SECURITY AGREEMENT
SECURITY
AGREEMENT (this “Agreement”), dated as of September 5, 2008, by and among
Splinternet Holdings, Inc., a Delaware corporation (“Holdings”), Splinternet
Communications, Inc., a Connecticut corporation (“Communications”) (Holdings and
Communications together referred to as the “Companies” and sometimes
individually as the “Company”), and Xxxxx X. Xxxxxxx, and his respective
endorsees, transferees and assigns (the “Secured Party”).
WITNESSETH:
WHEREAS,
pursuant to a loan made by the Secured Party to Holdings simultaneously herewith
in the principal amount of $75,000.00 (the “Loan”), Holdings has issued to the
Secured Party an 8.00% Secured Demand Promissory Note (the “Note”);
WHEREAS,
Communications is a wholly-owned subsidiary of Holdings and will benefit from
the Loan;
WHEREAS,
in order to induce the Secured Party to make the Loan, each 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 each Company to secure the prompt payment, performance
and
discharge in full of all of the Obligations (as hereinafter
defined).
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 and of any tort claims in connection therewith:
(i) All
Goods
of each 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 each Company’s businesses and all improvements thereto
(collectively, the “Equipment”);
(ii) All
Inventory of each Company;
(iii) All
of
each 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”);
(iv) All
Receivables of each 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
each 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) All
of
the capital stock of any corporation or other entity owned by each
Company.
(b) “Obligations”
means all of each Company’s obligations under this Agreement and the Note, and
all other indebtedness, obligations, and liabilities of any kind of each Company
to the Secured Party, 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.
(c) “UCC”
means the Uniform Commercial Code, as currently in effect in the State of
Connecticut.
2. Grant
of Security Interest.
As an
inducement for the Secured Party to make the Loan and to secure the complete
and
timely payment, performance and discharge in full, as the case may be, of all
of
the Obligations, each 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 each Company’s right, title and interest of whatsoever kind and
nature in and to the Collateral (the “Security Interest”).
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3. Representations,
Warranties, Covenants and Agreements of each Company.
Each
Company represents and warrants to, and covenants and agrees with, the Secured
Party as follows:
(a) Each
Company has the requisite power and authority to enter into this Agreement
and
otherwise to carry out its obligations thereunder. The execution, delivery
and
performance by each Company of this Agreement and the filings contemplated
therein have been duly authorized by all necessary action on the part of each
Company and no further action is required by each Company. This Agreement
constitutes a legal, valid and binding obligation of each 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) Each
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) Each
Company is the sole owner of the Collateral (except for non-exclusive licenses
granted by each 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. So long as this Agreement shall be in effect, each 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).
(d) No
part
of the Collateral has been judged invalid or unenforceable. No written claim
has
been received that any Collateral or each Company’s use of any Collateral
violates the rights of any third party. There has been no adverse decision
to
each Company’s claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to each 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 each Company, threatened before
any court, judicial body, administrative or regulatory agency, arbitrator or
other governmental authority.
(e) Each
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.
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(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 UCC-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 each Company of, or the effectiveness of, the Security Interest granted
hereby or for the execution, delivery and performance of this Agreement by
each
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, each Company will deliver to the Secured
Party one or more executed UCC financing statements on Form UCC-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) 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
each Company is a party or by which each Company is bound. No consent
(including, without limitation, from stock holders or creditors of each Company)
is required for each Company to enter into and perform its obligations
hereunder.
(i) Each
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. Each Company
hereby agrees to defend the same against any and all persons. Each Company
shall
safeguard and protect all Collateral for the account of the Secured Party.
At
the request of the Secured Party, each 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, each Company shall pay all
fees, taxes and other amounts necessary to maintain the Collateral and the
Security Interest hereunder, and each 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.
(j) Each
Company will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted by each 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.
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(k) Each
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) Each
Company shall, within ten (10) business 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) Each
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 reasonably request to perfect,
protect or enforce its security interest in the Collateral.
(n) Each
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) Each
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) Each
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 each
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 each Company with respect to the Collateral is accurate and
complete in all material respects as of the date furnished.
4. Defaults.
The
following events shall be “Events
of Default”:
(a) The
occurrence of an Event of Default (as defined in the Note) under the
Note;
(b) Any
representation or warranty of each Company in this Agreement shall prove to
have
been incorrect in any material respect when made; and
(c) The
failure by each Company to observe or perform any of its obligations hereunder
for thirty (30) days after receipt by each Company of notice of such failure
from the Secured Party.
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5. Duty
To Hold In Trust.
Upon
the occurrence of any Event of Default and at any time thereafter, each Company
shall, upon receipt by it of any revenue, income or other sums subject to the
Security Interest, whether payable pursuant to the Note 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 Note, 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 each Company shall assemble the Collateral and make it available
to
the Secured Party at places which the Secured Party shall reasonably select,
whether at each Company’s premises or elsewhere, and make available to the
Secured Party, without rent, all of each 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 each 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 each Company or right of redemption
of
each 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 each 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 each 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, each Company will be liable for the deficiency. To the
extent permitted by applicable law, each 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.
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8. Costs
and Expenses. Each
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. Each 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. Each 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 (a) the enforcement of this Agreement,
(b) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, or (c) the exercise or
enforcement of any of the rights of the Secured Party under the Note.
9. Responsibility
for Collateral.
Each
Company assumes all liabilities and responsibility in connection with all
Collateral, and the obligations of each Company hereunder or under the Note
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 each Company hereunder,
shall
be absolute and unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the Note 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 Note 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 each 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. Each 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, each 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. Each 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.
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11. Term
of Agreement.
This
Agreement and the Security Interest shall terminate on the date on which all
payments under the Note 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 each 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) Each
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 each Company’s true and lawful attorney-in-fact, with
power, in its own name or in the name of each 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 each
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 and the Note, all as fully and effectually as each
Company might or could do; and each 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, each 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) Each
Company hereby irrevocably appoints the Secured Party as each Company’s
attorney-in-fact, with full authority in the place and stead of each Company
and
in the name of each 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 each Company where permitted by
law.
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(d) Each
Company shall execute such additional agreements and documents necessary or
advisable to accomplish the purposes of this Agreement.
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: (a) if delivered by hand, upon receipt,
(b) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (c) 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 each Company:
|
Splinternet
Holdings, Inc.
|
|
000
Xxxxxxxxxxx Xxxxxx
|
|
|
Xxxxxxx,
Xxxxxxxxxxx 00000
|
|
|
If
to the Secured Party:
|
Xxxxx
X. Xxxxxxx
|
|
000
Xxxxxxxx Xxxxxx
|
|
|
Xxxxxxxx,
Xxxxxxxxxxx 00000
|
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 each 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 Note 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 Note 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.
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(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
Connecticut, 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 Connecticut in which case
such law shall govern. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the state courts of the State of Connecticut and
the
jurisdiction of the United States District Courts in the State of Connecticut
for the purpose of any suit, action or other 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 Connecticut 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 Connecticut and any objection to an action or proceeding in the State
of Connecticut 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.
10
(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.
(k) Each
of
the Companies and Secured Party agrees that Xxxx Xxxxxx Xxxxx Xxx &
Xxxxxxxxx, LLP, the draftsperson of this Agreement and the Note, has prepared
this Agreement and the Note on behalf the Companies and is not representing
Secured Party in an individual capacity in the negotiation and consummation
of
the transactions hereunder. Each of the Companies and Secured Party further
agrees that he each has participated in the preparation of this Agreement and
has read and fully understands this Agreement and has been advised and has
had
the opportunity to retain independent counsel of its own choosing and has done
so to the extent it has deemed necessary.
[remainder
of page intentionally left blank]
11
IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
be
duly executed on the day and year first above written.
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
|
Name:
|
Xxxxx
X. Xxxxxxx
|
|
Title:
|
President
|
|
SPLINTERNET
COMMUNICATIONS, INC.
|
|
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
|
Name:
|
Xxxxx
X. Xxxxxxx
|
|
Title:
|
President
|
|
XXXXX
X. XXXXXXX
|
|
12
SCHEDULE
A
Principal
Place of Business of each Company:
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxx 00000
Locations
Where Collateral is Located or Stored:
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxx 00000
13
SCHEDULE
B
Jurisdictions:
Delaware
14
