SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of July __, 2005, by
and among MSGI Security Solutions, Inc., a Nevada corporation ("Company"), and
the secured parties signatory hereto and their respective endorsees, transferees
and assigns (collectively, the "Secured Party").
W I T N E S S E T H:
WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof, between Company and the Secured Party (the "Purchase Agreement"),
Company has agreed to issue to the Secured Party and the Secured Party has
agreed to purchase from Company certain of Company's 8% Callable Secured
Convertible Notes, due three years from the date of issue (the "Notes"), which
are convertible into shares of Company's Common Stock, par value $.01 per share
(the "Common Stock"). In connection therewith, Company shall issue the Secured
Party certain Common Stock purchase warrants (the "Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase the Notes,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a first priority
security interest in certain property of Company to secure the prompt payment,
performance and discharge in full of all of Company's obligations under the
Notes and exercise and discharge in full of Company's obligations under the
Warrants.
NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth in this Section 1.
Terms used but not otherwise defined in this Agreement that
are defined in Article 9 of the UCC (such as "general
intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.
(a) "Collateral" means the collateral in which the Secured Party
is granted a security interest by this Agreement and which
shall include the following, whether presently owned or
existing or hereafter acquired or coming into existence, and
all additions and accessions thereto and all substitutions and
replacements thereof, and all proceeds, products and accounts
thereof, including, without limitation, all proceeds from the
sale or transfer of the Collateral and of insurance covering
the same in connection therewith:
(i) All Goods of the Company, including, without limitations, all
machinery, equipment, computers, motor vehicles, trucks,
tanks, boats, ships, appliances, furniture, special and
general tools, fixtures, test and quality control devices and
other equipment of every kind and nature and wherever
situated, together with all documents of title and documents
representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes
for any of the foregoing and all other items used and useful
in connection with the Company's businesses and all
improvements thereto (collectively, the "Equipment"); and
(ii) All Inventory of the Company; and
(iii) All of the Company's contract rights and general intangibles,
including, without limitation, all partnership interests,
stock or other securities, licenses, distribution and other
agreements, computer software development rights, leases,
franchises, customer lists, quality control procedures, grants
and rights, goodwill, trademarks, service marks, trade styles,
trade names, patents, patent applications, copyrights, deposit
accounts, and income tax refunds (collectively, the "General
Intangibles"); and
(iv) All Receivables of the Company including all insurance
proceeds, and rights to refunds or indemnification whatsoever
owing, together with all instruments, all documents of title
representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks
which any of the same may represent, and all right, title,
security and guaranties with respect to each Receivable,
including any right of stoppage in transit; and
(v) All of the Company's documents, instruments and chattel paper,
files, records, books of account, business papers, computer
programs and the products and proceeds of all of the foregoing
Collateral set forth in clauses (i)-(iv) above.
(b) "Company" shall mean, collectively, Company and all of the
subsidiaries of Company, a list of which is contained in
Schedule A, attached hereto.
(c) "Obligations" means all of the Company's obligations under
this Agreement and the Notes, in each case, whether now or
hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated,
whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later
decreased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or
any part of such payment is avoided or recovered directly or
indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to
time.
(d) "UCC" means the Uniform Commercial Code, as currently in
effect in the State of New York.
2. Grant of Security Interest. As an inducement for the Secured
Party to purchase the Notes and to secure the complete and
timely payment, performance and discharge in full, as the case
may be, of all of the Obligations, the Company hereby,
unconditionally and irrevocably, pledges, grants and
hypothecates to the Secured Party, a continuing security
interest in, a continuing first lien upon, and a right of
set-off against, in each case to the fullest extent permitted
by law, all of the Company's right, title and interest of
whatsoever kind and nature in and to the Collateral (the
"Security Interest").
3. Representations, Warranties, Covenants and Agreements of the
Company. Except as otherwise disclosed in the Company's
filings with the Securities and Exchange Commission, the
Company represents and warrants to, and covenants and agrees
with, the Secured Party as follows:
(a) Each of the Company and the Company's subsidiaries has the
requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by the
Company of this Agreement and the filings contemplated therein
have been duly authorized by all necessary action on the part
of the Company and no further action is required by the
Company. This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally.
(b) The Company is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Company in the ordinary
course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Collateral. There is not on file in any governmental or
regulatory authority, agency or recording office an effective
financing statement, security agreement, license or transfer
or any notice of any of the foregoing (other than those that
have been filed in favor of the Secured Party pursuant to this
Agreement) covering or affecting any of the Collateral.
(c) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any
Collateral or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision
to the Company's claim of ownership rights in or exclusive
rights to use the Collateral in any jurisdiction or to the
Company's right to keep and maintain such Collateral in full
force and effect, and there is no proceeding involving said
rights pending or, to the best knowledge of the Company,
threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental authority.
(d) The execution, delivery and performance of this Agreement does
not conflict with or cause a breach or default, or an event
that with or without the passage of time or notice, shall
constitute a breach or default, under any agreement to which
the Company is a party or by which the Company is bound. No
consent (including, without limitation, from stock holders or
creditors of the Company) is required for the Company to enter
into and perform its obligations hereunder.
(e) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first
priority liens and security interests in the Collateral in
favor of the Secured Party until this Agreement and the
Security Interest hereunder shall terminate pursuant to
Section 11. The Company hereby agrees to defend the same
against any and all persons. The Company shall safeguard and
protect all Collateral for the account of the Secured Party.
Without limiting the generality of the foregoing, the Company
shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interest hereunder,
and the Company shall obtain and furnish to the Secured Party
from time to time, upon demand, such releases and/or
subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.
(f) The Company will not transfer, pledge, hypothecate, encumber,
license (except for in the ordinary course of business and in
connection with any receivables financing the Company may
obtain), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.
(g) The Company shall keep and preserve its Equipment, Inventory
and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or
cause to be operated or located) in any area excluded from
insurance coverage.
(h) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient
detail, of any substantial change in the Collateral, and of
the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the
Secured Party's security interest therein.
(i) The Company shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments,
documents, certificates and assurances and take such further
action as the Secured Party may from time to time request and
may in its sole discretion deem necessary to perfect, protect
or enforce its security interest in the Collateral including,
without limitation, the execution and delivery of a separate
security agreement with respect to the Company's intellectual
property ("Intellectual Property Security Agreement") in which
the Secured Party has been granted a security interest
hereunder, substantially in a form acceptable to the Secured
Party, which Intellectual Property Security Agreement, other
than as stated therein, shall be subject to all of the terms
and conditions hereof.
(j) The Company shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any
time, and to make copies of records pertaining to the
Collateral as may be requested by the Secured Party from time
to time.
(k) The Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect
any rights, claims, causes of action and accounts receivable
in respect of the Collateral.
(l) The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against
any Collateral and of any other information received by the
Company that may materially affect the value of the
Collateral, the Security Interest or the rights and remedies
of the Secured Party hereunder.
(m) All information heretofore, herein or hereafter supplied to
the Secured Party by or on behalf of the Company with respect
to the Collateral is accurate and complete in all material
respects as of the date furnished.
(n) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the
Notes) under the Notes;
(b) Any representation or warranty of the Company in this
Agreement or in the Intellectual Property Security Agreement
shall prove to have been incorrect in any material respect
when made;
(c) The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security
Agreement for ten (10) days after receipt by the Company of
notice of such failure from the Secured Party; and
(d) Any breach of, or default under, the Warrants.
5. Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Company shall, upon
receipt by it of any revenue, income or other sums subject to
the Security Interest, whether payable pursuant to the Notes
or otherwise, or of any check, draft, note, trade acceptance
or other instrument evidencing an obligation to pay any such
sum, hold the same in trust for the Secured Party and shall
forthwith endorse and transfer any such sums or instruments,
or both, to the Secured Party for application to the
satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon occurrence of any Event
of Default and at any time thereafter, the Secured Party shall
have the right to exercise all of the remedies conferred
hereunder and under the Notes, and the Secured Party shall
have all the rights and remedies of a secured party under the
UCC and/or any other applicable law (including the Uniform
Commercial Code of any jurisdiction in which any Collateral is
then located). Without limitation, the Secured Party shall
have the following rights and powers:
(a) The Secured Party shall have the right to take possession of
the Collateral and, for that purpose, enter, with the aid and
assistance of any person, any premises where the Collateral,
or any part thereof, is or may be placed and remove the same,
and the Company shall assemble the Collateral and make it
available to the Secured Party at places which the Secured
Party shall reasonably select, whether at the Company's
premises or elsewhere, and make available to the Secured
Party, without rent, all of the Company's respective premises
and facilities for the purpose of the Secured Party taking
possession of, removing or putting the Collateral in saleable
or disposable form.
(b) The Secured Party shall have the right to operate the business
of the Company using the Collateral and shall have the right
to assign, sell, lease or otherwise dispose of and deliver all
or any part of the Collateral, at public or private sale or
otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in
such parcel or parcels and at such time or times and at such
place or places, and upon such terms and conditions as the
Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot
be waived) advertisement or demand upon or notice to the
Company or right of redemption of the Company, which are
hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party
may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold,
free from and discharged of all trusts, claims, right of
redemption and equities of the Company, which are hereby
waived and released.
7. Applications of Proceeds. The proceeds of any such sale, lease
or other disposition of the Collateral hereunder shall be
applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like
(including, without limitation, any taxes, fees and other
costs incurred in connection therewith) of the Collateral, to
the reasonable attorneys' fees and expenses incurred by the
Secured Party in enforcing its rights hereunder and in
connection with collecting, storing and disposing of the
Collateral, and then to satisfaction of the Obligations, and
to the payment of any other amounts required by applicable
law, after which the Secured Party shall pay to the Company
any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party is
legally entitled, the Company will be liable for the
deficiency, together with interest thereon, at the rate of 15%
per annum (the "Default Rate"), and the reasonable fees of any
attorneys employed by the Secured Party to collect such
deficiency. To the extent permitted by applicable law, the
Company waives all claims, damages and demands against the
Secured Party arising out of the repossession, removal,
retention or sale of the Collateral, unless due to the gross
negligence or willful misconduct of the Secured Party.
8. Costs and Expenses. The Company agrees to pay all
out-of-pocket fees, costs and expenses incurred in connection
with any filing required hereunder, including without
limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto
or any expenses of any searches reasonably required by the
Secured Party. The Company shall also pay all other claims and
charges which in the reasonable opinion of the Secured Party
might prejudice, imperil or otherwise affect the Collateral or
the Security Interest therein. The Company will also, upon
demand, pay to the Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which
the Secured Party may incur in connection with (i) the
enforcement of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, or (iii) the exercise
or enforcement of any of the rights of the Secured Party under
the Notes. Until so paid, any fees payable hereunder shall be
added to the principal amount of the Notes and shall bear
interest at the Default Rate.
9. Responsibility for Collateral. The Company assumes all
liabilities and responsibility in connection with all
Collateral, and the obligations of the Company hereunder or
under the Notes and the Warrants shall in no way be affected
or diminished by reason of the loss, destruction, damage or
theft of any of the Collateral or its unavailability for any
reason.
10. Security Interest Absolute. All rights of the Secured Party
and all Obligations of the Company hereunder, shall be
absolute and unconditional, irrespective of: (a) any lack of
validity or enforceability of this Agreement, the Notes, the
Warrants or any agreement entered into in connection with the
foregoing, or any portion hereof or thereof; (b) any change in
the time, manner or place of payment or performance of, or in
any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from
the Notes, the Warrants or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or
amendment or waiver of or consent to departure from any other
collateral for, or any guaranty, or any other security, for
all or any of the Obligations; (d) any action by the Secured
Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance
which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge of all or any
part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the
rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or
bankruptcy. The Company expressly waives presentment, protest,
notice of protest, demand, notice of nonpayment and demand for
performance. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of
competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall be deemed to be otherwise due
to any party other than the Secured Party, then, in any such
event, the Company's obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or
satisfied by any prior payment thereof and/or cancellation of
this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and
provisions hereof. The Company waives all right to require the
Secured Party to proceed against any other person or to apply
any Collateral which the Secured Party may hold at any time,
or to marshal assets, or to pursue any other remedy. The
Company waives any defense arising by reason of the
application of the statute of limitations to any obligation
secured hereby.
11. Term of Agreement. This Agreement and the Security Interest
shall terminate on the date on which all payments under the
Notes have been made in full and all other Obligations have
been paid or discharged. Upon such termination, the Secured
Party, at the request and at the expense of the Company, will
join in executing any termination statement with respect to
any financing statement executed and filed pursuant to this
Agreement.
12. Power of Attorney; Further Assurances.
(a) The Company authorizes the Secured Party, and does hereby
make, constitute and appoint it, and its respective officers,
agents, successors or assigns with full power of substitution,
as the Company's true and lawful attorney-in-fact, with power,
in its own name or in the name of the Company, to, after the
occurrence and during the continuance of an Event of Default,
(i) endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in
respect of any policy of insurance) in respect of the
Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any
invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or
discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and xxx for monies due in respect of the
Collateral; and (v) generally, to do, at the option of the
Secured Party, and at the Company's expense, at any time, or
from time to time, all acts and things which the Secured Party
deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order
to effect the intent of this Agreement, the Notes and the
Warrants, all as fully and effectually as the Company might or
could do; and the Company hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and
shall be irrevocable for the term of this Agreement and
thereafter as long as any of the Obligations shall be
outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in
the proper filing and recording places in any jurisdiction,
including, without limitation, the jurisdictions indicated on
Schedule B, attached hereto, all such instruments, and take
all such action as may reasonably be deemed necessary or
advisable, or as reasonably requested by the Secured Party, to
perfect the Security Interest granted hereunder and otherwise
to carry out the intent and purposes of this Agreement, or for
assuring and confirming to the Secured Party the grant or
perfection of a security interest in all the Collateral.
(c) The Company hereby irrevocably appoints the Secured Party as
the Company's attorney-in-fact, with full authority in the
place and stead of the Company and in the name of the Company,
from time to time in the Secured Party's discretion, to take
any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including the filing, in its sole
discretion, of one or more financing or continuation
statements and amendments thereto, relative to any of the
Collateral without the signature of the Company where
permitted by law.
13. Notices. All notices, requests, demands and other
communications hereunder shall be in writing, with copies to
all the other parties hereto, and shall be deemed to have been
duly given when (i) if delivered by hand, upon receipt, (ii)
if sent by facsimile, upon receipt of proof of sending
thereof, (iii) if sent by nationally recognized overnight
delivery service (receipt requested), the next business day or
(iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the
following addresses:
If to the Company: MSGI Security Solutions, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx X. Annex, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party:
With a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other person, firm, corporation or other entity, then the
Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
15. Miscellaneous.
(a) No course of dealing between the Company and the Secured Party, nor any
failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Notes shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(b) All of the rights and remedies of the Secured Party with respect to the
Collateral, whether established hereby or by the Notes or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to be invalid,
prohibited or unenforceable in any jurisdiction for any reason, unless such
provision is narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this Agreement shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default or right, whether of the same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of each party
hereto and its successors and assigns.
(g) Each party shall take such further action and execute and deliver such
further documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the laws of the State
of New York, except to the extent the validity, perfection or enforcement of a
security interest hereunder in respect of any particular Collateral which are
governed by a jurisdiction other than the State of New York in which case such
law shall govern. Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States Federal court sitting in
Manhattan county over any action or proceeding arising out of or relating to
this Agreement, and the parties hereto hereby irrevocably agree that all claims
in respect of such action or proceeding may be heard and determined in such New
York State or Federal court. The parties hereto agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The parties hereto further waive any objection to venue in the State of New York
and any objection to an action or proceeding in the State of New York on the
basis of forum non conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
(j) This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.
MSGI SECURITY SOLUTIONS, INC.
