
of
collection and the reasonable fees, costs, expenses and other client charges
of
any attorneys employed by the Secured Party to collect such
deficiency.
(d) Each
Grantor hereby acknowledges that if the Secured Party complies with any
applicable state, provincial, or federal law requirements in connection with
a
disposition of the Pledged Property, such compliance will not adversely affect
the commercial reasonableness of any sale or other disposition of the Pledged
Property.
(e) The
Secured Party shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and the Pledged
Property) for, or other assurances of payment of, the Obligations or any of
them
or to resort to such collateral security or other assurances of payment in
any
particular order, and all of the Secured Party's rights hereunder and in respect
of such collateral security and other assurances of payment shall be cumulative
and in addition to all other rights, however existing or arising. To the extent
that the Grantor lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the Secured Party's rights under this Agreement
or under any other instrument creating or evidencing any of the Obligations
or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, the Company hereby irrevocably waives the benefits
of all such laws.
Section
5.2 Duties
Regarding Pledged Property.
The
Secured Party shall have no duty as to the collection or protection of the
Pledged Property or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody and reasonable care of any of the
Pledged Property actually in the Secured Party’s possession.
ARTICLE
6.
AFFIRMATIVE
COVENANTS
So
long
as any of the Obligations shall remain outstanding, unless the Secured Party
shall otherwise consent in writing:
Section
6.1. Existence,
Properties, Etc. Each
Grantor shall do, or cause to be done, all things, or proceed with due diligence
with any actions or courses of action, that may be reasonably necessary
(i) to maintain Grantor’s due organization, valid existence and good
standing under the laws of its state of incorporation, and (ii) to preserve
and keep in full force and effect all qualifications, licenses and registrations
in those jurisdictions in which the failure to do so could have a Material
Adverse Effect (as defined below); and (b) each Grantor shall not do, or
cause to be done, any act impairing the Grantor’s corporate power or authority
(i) to carry on the Grantor’s business as now conducted, and (ii) to
execute or deliver this Agreement or any other document delivered in connection
herewith, including, without limitation, any UCC-1 Financing Statements required
by the Secured Party (which other loan instruments collectively shall be
referred to as the “Loan
Instruments”) to
which it is or will be a party, or perform any of its obligations hereunder
or
thereunder. For purpose of this Agreement, the term “Material
Adverse Effect”
shall
mean any material and adverse affect as determined by Secured Party in its
reasonable discretion, whether individually or in the aggregate, upon
(a) the Grantor’s assets, business, operations, properties or condition,
financial or otherwise; (b) the Grantor’s ability to make payment as and
when due of all or any part of the Obligations; or (c) the Pledged
Property.
7
Section
6.2. Financial
Statements and Reports.
Each
Grantor shall furnish to the Secured Party within a reasonable time such
financial data as the Secured Party may reasonably request.
Section
6.3. Accounts
and Reports.
Each
Grantor shall maintain a standard system of accounting in accordance with
generally accepted accounting principles consistently applied (“GAAP”) and
provide, at its sole expense, to the Secured Party the following:
(a) as
soon
as available, a copy of any notice or other communication alleging any
nonpayment or other material breach or default, or any foreclosure or other
action respecting any material portion of its assets and properties, received
respecting any of the indebtedness of the Grantor in excess of $500,000 (other
than the Obligations), or any demand or other request for payment under any
guaranty, assumption, purchase agreement or similar agreement or arrangement
respecting the indebtedness or obligations of others in excess of $500,000;
and
(b) within
fifteen (15) days after the making of each submission or filing, a copy of
any report, financial statement, notice or other document, whether periodic
or
otherwise, submitted to the shareholders of the Grantor, or submitted to or
filed by the Grantor with any governmental authority involving or affecting
(i)
the Grantor that could reasonably be expected to have a Material Adverse Effect;
(ii) the Obligations; (iii) any part of the Pledged Property; or
(iv) any of the transactions contemplated in this Agreement or the Loan
Instruments (except, in each case, to the extent any such submission, filing,
report, financial statement, notice or other document is posted on XXXXX
Online).
Section
6.4. Maintenance
of Books and Records; Inspection.
Each
Grantor shall maintain its books, accounts and records in accordance with GAAP,
and permit the Secured Party, its officers and employees and any professionals
designated by the Secured Party in writing, at any time during normal business
hours and upon reasonable notice to visit and inspect any of its properties
(including but not limited to the collateral security described in the
Transaction Documents and/or the Loan Instruments), corporate books and
financial records, and to discuss its accounts, affairs and finances with any
employee, officer or director thereof (it being agreed that, unless an Event
of
Default shall have occurred and be continuing, there shall be no more than
two
(2) such visits and inspections in any Fiscal Year).
8
Section
6.5. Maintenance
and Insurance.
(a) Each
Grantor shall maintain or cause to be maintained, at its own expense, all of
its
material assets and properties in good working order and condition, ordinary
wear and tear excepted, making all necessary repairs thereto and renewals and
replacements thereof.
(b) Each
Grantor shall maintain or cause to be maintained, at its own expense, insurance
in form, substance and amounts (including deductibles), which the Grantor deems
reasonably necessary to the Company’s business, (i) adequate to insure all
assets and properties of the Grantor of a character usually insured by persons
engaged in the same or similar business against loss or damage resulting from
fire or other risks included in an extended coverage policy; (ii) against
public liability and other tort claims that may be incurred by the Grantor;
(iii) as may be required by the Transaction Documents and/or applicable law
and (iv) as may be reasonably requested by Secured Party, all with financially
sound and reputable insurers.
Section
6.6. Contracts
and Other Collateral.
Each
Grantor shall perform all of its obligations under or with respect to each
instrument, receivable, contract and other intangible included in the Pledged
Property to which the Grantor is now or hereafter will be party on a timely
basis and in the manner therein required, including, without limitation, this
Agreement, except to the extent the failure to so perform such obligations
would
not reasonably be expected to have a Material Adverse Effect.
Section
6.7. Defense
of Collateral, Etc.
Each
Grantor shall defend and enforce its right, title and interest in and to any
part of: (a) the Pledged Property; and (b) if not included within the
Pledged Property, those assets and properties whose loss would reasonably be
expected to have a Material Adverse Effect, each against all manner of claims
and demands on a timely basis to the full extent permitted by applicable law
(other than any such claims and demands by holders of Permitted
Liens).
Section
6.8. Taxes
and Assessments.
Each
Grantor shall (a) file all material tax returns and appropriate schedules
thereto that are required to be filed under applicable law, prior to the date
of
delinquency (taking into account any extensions of the original due date),
(b) pay and discharge all material taxes, assessments and governmental
charges or levies imposed upon the Grantor, upon its income and profits or
upon
any properties belonging to it, prior to the date on which penalties attach
thereto, and (c) pay all material taxes, assessments and governmental
charges or levies that, if unpaid, might become a lien or charge upon any of
its
properties; provided,
however,
that
the Grantor in good faith may contest any such tax, assessment, governmental
charge or levy described in the foregoing clauses (b) and (c) so long as
appropriate reserves are maintained with respect thereto if and to the extent
required by GAAP.
Section
6.9. Compliance
with Law and Other Agreements.
Each
Grantor shall maintain its business operations and property owned or used in
connection therewith in compliance with (a) all applicable federal, state
and local laws, regulations and ordinances governing such business operations
and the use and ownership of such property, and (b) all agreements,
licenses, franchises, indentures and mortgages to which the Grantor is a party
or by which the Grantor or any of its properties is bound, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.
9
Section
6.10. Notice
of
Default. The Grantors will immediately notify the Secured Party of any event
causing a substantial loss or diminution in the value of all or any material
part of the Pledged Property and the amount or an estimate of the amount of
such
loss or diminution. The Grantors shall promptly notify the Secured Party of
any
condition or event which constitutes, or would constitute with the passage
of
time or giving of notice or both, an Event of Default, and promptly inform
the
Secured Party of any events or changes in the financial condition of any Grantor
occurring since the date of the last financial statement of such Grantor
delivered to the Secured Party, which individually or cumulatively when viewed
in light of prior financial statements, which might reasonably be expected
to
have a Material Adverse Effect on the business operations or financial condition
of the Grantor.
Section
6.11. Notice
of Litigation.
Each
Grantor shall give notice, in writing, to the Secured Party of (a) any
actions, suits or proceedings wherein the amount at issue is in excess of
$250,000, instituted by any persons against the Grantor, or affecting any of
the
assets of the Company, and (b) any dispute, not resolved within fifteen
(15) days of the commencement thereof, between the Grantor on the one hand
and
any governmental or regulatory body on the other hand, which might reasonably
be
expected to have a Material Adverse Effect on the business operations or
financial condition of the Grantor.
Section
6.13. Future
Subsidiaries.
Schedule
6.13
attached
hereto has all the subsidiaries of the Grantors. If any Grantor shall hereafter
create or acquire any subsidiary, simultaneously with the creation or
acquisition of such subsidiary, such Grantor shall cause such subsidiary to
become a party to this Agreement as an additional "Grantor" hereunder, and
to
duly execute and deliver a guaranty of the Obligations in favor of the Secured
Party in form and substance reasonably acceptable to the Secured Party, and
to
duly execute and/or deliver such opinions of counsel and other documents, in
form and substance reasonably acceptable to the Secured Party, as the Secured
Party shall reasonably request with respect thereto.
Section
6.14. Changes
to Identity.
Each
Grantor will (a) give the Secured Party at least 30 days' prior written notice
of any change in such Grantor's name, identity or organizational structure,
(b)
maintain its jurisdiction of incorporation, organization or formation as set
forth on its respective signature page attached hereto, (C) immediately notify
the Secured Party upon obtaining an organizational identification number, if
on
the date hereof such Grantor did not have such identification
number.
Section
6.15. Establishment
of Deposit Account, Account Control Agreements.
(a) In
connection with the execution of this Agreement, each Grantor, the Secured
Party, and each applicable bank or other depository institution shall enter
into
a an account control agreement (the “Account
Control Agreement”)
in the
form of Exhibit
B
attached
hereto with respect to each of the Grantor’s deposit accounts, including,
without limitation, all savings, passbook, money market or other depository
accounts, and all certificates of deposit, maintained by each Grantor with
any
bank, savings and loan association, credit union or other depository institution
maintained or used by each Grantor (the “Deposit
Accounts”)
providing dominion and control over such accounts to the Secured Party such
that
upon notice by the Secured Party to such bank or other depository institution
of
the occurrence of an Event of Default all actions under such account shall
be
taken solely at the Secured Party’s direction. Each Grantor’s current Deposit
Accounts are set forth on Schedule
6.15
attached
hereto.
10
(b) Each
Grantor shall cause all cash, all collections and proceeds from accounts
receivable, all receipts from credit card payments, and all proceeds from the
sale of any Pledged Property to be deposited only into its Deposit Accounts
in
the ordinary course of business and consistent with past practices. Each Grantor
shall have valid and effective Account Control Agreements in place at all times
with respect to all of its Deposit Accounts. No Deposit Account shall be
established, used or maintained by the Company unless it first enters into
an
Account Control Agreement.
(c) With
respect to each Deposit Account, from an after the occurrence of an Event of
Default, the Secured Party shall have the right, at any time and from time
to
time, to exercise its rights under such Account Control Agreement, including,
for the avoidance of any doubt, the exclusive right to give instructions to
the
financial institution at which such Deposit Account is maintained as to the
disposition of funds or other property on deposit therein or credited thereto.
The Secured Party hereby covenants and agrees that it will not send any such
notice to a financial institution at which any such Deposit Account is
maintained directing the disposition of funds or other property therein unless
and until the occurrence of an Event of Default
(d) In
connection with the foregoing, each Grantor hereby authorizes and directs each
bank or other depository institution which maintains any Deposit Account to
pay
or deliver to the Secured Party upon the Secured Party’s written demand thereof
made at any time after the occurrence of an Event of Default has occurred all
balances in each Deposit Account with such depository for application to the
Obligations then outstanding.
Section
6.16 Perfection
of Security Interests.
(a) Financing
Statements.
The
Grantors hereby irrevocably authorize the Secured Party, at the sole cost and
expense of the Grantors, at any time and from time to time to file in any filing
office in any jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Pledged Property (i) as all assets of Grantors
or
words of similar effect, regardless of whether any particular asset comprised
in
the Pledged Property falls within the scope of Article 9 of the Code of such
jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) contain any other information required by Part 5 of Article
9 of
the Code for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether such Grantor is an organization,
the type of organization and any organization identification number issued
to
such Grantor, and (ii) in the case of a financing statement filed as a fixture
filing, a sufficient description of real property to which the Pledged Property
relates. Grantors agree to furnish any such information to the Secured Party
promptly upon request. Grantors also ratify their authorization for the Secured
Party to have filed in any jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof. The Grantors acknowledge
that they are not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement without the prior
written consent of the Secured Party and agree that they will not do so without
the prior written consent of the Secured Party. The Grantors acknowledge and
agree that this Agreement constitutes an authenticated record.
11
(b) Possession.
The
Grantors (i) shall have possession of the Pledged Property, except where
expressly otherwise provided in this Agreement or where the Secured Party
chooses to perfect its security interest by possession in addition to the filing
of a financing statement; and (ii) will, where Pledged Property is in the
possession of a third party, join with the Secured Party in notifying the third
party of the Secured Party’s security interest and obtaining an acknowledgment
from the third party that it is holding the Pledged Property for the benefit
of
the Secured Party.
(c) Control. In
addition to the provisions set forth in Section 6.15 above, the Grantors will
cooperate with the Secured Party in obtaining control with respect to the
Pledged Property consisting of (i) Investment Property, (ii) Letters of Credit
and Letter-of-Credit Rights and (iii) electronic Chattel Paper.
(d) Chattel
Paper. Marking
of Chattel Paper. The Grantors will not create any Chattel Paper without placing
a legend on the Chattel Paper acceptable to the Secured Party indicating that
the Secured Party has a security interest in the Chattel Paper.
Section
6.17 Notice
of Commercial Tort Claims.
If any
Grantor shall at any time acquire a Commercial Tort Claim, such Grantor shall
immediately notify the Secured Party in a writing signed by such Grantor which
shall (a) provide brief details of said claim and (b) grant to the Secured
Party
a security interest in said claim and in the proceeds thereof, all upon the
terms of this Agreement, in such form and substance satisfactory to the Secured
Party.
ARTICLE
7.
NEGATIVE
COVENANTS
So
long
as any of the Obligations shall remain outstanding, unless the Secured Party
shall otherwise consent in writing each Grantor covenants and agrees that it
shall not:
Section
7.1. Transfers,
Liens and Encumbrances.
(a) Sell,
assign (by operation of law or otherwise), lease, license, exchange or otherwise
transfer or dispose of any of the Pledged Property, except Grantor may (i)
sell
or dispose of Inventory in the ordinary course of business, and (ii) sell or
dispose of assets the Grantor has determined, in good faith, not to be useful
in
the conduct of its business, and (iii) sell or dispose of accounts in the course
of collection in the ordinary course of business consistent with past
practice.
(b) Directly
or indirectly make, create, incur, assume or permit to exist any Lien in, to
or
against any part of the Pledged Property other than Permitted
Liens.
Section
7.2. Restriction
on Redemption and Cash Dividends.
Directly or indirectly, redeem, repurchase or declare or pay any cash dividend
or distribution on its capital stock without the prior express written consent
of the Secured Party.
12
Section
7.3. Incurrence
of Indebtedness.
Directly or indirectly, incur or guarantee, assume or suffer to exist any
indebtedness, other than the indebtedness evidenced by the Notes and other
Permitted Indebtedness.
Section
7.4. Places
of Business.
Change
the location of its chief place of business, chief executive office or any
place
of business disclosed to the Secured Party, unless such change in location
is to
a different location within the United States and the Grantor provides notice
to
the Secured Party of new location within 10 days’ of such change in
location.
ARTICLE
8.
MISCELLANEOUS
Section
8.1. Notices.
All
notices or other communications required or permitted to be given pursuant
to
this Agreement shall be in writing and shall be considered as duly given on:
(a) the date of delivery, if delivered in person or by nationally
recognized overnight delivery service or (b) five (5) days after
mailing if mailed from within the continental United States by certified mail,
return receipt requested to the party entitled to receive the same:
|
If
to the Secured Party:
|
YA
Global Investments, L.P.
|
|
|
000
Xxxxxx Xxxxxx-Xxxxx 0000
|
||
|
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
|
||
|
Attention:
|
Xxxx
Xxxxxx
|
|
|
Portfolio
Manager
|
||
|
Telephone:
|
(000)
000-0000
|
|
|
Facsimile:
|
(000)
000-0000
|
|
|
With
a copy to:
|
Xxxxx
Xxxxxxxx, Esq.
|
|
|
000
Xxxxxx Xxxxxx, Xxxxx 0000
|
||
|
Xxxxxx
Xxxx, XX 00000
|
||
|
Telephone:
|
(000)
000-0000
|
|
|
Facsimile:
|
(000)
000-0000
|
|
13
|
If
to the Company:
|
Mr.
C. Xxxxxx XxXxxxxx
|
|
|
Chief
Executive Officer
|
||
|
0000
X. Xxxxx Xxxx, Xxx. 000
|
||
|
Xxxxxxxxx,
XX 00000
|
||
|
Telephone:
|
(000)
000-0000
|
|
|
Facsimile:
|
(000)
000-0000
|
|
|
With
a copy to:
|
Xxxxxx
X. Xxxxxxx, Esq.
|
|
|
Xxxxxxxxxxx
& Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
|
||
|
000
X. Xxxxxxxx Xxxx., Xxxxx 0000
|
||
|
Xxxxx,
XX 00000
|
||
|
Facsimile:
|
(000)
000-0000
|
|
|
Facsimile:
|
(000)
000-0000
|
|
|
If
to any other Grantor
|
To
the address listed on the respective signature pages attached
hereto
|
|
Any
party
may change its address by giving notice to the other party stating its new
address. Commencing on the tenth (10th) day
after the giving of such notice, such newly designated address shall be such
party’s address for the purpose of all notices or other communications required
or permitted to be given pursuant to this Agreement.
Section
8.2. Severability.
If any
provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall
not
in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if
any
such invalid or unenforceable provision were not contained herein.
Section
8.3. Expenses.
In the
event of an Event of Default, the Company will pay to the Secured Party the
amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and expenses of its counsel, which the Secured Party may incur
in connection with: (i) the custody or preservation of, or the sale,
collection from, or other realization upon, any of the Pledged Property;
(ii) the exercise or enforcement of any of the rights of the Secured Party
hereunder or (iii) the failure by the Grantor to perform or observe any of
the provisions hereof.
Section
8.4. Waivers,
Amendments, Etc.
The
Secured Party’s delay or failure at any time or times hereafter to require
strict performance by Grantor of any undertakings, agreements or covenants
shall
not waive, affect, or diminish any right of the Secured Party under this
Agreement to demand strict compliance and performance herewith. Any waiver
by
the Secured Party of any Event of Default shall not waive or affect any other
Event of Default, whether such Event of Default is prior or subsequent thereto
and whether of the same or a different type. None of the undertakings,
agreements and covenants of the Grantor contained in this Agreement, and no
Event of Default, shall be deemed to have been waived by the Secured Party,
nor
may this Agreement be amended, changed or modified, unless such waiver,
amendment, change or modification is evidenced by an instrument in writing
specifying such waiver, amendment, change or modification and signed by the
Secured Party in the case of any such waiver, and signed by the Secured Party
and the Grantor in the case of any such amendment, change or modification.
Further, no such document, instrument, and/or agreement purported to be executed
on behalf of the Secured Party shall be binding upon the Secured Party unless
executed by a duly authorized representative of the Secured Party.
14
Section
8.5. Continuing
Security Interest.
This
Agreement shall create a continuing security interest in the Pledged Property
and shall: (i) remain in full force and effect so long as any of the
Obligations shall remain outstanding; (ii) be binding upon each Grantor and
its successors and assigns; and (iii) inure to the benefit of the Secured
Party and its successors and assigns. Upon the payment or satisfaction in full
of the Obligations, this Agreement and the security interest created hereby
shall terminate, and, in connection therewith, each Grantor shall be entitled
to
the return, at its expense, of such of the Pledged Property as shall not have
been sold in accordance with Section 5.2 hereof or otherwise applied
pursuant to the terms hereof and the Secured Party shall deliver to the Grantor
such documents as the Grantor shall reasonably request to evidence such
termination.
Section
8.6. Independent
Representation.
Each
party hereto acknowledges and agrees that it has received or has had the
opportunity to receive independent legal counsel of its own choice and that
it
has been sufficiently apprised of its rights and responsibilities with regard
to
the substance of this Agreement.
Section
8.7. Applicable
Law: Jurisdiction.
This
Agreement shall be governed by and interpreted in accordance with the laws
of
the State of Delaware without regard to the principles of conflict of laws.
The
parties further agree that any action between them shall be heard in Xxxxxx
County, New Jersey, and expressly consent to the jurisdiction and venue of
the
Superior Court of New Jersey, sitting in Xxxxxx County and the United States
District Court for the District of New Jersey sitting in Newark, New Jersey
for
the adjudication of any civil action asserted pursuant to this Paragraph,
provided,
however,
that
nothing herein shall prevent the Secured Party from enforcing its rights and
remedies (including, without limitation, by filing a civil action) with respect
to the Pledged Property and/or the Grantors in any other jurisdiction in which
the Pledged Property and/or the Grantors may be located.
Section
8.8. Waiver
of Jury Trial.
AS A
FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO
MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES
ANY
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS
AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.
Section
8.9 Right
of Set Off.
The
Grantors each hereby grant to the Secured Party, a lien, security interest
and
right of setoff as security for all liabilities and obligations to the Secured
Party, whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Secured Party or any of its affiliates, or any
entity under the control of the Secured Party, or in transit to any of them.
At
any time, without demand or notice, the Secured Party may set off the same
or
any part thereof and apply the same to any liability or obligation of the
Grantors even though unmatured and regardless of the adequacy of any other
collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE THE SECURED
PARTY TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GRANTORS, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
15
Section
8.10. Waiver
of Claims.
The
Grantors acknowledge and agree that they have no offsets, defenses, claims,
or
counterclaims against the Secured Party or its officers, directors, employees,
attorneys, representatives, parents, affiliates, predecessors, successors,
or
assigns with respect to the Obligations, the Prior Debt Security Documents
or
otherwise, and that if the Grantors now has, or ever did have, any offsets,
defenses, claims, or counterclaims against the Secured Party or its officers,
directors, employees, attorneys, representatives, affiliates, predecessors,
successors, or assigns, whether known or unknown, at law or in equity, from
the
beginning of the world through this date and through the time of execution
of
this Agreement, all of them are hereby expressly WAIVED,
and the
Grantors hereby RELEASE
the
Secured Party and its officers, directors, employees, attorneys,
representatives, affiliates, predecessors, successors, and assigns from any
liability therefor.
Section
8.11. Existing
Security Interests. The
security interests granted herein are intended to be supplemental to, and not
in
limitation of, any existing security interests granted to the Secured Party
to
secure the Obligations, whether under the Prior Debt Security Documents or
otherwise. All such existing security interests, and any rights of the Secured
Party in connection therewith, shall remain in full force and effect in
accordance with their respective terms, provided,
however,
that in
the event of a conflict between the terms of this Agreement and of any such
prior security interests, or the documents evidencing the same, the terms of
this Agreement shall control.
Section
8.12. Ratification
of Prior Documents.
Each
Grantor hereby ratifies, confirms and reaffirms all and singular the terms
and
conditions of the Prior Debt Security Documents, the Convertible Debentures
and
any other or related documents or agreements (the “Prior
Documents”),
as
the same may be amended and in effect as of the date hereof. The Grantors
further acknowledge and agree that except as the Prior Documents may be
specifically affected by this Agreement, the Securities Purchase Agreement,
and/or any of the other documents executed in connection herewith, all terms
and
conditions of the Prior Documents, as the same may be amended and in effect
as
of the date hereof, shall remain in full force and effect.
Section
8.13 Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties and supersedes
any
prior agreement or understanding among them with respect to the subject matter
hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
16
IN
WITNESS WHEREOF, the
parties hereto have executed this Security Agreement as of the date first above
written.
|
COMPANY:
|
|||||
| HOMELAND SECURITY CAPITAL CORPORATION | |||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
|
GUARANTOR:
|
|||||
|
HOMELAND
SECURITY ADVISORY SERVICES, INC.
|
|||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
|
GUARANTOR:
|
|||||
|
CELERITY
SYSTEMS, INC.
|
|||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
17
IN
WITNESS WHEREOF, the
parties hereto have executed this Security Agreement as of the date first above
written.
|
BUYER:
|
||||
|
YA
GLOBAL INVESTMENTS, L.P.
|
||||
|
By:
|
Yorkville
Advisors, LLC
|
|||
|
Its:
|
Investment
Manager
|
|||
|
By:
|
||||
|
Name:
|
Xxxx
Xxxxxx
|
|||
|
Its:
|
Portfolio
Manager
|
|||
18
EXHIBIT
A
DEFINITION
OF PLEDGED PROPERTY
For
the
purpose of securing prompt and complete payment and performance by the Grantor
of all of the Obligations, the Grantors each unconditionally and irrevocably
hereby grant to the Secured Party a continuing security interest in and to,
and
lien upon, the following Pledged Property of each Grantor (all capitalized
terms
used herein shall have the respective meanings ascribed thereto in the
Code):
All
personal property of each Grantor, wherever located and whether now or
hereinafter existing and whether now owned or hereafter acquired, of every
kind
and description, tangible or intangible, including without limitation,
all:
1. Goods;
2.
Inventory,
including, without limitation, all goods, merchandise and other personal
property now owned or hereafter acquired by the Grantor which are held for
sale
or lease, or are furnished or to be furnished under any contract of service
or
are raw materials, work-in-process, supplies or materials used or consumed
in
the Grantor’s business, and all products thereof, and all substitutions.
replacements, additions or accessions therefor and thereto; and any cash
or
non-cash Proceeds of all of the foregoing;
3.
Equipment,
including, without limitation, all machinery, equipment, furniture, parts,
tools
and dies, of every kind and description, of the Grantor (including automotive
equipment and motor vehicles), now owned or hereafter acquired by the Grantor,
and used or acquired for use in the business of the Grantor, together with
all
accessions thereto and all substitutions and replacements thereof and parts
therefor and all cash or non-cash Proceeds of the foregoing;
4. Fixtures,
including, without limitation, all goods which are so related to particular
real
estate that an interest in them arises under real estate law and all accessions
thereto, replacements thereof and substitutions therefor, including, but
not
limited to, plumbing, heating and lighting apparatus, mantels, floor coverings,
furniture, furnishings, draperies, screens, storm windows and doors, awnings,
shrubbery, plants, boilers, tanks, machinery, stoves, gas and electric ranges,
wall cabinets, appliances, furnaces, dynamos, motors, elevators and elevator
machinery, radiators, blinds and all laundry, refrigerating, gas, electric,
ventilating, air-refrigerating, air-conditioning, incinerating and sprinkling
and other fire prevention or extinguishing equipment of whatsoever kind and
nature and any replacements, accessions and additions thereto, Proceeds thereof
and substitutions therefor;
5. Instruments
(including promissory notes);
6. Documents;
7. Accounts,
including, without limitation, all Contract Rights and accounts receivable,
health-care-insurance receivables, and license fees; any other obligations
or
indebtedness owed to the Grantor from whatever source arising; all rights
of
Grantor to receive any payments in money or kind; all guarantees of Accounts
and
security therefor; all cash or non-cash Proceeds of all of the foregoing;
all of
the right, title and interest of Grantor in and with respect to the goods,
services or other property which gave rise to or which secure any of the
accounts and insurance policies and proceeds relating thereto, and all of
the
rights of the Grantor as an unpaid seller of goods or services, including,
without limitation the rights of stoppage in transit, replevin, reclamation
and
resale and all of the foregoing, whether now existing or hereafter created
or
acquired;
A-1
8.
Contracts
and Contract Rights, including, to the extent not included in the definition
of
Accounts, all rights to payment or performance under a contract not yet earned
by performance and not evidenced by an Instrument or Chattel Paper;
9.
Chattel
Paper (whether tangible or electronic);
10. Deposit
Accounts (and in and to any deposits or other sums at any time credited to
each
such Deposit Account);
11. Money,
cash and cash equivalents;
12. Letters
of Credit and Letter-of-Credit Rights (whether or not the Letter of Credit
is
evidenced by a writing);
13. Commercial
Tort Claims;
14. Securities
Accounts, Security Entitlements, Securities, Financial Assets and all other
Investment Property, including, without limitation, all ownership or membership
interests in any subsidiaries or affiliates (whether or not controlled by
the
Grantor);
15. General
Intangibles, including, without limitation, all payment intangibles, tax
refunds
and other claims of the Grantor against any governmental authority, and all
choses in action, insurance proceeds, goodwill, patents, copyrights, trademarks,
tradenames, customer lists, formulae, trade secrets, licenses, permits,
franchises, designs, computer software, research and literary rights now
owned
or hereafter acquired;
16. Farm
Products;
17. All
books
and records (including all ledger sheets, files, computer programs, tapes
and
related data processing software) evidencing an interest in or relating to
any
of the foregoing;
18. To
the
extent not already included above, all supporting obligations, and any and
all
cash and non-cash Proceeds, products, accessions, and/or replacements of
any of
the foregoing, including proceeds of insurance covering any or all of the
foregoing.
A-2
