Exhibit 10.4
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT (this "Agreement" dated as
of December 13, 2006, by and among MSGI Security Solutions, Inc., a
Nevada corporation (the "Company"), the subsidiaries of the Company listed on
the signature pages hereto and the secured parties signatory hereto and their
respective endorsees, transferees and assigns (collectively, the "Secured
Party").
W I T N E S S E T H :
WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof, between Company and the Secured Party (the "Purchase Agreement"),
Company has agreed to issue to the Secured Party and the Secured Party has
agreed to purchase from Company certain of Company's 6% Callable Secured
Convertible Notes, due three years from the date of issue (the "Notes"), which
are convertible into shares of Company's Common Stock, par value $.01 per share
(the "Common Stock"). In connection therewith, Company shall issue the Secured
Party certain Common Stock purchase warrants (the "Warrants"); and
WHEREAS, in order to induce the Secured Party to purchase the Notes,
Company has agreed to execute and deliver to the Secured Party this Agreement
for the benefit of the Secured Party and to grant to it a first priority
security interest in certain Intellectual Property (defined below) of Company to
secure the prompt payment, performance and discharge in full of all of Company's
obligations under the Notes and exercise and discharge in full of Company's
obligations under the Warrants; and
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. Defined Terms. Unless otherwise defined herein, terms
which are defined in the Purchase Agreement and used herein are so used
as so defined; and the following terms shall have the following meanings:
"Software Intellectual Property" shall mean:
(a) all software programs (including all source code,
object code and all related applications and data files), whether now
owned, licensed or leased or hereafter acquired by the Company, above;
(b) all computers and electronic data processing
hardware and firmware associated therewith;
(c) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such
software, hardware and firmware described in the preceding clauses (a) and (b);
and
(d) all rights with respect to all of the foregoing,
including, without limitation, any and all upgrades, modifications,
copyrights, licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications and substitutions, replacements, additions, or model
conversions of any of the foregoing.
"Copyrights" shall mean (a) all copyrights,
registrations and applications for registration owned by the
Company, issued or filed, including any reissues, extensions or renewals
thereof, by or with the United States Copyright Office or any similar office or
agency of the United States, any state thereof, or any other country or
political subdivision thereof, or otherwise, including, all rights in and to the
material constituting the subject matter thereof, including, without limitation,
any referred to in Schedule B hereto, and (b) any rights owned by the Company in
any material which is copyrightable or which is protected by common law, United
States copyright laws or similar laws or any law of any State, including,
without limitation, any thereof referred to in Schedule B hereto.
"Copyright License" shall mean any written agreement,
providing for a grant by the Company of any right in any Copyright,
including, without limitation, any thereof referred to in Schedule B hereto.
"Intellectual Property" shall mean, collectively, the
Software Intellectual Property, Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses and Trade Secrets.
"Obligations" shall mean all of the Company's
obligations under this Agreement, the Notes and the Warrants, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later decreased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from the Secured
Party as a preference, fraudulent transfer or otherwise as such obligations may
be amended, supplemented, converted, extended or modified from time to time.
"Patents" shall mean (a) all letters patent of the
United States or any other country or any political
subdivision thereof owned by the Company, and all reissues and extensions
thereof, including, without limitation, any thereof referred to in Schedule B
hereto, and (b) all applications for letters patent of the United States and all
divisions, continuations and continuations-in-part thereof or any other country
or any political subdivision, including, without limitation, any thereof
referred to in Schedule B hereto.
"Patent License" shall mean all written agreements,
providing for the grant by the Company of any right to
manufacture, use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule B hereto.
"Security Agreement" shall mean the Security
Agreement, dated the date hereof between Company and the
Secured Party.
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"Trademarks" shall mean (a) all trademarks, trade
names, corporate names, company names, business names, fictitious
business names, tradedress, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof, or
otherwise, owned by the Company, including, without limitation, any thereof
referred to in Schedule B hereto, and (b) all reissues, extensions or renewals
thereof.
"Trademark License" shall mean any written agreement,
providing for the grant by the Company of any right to use any
Trademark, including, without limitation, any thereof referred to in Schedule B
hereto.
"Trade Secrets" shall mean common law and statutory
trade secrets and all other confidential or proprietary information and
all know-how obtained by or used in or contemplated at any time for use in the
business of the Company (each of the foregoing being collectively called a
"Trade Secret"), whether or not such Trade Secret has been reduced to a writing
or other tangible form, all Trade Secret licenses, including each Trade Secret
license referred to in Schedule B hereto, and including the right to xxx for and
to enjoin and to collect damages for the actual or threatened misappropriation
of any Trade Secret and for the breach or enforcement of any such Trade Secret
license.
2. Grant of Security Interest. In accordance with
Section 3(m) of the Security Agreement, to secure the complete and
timely payment, performance and discharge in full, as the case may be, of all of
the Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a continuing first lien upon, and a right of set-off against, in each case to
the fullest extent permitted by law, all of the Company's right, title and
interest of whatsoever kind and nature in and to the Intellectual Property (the
"Security Interest").
3. Representations and Warranties. Except as otherwise
disclosed in the Company's filings with the Securities and Exchange
Commission, the Company hereby represents and warrants, and covenants and agrees
with, the Secured Party as follows:
(a) Each of the Company and the Company's
subsidiaries has the requisite corporate power and authority to enter
into this Agreement and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.
(b) The Company is the sole owner of the Intellectual
Property (except for non-exclusive licenses granted by the Company in
the ordinary course of business), free and
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clear of any liens, security interests, encumbrances, rights or claims,
and is fully authorized to grant the Security Interest in and to pledge the
Intellectual Property. There is not on file in any governmental or regulatory
authority, agency or recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the foregoing (other than
those that have been filed in favor of the Secured Party pursuant to this
Agreement) covering or affecting any of the Intellectual Property.
(c) Upon request of the Secured Party, the Company
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Secured Party may request to evidence the Secured
Party's security interest in the Intellectual Property and the goodwill and
general intangibles of the Company relating thereto or represented thereby, and
the Company hereby appoints the Secured Party its attorney-in-fact to execute
and file all such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power being coupled with an interest
is irrevocable until the Obligations have been fully satisfied and are paid in
full.
(d) The execution, delivery and performance of this
Agreement does not conflict with or cause a breach or default, or an
event that with or without the passage of time or notice, shall constitute a
breach or default, under any agreement to which the Company is a party or by
which the Company is bound. No consent (including, without limitation, from
stock holders or creditors of the Company) is required for the Company to enter
into and perform its obligations hereunder.
(e) The Company shall at all times maintain the liens
and Security Interest provided for hereunder as valid and perfected
first priority liens and security interests in the Intellectual Property to the
extent they can be perfected by filing in favor of the Secured Party until this
Agreement and the Security Interest hereunder shall terminate pursuant to
Section 11. The Company shall safeguard and protect all Intellectual Property
for the account of the Secured Party. Without limiting the generality of the
foregoing, the Company shall pay all fees, taxes and other amounts necessary to
maintain the Intellectual Property and the Security Interest hereunder, and the
Company shall obtain and furnish to the Secured Party from time to time, upon
demand, such releases and/or subordinations of claims and liens which may be
required to maintain the priority of the Security Interest hereunder.
(f) The Company will not transfer, pledge, hypothecate,
encumber, license (except for in the ordinary course of business or in
connection with any receivables financing the Company or a subsidiary may
obtain), sell or otherwise dispose of any of the Intellectual Property without
the prior written consent of the Secured Party.
(g) The Company shall, within ten (10) days of
obtaining knowledge thereof, advise the Secured Party promptly, in
sufficient detail, of any substantial change in the Intellectual Property, and
of the occurrence of any event which would have a material adverse effect on the
value of the Intellectual Property or on the Secured Party's security interest
therein.
(h) The Company shall permit the Secured Party and its
representatives and agents to inspect the Intellectual Property at any
time, and to make copies of
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records pertaining to the Intellectual Property as may be requested by
the Secured Party from time to time.
(i) The Company will take all steps reasonably
necessary to diligently pursue and seek to preserve, enforce and
collect any rights, claims, causes of action and accounts receivable in respect
of the Intellectual Property.
(j) The Company shall promptly notify the Secured Party
in sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any Intellectual
Property and of any other information received by the Company that may
materially affect the value of the Intellectual Property, the Security Interest
or the rights and remedies of the Secured Party hereunder.
(k) All information heretofore, herein or hereafter
supplied to the Secured Party by or on behalf of the Company with
respect to the Intellectual Property is accurate and complete in all material
respects as of the date furnished.
(l) Schedule A attached hereto contains a list of all
of the subsidiaries of the Company.
(m) Schedule B attached hereto includes all Licenses,
and all Patents and Patent Licenses, if any, owned by the Company in
its own name as of the date hereof. Schedule B hereto includes all Trademarks
and Trademark Licenses, if any, owned by the Company in its own name as of the
date hereof. Schedule B hereto includes all Copyrights and Copyright Licenses,
if any, owned by the Company in its own name as of the date hereof. Schedule B
hereto includes all Trade Secrets and Trade Secret Licenses, if any, owned by
the Company as of the date hereof. To the Company's knowledge, each License,
Patent, Trademark, Copyright and Trade Secret is valid, subsisting, unexpired,
enforceable and has not been abandoned. Except as set forth in Schedule B, none
of such Licenses, Patents, Trademarks, Copyrights and Trade Secrets is the
subject of any licensing or franchise agreement. To the Company's knowledge, no
holding, decision or judgment has been rendered by any Governmental Body which
would limit, cancel or question the validity of any License, Patent, Trademark,
Copyright and Trade Secrets . No action or proceeding is pending (i) seeking to
limit, cancel or question the validity of any License, Patent, Trademark,
Copyright or Trade Secret, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any License, Patent, Trademark,
Copyright or Trade Secret. The Company has used and will continue to use for the
duration of this Agreement, proper statutory notice in connection with its use
of the Patents, Trademarks and Copyrights and consistent standards of quality in
products leased or sold under the Patents, Trademarks and Copyrights.
(n) With respect to any Intellectual Property:
(i) such Intellectual Property is subsisting and
has not been adjudged invalid or
unenforceable, in whole or in part;
(ii) such Intellectual Property is valid and
enforceable;
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(iii) the Company has made all necessary filings
and recordations to protect its interest in
such Intellectual Property, including,
without limitation, recordations of all of
its interests in the Patents, Patent
Licenses, Trademarks in the United States
Patent and Trademark Office and in
corresponding offices throughout the world
and its claims to the Copyrights in the
United States Copyright Office and in
corresponding offices throughout the world
(as applicable);
(iv) other than as set forth in Schedule B, the
Company is the exclusive owner of the entire
and unencumbered right, title and interest
in and to such Intellectual Property and as
of the date hereof no claim has been made
that the use of such Intellectual Property
infringes on the asserted rights of any
third party; and
(v) the Company has performed and will continue
to perform all acts and has paid all
required fees and taxes to maintain each and
every item of Intellectual Property in full
force and effect throughout the world, as
applicable.
(o) Except with respect to any Trademark or Copyright
that the Company shall reasonably determine is of negligible economic
value to the Company, the Company shall:
(i) maintain each Trademark and Copyright in full force free
from any claim of abandonment for non-use, maintain as in the past the
quality of products and services offered under such Trademark or
Copyright; employ such Trademark or Copyright with the appropriate
notice of registration; not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark or Copyright unless
the Secured Party shall obtain a perfected security interest in such
xxxx pursuant to this Agreement; and not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark or Copyright may become invalidated;
(ii) not, except with respect to any Patent that it shall
reasonably determine is of negligible economic value to it, do any act,
or omit to do any act, whereby any Patent may become abandoned; and
(iii) notify the Secured Party immediately if it knows, or has
reason to know, that any application or registration relating to any
Patent, Trademark or Copyright may become abandoned, or of any adverse
determination or development (including, without limitation, the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United
States Copyright Office or any court or tribunal in any country)
regarding its
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ownership of any Patent, Trademark or Copyright or its
right to register the same or to keep and maintain the same.
(p) Whenever the Company, either by itself or through
any agent, employee, licensee or designee, shall file an application
for the registration of any Patent, Trademark or Copyright with the United
States Patent and Trademark Office, United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof or acquire rights to any new Patent, Trademark or Copyright whether or
not registered, report such filing to the Secured Party within five business
days after the last day of the fiscal quarter in which such filing occurs.
(q) The Company shall take all reasonable and necessary
steps, including, without limitation, in any proceeding before the
United States Patent and Trademark Office, United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Patents, Trademarks and
Copyrights, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(r) In the event that any Patent, Trademark or
Copyright included in the Intellectual Property is infringed,
misappropriated or diluted by a third party, the Company shall promptly notify
the Secured Party after it learns thereof and shall, unless it shall reasonably
determine that such Patent, Trademark or Copyright is of negligible economic
value to it, which determination it shall promptly report to the Secured Party,
promptly xxx for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution, or take such other actions as it
shall reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright. If the Company lacks the financial resources to
comply with this Section 3(t), the Company shall so notify the Secured Party and
shall cooperate fully with any enforcement action undertaken by the Secured
Party on behalf of the Company.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the
Notes) under the Notes;
(b) Any representation or warranty of the Company in this
Agreement or in the Security Agreement shall prove to have been
incorrect in any material respect when made;
(c) The failure by the Company to make reasonable efforts to
observe or perform any of its obligations hereunder or in the Security
Agreement within ten (10) days after receipt by the Company of notice of such
failure from the Secured Party; and
(d) Any breach of, or default under, the Warranties that is
not cured within sixty (60) days following the notice from the Secured
Party of such breach or default.
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5. Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Company shall, upon receipt by
it of any revenue, income or other sums subject to the Security Interest,
whether payable pursuant to the Notes 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 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 Notes,
and the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Intellectual Property is then located).
Without limitation, the Secured Party shall have the following rights and
powers:
(a) The Secured Party shall have the right to take possession
of the Intellectual Property and, for that purpose, enter, with the aid
and assistance of any person, any premises where the Intellectual Property, or
any part thereof, is or may be placed and remove the same, and the Company shall
assemble the Intellectual Property and make it available to the Secured Party at
places which the Secured Party shall reasonably select, whether at the Company's
premises or elsewhere, and make available to the Secured Party, without rent,
all of the Company's respective premises and facilities for the purpose of the
Secured Party taking possession of, removing or putting the Intellectual
Property in saleable or disposable form.
(b) The Secured Party shall have the right to operate the
business of the Company using the Intellectual Property and shall have
the right to assign, sell, lease or otherwise dispose of and deliver all or any
part of the Intellectual Property, 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 Company or right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer of Intellectual
Property, the Secured Party may, unless prohibited by applicable law which
cannot be waived, purchase all or any part of the Intellectual Property being
sold, free from and discharged of all trusts, claims, right of redemption and
equities of the Company, which are hereby waived and released.
7. Applications of Proceeds. The proceeds of any such sale, lease or
other disposition of the Intellectual Property hereunder or from payments made
on account of any insurance policy insuring any portion of the Intellectual
Property 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 Intellectual Property, to the reasonable attorneys' fees and expenses
incurred by the applicable Secured Party in enforcing the Secured Party's rights
hereunder and in connection with collecting, storing and disposing of the
Intellectual Property, and then to satisfaction of the Obligations pro rata
among each Secured Party (based on then-outstanding principal amounts of
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Notes at the time of any such determination), and to the payment of any
other amounts required by applicable law, after which the Secured Party shall
pay to the Company any surplus proceeds. If, upon the sale, license or other
disposition of the Intellectual Property, the proceeds thereof are insufficient
to pay all amounts to which the Secured Party is legally entitled, the Company
will be liable for the deficiency, together with interest thereon, at the rate
of 15% 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
Intellectual Property waives all claims, damages and demands against the Secured
Party arising out of the repossession, removal, retention or sale of the
Intellectual Property, unless due solely to the gross negligence or willful
misconduct of the Secured Party as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.
8. Costs and Expenses. The Company 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,
continuation statements, partial releases and/or termination statements related
thereto or any expenses of any searches reasonably required by the Secured
Party.
9. Responsibility for Intellectual Property. The Company assumes all
liabilities and responsibility in connection with all Intellectual Property, and
the obligations of the Company hereunder or under the Notes and the Warrants
shall in no way be affected or diminished by reason of the loss, destruction,
damage or theft of any of the Intellectual Property or its unavailability for
any reason.
10. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Notes, the Warrants 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 Notes, the Warrants or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Intellectual Property, or any release or amendment or waiver of or
consent to departure from any other Intellectual Property 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 Intellectual
Property; or (e) any other circumstance which might otherwise constitute any
legal or equitable defense available to the Company, or a discharge of all or
any part of the Security Interest granted hereby. Until the Obligations shall
have been paid and performed in full, the rights of the Secured Party shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Intellectual Property 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
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Secured Party, then, in any such event, the Company's obligations
hereunder shall survive cancellation of this Agreement, and shall not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement, but shall remain a valid and binding obligation enforceable in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured Party to proceed against any other person or to apply any
Intellectual Property which the Secured Party may hold at any time, or to
marshal assets, or to pursue any other remedy. The Company waives any defense
arising by reason of the application of the statute of limitations to any
obligation secured hereby.
11. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Notes have been made in
full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Company authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors or
assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Intellectual Property that may come into possession of the
Secured Party; (ii) to sign and endorse any UCC financing statement or any
invoice, freight or express xxxx, xxxx of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications and notices in connection
with accounts, and other documents relating to the Intellectual Property; (iii)
to pay or discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on or threatened against the Intellectual Property;
(iv) to demand, collect, receipt for, compromise, settle and xxx for monies due
in respect of the Intellectual Property; and (v) generally, to do, at the option
of the Secured Party, and at the Company's expense, at any time, or from time to
time, all acts and things which the Secured Party deems necessary to protect,
preserve and realize upon the Intellectual Property and the Security Interest
granted therein in order to effect the intent of this Agreement, the Notes and
the Warrants, all as fully and effectually as the Company might or could do; and
the Company hereby ratifies all that said attorney shall lawfully do or cause to
be done by virtue hereof. This power of attorney is coupled with an interest and
shall be irrevocable for the term of this Agreement and thereafter as long as
any of the Obligations shall be outstanding.
(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in the
proper filing and recording places in any jurisdiction, including, without
limitation, the jurisdictions indicated on Schedule C, attached hereto, all such
instruments, and take all such action as may reasonably be deemed necessary or
advisable, or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out the intent and
purposes of this Agreement, or for assuring and confirming to the Secured Party
the grant or perfection of a security interest in all the Intellectual Property.
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(c) The Company hereby irrevocably appoints the Secured Party
as the Company's attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company, from time to time in the
Secured Party's 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 Intellectual Property without the signature of the Company where
permitted by law.
13. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:
If to the Company: MSGI Security Solutions, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Xxxxxxxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx X. Annex, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party: To the address set forth immediately
below such party's name on the signature
pages to the Purchase Agreement.
With copies to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esquire
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Intellectual Property 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.
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15. Miscellaneous.
(a) No course of dealing between the Company and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Party, any right, power or privilege hereunder or under the
Notes 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 Intellectual Property, whether established hereby or by
the Notes or by any other agreements, instruments or documents or by law shall
be cumulative and may be exercised singly or concurrently.
(c) This Agreement and the Security Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and is
intended to supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a written
agreement specifically referring to this Agreement and signed by the parties
hereto.
(d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or similar nature or
otherwise.
(f) This Agreement shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in
order to carry out the provisions and purposes of this Agreement.
(h) This Agreement shall be construed in accordance with the laws
of the State of New York, except to the extent the validity, perfection
or enforcement of a security interest hereunder in respect of any particular
Intellectual Property which are governed by a jurisdiction other than the State
of New York in which case such law shall govern. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of any New York State or
United States Federal court sitting in New York County over any action or
proceeding arising out of or
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relating to this Agreement, and the parties hereto hereby irrevocably
agree that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The parties hereto further waive any objection to venue
in the State of New York and any objection to an action or proceeding in the
State of New York on the basis of forum non conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO
THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH
PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH
ITS LEGAL COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS
RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE,
MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. IN THE EVENT OF A LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
(j) This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and,
all of which taken together shall constitute one and the same Agreement. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature were the original thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
MSGI SECURITY SOLUTIONS, INC.
By:
--------------------------------------------
Xxxxxx Xxxxxxx
Chief Executive Officer
FUTURE DEVELOPMENTS AMERICA, INC.
-----------------------------------------------
By:
Title:
INNALOGIC, LLC
-----------------------------------------------
By:
Title:
MSGI ITALIA
-----------------------------------------------
By:
Title:
AJW PARTNERS, LLC
By: SMS Group, LLC
By:
--------------------------------------------
Xxxxx X. Xxxxxxxx
Manager
AJW OFFSHORE, LTD.
By: First Street Manager II, LLC
By:
--------------------------------------------
Xxxxx X. Xxxxxxxx
Manager
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AJW QUALIFIED PARTNERS, LLC
By: AJW Manager, LLC
By:
--------------------------------------------
Xxxxx X. Xxxxxxxx
Manager
NEW MILLENNIUM CAPITAL
PARTNERS II, LLC
By: First Street Manager II, LLC
By:
--------------------------------------------
Xxxxx X. Xxxxxxxx
Manager
ENABLE GROWTH PARTNERS L.P.
-----------------------------------------------
By:
Title:
ENABLE OPPORTUNITY PARTNERS LP
-----------------------------------------------
By:
Title:
XXXXXX DIVERSIFIED STRATEGY MASTER FUND, ENA
-----------------------------------------------
By:
Title:
15
