EXHIBIT 10(G)
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated as of January 22, 2002, by and
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among IMAGING TECHNOLOGIES CORPORATION, a Delaware corporation ("Company"), and
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the secured parties signatory hereto and their respective endorsees, transferees
and assigns (collectively, the "Secured Party").
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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
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agreed to issue to the Secured Party and the Secured Party has agreed to
purchase from Company certain of Company's 8% Secured Convertible Debentures
(the "Debentures"), which are convertible into shares of Company's Common Stock,
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$0.005 par value (the "Common Stock"). In connection therewith, Company shall
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issue the Secured Party certain Common Stock purchase warrants dated as of the
date hereof to purchase the number of shares of Common Stock indicated below
each Secured Party's name on the Purchase Agreement (the "Warrants"); and
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WHEREAS, in order to induce the Secured Party to purchase the Debentures,
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 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 Debentures 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:
Certain Definitions. As used in this Agreement, the following terms shall have
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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
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intangibles" and "proceeds") shall have the respective meanings given such terms
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in Article 9 of the UCC.
"Collateral" means the collateral in which the Secured Party is granted a
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security interest by this Agreement and which shall include the following,
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whether presently owned or existing or hereafter acquired or coming into
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existence, and all additions and accessions thereto and all substitutions and
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replacements thereof, and all proceeds, products and accounts thereof,
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including, without limitation, all proceeds from the sale or transfer of the
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Collateral and of insurance covering the same and of any tort claims in
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connection therewith:
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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 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
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All Inventory of the Company; and
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
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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
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.
"Company" shall mean, collectively, Company and all of the subsidiaries of
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Company, a list of which is contained in Schedule A, attached hereto.
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"Obligations" means all of the Company's obligations under this Agreement and
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the Debentures, in each case, whether now or hereafter existing, voluntary or
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involuntary, direct or indirect, absolute or contingent, liquidated or
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unliquidated, whether or not jointly owed with others, and whether or not from
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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.
"Senior Debt" shall mean all indebtedness owed by the Company to CoAmerica Bank
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(formerly Imperial Bank), pursuant to the Settlement Agreement dated as of June
6, 2000 and the Amended and Restated Security Agreement dated as of June 6,
2000.
"UCC" means the Uniform Commercial Code, as currently in effect in the State of
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New York.
Grant of Security Interest. Subject to the rights and remedies of the Senior
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Debt, as an inducement for the Secured Party to purchase the Debentures and to
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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 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
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Interest").
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Representations, Warranties, Covenants and Agreements of the Company. The
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Company represents and warrants to, and covenants and agrees with, the Secured
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Party as follows:
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 creidtor's rights generally.
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
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hereto;
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 Cattached hereto. There is not on file in any
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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 Cattached hereto. So long as this
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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).
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.
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
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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 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 liens in the Collateral.
This Agreement creates in favor of the Secured Party a valid security interest
in the Collateral securing the payment and performance of the Obligations and,
upon making the filings described in the immediately following sentence, a
perfected security interest in such Collateral. 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
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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.
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
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by the Secured Party.
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.
The Company shall at all times maintain the liens and Security Interest provided
for hereunder as valid and perfected liens and security interests in the
Collateral in favor of the Secured Party until this Agreement and the Security
Interest hereunder shall 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.
The Company will not transfer, pledge, hypothecate, encumber, license (except in
the ordinary course of business), sell or otherwise dispose of any of the
Collateral without the prior written consent of the Secured Party.
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.
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.
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
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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.
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.
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.
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.
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.
Schedule A attached hereto contains a list of all of the subsidiaries of
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Company.
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Defaults. The following events shall be "Events of Default":
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The occurrence of an Event of Default (as defined in the Debentures) under the
Debentures;
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;
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
Any breach of, or default under, the Warrants.
Duty To Hold In Trust. Upon the occurrence of any Event of Default and at any
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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
Debentures 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.
Rights and Remedies Upon Default. Subject to the rights and remedies of the
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Senior Debt, upon occurrence of any Event of Default and at any time thereafter,
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the Secured Party shall have the right to exercise all of the remedies conferred
hereunder and under the Debentures, 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:
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.
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.
Applications of Proceeds. The proceeds of any such sale, lease or other
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disposition of the Collateral hereunder shall be applied first, to the expenses
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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. 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.
Costs and Expenses. The Company agrees to pay all out-of-pocket fees, costs
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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 Debentures.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Debentures and shall bear interest at the rate of 15% per annum.
Responsibility for Collateral. The Company assumes all liabilities and
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responsibility in connection with all Collateral, and the obligations of the
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Company hereunder or under the Debentures and the Warrants shall in no way be
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affected or diminished by reason of the loss, destruction, damage or theft of
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any of the Collateral or its unavailability for any reason.
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Security Interest Absolute. All rights of the Secured Party and all Obligations
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of the Company hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of this Agreement, the Debentures,
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 Debentures, 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
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.
Term of Agreement. This Agreement and the Security Interest shall terminate on
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the date on which all payments under the Debentures 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.
POWER OF ATTORNEY; FURTHER ASSURANCES.
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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 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 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 Debentures 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.
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
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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.
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.
Notices. All notices, requests, demands and other communications hereunder
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shall be in writing, with copies to all the other parties hereto, and shall be
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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: Imaging Technologies Corporation
15175 Innovation Drive
San Diego, California 92128
Attention: President and Chief Executive Officer
Facsimile: 858-207-6505
With copies to: Jenkens & Gilchrist Parker Chapin, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attention: Christopher S. Auguste, Esq.
Facsimile: 212-704-6288
If to the Secured Party:
Bristol Investment Fund, Ltd.
Caledonian House
Jennett Street
George Town
Attention: Administrator
Facsimile: 441-295-2305
With copies to:
Bristol DLP, LLC
6363 Sunset Boulevard, Fifth Floor
Hollywood, California 90028
Attention: Amy Wang
Facsimile: 323-468-8307
Other Security. To the extent that the Obligations are now or hereafter secured
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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.
Miscellaneous.
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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 Debentures 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.
All of the rights and remedies of the Secured Party with respect to the
Collateral, whether established hereby or by the Debentures or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.
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.
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.
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.
This Agreement shall be binding upon and inure to the benefit of each party
hereto and its successors and assigns.
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.
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. The parties further agree that
the successful or prevailing party in any proceeding shall be entitled to
recover attorneys' fees and other costs incurred in such proceeding.
EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
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
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.
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.
IMAGING TECHNOLOGIES CORPORATION
By:_____________________________________
Brian Bonar
President and Chief Executive Officer
BRISTOL INVESTMENT FUND, LTD.
By:_____________________________________
Diana Derycz Kessler
Director