Carsunlimited.com, Inc. New York, NY 10022
Xxxxxxxxxxxxx.xxx,
Inc.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
August
9,
2006
Mellon
HBV Master U.S. Event Driven Fund, X.X.
Xxxxxx
HBV Master Global Event Driven Fund, L.P.
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Ladies
and Gentlemen:
To
secure
the payment of our obligations to you, including the payment of principal and
interest of our senior secured convertible redeemable promissory notes in the
aggregate principal amount of $7,500,000.00 dated the date hereof payable to
you
or order (collectively, the "Note"), and to secure the performance of all
obligations in your favor under the related Securities Purchase Agreement dated
the date hereof among us pursuant to which the Note was issued, and any other
agreement securing, guaranteeing or otherwise pertaining to the Note, we hereby
grant you a continuing first priority lien and security interest in all our
right, title and interest in and to all of our personal property and assets
(both tangible and intangible), including, without limitation, the following,
whether now owned or hereafter acquired and wherever located: (a) all
Receivables; (b) all Equipment; (c) all Fixtures; (d) all General Intangibles;
all Inventory: (f) all Investment Property; (g) all Deposit Accounts; (h) all
Cash; (i) all other Goods of ours; (j) all Intellectual Property; and (k) all
Proceeds of each of the foregoing and all accessions to, and replacements for,
each of the foregoing (the “Collateral”), (all as such terms are defined in the
New York State Uniform Commercial Code, as in effect from time to time). All
obligations secured hereby are collectively referred to herein as the
"Obligations."
We
hereby
authorize you, at our expense, to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without our signature. A carbon, photographic or other reproduction
of this Agreement or any financing statements covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
applicable law.
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1
Upon
payment or performance in full of all of the Obligations, you will, at our
request and expense, release the security interest granted herein and deliver
such termination statements as may be necessary therefor.
We
hereby
warrant to you that (i) we own the Collateral free and clear of all liens,
restrictions and limitations except for Permitted Liens, as defined in the
Note,
(ii) this Agreement has been duly authorized and constitutes our legal, valid
and binding obligation enforceable against us in accordance with its terms;
(iii) no authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either for
the
grant of a security interest by us in the Collateral pursuant to this Agreement
or for our execution, delivery or performance of this Agreement or for your
exercise of the rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement or the Note; (iv) the grant of
a
security interest in the Collateral to you pursuant to this Agreement creates
a
valid and perfected first priority security interest in your favor in the
Collateral (exclusive of Permitted Liens) securing the payment of the Note
and
the Obligations ; and (v) there are no options, warrants, privileges or other
rights outstanding pursuant to which any of the Collateral may be
acquired.
We
also
agree that we will not transfer, assign or further encumber any of our rights
in
any of the Collateral except pursuant to this Agreement or as you may consent
in
writing.
We
will
take such action and execute such additional documents as you may request in
connection with this Agreement or to enforce your rights hereunder. If we fail
to take any such action or execute any such document, we hereby authorize you
to
do so in our name and on our behalf.
We
hereby
represent and warrant to you that there is no action, legal, administrative
or
other proceeding pending or threatened against our title to the Collateral
or
against our grant of a security interest therein hereunder, nor do we know
of
any basis for the assertion of any such claim.
We
covenant with you that so long as any Obligation remains
outstanding:
| 1. |
Protection
of Security and Legal Proceedings.
We will, at our own expense, take any and all actions necessary to
preserve, protect and defend your security interest in the Collateral
and
the perfection and priority thereof against all adverse claims, including
appearing in and defending any and all actions and proceedings which
purport to affect any of the foregoing. We will promptly reimburse
you for
all sums, including costs, expenses and actual attorneys'
fees, which you may pay or incur in defending, protecting or enforcing
your security interest in the Collateral or perfection or the priority
thereof, or in discharging any prior or subsequent lien or adverse
claim
against the Collateral or any part thereof , or by reason of becoming
or
being made a party to or intervening in any action or proceeding
affecting
the Collateral or your rights therein, all of which actions we hereby
agree that you will have the right to take in your sole and absolute
discretion;
|
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2
| 2. |
Payment
of Taxes.
We shall pay or cause to be paid all taxes and other levies with
respect
to the Collateral when the same become due and
payable;
|
| 3. |
Use
and Maintenance of Collateral.
We shall: (A) comply with all laws, statutes and regulations pertaining
to
our use and ownership of the Collateral and the conduct of our business;
(B) properly care for and maintain all of the Collateral in good
condition, free of misuse, abuse, waste and deterioration, reasonable
wear
and tear excepted; and (C) keep accurate and complete books and records
pertaining to the Collateral in accordance with generally accepted
accounting principles;
|
| 4. |
Inspection.
We shall give you such information as may be requested concerning
the
Collateral and shall at all reasonable times and upon reasonable
notice
permit you and your agents and representatives to enter upon any
premises
upon which the Collateral is located for the purpose of inspecting
the
Collateral. Furthermore, you shall at all reasonable times on reasonable
notice have full access to and the right to audit any and all of
our books
and records pertaining to the Collateral; provided, however, that
any such
action which involves communicating with our customers shall be carried
out by you through our independent auditors unless an Event of Default
(as
such term is defined in the Note) occurs and is continuing, in which
case
you shall then have the right directly to notify such obligors;
and
|
| 5. |
Sale
or Hypothecation of Collateral.
We shall not directly or indirectly, whether voluntarily, involuntarily,
by operation of law or otherwise sell, assign, transfer, exchange,
lease,
lend, or grant any option with respect to or dispose of any of the
Collateral, or any of our rights therein, nor create or permit to
exist
any lien on or with respect to any of the Collateral, except for
the lien
in favor of you and Permitted
Liens.
|
| 6. |
Intellectual
Property Matters.
We shall notify you immediately if we know or have reason to know
(i) that
any application or registration relating to any of our Intellectual
Property may become abandoned or dedicated, or (ii) of any adverse
determination or development (including the institution of, or any
such
determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or
any
court) regarding our ownership of any Intellectual Property that
is
material to the operation of our business, our right to register
the same,
or to keep and maintain the same.
|
You
and
your successors and assigns will have all of the rights, powers and privileges
of a secured party under the New York Uniform Commercial Code in force and
effect from time to time with respect to the security interest granted by this
Agreement. Upon the occurrence of any Event of Default under the Note, you
may
take any action which you may deem necessary for the maintenance, preservation
and protection of any of the Collateral or your security interest therein,
and
you may exercise any of your rights as a secured party under the New York
Uniform Commercial Code, including, without limitation, the right to transfer
any of the Collateral into your name or the name of your nominee and to sell
any
of the Collateral at a public or private sale on such terms as you deem
appropriate and the right to foreclose upon the Collateral. We hereby appoint
you and any of your officers or agents, with full power of substitution, as
our
attorney-in-fact with full irrevocable power and authority in our place and
in
our name or your own name, from time to time in your discretion so long as
an
Event of Default has occurred and is continuing under the Note, for the purpose
of carrying out the terms of this Agreement, to take any appropriate action
and
to authenticate any instrument which may be necessary or desirable to accomplish
the purposes of this Agreement. At any such sale you may be the
purchaser.
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3
You
will
not be required to resort to or pursue any of your rights or remedies under
or
with respect to any other security for or guaranty of payment of any of the
obligations secured by this Agreement before pursuing any of your rights or
remedies under this Agreement.
This
Agreement and your rights and obligations hereunder will be governed by and
construed in accordance with the laws of the State of New York. We agree that
any legal action or proceeding with respect to this Agreement may be brought
in
the courts of the State of New York and of the United States having jurisdiction
in the Borough of Manhattan, City and State of New York and for the purpose
of
any such legal action or proceeding, we hereby waive any claim or defense that
such forum is not convenient or proper. We agree that any such court shall
have
in personam jurisdiction over us and that service of process may be effected
in
any manner authorized by New York law. You shall not by any act, delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default under the Note or in any breach
of any of the terms and conditions of this Agreement. No failure to exercise,
nor any delay in exercising, on your part, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of
any right, power or privilege hereunder shall operate as a waiver thereof.
No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by you of any right or remedy under this
Agreement on any one occasion shall not be construed as a bar to any right
or
remedy which you would otherwise have on any subsequent occasion. The rights
and
remedies provided in this Agreement are cumulative, may be exercised singly
or
concurrently and are not exclusive of any rights or remedies provided by law.
Any
term
of this Agreement may be amended with the written consent of the parties or
their respective successors and assigns. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon the parties and their
respective successors and assigns.
This
Agreement will be binding upon our administrators, successors and
assigns.
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4
WE
HEREBY
WAIVE, AND COVENANT THAT WE WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE SUBJECT MATTER HEREOF, ANY DOCUMENT RELATING HERETO OR ANY
OBLIGATION, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER
IN
CONTRACT OR IN TORT OR OTHERWISE.
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5
If
the
foregoing is acceptable to you, please sign the enclosed copy of this letter
in
the space provided below, whereupon this letter will become an agreement between
us as of the date first above written.
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Very
truly yours,
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| Xxxxxxxxxxxxx.xxx, Inc.. | ||
| |
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| By: | ||
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||
| Name: | ||
| Title: | ||
| AGREED AND ACCEPTED: | |||
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Mellon
HBV Master U.S. Event Driven Fund, X.X.
|
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| Xxxxxx HBV Master Global Event Driven Fund, L.P. | |||
| By: | |||
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| Name: | |||
| Title: |
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