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Exhibit 99.8
SECURITY AGREEMENT
XXXXXX GROUP, LLC (hereinafter called "Debtor"), whose address is 0000
X. Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, for value received and intending
to be legally bound, hereby grants to XXXXX X. XXXXXXXX (hereinafter called
"Secured Party"), whose address is Eight Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxx, 00000, a security interest in the following property:
All of Debtor's right, title and interest in certain Common
Stock, Warrants, and Options of Equlanet Communications Corp,(OTC
BB:ENET.OB) in the quantity of 666,666 shares, and 33,334
Warrants and Options assigned to Debtor on the date hereof, as well as
all proceeds or payments received should any of the foregoing be sold,
exchanged, collected or otherwise disposed of (all of which is
hereafter called the"Collateral"); provided, however, no provisions
herein shall be construed as or deemed authority for Debtor to sell,
exchange or otherwise dispose of the Collateral or any portion thereof.
The security interest granted hereby to Secured Party secures
the payment of all indebtedness, liabilities and obligations of Debtor
to Secured Party (hereinafter collectively called the"Obligations"),
whether joint or several, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and all
renewals, extensions and rearrangements of the Obligations, and any of
the same, including under a certain Promissory Note of even date in the
original principal amount of $150,000.00, executed by Debtor and
payable to Secured Party and all costs and expenses and attorneys' fees
and legal expenses payable by Secured Party in connection herewith or
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therewith, and also secures the performance by Debtor of the agreements
hereinafter set forth.
Except where the context otherwise requires, words importing the
singular number shall include the plural number and vice versa. Debtor hereby
represents, warrants and agrees that:
1. (a) Debtor is the sole owner and holder of the Collateral free and
clear of all liens and security interests; (b) Debtor has the authority to enter
into and perform this agreement and to grant the security interests created
hereby; and (c) the Collateral is being used or acquired for use primarily for
business purposes.
2. (a) The Collateral will be kept at Debtor's place of business listed
in section 3 of this agreement; Debtor will give Secured Party at least 30 days
prior written notice of any change in the location of the Collateral within the
State of Texas; and (b) Debtor will not remove the Collateral from the State of
Texas without the prior written consent of Secured Party.
3. The principal place of business and chief executive office of Debtor
is the address for Debtor shown in the preamble of this agreement. Debtor will
immediately notify Secured Party in writing of any change in Debtor's place of
business or chief executive office, and of any additional place of business.
4. Debtor will defend the Collateral against any claims and demands of
all persons at any time claiming the same or any interest therein.
5. Except for those in favor of Secured Party, no financing statement
or security agreement covering any Collateral or any proceeds thereof is
currently or will be on file in any public office. Debtor hereby authorizes
Secured Party to file, in jurisdictions where this authorization will be given
effect, a financing statement signed only by Secured Party describing the
Collateral in the same manner as it is described herein; and from time to time,
at the request
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of Secured Party, Debtor will execute one or more financing statements and such
other documents (and pay the cost of filing or recording the same in all public
offices deemed necessary or desirable by Secured Party) and do such other acts
and things, all as Secured Party may request, to establish and maintain a valid
security interest in the Collateral (free of all other liens and claims
whatsoever except as otherwise provided herein) to secure the payment of the
Obligations. In connection with the foregoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry out
and implement the following agreements and understandings and Debtor hereby
agrees to pay the costs thereof) that Secured Party may, at any time or times,
file as a financing statement any counterpart, copy or reproduction of this
agreement, if Secured Party shall elect so to file, and it is also agreed and
understood that Secured Party may, if deemed necessary or desirable, file (or
sign and file) as a financing statement any carbon copy of, or photographic or
other reproduction of, this agreement or of any financing statement executed in
connection with this agreement.
6. Debtor will not (a) permit any liens, encumbrances or security
interests (other than Secured Party's Liens) to attach to any of the Collateral;
(b) permit any of the Collateral to be levied upon under any legal process; (c)
sell, transfer, lease or otherwise dispose of any of the Collateral or any
interest therein, or offer to do so, without the prior express written consent
of Secured Party; and (d) permit anything to be done that may impair the value
of any of the Collateral or the security intended to be afforded thereby or
hereby.
7. (a) Debtor will insure the Collateral with companies acceptable to
the Secured Party against such casualties and in such amounts as the Secured
Party shall reasonably require, with a loss payable clause in favor of the
Debtor and Secured Party, as their interests may appear,
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and the Secured Party is hereby authorized to collect sums which may become due
under any of said policies and apply the same to the obligations hereby secured.
(b) Debtor will at all times keep the Collateral in good order
and repair and will not waste or destroy the Collateral or any part thereof.
8. Debtor will not use the Collateral or permit the Collateral to be
used in violation of any statute, ordinance or other law which could result in a
material adverse effect upon its business or financial condition or which could
result in loss or forfeiture of the Collateral or which could result in loss or
impairment of (or priority with respect to) Secured Party's interest in the
Collateral; and Debtor will permit Secured Party and its agents, representatives
and employees to examine the Collateral at all reasonable times, and for such
purpose, Secured Party may enter upon or into any premises where the Collateral
may be located without being guilty of a trespass. Debtor will furnish to
Secured Party upon request all pertinent information regarding the Collateral.
9. Debtor will protect the title and possession of the Collateral and
will, at Debtor's own cost and expense, promptly pay when due all taxes,
assessments, maintenance charges and other impositions of every kind and
character charged, levied, assessed or imposed against the Collateral or real
property, if any, to which the Collateral may be affixed or any part thereof, as
the same become payable and before they become delinquent, and upon request of
Secured Party, shall furnish due proof of such payment to Secured Party promptly
after payment.
10. Secured Party may at its option, but without any obligation to do
so, pay for the account of Debtor, any taxes, liens or security interests or
other encumbrances at any time levied or placed on the Collateral, pay for the
maintenance and preservation of the Collateral, prosecute or defend any suits in
relation to the security interests arising pursuant to this agreement and
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insure and keep insured the Collateral in an amount not to exceed the
Obligations hereunder. Any such amounts which may be so paid out by Secured
Party and all sums paid for insurance premiums, as aforesaid, including, without
limitation, the costs, expenses and attorneys' fees paid in any suit affecting
the Collateral when necessary to protect the security interest hereof shall be a
part of the Obligations hereby secured and recoverable in all respects.
11. Debtor will pay promptly when due all taxes and assessments upon
the Collateral, its use or operation, upon this agreement and upon any note or
notes or other writing evidencing the Obligations, or any of them, including
documentary or other taxes.
12. Until default, Debtor may have possession of the Collateral and use
it in any lawful manner except that Debtor will apply any proceeds or payments
received with respect to the Collateral to the Obligations immediately upon
receipt thereof.
13. The happening of any one or more default under the Obligations
shall constitute a default under this agreement.
14. Upon the occurrence of any default specified in this agreement,
Secured Party may, in addition to any other rights and remedies which it may
have, immediately and without demand, exercise any or all of the rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code as adopted and amended in the State of Texas from time to time (the "UCC")
or any other writing evidencing any of the Obligations secured hereby; and upon
the request or demand of Secured Party, Debtor shall, at Debtor's expense,
assemble the Collateral and make it available to Secured Party at a convenient
place acceptable to Secured Party; and Debtor shall promptly pay to Secured
Party any and all costs and expenses, including legal expenses and attorneys'
fees as specified in any note or any other evidence of the Obligations held by
Secured Party, but in any event, which shall include attorneys' fees of the
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suit, out of court, in trial, on appeal, or in bankruptcy proceedings, incurred
or paid by Secured Party in protecting and enforcing the rights of Secured Party
hereunder, including Secured Party's right to take possession of the Collateral
and to hold, prepare for sale, sell and dispose of such Collateral. Any notice
of sale, disposition or other intended action by Secured Party sent to Debtor at
the address specified in the preamble of this agreement, or to such other
address of Debtor as may from time to time be shown on Secured Party's records,
at least ten days prior to such action, shall constitute reasonable notice to
Debtor. Upon disposition by Secured Party of any property in which Secured Party
has a security interest hereunder, Debtor shall be and remain liable for any
deficiency; and Secured Party shall account to Debtor for any surplus, but
Secured Party shall have the right to apply all or any part of such surplus to
or to hold the same as a reserve against all or any of the Obligations of Debtor
to Secured Party, whether or not they or any of them be then due, and in such
order of application as Secured Party may from time to time elect.
15. The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon and, in this
connection, TO THE EXTENT NOT PROHIBITED BY LAW, DEBTOR EXPRESSLY WAIVES ANY
CONSTITUTIONAL RIGHTS OF DEBTOR WITH REGARD TO NOTICE OR ANY JUDICIAL PROCESS OR
HEARING PRIOR TO THE EXERCISE OF THE RIGHTS OF SECURED PARTY TO TAKE POSSESSION
OR CONTROL OF THE COLLATERAL UPON THE HAPPENING OF ANY OF THE EVENTS OR
CONDITIONS CONSTITUTING A DEFAULT.
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16. No waiver by Secured Party of any default shall operate as a waiver
of any other default or of the same default on a future occasion. No delay or
omission on the part of Secured Party in exercising any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Secured Party
of any right or remedy shall preclude or affect any other or further exercise
thereof or the exercise of any other right or remedy. The provisions of this
agreement are cumulative to the provisions of and any other writing evidencing
or pertaining to any of the Obligations secured by this agreement, and Secured
Party shall have all the benefits, rights and remedies of and under any writing
evidencing any of the Obligations secured hereby. The singular pronoun, when
used herein, shall include the singular and plural, as applicable, and the use
of any gender shall include all genders. All rights of Secured Party hereunder
shall inure to the benefit of its successors and assigns; and all obligations of
Debtor shall bind its successors and assigns. Debtor waives all rights to the
marshalling of its assets including, without limitation, the Collateral.
17. All recitals in any instrument executed by Secured Party incident
to the sale, transfer, assignment, lease or other disposition or utilization of
the collateral or any part thereof hereunder shall be full proof of the matters
stated therein and no other proof shall be requisite to establish full legal
propriety of the sale or other action taken by Secured Party or of any fact,
condition or thing incident thereto and all prerequisites of such sale or other
action or any fact, condition or thing incident thereto shall be presumed
conclusively to have been performed or to have occurred.
18. If any certificate of title or similar document is, at any time and
pursuant to the laws of any jurisdiction, issued or outstanding with respect to
the Collateral or any part thereof, Debtor will promptly advise Secured Party
thereof, and Debtor will promptly cause the interest of
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Secured Party to be properly noted thereon; and Debtor will further promptly
deliver to Secured Party any such certificate of title or similar document
issued or outstanding at any time with respect to such Collateral. If any
instruments, chattel paper, money or monies, or documents are, at any time or
times, included in the Collateral, whether as proceeds or otherwise, Debtor will
promptly deliver the same to Secured Party without demand therefor by Secured
Party.
19. This agreement has been delivered in the State of Texas and shall
be construed in accordance with the laws of such State, including the UCC and
applicable federal law; provided, however, that if additional rights or remedies
are hereafter granted to secured parties by the laws of the State of Texas or by
applicable federal law, Secured Party shall also have and may exercise any such
rights or remedies. Wherever possible, each provision of this agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this agreement. To the extent permitted by
applicable law, Debtor hereby waives any provision of law that renders any
provision hereof prohibited or unenforceable in any respect. TO THE EXTENT
LAWFUL, ANY LITIGATION ARISING HEREUNDER OR RELATED HERETO OR TO THE NOTE
EXECUTED IN CONNECTION HEREWITH SHALL BE TRIED BY THE STATE COURTS FOR THE
COUNTY OR THE FEDERAL COURT OF THE UNITED STATES FEDERAL DISTRICT WHERE THE
PRINCIPAL OFFICE OF SECURED PARTY IS LOCATED, WHICHEVER IS APPLICABLE, AND
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS
AND WAIVES ALL OBJECTIONS TO VENUE THEREIN.
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20. Debtor will promptly reimburse Secured Party for all amounts
expended, advanced or incurred by Secured Party to satisfy any obligation of
Debtor under this agreement or any of the other documents securing or pertaining
to the loan evidenced by the note executed in connection herewith, or to collect
the note executed herewith, or to enforce the rights of Secured Party under this
agreement, or any of the other documents securing or pertaining to the loan
evidenced by the note executed in connection herewith (whether or not any legal
or other proceeding is instituted), which amounts will include all court costs,
attorneys' fees, fees of auditors and accountants, and investigation expenses
reasonably incurred by Secured Party to third parties in connection with any
such matters.
21. Debtor represents and warrants to Secured Party that the value of
the consideration received and to be received, directly or indirectly, by Debtor
as a result of the credit or other financial accommodations granted and extended
by Secured Party to Debtor is fair consideration to Debtor and reasonably worth
at least as much as the Obligations, and that the financial accommodations
granted and extended by Secured Party have benefitted and may reasonably be
expected to benefit Debtor, directly or indirectly.
22. All rights to marshalling of assets of Debtor, including any such
right with respect to the Collateral, are hereby waived by Debtor.
23. The execution and delivery of this agreement in no manner shall
impair or affect any other security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this agreement, all such present and future additional security to be
considered as cumulative security. Any of the Collateral may be released from
this agreement without altering, varying or diminishing in any way the force,
effect, lien, security interest or
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charge of this agreement as to the Collateral not expressly released, and this
agreement shall continue as a first lien security interest and charge on all of
the Collateral not expressly released until all sums and indebtedness secured
hereby have been paid in full. Any future assignment or attempted assignment or
transfer of the interest of Debtor in and to any of the Collateral shall not
deprive Secured Party of the right to sell or otherwise dispose of or utilize
all of the Collateral as above provided or necessitate the sale or disposition
thereof in parcels or in severalty.
24. This agreement may be executed in one or more counterparts, each of
which shall constitute an original, but when taken together shall constitute but
one and the same agreement. This agreement has been substantially negotiated in,
delivered and accepted at, and the proceeds of the loan will be disbursed in,
Houston, Texas.
IN WITNESS WHEREOF, this agreement is executed the 21th day of December,
1999.
/s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx, President
XXXXXX GROUP, LLC
