SECURITY AGREEMENT
Exhibit
4.5
Page
- 1
Exhibit
4.5
Security
Agreement by and among the Company and the Investors
SECURITY
AGREEMENT (this “Agreement”),
dated
as of December 27, 2006, by and among Camelot Entertainment Group, Inc., a
Delaware 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 $.001 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:
| 19. |
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 and of any tort claims in connection therewith:
1. 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
2. All
Inventory of the Company; and
3. 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
Page
- 2
4. 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
5. 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;
and
(vi) Notwithstanding
the above, the Company is not granting a security interest in its two wholly
owned subsidiaries, Camelot Film Group, Inc. and Camelot Studio Group, Inc.
which shall not be considered Collateral under this Agreement.
B. “Company”
shall
mean, collectively, Company and all of the subsidiaries of Company excluding
Camelot Film Group, Inc. and Camelot Studio Group, Inc., 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.
| 20. |
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, an unqualified right to possession and disposition of 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”).
|
| 21. |
Representations,
Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees
with, the
Secured Party as follows:
|
A. The
Company 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 represents and warrants that it has no place of business or offices
where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where
Collateral is stored or located, except as set forth on Schedule
A
attached
hereto;
Page
- 3
C. 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,
except as set forth on Schedule
C.
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, except as set forth on Schedule
C.
So long
as this Agreement shall be in effect, the Company shall not execute and shall
not knowingly permit to be on file in any such office or agency any such
financing statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Party pursuant to the terms of this
Agreement), except as set forth on Schedule
C.
D. 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.
E. The
Company shall at all times maintain its books of account and records relating
to
the Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule
A
attached
hereto and may not relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Party at least 30 days prior to
such relocation (i) written notice of such relocation and the new location
thereof (which must be within the United States) and (ii) evidence that
appropriate financing statements and other necessary documents have been filed
and recorded and other steps have been taken to perfect the Security Interest
to
create in favor of the Secured Party valid, perfected and continuing first
priority liens in the Collateral.
F. This
Agreement creates in favor of the Secured Party a valid security interest in
the
Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
first priority security interest in such Collateral. Except for the filing
of
financing statements on Form-1 under the UCC with the jurisdictions indicated
on
Schedule
B,
attached hereto, no authorization or approval of or filing with or notice to
any
governmental authority or regulatory body is required either (i) for
the grant by the Company of, or the effectiveness of, the Security Interest
granted hereby or for the execution, delivery and performance of this Agreement
by the Company or (ii) for
the perfection of or exercise by the Secured Party of its rights and remedies
hereunder.
G. On
the
date of execution of this Agreement, the Company will deliver to the Secured
Party one or more executed UCC financing statements on Form-1 with respect
to
the Security Interest for filing with the jurisdictions indicated on
Schedule
B,
attached hereto and in such other jurisdictions as may be requested by the
Secured Party.
H. Except
as
set forth on Schedule
C,
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.
I. 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.
At
the request of the Secured Party, the Company will sign and deliver to the
Secured Party at any time or from time to time one or more financing statements
pursuant to the UCC (or any other applicable statute) in form reasonably
satisfactory to the Secured Party and will pay the cost of filing the same
in
all public offices wherever filing is, or is deemed by the Secured Party to
be,
necessary or desirable to effect the rights and obligations provided for herein.
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.
Page
- 4
J. The
Company will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted and sales made by the Company in the ordinary
course of business), sell or otherwise dispose of any of the Collateral without
the prior written consent of the Secured Party.
K. 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.
L. 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.
M. 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.
N. 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.
O. 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.
P. 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.
Q. 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.
R. Schedule
A
attached
hereto contains a list of all of the subsidiaries of Company.
| 22. |
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.
Page
- 5
| 23. |
Duty
To Hold In Trust.
Upon the occurrence of any Event of Default and a failure to cure
such
default in a timely manner 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.
|
| 24. |
Rights
and Remedies Upon Default.
Upon occurrence of any Event of Default and a failure to cure such
default
in a timely manner 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.
| 25. |
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.
|
| 26. |
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.
|
Page
- 6
| 27. |
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.
|
| 28. |
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.
|
| 29. |
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 or at such
time
as the Secured Party fully converts the Notes 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.
|
| 30. |
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 that is has not been cured
in
a timely manner, (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.
Page
- 7
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. Following
an Event of Default that has not been cured in a timely manner, 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.
| 31. |
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:
Camelot
Entertainment Group, Inc.
0000
Xxxx
Xxxxxx, #000
Xxxxxx,
Xxxxxxxxxx 00000
Attention:
Chief Executive Officer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
copy
to:
Xxxxxx
& Xxxxxx, LLP
000
Xxxxx
0, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
If
to the Secured Party:
|
AJW
Partners, LLC
|
AJW
Offshore, Ltd.
AJW
Qualified Partners, LLC
New
Millennium Capital Partners II, LLC
0000
Xxxxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxxxx
Facsimile:
000-000-0000
Page
- 8
|
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
| 32. |
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.
|
| 33. |
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.
Page
- 9
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 WAIVES 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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
Page
- 10
IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
be
duly executed on the day and year first above written.
By:
_____________________________________
Xxxxxx
X.
Xxxxxx
Chief
Executive Officer
AJW
PARTNERS, LLC
By:
SMS
Group, LLC
By:
_____________________________________
Xxxxx
X.
Xxxxxxxx
Manager
AJW
OFFSHORE, LTD.
By:
First
Street Manager II, LLC
By:
_____________________________________
Xxxxx
X.
Xxxxxxxx
Manager
AJW
QUALIFIED PARTNERS, LLC
By:
AJW
Manager, LLC
By:
_____________________________________
Xxxxx
X.
Xxxxxxxx
Manager
NEW
MILLENNIUM CAPITAL PARTNERS II, LLC
By:
First
Street Manager II, LLC
By:
_____________________________________
Xxxxx
X.
Xxxxxxxx
Manager
Page
- 11
