EXHIBIT 10.4

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT, dated as of June 17, 2015, by and among each of the
entities identified on the signature page hereto under the heading “Grantors”
(each a “Grantor” and, collectively, the “Grantors”) and FOREFRONT INCOME TRUST
(the “Secured Party”).

 

RECITALS

 

A. Pursuant to a Note Purchase Agreement (“NPA”) and a Secured Promissory Note
(“Note”) each dated as of June 17, 2015 (as same may be amended, restated,
modified or supplemented from time to time) by and between BANJO & MATILDA,
INC., a Nevada corporation, and BANJO & MATILDA (USA), INC., a Delaware
corporation and a wholly-owned subsidiary of BANJO & MATILDA, INC.,
(“Borrowers”), and the Secured Party, and the Borrowers will receive loans and
other financial accommodations from the Secured Party and will incur Obligations
(as hereinafter defined).

 

B. To induce the Secured Party to extend credit to the Borrowers on and after
the date hereof as provided in the Note, each Grantor desires to grant the
Secured Party security and assurance in order to secure the payment and
performance of all Obligations and to that effect to grant the Secured Party a
first priority perfected security interest in certain of its assets and, in
connection therewith, to execute and deliver this Agreement.

 

Accordingly, the parties hereto hereby agree as follows:

 

DEFINITIONS

 

(a) Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Uniform Commercial Code as in effect
in the State of Delaware (the “UCC”).

 

(b) Capitalized terms used herein and not otherwise defined shall have the
following meanings:

 

“Agreement” shall mean this Security Agreement and shall include all amendments,
modifications and supplements hereto and shall refer to this Security Agreement
as the same may be in effect at the time such reference becomes operative.

 

 “Collateral” shall mean the following property of each Grantor, wherever
located, and whether now owned or hereafter acquired or arising:

 

 

(i)

Accounts;

 

 

(ii)

Instruments, including Promissory Notes;

 

 

(iii)

Deposit Accounts;

 

 
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(iv)

all interest in and to merchant processing accounts, including, without
limitation, the following: (a) all books, records, ledgers, files, documents and
correspondence relating thereto; (b) all monies due or to become due and all
amounts received or receivable with respect thereto, including all recoveries,
all contract files, and all proceeds thereof; and

 

 

(v)

To the extent not listed above as original collateral, proceeds and products of
the foregoing.

 

“Default” shall have the meaning assigned to such term in the Note.

 

“Event of Default” shall have the meaning assigned to such term in the Note.

 

“Obligations” shall mean (i) all obligations, liabilities and indebtedness of
each Grantor to the Secured Party, whether now existing or hereafter created,
absolute or contingent, direct or indirect, due or not, whether created directly
or acquired by assignment or otherwise, including, without limitation,
obligations, liabilities, and indebtedness of each Grantor arising under or
relating to the NPA or the Note to which it is a party (including, without
limitation, with respect to the Borrowers, all obligations, liabilities and
indebtedness with respect to the principal of and interest on the Loans)
including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, and interest
that but for the filing of a petition in bankruptcy with respect to any Grantor
would accrue on such obligations, whether or not a claim is allowed against such
Grantor for such interest in the related bankruptcy proceeding, and all fees,
costs, expenses and indemnity obligations of the Grantors to the Secured Party
hereunder, or under any other Loan Document, (ii) all obligations of the
Borrowers under each interest rate swap, collar, cap, floor or forward rate
agreement or other agreement regarding the hedging of interest rate risk
exposure of the Borrowers, in each case, entered into with the Secured Party and
(iii) all Banking Services Obligations.

 

(c) Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and the neuter. Except as otherwise herein
specifically provided, each accounting term used herein shall have the meaning
given to it under Generally Accepted Accounting Principles. The term “including”
shall not be limited or exclusive, unless specifically indicated to the
contrary. The word “will” shall be construed to have the same meaning in effect
as the word “shall”. The words “herein”, “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto, all of which are by this reference incorporated
into this Agreement.

 

I. SECURITY

 

SECTION 1.01. Grant of Security. As security for the Obligations, each Grantor
hereby transfers, assigns and grants to the Secured Party a security interest in
the Collateral.

 

 
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SECTION 1.02. Release and Satisfaction. Upon the termination of this Agreement
and the indefeasible payment in full of the Obligations, the Secured Party shall
deliver to each Grantor, upon request therefor and at such Grantor’s expense,
releases and satisfactions of all financing statements, notices of assignment
and other registrations of security.

 

II. REPRESENTATIONS AND WARRANTIES

 

SECTION 2.01. Representations and Warranties With Respect to Security. Each
Grantor hereby represents and warrants to the Secured Party as follows:

 

(a) Name. Each Grantor’s exact legal name, state of incorporation or
organization and organizational number is set forth on Schedule A annexed
hereto.

 

(b) Ownership of Collateral. Grantor owns all of their personal property and
assets, including, without limitation, the Collateral, free and clear of all
liens, other than the liens permitted by the terms of the NPA and Note.

 

(c) Accounts. Annexed hereto as Schedule A is a list identifying the chief
executive office or principal place of business of each Grantor and all
addresses at which each Grantor maintains books or records relating to its
Accounts as of the date of this Agreement.

 

(d) Trade Names. Except as set forth on Schedule A annexed hereto, each Grantor
has not done during the five years prior to this Agreement, and does not
currently do, business under fictitious business names or trade names. No
Grantor has been known under any other name during such five year period. Each
Grantor will only change its name or do business under any other fictitious
business names or trade names during the term of this Agreement after giving not
less than thirty (30) Business Days’ prior written notice to the Secured Party.

 

(e) Acquired Collateral. Except as set forth on Schedule A annexed hereto, the
Collateral has been acquired or originated by each Grantor in the ordinary
course of such Grantor’s business.

 

(f) Third Party Locations. Except as set forth on Schedule A annexed hereto, no
Collateral is in the possession of, or under the control of, any Person other
than a Grantor or the Secured Party.

 

(g) Enforceability of Security Interests. Upon the execution of this Agreement
by each Grantor and the filing of financing statements properly describing the
Collateral and identifying such Grantor and the Secured Party in the applicable
jurisdiction required pursuant to the UCC, security interests and liens granted
to the Secured Party under Section 1.01 hereof shall constitute valid, perfected
and first priority security interests and liens in and to the Collateral of such
Grantor, other than Collateral which may not be perfected by filing under the
Uniform Commercial Code, and subject to the Liens permitted pursuant to the NPA
and the Note, in each case enforceable against all third parties and securing
the payment of the Obligations.

 

 
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III. COVENANTS OF GRANTORS

 

SECTION 3.01. Records; Location of Collateral. So long as any Grantor shall have
any Obligation to the Secured Party: (a) Grantors shall not change the
jurisdiction of their incorporation or organization or move their chief
executive office, principal place of business or office at which is kept its
books and records (including computer printouts and programs) from the locations
existing on the date hereof and listed on Schedule A annexed hereto; (b)
Grantors shall not establish any offices or other places of business at any
other location; (c) Grantors shall not move any of the Collateral to any
location other than those locations existing on the date hereof and listed on
Schedule A annexed hereto; or (d) Grantors shall not change their corporate
names in any respect, unless, in each case of clauses (a), (b) (c) and (d)
above, (i) Grantors shall have given the Secured Party thirty (30) Business
Days’ prior written notice of its intention to do so, identifying the new
location and providing such other information as the Secured Party deems
necessary, and (ii) Grantors shall have delivered to the Secured Party such
documentation, in form and substance satisfactory to the Secured Party and as
required by the Secured Party, to preserve the Secured Party’s security interest
in the Collateral.

 

SECTION 3.02. Other Collateral. Grantors shall promptly notify the Secured Party
upon acquiring or otherwise obtaining any Collateral after the date hereof
consisting of Deposit Accounts.

 

SECTION 3.03. Further Actions.

 

(a) Deposit Accounts. At the request of the Secured Party, each Grantor will
cause each depository bank where such Grantor maintains a Deposit Account to
execute an agreement pursuant to which the depository bank agrees to comply,
without the further consent of such Grantor, at any time, with instructions from
the Secured Party to such depository bank directing the disposition of funds
from time to time credited to such deposit account or agree to the Secured Party
becoming the customer of the depository bank with respect to such deposit
accounts, with such Grantor being permitted, only with the consent of the
Secured Party, to exercise rights to withdraw funds from such deposit account.

 

(b) Collateral in the Possession of Third Parties. If any Collateral is at any
time in the possession of any person or entity other than a Grantor or the
Secured Party (a “Third Party”), the Grantor shall promptly notify the Secured
Party thereof, and at the Secured Party’s request and option, shall promptly
obtain an acknowledgment from the Third Party, in form and substance
satisfactory to the Secured Party that the Third Party holds such collateral for
the benefit of the Secured Party and such Third Party’s agreement to comply,
without further consent of the Grantor, at any time with the instructions of the
Secured Party as to such Collateral.

 

(c) General. Each Grantor further agrees, upon the request of the Secured Party
and at the Secured Party’s option, to take any and all other actions as the
Secured Party may determine to be necessary or useful for the attachment,
perfection and first priority of, and the ability of the Secured Party to
enforce, the Secured Party’s security interest in any and all of the Collateral,
including without limitation, (i) executing and delivering and where appropriate
filing financing statements and amendments relating thereto under the UCC to the
extent, if any, that such Grantor’s signature thereon is required therefor, (ii)
causing the Secured Party’s name to be noted as Secured Party on any certificate
of title for a titled good if such notation is a condition to attachment,
perfection or priority of, or the ability of the Secured Party to enforce, the
Secured Party’s security interest in such Collateral, (iii) complying with any
provision of any statute, regulation or treaty of the United States as to any
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of the Secured Party to enforce the
Secured Party’s security interest in such Collateral, (iv) obtaining
governmental and other third party waivers, consents and approvals in form and
substance satisfactory to the Secured Party, including, without limitation, any
consent of any licensor, lessor or other persons obligated on Collateral and (v)
obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Secured Party. Each Grantor further authorizes the Secured
Party to file initial financing statements describing the Collateral, and any
amendments thereto.

 

 
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SECTION 3.04. Insurance and Assessments. In the event any Grantor shall fail to
purchase or maintain insurance, or pay any tax, assessment, government charge or
levy, except as the same may be otherwise permitted hereunder or under the NPA
and Note, or in the event that any lien, encumbrance or security interest
prohibited hereby shall not be paid in full or discharged, or in the event such
Grantor shall fail to perform or comply with any other covenant, promise or
obligation to the Secured Party hereunder, or under the NPA and Note, the
Secured Party may, but shall not be required to, perform, pay, satisfy,
discharge or bond the same for the account of such Grantor, and all money so
paid by the Secured Party, including reasonable attorney’s fees, shall be deemed
to be Obligations.

 

SECTION 3.05. Inspection. Upon reasonable notice to a Grantor, the Secured Party
may, during such Grantor’s normal business hours, examine and inspect any
Collateral and may examine, inspect and copy all books and records with respect
thereto or relevant to the Obligations.

 

SECTION 3.06. Maintenance of Corporate Existence. Each Grantor shall preserve
and maintain its corporate existence and, except as otherwise permitted pursuant
to the NPA and Note, shall not merge with or into or consolidate with any other
entity.

 

SECTION 3.07. Indemnification. Each Grantor agrees to indemnify the Secured
Party and hold it harmless from and against any and all injuries, claims,
damages, judgments, liabilities, costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel), charges and
encumbrances which may be incurred by or asserted against the Secured Party in
connection with or arising out of any assertion, declaration or defense of the
Secured Party’s rights or security interest under the provisions of this
Agreement or any other Loan Document, permitting it to collect, settle or adjust
Accounts or to deal with account debtors in any way or in connection with the
realization, repossession, safeguarding, insuring or other protection of the
Collateral or in connection with the collecting, perfecting or protecting the
Secured Party’s liens and security interests hereunder or under any other Loan
Document.

 

 
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IV. POWER OF ATTORNEY; NOTICES

 

SECTION 4.01. Power of Attorney. Each Grantor hereby irrevocably constitutes and
appoints the Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable
power and authority in the place and stead of such Grantor or in the Secured
Party’s own name, for the purpose of carrying out the terms of this Agreement
aftet the occurrence and during the continuance of an Event of Default, to take
any and all appropriate action and to execute any and all documents and
instruments that may be necessary or useful to accomplish the purposes of this
Agreement and, without limiting the generality of the foregoing, hereby give
said attorneys the power and right, on behalf of the Grantor, upon five (5)
days’ notice but without the assent of the Grantor, to (a) upon the occurrence
and continuance of an Event of Default, endorse the names of such Grantor on any
checks, notes, drafts or other forms of payment or security that may come into
the possession of the Secured Party or any affiliate of the Secured Party, to
sign the Grantor’s name on invoices or bills-of-lading, drafts against
customers, notices of assignment, verifications and schedules, (b) upon the
occurrence and continuance of an Event of Default, sell, transfer, pledge, make
any arrangement with respect to or otherwise dispose of or deal with any of the
Collateral consistent with the UCC and (c) upon the occurrence and during the
continuance of an Event of Default, do acts and things which the Secured Party
deems necessary or useful to protect, preserve or realize upon the Collateral
and the Secured Party’s security interest therein. The powers granted herein,
being coupled with an interest, are irrevocable until all of the Obligations are
indefeasibly paid in full and this Agreement is terminated. The powers conferred
on the Secured Party hereunder are solely to protect its interests in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Neither the Secured Party nor any attorney-in-fact shall be liable for any act
or omission, error in judgment or mistake of law provided the same is not the
result of gross negligence or willful misconduct.

 

SECTION 4.02. Notices. Upon the occurrence of an Event of Default, the Secured
Party may notify account debtors and other persons obligated on any of the
Collateral that the Collateral have been assigned to the Secured Party or of its
security interest therein and to direct such account debtors and other persons
obligated on any of the Collateral to make payment of all amounts due or to
become due to a Grantor directly to the Secured Party and upon such notification
and at such Grantor’s expense to enforce collection of any such Collateral, and
to adjust, compromise or settle for cash, credit or otherwise upon any terms the
amount of payment thereof. The Secured Party may, at any time following the
occurrence of an Event of Default, notify the Postal Service authorities to
change the address of delivery of mail to an address designated by the Secured
Party. After making of such a request or the giving of any such notification,
each Grantor shall hold any proceeds of collection of accounts, Chattel Paper,
general intangibles, instruments and other Collateral received by it as trustee
for the Secured Party without commingling the same with such Grantor and shall
turn the same over to the Secured Party in the identical form received, together
with any necessary endorsements or assignments. The Secured Party shall apply
the proceeds of collection of such Collateral received by the Secured Party to
the Obligations, in such order as the Secured Party, in its sole discretion,
shall determine, such proceeds to be immediately credited after final payment in
cash or other immediately available funds of the items giving rise to them.

 

 
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V. REMEDIES OF SECURED PARTY

 

SECTION 5.01. Enforcement. Upon the occurrence of an Event of Default, the
Secured Party shall have, in addition to all of its other rights under this
Agreement and the other Loan Documents by operation of law or otherwise (which
rights shall be cumulative), all of the rights and remedies of a secured party
under the UCC and shall have the right, to the extent permitted by law, without
charge, to enter any Grantor’s premises, and until it completes the enforcement
of its rights in the Collateral subject to its security interest hereunder and
the sale or other disposition of any property subject thereto, take possession
of such premises without charge, rent or payment therefor (through self help
without judicial process and without having first given notice or obtained an
order of any court), or place custodians in control thereof, remain on such
premises and use the same for the purpose of completing any work in progress,
preparing any Collateral for disposition, and disposition of or collecting any
Collateral. Without limiting the foregoing, upon the occurrence of an Event of
Default, the Secured Party may, without demand, advertising or notice, all of
which such Grantor hereby waives (except as the same may be required by law),
sell, lease, license or otherwise dispose of and grant options to a third party
to purchase, lease, license or otherwise dispose of any and all Collateral held
by it or for its account at any time or times in one or more public or private
sales or other dispositions, for cash, on credit or otherwise, at such prices
and upon such terms as the Secured Party, in its sole discretion, deems
advisable. At any such sale the Collateral or any portion thereof may be sold in
one lot as an entirety or in separate parcels as the Secured Party in its sole
discretion deems advisable. Each Grantor agrees that if notice of sale shall be
required by law such requirement shall be met if such notice is mailed, postage
prepaid, to such Grantor at its address set forth above or such other address as
it may have, in writing, provided to the Secured Party, at least ten (10) days
before the time of such sale or disposition. The Secured Party may postpone or
adjourn any sale of any Collateral from time to time by an announcement at the
time and place of the sale to be so postponed or adjourned, without being
required to give a new notice of sale. Notice of any public sale shall be
sufficient if it describes the security of the Collateral to be sold in general
terms, stating the amounts thereof, the nature of the business in which such
Collateral was created and the location and nature of the properties covered by
the other security interests or mortgages and the prior liens thereof. The
Secured Party may be the purchaser at any such sale if it is public, free from
any right of redemption, which such Grantor also waives, and payment may be
made, in whole or in part, in respect of such purchase price by the application
of the Obligations by the Secured Party. Each Grantor with respect to its
property constituting such Collateral, shall be obligated for, and the proceeds
of sale shall be applied first to, the costs of taking, assembling, finishing,
collecting, refurbishing, storing, guarding, insuring, preparing for sale, and
selling the Collateral, including the fees and disbursements of attorneys,
auctioneers, appraisers and accountants employed by the Secured Party. Proceeds
shall then be applied to the payment, in whatever order the Secured Party may
elect, of all of the Obligations. The Secured Party shall return any excess to
such Grantor or to whomever may be fully entitled to receive the same or as a
court of competent jurisdiction may direct. In the event that the proceeds of
any sale or other disposition of the Collateral are insufficient to pay in full
the Obligations, such Grantor shall remain liable for any deficiency.

 

 
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SECTION 5.02. Standards for Exercising Rights and Remedies. To the extent that
applicable law imposes duties on the Secured Party to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is
not commercially unreasonable for the Secured Party (a) to fail to incur
expenses reasonably deemed significant by the Secured Party to prepare
Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition, (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (f) to contact other persons, whether
or not in the same business each Grantor, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in
wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risk of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Secured Party, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral. Each Grantor acknowledges that the purpose of this
Section 5.02 is to provide non-exhaustive indications of what actions or
omissions by the Secured Party would fulfill the Secured Party’s duties under
the UCC or the Uniform Commercial Code as in effect in other relevant
jurisdiction in the Secured Party’s exercise of remedies against the Collateral
and that other actions or omissions by the Secured Party shall not be deemed to
fail to fulfill such duties solely on account of not being indicated in this
Section 5.02. Without limitation upon the foregoing, nothing contained in this
Section 5.02 shall be construed to grant any rights to each Grantor or to impose
any duties on the Secured Party that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section 5.02.

 

SECTION 5.03. Waiver. Each Grantor waives any right, to the extent applicable
law permits, to receive prior notice of, or a judicial or other hearing with
respect to, any action or prejudgment remedy or proceeding by the Secured Party
to take possession, exercise control over, or dispose of any item of the
Collateral in any instance (regardless of where such Collateral may be located)
where such action is permitted under the terms of this Agreement or any other
Loan Document, or by applicable law, or of the time, place or terms of sale in
connection with the exercise of the Secured Party’s rights hereunder and such
Grantor also waives, to the extent permitted by law, any bond, security or
sureties required by any statute, rule or otherwise by law as an incident to any
taking of possession by the Secured Party of property subject to the Secured
Party’s Lien. Each Grantor further waives any damages (direct, consequential or
otherwise) occasioned by the enforcement of the Secured Party’s rights under
this Agreement and any other Loan Document including the taking of possession of
any Collateral all to the extent that such waiver is permitted by law and to the
extent that such damages are not caused by the Secured Party’s gross negligence
or willful misconduct. These waivers and all other waivers provided for in this
Agreement and any other Loan Documents have been negotiated by the parties and
each Grantor acknowledges that it has been represented by counsel of its own
choice and has consulted such counsel with respect to its rights hereunder.

 

 
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SECTION 5.04. Other Rights. Each Grantor agrees that the Secured Party shall not
have any obligation to preserve rights to any Collateral against prior parties
or to proceed first against any Collateral or to marshall any Collateral of any
kind for the benefit of any other creditors of such Grantor or any other Person.
The Secured Party is hereby granted, to the extent that such Grantor is
permitted to grant a license or right of use, a license or other right to use,
without charge, labels, patents, copyrights, rights of use, of any name, trade
secrets, trade names, trademarks and advertising matter, or any property of a
similar nature of such Grantor as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and such
Grantor’s rights under all licenses and any franchise, sales or distribution
agreements shall inure to the Secured Party’s benefit.

 

SECTION 5.05. Expenses. Each Grantor agrees that it shall pay on demand therefor
all costs and expenses incurred in amending, implementing, perfecting,
collecting, defending, declaring and enforcing the Secured Party’s rights and
security interests in the Collateral hereunder or under the NPA and Note or
other instrument or agreement delivered in connection herewith or therewith,
including, but not limited to, searches and filings, and the Secured Party’s
reasonable attorneys’ fees (regardless of whether any litigation is commenced,
whether a default is declared hereunder, and regardless of tribunal or
jurisdiction).

 

VI. GENERAL PROVISIONS

 

SECTION 6.01. Termination. This Agreement shall remain in full force and effect
until all the Obligations shall have been indefeasibly fully paid and satisfied
and the Note shall have been paid in full and, until such time, the Secured
Party shall retain all security in and title to all existing and future
Collateral held by it hereunder.

 

SECTION 6.02. Remedies Cumulative. The Secured Party’s rights and remedies under
this Agreement shall be cumulative and non-exclusive of any other rights or
remedies which it may have under the NPA and Note, or any other agreement or
instrument, by operation of law or otherwise and may be exercised alternatively,
successively or concurrently as the Secured Party may deem expedient.

 

SECTION 6.03. Binding Effect. This Agreement is entered into for the benefit of
the parties hereto and their successors and assigns. It shall be binding upon
and shall inure to the benefit of the said parties, their successors and
assigns. No Grantor shall assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Secured Party and any
attempted assignment shall be null and void.

 

SECTION 6.04. Notices. Wherever this Agreement provides for notice to either
party (except as expressly provided to the contrary), it shall be in writing and
given in the manner specified in the NPA and Note. Such notices to each Grantor
shall be delivered to the address for notices set forth on Schedule A annexed
hereto.

 

 
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SECTION 6.05. Waiver. No delay or failure on the part of the Secured Party in
exercising any right, privilege, remedy or option hereunder shall operate as a
waiver of such or any other right, privilege, remedy or option, and no waiver
shall be valid unless in writing and signed by an officer of the Secured Party
and only to the extent therein set forth.

 

SECTION 6.06. Modifications and Amendments. This Agreement and the other
agreements to which it refers constitute the complete agreement between the
parties with respect to the subject matter hereof and may not be changed,
modified, waived, amended or terminated orally, but only by a writing signed by
the party to be charged.

 

SECTION 6.07. Several Agreements. This Agreement shall constitute the several
obligations and agreements of each Grantor and may be amended, restated,
supplemented or otherwise modified from time to time, with respect to any
Grantor without the consent or approval of any other Grantor, and no such
amendment, restatement, supplement or modification shall be deemed to amend,
restate, supplement or modify the obligations of any other Grantor hereunder.

 

SECTION 6.08. Survival of Representations and Warranties. The representations
and warranties of each Grantor made or deemed made herein shall survive the
execution and delivery of this Agreement.

 

SECTION 6.09. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, in such jurisdiction, be
ineffective to the extent of such invalidity, illegality or uneforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 6.10. Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEVADA WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OR CHOICE OF
LAWS. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL
OR STATE COURT IN THE STATE OF NEW YORK, THE CITY OF NEW YORK, IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, EACH GRANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR
ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER THEREOF
MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH GRANTOR AGREES (i) NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY
REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR
JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT
AND (ii) NOT TO ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING
UNLESS SUCH COUNTERCLAIM CONSTITUTES A COMPULSORY OR MANDATORY COUNTERCLAIM
UNDER APPLICABLE RULES OF CIVIL PROCEDURE. EACH GRANTOR AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF
FLORIDA. EACH GRANTOR AND THE SECURED PARTY EACH IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

 
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SECTION 6.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which taken
together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized as of the day and year first above
written.

 

 

BANJO & MATILDA, INC.

           

By:

/s/ Brendan Macpherson

   

Name:

Brendan Macpherson

   

Title:

CEO

           

BANJO & MATILDA (USA), INC.

           

By:

/s/ Brendan Macpherson    

Name:

Brendan Macpherson

   

Title:

CEO

           

FOREFRONT INCOME TRUST

           

By:

/s/ Bradley Reifler    

Name:

Bradley Reifler

   

Title:

CEO

 

 

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Schedule A

to Security Agreement

 

1. Name of Grantor: Banjo & Matilda, Inc.; previous names: Eastern World
Solutions, Inc. and Encom Group, Inc.

 

2. State of Formation/Incorporation: Nevada

 

3. File Number: 5414728

 

4. Chief Executive Office or Principal Place of Business: 76 William Street,
Paddington NSW 2021, Australia

 

5. Other offices at which books or records with respect to Accounts are
maintained: None

 

6. Trade Names: N/A

 

7. Non-Ordinary Course Collateral Acquisitions: None

 

8. Collateral in the possession or control of third parties: Citibank

 

9. Address for Notices: 76 William Street, Paddington NSW 2021, Australia

 

1. Name of Grantor: Banjo & Matilda (USA), Inc.

 

2. State of Formation/Incorporation: Delaware

 

3. Chief Executive Office or Principal Place of Business: 76 William Street,
Paddington NSW 2021, Australia

 

4. Other offices at which books or records with respect to Accounts are
maintained: None

 

5. Trade Names: N/A

 

6. Non-Ordinary Course Collateral Acquisitions: None

 

7. Collateral in the possession or control of third parties: Citibank

 

8. Address for Notices: 76 William Street, Paddington NSW 2021, Australia

 

 

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