Exhibit 10.3
 
 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT (this “Agreement”), dated as of July 26, 2019, is made
by and among ENDRA Life Sciences Inc., a Delaware corporation (the “Grantor”),
and the secured parties listed on the signature pages hereof (collectively, the
“Secured Parties” and each, individually, a “Secured Party”).
 
RECITALS
 
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated of even
date herewith (as may be amended, restated, supplemented, or otherwise modified
from time to time, including all schedules and exhibits thereto, collectively,
the “Securities Purchase Agreement”), by and among the Grantor and each of the
Secured Parties, Grantor has agreed to sell, and each of the Secured Parties
have each agreed to purchase, severally and not jointly, certain Notes; and
 
WHEREAS, in order to induce the Secured Parties to purchase, severally and not
jointly, the Notes as provided for in the Securities Purchase Agreement, Grantor
has agreed to grant a continuing security interest in and to the Collateral in
order to secure the prompt and complete payment, observance and performance of
the Secured Obligations (as defined below).
 
AGREEMENTS
 
NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
 
1. Defined Terms. All capitalized terms used herein (including in the preamble
and recitals hereof) without definition shall have the meanings ascribed thereto
in the Notes. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein or in the Notes; provided, however, if the Code is used to define any
term used herein and if such term is defined differently in different Articles
of the Code, the definition of such term contained in Article 9 of the Code
shall govern. In addition to those terms defined elsewhere in this Agreement, as
used in this Agreement, the following terms shall have the following meanings:
 
(a) “Account” means an “account” (as that term is defined in Article 9 of the
Code).
 
(b) “Account Debtor” means an “account debtor” (as that term is defined in
Article 9 of the Code).
 
(c) “Bankruptcy Code” means title 11 of the United States Code, as in effect
from time to time.
 
 
 

 
 
(d) “Books” means books and records (including, without limitation, the
Grantor’s Records) indicating, summarizing, or evidencing the Grantor’s assets
(including the Collateral) or liabilities, the Grantor’s Records relating to its
business operations (including, without limitation, stock ledgers) or financial
condition, and the Grantor’s goods or General Intangibles related to such
information.
 
(e) “Chattel Paper” means “chattel paper” (as that term is defined in Article 9
of the Code) and includes tangible chattel paper and electronic chattel paper.
 
(f) “Code” means the New York Uniform Commercial Code, as in effect from time to
time; provided, however, in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, priority, or remedies with
respect to any Secured Party’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority, or remedies.
 
(g) “Collateral” has the meaning set forth in Section 2.
 
(h) “Commencement Notice” means a written notice, given by any Secured Party to
the other Secured Parties in accordance with the notice provisions set forth in
the Securities Purchase Agreement, pursuant to which such Secured Party notifies
the other Secured Parties of the existence of one or more Events of Default and
of such Secured Party’s intent to commence the exercise of one or more of the
remedies provided for under this Agreement with respect to all or any portion of
the Collateral as a consequence thereof, which notice shall incorporate a
reasonably detailed description of each Event of Default then existing and of
the remedial action proposed to be taken.
 
(i) “Commercial Tort Claims” means “commercial tort claims” (as that term is
defined in Article 9 of the Code), and includes those commercial tort claims
listed on Schedule 1 attached hereto.
 
(j) “Equipment” means all “equipment” (as that term is defined in Article 9 of
the Code) in all of its forms of the Grantor, wherever located, and including,
without limitation, all machinery, apparatus, installation facilities and other
tangible personal property, and all parts thereof and all accessions, additions,
attachments, improvements, substitutions, replacements and proceeds thereto and
therefor.
 
(k) “Copyrights” means all copyrights and copyright registrations, and also
includes (i) all reissues, continuations, extensions or renewals thereof, (ii)
all income, royalties, damages and payments now and hereafter due or payable
under and with respect thereto, including payments under all licenses entered
into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (iii) the right to sue for past, present and
future infringements and dilutions thereof, (iv) the goodwill of Grantor’s
business symbolized by the foregoing or connected therewith, and (v) all of
Grantor’s rights corresponding thereto throughout the world.
 
 
 
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(l) “Event of Default” has the meaning set forth in the Notes.
 
(m) “GAAP” means United States generally accepted accounting principles,
consistently applied.
 
(n) “General Intangibles” means “general intangibles” (as that term is defined
in Article 9 of the Code) and, in any event, includes payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes,
or regulations, choses or things in action, goodwill, programming materials,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment under any royalty or licensing agreements
(including Intellectual Property Licenses), infringement claims, commercial
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, pension plan refunds, pension plan refund claims,
insurance premium rebates, tax refunds, and tax refund claims, interests in a
partnership or limited liability company which do not constitute a security
under Article 8 of the Code, and any other personal property other than
Commercial Tort Claims, money, Accounts, Chattel Paper, goods, Negotiable
Collateral, and oil, gas, or other minerals before extraction.
 
(o) “Governmental Authority” means any domestic or foreign federal, state,
local, or other governmental or administrative body, instrumentality, board,
department, or agency or any court, tribunal, administrative hearing body,
arbitration panel, commission, or other similar dispute-resolving panel or body.
 
(p) “Insolvency Proceeding” means any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any other state or
federal bankruptcy or insolvency law or any equivalent laws in any other
jurisdiction, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.
 
(q) “Intellectual Property” means Patents, Copyrights, Trademarks, the goodwill
associated with such Trademarks, trade secrets and customer lists, and
Intellectual Property Licenses.
 
(r) “Intellectual Property Licenses” means rights under or interests in any
patent, trademark, copyright or other intellectual property, including software
license agreements with any other party, whether the applicable Grantor is a
licensee or licensor under any such license agreement, as may be amended,
restated, supplemented, or otherwise modified from time to time.
 
(s)  “Inventory” means all “inventory” (as that term is defined in Article 9 of
the Code) in all of its forms of the Grantor, wherever located, including,
without limitation, (i) all goods in which the Grantor has an interest in mass
or a joint or other interest or right of any kind (including goods in which the
Grantor has an interest or right as consignee), and (ii) all goods which are
returned to or repossessed by the Grantor, and all accessions thereto, products
thereof and documents therefor.
 
 
 
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(t) “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment
for security, security interest, encumbrance, levy, lien or charge of any kind.
 
(u) “Negotiable Collateral” means letters of credit, letter-of-credit rights,
instruments, promissory notes, drafts, and documents.
 
(v) “New Subsidiary” has the meaning set forth in the Notes.
 
(w) “Notes” has the meaning set forth in the Securities Purchase Agreement.
 
(x) “Patents” means all patents and patent applications, and also includes (i)
all renewals thereof, (ii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (iii) the right to sue
for past, present and future infringements and dilutions thereof, and (iv) all
of Grantor’s rights corresponding thereto throughout the world.
 
(y)  “Permitted Liens” (i) any Lien for taxes not yet due or delinquent or being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP, (ii) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent or that is being contested in good
faith for which adequate reserves have been established in accordance with GAAP,
(iii) any Lien created by operation of law, such as materialmen’s liens,
mechanics’ liens and other similar liens, arising in the ordinary course of
business with respect to a liability that is not yet due or delinquent or that
is being contested in good faith by appropriate proceedings, (iv) Liens on
Equipment having a fair market value of not more than $450,000 in the aggregate,
but only if the lien constitutes a purchase money security interest incurred in
connection with the purchase of such Equipment, and (v) Liens securing the
Company’s obligations under the Transaction Documents.
 
(z) “Permitted Secured Party” means, with respect to the exercise of any remedy
provided for under this Agreement, (A) any Secured Party that has delivered a
Commencement Notice with respect to the exercise of such remedy to the other
Secured Parties and has not received a Veto Notice with respect thereto within
the Veto Period or (B) any Significant Secured Party that has in connection with
a Commencement Notice delivered a Veto Notice to a Secured Party within the Veto
Period; provided, however, there shall only be a single Permitted Secured Party
that may exercise any specific remedy at any one time (it being agreed that if a
Commencement Notice is delivered by more than one Secured Party with respect to
any remedy provided for under this Agreement, then the first Secured Party to
deliver a Commencement Notice and not receive a Veto Notice within the Veto
Period shall be the only Secured Party that may exercise such remedy).
 
 
 
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(aa) “Permitted Transfers” means (i) sales of Inventory in the ordinary course
of business, (ii) licenses for the use of Intellectual Property in the ordinary
course of business that could not result in a legal transfer of title of the
licensed property, or (iii) dispositions of worn-out, obsolete or surplus
Equipment at fair market value in the ordinary course of business.
 
(bb) “Person” has the meaning set forth in the Securities Purchase Agreement.
 
(cc) “Proceeds” has the meaning set forth in Section 2.
 
(dd) “Real Property” means any estates or interests in real property now owned
or hereafter acquired by Grantor and the improvements thereto.
 
(ee) “Records” means information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in perceivable
form.
 
(ff) “Secured Obligations” means all of the present and future payment and
performance obligations of Grantor arising under this Agreement, the Notes and
the other Transaction Documents, including, without duplication, reasonable
outside attorneys’ fees and out-of-pocket expenses and any interest, fees, or
expenses that accrue after the filing of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding.
 
(gg) “Security Documents” means, collectively, this Agreement and each other
security agreement, control agreement pledge agreement, assignment, mortgage,
security deed, deed of trust, and other agreement or document executed and
delivered by the Grantor as security for any of the Secured Obligations, as each
may be amended, restated, supplemented, or otherwise modified from time to time.
 
(hh) “Security Interest” and “Security Interests” have the meanings set forth in
Section 2.
 
(ii) “Significant Secured Party” means, on any date of determination, one or
more Secured Parties holding alone or in the aggregate fifteen percent (15%) or
more of the aggregate principal amount of Notes outstanding on such date.
 
(jj) “Supporting Obligations” means “supporting obligations” (as such term is
defined in Article 9 of the Code).
 
(kk) “Trademarks” means all trademarks, trade names, trademark applications,
service marks, service mark applications, and also includes (i) all renewals
thereof, (ii) all income, royalties, damages and payments now and hereafter due
or payable under and with respect thereto, including payments under all licenses
entered into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (iii) the right to sue for past, present and
future infringements and dilutions thereof, (iv) the goodwill of Grantor’s
business symbolized by the foregoing or connected therewith, and (v) all of
Grantor’s rights corresponding thereto throughout the world.
 
 
 
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(ll) “Transaction Documents” has the meaning set forth in the Securities
Purchase Agreement.
 
(mm) “URL” means “uniform resource locator,” an internet web address.
 
(nn) “Veto Notice” means, with respect to any Commencement Notice, a written
notice given by any Significant Secured Party to the other Secured Parties in
accordance with the notice provisions set forth in the Securities Purchase
Agreement pursuant to which such Significant Secured Party notifies the other
Secured Parties of its objection to the commencement of the remedial action
specified in such Commencement Notice and certifies that, to the best of its
knowledge, it is a Significant Secured Party.
 
(oo)  “Veto Period” means, with respect to any Commencement Notice, the period
of ten (10) consecutive calendar days following the delivery of such
Commencement Notice to the Secured Parties.
 
2. Grant of Security. The Grantor hereby unconditionally grants, assigns, and
pledges to each Secured Party a separate, continuing security interest (each, a
“Security Interest” and, collectively, the “Security Interests”) in all assets
of the Grantor whether now owned or hereafter acquired or arising and wherever
located (collectively, the “Collateral”), including, without limitation, the
Grantor’s right, title, and interest in and to the following, whether now owned
or hereafter acquired or arising and wherever located:
 
(a) Accounts;
 
(b) Books;
 
(c) Chattel Paper;
 
(d) Equipment and fixtures;
 
(e) General Intangibles;
 
(f) Intellectual Property;
 
(g) Inventory;
 
(h) Negotiable Collateral;
 
(i) Real Property;
 
(j) rights in respect of Supporting Obligations;
 
(k) Commercial Tort Claims;
 
(l) all of the Grantor’s money, cash, cash equivalents, or other assets of the
Grantor that now or hereafter come into the possession, custody, or control of
any Secured Party; and
 
 
 
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(m) all of the proceeds and products, whether tangible or intangible, of any of
the foregoing, including proceeds of insurance or Commercial Tort Claims
covering or relating to any or all of the foregoing, and any and all Accounts,
Books, Chattel Paper, Equipment, General Intangibles, Intellectual Property,
Inventory, Negotiable Collateral, Real Estate, Supporting Obligations, money, or
other tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds
of any award in condemnation with respect to any of the foregoing, any rebates
or refunds, whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”).
 
3. Security for Obligations. This Agreement and the Security Interests created
hereby secures the payment and performance of the Secured Obligations, whether
now existing or arising hereafter.
 
4. Grantor Remains Liable. Anything herein to the contrary notwithstanding, (a)
the Grantor shall remain liable under the contracts and agreements included in
the Collateral, to perform all of the duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by
Secured Parties, or any of them, of any of the rights hereunder shall not
release the Grantor from any of its duties or obligations under such contracts
and agreements included in the Collateral, and (c) no Secured Party shall have
any obligation or liability under such contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder. Until
an Event of Default shall occur and be continuing, except as otherwise provided
in this Agreement or any other Transaction Document, the Grantor shall have the
right to possession and enjoyment of the Collateral for the purpose of
conducting the ordinary course of its businesses, subject to and upon the terms
hereof and the other Transaction Documents.
 
5. Representations and Warranties. The Grantor hereby represents and warrants as
follows:
 
(a) The exact legal name of the Grantor is set forth in the preamble this
Agreement.
 
(b) Schedule 2 attached hereto sets forth (i) all Real Property owned or leased
by the Grantor, together with all other locations of Collateral, as of the date
hereof, and (ii) the chief executive office of the Grantor as of the date
hereof.
 
(c) This Agreement creates a valid security interest in all of the Collateral of
the Grantor, to the extent a security interest therein can be created under the
Code, securing the payment of the Secured Obligations. Except to the extent a
security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary to
perfect such security interest have been duly taken or will have been taken upon
the filing of financing statements listing the Grantor, as a debtor, and Secured
Parties, as secured parties, in the jurisdictions listed on Schedule 3 attached
hereto. Upon the making of such filings, Secured Parties shall each have a first
priority perfected security interest in all of the Collateral of the Grantor to
the extent such security interest can be perfected by the filing of a financing
statement.
 
 
 
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(d) Except for the Security Interests created hereby, no Collateral is subject
to any Lien as of the date hereof other than Permitted Liens.
 
(e) No consent, approval, authorization, or other order or other action by, and
no notice to or filing with, any Governmental Authority or any other Person is
required for the grant of a Security Interest by the Grantor in and to the
Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by the Grantor.
 
6. Covenants. The Grantor covenants and agrees with each Secured Party that from
and after the date of this Agreement and until the date of termination of this
Agreement in accordance with Section 22 hereof:
 
(a) Possession of Collateral. In the event that any Collateral with a value in
excess of $50,000 individually or $200,000 in the aggregate, including proceeds,
is evidenced by or consists of Negotiable Collateral or Chattel Paper, and if
and to the extent that perfection or priority of Secured Parties’ respective
Security Interests is dependent on or enhanced by possession, the Grantor,
immediately upon the written request of any Secured Party, shall execute such
other documents and instruments as shall be requested by such Secured Party or,
if applicable, endorse and deliver physical possession of such Negotiable
Collateral or Chattel Paper to such Secured Party, together with such undated
powers endorsed in blank as shall be requested by such Secured Party.
 
(b) Chattel Paper.
 
(i) The Grantor shall take all steps reasonably necessary to grant each Secured
Party control of all Chattel Paper in accordance with the Code and with respect
to any electronic Chattel Paper having an aggregate value or face amount in
excess of $50,000 all “transferable records” as that term is defined in Section
16 of the Uniform Electronic Transactions Act and Section 201 of the federal
Electronic Signatures in Global and National Commerce Act as in effect in any
relevant jurisdiction; and
 
(ii) If the Grantor retains possession of any Chattel Paper or instruments
(which retention of possession shall be subject to the extent permitted hereby
and by the Securities Purchase Agreement), promptly upon the written request of
any Secured Party, such Chattel Paper and instruments shall be marked with the
following legend: “This writing and the obligations evidenced or secured hereby
are subject to the Security Interests of [names of Secured Parties].”
 
(c) Letter-of-Credit Rights. In the event that the Grantor is or becomes the
beneficiary of one or more letters of credit with a face amount of greater than
$50,000 individually or $100,000 in the aggregate, the Grantor shall promptly
(and in any event within five (5) Business Days after becoming a beneficiary)
notify the Secured Parties thereof and, upon the request by any Secured Party,
enter into a multi-party agreement with the Secured Parties and the issuing or
confirming bank with respect to letter-of-credit rights assigning such
letter-of-credit rights to the Secured Parties and directing all payments
thereunder to the Secured Parties, all in form and substance satisfactory to the
Secured Parties.
 
 
 
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(d) Commercial Tort Claims. The Grantor shall promptly (and in any event within
five (5) Business Days of receipt thereof) notify the Secured Parties in writing
upon incurring or otherwise obtaining a Commercial Tort Claim having a value or
involving an asserted claim, in excess of $50,000 in the aggregate after the
date hereof and, upon the written request of any Secured Party, promptly amend
Schedule 1 to this Agreement to describe such after-acquired Commercial Tort
Claim in a manner that reasonably identifies such Commercial Tort Claim, and
hereby authorizes the filing of additional financing statements or amendments to
existing financing statements describing such Commercial Tort Claims, and agrees
to do such other acts or things deemed necessary by any Secured Party to give
the Secured Parties a first priority, perfected security interest (subject to
Permitted Liens) in any such Commercial Tort Claim.
 
(e) Transfers and Other Liens. The Grantor shall not (i) sell, lease, license,
assign (by operation of law or otherwise), transfer or otherwise dispose of, or
grant any option with respect to, any of the Collateral, except for Permitted
Transfers or as expressly permitted by this Agreement and the other Transaction
Documents, or (ii) except for Permitted Liens, create or permit to exist any
Lien upon or with respect to any of the Collateral without the consent of
Secured Parties holding at least a majority of the aggregate principal amount of
the then outstanding Notes. The inclusion of Proceeds in the Collateral shall
not be deemed to constitute consent by any Secured Party to any sale or other
disposition of any of the Collateral except as expressly permitted in this
Agreement or the other Transaction Documents.
 
(f) Preservation of Existence.  The Grantor shall maintain and preserve its
existence, rights and privileges, and become or remain duly qualified and in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary.
 
(g) Maintenance of Properties. The Grantor shall maintain and preserve all of
its properties which are necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and comply at all times with the provisions of all leases to which it is a party
as lessee or under which it occupies property, so as to prevent any loss or
forfeiture thereof or thereunder.
 
(h) Maintenance of Insurance. The Grantor shall maintain insurance with
responsible and reputable insurance companies or associations (including,
without limitation, comprehensive general liability, property, hazard, rent and
business interruption insurance) with respect to all of its assets and
properties (including, without limitation, all real properties leased or owned
by it and any and all Inventory and Equipment) and business, in such amounts and
covering such risks as is required by any governmental authority having
jurisdiction with respect thereto or as is carried generally in accordance with
sound business practice by companies in similar businesses similarly situated,
in each case, reasonably acceptable to the Secured Parties.
 
 
 
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(i) Other Actions as to Any and All Collateral. The Grantor shall promptly and
in any event within five (5) Business Days (or such longer period as agreed to
by the Secured Parties, in their reasonable discretion) of (i) acquiring or
otherwise obtaining any Collateral after the date hereof consisting of Chattel
Paper (electronic, tangible or otherwise), documents (as defined in Article 9 of
the Code), promissory notes (as defined in the Code) or instruments (as defined
in the Code) or (ii) any amount payable under or in connection with any of the
Collateral being or becoming evidenced after the date hereof by any Chattel
Paper, documents, promissory notes, or instruments and, in each such case, of
clauses (i) and (ii) above, having an aggregate value with respect to Collateral
of the same type or an individual value (or face amount) in excess of $50,000
and, upon the written request of any Secured Party, promptly execute such other
documents, or if applicable, deliver such Chattel Paper and do such other acts
or things reasonably requested by any Secured Party to protect the Secured
Parties’ respective Security Interests therein.
 
7. Relation to Other Transaction Documents. In the event of any conflict between
any provision in this Agreement and any provision in the Securities Purchase
Agreement or Notes, such provision of the Securities Purchase Agreement or Notes
shall control, except to the extent the applicable provision in this Agreement
is more restrictive with respect to the rights of the Grantor or imposes more
burdensome or additional obligations on the Grantor, in which event the
applicable provision in this Agreement shall control.
 
8. Further Assurances.
 
(a) The Grantor agrees that from time to time, at its own expense, it will
promptly execute and deliver all further instruments and documents, and take all
further action, that any Secured Party may reasonably request, in order to
perfect and protect the Security Interests granted or purported to be granted
hereby or to enable any Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral; provided, however, in
no event shall the Grantor be required to take any action to perfect a Security
Interest in any Collateral represented by a certificate of title.
 
(b) The Grantor authorizes the filing by any Secured Party of financing or
continuation statements, or amendments thereto, including, but limited to, the
recordation of the security interests granted hereunder in Patents, Trademarks
and Copyrights in the United States Patent and Trademark Office and the United
States Copyright Office, and Grantor will execute and deliver to such Secured
Party such other instruments or notices, as may be necessary or as such Secured
Party may reasonably request, in order to perfect and preserve the Security
Interests granted or purported to be granted hereby. Upon the Satisfaction in
Full of the Secured Obligations, Grantor shall be authorized to (at Grantor’s
expense) file a termination statement and/or other necessary documents
terminating and releasing any and all financing statements or Liens on the
Collateral pursuant to Section 22.
 
 
 
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(c) The Grantor authorizes any Secured Party at any time and from time to time
to file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all real and personal property of
debtor” or “all assets of debtor” or words of similar effect, (ii) describing
the Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance. The Grantor also hereby
ratifies any and all financing statements or amendments previously filed by any
Secured Party in any jurisdiction. Upon the Satisfaction in Full of the Secured
Obligations, each Secured Party shall (at Grantor’s expense) file a termination
statement and/or other necessary documents terminating and releasing any and all
financing statements or Liens on the Collateral pursuant to Section 22 within
five (5) Business Days following a written request therefor from Grantor.
 
(d) The Grantor acknowledges that except as provided pursuant to clause (b)
above it is not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement filed in
connection with this Agreement without the prior written consent of each Secured
Party affected thereby, subject to the Grantor’s rights under Section
9-509(d)(2) of the Code.
 
(e) Upon one (1) Business Day (or such longer period as agreed to by the Secured
Parties, in their reasonable discretion) advance notice, the Grantor shall
permit each Secured Party or its employees, accountants, attorneys or agents,
access to examine and inspect any Collateral or any other property of the
Grantor at any time during ordinary business hours, at such Secured Party’s
expense.
 
9. Secured Parties’ Right to Perform Contracts, Exercise Rights, etc. Upon the
occurrence and during the continuance of an Event of Default, any Secured Party
may proceed to perform any and all of the obligations of the Grantor contained
in any contract, lease, or other agreement and exercise any and all rights of
the Grantor therein contained as fully as the Grantor itself could.
 
10. Secured Parties Appointed Attorney-in-Fact. The Grantor, on behalf of itself
and each New Subsidiary of the Grantor, hereby irrevocably appoints each Secured
Party as the attorney-in-fact of the Grantor and each such New Subsidiary upon
the occurrence and during the continuance of an Event of Default. In the event
the Grantor or any New Subsidiary fails to execute or deliver in a timely manner
any Transaction Document or other agreement, document, certificate or instrument
which the Grantor or New Subsidiary now or at any time hereafter is required to
execute or deliver pursuant to the terms of the Securities Purchase Agreement or
any other Transaction Document, upon the occurrence and during the continuance
of an Event of Default and after advance written notice to the Grantor, each
Secured Party shall have full authority in the place and stead of the Grantor or
New Subsidiary, and in the name of the Grantor, such New Subsidiary or
otherwise, to execute and deliver each of the foregoing. Without limitation of
the foregoing, upon the occurrence and during the continuance of an Event of
Default, each Secured Party shall have full authority in the place and stead of
the Grantor and each New Subsidiary, and in the name of any the Grantor, any
such New Subsidiary or otherwise, to take any action and to execute any
instrument which such Secured Party may reasonably deem necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation:
 
 
 
-11-

 
 
(a) to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in connection
with any Collateral of the Grantor or New Subsidiary;
 
(b) to receive and open all mail addressed to the Grantor or New Subsidiary and
to notify postal authorities to change the address for the delivery of mail to
the Grantor or New Subsidiary to that of such Secured Party (provided such
Secured Party shall promptly provide a copy of all such mail to the Grantor);
 
(c) to receive, indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;
 
(d) to file any claims or take any action or institute any proceedings which
such Secured Party may deem necessary for the collection of any of the
Collateral of the Grantor or New Subsidiary or otherwise to enforce the rights
of any Secured Party with respect to any of the Collateral; and
 
(e) to use any labels, patents, trademarks, trade names, URLs, domain names,
industrial designs, copyrights, customer lists, advertising matter or other
industrial or intellectual property rights, in advertising for the exclusive
purpose of sale and selling Inventory and other Collateral and to collect any
amounts due under Accounts, contracts or Negotiable Collateral of the Grantor or
New Subsidiary.
 
To the extent permitted by law, the Grantor hereby ratifies, for itself and each
New Subsidiary, all that such attorney-in-fact shall lawfully do or cause to be
done by virtue hereof. Such power-of-attorney granted pursuant to this Section
10 is coupled with an interest and shall be irrevocable until this Agreement is
terminated.
 
11. Secured Parties May Perform. If the Grantor fails to perform any agreement
contained herein, upon the occurrence and during the continuance of an Event of
Default, after advance written notice to the Grantor, any Secured Party may
itself perform, or cause performance of, such agreement, and the reasonable
out-of-pocket expenses of such Secured Party incurred in connection therewith
shall be payable by the Grantor.
 
 
 
-12-

 
 
12. Secured Parties’ Duties; Bailee for Perfection. The powers conferred on the
Secured Parties hereunder are solely to protect the Secured Parties’ respective
interests in the Collateral and shall not impose any duty upon any Secured Party
in favor of the Grantor or any other Secured Party to exercise any such powers.
Except for the safe custody of any Collateral in its actual possession and the
accounting for moneys actually received by it hereunder and except as provided
in the Code, no Secured Party shall have any duty to the Grantor or any other
Secured Party as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. A Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its actual possession if such
Collateral is accorded treatment substantially equal to that which such Secured
Party accords its own property. Each Secured Party agrees that, with respect to
any Collateral at any time or times in its possession and in which any other
Secured Party has a Lien, the Secured Party in possession of any such Collateral
shall be the bailee of each other Secured Party solely for purposes of
perfecting (to the extent not otherwise perfected) each other Secured Party’s
Lien in such Collateral, provided that no Secured Party shall be obligated to
obtain or retain possession of any such Collateral. Without limiting the
generality of the foregoing, the Secured Parties and the Grantor hereby agree
that any Secured Party that is in possession of any Collateral at such time as
the Secured Obligations owing to such Secured Party have been paid in full may
re-deliver such Collateral to the Grantor or, if requested by any Secured Party
prior to such re-delivery, may deliver such Collateral (unless otherwise
restricted by applicable law or court order and subject in all events to the
receipt of an indemnification of all liabilities arising from such delivery) to
the requesting Secured Party, without recourse to or representation or warranty
by the Secured Party in such possession.
 
13. Collection of Accounts, General Intangibles and Negotiable Collateral. At
any time upon the occurrence and during the continuation of an Event of Default,
any Secured Party may, following delivery of advance written notice to the
Grantor, (a) notify Account Debtors of the Grantor that the Accounts, General
Intangibles, Chattel Paper or Negotiable Collateral have been assigned to such
Secured Party or that such Secured Party has a security interest therein, and
(b) collect the Accounts, General Intangibles and Negotiable Collateral
directly, and any collection costs and expenses shall constitute part of the
Secured Obligations.
 
14. Remedies. Upon the occurrence and during the continuance of an Event of
Default:
 
(a) Any Secured Party may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein, in the other Transaction
Documents, or otherwise available to it, all the rights and remedies of a
secured party on default under the Code or any other applicable law. Without
limiting the generality of the foregoing, the Grantor expressly agrees that, in
any such event, any Secured Party without any demand, advertisement, or notice
of any kind (except a notice specified below of time and place of public or
private sale) to or upon the Grantor or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the Code or by any other applicable law), may take immediate
possession of all or any portion of the Collateral and (i) require the Grantor
to, and the Grantor hereby agrees that it will at its own expense and upon
request of such Secured Party forthwith, assemble all or part of the Collateral
as directed by such Secured Party and make it available to such Secured Party at
one or more locations of the Grantor, and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of such Secured Party’s offices or elsewhere,
for cash, on credit, and upon such other terms as such Secured Party may deem
commercially reasonable. The Grantor agrees that, to the extent notice of sale
shall be required by law, at least 10 days’ notice of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification and specifically such notice shall constitute
a reasonable “authenticated notification of disposition” within the meaning of
Section 9-611 of the Code. No Secured Party shall be obligated to make any sale
of Collateral regardless of notice of sale having been given. Any Secured Party
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
 
 
 
-13-

 
 
(b) Any cash held by any Secured Party as Collateral and all proceeds received
by any Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against the
Secured Obligations in the order set forth in Section 15 hereof. In the event
the proceeds of Collateral are insufficient for the Satisfaction in Full of the
Secured Obligations (as defined below), the Grantor shall remain jointly and
severally liable for any such deficiency.
 
(c) The Grantor hereby acknowledges that the Secured Obligations arose out of a
commercial transaction, and agrees that if an Event of Default shall occur and
be continuing any Secured Party shall have the right to an immediate writ of
possession without notice of a hearing. Each Secured Party shall have the right
to the appointment of a receiver for the properties and assets of the Grantor,
and the Grantor hereby consents to such rights and such appointment and hereby
waives any objection it may have thereto or the right to have a bond or other
security posted by any Secured Party.
 
(d) Notwithstanding anything in this Agreement to the contrary, each Secured
Party agrees that it will not exercise any remedy provided for under this
Agreement with respect to all or any portion of the Collateral unless such
Secured Party is a Permitted Secured Party (provided that the foregoing shall
not prevent any Secured Party from commencing or participating in any Insolvency
Proceeding or taking any action (other than with respect to the Collateral) to
enforce the payment or performance of the Grantor’s obligations under any of the
Notes or other Transaction Documents). This Section 14(d) is not intended to
confer any rights or benefits upon the Grantor or any other Person except
Secured Parties, and no Person (including the Grantor) other than the Secured
Parties shall have any right to enforce any of the provisions of this Section
14(d). As between the Grantor and any Secured Party, any action that such
Secured Party may take under this Agreement shall be conclusively presumed to
have been authorized and approved by the other Secured Parties.
 
(e) Each Secured Party may, in addition to other rights and remedies provided
for herein, in the other Transaction Documents, or otherwise available to it
under applicable law and without the requirement of notice to or upon the
Grantor or any other Person (which notice is hereby expressly waived to the
maximum extent permitted by the Code or any other applicable law).
 
15. Priority of Liens; Application of Proceeds of Collateral. Each Secured Party
hereby acknowledges and agrees that, notwithstanding the time or order of the
filing of any financing statement or other registration or document with respect
to the Collateral and the Security Interests, or any provision of this
Agreement, any other Security Document, the Code or other applicable law, solely
as amongst the Secured Parties, the separate Security Interests of the Secured
Parties shall have the same rank and priority; provided, that, the foregoing
shall not apply to any Security Interest of a Secured Party that is void or
voidable as a matter of law. In furtherance thereof, all proceeds of Collateral
received by any Secured Party shall be applied as follows:
 
 
 
-14-

 
 
(a)           first, ratably to pay any expenses due to any of the Secured
Parties (including, without limitation, the reasonable costs and out-of-pocket
expenses paid or incurred by any Secured Party to correct any default under or
enforce any provision of the Transaction Documents, or after the occurrence of
any Event of Default in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or advertising to
sell the Collateral, or any portion thereof, irrespective of whether a sale is
consummated) or indemnities then due to any of the Secured Parties under the
Transaction Documents, until paid in full;
 
(b)           second, ratably to pay any fees or premiums then due to any of the
Secured Parties under the Transaction Documents, until paid in full;
 
(c)           third, ratably to pay interest due in respect of the Secured
Obligations then due to any of the Secured Parties, until paid in full;
 
(d)           fourth, ratably to pay the principal amount of all Secured
Obligations then due to any of the Secured Parties, until paid in full;
 
(e)           fifth, ratably to pay any other Secured Obligations then due to
any of the Secured Parties; and
 
(f)           sixth, to Grantor or such other Person entitled thereto under
applicable law.
 
16. Remedies Cumulative. Each right, power, and remedy of any Secured Party as
provided for in this Agreement or in any other Transaction Document or now or
hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power,
or remedy provided for in this Agreement or in the other Transaction Documents
or now or hereafter existing at law or in equity or by statute or otherwise, and
the exercise or beginning of the exercise by any Secured Party, of any one or
more of such rights, powers, or remedies shall not preclude the simultaneous or
later exercise by such Secured Party of any or all such other rights, powers, or
remedies. The Grantor acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to each Secured Party and that the remedy
at law for any such breach may be inadequate. The Grantor therefore agrees that,
in the event of any breach or any threatened breach, each Secured Party shall be
entitled, in addition to all other available remedies, to an injunction
restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required.
 
17. Marshaling. No Secured Party shall be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising. To
the extent that it lawfully may, the Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of any Secured Party’s rights and remedies under
this Agreement or under any other instrument creating or evidencing any of the
Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Grantor hereby
irrevocably waives the benefits of all such laws.
 
 
 
-15-

 
 
18. Acknowledgment.
 
(a)           Each Secured Party hereby agrees and acknowledges that no other
Secured Party has agreed to act for it as an administrative or collateral agent,
and each Secured Party is and shall remain solely responsible for the
attachment, perfection and priority of all Liens created by this Agreement or
any other Security Document in favor of such Secured Party. No Secured Party
shall have by reason of this Agreement or any other Transaction Document an
agency or fiduciary relationship with any other Secured Party. No Secured Party
(which term, as used in this sentence, shall include reference to each Secured
Party’s officers, directors, employees, attorneys, agents and affiliates and to
the officers, directors, employees, attorneys and agents of such Secured Party’s
affiliates) shall: (i) have any duties or responsibilities except those
expressly set forth in this Agreement and the other Security Documents or
(ii) be required to take, initiate or conduct any enforcement action (including
any litigation, foreclosure or collection proceedings hereunder or under any of
the other Security Documents). Without limiting the foregoing, no Secured Party
shall have any right of action whatsoever against any other Secured Party as a
result of such Secured Party acting or refraining from acting hereunder or under
any of the Security Documents except as a result and to the extent of losses
caused by such Secured Party’s actual gross negligence or willful misconduct (it
being understood and agreed by each Secured Party that the delivery by any
Significant Secured Party of one or more Veto Notices shall not be deemed to be
or construed as gross negligence or willful misconduct on the part of the
Secured Party delivering any such Veto Notice). No Secured Party assumes any
responsibility for any failure or delay in performance or breach by the Grantor
or any other Secured Party of its obligations under this Agreement or any other
Transaction Document. No Secured Party makes to any other Secured Party any
express or implied warranty, representation or guarantee with respect to any
Secured Obligations, Collateral, Transaction Document or the Grantor. No Secured
Party nor any of its officers, directors, employees, attorneys or agents shall
be responsible to any other Secured Party or any of its officers, directors,
employees, attorneys or agents for: (i) any recitals, statements, information,
representations or warranties contained in any of the Transaction Documents or
in any certificate or other document furnished pursuant to the terms hereof;
(ii) the execution, validity, genuineness, effectiveness or enforceability of
any of the Transaction Documents; (iii) the validity, genuineness,
enforceability, collectability, value, sufficiency or existence of any
Collateral, or the attachment, perfection or priority of any Lien therein; or
(iv) the assets, liabilities, financial condition, results of operations,
business, creditworthiness or legal status of the Grantor or any Account Debtor.
No Secured Party nor any of its officers, directors, employees, attorneys or
agents shall have any obligation to any other Secured Party to ascertain or
inquire into the existence of any default or Event of Default, the observance or
performance by the Grantor of any of its duties or agreements under any of the
Transaction Documents or the satisfaction of any conditions precedent contained
in any of the Transaction Documents.
 
 
 
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(b)           Each Secured Party hereby acknowledges and represents that it has,
independently and without reliance upon any other Secured Party, and based upon
such documents, information and analyses as it has deemed appropriate, made its
own credit analysis of the Grantor and its own decision to enter into the
Transaction Documents and to purchase the Notes, and each Secured Party has made
such inquiries concerning the Transaction Documents, the Collateral and the
Grantor as such Secured Party feels necessary and appropriate, and has taken
such care on its own behalf as would have been the case had it entered into the
Transaction Documents without any other Secured Party. Each Secured Party hereby
further acknowledges and represents that the other Secured Parties have not made
any representations or warranties to it concerning the Grantor, any of the
Collateral or the legality, validity, sufficiency or enforceability of any of
the Transaction Documents. Each Secured Party also hereby acknowledges that it
will, independently and without reliance upon the other Secured Parties, and
based upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions
in taking or refraining to take any other action under this Agreement or the
Transaction Documents. No Secured Party shall have any duty or responsibility to
provide any other Secured Party with any notices, reports or certificates
furnished to such Secured Party by the Grantor or any credit or other
information concerning the affairs, financial condition, business or assets of
the Grantor (or any of its affiliates) which may come into possession of such
Secured Party.
 
19. Indemnity and Expenses.
 
(a) Without limiting any obligations of the Grantor under the Securities
Purchase Agreement, the Grantor agrees to indemnify all Secured Parties from and
against all claims, lawsuits and liabilities (including reasonable external
attorneys’ fees) arising out of or resulting from this Agreement (including
enforcement of this Agreement) or any other Transaction Document, except claims,
losses or liabilities resulting from the gross negligence or willful misconduct
of the party seeking indemnification as determined by a final non-appealable
order of a court of competent jurisdiction. This provision shall survive the
termination of this Agreement and the Transaction Documents and the Satisfaction
in Full of the Secured Obligations.
 
(b) The Grantor shall, upon demand, pay to each Secured Party all of the
reasonable costs and out-of-pocket expenses which such Secured Party may incur
in connection with (i) the custody, preservation, use or operation of, or, upon
an Event of Default, the sale of, collection from, or other realization upon,
any of the Collateral in accordance with this Agreement and the other
Transaction Documents, (ii) the exercise or enforcement of any of the rights of
such Secured Party hereunder or (iii) the failure by the Grantor to perform or
observe any of the provisions hereof.
 
 
 
-17-

 
 
20. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES SOLELY WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Grantor and Secured Parties holding at least a majority of the aggregate
principal amount of the then outstanding Notes, and any amendment to any
provision of this Agreement made in conformity with the provisions of this
Section 20 shall be binding on all Secured Parties, provided that no such
amendment shall be effective to the extent that it (1) applies to less than all
of the Secured Parties or (2) imposes any obligation or liability on any Secured
Party without such Secured Party’s prior written consent (which may be granted
or withheld in such Secured Party’s sole discretion). No waiver shall be
effective unless it is in writing and signed by an authorized representative of
the waiving party, provided that all of the single Significant Secured Parties
(in a writing signed by all such Significant Secured Parties) may waive any
provision of this Agreement, and any waiver of any provision of this Agreement
made in conformity with the provisions of this Section 20 shall be binding on
all Secured Parties, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all the Secured Parties (unless a party
gives a waiver as to itself only) or (2) imposes any obligation or liability on
any Secured Party without such Secured Party’s prior written consent (which may
be granted or withheld in such Secured Party’s sole discretion).
 
21. Addresses for Notices. All notices and other communications provided for
hereunder (a) shall be given in the form and manner set forth in the Securities
Purchase Agreement and (b) shall be delivered, (i) in the case of notice to the
Grantor, by delivery of such notice to the Grantor’s address specified in the
Securities Purchase Agreement or at such other address as shall be designated by
the Grantor in a written notice to each of the Secured Parties in accordance
with the provisions thereof, and (ii) in the case of notice to any Secured
Party, by delivery of such notice to such Secured Party at its address specified
in the Securities Purchase Agreement or at such other address as shall be
designated by such Secured Party in a written notice to the Grantor and each
other Secured Party in accordance with the provisions thereof.
 
22. Separate, Continuing Security Interests; Assignments under Transaction
Documents. This Agreement shall create a separate, continuing security interest
in the Collateral in favor of each Secured Party and shall (a) remain in full
force and effect until Satisfaction in Full of the Secured Obligations, (b) be
binding upon the Grantor, and its permitted successors and permitted assigns,
and (c) inure to the benefit of, and be enforceable by, the Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Secured Party may, in accordance
with the provisions of the Transaction Documents, assign or otherwise transfer
all or any portion of its rights and obligations under the Transaction Documents
to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Secured Party herein or
otherwise. Upon Satisfaction in Full of the Secured Obligations, this Agreement
shall terminate and the Security Interests granted hereby shall terminate and
all rights to the Collateral shall revert to the Grantor or any other Person
entitled thereto, in each case, automatically, without any further consent or
action of any Secured Party. At such time, (i) the Grantor shall be authorized
to file appropriate termination statements to terminate such Security Interests,
(ii) each Secured Party shall promptly return to the Grantor any Collateral in
its possession and (iii) each Secured Party shall execute and deliver such other
releases and terminations as may be reasonably requested by the Grantor. No
Secured Party shall by any act, delay, omission or otherwise, be deemed to have
waived any of its rights or remedies hereunder, unless such waiver is in writing
and signed by such Secured Party and then only to the extent therein set forth.
A waiver by any Secured Party of any right or remedy on any occasion shall not
be construed as a bar to the exercise of any such right or remedy which such
Secured Party would otherwise have had on any other occasion.
 
 
 
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23. Governing Law; Jurisdiction; Service of Process; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan,
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 suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper; provided, however, any
suit seeking enforcement against any Collateral or other property may be
brought, at any Secured Party’s option, in the courts of any jurisdiction where
such Secured Party elects to bring such action or where such Collateral or other
property may be found. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
 
24. Miscellaneous.
 
(a) This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party. In the event that any signature is delivered by facsimile transmission or
by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such signature page were an
original thereof. Any party delivering an executed counterpart of this Agreement
by facsimile or other electronic method of transmission also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other
Security Document mutatis mutandis.
 
(b) Any provision of this Agreement which is prohibited or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.
 
(c) Headings used in this Agreement are for convenience only and shall not be
used in connection with the interpretation of any provision hereof.
 
 
 
-19-

 
 
(d) The pronouns used herein shall include, when appropriate, either gender and
both singular and plural, and the grammatical construction of sentences shall
conform thereto.
 
(e) The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. For clarification purposes, the
Recitals are part of this Agreement.
 
(f) Unless the context of this Agreement or any other Transaction Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the terms “includes” and
“including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Transaction Document refer to this Agreement or such other
Transaction Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Transaction Document, as the case may
be. Section, subsection, clause, schedule, and exhibit references herein are to
this Agreement unless otherwise specified. Any reference in this Agreement or in
any other Transaction Document to any agreement, instrument, or document shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements, thereto and
thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). “Satisfaction in
Full of the Secured Obligations” shall mean the payment in full in cash and/or
conversion into Common Stock of all Secured Obligations (other than any
obligations which expressly survive such payment in full or conversion). Any
reference herein to any Person shall be construed to include such Person’s
permitted successors and permitted assigns. Any requirement of a writing
contained herein or in any other Transaction Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
 
(g) All dollar amounts referred to in this Agreement and the other Transaction
Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing
under this Agreement and all other Transaction Documents shall be paid in U.S.
Dollars. All amounts denominated in other currencies shall be converted into the
U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date
of calculation. “Exchange Rate” means, in relation to any amount of currency to
be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar
exchange rate as published in The Wall Street Journal on the relevant date of
calculation.
 
[signature pages follow]
 
 
-20-

 
IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement
by and through their duly authorized officers, as of the day and year first
above written.
 
GRANTOR:
 
ENDRA LIFE SCIENCES INC., a Delaware corporation
By:                                                                 
      Name: Francois Michelon
      Title: Chief Executive Officer
 
 
 

 
 
 
 
-21-

 
 
 
SECURED PARTIES:
[________________________]
By:                                                                 
      Name:
      Title:
 
 
 

 
 
 
 
 
 
 
-22-