SECURITY AGREEMENT
SECURITY
AGREEMENT (as amended, restated, supplemented or otherwise modified from time
to
time in accordance herewith and including all attachments, exhibits and
schedules hereto, the “Agreement”),
dated
as of March 29, 2007, made by Interlink Global Corporation, a Nevada corporation
(the “Grantor”),
in
favor of the secured parties listed on Exhibit
A
to this
Agreement and their permitted successors and assigns (collectively, the
“Secured
Parties”).
WHEREAS,
the Grantor has issued or will issue separate senior secured convertible
promissory notes to the Secured Parties (the“Notes”)
pursuant to a Note and Warrant Purchase Agreement dated as of March 29, 2007
(the “Purchase
Agreement”),
by
and among the Grantor and the Secured Parties; and
WHEREAS,
the Secured Parties and the Grantor desire that the Grantor execute and deliver
to the Secured Parties a security agreement providing for the grant to the
Secured Parties of a continuing security interest in all personal property
and
assets of the Grantor, all in substantially the form hereof to secure all
Obligations (hereinafter defined).
NOW,
THEREFORE, the parties agree as follows:
ARTICLE
I. Definitions
Section
1.1. Definition
of Terms Used Herein.
All
capitalized terms used herein and not defined herein have the respective
meanings provided therefor in the Purchase Agreement or the Notes, as
applicable. All terms defined in the Uniform Commercial Code (hereinafter
defined) as in effect from time to time and used herein and not otherwise
defined herein (whether or not such terms are capitalized) have the same
definitions herein as specified therein.
Section
1.2. Definition
of Certain Terms Used Herein.
As used
herein, the following terms have the following meanings:
"Collateral"
means
all accounts receivable of the Grantor and all personal and fixed property
of
every kind and nature, including, without limitation, all furniture, fixtures,
equipment, raw materials, inventory, as extracted collateral, or other goods,
accounts, contract rights, rights to the payment of money, insurance refund
claims and all other insurance claims and proceeds, tort claims, chattel paper,
documents, instruments, securities and other investment property, deposit
accounts, rights to proceeds of letters of credit and all general intangibles
including, without limitation, all tax refund claims, license fees, patents,
patent licenses, patent applications, trademarks, trademark licenses, trademark
applications, trade names, copyrights, copyright licenses, copyright
applications, rights to xxx and recover for past infringement of patents,
trademarks and copyrights, computer programs, computer software, engineering
drawings, service marks, customer lists, goodwill, and all licenses, permits,
agreements of any kind or nature pursuant to which the Grantor possesses, uses
or has authority to possess or use property (whether tangible or intangible)
of
others or others possess, use or have authority to possess or use property
(whether tangible or intangible) of the Grantor, and all recorded data of any
kind or nature, regardless of the medium of recording including, without
limitation, all books and records, software, writings, plans, specifications
and
schematics, whether now owned or hereinafter acquired by the Grantor; and all
proceeds and products of each of the foregoing.
“Default”
means
any event or circumstance which, with the giving of notice, the lapse of time,
or both, would (if not cured, waived, or otherwise remedied during such time)
constitute an Event of Default.
“Event
of Default”
has
the
meaning specified in the Notes.
“Indemnitees”
has the
meaning specified in Section 7.5(b).
“Lien”
means:
(i) any interest in property securing an obligation owed to, or a claim by,
a
Person other than the owner of the property, whether such interest is based
on
the common law, statute, or contract, and including a security interest, charge,
claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, agreement, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes; (ii) to the extent not included under clause
(i),
any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
property; and (iii) any contingent or other agreement to provide any of the
foregoing.
"Notes"
has the
meaning assigned to such term in the first recital of this
Agreement.
"Obligations"
means
all indebtedness, liabilities, obligations, covenants and duties of the Grantor
to the Secured Parties of every kind, nature and description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, now
existing or hereafter arising under or in connection with the Notes, this
Agreement or the other Transaction Documents.
“Registered
Organization”
means
an
entity formed by filing a registration document with a United States
Governmental Authority, such as a corporation, limited partnership or limited
liability company.
"Security
Interest"
has the
meaning specified in Section 2.1 of this Agreement.
“Transaction
Documents”
means
the Note and Warrant Purchase Agreement, the Series B Senior Secured Promissory
Note, the Registration Rights Agreement and all documents and agreements
referred to therein or executed in connection therewith.
“Uniform
Commercial Code”
means
the Uniform Commercial Code from time to time in effect in the State of
Florida.
ARTICLE
II. Security
Interest
Section
2.1. Security
Interest.
As
security for the payment and performance, in full of the Obligations, and any
extensions, renewals, modifications or refinancings of the Obligations, the
Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Secured Parties, and hereby grants to the
Secured Parties, their successors and assigns, a security interest in, all
of
such Grantor's right, title and interest in, to and under the Collateral and
all
hereinafter acquired Collateral (the "Security
Interest").
2
Section
2.2. No
Assumption of Liability.
The
Security Interest is granted as security only and shall not subject the Secured
Parties to, or in any way alter or modify, any obligation or liability of the
Grantor with respect to or arising out of the Collateral.
ARTICLE
III. Representations
and Warranties
The
Grantor represents and warrants to the Secured Parties that:
Section
3.1. Title
and Authority.
The
Grantor has good and valid rights in and title to the Collateral with respect
to
which it has purported to grant a security interest hereunder and has full
power
and authority to grant to the Secured Parties the Security Interest and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.
Section
3.2. Filings;
Actions to Achieve Perfection.
Fully
executed Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered
to
the Secured Parties for filing in each United States governmental, municipal
or
other office specified in Schedule
A,
which
are all the filings, recordings and registrations that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and first
priority perfected security interest in favor of the Secured Parties in respect
of all Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law
with
respect to the filing of continuation statements or with respect to the filing
of amendments or new filings to reflect the change of the Grantor's name,
location, identity or corporate structure. The Grantor’s name is listed in the
preamble of this Agreement identically to how it appears on its certificate
of
incorporation or other organizational documents.
Section
3.3. Validity
and Priority of Security Interest.
The
Security Interest constitutes (a) a legal and valid first priority security
interest (subject to subsection (b) below) in all the Collateral securing the
payment and performance of the Obligations, (b) subject only to any previously
perfected security interests in the Collateral listed on Schedule
3.3
to this
Agreement (“Existing
Liens”),
a
perfected first priority security interest in all Collateral in which a security
interest may be perfected by filing, recording or registration in the United
States pursuant to the Uniform Commercial Code or other applicable law in the
United States (or any political subdivision thereof) and its territories and
possessions or any other country, state or nation (or any political subdivision
thereof). The Security Interest is and shall be subordinate to any other
Existing Lien on any of the Collateral.
Section
3.4. Absence
of Other Liens.
The
Grantor's Collateral is owned by the Grantor free and clear of any Lien other
than Existing Liens. Without limiting the foregoing and except as set forth
on
Schedule
3.4
to this
Agreement, the Grantor has not filed or consented to any filing of any financing
statement or similar filing in favor of any Person other than the Secured
Parties, nor permitted the granting or assignment of a security interest or
permitted perfection of any security interest in the Collateral in favor of
any
Person other than the Secured Parties. The Grantor’s having possession of all
instruments, certificates and cash constituting Collateral from time to time
and
the filing of financing statements in the offices referred to in Schedule
A
hereto
results in the perfection of such security interest. Such Security Interest
is,
or in the case of Collateral in which the Grantor obtain rights after the date
hereof, will be, a perfected, first priority security interest. Such notices,
filings and all other action necessary or desirable to perfect and protect
such
security interest have been duly taken.
3
Section
3.5. Valid
and Binding Obligation.
This
Agreement constitutes the legal, valid and binding obligation of the Grantor,
enforceable against the Grantor in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in this Agreement may be limited
by applicable federal or state securities laws.
ARTICLE
IV. Covenants
Section
4.1. Change
of
Name; Location of Collateral; Place of Business, State of Formation or
Organization.
(a)
The
Grantor shall notify the Secured Parties in writing at least eleven (11) days
prior to any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating
to
Collateral owned by it (including the establishment of any such new office
or
facility), (iii) in its identity or corporate structure such that a filed filing
made under the Uniform Commercial Code becomes misleading or (iv) in its Federal
Taxpayer Identification Number. Furthermore, the Grantor shall not effect or
permit any change referred to in the preceding sentence unless all filings
have
been made under the Uniform Commercial Code or otherwise that are required
in
order for the Secured Parties to continue at all times following such change
to
have a valid, legal and perfected first priority security interest in all the
Collateral.
(b)
Without
limiting Section 4.1(a), without the prior written consent of the Secured
Parties in each instance, the Grantor shall not change its (i) principal
residence, if it is an individual, (ii) place of business, if it has only one
place of business and is not a Registered Organization, (iii) principal place
of
business, if it has more than one place of business and is not a Registered
Organization, or (iv) state of incorporation, formation or organization, if
it
is a Registered Organization.
Section
4.2. Records.
The
Grantor shall maintain, at its own cost and expense, such complete and accurate
records with respect to the Collateral owned by it as is consistent with its
current practices and in accordance with such prudent and standard practices
used in industries that are the same as or similar to those in which the Grantor
is engaged, but in any event to include complete accounting records indicating
all payments and proceeds received with respect to any part of the Collateral,
and, at such time or times as the Secured Parties may reasonably request,
promptly to prepare and deliver to the Secured Parties a duly certified schedule
or schedules in form and detail satisfactory to the Secured Parties showing
the
identity, amount and location of any and all Collateral.
4
Section
4.3. Periodic
Certification; Notice of Changes.
In the
event there should at any time be any change in the information represented
and
warranted herein or in the documents and instruments executed and delivered
in
connection herewith, the Grantor shall promptly notify the Secured Parties
in
writing of such change (this notice requirement shall be in extension of and
shall not limit or relieve the Grantor of any other covenants
hereunder).
Section
4.4. Protection
of Security.
The
Grantor shall, at its own cost and expense, take any and all actions necessary
to defend title to the Collateral against all persons and to defend the Security
Interest of the Secured Parties in the Collateral and the priority thereof
against any Lien.
Section
4.5. Inspection
and Verification.
The
Secured Parties and such persons as the Secured Parties may reasonably designate
shall have the right, during normal business hours, to inspect the Collateral,
all records related thereto (and to make extracts and copies from such records)
and the premises upon which any of the Collateral is located, to discuss the
Grantor's affairs with the officers of the Grantor and its independent
accountants and to verify under reasonable procedures the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Collateral, including, in the case of collateral in the possession
of
any third Person, by contacting any account debtor or third Person possessing
such Collateral for the purpose of making such a verification. Out-of-pocket
expenses in connection with any inspections by representatives of the Secured
Parties shall be (a) the obligations of the Grantor with respect to any
inspection after the Secured Parties’ lawful demand for payment of the Notes and
the nonpayment thereof by Grantor or (b) the obligation of the Secured Parties
in any other case.
Section
4.6. Taxes;
Encumbrances.
At
their option, the Secured Parties may discharge, Liens other than Existing
Liens
at any time levied or placed on the Collateral and may pay for the maintenance
and preservation of the Collateral to the extent the Grantor fails to do so
and
the Grantor shall reimburse the Secured Parties on demand for any payment made
or any expense incurred by the Secured Parties pursuant to the foregoing
authorization; provided, however, that nothing in this Section shall be
interpreted as excusing the Grantor from the performance of, or imposing any
obligation on the Secured Parties to cure or perform, any covenants or other
obligation of the Grantor with respect to any Lien or maintenance or
preservation of Collateral as set forth herein.
Section
4.7. Use
and Disposition of Collateral.
The
Grantor shall not make or permit to be made an assignment, pledge or
hypothecation of any Collateral or shall grant any other Lien in respect of
the
Collateral without the prior written consent of the Secured Parties. The Grantor
shall not make or permit to be made any transfer of any Collateral other than
with respect to Existing Liens and other liens approved by the Secured Parties
and the Grantor shall remain at all times in possession of the Collateral owned
by it.
5
Section
4.8. Insurance/Notice
of Loss.
Within
a reasonable period of time following the date of this Agreement, Grantor,
at
its own expense, shall maintain or cause to be maintained insurance covering
physical loss or damage to the Collateral as described on Schedule
4.8
to this
Agreement. In extension of the foregoing and without limitation, such insurance
shall be payable to the Secured Parties as loss payee under a “standard” loss
payee clause, and the Secured Parties shall be listed as an “additional insured”
on Grantor’s general liability insurance. Such insurance shall not be
terminated, cancelled or not renewed for any reason, including non-payment
of
insurance premiums, unless the insurer shall have provided the Secured Parties
at least 30 days prior written notice. Grantor irrevocably makes, constitutes
and appoints the Secured Parties (and all officers, employees or agents
designated by the Secured Parties) as its true and lawful agent and
attorney-in-fact for the purpose, at any time following the Secured Parties’
lawful demand for payment of the Notes and the nonpayment thereof by Grantor,
of
making, settling and adjusting claims in respect of Collateral under policies
of
insurance, endorsing the name of Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event
that
Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Secured Parties may, without waiving or releasing any
obligation or liability of Grantor hereunder, in their sole discretion, obtain
and maintain such policies of insurance and pay such premium and take any other
actions with respect thereto as the Secured Parties deem advisable. All sums
disbursed by the Secured Parties in connection and in accordance with this
Section, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable upon demand, by Grantor to the
Secured Parties and shall be additional Obligations secured hereby. Grantor
shall promptly notify the Secured Parties if any material portion of the
Collateral owned or held by Grantor is damaged or destroyed. The proceeds of
any
casualty insurance in respect of any casualty loss of any of the Collateral
shall (i) so long as the Secured Parties have not demanded payment of the Notes,
be disbursed to Grantor for direct application by Grantor solely to the repair
or replacement of Grantor’s property so damaged or destroyed, and (ii) in all
other circumstances, be held by the Secured Parties as cash collateral for
the
Obligations. The Secured Parties may, at their sole option, disburse from time
to time all or any part of such proceeds so held as cash collateral, upon such
terms and conditions as the Secured Parties may reasonably prescribe, for direct
application by the Secured Parties solely to the repair or replacement of
Grantor’s property so damaged or destroyed, or Grantor may apply all or any part
of such proceeds to the Obligations.
Section
4.9. Legend.
Grantor
shall legend, in form and manner satisfactory to the Secured Parties, its
accounts and its books, records and documents evidencing or pertaining thereto
with an appropriate reference to the fact that such accounts have been assigned
to the Secured Parties and that the Secured Parties have a security interest
therein.
ARTICLE
V. Further
Assurances; Power of Attorney
Section
5.1. Further
Assurances.
Grantor
shall, at its own expense, execute, acknowledge, deliver and cause to be duly
filed all such further instruments and documents and take all such actions
as
the Secured Parties may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting
of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If
any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Secured Parties,
duly endorsed in a manner satisfactory to the Secured Parties.
6
Section
5.2. Power
of
Attorney.
(a)
Grantor
hereby irrevocably (as a power coupled with an interest) constitutes and
appoints the Secured Party(as defined in Section 7.14 hereof) and all officers,
employees or agents designated by the Secured Party, its attorney-in-fact with
full power of substitution, for the benefit of the Secured Parties,
(i)
to
take
all appropriate action and to execute all documents and instruments that may
be
necessary or desirable to accomplish the purposes of this Agreement, and without
limiting the generality of the foregoing, Grantor hereby grants the power to
file one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by Grantor,
without the signature of Grantor, and naming Grantor as debtor and the Secured
Party and/or the Secured Parties as secured party; and
(ii)
at
any
time following the Secured Parties’ lawful demand for payment of the Notes and
the nonpayment thereof by Grantor (i) to receive, endorse, assign and/or deliver
any and all notes, acceptances, checks, drafts, money orders or other evidences
of payment relating to the Collateral or any part thereof; (ii) to demand,
collect, receive payment of, give receipt for and give discharges and releases
of all or any of the Collateral; (iii) to sign the name of Grantor on any
invoice or xxxx of lading relating to any of the Collateral; (iv) to send
verifications of accounts to any account debtor or any other Person liable
for
an account; (v) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce
any
rights in respect of any Collateral; (vi) to settle, compromise, compound,
adjust or defend any actions, suits or proceeding relating to all or any of
the
Collateral; and (vii) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with all or any of the Collateral, and to
do
all other acts and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Secured Parties were the absolute owner
of
the Collateral for all purposes; provided,
however, that
nothing herein contained shall be construed as requiring or obligating the
Secured Parties to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Secured Parties, or to present
or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or
any
property covered thereby, and no action taken or omitted to be taken by the
Secured Parties with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of Grantor or to any claim
or action against the Secured Parties.
(b)
The
provisions of this Article shall in no event relieve Grantor of any of its
obligations hereunder with respect to the Collateral or any part thereof or
impose any obligation on the Secured Parties to proceed in any particular manner
with respect to the Collateral or any part thereof, or in any way limit the
exercise by the Secured Parties of any other or further right which it may
have
on the date of this Agreement or hereafter, whether hereunder, by law or
otherwise.
7
ARTICLE
VI. Remedies
Section
6.1. Remedies
upon Default.
(a)
Upon
the
occurrence and during the continuance of an Event of Default, Grantor agrees
to
deliver each item of its Collateral to the Secured Parties on demand, and it
is
agreed that the Secured Parties shall have the right to take any of or all
the
following actions at the same or different times (but at all times subject
to
any Existing Liens): with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may
be
located for the purpose of taking possession of or removing the Collateral,
exercise Grantor's right to xxxx and receive payment for completed work and,
generally, to exercise any and all rights afforded to a secured party under
the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, Grantor agrees that the Secured Parties shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or
at
any broker's board or on any securities exchange, for cash, upon credit or
for
future delivery as the Secured Parties shall deem appropriate. The Secured
Parties shall be authorized at any such sale (if it deems it advisable to do
so
and reasonably required by Federal securities laws) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with
a
view to the distribution or sale thereof, and upon consummation of any such
sale
the Secured Parties shall have the right to assign, transfer and deliver to
the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser
at
any such sale shall hold the property sold absolutely, free from any claim
or
right on the part of Grantor, and Grantor hereby waives (to the extent permitted
by law) all rights of redemption, stay and appraisal which Grantor now has
or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
(b)
The
Secured Parties shall give Grantor ten (10) days' written notice (which Grantor
agrees is reasonable notice within the meaning of Section 9-504(3) of the
Uniform Commercial Code) of the Secured Parties’ intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time
and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is
to
be made and the day on which the Collateral, or portion thereof, will first
be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Secured Parties may fix and state in the notice (if any) of such sale.
At
any such sale, the Collateral, or portion thereof, to be sold may be sold in
one
lot as an entirety or in separate parcels, as the Secured Parties may (in their
sole and absolute discretion) determine. The Secured Parties shall not be
obligated to make any sale of any Collateral if they shall determine not to
do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Secured Parties may, without notice or publication, adjourn
any
public or private sale or cause the same to be adjourned from time to time
by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Secured Parties until the sale price is paid by the purchaser or purchasers
thereof, but the Secured Parties shall not incur any liability in case any
such
purchaser or purchasers shall fail to take up and pay for the Collateral so
sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, the Secured Parties may bid for or purchase, free
(to
the extent permitted by law) from any right of redemption, stay, valuation
or
appraisal on the part of Grantor (all said rights being also hereby waived
and
released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim
then
due and payable to the Secured Parties from Grantor as a credit against the
purchase price, and the Secured Parties may, upon compliance with the terms
of
sale, hold, retain and dispose of such property without further accountability
to Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Secured Parties shall be free to carry out such sale pursuant to such agreement
and Grantor shall not be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Secured Parties
shall have entered into such an agreement all Obligations have been paid in
full. As an alternative to exercising the power of sale herein conferred upon
it, the Secured Parties may proceed by a suit or suits at law or in equity
to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed
receiver.
8
Section
6.2. Application
of Proceeds.
The
Secured Parties shall apply the proceeds of any collection or sale of the
Collateral, as well as any Collateral consisting of cash, as follows:
(a)
FIRST,
to
the payment of all costs and expenses incurred by the Secured Parties in
connection with such collection or sale or otherwise in connection with this
Agreement or any of the Obligations, including all court costs and the fees
and
expenses of its agents and legal counsel, and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder,
under
the Purchase Agreement, the Notes and the other Transaction
Documents;
(b)
SECOND,
to the payment in full of the Obligations; and
(c)
THIRD,
to
Grantor, its successors or assigns, or to whomsoever may be lawfully entitled
to
receive the same, or as a court of competent jurisdiction may otherwise
direct.
Subject
to the foregoing, the Secured Parties shall have absolute discretion as to
the
time of application of such proceeds, moneys or balances in accordance with
this
Agreement. Upon any sale of the Collateral by the Secured Parties (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of any such proceeds, moneys or balances by the Secured Parties
or
of the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Secured Parties or such officer or be answerable in any way
for
the misapplication thereof.
9
Section
6.3. Grant
of License to Use Intellectual Property.
For the
purpose of enabling the Secured Parties to exercise rights and remedies under
this Article at such time as the Secured Parties shall be lawfully entitled
to
exercise such rights and remedies, Grantor hereby grants to the Secured Parties
an irrevocable, non-exclusive license (exercisable without payment of royalty
or
other compensation to Grantor) to use, license or sub-license any of the
Collateral consisting of intellectual property now owned or hereafter acquired
by Grantor, and wherever the same may be located, and including in such license
reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Secured Parties
may be exercised, at the option of the Secured Parties, only following the
Secured Parties’ lawful demand for payment of the Notes and the nonpayment
thereof by Grantor.
ARTICLE
VII. Miscellaneous
Section
7.1. Notices.
All
communications and notices hereunder to the Grantor and to the Secured Parties
shall (except as otherwise expressly permitted herein) be in writing and
delivered to the Grantor or the Secured Parties, as the case may be, as provided
in the Purchase Agreement.
Section
7.2. Security
Interest Absolute.
All
rights of the Secured Parties hereunder, the Security Interest and all
obligations of Grantor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Purchase
Agreement, the Notes, any Transaction Document or any agreement with respect
to
any of the Obligations or any other agreement or instrument relating to any
of
the foregoing, (b) any change in the time, manner or place of payment 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 Purchase Agreement, the
Notes, any Transaction Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to,
or a
discharge of, Grantor in respect of the Obligations or this Agreement.
Section
7.3. Survival
of Agreement.
All
covenants, agreements, representations and warranties made by Grantor herein
and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement shall be considered to have been relied
upon
by the Secured Parties and shall survive the making of the loan and the
execution and delivery to the Secured Parties of the Notes, regardless of any
investigation made by the Secured Parties or on their behalf; and shall continue
in full force and effect until this Agreement shall terminate.
Section
7.4. Binding
Effect; Several Agreement; Successors and Assigns.
This
Agreement shall become effective as to Grantor when a counterpart hereof
executed on behalf of Grantor shall have been delivered to the Secured Parties
and a counterpart hereof shall have been executed on behalf of the Secured
Parties, and thereafter shall be binding upon Grantor and the Secured Parties
and their respective successors and assigns, and shall inure to the benefit
of
Grantor, the Secured Parties and their respective successors and assigns, except
that Grantor shall not have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any
such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement, the Purchase Agreement, the Notes or the other Transaction Documents.
10
Section
7.5. Secured
Parties’ Fees and Expense; Indemnification.
(a)
Grantor
agrees to pay upon demand to the Secured Parties the amount of any and all
reasonable expenses, including all reasonable fees, disbursements and other
charges of its counsel and of any experts or agents, which the Secured Parties
may incur in connection with (i) the administration of this Agreement (including
the customary fees and charges of the Secured Parties for any audits conducted
by them or on their behalf with respect to the accounts inventory), (ii) the
custody or preservation of, or the sale of, collection from or other realization
upon any of the Collateral, (iii) the exercise, enforcement or protection of
any
of the rights of the Secured Parties hereunder or (iv) the failure of Grantor
to
perform or observe any of the provisions hereof.
(b)
Grantor
agrees to indemnify the Secured Parties and the agent, contractors and employees
of the Secured Parties (collectively, the “Indemnitees”)
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against
any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery, or performance of this Agreement or any agreement or
instrument contemplated hereby or any claim, litigation, investigation or
proceeding relating hereto or to the Collateral, whether or not any Indemnitee
is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross
negligence or willful misconduct of such Indemnitee.
(c)
Any
such
amounts payable as provided hereunder shall be additional Obligations secured
hereby. The provisions of this Section shall remain operative and in full force
and effect regardless of the termination of this Agreement, the Purchase
Agreement, the Notes or the other Transaction Documents, the consummation of
the
transactions contemplated hereby, the repayment of any of the Obligations,
the
invalidity or unenforceability of any term or provision of this Agreement,
the
Purchase Agreement, the Notes or the other Transaction Documents, or any
investigation made by or on behalf of the Secured Parties. All amounts due
under
this Section shall be payable on written demand therefor.
Section
7.6. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO ANY OF THE CONFLICTS
OF
LAW PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW
OF
ANOTHER JURISDICTION. THIS AGREEMENT SHALL NOT BE INTERPRETED OR CONSTRUED
WITH
ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE
DRAFTED.
11
Section
7.7. Waivers;
Amendment.
(a)
No
failure or delay of the Secured Parties in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies
of
the Secured Parties hereunder and under the Purchase Agreement are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement, the Purchase Agreement, the
Notes
or the other Transaction Documents or consent to any departure by Grantor
therefrom shall in any event be effective unless the same shall be permitted
by
paragraph (b) below, and then such waiver or consent shall be effective only
in
the specific instance and for the purpose for which given. No notice to or
demand on Grantor in any case shall entitle Grantor to any other or further
notice or demand in similar or other circumstances.
(b)
Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements, in writing entered into by the
Secured Parties and Grantor.
Section
7.8. WAIVER
OF JURY TRIAL.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE
PURCHASE AGREEMENT OR THE NOTES. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE PURCHASE
AGREEMENT AND THE NOTES, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section
7.9. Severability.
In the
event any one or more of the provisions contained in this Agreement should
be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in
any
way be affected or impaired thereby (it being understood that the invalidity
of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
Section
7.10. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but
one contract. Each party shall be entitled to rely on a facsimile signature
of
any other party hereunder as if it were an original.
12
Section
7.11.
Jurisdiction; Consent to Service of Process.
(a)
Grantor
hereby irrevocably and unconditionally submits, for itself and its property,
to
the nonexclusive jurisdiction of any Florida State court or Federal court of
the
United States of America sitting in Tampa Florida, and any appellate court
from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, the Purchase Agreement or the Notes, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Florida or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees
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. Nothing in this Agreement shall affect any right that the
Secured Parties may otherwise have to bring any action or proceeding relating
to
this Agreement, the Note and Warrant Purchase Agreement, the Notes or the other
Transaction Documents against Grantor or its properties in the courts of any
jurisdiction.
(b)
Grantor
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter
have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement, the Purchase Agreement, the Notes or the other
Transaction Documents in any Florida State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c)
Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 7.1. Nothing in this Agreement will affect
the
right of any party to this Agreement to process in any other manner permitted
by
law.
Section
7.12. Termination.
This
Agreement and the Security Interest shall terminate when all the Obligations
have been paid in full, at which time the Secured Parties shall execute and
deliver to Grantor, at Grantor’s expense, all Uniform Commercial Code
termination statements and similar documents which Grantor shall reasonably
request to evidence such termination. Any execution and delivery of termination
statements or documents pursuant to this Section shall be without recourse
to or
warranty by the Secured Parties.
Section
7.13. Prejudgment
Remedy Waiver.
Grantor
acknowledges that this Agreement, the Purchase Agreement, the Notes and the
other Transaction Documents evidence a commercial transaction and that it could,
under certain circumstances have the right, to notice of and hearing on the
right of the Secured Parties to obtain a prejudgment remedy, such as attachment,
garnishment and/or replevin, upon commencing any litigation against Grantor.
Notwithstanding, Grantor hereby waives, to the extent it may lawfully do so,
all
rights to notice, judicial hearing or prior court order to which it might
otherwise have the right under any state or federal statute or constitution
in
connection with the obtaining by the Secured Parties of any prejudgment remedy
by reason of this Agreement, the Purchase Agreement, the Notes, the other
Transaction Documents or by reason of the Obligations or any renewals or
extensions of the same. Grantor also waives, to the extent it may lawfully
do
so, any and all objection which it might otherwise assert, now or in the future,
to the exercise or use by the Secured Parties of any right of setoff,
repossession or self help as may presently exist under statute or common
law.
13
Section
7.14. Intentionally
Omitted
[SIGNATURE
PAGES FOLLOW]
14
IN
WITNESS WHEREOF, the parties have duly executed this Security Agreement as
of
the day and year first written above.
INTERLINK
GLOBAL CORPORATIOHN.
By:_____________________________________
Name:
Title:
SECURED
PARTY:
By:_____________________________________
Name:
Title:
EXHIBIT
A
Secured
Parties
SCHEDULE
A
State
of Incorporation; Chief Executive Office; Filing Locations
State
of Incorporation:
Nevada
Chief
Executive Office:
0000
Xxxxxx Xxxxx, Xxxxx 000
Xxxxx,
XX
00000
Filing
Locations:
Secretary
of State of the State of Nevada
SCHEDULE
3.3
Existing
Liens
SCHEDULE
3.4
Absence
of Other Liens
SCHEDULE
4.8
Insurance
