EXHIBIT 10.2 - Security Agreement dated as of January 2003 between
XxxxxxxXxxx.Xxx, Inc. and Xxxxxxxxx Productions, Inc.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Security Agreement") is made on January __,
2003, by and between XXXXXXXXXXX.XXX, INC., a Florida corporation with a
principal place of business located at 0000 X. Xxxxxxx Xxxxxxx, Xxxx Xxxxx, XX
00000 ("Shutterport") and XXXXXXXXX PRODUCTIONS, INC., a Florida corporation
with a principal place of business located at 0000 X. Xxxxxxx Xxxx Xxxx.,
Xxxxxxxxxx Xxxxx, XX 00000 ("Xxxxxxxxx"). Capitalized terms not otherwise
defined in this Security Agreement shall have the meanings ascribed to them in
the Asset Purchase Agreement (as hereinafter defined).
BACKGROUND
WHEREAS, in order to induce Xxxxxxxxx to enter into the Asset Purchase
Agreement of even date herewith (the "Asset Purchase Agreement") and accept the
secured convertible promissory note (the "Note") referred to therein,
Shutterport is willing to enter into this Security Agreement and to xxxxx
Xxxxxxxxx a security interest in certain of Shutterport's tangible and
intangible personal property, subject to the terms and conditions set forth
herein and in the Note. All terms used but not defined herein shall have such
meaning as is ascribed to them by the Asset Purchase Agreement or the Note.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth in this Security Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Xxxxxxxxx and Shutterport, intending to be legally bound hereby, agree as
follows:
1. SECURITY INTEREST.
(a) To secure payment and performance of Shutterport's "Obligations"
(as hereinafter defined) under the Note, Shutterport hereby pledges, assigns,
transfers and grants to Xxxxxxxxx a continuing security interest in the
"Shutterport Property," which shall refer to Shutterport's right title and
interest in the "Howdy Xxxxx" library, which includes 130 colored episodes of
the "Howdy Xxxxx" television show, where the principal photography was shot in
the mid-1970's and the rights to duplicate, sell, market and broadcast said
episodes, including, without limitation, all related "goods," "accounts,"
"chattel paper," "contracts," "documents," "general intangibles," "instruments"
and "inventory," (as those terms are defined hereinbelow), together, in each
instance, with the renewals, substitutions, replacements, additions, rental
payments, products and "proceeds" (as hereinafter defined) thereof. The interest
of Xxxxxxxxx in and to the Shutterport Property is a first priority lien and
security interest in and to the Shutterport Property.
(b) The items of Shutterport Property as referenced by Subparagraph(a)
of this Section shall hereinafter collectively be referred to as the
"Collateral".
(c) Shutterport expressly understands and agrees that the security
interests granted to Xxxxxxxxx hereunder shall remain as security for payment
and performance of Shutterport's Obligations, whether now existing or that may
hereafter be incurred by future advances or otherwise. Notice of the continuing
grant of these security interests
shall, therefore, not be required to be stated on the face of any document
representing any such Obligations, nor otherwise identify such document as being
secured hereby.
2. DEFINITIONS. The following terms shall have the following meanings:
(a) "Accounts" means all accounts, as that term is defined in Article 9
of the Uniform Commercial Code as in effect from time-to-time in the State of
Florida (the "UCC"), and, in any event, shall include any right to payment held
by Shutterport, whether in the form of accounts receivable, notes, drafts,
acceptances, letters of credit (including proceeds of letters of credit) or
other forms of obligations and receivables, now owned or hereafter received or
acquired by or belonging or owing to Shutterport (including, without limitation,
under any trade name, style or division thereof) for Inventory sold or leased or
services rendered by it whether or not earned by performance, together with all
guarantees and security therefor and all Proceeds thereof, whether cash Proceeds
or otherwise, including, without limitation, all right, title and interest of
Shutterport in the Inventory which gave rise to any such Accounts, including,
without limitation, unpaid seller's rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed, rejected or
repossessed Inventory or other goods;
(b) "Chattel Paper" means all chattel paper, as that term is defined in
Article 9 of the UCC, and, in any event, shall include any writing or writings
which evidence both a monetary obligation and a security interest in or a lease
of specific goods, whether now or hereafter held by Shutterport;
(c) "Contracts" means all contracts, undertakings, franchise agreements
or other agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments, as those terms are defined above and below) in or under which
Shutterport may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, and any agreement relating to
the terms of payment or the terms of performance thereof;
(d) "Documents" means all documents, as that term is defined in Article
9 of the UCC;
(e) "General Intangibles" means all general intangibles, as that term
is defined in Article 9 of the UCC, and, in any event, shall include all right,
title and interest which Shutterport may now or hereafter have in or under any
Contract, customer lists, intellectual property, corporations, limited liability
companies, partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patentable), technical information,
procedures, designs, knowledge, know-how, software, data bases, data, skill,
expertise, recipes, experience, processes, models, drawings, blueprints,
catalogs, materials and records, permits and authorizations, unfilled customer
purchase orders, goodwill, claims in or under insurance policies, including
unearned premiums, uncertificated securities, deposit accounts, rights to
receive tax refunds and other payments and rights of indemnification, but shall
not include any of the "Patent Collateral" and/or "Trademark Collateral" as
those terms are defined in the Patent Security Agreement and Trademark Security
Agreement, respectively, executed by the parties hereto;
(f) "Goods" means all goods, as that term is defined in Article 2 of
the UCC;
(g) "Instruments" means all instruments, as that term is defined in
Article 9 of the UCC, and, in any event, shall include any negotiable instrument
or certificated security, as defined in Article 8 of the UCC, or any other
writing which evidences a right to the payment of money and is not itself an
instrument that constitutes, or is a part of a group or writings that
constitute, Chattel Paper, and is of a type which, in the ordinary course of
business, is transferred by delivery with any necessary endorsement or
assignment, whether now or hereafter held by Shutterport;
(h) "Inventory" means all inventory, as that term is defined in Article
9 of the UCC, wherever located, and, in any event, shall include all inventory,
merchandise, goods and other personal property which are held by or on behalf of
Shutterport for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process or
materials used or consumed or to be used or consumed in Shutterport's business,
or the processing, packaging, promotion, delivery or shipping of the same, and
all finished goods, whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Shutterport or is
held by Shutterport or by others for Shutterport's account, including, without
limitation, all goods covered by purchase orders and contracts with suppliers
and all goods billed and held by suppliers and all inventory which may be
located on premises of Shutterport or of any carriers, forwarding agents,
truckers, warehousemen, vendors, selling agents or other Persons;
(i) "Transaction Documents" means the Asset Purchase Agreement, Note
and this Agreement;
(j) "Obligations" means any and all indebtedness, obligations,
liabilities, contracts, indentures, agreements, warranties, covenants,
guaranties, representations, provisions, terms and conditions of whatever kind
with regard to the Transaction Documents, whether due or to become due, absolute
or contingent, now existing or hereafter incurred or arising, whether or not
otherwise guaranteed or secured and whether evidenced by any note or draft or
documented on the books and records of Xxxxxxxxx or otherwise on open account,
including without limitation, all costs, expenses, fees, charges and attorneys'
and other professional fees incurred by Xxxxxxxxx in connection with, involving
or related to the administration, protection, modification, collection,
enforcement, preservation or defense of any of Xxxxxxxxx'x rights with respect
to any of the Obligations, the Collateral or any agreement, instrument or
document evidencing, governing, securing or relating to any of the foregoing,
including without limitation, all costs and expenses incurred in inspecting or
surveying mortgaged real estate, if any, or conducting environmental studies or
tests, and in connection with any "workout" or default resolution negotiations
involving legal counsel or other professionals and any renegotiation or
restructuring of any of the Obligations; and
(k) "Proceeds" means all proceeds, as that term is defined in Article 9
of the UCC, and, in any event, shall include (a) any and all Accounts, Chattel
Paper, Instruments, cash and other proceeds payable to Shutterport from
time-to-time in respect of any of the foregoing collateral security, (b) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to
Shutterport from time-to-time with respect to any of the collateral security,
(c) any and all payments (in any form whatsoever) made or due and payable to
Shutterport from time-to-time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the collateral
security by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), and (d) any and
all other amounts from time-to-time paid or payable under or in connection with
any of the collateral security.
3. SHUTTERPORT'S REPRESENTATIONS, WARRANTIES AND COVENANTS. In order to
induce Xxxxxxxxx to execute the Transaction Documents, Shutterport repeats and
reaffirms the representations, warranties and covenants set forth in the Asset
Purchase Agreement, which are deemed incorporated herein by reference as if set
forth in full herein and also makes the following representations, warranties
and warranties upon which Xxxxxxxxx relies:
(a) Authority. Shutterport has full power and authority to enter into
and perform the Obligations under this Agreement, to execute and deliver the
Transaction Documents and to incur the obligations provided for herein and
therein, all of which have been duly authorized by all necessary and proper
corporate action. No other consent or approval or the taking of any other action
is required as a condition to the validity or enforceability of this Agreement
or any of the other Transaction Documents.
(b) Binding Agreements. This Agreement and the other Transaction
Documents constitute the valid and legally binding obligations of Shutterport,
enforceable in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
(c) No Conflicting Law or Agreements. The execution, delivery and
performance by Shutterport of this Agreement and the other Transaction
Documents: (i) do not violate any provision of the Articles of Incorporation or
bylaws of Shutterport, (ii) do not violate any order, decree or judgment, or any
provision of any statute, rule or regulation, (iii) do not violate or conflict
with, result in a breach of or constitute (with notice or lapse of time, or
both) a default under any mortgage, indenture, contract or other agreement to
which Shutterport is a party, or by which any of Shutterport's properties are
bound, or (iv) except for the lien granted to Xxxxxxxxx hereunder, do not result
in the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or assets of Shutterport.
(d) Collateral. Shutterport is and shall continue to be the sole
owner of the Collateral free and clear of all liens, encumbrances, security
interests and claims, except for the liens granted to Xxxxxxxxx hereunder.
Shutterport is fully authorized to sell, transfer, pledge and/or grant a
security interest in each and every item of the Collateral to Xxxxxxxxx. All
documents and agreements related to the Collateral shall be true and correct and
in all respects what they purport to be; all signatures and endorsements that
appear thereon shall be genuine and all signatories and endorsers shall have
full capacity to contract. None of the transactions underlying or giving rise to
the Collateral shall violate any applicable state or federal laws or
regulations. All documents relating to the Collateral shall be legally
sufficient under such laws or regulations and shall be legally enforceable in
accordance with their terms. Shutterport agrees to defend the Collateral against
the claims of all persons other than Xxxxxxxxx, except as expressly reserved or
otherwise provided herein.
4. AFFIRMATIVE COVENANTS OF SHUTTERPORT. Shutterport covenants and
agrees that, from the date hereof until full and final payment and performance
of all Obligations, Shutterport shall:
(a) Insurance and Endorsement. (i) Keep the Collateral and
Shutterport's other properties insured against loss or damage by fire and other
hazards (so-called "All Risk" coverage) in amounts and with companies
satisfactory to Xxxxxxxxx to the same extent and covering such risks as is
customary in the same or a similar business; maintain public liability coverage,
including without limitation, products liability coverage, against claims for
personal injuries or death; and maintain all worker's compensation, employment
or similar insurance as may be required by applicable law; (ii) All insurance
shall contain such terms, be in such form, and be for such periods as are
reasonably satisfactory to Xxxxxxxxx, and be written by such carriers duly
licensed by the State of Florida. Without limiting the generality of the
foregoing, such insurance must provide that it may not be canceled without ten
(10) days' prior written notice to Xxxxxxxxx. Shutterport shall cause Xxxxxxxxx
to be endorsed as a loss payee with a long form Lender's Loss Payable Clause, in
form and substance acceptable to Xxxxxxxxx on all such insurance. In the event
of a failure to provide and maintain insurance as herein provided, Xxxxxxxxx
may, at its option after having giving five (5) days prior written notice of
intent to do so, provide such insurance and charge the amount thereof to
Shutterport. Shutterport shall furnish to Xxxxxxxxx certificates or other
satisfactory evidence of compliance with the foregoing insurance provisions.
Shutterport hereby irrevocably appoints Xxxxxxxxx as its attorney-in-fact,
coupled with an interest, to make proofs of loss and claims for insurance, and
to receive payments of the insurance and execute all documents, checks and
drafts in connection with payment of the insurance. Any Proceeds received by
Xxxxxxxxx shall be applied to the Obligations or shall be remitted to
Shutterport, in either event at Xxxxxxxxx'x sole discretion.
(b) Tax and Other Liens. Comply with all statutes and government
regulations and pay all taxes (including withholdings), assessments,
governmental charges or levies, or claims for labor, supplies, rent and other
obligations made against it or its property which, if unpaid, might become a
lien or charge against Shutterport or its properties.
(c) Inspections. Upon reasonable notice and during normal business
hours, allow Xxxxxxxxx by or through any of their officers, and/or accountants
designated by Xxxxxxxxx, to enter the offices of Shutterport to examine or
inspect any of the properties, books and records or extracts therefrom relating
to Shutterport's financial or business conditions, to make copies of such books
and records or extracts therefrom, and to discuss the affairs, finances and
accounts thereof with Shutterport all at such reasonable times and as often as
Xxxxxxxxx or any such representative of Xxxxxxxxx may reasonably request.
(d) Litigation. Promptly advise Xxxxxxxxx of the commencement or threat
of litigation, including arbitration proceedings and any proceedings before any
governmental agency (collectively, "Litigation"), which is instituted against
Shutterport.
(e) Maintenance of Existence. Maintain its corporate existence, and
comply with all valid and applicable statutes, rules and regulations, and
maintain its properties in good repair,
working order and operating condition. Shutterport shall immediately notify
Xxxxxxxxx of any event causing material loss in the value of its assets.
(f) Collateral Duties. Do whatever Xxxxxxxxx may reasonably request
from time to time by way of obtaining, executing, delivering and filing
financing statements, assignments, landlord's or mortgagee's waivers, and other
notices and amendments and renewals thereof, and Shutterport will take any and
all steps and observe such formalities as Xxxxxxxxx may reasonably request in
order to create and maintain a valid and enforceable first lien upon, pledge of,
and first priority security interest in, any and all of the Collateral.
Xxxxxxxxx is authorized to file financing statements without the signature of
Shutterport and to execute and file such financing statements on behalf of
Shutterport as specified by the UCC to perfect or maintain Xxxxxxxxx'x security
interest in all of the Collateral.
(g) Notice of Default. Provide to Xxxxxxxxx, not later than five (5)
business days after becoming aware of the occurrence or existence of an Event of
Default (as defined in the Note) or a condition which would constitute an Event
of Default but for the giving of notice or passage of time on both, notice in
writing of such Event of Default or condition.
5. NEGATIVE COVENANTS OF SHUTTERPORT. Shutterport covenants and agrees
that from the date hereof until full and final payment and performance of all
obligations, Shutterport shall not without the prior written consent of
Xxxxxxxxx:
Encumbrances. Incur or permit to exist any lien, mortgage, charge or
other encumbrance against any of the Collateral, whether now owned or hereafter
acquired, except: (i) liens required or expressly permitted by the Transaction
Documents; (ii) pledges or deposits in connection with or to secure worker's
compensation, unemployment or liability insurance; and (iii) tax liens which are
being contested in good faith against which, if requested by Xxxxxxxxx,
Shutterport shall set up a cash reserve or post a surety bond in an amount equal
to the total amount of the lien being contested.
Maintenance of Collateral. Permit to incur or suffer any loss, theft,
substantial damage or destruction of any of the Collateral which is not
immediately replaced with Collateral of equal or greater value, or which is not
fully covered by insurance, the proceeds of which shall have been endorsed over
to Xxxxxxxxx in accordance with Section 4(b) hereof.
6. ADDITIONAL RIGHTS OF XXXXXXXXX.
(a) Shutterport hereby constitutes and appoints Xxxxxxxxx (and any
officer of Xxxxxxxxx, with full power of substitution) its true and lawful
attorney and agent in fact to take any or all of the actions described below in
Xxxxxxxxx'x or Shutterport's name and at Shutterport's expense, and Shutterport
hereby ratifies and confirms all actions so taken:
(i) Evidence of Liens. Xxxxxxxxx may execute such financing
statements and other documents and take such other actions as Xxxxxxxxx
deems reasonably necessary or proper in order to create, perfect or
continue the security interest and other liens provided for by this
Security Agreement, and Xxxxxxxxx may file the same (or a photocopy of
this
Security Agreement or of any financing statement signed by Shutterport)
in any appropriate governmental office.
(ii) Preservation of Collateral. Xxxxxxxxx may take any and
all action that it deems necessary or proper to preserve its interest
in the Collateral, including, without limitation, the payment of debts
of Shutterport which might impair the Collateral or Xxxxxxxxx'x
security interest therein, the purchase of insurance on the Collateral,
the repair or safeguarding of the Collateral, or the payment of taxes,
assessments or other liens thereon. All sums so expended by Xxxxxxxxx
shall be added to the Obligations, shall be secured by the Collateral,
and shall be payable on demand.
(iii) Xxxxxxxxx'x Right to Cure. In the event Shutterport
fails to perform any of its obligations, then Xxxxxxxxx may perform the
same but shall not be obligated to do so. All sums so expended by
Xxxxxxxxx shall be added to the Obligations, shall be secured by the
Collateral, and shall be payable on demand.
(iv) Verification of Accounts. Xxxxxxxxx may test
verifications of any and all Accounts in any manner and through any
medium Xxxxxxxxx considers advisable, and Shutterport shall render any
reasonable assistance.
(v) Proofs of Loss. Xxxxxxxxx may file proofs of loss with
respect to any of the Collateral with the appropriate insurer and may
endorse any checks or drafts constituting insurance proceeds.
(vi) Collections; Modification or Terms. Upon the occurrence
and continuance of any Event of Default, Xxxxxxxxx may demand, xxx for,
collect and give receipts for any money, instruments or property
payable or receivable on account of or in exchange for any of the
Collateral, or make any compromises it deems necessary or proper
including, without limitation, extending the time of payment,
permitting payment in installments, or otherwise modifying the terms or
rights relating to any of the Collateral, all of which may be effected
without notice to or consent by Shutterport and without otherwise
discharging or affecting the Obligations, the Collateral or the
security interest granted under this Security Agreement.
(vii) Notification of Account Debtors. Upon the occurrence and
continuance of any Event of Default, Xxxxxxxxx may notify the account
debtors of Shutterport on any of the Accounts to make payment directly
to Xxxxxxxxx and Xxxxxxxxx may endorse all items of payment received by
it which are payable to Shutterport.
(viii) Endorsements. Upon the occurrence and continuance of
any Event of Default, Xxxxxxxxx may endorse Shutterport's name on
checks, notes, acceptances, drafts, invoices, bills of lading and any
other documents or instruments requiring Shutterport's endorsement and
properly account to Shutterport for all such transactions.
Shutterport covenants and agrees that the power of attorney granted by
the foregoing subsection (a) is coupled with an interest and shall be
irrevocable so long as this Security Agreement is in force; that said powers are
granted solely for the protection of
Xxxxxxxxx'x interest and that Xxxxxxxxx shall have no duty to exercise any
thereof; that the decision whether to exercise any of such powers, and the
manner of exercise, shall be solely within Xxxxxxxxx'x discretion and that
neither Xxxxxxxxx nor any of its directors, officers, employees or agents shall
be liable for any act of omission or commission, or for any mistake or error of
judgment, in connection with any such power.
7. REMEDIES OF XXXXXXXXX IN RESPECT OF THE COLLATERAL. Xxxxxxxxx shall
be entitled to the rights and remedies, and Shutterport shall have the
obligations, set forth below:
(a) Xxxxxxxxx may enter upon the premises where any of the Collateral
is located and take possession of, and at Xxxxxxxxx'x option remove, any or all
thereof.
(b) Upon notice from Xxxxxxxxx, Shutterport shall promptly at its
expense assemble any or all of the Collateral and make it available at a
reasonably convenient place designated by Xxxxxxxxx.
(c) Xxxxxxxxx may, with or without judicial process, sell, lease or
otherwise dispose of any or all of the Collateral at public or private sale or
proceedings, by one or more contracts, in one or more parcels, at the same or
different times and places, with or without having the Collateral at the place
of sale or other disposition, to such persons or entities, for cash or credit or
for future delivery and upon such other terms, as Xxxxxxxxx may in its
discretion deem best in each such matter. The purchaser of any of the Collateral
at any such sale shall hold the same free of any equity of redemption of other
right or claim of Shutterport, all of which, together with all rights, of stay,
exemption or appraisal under any statute or other law now or hereafter in
effect, Shutterport hereby unconditionally waives to the fullest extent
permitted by law. If any of the Collateral is sold on credit or for future
delivery, Xxxxxxxxx shall not be liable for the failure of the purchaser to pay
for same and, in the event of such failure, Xxxxxxxxx may resell such
Collateral.
(d) Shutterport further agrees that notice of the time after which any
private sale or other intended disposition or action relating to any of the
Collateral is to be made or taken, shall be deemed commercially reasonable
notice thereof, and shall satisfy the requirements of any applicable statute or
other law, if such notice is delivered or mailed (by ordinary first class mail,
postage prepaid) not less than five (5) business days prior to the date of the
sale, disposition or other action to which the notice related. Xxxxxxxxx shall
not be obligated to make any sale or other disposition or take other action
pursuant to such notice and may, without other notice or publication, adjourn or
postpone any public or private sale or other disposition or action by
announcement at the time and place fixed therefor, and such sale, disposition or
action may be held or accomplished at any time or place to which the same may be
so adjourned or postponed.
(e) Xxxxxxxxx may purchase any or all of the Collateral at any public
sale and may purchase at private sale any of the Collateral that is of a type
customarily sold in a recognized market or the subject of widely distributed
price quotations or as may be further permitted by law. Xxxxxxxxx may make
payment of the purchase price for any Collateral by credit against the then
outstanding amount of the Obligations.
(f) Xxxxxxxxx may at its discretion retain any or all of the Collateral
and apply the same in satisfaction of part or all of the Obligations.
(g) Any cash proceeds of sale, lease or other disposition of Collateral
shall be applied as follows:
FIRST: To the expenses of collecting, enforcing, safeguarding,
holding and disposing of Collateral, and to other reasonable expenses
of Xxxxxxxxx in connection with the enforcement of this Security
Agreement, the Note, or the Transaction Documents including, without
limitation, court costs and the reasonable fees of attorneys,
accountants and appraisers;
SECOND: Any surplus then remaining to the payment of the
Obligations; and
THIRD: Any surplus then remaining to Shutterport or whoever
may be lawfully entitled thereto.
(h) Shutterport agrees that, in connection with any action or
proceeding arising out of or relating to the Obligations, this Security
Agreement or the Collateral:
(i) Shutterport waives the right to a trial by jury and all
defenses and right to interpose any setoff or counterclaim of any
nature, except and only to the extent such defense pertains to the
existence of an Event of Default;
(ii) Shutterport consents to the jurisdiction of any court of
the State of New York and of any federal court located in New York, and
Shutterport waives any right to object to such court as a forum
inconvenient to Shutterport;
(iii) Shutterport agrees that all of the Collateral
constitutes equal security for all of the Obligations, and agrees that
Xxxxxxxxx shall be entitled to sell or otherwise deal with any or all
of the Collateral, in any order or simultaneously as Xxxxxxxxx shall
determine in its sole discretion, free of any requirement for the
marshalling of assets or other restriction upon Xxxxxxxxx in dealing
with the Collateral.
8. COSTS AND EXPENSES. Shutterport agrees to pay on demand all of
Xxxxxxxxx'x reasonable expenses in collecting, enforcing, safeguarding, holding
and disposing of Collateral, and all other losses, costs and expenses incurred
by Xxxxxxxxx in connection with the enforcement of any of the Transaction
Documents, or in connection with legal advice relating to the rights or
responsibilities of Xxxxxxxxx under any thereof (including in each case, without
limitation, the reasonable fees and out-of-pocket expenses of attorneys,
accountants and appraisers).
With respect to any amount advanced by Xxxxxxxxx and required to be
reimbursed by Shutterport pursuant to any provision of this Security Agreement,
Shutterport shall also pay Xxxxxxxxx interest on such amount at the rate from
time to time applicable to overdue principal of the Note from the date of the
expenditure to the date of reimbursement. Shutterport's obligations under this
Section 8 shall survive payment of the Note and the other Obligations.
9. WAIVERS, ETC. Shutterport hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with this Agreement or
the enforcement of Xxxxxxxxx'x rights hereunder or in connection with any
obligations or any Collateral; consents to and waives notice of: (a) the
granting of renewals, extensions of time for payment or other indulgences to
Shutterport or to any account debtor in respect of any account receivable of
Shutterport; (b) substitution, release or surrender of any Collateral; (c) the
addition or release of persons primarily or secondarily liable on any of the
Obligations or on any account receivable or other Collateral; and (d) the
acceptance of partial payments on any Obligations or on any account receivable
or other Collateral and/or the settlement or compromise thereof. No delay or
omission on the part of Xxxxxxxxx in exercising any right hereunder shall
operate as a waiver of such right or of any other right hereunder. Any waiver of
any such right on any one occasion shall not be construed as a bar to or waiver
of any such right on any such future occasion. Shutterport further waives any
right it may have under the laws of the State of New Jersey (or under the laws
of any other state in which any of the collateral may be located), or under the
constitution of the United States of America, to notice or to a judicial hearing
prior to the exercise of any right or remedy provided by this Agreement to
Xxxxxxxxx and waives its rights, if any, to set aside or invalidate any sale
duly consummated in accordance with the foregoing provisions hereof on the
grounds (if such be the case) that the sale was consummated without a prior
judicial hearing. Shutterport's waivers under this Section 9 have been made
voluntarily, intelligently, knowingly, without duress and only after extensive
consideration of the ramifications thereof.
10. TERMINATION; ASSIGNMENT, ETC. This Agreement and the security
interest in the Collateral created hereby shall terminate when all of the
Obligations have been paid and finally discharged in full. No waiver by
Xxxxxxxxx or by any other holder of the Obligations of any default shall be
effective unless in writing signed by Xxxxxxxxx nor shall any waiver granted on
any one occasion operate as a waiver of any other default or of the same default
on a future occasion. In the event of a sale or assignment by Xxxxxxxxx of all
or any of the Obligations held by Xxxxxxxxx, Xxxxxxxxx may assign or transfer
its respective rights and interests under this Agreement in whole or in part to
the purchaser or purchasers of such obligations, whereupon such purchaser or
purchasers shall become vested with all of the powers and rights hereunder, and
Xxxxxxxxx shall thereafter be forever released and fully discharged from any
liability or responsibility hereunder with respect to the rights and interests
so assigned except that Xxxxxxxxx shall be liable for damages suffered by
Shutterport as a result of actions taken by Xxxxxxxxx in bad faith or with
willful misconduct.
11. MISCELLANEOUS.
(a) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon Xxxxxxxxx and Shutterport and their respective successors
and assigns.
(b) Changes. Changes in or additions to this Agreement may be made or
compliance with any term, covenant, agreement, condition or provision set forth
herein may be omitted or waived (either generally or in a particular instance
and either retroactively or prospectively), only upon written consent of
Shutterport and Xxxxxxxxx.
(c) Notices. All notices, requests, consents and demands shall be made
in writing and shall be delivered by facsimile to the fax number set forth below
or by hand, sent via a reputable overnight courier service or mailed by first
class certified or registered mail, return receipt requested, postage prepaid to
Shutterport;
If to Shutterport:
Xxxxxxxxxxx.xxx, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Fax No. (000) 000-0000
If to Xxxxxxxxx:
Xxxxxxxxx Productions, Inc.
0000 X. Xxxxxxx Xxxx Xxxx.
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Fax No. (000) 000-0000
(d) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Florida notwithstanding any conflict-of-laws doctrines of such
state or other jurisdictions to the contrary, and without the aid of any canon,
custom or rule of law requiring constructions against the draftsman. The parties
agree to submit to the jurisdiction and venue of the sate and federal courts of
Broward County, Florida for the purposes of resolving disputes hereunder and
authorize any such action to be instituted and prosecuted exclusively in the
Broward County courts, or, if appropriate, the United States District Court for
the Southern District of Florida.
(e) Breach. Shutterport agrees to pay all costs of enforcement,
including reasonable attorney's fees and legal expenses incurred by Xxxxxxxxx in
the event that Shutterport fails to comply with or otherwise breaches this
Agreement.
(f) Severability. If any provision of this Agreement is held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of the other provisions of this Agreement, all of which are
declared severable.
(g) Headings. The headings used in this Agreement are solely for
convenience of reference and shall not affect its interpretation.
(h) Conflict. In the event of any conflict between the terms of any of
the Transaction Documents, including, but not limited to, this Agreement and the
Note, the terms of the Note shall control.
(i) Entire Understanding. Except as expressly reserved or otherwise
provided herein, this Agreement contains the entire understanding among the
parties hereto with respect to the subject matter hereof, and supercedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written, except as herein contained. The
express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.
(j) Jury Waiver. Shutterport hereby waives trial by jury in any court
in any suit, action or proceeding on any matter arising in connection with or in
any way related to the financing transactions of which this agreement is a part
and/or the enforcement of any of Xxxxxxxxx'x rights and remedies, including
without limitation, tort claims. Shutterport acknowledges that it makes this
waiver voluntarily, intelligently, knowingly, without duress and only after
extensive consideration of the ramifications thereof.
(k) Counterparts. This Agreement may be executed in any number of
counterparts, including separate counterparts, all of which when taken together,
shall constitute one instrument.
Signed as of January __, 2003.
WITNESSES: XXXXXXXXXXX.XXX, INC.
___________________________ By:____________________________
Xxxxxx Xxxxx, President
XXXXXXXXX PRODUCTIONS, INC.
___________________________ By:____________________________
Xxxxx Xxxxxxxxx, President
STATE OF FLORIDA )
) SS.
OF PALM BEACH )
The foregoing instrument was acknowledged before me this ___ day of
January, 2003 by Xxxxxx Xxxxx, President of Xxxxxxxxxxx.xxx, Inc., a Florida
corporation.
----------------------------------------
Notary Public
My commission expires: _____________
