SECURITY AGREEMENT
Exhibit
10.2
SECURITY
AGREEMENT (this “Agreement”),
is
made and entered into as of June 11, 2007, among Xxxxxxxx Technologies, Inc.,
a
Florida corporation (the “Company”),
and
the secured parties signatory hereto, and their endorsees, transferees and
assigns (each such secured parties, and collectively, the “Secured
Party”).
W
I T N E
S S E T H:
WHEREAS,
pursuant to a Litigation Settlement, Securities Purchase, Relinquishment and
Exchange Agreement, dated as of the date hereof, between the Company and the
Secured Party (the “Purchase
Agreement”),
the
Secured Party has agreed to relinquish certain rights (the “Secured
Party’s Relinquishments”)
in
addition to those enumerated in the Purchase Agreement including in particular
Section 9 thereof; and
WHEREAS,
in
order to induce the Secured Party to undertake the Secured Party’s
Relinquishments, the 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
second 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 this Agreement and in partial discharge of the Company’s
obligations under the Purchase Agreement as they relate to the Secured Party’s
Relinquishments.
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 specifically include 1,739,130 of Technest Holdings
Inc.’s (“Technest”)
Common
Stock, par value $0.001 per share, which is currently pledged to Silicon Valley
Bank pursuant to that certain agreement between Technest and Silicon Valley
Bank.
(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) “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 undertake the Secured Party’s
Relinquishments and to secure the prompt payment, performance and discharge
in
full of all of Company’s obligations under this Agreement and in partial
discharge of the Company’s obligations under the Purchase Agreement as they
relate to the Secured Party’s Relinquishments, the Company hereby,
unconditionally and irrevocably, pledges, grants and hypothecates to the Secured
Party, a continuing security interest in, a continuing second (and ultimately
a
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”).
The
Security Interest shall only be subordinated to the security interest of Silicon
Valley Bank and shall be amended to a first priority lien after Silicon Valley
Bank has relinquished its interest in the Collateral until such time as the
Company and the Secured Party have taken all necessary steps to transfer full
ownership of the Collateral to the Secured Party in consideration of the
undertakings in the Purchase Agreement and related documents.
3. 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 hereunder. The execution,
delivery and performance by the Company of this Agreement and the filings
contemplated herein 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;
(c) The
Company is the sole owner of the Collateral, 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.
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(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 second
priority (and ultimately 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 prompt payment, performance and discharge in full of
all
of Company’s obligations under this Agreement and the Company’s obligations
under the Purchase Agreement as they relate to the Secured Party’s
Relinquishments, and, upon making the filings described in the immediately
following sentence, a perfected second 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
for the documents evidencing the pledge of the Collateral to Silicon Valley
Bank
(“SVB”) (which may prohibit the creation of subordinate liens) and as otherwise
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. In the
event the SVB documents prohibit a subordinate lien from being created, the
Company will use its best efforts to have SVB allow the Secured Party a
subordinate lien. In the event that SVB so refuses, the Company agrees to enter
into such agreement as requested by the Secured Party to cause the Collateral
to
be immediately assigned to it subsequent to SVB’s release of such lien.
(i) The
Company shall at all times maintain the lien and the Security Interest provided
for hereunder as valid and perfected second lien (and perfected first lien
at
such time as the first priority lien in favor of Silicon Valley Bank is removed)
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.
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(j) The
Company will not transfer, pledge, hypothecate, encumber, sell or otherwise
dispose of any of the Collateral without the prior written consent of the
Secured Party.
(k) 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.
(l) 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, substantially in a form acceptable to the Secured Party.
(m) 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.
(n) 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.
(o) 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) Any
representation or warranty of the Company in this Agreement or in the Purchase
Agreement shall prove to have been incorrect in any material respect when made;
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(b) The
failure by the Company to observe or perform any of its obligations hereunder
or
in the Purchase Agreement for ten (10) days after receipt by the Company of
notice of such failure from the Secured Party; and
(c) Any
breach of, or default under, the Purchase Agreement.
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 shares currently pledged to Silicon Valley
Bank
and subject to the Security Interest, 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 Company’s
obligations hereunder.
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 any other related agreement, 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) subject only to Silicon Valley Bank’s priority if
then in effect.
7. Applications
of Proceeds.
The
proceeds of any 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 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 any
applicable agreement.
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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 any other
agreement, including, without limitation the Purchase Agreement, 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.
Immediately
upon release of the Collateral by Silicon Valley Bank, the Parties agree that
the Collateral shall immediately be placed with the escrow agent pursuant to
the
terms of that certain escrow agreement dated as of the even date hereof.
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, 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 of the Company under this Agreement
and the Company’s obligations under the Purchase Agreement as they relate to the
Secured Party’s Relinquishments, or any other amendment or waiver of or any
consent to any departure from any 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 of
the
Company under this Agreement and the Company’s obligations under the Purchase
Agreement as they relate to the Secured Party’s Relinquishments; (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 of the Company under
this Agreement and the Company’s obligations under the Purchase Agreement as
they relate to the Secured Party’s Relinquishments shall have been paid and/or
performed in full, the rights of the Secured Party shall continue even if such
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.
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11. Term
of Agreement.
This
Agreement and the Security Interest shall terminate on the date on which
ownership of the underlying stock has been successfully transferred to the
Secured Party and all other obligations of the Company under this Agreement
and
the Company’s obligations under the Purchase Agreement as they relate to the
Secured Party’s Relinquishments 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 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, 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
Company’s obligations under this Agreement and the Company’s obligations under
the Purchase Agreement as they relate to the Secured Party’s Relinquishments
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.
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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, (iv) one day after electronically mailed either in the
text of an email message or attached in a commonly readable format, and the
sender has received no generated notice that the client email message has not
been successfully delivered, or (v) 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:
|
Xxxxxxxx Technologies, Inc. |
|
000
Xxxxx Xxxxxx
Xxxxxxxxx
|
|
| Xxxxxxx, XX 00000 | |
| Fax: 000-000-0000 | |
| Attention: President | |
|
If
to the Secured Party:
|
c/o Southridge Capital Management LLC |
| 00 Xxxxx Xxxxxx | |
| Xxxxxxxxxx, XX 00000 | |
| Tel. # (000) 000-0000 | |
| Fax # (000) 000-0000 | |
| Attention: Xxxxxxx Xxxxx | |
|
with
a copy to:
|
Xxxxxxx Xxxxxx LLP |
| 000 Xxxxxxxxx Xxxxxx | |
| Xxx Xxxx, Xxx Xxxx 00000 | |
| Tel. # (000) 000-0000 | |
| Fax # (000) 000-0000 | |
| Attention: Xxxxx Xxxxxxxxx, Esq. |
14. Other
Security.
To the
extent that the obligations of the Company under this Agreement and the
Company’s obligations under the Purchase Agreement as they relate to the Secured
Party’s Relinquishments 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.
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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 this Agreement or any other related
agreement 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 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.
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(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 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]
10
IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
be
duly executed on the day and year first above written.
| COMPANY: | ||
| XXXXXXXX TECHNOLOGIES, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxx | |
|
Name: Xxxx Xxxxxxx |
||
| Title: Chief Financial Officer | ||
| SECURED PARTY: | ||
| SOUTHRIDGE PARTNERS LP | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxx | |
|
Name: Xxxxx Xxxxxxx |
||
| Title: Manager of General Partner | ||
| SOUTHSHORE CAPITAL FUND LTD | ||
| |
|
|
| By: | Illegible | |
|
Name: Navigator Management, Ltd. |
||
| Title: Director | ||
| ABERDEEN AVENUE LLC | ||
| |
|
|
| By: | Illegible | |
|
Name: Navigator Management, Ltd. |
||
| Title: Director | ||
| BRITTANY CAPITAL MANAGEMENT LTD. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Name: Xxxxx X. Xxxxxx |
||
| Title: President | ||
11
