SECURITY AGREEMENT
SECURITY AGREEMENT (this “Agreement”), dated as of October 19, 2007, by and among
CornerWorld, Inc., a Delaware corporation (“Company”), and the secured party signatory
hereto and their respective endorsees, transferees and assigns (collectively, the “Secured
Party”).
W I T N E S S E T H:
WHEREAS, the Secured Party has agreed to purchase from Company the Company’s 10% Secured
Promissory Note (the “Note”); and
WHEREAS, in order to induce the Secured Party to purchase the Note, 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 security interest in certain property of Company to secure the prompt payment,
performance and discharge in full of all of Company’s obligations under the Note.
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 the Company, including, without limitations, all machinery,
equipment, computers, appliances, furniture, special and general tools, fixtures,
test and quality control devices and other equipment of every kind and nature ,and
wherever situated, together with all documents of title and documents representing
the same, all additions and accessions thereto, replacements therefor, all parts
therefor, and all substitutes for any of the foregoing and all other items used and
useful in connection with the Company’s businesses, and all improvements thereto
(collectively, the “Equipment”); and
(ii) All Inventory of the Company;
(iii) All of the Company’s contract rights and general intangibles, including,
without limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights, leases,
franchises, customer lists, quality control procedures, grants and
rights, goodwill, trademarks, service marks, trade styles, trade names,
patents, patent applications, copyrights, deposit accounts, and income tax refunds
(collectively, the “General Intangibles”);
(iv) All Receivables of the Company including all insurance proceeds, and
rights to refunds or indemnification whatsoever owing, together with all
instruments, all documents of title representing any of the foregoing, all rights in
any merchandising, goods, equipment, motor vehicles and trucks which any of the same
may represent, and all right, title, security and guaranties with respect to each
Receivable, including any right of stoppage in transit; and
(v) All of the Company’s documents, instruments and chattel paper, files,
records, books of account, business papers, computer programs and the products and
proceeds of all of the foregoing Collateral set forth in clauses (i)-(iv) above.
(b) “Obligations” means all of the Company’s obligations under this Agreement and the
Note, 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
New York.
2. Grant of Security Interest. As an inducement for the Secured Party to purchase the
Note and to secure the complete and timely payment, performance and discharge in full, as the case
may be, of all of the Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in, a continuing 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 Company
shall at all times maintain the Security Interest as a valid and perfected first security interest
in the Collateral in accordance with the terms and conditions of this Agreement.
3. Representations, Warranties, Covenants and Agreements of the Company. As of the
date hereof, 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
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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
creditors’ 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. 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, 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 to the extent that such financing statement or any agreement
entered into which grants a security interest evidenced by such financing statement recognizes the
priority of the security interest granted to Secured Party pursuant to this Agreement.
(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
rights to use the Collateral in any jurisdiction or to the Company’s right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental authority.
(e) The Company shall at all times maintain its books of account and records relating to the
Collateral at its principal place of business and its Collateral at the locations set forth on
Schedule A attached hereto and may not relocate such books of account and records or
tangible Collateral unless it delivers to the Secured Party at least ten (10) 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 such that the Security
Interest created hereunder in favor of the Secured Party shall continue to be a valid, perfected
and continuing lien in the Collateral.
(f) This Agreement creates in favor of the Secured Party a valid security interest in the
Collateral securing the payment and performance of the Obligations and, upon making the filings
described in the immediately following sentence, a perfected 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
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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) The execution, delivery and performance of this Agreement does not conflict with or cause
a breach or default, or an event that with or without the passage of time or notice, shall
constitute a breach or default, under any agreement to which the Company is a party or by which the
Company is bound. No consent (including, without limitation, from stock holders or creditors of
the Company) is required for the Company to enter into and perform its obligations hereunder.
(i) The Company shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected liens and security interests in the Collateral in favor of the
Secured Party until this Agreement and the Security Interest hereunder shall terminate pursuant to
Section 11. The Company hereby agrees to defend the same against any and all persons. The Company
shall safeguard and protect all Collateral for the account of the Secured Party. At the request of
the Secured Party, the Company will sign and deliver to the Secured Party at any time or from time
to time one or more financing statements pursuant to the UCC (or any other applicable statute) in
form reasonably satisfactory to the Secured Party and will pay the cost of filing the same in all
public offices wherever filing is, or is deemed by the Secured Party to be, necessary or desirable
to effect the rights and obligations provided for herein. Without limiting the generality of the
foregoing, the Company shall pay all fees, taxes and other amounts necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and furnish to the
Secured Party from time to time, upon demand, such releases and/or subordinations of claims and
liens which may be required to maintain the priority of the Security Interest hereunder.
(j) The Company will not transfer, pledge, hypothecate, encumber, license, sell or otherwise
dispose of any of the Collateral, other than in the ordinary course of business provided that such
transaction (or series of transactions) is not in excess of $50,000, without the prior written
consent of the Secured Party.
(k) The Company shall keep and preserve its Equipment, Inventory and other tangible Collateral
in good condition, repair and order and shall not operate or locate any such Collateral (or cause
it to be operated or located) in any area excluded from insurance coverage.
(l) The Company shall, within ten (10) days of obtaining knowledge thereof, advise the Secured
Party promptly, in sufficient detail, of any substantial change in the Collateral, and of the
occurrence of any event which would have a material adverse effect on the value of the Collateral
or on the Secured Party’s security interest therein.
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(m) The Company shall promptly execute and deliver to the Secured Party such further deeds,
mortgages, assignments, security agreements, financing statements or other instruments, documents,
certificates and assurances and take such further action as the Secured Party may from time to time
request and may deem necessary to perfect, protect or enforce its security interest in the
Collateral.
(n) The Company shall permit the Secured Party and its representatives and agents reasonably
to inspect the Collateral during normal business hours, and to make copies of records pertaining to
the Collateral as may be requested by the Secured Party from time to time.
(o) The Company will take all steps reasonably necessary to diligently pursue and seek to
preserve, enforce and collect any rights, claims, causes of action and accounts receivable in
respect of the Collateral.
(p) The Company shall promptly notify the Secured Party in sufficient detail upon becoming
aware of any attachment, garnishment, execution or other legal process levied against any
Collateral and of any other information received by the Company that would materially affect the
value of the Collateral, the Security Interest or the rights and remedies of the Secured Party
hereunder.
(q) All information heretofore, herein or hereafter supplied to the Secured Party by or on
behalf of the Company with respect to the Collateral is accurate and complete in all material
respects as of the date furnished.
(r) Schedule A attached hereto contains a list of all of the subsidiaries of Company.
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 the Company in this Agreement shall prove to have been
incorrect in any material respect when made; and
(c) The failure by the Company to observe or perform any of its obligations hereunder for ten
(10) days after receipt by the Company of notice of such failure from the Secured Party.
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 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.
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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 the Company shall assemble the
Collateral and make it available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company’s premises or elsewhere, and make available to the
Secured Party, without rent, all of the Company’s respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the Collateral in saleable
or disposable form.
(b) The Secured Party shall have the right to operate the business of the Company using the
Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all
or any part of the Collateral, at public or private sale or otherwise, all as undertaken in
accordance with the applicable requirements of the UCC with respect to any such disposition, either
with or without special conditions or stipulations, for cash or on credit or for future delivery,
in such parcel or parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all without (except as
shall be required by applicable statute and cannot be waived) advertisement or demand upon or
notice to the Company or right of redemption of the Company, which are hereby expressly waived.
Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Party may,
unless prohibited by applicable law which cannot be waived, purchase all or any part of the
Collateral being sold, free from and discharged of all trusts, claims, right of redemption and
equities of the Company, which are hereby waived and released.
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 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 12% 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.
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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 the Notes. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Notes and shall bear interest at the Default Rate.
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 the Notes 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 the 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 the
Company, or a discharge of all or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the Secured Party shall
continue even if the Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Company expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent jurisdiction to have been a
voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other than the Secured Party, then, in
any such event, the Company’s obligations hereunder shall survive cancellation of this Agreement,
and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms
and provisions hereof. The Company waives all right to require the Secured Party to proceed
against any other person or to apply any Collateral which the Secured Party may hold at any time,
or to marshal assets, or to pursue any
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other remedy. The Company waives any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.
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 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 any
invoice, freight or express xxxx, xxxx of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand,
collect, receipt for, compromise, settle and xxx for monies due in respect of the Collateral; and
(v) generally, to do, at the option of the Secured Party, and at the Company’s expense, at any
time, or from time to time, all acts and things which the Secured Party deems reasonably 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 the
Company might or could do; and the Company hereby ratifies all that said attorney shall lawfully do
or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall
be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.
(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 reasonable 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 of one or more
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financing or continuation statements and amendments thereto, relative to any of the Collateral
without the signature of the Company where permitted by law.
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 with priority
next day delivery (receipt requested), the next business day, or (iv) if mailed by first-class
registered or certified mail, return receipt requested, postage prepaid, four days after posting in
the U.S. mails, in each case if delivered to the following addresses:
| If to the Company: | CornerWorld, Inc. | |||
| 00000 Xxxxx Xxxxx, Xxxxx 000 | ||||
| Xxxxxx, Xxxxx 00000 | ||||
| Telephone: 000-000-0000 | ||||
| Facsimile: 000-000-0000 | ||||
| Attention: Xxxxx Xxxx | ||||
| With a copy to: | Xxxxxxx X. Xxxxxxxx, Esq. | |||
| Sichenzia Xxxx Xxxxxxxx Xxxxxxx, LLP | ||||
| 00 Xxxxxxxx, 00xx Xx. | ||||
| Xxx Xxxx, XX 00000 | ||||
| Telephone: 000-000-0000 | ||||
| Facsimile: 212-930-9725 | ||||
| If to the Secured Party: | Dynasty Capital LLC | |||
| 0000 Xxxxxxxx Xxxx, #00000 | ||||
| Xxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0 | ||||
| Fax: (000) 000-0000 | ||||
| Attention: Xxxxx Xxxxxxxx | ||||
| With a copy to: | W. Xxxxx Xxxxxx, Esq. | |||
| Xxxxxx & Associates | ||||
| 00000 Xx Xxxxxx Xxxx, Xxxxx 000 | ||||
| Xxx Xxxxx, Xxxxxxxxxx 00000 | ||||
| Telephone: 000-000-0000 | ||||
| Facsmile: 000-000-0000 | ||||
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
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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 the Company and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, any right, power or
privilege hereunder or under the 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 Notes or by any other agreements, instruments or documents or
by law shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties with respect to the subject
matter hereof and is intended to supersede all prior negotiations, understandings and agreements
with respect thereto. Except as specifically set forth in this Agreement, no provision of this
Agreement may be modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to be invalid, prohibited or
unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any jurisdiction, such provision, as to such
jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or
unenforceability without invalidating the remaining portion of such provision or the other
provisions of this Agreement and without affecting the validity or enforceability of such provision
or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this Agreement shall be considered
valid unless in writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default or right, whether of the same or similar nature
or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of each party hereto and its
successors and assigns.
(g) Each party shall take such further action and execute and deliver such further documents
as may be necessary or appropriate in order to carry out the provisions and purposes of this
Agreement.
(h) This Agreement shall be construed in accordance with the laws of the State of New York,
except to the extent the validity, perfection or enforcement of a security interest hereunder in
respect of any particular Collateral which are governed by a jurisdiction
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other than the State of New York in which case such law shall govern. Each of the parties
hereto irrevocably submits to the exclusive jurisdiction of any New York State or United States
Federal court sitting in New York 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 MATTER 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 WAIVED 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]
CornerWorld, Inc. Security Agreement
11
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed
on the day and year first above written.
| CORNERWORLD, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| DYNASTY CAPTIAL LLC | ||||||
| By: | ||||||
| Name: | ||||||
CornerWorld, Inc. Security Agreement Signature Page (August 2007)
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