Exhibit 10.1
SECURITY AGREEMENT
THIS SECURITY
AGREEMENT , dated this 22
nd
day of September
, 2008 (the “ Agreement ”), made by
PLATINUM INTELLECTUAL PROPERTY, L.P. , a Texas limited
partnership (“ PIP LP ”), with an address at
2777 Stemmons Freeway, Suite 1440, Dallas, Texas 75207, and PRO
OPERATIONS, L.P. , a Texas limited partnership (“ PRO
LP ”), with an address at 2777 Stemmons Freeway, Suite
1440, Dallas, Texas 75207, (collectively on a joint and several
basis, the “ Grantor ”), in favor of ALPINA
LENDING, L.P., a Nevada limited partnership with an address at
7161 S. Eastern Ave., Suite 3A, Las Vegas, Nevada 89119-4675 (the
“ Secured Party ”).
W
I T N
E S S E T H
:
WHEREAS, pursuant to that certain Secured Convertible
Promissory Note dated the date hereof by and between the Grantor
and the Secured Party, as agent on behalf of all Lenders party
thereto (as such Secured Convertible Promissory Note may be further
amended from time to time, the “ Note ”), the
Secured Party, as agent on behalf of all Lenders party to the Note,
has agreed to provide working capital financing to the Grantor in
the original principal amount of up to One Million Five Hundred
Thousand and No/100 Dollars ($1,500,000.00);
WHEREAS, in order to secure any and all amounts due and
owing under the Note, the Grantor has agreed to execute and deliver
to the Secured Party a security agreement providing for the grant
to the Secured Party of a security interest in all of the personal
property of the Grantor; and
WHEREAS, the Grantor has determined that its execution,
delivery and performance of this Agreement directly benefit, and
are within the corporate and limited partnership (as applicable)
purposes and in the best interests of, the Grantor.
NOW, THEREFORE,
in consideration of the foregoing
premises and the mutual representations, warranties, covenants and
undertakings of the parties hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be
legally bound, do agree as follows:
SECTION 1. Definitions
. All terms used in this
Agreement which are defined in the Note and which are not otherwise
defined herein shall have the same meanings herein as set forth
therein.
SECTION 2.
Grant of Security Interest
. To secure the payment and performance in full of all of the
Obligations, the Grantor hereby assigns, mortgages, pledges,
hypothecates, transfers and sets over to the Secured Party, and
grants to the Secured Party a continuing first priority security
interest subject only to Permitted Liens, in all personal and
fixture property of the Grantor, wherever located and whether now
or hereafter existing and whether now owned or hereafter acquired,
of every kind and description, tangible or intangible, to the
fullest extent permitted by the Uniform Commercial Code, as it may
be amended from time to time (as so amended, the “
Code ”) (collectively, the “ Collateral
”), which Collateral includes, without limitation, the
following:
(a) all of the Grantor’s
right, title and interest in and to all goods and equipment of any
kind, wherever located and whether now or hereafter existing and
whether now owned or hereafter acquired and all parts thereof and
accessions thereto, including, without limitation, all equipment,
furnishings, furniture, tools and supplies of every kind and
description and all improvements thereto (any and all such goods,
equipment, parts and accessions being hereinafter referred to
collectively as the “ Goods and Equipment
”);
(b) all of the Grantor’s
right, title and interest in and to all inventory of any kind,
wherever located and whether now or hereafter existing and whether
now owned or hereafter acquired, and all accessions thereto and
products thereof (any and all such inventory, accessions and
products being hereinafter referred to collectively as “
Inventory ”);
(c) all of the Grantor’s
right, title and interest in and to: (i) all accounts,
receivables, rights to receive royalties and license fees, contract
rights, chattel paper, electronic chattel paper, instruments
(including promissory notes), general intangibles as defined in
Tex. Bus. & Com. Code Ann. § 9-101 et seq .,
including, without limitation, general intangibles as defined in
Tex. Bus. & Com. Code Ann. § 9-101 et seq .
that are classified otherwise under Revised Article 9 of the Code,
and other rights or obligations of any kind, whether now or
hereafter existing and whether now owned or hereafter acquired,
arising out of or in connection with the sale or lease of goods or
the rendering of services or otherwise, including, without
limitation, all rights relating to any license or contract to which
the Grantor is a party, including all moneys due from time to time
in respect thereof (any and all such accounts, receivables, rights
to receive royalties and license fees, contract rights, chattel
paper, electronic chattel paper, instruments (including promissory
notes), general intangibles, rights and obligations being
hereinafter referred to collectively as the “
Receivables ”); and (ii) all rights now or
hereafter existing in and to all security agreements, leases and
other contracts, now or hereafter existing in, securing or
otherwise relating to any accounts, receivables, rights to receive
royalties and license fees, contract rights, chattel paper,
electronic chattel paper, instruments (including promissory notes),
general intangibles or obligations (any and all such security
agreements, leases and other contracts being hereinafter referred
to collectively as the “ Related Contracts
”);
(d) all of the Grantor’s
right, title and interest in, to and under its Intellectual
Property Rights (including without limitation those Patents and
Trademarks listed on Schedule I hereto), and including
without limitation all proceeds thereof (such as, by way of example
but not by way of limitation, license royalties and proceeds of
infringement suits), the right to sue for past, present and future
infringements, all rights corresponding thereto throughout the
world and all re-issues, divisions continuations, renewals,
extensions and continuations-in-part thereof;
(e) all of the Grantor’s
right, title and interest in and to all letter-of-credit rights
(whether or not the letter-of-credit is entered by
writing);
(f) all of the Grantor’s
right, title and interest in and to all deposit
accounts;
(g) all of Grantor’s right,
title and interest in and to all securities and all investment
property;
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(h) all of Grantor’s right,
title and interest in and to all commercial tort claims;
and
(i) all proceeds of any and all of
the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not the Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral;
in each case, howsoever the
Grantor’s interest therein may arise or appear (whether by
ownership, license, security interest, claim or
otherwise).
SECTION 3.
Security for the
Obligations . The security interest created hereby in the
Collateral constitutes a continuing collateral security for all of
the Obligations.
SECTION 4.
Representations, Warranties
and Covenants . The Grantor represents, warrants and
covenants (on a joint and several basis to the extent there is more
than one Grantor) to the Secured Party as follows:
(a) PIP LP is a limited partnership
duly formed, validly existing, and in good standing under the laws
of the state of Texas and has the requisite power and authority to
execute and deliver each of this Agreement, the Note and the other
Loan Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. PRO LP is a limited
partnership duly formed, validly existing, and in good standing
under the laws of the state of Texas and has the requisite power
and authority to execute and deliver each of this Agreement, the
Note and the other Loan Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of each of this Agreement, the
Note and the other Loan Documents to which the Grantor is a party
has been duly authorized by all requisite action on its part. Each
of this Agreement, the Note and the other Loan Documents to which
the Grantor is a party has been duly executed and delivered by the
Grantor and constitutes a legal, valid and binding agreement of the
Grantor enforceable in accordance with its terms. The execution,
delivery and performance of each of this Agreement, the Note and
the other Loan Documents to which the Grantor is a party will not
violate any of its organizational documents or any agreement,
indenture or other document to which the Grantor is a party or
under which either it or its assets are bound, or any judgment,
order, injunction or decree or provision of applicable law by which
the Grantor is, or its assets are, bound.
(b) The Grantor is and will be at
all times the owner of the Collateral, free and clear of all Liens,
except for the Lien created by this Agreement and Permitted
Liens.
(c) All Goods and Equipment and
Inventory now existing are located at the location set forth on
Schedule II of this Agreement. The Grantor’s chief
place of business and chief executive office, the place where the
Grantor keeps its records concerning Receivables and all originals
of all chattel paper which constitute Receivables and of the
Related Contracts are located at 2777 Stemmons Freeway, Suite 1440,
Dallas, Texas 75207. Set forth on Schedule II hereto is a
complete and correct list of each trade name used by the
Grantor.
(d) The exercise by the Secured
Party of its rights and remedies hereunder will not contravene law
or any contractual restriction binding on or affecting the Grantor
or any of its properties and will not result in or require the
creation of any Lien upon or with respect to any of its
properties.
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(e) No authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or other regulatory body is required for: (i) the
grant by the Grantor, or the perfection, of the security interest
purported to be created hereby in the Collateral; or (ii) the
exercise by the Secured Party of any of its rights and remedies
hereunder, except for the filing under the Code of the financing
statements with the filing office listed in Schedule III
hereto (the “ Financing Statements ”), all of
which Financing Statements have been duly filed and are in full
force and effect, including all necessary filings with the United
States Patent and Trademark Office.
(f) This Agreement creates a valid
security interest in favor of the Secured Party in the Collateral
as security for the Obligations. Such security interest is, or in
the case of Collateral in which the Grantor obtains rights after
the date hereof will be, a perfected security interest subject to
no other prior Lien other than for Permitted Liens. All action
necessary or desirable to perfect and protect such security
interest has been duly taken.
(g) The Grantor hereby agrees to
notify the Secured Party of the occurrence of an Event of Default
in accordance with the Note.
SECTION 5.
Covenants as to the
Collateral . So long as any of the Obligations shall remain
outstanding, unless the Secured Party shall otherwise consent in
writing:
(a) Further Assurances . The
Grantor will at its expense, at any time and from time to time,
promptly execute and deliver all further instruments and documents
and take all further action that may be necessary or desirable or
that the Secured Party may reasonably request in order: (i) to
perfect and protect the security interest purported to be created
hereby; (ii) to enable the Secured Party to exercise and
enforce its rights and remedies hereunder in respect of the
Collateral; or (iii) to otherwise effect the purposes of this
Agreement, including, without limitation: (A) executing and
filing such financing or continuation statements, or amendments
thereto, as may be necessary or desirable or that the Secured Party
may reasonably request in order to perfect and preserve the
security interest purported to be created hereby; and
(B) promptly furnishing to the Secured Party from time to time
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral
as the Secured Party may reasonably request, all in reasonable
detail.
(b) Location of Goods and
Equipment and Inventory; Grantor’s Legal Status . The
Grantor will not keep Inventory (other than goods in transit),
Goods and Equipment or records with respect to Receivables and the
Related Contracts in any state in which financing statements have
not theretofore been filed in a manner sufficient to perfect under
the Code of such state the security interests in such Inventory,
Goods and Equipment, Receivables and the Related Contracts granted
hereby. The Grantor will provide the Secured Party thirty
(30) days prior written notice of any change in the
Grantor’s name, identity (including organizational
identification number if it has one or later obtains one), chief
place of business, chief executive office, type of organization,
jurisdiction of organization or other legal structure, which might
make any financing statement filed thereunder misleading, and prior
to such change Grantor will have presented to the Secured Party
evidence satisfactory to it of the filing of all amendments to
financing statements and all additional financing statements
necessary to maintain the security interests granted hereunder at
all times.
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(c) Condition of Goods and
Equipment . The Grantor will cause the Collateral to be
maintained and preserved in the same condition, repair and working
order as when acquired, reasonable wear and tear excepted, and in
accordance with any manufacturer’s manual, and will
forthwith, or in the case of any loss or damage to any of the
Collateral as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or
desirable or that the Secured Party may reasonably request to such
end. The Grantor will promptly furnish to the Secured Party a
statement respecting any loss or damage to any of the
Collateral.
(d) Taxes . The Grantor will
pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, or incurred in
connection with the use or operation of, and all claims (including,
without limitation, claims for labor, materials and supplies)
against, the Collateral, except to the extent the validity thereof
is being contested in good faith by proper proceedings which stay
the imposition of any penalty, fine or lien resulting from the
non-payment thereof and with respect to which adequate reserves
have been set aside for the payment thereof.
(e) Insurance . The Grantor
will, at its own expense, maintain insurance in accordance with the
Note. The Grantor will, if so requested by the Secured Party,
deliver to the Secured Party original or duplicate policies of such
insurance and, as often as the Secured Party may reasonably
request, a report of a reputable insurance broker with respect to
such insurance.
(f) Provisions Concerning the
Receivables and the Related Contracts .
(i) The Grantor will:
(A) maintain its chief executive office in the continental
United States; (B) keep all originals of all chattel paper
which constitute Receivables at its chief executive office;
(C) keep adequate records concerning the Receivables and such
chattel paper and permit representatives of the Secured Party at
any time during normal business hours to inspect and make abstracts
from such records and chattel paper; and (D) not change the
current bank account to which the Receivables are paid without the
approval of the Secured Party.
(ii) The Grantor will duly perform
and observe all of its material obligations under each Related
Contract and, except as otherwise provided in this subsection (f),
continue to collect, at its own expense, all amounts due or to
become due under the Receivables. In connection with such
collections, the Grantor may (and, at the Secured Party’s
direction, will) take such action as the Grantor or the Secured
Party may deem reasonably necessary or advisable to enforce
collection or performance of the Receivables; provided ,
however , that the Secured Party shall have the right at any
time, upon the occurrence and during the continuance of an Event of
Default: (x) to notify the account
