SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of November 30, 2006, by
and among Wellstar International Inc., a Nevada corporation ("Company"), 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 8% 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 $.001 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 property 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.
NOW, THEREFORE, in consideration of the agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the
UCC (such as "general intangibles" and "proceeds") shall have the
respective meanings given such terms in Article 9 of the UCC.
(a) "Collateral" means the collateral in which the Secured Party is
granted a security interest by this Agreement and which shall
include the following, whether presently owned or existing or
hereafter acquired or coming into existence, and all additions
and accessions thereto and all substitutions and replacements
thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or
transfer of the Collateral and of insurance covering the same
and of any tort claims in connection therewith:
(i) All Goods of the Company, including, without
limitations, all machinery, equipment, computers, 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
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documents of title and documents representing the same,
all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for
any of the foregoing and all other items used and useful
in connection with the Company's businesses and all
improvements thereto (collectively, the "Equipment");
and
(ii) All Inventory of the Company; and
(iii) All of the Company's contract rights and general
intangibles, including, without limitation, all
partnership interests, stock or other securities,
licenses, distribution and other agreements, computer
software development rights, leases, franchises,
customer lists, quality control procedures, grants and
rights, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications,
copyrights, deposit accounts, and income tax refunds
(collectively, the "General Intangibles"); and
(iv) All Receivables of the Company including all insurance
proceeds, and rights to refunds or indemnification
whatsoever owing, together with all instruments, all
documents of title representing any of the foregoing,
all rights in any merchandising, goods, equipment, motor
vehicles and trucks which any of the same may represent,
and all right, title, security and guaranties with
respect to each Receivable, including any right of
stoppage in transit; and
(v) All of the Company's documents, instruments and chattel
paper, files, records, books of account, business
papers, computer programs and the products and proceeds
of all of the foregoing Collateral set forth in clauses
(i)-(iv) above.
(b) "Company" shall mean, collectively, Company and all of the
subsidiaries of Company, a list of which is contained in
Schedule A, attached hereto.
(c) "Obligations" means all of the Company's obligations under this
Agreement and the Notes, 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.
(d) "UCC" means the Uniform Commercial Code, as currently in effect
in the State of New York.
2. Grant of Security Interest. As an inducement for the Secured Party to
purchase the Notes and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably,
pledges, grants and hypothecates to the Secured Party, a continuing
security interest in, a continuing first lien upon, an unqualified right
to possession and disposition of and a right of set-off against, in each
case to the fullest extent permitted by law, all of the Company's right,
title and interest of whatsoever kind and nature in and to the
Collateral (the "Security Interest").
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3. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and otherwise to carry out its
obligations 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 creditor's rights generally.
(b) The Company represents and warrants that it has no place of
business or offices where its respective books of account and
records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored
or located, except as set forth on Schedule A attached hereto;
(c) The Company is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Company in the ordinary
course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and is fully
authorized to grant the Security Interest in and to pledge the
Collateral, except as set forth on Schedule C. There is not on
file in any governmental or regulatory authority, agency or
recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the
Secured Party pursuant to this Agreement) covering or affecting
any of the Collateral, except as set forth on Schedule C. So
long as this Agreement shall be in effect, the Company shall not
execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document
or instrument (except to the extent filed or recorded in favor
of the Secured Party pursuant to the terms of this Agreement),
except as set forth on Schedule C.
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any
Collateral or the Company's use of any Collateral violates the
rights of any third party. There has been no adverse decision to
the Company's claim of ownership rights in or exclusive rights
to use the Collateral in any jurisdiction or to the Company's
right to keep and maintain such Collateral in full force and
effect, and there is no proceeding involving said rights pending
or, to the best knowledge of the Company, threatened before any
court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.
(e) The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of
business and its Collateral at the locations set forth on
Schedule A attached hereto and may not relocate such books of
account and records or tangible Collateral unless it delivers to
the Secured Party at least 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 and other necessary documents
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have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured
Party valid, perfected and continuing first priority liens in
the Collateral.
(f) This Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and
performance of the Obligations and, upon making the filings
described in the immediately following sentence, a perfected
first priority security interest in such Collateral. Except for
the filing of financing statements on Form-1 under the UCC with
the jurisdictions indicated on Schedule B, attached hereto, no
authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either (i)
for the grant by the Company of, or the effectiveness of, the
Security Interest granted hereby or for the execution, delivery
and performance of this Agreement by the Company or (ii) for the
perfection of or exercise by the Secured Party of its rights and
remedies hereunder.
(g) On the date of execution of this Agreement, the Company will
deliver to the Secured Party one or more executed UCC financing
statements on Form-1 with respect to the Security Interest for
filing with the jurisdictions indicated on Schedule B, attached
hereto and in such other jurisdictions as may be requested by
the Secured Party.
(h) Except as set forth on Schedule C, the execution, delivery and
performance of this Agreement does not conflict with or cause a
breach or default, or an event that with or without the passage
of time or notice, shall constitute a breach or default, under
any agreement to which the Company is a party or by which the
Company is bound. No consent (including, without limitation,
from stock holders or creditors of the Company) is required for
the Company to enter into and perform its obligations hereunder.
(i) The Company shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first
priority liens and security interests in the Collateral in favor
of the Secured Party until this Agreement and the Security
Interest hereunder shall terminate pursuant to Section 11. The
Company hereby agrees to defend the same against any and all
persons. The Company shall safeguard and protect all Collateral
for the account of the Secured Party. At the request of the
Secured Party, the Company will sign and deliver to the Secured
Party at any time or from time to time one or more financing
statements pursuant to the UCC (or any other applicable statute)
in form reasonably satisfactory to the Secured Party and will
pay the cost of filing the same in all public offices wherever
filing is, or is deemed by the Secured Party to be, necessary or
desirable to effect the rights and obligations provided for
herein. Without limiting the generality of the foregoing, the
Company shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interest hereunder, and
the Company shall obtain and furnish to the Secured Party from
time to time, upon demand, such releases and/or subordinations
of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.
(j) The Company will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by the
Company in the ordinary course of business), sell or otherwise
dispose of any of the Collateral without the prior written
consent of the Secured Party.
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(k) The Company shall keep and preserve its Equipment, Inventory and
other tangible Collateral in good condition, repair and order
and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance
coverage.
(l) The Company shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient
detail, of any substantial change in the Collateral, and of the
occurrence of any event which would have a material adverse
effect on the value of the Collateral or on the Secured Party's
security interest therein.
(m) The Company shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments,
documents, certificates and assurances and take such further
action as the Secured Party may from time to time request and
may in its sole discretion deem necessary to perfect, protect or
enforce its security interest in the Collateral including,
without limitation, the execution and delivery of a separate
security agreement with respect to the Company'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 Company 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 Company will take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any
rights, claims, causes of action and accounts receivable in
respect of the Collateral.
(p) The Company shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment,
garnishment, execution or other legal process levied against any
Collateral and of any other information received by the Company
that 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 Company with respect to the
Collateral is accurate and complete in all material respects as
of the date furnished.
(r) Schedule A attached hereto contains a list of all of the
subsidiaries of Company.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the Notes)
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under the Notes;
(b) Any representation or warranty of the Company in this Agreement
or in the Intellectual Property Security Agreement shall prove
to have been incorrect in any material respect when made;
(c) The failure by the Company to observe or perform any of its
obligations hereunder or in the Intellectual Property Security
Agreement for 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 Warrants.
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 Collateral
is then located). Without limitation, the Secured Party shall have the
following rights and powers:
(a) The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and
assistance of any person, any premises where the Collateral, or
any part thereof, is or may be placed and remove the same, and
the Company shall assemble the Collateral and make it available
to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or
elsewhere, and make available to the Secured Party, without
rent, all of the Company's respective premises and facilities
for the purpose of the Secured Party taking possession of,
removing or putting the Collateral in saleable or disposable
form.
(b) The Secured Party shall have the right to operate the business
of the Company using the Collateral and shall have the right to
assign, sell, lease or otherwise dispose of and deliver all or
any part of the Collateral, at public or private sale or
otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in
such parcel or parcels and at such time or times and at such
place or places, and upon such terms and conditions as the
Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Company or
right of redemption of the Company, which are hereby expressly
waived. Upon each such sale, lease, assignment or other transfer
of Collateral, the Secured Party may, unless prohibited by
applicable law which cannot be waived, purchase all or any part
of the Collateral being sold, free from and discharged of all
trusts, claims, right of redemption and equities of the Company,
which are hereby waived and released.
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7. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral hereunder shall be applied first, to the
expenses of retaking, holding, storing, processing and preparing for
sale, selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the
Collateral, to the reasonable attorneys' fees and expenses incurred by
the Secured Party in enforcing its rights hereunder and in connection
with collecting, storing and disposing of the Collateral, and then to
satisfaction of the Obligations, and to the payment of any other amounts
required by applicable law, after which the Secured Party shall pay to
the Company any surplus proceeds. If, upon the sale, license or other
disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the
Company will be liable for the deficiency, together with interest
thereon, at the rate of 15% per annum (the "Default Rate"), and the
reasonable fees of any attorneys employed by the Secured Party to
collect such deficiency. To the extent permitted by applicable law, the
Company waives all claims, damages and demands against the Secured Party
arising out of the repossession, removal, retention or sale of the
Collateral, unless due to the gross negligence or willful misconduct of
the Secured Party.
8. Costs and Expenses. The Company agrees to pay all out-of-pocket fees,
costs and expenses incurred in connection with any filing required
hereunder, including without limitation, any financing statements,
continuation statements, partial releases and/or termination statements
related thereto or any expenses of any searches reasonably required by
the Secured Party. The Company shall also pay all other claims and
charges which in the reasonable opinion of the Secured Party might
prejudice, imperil or otherwise affect the Collateral or the Security
Interest therein. The Company will also, upon demand, pay to the Secured
Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and
agents, which the Secured Party may incur in connection with (i) the
enforcement of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from, or other realization upon, any of the
Collateral, or (iii) the exercise or enforcement of any of the rights of
the Secured Party under the Notes. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Notes and shall
bear interest at the Default Rate.
9. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of
the Company hereunder or under the Notes and the Warrants shall in no
way be affected or diminished by reason of the loss, destruction, damage
or theft of any of the Collateral or its unavailability for any reason.
10. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or
enforceability of this Agreement, the 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 Collateral, or any release or amendment or
waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d)
any action by the Secured Party to obtain, adjust, settle and cancel in
its sole discretion any insurance claims or matters made or arising in
connection with the Collateral; or (e) any other circumstance which
might otherwise constitute any legal or equitable defense available to
the Company, or a discharge of all or any part of the Security Interest
granted hereby. Until the Obligations shall have been paid and performed
in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation,
the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice
of nonpayment and demand for performance. In the event that at any time
any transfer of any Collateral or any payment received by the Secured
Party hereunder shall be deemed by final order of a court of competent
jurisdiction to have been a voidable preference or fraudulent conveyance
under the bankruptcy or insolvency laws of the United States, or shall
be deemed to be otherwise due to any party other than the Secured Party,
then, in any such event, the Company's obligations hereunder shall
survive cancellation of this Agreement, and shall not be discharged or
satisfied by any prior payment thereof and/or cancellation of this
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Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives
all right to require the Secured Party to proceed against any other
person or to apply any Collateral which the Secured Party may hold at
any time, or to marshal assets, or to pursue any 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 Collateral that may come
into possession of the Secured Party; (ii) to sign and endorse
any UCC financing statement or any invoice, freight or express
xxxx, xxxx of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in
connection with accounts, and other documents relating to the
Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on
or threatened against the Collateral; (iv) to demand, collect,
receipt for, compromise, settle and xxx for monies due in
respect of the Collateral; and (v) generally, to do, at the
option of the Secured Party, and at the Company's expense, at
any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize
upon the Collateral 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.
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(b) On a continuing basis, the Company will make, execute,
acknowledge, deliver, file and record, as the case may be, in
the proper filing and recording places in any jurisdiction,
including, without limitation, the jurisdictions indicated on
Schedule B, attached hereto, all such instruments, and take all
such action as may reasonably be deemed necessary or advisable,
or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out
the intent and purposes of this Agreement, or for assuring and
confirming to the Secured Party the grant or perfection of a
security interest in all the Collateral.
(c) The Company hereby irrevocably appoints the Secured Party as the
Company's attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company, from time
to time in the Secured Party's 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 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: Wellstar International Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party: AJW Partners, LLC
AJW Offshore, Ltd.
AJW Qualified Partners, LLC
New Millennium Capital Partners II, LLC
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
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With a copy to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 000-000-0000
14. Other Security. To the extent that the Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other
entity, then the Secured Party shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting
any of the Secured Party's rights and remedies hereunder.
15. Miscellaneous.
(a) No course of dealing between the Company and the Secured Party,
nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Party, any right, power or privilege
hereunder or under the 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 Collateral, whether established hereby or by the Notes or
by any other agreements, instruments or documents or by law
shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements
with respect thereto. Except as specifically set forth in this
Agreement, no provision of this Agreement may be modified or
amended except by a written agreement specifically referring to
this Agreement and signed by the parties hereto.
(d) In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial
construction, this Agreement shall, as to such jurisdiction, be
construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing,
any provision of this Agreement is held to be invalid,
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prohibited or unenforceable in any jurisdiction, such provision,
as to such jurisdiction, shall be ineffective to the extent of
such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the
other provisions of this Agreement and without affecting the
validity or enforceability of such provision or the other
provisions of this Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or
appropriate in order to carry out the provisions and purposes of
this Agreement.
(h) This Agreement shall be construed in accordance with the laws of
the State of New York, except to the extent the validity,
perfection or enforcement of a security interest hereunder in
respect of any particular Collateral which are governed by a
jurisdiction other than the State of New York in which case such
law shall govern. Each of the parties hereto irrevocably submit
to the exclusive jurisdiction of any New York State or United
States Federal court sitting in Manhattan county over any action
or proceeding arising out of or relating to this Agreement, and
the parties hereto hereby irrevocably agree that all claims in
respect of such action or proceeding may be heard and determined
in such New York State or Federal court. The parties hereto
agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law.
The parties hereto further waive any objection to venue in the
State of New York and any objection to an action or proceeding
in the State of New York on the basis of forum non conveniens.
(i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT 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 WAIVES ITS RIGHTS TO A JURY TRIAL
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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 Security Agreement
to be duly executed on the day and year first above written.
WELLSTAR INTERNATIONAL INC.
By: _____________________________________
John Antonio
Chief Executive Officer
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
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
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SCHEDULE A
Principal Place of Business of the Company:
Locations Where Collateral is Located or Stored:
List of Subsidiaries of the Company:
14
SCHEDULE B
Jurisdictions:
15
