Common use of Secured Debenture Clause in Contracts

Secured Debenture. The Company represents and warrants that it is ------------------ aware of the security agreement being entered into between J▇▇▇ ▇▇▇ ▇▇▇▇, M▇▇▇▇▇ ▇▇▇▇▇ and A▇▇ ▇▇▇▇▇▇▇, as a pledgors of 4,000,000 shares of the Company's common stock and the Purchaser, ____________ as the secured party. The Company understands that the Purchaser is relying on the security agreement and the stock being pledged in the event the Company defaults in the terms of the Subscription Agreement, Registration Rights Agreement or Debentures being entered into between the Company and Purchaser. Furthermore, the Company understands that were it not for this accommodation pledge being made by J▇▇▇ ▇▇▇ ▇▇▇▇, M▇▇▇▇▇ ▇▇▇▇▇ and A▇▇ ▇▇▇▇▇▇▇, the Purchaser would not be subscribing for the Debentures. Therefore, the Company represents and warrants that in the event it defaults by failing to (i) have the registration statement covering this Offering filed within ninety (90) calendar days of the Closing Date of the first tranche of $100,000 or (ii) have declared effective within one hundred eighty (180) calendar days of the Closing Date of the first tranche of $100,000, or (iii) respond within thirty (30) calendar days of receipt of comments from the SEC, that it will cooperate with the Purchaser and do everything necessary to have the legend removed from the pledged shares to facilitate their sale pursuant to the terms of the security agreement. The Company also represents and acknowledges that the Debenture is a full recourse loan being made by the Company and that in the event the 4,000,000 shares are not sufficient to cover 130% of principal plus liquidated damages that the Company shall be completely liable and responsible to pay any deficiency to the Purchaser including liquidated damages as stated in this Subscription Agreement or the Debentures, and reasonable attorney's fees and costs.