SECURITY AGREEMENT
Exhibit
10.16
1.
THE
SECURITY. The undersigned, Medialink Worldwide Incorporated, a Delaware
corporation (the “Pledgor”)
and
all of the subsidiaries of the Pledgor exclusive of the Excluded Subsidiaries
(as defined in the Amendment and Waiver Agreement dated October 6, 2008 (the
“Subsidiaries”
and
together with the Pledgor, the “Debtors”),
hereby assign and grant to the holders of the Pledgor’s Variable Rate
Convertible Debentures (collectively, the “Debentures”),
signatory hereto, their endorsees, transferees and assigns (collectively, the
“Creditors”),
a
security interest in all assets of the Debtors, now owned or hereafter acquired,
including the following described property now owned or hereafter acquired
by
the Debtors (the “Collateral”):
(a)
All
accounts, contract rights, chattel paper, instruments, deposit accounts, letter
of credit rights, payment intangibles and general intangibles, including all
amounts due to each Debtor from a factor; and all returned or repossessed goods
which, on sale or lease, resulted in an account or chattel paper.
(b)
All
inventory, including all materials, work in process and finished
goods.
(c)
All
machinery, furniture, fixtures and other equipment of every type now owned
or
hereafter acquired by the Pledgor.
(d)
All
instruments, notes, chattel paper, documents, certificates of deposit,
securities and investment property of every type, including, without limitation,
the capital stock of all of the Subsidiaries. The Collateral shall include
all
liens, security agreements, leases and other contracts securing or otherwise
relating to the foregoing.
(e)
All
general intangibles, including, but not limited to: (i) all patents, and all
unpatented or unpatentable inventions, (ii) all trademarks, service marks,
and
trade names, (iii) all copyrights and literary rights, (iv) all computer
software programs, (v) all mask works of semiconductor chip products, and (vi)
all trade secrets, proprietary information, customer lists, manufacturing,
engineering and production plans, drawings, specifications, processes and
systems. The Collateral shall include all good will connected with or symbolized
by any of such general intangibles, all contract rights, documents,
applications, licenses, materials and other matters related to such general
intangibles; all tangible property embodying or incorporating any such general
intangibles; and all chattel paper and instruments relating to such general
intangibles.
(f)
All
negotiable and nonnegotiable documents of title covering any
Collateral.
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(g)
All
accessions, attachments and other additions to the Collateral, and all tools,
parts and equipment used in connection with the Collateral.
(h)
All
substitutes or replacements for any Collateral, all cash or non-cash proceeds,
product, rents and profits of any Collateral, all income, benefits and property
receivable on account of the Collateral, all rights under warranties,
indemnities and insurance contracts, letters of credit, guaranties or other
supporting obligations covering the Collateral, and any causes of action
relating to the Collateral.
(i)
All
books and records pertaining to any Collateral, including but not limited to
any
computer-readable memory and any computer hardware or software necessary to
process such memory ("Books
and Records").
2.
THE
INDEBTEDNESS. The Collateral secures and will secure all Indebtedness.
"Indebtedness"
means
all debts, obligations or liabilities under the Debentures now or hereafter
existing, absolute or contingent of the Debtors to the Creditors, whether
voluntary or involuntary, whether due or not due, or whether incurred directly
or indirectly or acquired by the Creditors by assignment or otherwise.
3.
DEBTORS’ COVENANTS. Each Debtor, severally and jointly, represents, covenants
and warrants that unless compliance is waived by each of the Creditors in
writing:
(a)
Each
Debtor will properly preserve the Collateral (except for any thereof that is
sold in the ordinary course of business), defend the Collateral against any
adverse claims and demands, and keep accurate Books and Records.
(b)
Each
Debtor’s chief executive office is located in the state specified on the
signature page hereof. In addition, each Debtor is incorporated in or organized
under the laws of the state specified on such signature page. Each Debtor shall
give the Creditors at least thirty (30) days notice before changing its chief
executive office or state of incorporation or organization. The Debtors will
notify the Creditors in writing prior to any change in the location of any
Collateral (except to the extent the change arises from the sale thereof in
the
ordinary course of business), including the Books and Records.
(c)
Each
Debtor will notify the Creditors, in writing, prior to any change in the
Debtor’s name, identity or material change in its business
structure.
(d)
Except as set forth on Exhibit
B
attached
hereto, or except as otherwise specifically contemplated by this Agreement
or
unless otherwise agreed, each Debtor has not granted and will not grant any
security interest in any of the Collateral except to the Creditors, and will
keep the Collateral free of all liens, claims, security interests and
encumbrances of any kind or nature except the security interest of the
Creditors.
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(e)
Each
Debtor will promptly notify the Creditors, in writing, of any event which
materially affects the value of the Collateral, the ability of the Debtors
or
the Creditors to dispose of the Collateral, or the rights and remedies of the
Creditors in relation thereto, including, but not limited to, the levy of any
legal process against any Collateral and the adoption of any marketing order,
arrangement or procedure affecting the Collateral, whether governmental or
otherwise.
(f)
Each
Debtor, severally and jointly, shall pay all costs necessary to preserve,
defend, enforce and collect the Collateral, including but not limited to taxes,
assessments, insurance premiums, repairs, rent, storage costs and expenses
of
sales, and any costs to perfect the security interest of the Creditors
(collectively, the “Collateral
Costs”).
Without waiving such Debtor’s default for failure to make any such payment, the
Creditors, following any such failure, at its option may pay any such Collateral
Costs, and discharge encumbrances on the Collateral, and such Collateral Costs
payments shall be a part of the Indebtedness and bear interest at the rate
set
out in the Indebtedness. Each Debtor, severally and jointly, agrees to reimburse
the Creditors on demand for any Collateral Costs reasonably
incurred.
(g)
Until
the Creditors exercise their rights to make collection, the Debtors will
diligently collect all Collateral.
(h)
If
any Collateral is or becomes the subject of any registration certificate,
certificate of deposit or negotiable document of title, including any warehouse
receipt or xxxx of lading, each Debtor shall immediately deliver such document
to the Creditors, together with any necessary endorsements.
(i)
The
Debtors will not sell, lease, agree to sell or lease, or otherwise dispose
of
any Collateral generating proceeds (A) in excess of $15,000 in any one or a
series of related transactions or (B) in excess of $100,000 in the aggregate,
except with the prior written consent of the Creditors; provided,
however,
that
the Debtors may, without the consent of the Creditors, (1) sell inventory in
the
ordinary course of business or (2) sell all or substantially all of the assets
of the Debtors in a transaction provided that, as a condition to any such sale,
the Debentures shall be redeemed in full, including all outstanding interest,
costs and expenses (the “Outstanding Obligations”), at closing pursuant to an
escrow account in which a sufficient amount of the proceeds from such sale
to
cover the Outstanding Obligations are paid to and distributed directly to the
holders of the Debentures.
(j)
Each
Debtor will maintain and keep in force insurance covering the Collateral against
fire and extended coverage, to the extent that any Collateral is of a type
which
can be so insured. Such insurance shall require losses to be paid on a
replacement cost basis and include a loss payable endorsement in favor of the
Creditors in a form reasonably acceptable to the Creditors. Upon the request
of
the Creditors, the Debtors shall deliver to the Creditors a certificate of
insurance listing all insurance in force.
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(k)
The
Debtors will not attach any Collateral to any real property or fixture in a
manner which might cause such Collateral to become a part thereof unless the
Debtor first obtains the written consent of any owner, holder of any lien on
the
real property or fixture, or other person having an interest in such property
to
the removal by the Creditors of the Collateral from such real property or
fixture. Such written consent shall be in form and substance reasonably
acceptable to the Creditors and shall provide that the Creditors have no
liability to such owner, holder of any lien, or any other person.
(l)
Exhibit
A
to this
Agreement is a complete list of all patents, trademark and service xxxx
registrations, copyright registrations, mask work registrations, and all
applications therefore, in which each Debtor has any right, title, or interest,
throughout the world.
Each
Debtor will promptly notify the Creditors of any acquisition (by adoption and
use, purchase, license or otherwise) of any patent, trademark or service xxxx
registration, copyright registration, mask work registration, and applications
therefore, and unregistered trademarks and service marks and copyrights,
throughout the world, which are granted or filed or acquired by any Debtor
after
the date hereof or which are not listed on such Exhibit.
Each
Debtor authorizes the Creditors, without notice to any Debtor, to modify this
Agreement by amending such Exhibit to include any such Collateral.
(m)
Each
Debtor will, at its expense, diligently prosecute all material patent, trademark
or service xxxx or copyright applications pending on or after the date hereof,
will maintain in effect all issued patents and will renew all trademark and
service xxxx registrations, including payment of any and all maintenance and
renewal fees relating thereto, except for such patents, service marks and
trademarks that are being sold, donated or abandoned by the Debtors pursuant
to
the terms of its intellectual property management program.
Each
Debtor also will promptly make application on any material patentable but
unpatented inventions, material registerable but unregistered trademarks and
service marks, and material copyrightable but uncopyrighted works.
Each
Debtor will at its expense protect and defend all rights in the Collateral
against any material claims and demands of all persons other than the Creditors
and will, at its expense, enforce all rights in the Collateral against any
and
all infringers of the Collateral where such infringement would materially impair
the value or use of the Collateral to the Debtors or the Creditors.
No
Debtor
will license or transfer any of the Collateral, except for such licenses as
are
customary in the ordinary course of the Debtors’ business, or except with the
prior written consent of each of the Creditors, which consent shall not be
unreasonably withheld.
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4.
ADDITIONAL OPTIONAL REQUIREMENTS.
Each
Debtor agrees that the Creditors may, at their option at any time, whether
or
not any Debtor is in default:
(a)
Require the Debtors to deliver to the Creditors (i) copies of or extracts from
the Books and Records, and (ii) information on any contracts or other matters
affecting the Collateral.
(b)
Examine the Collateral, including the Books and Records, and make copies of
or
extracts from the Books and Records, and for such purposes enter at any
reasonable time, with or without prior notice, upon the property where any
Collateral or any Books and Records are located.
(c)
Require each Debtor to deliver to the Creditors any instruments, chattel paper
or letters of credit which are part of the Collateral, and to assign to the
Creditors the proceeds of any such letters of credit.
(d)
Notify any account debtors, any buyers of the Collateral, or any other persons
of the Creditors’ interest in the Collateral; provided, however, that the
Creditors may make such notification under this Section 4(d) only if (A) the
Debtor is in default or (B) an event has occurred which, with the passage of
time or notice by the Creditors, the Debtor will be in default.
5.
DEFAULTS. Any one or more of the following shall be a default
hereunder:
(a)
Any
Indebtedness is not paid when due, or any default occurs under any agreement
relating to the Indebtedness, after giving effect to any applicable grace or
cure periods.
(b)
Any
Debtor
breaches
any term, provision, warranty or representation under this Agreement or under
any other obligation of the Debtor to the Creditor, and such breach remains
uncured after any applicable cure period.
(c)
Any
Creditor fails to have an enforceable lien on or security interest in the
Collateral due to the action or inaction on the part of the Debtor.
(d)
Any
custodian, receiver or trustee is appointed to take possession, custody or
control of all or a material portion of the Collateral.
(e)
Any
involuntary material lien of any kind or character attaches to any Collateral,
except for liens for taxes not yet due.
6.
CREDITOR’S REMEDIES AFTER DEFAULT. In the event of any default, the Creditors
may do any one or more of the following:
(a)
Declare any Indebtedness immediately due and payable, without notice or
demand.
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(b)
Enforce
the security interest given hereunder pursuant to the Uniform Commercial Code
and any other applicable law.
(c)
Require the Debtors to obtain the Creditors’ prior written consent to any sale,
lease, agreement to sell or lease, or other disposition of any Collateral
consisting of inventory.
(d)
Require the Debtors to segregate all collections and proceeds of the Collateral
so that they are capable of identification and deliver daily such collections
and proceeds to the Creditors in kind.
(e)
Require the Debtors, to the extent not previously required, to direct all
account debtors to forward all payments and proceeds of the Collateral to a
post
office box or account under the Creditors’ exclusive control.
(f)
Require the Debtors to assemble the Collateral, including the Books and Records,
and make them available to the Purchaser at a place designated by the
Creditors.
(g)
Enter
upon the property where any Collateral, including any Books and Records, are
located and take possession of such Collateral and such Books and Records,
and
use such property (including any buildings and facilities) and any of the
Debtors’ equipment, if the Creditor deems such use necessary or advisable in
order to take possession of, hold, preserve, process, assemble, prepare for
sale
or lease, market for sale or lease, sell or lease, or otherwise dispose of,
any
Collateral.
(h)
Demand and collect any payments on and proceeds of the Collateral. In connection
therewith, each Debtor irrevocably authorizes the Creditors to endorse or sign
the Debtor’s name on all checks, drafts, collections, receipts and other
documents, and to take possession of and open the mail addressed to the Debtor
and remove therefrom any payments and proceeds of the Collateral.
(i)
Grant
extensions and compromise or settle claims with respect to the Collateral for
less than face value, all without prior notice to any Debtor.
(j)
Use
or transfer any of the Debtors’ rights and interests in any Intellectual
Property now owned or hereafter acquired by any Debtor, if the Creditors deem
such use or transfer necessary or advisable in order to take possession of,
hold, preserve, process, assemble, prepare for sale or lease, market for sale
or
lease, sell or lease, or otherwise dispose of, any Collateral.
The
Debtors
agree that any such use or transfer shall be without any additional
consideration to any Debtor. As used in this paragraph, "Intellectual
Property"
includes, but is not limited to, all trade secrets, computer software, service
marks, trademarks, trade names, trade styles, copyrights, patents, applications
for any of the foregoing, customer lists, working drawings, instructional
manuals, and rights in processes for technical manufacturing, packaging and
labeling, in which any Debtor has any right or interest, whether by ownership,
license, contract or otherwise.
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(k)
Have
a receiver appointed by any court of competent jurisdiction to take possession
of the Collateral.
Each
Debtor hereby consents to the appointment of such a receiver and agrees not
to
oppose any such appointment.
(l)
Take
such measures as the Creditors may deem necessary or advisable to take
possession of, hold, preserve, process, assemble, insure, prepare for sale
or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any
Collateral, and each Debtor hereby irrevocably constitutes and appoints the
Creditors as the Debtors’ attorneys-in-fact to perform all acts and execute all
documents in connection therewith.
(m)
Exercise any other remedies available to the Creditors at law or in
equity.
7.
MISCELLANEOUS.
(a)
Any
waiver, express or implied, of any provision hereunder and any delay or failure
by any Creditor to enforce any provision shall not preclude any Creditor from
enforcing any such provision thereafter.
(b)
The
Debtors
shall, at the request of any of the Creditors, execute such other agreements,
documents, instruments, or financing statements in connection with this
Agreement as the Creditors may reasonably deem necessary.
(c)
This
Agreement shall be governed by and construed according to the laws of the State
of New York, to the jurisdiction of which the parties hereto
submit.
(d)
All
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies otherwise provided by law. Any single or partial exercise
of
any right or remedy shall not preclude the further exercise thereof or the
exercise of any other right or remedy.
(e)
All
terms not defined herein are used as set forth in the Uniform Commercial Code.
(f)
In the
event of any action by the Creditors to enforce this Agreement or to protect
the
security interest of the Creditors in the Collateral, or to take possession
of,
hold, preserve, process, assemble, insure, prepare for sale or lease, market
for
sale or lease, sell or lease, or otherwise dispose of, any Collateral, the
Debtors agree to immediately pay the costs and expenses thereof, together with
reasonable attorney's fees and allocated costs for in-house legal services
to
the extent permitted by law.
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(g)
In
the event any of the Creditors seek to take possession of any or all of the
Collateral by judicial process, the Debtors hereby irrevocably waive any bonds
and any surety or security relating thereto that may be required by applicable
law as an incident to such possession, and waives any demand for possession
prior to the commencement of any such suit or action.
(h)
This
Agreement shall constitute a continuing agreement, applying to all future as
well as existing transactions, whether or not of the character contemplated
at
the date of this Agreement, and if all transactions between the Creditors and
the Debtors shall be closed at any time, shall be equally applicable to any
new
transactions thereafter.
(i)
The
Creditors’ rights hereunder shall inure to the benefit of its successors and
assigns. In the event of any assignment or transfer by any Creditors of any
of
the Indebtedness or the Collateral, such Creditors thereafter shall be fully
discharged from any responsibility with respect to the Collateral so assigned
or
transferred, but such Creditors shall retain all rights and powers hereby given
with respect to any of the Indebtedness or the Collateral not so assigned or
transferred. All representations, warranties and agreements of the Debtors
shall
be binding upon the successors and assigns of the Debtors.
(j)
The
Debtors agree that the Collateral may be sold as provided for in this Agreement
and expressly waives any rights of notice of sale, advertisement procedures,
or
related provisions granted under applicable law, including the New York Lien
Law.
8.
AGENT.
Each Creditor hereby appoints Xxxxxxxx Investment Master Fund Ltd. to act as
its
agent (“Agent”)
for
purposes of exercising any and all rights and remedies of the Creditors
hereunder and to take all actions that the Creditors may or could take
hereunder. Unless any provision of this Agreement specifically requires all
Creditors to take a specific action or exercise a specific remedy, each Creditor
agrees that Agent shall exercise any and all rights and remedies of the
Creditors hereunder and take all actions that the Creditors may or could take
hereunder.
In
addition, unless otherwise specifically required, any notice the Debtors may
give to Creditors hereunder may instead be given only to Agent. The Agent shall
have the rights, responsibilities and immunities set forth in Annex
A
hereto.
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The
parties executed this Agreement as of October __, 2008.
MEDIALINK
WORLDWIDE INCORPORATED
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Address:
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By:
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State
of Incorporation:
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Name:
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Title:
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[INSERT
NAMES OF ADDITIONAL DEBTORS]
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By: | |
Name: | |
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Title:
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[SIGNATURE
PAGE OF CREDITORS FOLLOWS]
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[SIGNATURE
PAGE OF CREDITORS TO MDLK SECURITY AGREEMENT]
Signature
of Authorized Signatory of Investing entity:
_________________________________
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Title
of Authorized Signatory:
__________________________________
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[SIGNATURE
PAGE OF CREDITORS FOLLOWS]
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