Exhibit
10.9
SECURITY
AGREEMENT
THIS SECURITY AGREEMENT (as amended, restated,
supplemented or otherwise modified from time to time, this “
Agreement ”) dated as of July 1, 2008 by and between
BPA Associates LLC., a Massachusetts limited
liability company (the “ Company ”) and , John
Thomas Bridge & Opportunity Fund, together with its successors
and assigns in such capacity, the “ Secured Party
”).
W I T N E S S E T H:
WHEREAS, on the
date hereof, the Sahara Media Inc., a Delaware corporation
(“Sahara”) entered into a Debenture
Agreement (the “Debenture Agreement”); in which the
Secured Party has loaned the Company $500,000 (the
“Loan”)
WHEREAS , immediately after Sahara has received
the proceeds of the Loan pursuant to the Debenture Agreement,
Sahara is making a $50,000 payment to the Company (the
“Sahara Payment”);
WHEREAS, in consideration of the Secured
Party’s making the Loan and the Sahara Payment, the Company
has agreed to secure the payment of the Loan by Sahara with certain
assets of the Company as set forth herein.
NOW, THEREFORE,
in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions
. Capitalized terms used herein without definition and
defined in the Debenture Agreement are used herein as defined
therein. In addition, as used herein:
“ Collateral ” shall have the
meaning ascribed thereto in Section 3 hereof.
“ Documents ” means any
“documents,” as such term is defined in the Uniform
Commercial Code, and shall include, without limitation, all
documents of title (as defined in the Uniform Commercial Code),
bills of lading or other receipts evidencing or representing
Inventory or Equipment.
“ Event of Default ” shall
have the meaning set forth in the Debenture Agreement.
“ Liabilities ” shall
mean all obligations, liabilities and indebtedness of every nature
of Sahara from time to time owed or owing under or in
respect of this Agreement or the Debenture Agreement as the case
may be, including, without limitation, the principal amount of all
debts, claims and indebtedness, accrued and unpaid interest and all
fees, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and/or from time to
time hereafter owing, due or payable whether before or after the
filing of a bankruptcy, insolvency or similar proceeding under
applicable federal, state, foreign or other law and whether or not
an allowed claim in any such proceeding.
“ Lien ” shall mean any
mortgage, lien, pledge, hypothecation, charge, security interest,
encumbrance or adverse claim of any kind and any restrictive
covenant, condition, restriction or exception of any kind that has
the practical effect of creating a mortgage, lien, pledge,
hypothecation, charge, security interest, encumbrance or adverse
claim of any kind.
“ Proceeds ” means
“proceeds,” as such term is defined in the Uniform
Commercial Code and, in any event, includes, without limitation,
(a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable with respect to any of the Collateral, (b) any and
all payments (in any form whatsoever) made or due and payable from
time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body, authority, bureau or agency
(or any person acting under color of governmental authority), and
(c) any and all other amounts from time to time paid or payable
under, in respect of or in connection with any of the
Collateral.
“ Uniform Commercial Code
” shall mean the Uniform Commercial Code as in effect from
time to time in the State of Texas; provided, that to the extent
that the Uniform Commercial Code is used to define any term herein
and such term is defined differently in different Articles or
Divisions of the Uniform Commercial Code, the definition of such
term contained in Article or Division 9 shall govern.
Section 2. Representations,
Warranties and Covenants of the Company . The
Company represents and warrants to, and covenants with, the Secured
Party as follows:
(a) The
Company has all rights, title and interest to the Collateral and
the power to transfer the Collateral in which it purports to grant
a security interest pursuant to Section 3 hereof (subject,
with respect to after acquired Collateral, to the Company acquiring
the same) and no Lien or licenses exists or will exist upon such
Collateral at any time.
(b) This
Agreement is effective to create in favor of Secured Party a valid
security interest in and Lien upon all of the Company’s
right, title and interest in and to the Collateral, and upon the
filing of appropriate Uniform Commercial Code financing statements
in the jurisdictions listed on Schedule I attached hereto,
such security interest will be a duly perfected first priority
security interest in all of the Collateral.
(c) The
Collateral is a trade secret of the Company and the contents of the
Collateral is not information readily available to the general
public. No other party has the right to use or access
the Collateral.
Section 3. Collateral
. As collateral security for the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise)
of the Liabilities, the Company hereby pledges and grants to the
Secured Party, for the benefit of itself and the Buyers, a Lien on
and security interest in and to all of the Company’s right,
title and interest in all the database listed on Schedule
II.
Section 4. Covenants;
Remedies . In furtherance of the grant of the pledge
and security interest pursuant to Section 3 hereof, the
Company hereby agrees with the Secured Party as follows:
4.1. Delivery and Other
Perfection; Maintenance, etc .
(a)
Documents and Actions . The Company shall give,
execute, deliver, file and/or record any financing statement,
notice, instrument, document, agreement, or other papers that may
be necessary or desirable (in the reasonable judgment of the
Secured Party) to create, preserve, perfect or validate the
security interest granted pursuant hereto or to enable the Secured
Party to exercise and enforce the rights of the Secured Party
hereunder with respect to such pledge and security
interest. Notwithstanding the foregoing, the Company
hereby irrevocably authorizes the Secured Party at any time and
from time to time to file in any filing office in any jurisdiction
any initial financing statements and amendments thereto that (a)
cove the Collateral and (b) contain any other
information required by part 5 of Article 9 of the Uniform
Commercial Code of the State of Delaware or any other State for the
sufficiency or filing office acceptance of any financing statement
or amendment. The Company agrees to furnish any such
information to the Secured Party promptly upon
request. The Company also ratifies its authorization for
the Secured Party to have filed in any jurisdiction any like
initial financing statements or amendments thereto if filed prior
to the date hereof.
4.2 Other Liens
. The Company will not create, permit or suffer to
exist, and will defend the Collateral against and take such other
action as is necessary to remove, any Lien on the Collateral, and
will defend the right, title and interest of the Secured Party in
and to the Collateral and in and to all Proceeds thereof against
the claims and demands of all Persons whatsoever.
4.3 Events of Default, Etc
. During the period during which an Event of Default (as
defined in the Debenture Agreement) shall have occurred and be
continuing:
(a) the
Company shall, at the request of the Secured Party, assemble the
Collateral and make it available to Secured Party at a
place or places designated by the Secured Party which are
reasonably convenient to Secured Party, as applicable;
(b) the
Secured Party may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the
Secured Party shall have all of the rights and remedies with
respect to the Collateral of a Secured Party under the Uniform
Commercial Code (whether or not said Uniform Commercial Code is in
effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a
Secured Party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the maximum
extent permitted by law, to: (i) exercise all voting, consensual
and other powers of ownership pertaining to the Collateral as if
the Secured Party were the sole and absolute owner thereof (and the
Company agrees to take all such action as may be appropriate to
give effect to such right) and (ii) to the appointment of a
receiver or receivers for all or any part of the Collateral,
whether such receivership be incident to a proposed sale or sales
of such Collateral or otherwise and without regard to the value of
the Collateral or the solvency of any person or persons liable for
the payment of the Liabilities secured by such
Collateral. The Company hereby consents to the
appointment of such receiver or receivers, waives any and all
defenses to such appointment and agrees that such appointment shall
in no manner impair, prejudice or otherwise affect the rights of
Secured Party under this Agreement. The Company hereby
expressly waives notice of a hearing for appointment of a receiver
and the necessity for bond or an accounting by the
receiver;
(d) the
Secured Party, in its discretion may, in the name of the Secured
Party or in the name of a the Company or otherwise, demand, sue
for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so;
(f) the
Secured Party may, upon ten (10) Business Days’ prior written
notice to the Company of the time and place (which notice the
Company hereby agree is commercially reasonable notification for
purposes hereof), with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the
possession, custody or control of the Secured Party, sell, lease,
license, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Secured Party deems
best, and for cash or for credit or for future delivery (without
thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any
such disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and cannot be
waived), and the Secured Party or anyone else may be the purchaser,
lessee, licensee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind,
including any right or equity of redemption (statutory or
otherwise), of the Company, any such demand, notice and right or
equity being hereby expressly waived and released. The
Secured Party may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale,
and such sale may be made at any time or place to which the sale
may be so adjourned.
The proceeds of
each collection, sale or other disposition under this Section
4.3 shall be applied in accordance with Section 4.8
hereof.
4.4 Deficiency
. If the proceeds of sale, collection or other
realization
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