SECURITIES ACCOUNT CONTROL AGREEMENT (Third Party Intermediary)
SECURITIES ACCOUNT CONTROL AGREEMENT
(Third Party Intermediary)
(Third Party Intermediary)
THIS SECURITIES ACCOUNT CONTROL AGREEMENT (this “Agreement”) is entered into as of July 10,
2007 by and among AILI Holding Corp., a Delaware corporation (“Customer”), Legend Merchant Group
(“Intermediary”), and Laurus Master Fund, Ltd. (“Secured Party”).
RECITALS
A. Customer maintains that certain account no. 12U411196407, and may now or hereafter maintain
sub-accounts thereunder or consolidated therewith (collectively, the “Securities Account”) with
Intermediary pursuant to an agreement between Intermediary and Customer dated as of July 10, 2007
(the “Account Agreement”), a copy of which is attached hereto as Exhibit A, and Customer
has granted to Secured Party a security interest in the Securities Account and all financial assets
and other property now or at any time hereafter held in the Securities Account.
B. Secured Party, Customer and Intermediary have agreed to enter into this Agreement to
perfect Secured Party’s security interests in the Collateral, as defined below.
NOW, THEREFORE, in consideration of their mutual covenants and promises, the parties agree as
follows:
1. DEFINITIONS. As used herein:
(a) the term “Collateral” shall mean: (i) the Securities Account; (ii) all financial assets
credited to the Securities Account; (iii) all security entitlements with respect to the financial
assets credited to the Securities Account; (iv) any and all other investment property or assets
maintained or recorded in the Securities Account; and (v) all replacements or substitutions for,
and proceeds of the sale or other disposition of, any of the foregoing, including without
limitation, cash proceeds; and
(b) the terms “investment property,” “entitlement order,” “financial asset” and “security
entitlement” shall have the respective meanings set forth in the Uniform Commercial Code of the
State of New York. The parties hereby expressly agree that all property, including without
limitation, cash, certificates of deposit and mutual funds, at any time held in the Securities
Account is to be treated as a “financial asset.”
2. AGREEMENT FOR CONTROL. Intermediary is authorized by Customer and agrees to comply with
all entitlement orders originated by Secured Party with respect to the Securities Account, and all
other requests or instructions from Secured Party regarding disposition and/or delivery of the
Collateral, without further consent or direction from Customer or any other party.
3. CUSTOMER’S RIGHTS WITH RESPECT TO THE COLLATERAL. Without Secured Party’s prior written
consent: (i) neither Customer nor any party authorized by Customer
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to act with respect to the Securities Account may give trading instructions to Intermediary with
respect to the Collateral in the Securities Account; (ii) neither Customer nor any party other
than Secured Party may withdraw any Collateral from the Securities Account; and (iii) Intermediary
will not comply with any entitlement order or request to withdraw any Collateral from the
Securities Account given by any party other than Secured Party.
4. INTERMEDIARY’S REPRESENTATIONS AND WARRANTIES. Intermediary represents and warrants to
Secured Party that:
(a) The Securities Account is maintained with Intermediary solely in Customer’s name.
(b) Intermediary has no knowledge of any claim to, security interest in or lien upon any of
the Collateral, except: (i) the security interests in favor of Secured Party; and (ii)
Intermediary’s liens securing fees and charges, or payment for open trade commitments, as
described in the last paragraph of this
Section.
(c) Attached hereto as Exhibit A is a true and complete copy of the Account
Agreement.
(d) Attached hereto as Exhibit B is an accurate and complete statement of the
financial assets in the Securities Account as of the date set forth in said statement.
(e) Any claim to, security interest in or lien upon any of the Collateral which Intermediary
now has or at any time hereafter acquires shall be junior and subordinate to the security
interests of Secured Party in the Collateral, except for Intermediary’s liens securing: (i) fees
and charges owed by Customer with respect to the operation of the Securities Account; and (ii)
payment owed to Intermediary for open trade commitments for purchases in and for the Securities
Account.
5. AGREEMENTS OF INTERMEDIARY AND CUSTOMER. Intermediary and Customer agree that:
(a) Intermediary shall flag its books, records and systems to reflect Secured Party’s
security interests in the Collateral, and shall provide notice thereof to any party making inquiry
as to Customer’s accounts with Intermediary to whom or which Intermediary is legally required or
permitted to provide information.
(b) Intermediary shall send copies of all statements relating to the Securities Account
simultaneously to Customer and Secured Party.
(c) Intermediary shall promptly notify Secured Party if any other party asserts any claim to,
security interest in or lien upon any of the Collateral, and Intermediary shall not enter into any
control, custodial or other similar agreement with any other party that would create or
acknowledge the existence of any such other claim, security interest or lien.
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(d) Without Secured Party’s prior written consent, Intermediary and Customer shall not amend
or modify the Account Agreement, other than amendments to reflect ordinary and reasonable changes
in Intermediary’s fees and charges for handling the Securities Account.
(e) Neither Intermediary nor Customer shall terminate the Account Agreement without giving
thirty (30) days’ prior written notice to Secured Party.
6. MISCELLANEOUS.
(a) This Agreement shall not create any obligation or duty of Intermediary except as
expressly set forth herein.
(b) As to the matters specifically the subject of this Agreement, in the event of any conflict
between this Agreement and the Account Agreement or any other agreement between Intermediary and
Customer, the terms of this Agreement shall control.
(c) All notices, requests and demands which any party is required or may desire to give to any
other party under any provision of this Agreement must be in writing (unless otherwise specifically
provided) and delivered to each party at the address or facsimile number set forth below its
signature, or to such other address or facsimile number as any party may designate by written
notice to all other parties. Each such notice, request and demand shall be deemed given or made as
follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by facsimile, upon receipt; and
(iii) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid.
(d) The prevailing party in the prosecution or defense of any action arising out of this
Agreement, including any action for declaratory relief, shall be reimbursed by the party whose
course of action necessitated such prosecution or defense for all costs and expenses, including
reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the
prevailing party’s in-house counsel), expended or incurred by the prevailing party in connection
therewith, whether incurred at the trial or appellate level, in an arbitration proceeding,
bankruptcy proceeding or otherwise.
(e) This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the parties; provided however, that Intermediary may not assign its obligations
hereunder without Secured Party’s prior written consent. This Agreement may be amended or modified
only in writing signed by all parties hereto.
(f) This Agreement shall terminate upon: (i) Intermediary’s receipt of written notice from
Secured Party expressly stating that Secured Party no longer claims any security interest in the
Collateral; or (ii) termination of the Account Agreement pursuant to the terms hereof and
Intermediary’s delivery of all Collateral to Secured Party or its designee in accordance with
Secured Party’s written instructions.
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(g) This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.
| LEGEND MERCHANT GROUP | LAURUS MASTER FUND, LTD. | |||||||||
By:
|
/s/ XXXX XXXX | By: | ||||||||
Name:
|
Name: | |||||||||
Title:
|
PRESIDENT | Title: | ||||||||
| Address: | Address: | |||||||||
| 00 Xxxxx Xxxxxx, 00xx Xxxxx | c/o Laurus Capital Management, L.L.C. | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||||||||
| Attention: Portfolio Services | ||||||||||
| Telephone: (000) 000-0000 | Telephone: (000) 000-0000 | |||||||||
| FAX No.: (000) 000-0000 | FAX No.: (000) 000-0000 | |||||||||
| AILI HOLDING CORP. | ||||
By: |
||||
Name:
|
||||
Title:
|
||||
| Address: | ||||
| c/o Xxxx Xxxxx | ||||
| 000 Xxxxxxx Xxxxxx | ||||
| Xxxxxxxx, Xxx Xxxx 00000 | ||||
| Telephone: (000) 000-0000 | ||||
| FAX No.: (000) 000-0000 | ||||
SIGNATURE PAGE TO
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
(g) This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.
| LEGEND MERCHANT GROUP | LAURUS MASTER FUND, LTD. | |||||||||
By:
|
By: | /s/ Xxxxx Grin | ||||||||
Name:
|
Name: | |||||||||
Title:
|
Title: | Director | ||||||||
| Address: | Address: | |||||||||
| 00 Xxxxx Xxxxxx, 00xx Xxxxx | c/o Laurus Capital Management, L.L.C. | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||||||||
| Attention: Portfolio Services | ||||||||||
| Telephone: (000) 000-0000 | Telephone: (000) 000-0000 | |||||||||
| FAX No.: (000) 000-0000 | FAX No.: (000) 000-0000 | |||||||||
| AILI HOLDING CORP. | ||||
By: |
||||
Name:
|
||||
Title:
|
||||
| Address: | ||||
| c/o Xxxx Xxxxx | ||||
| 000 Xxxxxxx Xxxxxx | ||||
| Xxxxxxxx, Xxx Xxxx 00000 | ||||
| Telephone: (000) 000-0000 | ||||
| FAX No.: (000) 000-0000 | ||||
SIGNATURE PAGE TO
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
(g) This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth
above.
| LEGEND MERCHANT GROUP | LAURUS MASTER FUND, LTD. | |||||||||
By:
|
By: | |||||||||
Name:
|
Name: | |||||||||
Title:
|
Title: | |||||||||
| Address: | Address: | |||||||||
| 00 Xxxxx Xxxxxx, 00xx Xxxxx | c/o Laurus Capital Management, L.L.C. | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | |||||||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||||||||
| Attention: Portfolio Services | ||||||||||
| Telephone: (000) 000-0000 | Telephone: (000) 000-0000 | |||||||||
| FAX No.: (000) 000-0000 | FAX No.: (000) 000-0000 | |||||||||
| AILI HOLDING CORP. | ||||
By:
|
/s/ XXXX XXXXX
|
|||
Name:
|
XXXX XXXXX | |||
Title:
|
President | |||
| Address: | ||||
| c/o Xxxx Xxxxx | ||||
| 000 Xxxxxxx Xxxxxx | ||||
| Xxxxxxxx, Xxx Xxxx 00000 | ||||
| Telephone: (000) 000-0000 | ||||
| FAX No.: (000) 000-0000 | ||||
SIGNATURE PAGE TO
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
LEGEND SECURITIES ACCOUNT
CONTROL AGREEMENT
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| PAYER’S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION |
| Disclosure of Account Information Under Securities and Exchange Commission Rule 14B-1{c), we will be obligated to provide your name, address and securities position to each requesting company whose securities we hold tor your account unless you object to such disclosure. The Rule prohibits companies from using any information so obtained for any purpose other than communicating with you. |
| If you object to the disclosure of your name, address and securities positions, you must check the “I OBJECT TO RELEASE OF INFORMATION” box on the Form w-9 |
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