EXHIBIT 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of January 30, 2006 (this "Agreement"),
is entered into by and between BPK RESOURCES, INC. a Nevada corporation (the
"Debtor") and the TRIDENT GROWTH FUND, L.P., a Delaware limited partnership,
(the "Secured Party"), the Holder of that certain 12% Secured Convertible
Debenture due January 30, 2007 (or such earlier contingent date as set forth
therein) in the original aggregate principal amount of $600,000 (the
"Debenture"), issued by Debtor to the Secured Party in connection with that
certain Securities Purchase Agreement entered into by and between the Debtor and
the Secured Party (the "Purchase Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Debenture, the Secured Party has agreed to extend
certain loans described above to the Debtor as evidenced by the Debenture; and
WHEREAS, in order to induce the Secured Party to extend the loans
evidenced by the Debenture, the Debtor has agreed to execute and deliver to the
Secured Party this Agreement and to grant the Secured Party a perfected security
interest in all property of the Debtor to secure the prompt payment, performance
and discharge in full of all of the Debtor's obligations under the Debenture.
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, and capitalized terms not
otherwise defined herein shall have the meaning given them in the Securities
Purchase Agreement described above.
(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 Debtor, including, without limitations,
all machinery, equipment, computers, motor vehicles, trucks, tanks,
boats, ships, appliances, furniture, special and general tools,
fixtures, test and quality control devices and other equipment of
every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all
additions and accessions thereto, replacements therefor, all parts
therefor, and all substitutes for any of the foregoing and all other
items used and useful in connection with the Debtor's businesses and
all improvements thereto (collectively, the "Equipment"); and
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(ii) All Inventory of the Debtor; and
(iii) All of the Debtor's contract rights and general
intangibles, including, without limitation, all partnership
interests, stock or other securities, licenses, distribution and
other agreements, computer software (whether "off-the-shelf",
licensed from any third party or developed by Debtor) 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"); and
(iv) All Receivables and Accounts of the Debtor 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 Debtor'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 Debtor's obligations under the
Transaction Documents, 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
increased, 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 and or any other
applicable law of any jurisdiction (including, without limitation, the
state of Nevada and New York) as to any Collateral located therein.
2. Grant of Perfected Security Interest. As an inducement for the Secured
Party to extend the loans as evidenced by the Debenture and to secure the
complete and timely payment, performance and discharge in full, as the case may
be, of all of the Obligations, the Debtor hereby unconditionally and irrevocably
pledges, grants and hypothecates to the Secured Party a continuing and perfected
security interest in and to, a lien upon and a right of set-off against all of
their respective right, title and interest of whatsoever kind and nature in and
to, the Collateral (the "Security Interest").
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3. Representations, Warranties, Covenants and Agreements of the Debtor.
The Debtor represents and warrants to, and covenants and agrees with, the
Secured Party as follows:
(a) The Debtor 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 Debtor of this
Agreement and the filings contemplated therein have been duly authorized
by all necessary action on the part of the Debtor and no further action is
required by the Debtor.
(b) The Debtor represents and warrants that they have no place of
business or offices where their 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 Debtor is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Debtor in the ordinary course of
business), free and clear of any liens, security interests, encumbrances,
rights or claims (other than those disclosed in the Purchase Agreement),
and are 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 as disclosed in the Purchase Agreement and other
than those that will be 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, Debtor 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
as disclosed in the Purchase Agreement or filed or recorded in favor of
the Secured Party pursuant to the terms of this Agreement).
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral or
Debtor's use of any Collateral violates the rights of any third party.
There has been no adverse decision to Debtor's claim of ownership rights
in or exclusive rights to use the Collateral in any jurisdiction or to
Debtor'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 Debtor, threatened before any court, judicial
body, administrative or regulatory agency, arbitrator or other
governmental authority.
(e) The Debtor shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and
its Collateral at the locations set forth on Schedule A attached hereto
and may not relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Party at least 30 days prior
to such relocation (i) written notice of such relocation and the new
location thereof (which must be within the United States) and (ii)
evidence that appropriate financing statements under the UCC and other
necessary documents have been filed and recorded and other steps have been
taken to perfect the Security Interest to create in favor of the Secured
Party a valid, perfected and continuing perfected lien in the Collateral.
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(f) This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and performance
of the Obligations and, upon making the filings described in the
immediately following sentence, a perfected security interest in such
Collateral.
(g) The Debtor hereby authorizes the Secured Party to file one or
more financing statements under the UCC, with respect to the Security
Interest with the proper filing and recording agencies in any jurisdiction
deemed proper by them.
(h) The execution, delivery and performance of this Agreement by the
Debtor does not conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing Debtor's
debt or otherwise) or other understanding to which Debtor is a party or by
which any property or asset of the Debtor is bound or affected. No consent
(including, without limitation, from stockholders or creditors of the
Debtor) is required for the Debtor to enter into and perform its
obligations hereunder.
(i) The Debtor 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 be terminated pursuant
to Section 11 hereof. The Debtor hereby agrees to defend the same against
any and all persons. The Debtor shall safeguard and protect all Collateral
for the account of the Secured Party. At the request of the Secured Party,
the Debtor 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 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 Debtor shall pay all fees, taxes and other amounts
necessary to maintain the Collateral and the Security Interest hereunder,
and the Debtor 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 Debtor will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by a Debtor in its
ordinary course of business and sales of inventory), sell or otherwise
dispose of any of the Collateral except in the ordinary course of its
business without the prior written consent of the Secured Party.
(k) The Debtor shall keep and preserve its Equipment, Inventory and
other tangible Collateral in good condition, repair and order and shall
not operate or locate any such Collateral (or cause to be operated or
located) in any area excluded from insurance coverage.
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(l) The Debtor 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.
(m) The Debtor shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and
assurances and take such further action as the Secured Party may from time
to time request and may in its sole discretion deem necessary to perfect,
protect or enforce its security interest in the Collateral including,
without limitation, if applicable, the execution and delivery of a
separate security agreement with respect to each Debtor's intellectual
property ("Intellectual Property Security Agreement") in which the Secured
Party has been granted a security interest hereunder, substantially in a
form acceptable to the Secured Party, which Intellectual Property Security
Agreement, other than as stated therein, shall be subject to all of the
terms and conditions hereof.
(n) The Debtor shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and to
make copies of records pertaining to the Collateral as may be requested by
the Secured Party from time to time.
(o) The Debtor shall 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 Debtor 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 Debtor that may materially affect the value of
the Collateral, the Security Interest or the rights and remedies of the
Secured Party hereunder.
(q) All information heretofore, herein or hereafter supplied to the
Secured Party by or on behalf of the Debtor with respect to the Collateral
is accurate and complete in all material respects as of the date
furnished.
(r) The Debtor shall at all times preserve and keep in full force
and effect their respective valid existence and good standing and any
rights and franchises material to its business.
(s) The Debtor will not change its name, corporate structure, or
identity, or add any new fictitious name unless it provides at least 30
days prior written notice to the Secured Party of such change and, at the
time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue perfected
the perfected Security Interest granted and evidenced by this Agreement.
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(t) The Debtor may not consign any of its Inventory or sell any of
its Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale without the consent of the Secured Party which
shall not be unreasonably withheld..
(u) The Debtor may not relocate its chief executive office to a new
location without providing 30 days prior written notification thereof to
the Secured Party and so long as, at the time of such written
notification, the Debtor provides any financing statements or fixture
filings necessary to perfect and continue the Security Interest granted
and evidenced by this Agreement.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the
Debenture) under the Debenture;
(b) Any representation or warranty of Debtor in this Agreement shall
prove to have been incorrect in any material respect when made;
(c) The failure by Debtor to observe or perform any of its
obligations hereunder for five (5) days after delivery to Debtor of notice
of such failure by or on behalf of a Secured Party; or
(d) If any provision of this Agreement shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by Debtor, or a proceeding shall be commenced
by Debtor, or by any governmental authority having jurisdiction over
Debtor, seeking to establish the invalidity or unenforceability thereof,
or Debtor shall deny that Debtor has any liability or obligation purported
to be created under this Agreement.
5. Duty To Hold In Trust. Upon the occurrence of any Event of Default and
at any time thereafter, the Debtor shall, upon receipt of any revenue, income or
other sums subject to the Security Interest, whether payable pursuant to the
Debenture or otherwise, or of any check, draft, note, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in trust
for the Secured Party and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligations.
6. Rights and Remedies Upon Default. Upon the 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 Debenture, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC. Without limitation, the Secured Party shall have the following
rights and powers:
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(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 Debtor shall assemble the
Collateral and make it available to the Secured Party at places which the
Secured Party shall reasonably select, whether at the Debtor's premises or
elsewhere, and make available to the Secured Party, without rent, all of
the Debtor'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 Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the
Collateral, at public or private sale or otherwise, either with or without
special conditions or stipulations, for cash or on credit or for future
delivery, in such parcel or parcels and at such time or times and at such
place or places, and upon such terms and conditions as the Secured Party
may deem commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand upon
or notice to the Debtor or right of redemption of a Debtor, 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 Debtor, 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 to the Secured Party
based on its then outstanding principal amount of the Debenture, and to the
payment of any other amounts required by applicable law, after which the Secured
Party shall pay to the applicable Debtor 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 Debtor will be liable for the deficiency, together with interest thereon, at
the rate of 18% per annum or the lesser amount permitted by applicable law (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 Debtor waives all claims, damages and demands against the Secured Party
arising out of the repossession, removal, retention or sale of the Collateral,
unless due to the gross negligence or willful misconduct of the Secured Party.
8. Costs and Expenses. The Debtor agrees to pay all reasonable
out-of-pocket fees, costs and expenses incurred in connection with any filing
required hereunder, including without limitation, any financing statements
pursuant to the UCC, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Debtor 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 Debtor 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 Debenture. Until so paid, any fees payable hereunder
shall be added to the principal amount of the Debenture and shall bear interest
at the Default Rate.
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9. Responsibility for Collateral. The Debtor assumes all liabilities and
responsibility in connection with all Collateral, and the Obligations 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 Debtor hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debenture 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 Debenture 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 a Debtor, 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 Debtor 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 Debtor'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
Debtor waives all right to require the Secured Party to proceed against any
other person or to apply any Collateral which the Secured Party may hold at any
time, or to marshal assets, or to pursue any other remedy. The Debtor waives any
defense arising by reason of the application of the statute of limitations to
any obligation secured hereby.
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11. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debenture have been made
in full or have been satisfied and all other Obligations have been paid or
discharged. Upon such termination, the Secured Party, at the request and at the
expense of the Debtor, 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 Debtor authorizes the Secured Party, and does hereby make,
constitute and appoint the Secured Party and its respective officers,
agents, successors or assigns with full power of substitution, as the
Debtor's true and lawful attorney-in-fact, with power, in the name of the
Secured Party or the Debtor, to, after the occurrence and during the
continuance of an Event of Default, (i) endorse any note, 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 financing statement pursuant to the UCC 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 expense of the Debtor,
at any time, or from time to time, all acts and things which the Secured
Party deem 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 Debenture all as fully and effectually as the
Debtor might or could do; and the Debtor 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 Debtor will make, execute,
acknowledge, deliver, file and record, as the case may be, with the proper
filing and recording agencies 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 perfected
security interest in all the Collateral under the UCC.
(c) The Debtor hereby irrevocably appoints the Secured Party as the
Debtor's attorney-in-fact, with full authority in the place and instead of
the Debtor and in the name of the Debtor, from time to time in the Secured
Party's discretion, to take any action and to execute any instrument which
the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including the filing, in its sole discretion,
of one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of the
Debtor where permitted by law.
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13. Notices. All notices, requests, demands and other communications
hereunder shall be subject to the notice provision of the Purchase Agreement.
14. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
15. Best Efforts for Licensed Collateral. Notwithstanding any other
provision contained herein or any of the Transaction Documents, upon the
occurrence of an Event of Default, the Debtor hereby agrees that with respect to
any part of the Collateral which may require the consent of any third party or
third parties in order for Debtor to transfer and/or convey its interest in and
to such Collateral to the Secured Party, as may be required in accordance
herewith, Debtor agrees to and shall use its best efforts to obtain such
consents or approvals in as expedient manner as possible.
16. Miscellaneous.
(a) No course of dealing between the Debtor 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
Debenture 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 Debenture 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 any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason,
unless such provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as
not to be invalid, prohibited or unenforceable. If, notwithstanding the
foregoing, any provision of this Agreement is held to be invalid,
prohibited or unenforceable in any jurisdiction, such provision, as to
such jurisdiction, shall be ineffective to the extent of such invalidity,
prohibition or unenforceability without invalidating the remaining portion
of such provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the other
provisions of this Agreement in any other jurisdiction.
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(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver of
any subsequent breach or default or right, whether of the same or similar
nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.
(h) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Texas,
without regard to the principles of conflicts of law thereof. Each party
agrees that all proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and the
Debenture (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in
Dallas, Texas. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in Dallas,
Texas for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any proceeding,
any claim that it is not personally subject to the jurisdiction of any
such court, that such proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process
being served in any such proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence a proceeding to enforce any provisions of this Agreement, then
the prevailing party in such proceeding shall be reimbursed by the other
party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
proceeding.
Page 11
(i) 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.
[SIGNATURE PAGE FOLLOWS]
Page 12
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.
DEBTOR
BPK RESOURCES, INC. Address for Notice and Delivery:
000 Xxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Telephone: (____) ____-_______
Facsimile: (____) ____-________
Attn: Xxxxxxxxxxx X. Xxxxxxxx, CEO
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
SECURED PARTY
TRIDENT GROWTH FUND, L.P. Address for Notice and Delivery:
700 Gemini
By: TRIDENT MANAGEMENT, LLC, its Xxxxxxx, XX 00000
GENERAL PARTNER Attn: Xxxxx St. Xxxxxx
By: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title:Authorizzed Member
SCHEDULE A
Principal Place of Business of Debtor:
000 Xxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Locations Where Collateral is Located or Stored:
000 Xxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
SCHEDULE B
State of Delaware
