EXHIBIT 4.4
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of March 8, 2006 (this
"Agreement"), is entered into by and among RAPID LINK INCORPORATED a
Delaware corporation (the "Debtor") and the TRIDENT GROWTH FUND, L.P. a
California limited liability corporation, (the "Secured Party"), the Holder
of that certain 10% Secured Convertible Debenture due March 8, 2007 (or such
earlier contingent date as set forth therein) in the original aggregate
principal amount of $600,000 (the "Debenture"), issued by Debtor to the
Secured Party in connection with that certain Securities Purchase Agreement
of even date herewith entered into by and between the Debtor and the Secured
Party (the "Purchase Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Debenture, the Secured Party has agreed
to extend certain loans described above to the Debtor as evidenced by the
Debenture; and
WHEREAS, in order to induce the Secured Party to extend the
loans evidenced by the Debenture, the Debtor has agreed to execute and
deliver to the Secured Party this Agreement and to grant the Secured Party a
perfected first priority security interest in all property of the Debtor not
pledged as security to the Global Capital Companies as of the date hereof
(the "Global Capital Collateral") to secure the prompt payment, performance
and discharge in full of all of the Debtor's obligations under the
Debenture.
NOW, THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
as follows:
1. Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth in this Section 1. Terms
used but not otherwise defined in this Agreement that are defined in Article
9 of the Uniform Commercial Code (the "UCC") shall have the respective
meanings given such terms in Article 9 of the UCC, and capitalized terms not
otherwise defined herein shall have the meaning given them in the Purchase
Agreement.
(a) "Collateral" means, other than with respect to the Global
Capital Collateral, as such terms are defined in Section 9.102 of the
UCC: all "collateral," "accounts," "chattel paper" (including, but not
limited to tangible and electronic chattel paper), "commercial tort
claims," "commodity contracts," "commodity accounts," "deposit
accounts," "documents," "equipment," "farm products," "fixtures,"
"general intangibles" (including "payment intangibles" and "software"),
"goods," "health care insurance receivables," "instruments,"
"inventory," "investment property," "letter of credit rights,"
"mortgages," and "records" of the Debtor, 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" (cash or noncash) (as defined in Article 9
of the UCC) thereof, including, without limitation, all proceeds from
the sale or transfer of the Collateral and of insurance covering the
same. Without in any way limiting the generality of the foregoing, if
not already included in the Collateral described above, the term
"Collateral" shall also include, as defined in plain English: All
machinery, equipment, computers, computer programs, 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, contract rights,
partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software (whether "off-the-
shelf", licensed from any third party or developed by Debtor) computer
software development rights, leases, franchises, customer lists,
quality control procedures, grants and rights, goodwill, trademarks,
service marks, trade styles, trade names, patents, patent applications,
copyrights, deposit and investment accounts and income tax refunds,
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 same, including any right of stoppage in transit, business papers
together with all documents of title and documents representing the
same, all additions and accessions thereto, replacements therefor, all
parts therefor, and all substitutes for any of the foregoing and all
other items used and useful in connection with the Debtor's businesses
and all improvements thereto.
(b) "Obligations" means all of the Debtor's obligations under
the Transaction Documents, in each case, whether now or hereafter
existing, voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any
portion of such obligations or liabilities that are paid, to the extent
all or any part of such payment is avoided or recovered directly or
indirectly from the Secured Party as a preference, fraudulent transfer
or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.
2. Grant of Perfected First Priority Security Interest. As an
inducement for the Secured Party to extend the loan as evidenced by the
Debenture and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, the Debtor
hereby unconditionally and irrevocably pledges, grants and hypothecates to
the Secured Party a continuing and perfected first priority security
interest in and to, a lien upon and a right of set-off against all of their
respective right, title and interest of whatsoever kind and nature in and
to, the Collateral other than with respect to the Global Capital Collateral,
(the "Security Interest").
3. Representations, Warranties, Covenants and Agreements of
the Debtor. The Debtor represents and warrants to, and covenants and agrees
with, the Secured Party as follows:
(a) The Debtor has the requisite corporate power and authority
to enter into this Agreement and otherwise to carry out its obligations
hereunder. The execution, delivery and performance by the Debtor of
this Agreement and the filings contemplated therein have been duly
authorized by all necessary action on the part of the Debtor and no
further action is required by the Debtor.
(b) The Debtor represents and warrants that they have no place
of business or offices where their respective books of account and
records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or
located, except as set forth on Schedule A attached hereto.
(c) The Debtor is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Debtor in the ordinary course of
business), free and clear of any liens, security interests,
encumbrances, rights or claims, and are fully authorized to grant the
Security Interest in and to pledge the Collateral. There is not on
file in any governmental or regulatory authority, agency or recording
office an effective financing statement, security agreement, license or
transfer or any notice of any of the foregoing (other than those that
will be filed in favor of the Secured Party pursuant to this Agreement)
covering or affecting any of the Collateral. So long as this Agreement
shall be in effect, Debtor shall not execute and shall not knowingly
permit to be on file in any such office or agency any such financing
statement or other document or instrument (except to the extent filed
or recorded in favor of the Secured Party pursuant to the terms of this
Agreement).
(d) No part of the Collateral has been judged invalid or
unenforceable. No written claim has been received that any Collateral
or Debtor's use of any Collateral violates the rights of any third
party. There has been no adverse decision to Debtor's claim of
ownership rights in or exclusive rights to use the Collateral in any
jurisdiction or to Debtor's right to keep and maintain such Collateral
in full force and effect, and there is no Proceeding involving said
rights pending or, to the best knowledge of the Debtor, threatened
before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.
(e) The Debtor shall at all times maintain its books of account
and records relating to the Collateral at its principal place of
business and its Collateral at the locations set forth on Schedule A
attached hereto and may not relocate such books of account and records
or tangible Collateral unless it delivers to the Secured Party at least
30 days prior to such relocation (i) written notice of such relocation
and the new location thereof (which must be within the United States)
and (ii) evidence that appropriate financing statements under the UCC
and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in
favor of the Secured Party a valid, perfected and continuing perfected
first priority lien 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 subsection, a perfected first priority
security interest in such Collateral.
(g) The Debtor hereby authorizes the Secured Party to file one
or more financing statements under the UCC, with respect to the
Security Interest with the proper filing and recording agencies in any
jurisdiction deemed proper by them.
(h) The execution, delivery and performance of this Agreement by
the Debtor does not conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of, any agreement, credit facility, debt or other instrument
(evidencing Debtor's debt or otherwise) or other understanding to which
Debtor is a party or by which any property or asset of the Debtor is
bound or affected. No consent (including, without limitation, from
stockholders or creditors of the Debtor) is required for the Debtor to
enter into and perform its obligations hereunder.
(i) The Debtor shall at all times maintain the liens and Security
Interest provided for hereunder as valid and perfected first priority
liens and security interests in the Collateral in favor of the Secured
Party until this Agreement and the Security Interest hereunder shall be
terminated pursuant to Section 11 hereof. The Debtor hereby agrees to
defend the same against any and all persons. The Debtor shall safeguard
and protect all Collateral for the account of the Secured Party. At
the request of the Secured Party, the Debtor will sign and deliver to
the Secured Party at any time or from time to time one or more
financing statements pursuant to the UCC in form reasonably
satisfactory to the Secured Party and will pay the cost of filing the
same in all public offices wherever filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the generality of the
foregoing, the Debtor shall pay all fees, taxes and other amounts
necessary to maintain the Collateral and the Security Interest
hereunder, and the Debtor shall obtain and furnish to the Secured Party
from time to time, upon demand, such releases and/or subordinations of
claims and liens which may be required to maintain the priority of the
Security Interest hereunder.
(j) The Debtor will not transfer, pledge, hypothecate, encumber,
license (except for non-exclusive licenses granted by a Debtor in its
ordinary course of business and sales of "inventory"), sell or
otherwise dispose of any of the Collateral not in the ordinary course
of its business without the prior written consent of the Secured Party.
(k) The Debtor shall keep and preserve its "equipment,"
"inventory" and other tangible Collateral in good condition, repair and
order and shall not operate or locate any such Collateral (or cause to
be operated or located) in any area excluded from insurance coverage.
(l) The Debtor shall, within ten (10) days of obtaining knowledge
thereof, advise the Secured Party promptly, in sufficient detail, of
any substantial change in the Collateral, and of the occurrence of any
event which would have a material adverse effect on the value of the
Collateral or on the Secured Party's security interest therein.
(m) The Debtor shall promptly execute and deliver to the
Secured Party such further deeds, mortgages, assignments, security
agreements, financing statements or other instruments, documents,
certificates and assurances and take such further action as the Secured
Party may from time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce its security interest in the
Collateral including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to each
Debtor's intellectual property ("Intellectual Property Security
Agreement") in which the Secured Party has been granted a security
interest hereunder, substantially in a form acceptable to the Secured
Party, which Intellectual Property Security Agreement, other than as
stated therein, shall be subject to all of the terms and conditions
hereof.
(n) The Debtor shall permit the Secured Party and its
representatives and agents to inspect the Collateral at any time, and
to make copies of records pertaining to the Collateral as may be
requested by the Secured Party from time to time.
(o) The Debtor shall take all steps reasonably necessary to
diligently pursue and seek to preserve, enforce and collect any rights,
claims, causes of action and accounts receivable in respect of the
Collateral.
(p) The Debtor shall promptly notify the Secured Party in
sufficient detail upon becoming aware of any attachment, garnishment,
execution or other legal process levied against any Collateral and of
any other information received by the Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and
remedies of the Secured Party hereunder.
(q) All information heretofore, herein or hereafter supplied to
the Secured Party by or on behalf of the Debtor with respect to the
Collateral is accurate and complete in all material respects as of the
date furnished.
(r) The Debtor shall at all times preserve and keep in full
force and effect its valid existence and good standing and any rights
and franchises material to its business.
(s) The Debtor will not change its name, corporate structure, or
identity, or add any new fictitious name unless it provides at least 30
days prior written notice to the Secured Party of such change and, at
the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and
continue perfected the perfected first priority Security Interest
granted and evidenced by this Agreement.
(t) The Debtor may not consign any of its "inventory" or sell any
of its "inventory" on bill and hold, sale or return, sale on approval,
or other conditional terms of sale without the consent of the Secured
Party which shall not be unreasonably withheld.
(u) The Debtor may not relocate its chief executive office to a
new location without providing 30 days prior written notification
thereof to the Secured Party and so long as, at the time of such
written notification, the Debtor provides any financing statements or
fixture filings necessary to perfect and continue the Security Interest
granted and evidenced by this Agreement.
4. Defaults. The following events shall be "Events of Default":
(a) The occurrence of an Event of Default (as defined in the
Debenture) under the Debenture;
(b) Any representation or warranty of Debtor in this Agreement
shall prove to have been incorrect in any material respect when made;
(c) The failure by Debtor to observe or perform any of its
obligations hereunder for five (5) days after delivery to Debtor of
notice of such failure by or on behalf of a Secured Party; or
(d) If any provision of this Agreement shall at any time for any
reason be declared to be null and void, or the validity or
enforceability thereof shall be contested by Debtor, or a Proceeding
shall be commenced by Debtor, or by any governmental authority having
jurisdiction over Debtor, seeking to establish the invalidity or
unenforceability thereof, or Debtor shall deny that Debtor has any
liability or obligation purported to be created under this Agreement.
5. Duty To Hold In Trust. Upon the occurrence of any Event of
Default and at any time thereafter, the Debtor shall, upon receipt of any
revenue, income or other sums subject to the Security Interest, whether
payable pursuant to the Debenture or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay
any such sum, hold the same in trust for the Secured Party and shall
forthwith endorse and transfer any such sums or instruments, or both, to the
Secured Party for application to the satisfaction of the Obligations.
6. Rights and Remedies Upon Default. Upon the occurrence of
any Event of Default and at any time thereafter, the Secured Party shall
have the right to exercise all of the remedies conferred hereunder and under
the Debenture, and the Secured Party shall have all the rights and remedies
of a secured party under the UCC. Without limitation, the Secured Party
shall have the following rights and powers:
(a) The Secured Party shall have the right to take possession of
the Collateral and, for that purpose, enter, with the aid and
assistance of any person, any premises where the Collateral, or any
part thereof, is or may be placed and remove the same, and the Debtor
shall assemble the Collateral and make it available to the Secured
Party at places which the Secured Party shall reasonably select,
whether at the Debtor's premises or elsewhere, and make available to
the Secured Party, without rent, all of the Debtor's respective
premises and facilities for the purpose of the Secured Party taking
possession of, removing or putting the Collateral in saleable or
disposable form.
(b) The Secured Party shall have the right to operate the
business of the Debtor using the Collateral and shall have the right to
assign, sell, lease or otherwise dispose of and deliver all or any part
of the Collateral, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or
for future delivery, in such parcel or parcels and at such time or
times and at such place or places, and upon such terms and conditions
as the Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be
waived) advertisement or demand upon or notice to the Debtor or right
of redemption of a Debtor, which are hereby expressly waived. Upon
each such sale, lease, assignment or other transfer of Collateral, the
Secured Party may, unless prohibited by applicable law which cannot be
waived, purchase all or any part of the Collateral being sold, free
from and discharged of all trusts, claims, right of redemption and
equities of the Debtor, which are hereby waived and released.
7. Applications of Proceeds. The proceeds of any such sale,
lease or other disposition of the Collateral hereunder shall be applied
first, to the expenses of retaking, holding, storing, processing and
preparing for sale, selling, and the like (including, without limitation,
any taxes, fees and other costs incurred in connection therewith) of the
Collateral, to the reasonable attorneys' fees and expenses incurred by the
Secured Party in enforcing its rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to
satisfaction of the Obligations to the Secured Party based on its then
outstanding principal amount of the Debenture, and to the payment of any
other amounts required by applicable law, after which the Secured Party
shall pay to the applicable Debtor any surplus proceeds. If, upon the sale,
license or other disposition of the Collateral, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party is legally
entitled, the Debtor will be liable for the deficiency, together with
interest thereon, at the rate of 18% per annum or the lesser amount
permitted by applicable law (the "Default Rate"), and the reasonable fees of
any attorneys employed by the Secured Party to collect such deficiency. To
the extent permitted by applicable law, the Debtor waives all claims,
damages and demands against the Secured Party arising out of the
repossession, removal, retention or sale of the Collateral, unless due to
the gross negligence or willful misconduct of the Secured Party.
8. Costs and Expenses. The Debtor agrees to pay all
reasonable out-of-pocket fees, costs and expenses incurred in connection
with any filing required hereunder, including without limitation, any
financing statements pursuant to the UCC, continuation statements, partial
releases and/or termination statements related thereto or any expenses of
any searches reasonably required by the Secured Party. The Debtor shall
also pay all other claims and charges which in the reasonable opinion of the
Secured Party might prejudice, imperil or otherwise affect the Collateral or
the Security Interest therein. The Debtor will also, upon demand, pay to the
Secured Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents,
which the Secured Party may incur in connection with (i) the enforcement of
this Agreement, (ii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, or (iii)
the exercise or enforcement of any of the rights of the Secured Party under
the Debenture. Until so paid, any fees payable hereunder shall be added to
the principal amount of the Debenture and shall bear interest at the Default
Rate.
9. Responsibility for Collateral. The Debtor assumes all
liabilities and responsibility in connection with all Collateral, and the
Obligations 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 Debtor hereunder, shall be absolute and
unconditional, irrespective of: (a) any lack of validity or enforceability
of this Agreement, the Debenture or any agreement entered into in connection
with the foregoing, or any portion hereof or thereof; (b) any change in the
time, manner or place of payment or performance of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Debenture or any other agreement entered
into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or
waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection
with the Collateral; or (e) any other circumstance which might otherwise
constitute any legal or equitable defense available to a Debtor, or a
discharge of all or any part of the Security Interest granted hereby. Until
the Obligations shall have been paid and performed in full, the rights of
the Secured Party shall continue even if the Obligations are barred for
any reason, including, without limitation, the running of the statute
of limitations or bankruptcy. The Debtor expressly waives presentment,
protest, notice of protest, demand, notice of nonpayment and demand for
performance. In the event that at any time any transfer of any Collateral or
any payment received by the Secured Party hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable
preference or fraudulent conveyance under the bankruptcy or insolvency laws
of the United States, or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Debtor's
obligations hereunder shall survive cancellation of this Agreement, and
shall not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and binding
obligation enforceable in accordance with the terms and provisions hereof.
The Debtor waives all right to require the Secured Party to proceed against
any other person or to apply any Collateral which the Secured Party may hold
at any time, or to marshal assets, or to pursue any other remedy. The Debtor
waives any defense arising by reason of the application of the statute of
limitations to any obligation secured hereby.
11. Term of Agreement. This Agreement and the Security
Interest shall terminate on the date on which all payments under the
Debenture have been made in full or have been satisfied and all other
Obligations have been paid or discharged. Upon such termination, the Secured
Party, at the request and at the expense of the Debtor, will join in
executing any termination statement with respect to any financing statement
executed and filed pursuant to this Agreement.
12. Power of Attorney; Further Assurances.
(a) The Debtor authorizes the Secured Party, and does hereby
make, constitute and appoint the Secured Party and its respective
officers, agents, successors or assigns with full power of
substitution, as the Debtor's true and lawful attorney-in-fact, with
power, in the name of the Secured Party or the Debtor, to, after the
occurrence and during the continuance of an Event of Default, (i)
endorse any note, checks, drafts, money orders or other instruments of
payment (including payments payable under or in respect of any policy
of insurance) in respect of the Collateral that may come into
possession of the Secured Party; (ii) to sign and endorse any financing
statement pursuant to the UCC or any invoice, freight or express bill,
bill 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 sue for monies due
in respect of the Collateral; and (v) generally, to do, at the option
of the Secured Party, and at the expense of the Debtor, at any time, or
from time to time, all acts and things which the Secured Party deem
necessary to protect, preserve and realize upon the Collateral and the
Security Interest granted therein in order to effect the intent of this
Agreement and the Debenture all as fully and effectually as the Debtor
might or could do; and the Debtor hereby ratifies all that said
attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable
for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.
(b) On a continuing basis, the Debtor will make, execute,
acknowledge, deliver, file and record, as the case may be, with the
proper filing and recording agencies in any jurisdiction, including,
without limitation, the jurisdictions indicated on Schedule B attached
hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested
by the Secured Party, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this
Agreement, or for assuring and confirming to the Secured Party the
grant or perfection of a perfected security interest in all the
Collateral under the UCC.
(c) The Debtor hereby irrevocably appoints the Secured Party as
the Debtor's attorney-in-fact, with full authority in the place and
instead of the Debtor and in the name of the Debtor, from time to time
in the Secured Party's discretion, to take any action and to execute
any instrument which the Secured Party may deem necessary or advisable
to accomplish the purposes of this Agreement, including the filing, in
its sole discretion, of one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral
without the signature of the Debtor where permitted by law.
13. Notices. All notices, requests, demands and other
communications hereunder shall be subject to the notice provision of the
Purchase Agreement.
14. Other Security. To the extent that the Obligations are now
or hereafter secured by property other than the Collateral or by the
guarantee, endorsement or property of any other Person, then the Secured
Party shall have the right, in its sole discretion, to pursue, relinquish,
subordinate, modify or take any other action with respect thereto, without
in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.
15. Best Efforts for Licensed Collateral. Notwithstanding any
other provision contained herein or any of the Transaction Documents, upon
the occurrence of an Event of Default, the Debtor hereby agrees that with
respect to any part of the Collateral which may require the consent of any
third party or third parties in order for Debtor to transfer and/or convey
its interest in and to such Collateral to the Secured Party, as may be
required in accordance herewith, Debtor agrees to and shall use its best
efforts to obtain such consents or approvals in as expedient a manner as
possible.
16. Miscellaneous.
(a) No course of dealing between the Debtor and the Secured
Party, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Party, any right, power or privilege hereunder or
under the Debenture shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder
or thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
(b) All of the rights and remedies of the Secured Party with
respect to the Collateral, whether established hereby or by the
Debenture or by any other agreements, instruments or documents or by
law shall be cumulative and may be exercised singly or concurrently.
(c) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and is intended to
supersede all prior negotiations, understandings and agreements with
respect thereto. Except as specifically set forth in this Agreement, no
provision of this Agreement may be modified or amended except by a
written agreement specifically referring to this Agreement and signed
by the parties hereto.
(d) In the event any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any
reason, unless such provision is narrowed by judicial construction,
this Agreement shall, as to such jurisdiction, be construed as if such
invalid, prohibited or unenforceable provision had been more narrowly
drawn so as not to be invalid, prohibited or unenforceable. If,
notwithstanding the foregoing, any provision of this Agreement is held
to be invalid, prohibited or unenforceable in any jurisdiction, such
provision, as to such jurisdiction, shall be ineffective to the extent
of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other
provisions of this Agreement and without affecting the validity or
enforceability of such provision or the other provisions of this
Agreement in any other jurisdiction.
(e) No waiver of any breach or default or any right under this
Agreement shall be considered valid unless in writing and signed by the
party giving such waiver, and no such waiver shall be deemed a waiver
of any subsequent breach or default or right, whether of the same or
similar nature or otherwise.
(f) This Agreement shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.
(g) Each party shall take such further action and execute and
deliver such further documents as may be necessary or appropriate in
order to carry out the provisions and purposes of this Agreement.
(h) All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the
State of Texas, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions
contemplated by this Agreement and the Debenture (whether brought
against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in Dallas, Texas.
Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Dallas, Texas
for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any Proceeding,
any claim that it is not personally subject to the jurisdiction of any
such court, or that such Proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal Proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If
either party shall commence a Proceeding to enforce any provisions of
this Agreement, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its reasonable attorneys fees and
other costs and expenses incurred with the investigation, preparation
and prosecution of such Proceeding.
(i) This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed on the day and year first above written.
DEBTOR
RAPID LINK INCORPORATED Address for Notice and Delivery:
17383 Sunset Boulevard
Suite 350
Pacific Palisades,
California 90272
Telephone: (310) 566-1700
Facsimile: (310) 573-9435
Attn: John Jenkins, CEO
By:____________________________________
Name: John Jenkins
Title: Chief Executive Officer
SECURED PARTY
TRIDENT GROWTH FUND, L.P. Address for Notice and Delivery:
By: 700 Gemini
Houston, TX 77058
Telephone: (281) 488-8484
Facsimile: (281) 488-5353
By:
By:____________________________________
Name:
Title:
SCHEDULE A
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Principal Place of Business of Debtor:
-------------------------------------
17383 Sunset Boulevard
Suite 350
Pacific Palisades, California 90272
Locations Where Collateral is Located or Stored:
-----------------------------------------------
17383 Sunset Boulevard
Suite 350
Pacific Palisades, California 90272
Internap C/O Rapidlinks
76 9th Ave
10th floor
New York NY 10011
SCHEDULE B
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State of Delaware