Exhibit 10.2
 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT dated effective as of November 30, 2010 (the "Security
Agreement"), is executed by Touchlt Technologies, Inc., a Nevada corporation (as
"Debtor") with its chief executive offices located at Istanbul Trakya Serbest
Bolgesi Atattirk Bulvari Ali Riza Efendicd., A4 Blok catalea, Istanbul Turkey
and TCA Global Credit Master Fund, LP (the "Secured Party").
 
RECITALS:
 
WHEREAS, Debtor desires to borrow funds and obtain financial accommodations from
Secured Party pursuant to that certain Credit Agreement of even date herewith
among Debtor, Andrew Brabin, Recep Tanisman and Secured Party (the "Credit
Agreement").
 
NOW, THEREFORE, in consideration of the credit extended now and in the future by
Secured Party to the Debtor and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Debtor and Secured Party
hereby agree as follows:
 
AGREEMENTS:
 
Section 1   DEFINITIONS.
 
1.1   Defined Terms. Capitalized terms used but not otherwise defined in this
Security Agreement (including the Recitals) shall have the meanings ascribed to
them in the Credit Agreement. For the purposes of this Security Agreement, the
following capitalized words and phrases shall have the meanings set forth below.
 
"Capital Securities" shall mean, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued or acquired after the date hereof, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or auy other equivalent of such ownership
interest.
 
"Collateral" shall have the meaning set forth in Section 2.1 hereof.
 
"Obligor" shall mean Debtor, or any other party liable with respect to the
Obligations.
 
"Organizational Identification Number" means, with respect to Debtor, the
organizational identification number assigned to Debtor by the applicable
governmental unit or agency of the jurisdiction of organization of Debtor, if
arty.
 
"Taxes" shall mean any and all present and future taxes, duties, levies,
imposts, deductions, assessments, charges or withholdings, and any and all
liabilities (including interest and penalties and other additions to taxes) with
respect to the foregoing.
 
 
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"Unmatured Event of Default" shall mean any event which, with the giving of
notice, the passage of time or both, would constitute an Event of Default.
 
1.2   Other Terms Defined in UCC. All other capitalized words and phrases used
herein and not otherwise specifically defined herein or in the Credit Agreement
shall have the respective meanings assigned to such terms in the UCC, to the
extent the same are used or defined therein.
 
1.3   Other Interpretive Provisions.
 
(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms. Whenever the context so requires, the neuter
gender includes the masculine and feminine, the single number includes the
plural, and vice versa, and in particular the word "Debtor" shall be so
construed.
 
(b) Section and Schedule references are to this Security Agreement unless
otherwise specified. The words "hereof', "herein" and "hereunder" and words of
similar import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement
 
(c) The term "including" is not limiting, and means "including, without
limitation".
 
(d) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word "through" means "to and
including".
 
(e) Unless otherwise expressly provided herein, (i) references to agreements
(including this Security Agreement and the other Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, supplements and other modifications thereto, but only to the
extent such amendments, restatements, supplements and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation.
 
(f) To the extent any of the provisions of the other Loan Documents are
inconsistent with the terms of this Security Agreement, the provisions of this
Security Agreement shall govern.
 
(g) This Security Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and each
shall be performed in accordance with its terms.
 
 
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Section 2   SECURITY FOR THE OBLIGATIONS.
 
2.1   Security for Obligations. As security for the payment and performance of
the Obligations, Debtor does hereby pledge, assign, transfer, deliver and grant
to Secured Party, for its own benefit and as agent for its Affiliates, a
continuing and unconditional first priority security interest in and to any and
all property of Debtor, of any kind or description, tangible or intangible,
wheresoever located and whether now existing or hereafter arising or acquired,
including the following (all of which property for Debtor, along with the
products and proceeds therefrom, are individually and collectively referred to
as the "Collateral"):
 
(a) all property of, or for the account of, Debtor now or hereafter coming into
the possession, control or custody of, or in transit to, Secured Party or any
agent or bailee for Secured Party or any parent, affiliate or subsidiary of
Secured Party or any participant with Secured Party in the Obligations (whether
for safekeeping, deposit, collection, custody, pledge, transmission or
otherwise), including all cash, earnings, dividends, interest, or other rights
in connection therewith and the products and proceeds therefrom, including the
proceeds of insurance thereon; and
 
(b) the additional property of Debtor, whether now existing or hereafter arising
or acquired, and wherever now or hereafter located, together with all additions
and accessions thereto, substitutions, betterments and replacements therefor,
products and Proceeds therefrom, and all of Debtor's books and records and
recorded data relating thereto (regardless of the medium of recording or
storage), together with all of Debtor's right, title and interest in and to all
computer software required to utilize, create, maintain and process any such
records or data on electronic media, identified and set forth as follows:
 
All Accounts and all goods whose sale, lease or other disposition by Debtor has
given rise to Accounts and have been returned to, or repossessed or stopped in
transit by, Debtor, or rejected or refused by an Account Debtor;
 
(ii) All Inventory, including raw materials, work-in-process and finished goods;
 
(iii) All goods (other than Inventory), including embedded software, Equipment,
vehicles, furniture and Fixtures;
 
(iv) All Software and computer programs;
 
(v) All Securities, Investment Property, Financial Assets and Deposit Accounts;
 
(vi) All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter
of Credit Rights, all proceeds of letters of credit, Health-Care­Insurance
Receivables, Supporting Obligations, notes secured by real estate, Commercial
Tort Claims and General Intangibles, including Payment Intangibles; and
 
 
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(vii) All real estate property owned by Debtor and the interest of Debtor in
fixtures related to such real property;
 
(viii) All Proceeds (whether Cash Proceeds or Non-cash Proceeds) of the
foregoing property, including all insurance policies and proceeds of insurance
payable by reason of loss or damage to the foregoing property, including
unearned premiums, and of eminent domain or condemnation awards.
 
2.2   Possession and Transfer of Collateral. Until an Event of Default has
occurred, Debtor shall be entitled to possession and use of the Collateral
(other than Instruments or Documents (including Tangible Chattel Paper and
Investment Property consisting of certificated securities) and other Collateral
required to be delivered to Secured Party pursuant to this Section a The
cancellation or surrender of any promissory note evidencing an Obligation, upon
payment or otherwise, shall not affect the right of Secured Party to retain the
Collateral for any other of the Obligations except upon payment in full of the
Obligations. Debtor shall not sell, assign (by operation of law or otherwise),
license, lease or otherwise dispose of, or grant any option with respect to any
of the Collateral, except as permitted pursuant to the Credit Agreement.
 
2.3   Financing Statements. Debtor authorizes Secured Party to prepare and file
such financing statements, amendments and other documents and do such acts as
Secured Party deems necessary in order to establish and maintain valid, attached
and perfected, first priority security interests in the Collateral in favor of
Secured Party, for its own benefit and as agent for its Affiliates, free and
clear of all Liens and claims and rights of third parties whatsoever, except
Permitted Liens. Debtor hereby irrevocably authorizes Secured Party at any time,
and from time to time, to file in any jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) is
comprised of all assets of Debtor (or words of similar effect), regardless of
whether any particular asset comprising a part of the Collateral falls within
the scope of Article 9 of the UCC of the jurisdiction wherein such financing
statement or amendment is filed, or (ii) as being of an equal or lesser scope or
within greater detail as the grant of the security interest set forth herein,
and (b) contain any other information required by Section 5 of Article 9 of the
UCC of the jurisdiction wherein such financing statement or amendment is filed
regarding the sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether Debtor is an organization, the type of
organization and any Organizational Identification Number issued to Debtor, and
(ii) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of the real property to which the Collateral relates.
Debtor agrees to furnish any such information to Secured Party promptly upon
request. In addition, Debtor shall make appropriate entries on its books and
records disclosing the security interests of Secured Party, for its own benefit
and as agent for its Affiliates, in the Collateral. Debtor hereby agrees that a
photogenic or other reproduction of this Security Agreement is sufficient for
filing as a financing statement and Debtor authorizes Secured Party to file this
Security Agreement as a financing statement in any jurisdiction.
 
 
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2.4    Preservation of the Collateral. Secured Party may, but is not required
to, take such actions from time to time as Secured Party deems appropriate to
maintain or protect the Collateral. Secured Party shall have exercised
reasonable care in the custody and preservation of the Collateral if Secured
Party takes such action as Debtor shall reasonably request in writing which is
not inconsistent with Secured Party's status as a secured party, but the failure
of Secured Party to comply with any such request shall not be deemed a failure
to exercise reasonable care; provided, however, Secured Party's responsibility
for the safekeeping of the Collateral shall (i) be deemed reasonable if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property, and (ii) not extend to matters beyond the control of
Secured Party, including acts of God, war, insurrection, riot or governmental
actions. In addition, any failure of Secured Party to preserve or protect any
rights with respect to the Collateral against prior or third parties, or to do
any act with respect to preservation of the Collateral, not so requested by
Debtor, shall not be deemed a failure to exercise reasonable care in the custody
or preservation of the Collateral. Debtor shall have the sole responsibility for
taking such action as may be necessary, from time to time, to preserve all
rights of Debtor and Secured Party in the applicable Collateral against prior or
third parties. Without limiting the generality of the foregoing, where
Collateral consists in whole or in part of Capital Securities, Debtor represents
to, and covenants with, Secured Party that Debtor has made arrangements for
keeping informed of changes or potential changes affecting the Capital
Securities (including rights to convert or subscribe, payment of dividends,
reorganization or other exchanges, tender offers and voting rights), and Debtor
agrees that Secured Party shall have no responsibility or liability for
informing Debtor of any such or other changes or potential changes or for taking
any action or omitting to take any action with respect thereto.
 
2.5   Other Actions as to any and- all Collateral. Debtor further agrees to take
any other action reasonably requested by Secured Party to ensure the attachment,
perfection and first priority of, and the ability of Secured Party to enforce,
the security interest of Secured Party, for its own benefit and as agent for its
Affiliates, in any and all of the Collateral including (a) causing 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 ability of the bank to enforce, the security interest of Secured
Party, for its own benefit and as agent for its Affiliates, in such Collateral,
(b) complying with any provision of any statute, regulation or treaty of the
United States as to any material portion of the Collateral as soon as possible
but not more than forty-five (45) days after such request-if compliance with
such provision is a condition to attachment, perfection or priority of, or
ability of Secured Party to enforce, the security interest of Secured Party, for
its own benefit and as agent for its Affiliates, in such Collateral, (c)
obtaining governmental and other third party consents and approvals, including
without limitation any consent of any licensor, lessor or other Person with
authority or control over or an interest in any material portion of the
Collateral as soon as possible but not more than forty-five (45) days after such
request, (d) obtaining waivers from mortgagees and landlords in form and
substance reasonably satisfactory to Secured Party which affect any material
portion of the Collateral as soon as possible but not more than forty-five (45)
days after such request, and (e) taking all actions required by the UCC in
effect from time to time or by other law, as applicable in any relevant UCC
jurisdiction, or by other law as applicable in any foreign jurisdiction. Debtor
further agrees to indemnify and hold Secured Party harmless against claims of
any Persons not a party to this Security Agreement concerning disputes arising
over the Collateral except to the extent resulting from the gross negligence or
willful misconduct of Secured Party or its Affiliates.
 
 
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2.6   Collateral in the Possession of a Warehouseman or Bailee. If any material
portion of the Collateral at any time is in the possession of a warehouseman or
bailee, Debtor shall promptly notify Secured Party thereof, and, as soon as
possible but not more than forty-five (45) days later, shall obtain a Collateral
Access Agreement in form and substance reasonably satisfactory to Secured Party
from such warehouseman or bailee.
 
2.7   Letter-of-Credit Rights. If Debtor at any time is a beneficiary under a
letter of credit now or hereafter issued in favor of Debtor, Debtor shall
promptly notify Secured Party thereof and, at the request and option of Secured
Party, Debtor shall, pursuant to an agreement in form and substance reasonably
satisfactory to Secured Party, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to Secured Party,
for its own benefit and as agent for its Affiliates, of the proceeds of any
drawing under the letter of credit, or (ii) arrange for Secured Party, for its
own benefit and as agent for its Affiliates, to become the transferee
beneficiary of the letter of credit, with Secured Party agreeing, in each case,
that the proceeds of any drawing under the letter to credit are to be applied as
provided in the Credit Agreement.
 
2.8   Commercial Tort Claims. If Debtor shall at any time hold or acquire a
Commercial Tort Claim, Debtor shall promptly notify Secured Party in writing
signed by Debtor of the details thereof and grant to Secured Party, for its own
benefit and as agent for its Affiliates, in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security
Agreement, in each case in form and substance reasonably satisfactory to Secured
Party, and shall execute any amendments hereto deemed reasonably necessary by
Secured Party to perfect the security interest of Secured Party, for its own
benefit and as agent for its Affiliates, in such Commercial Tort Claim.
 
2.9   Electronic Chattel Paper and Transferable Records. If Debtor at any time
holds or acquires an interest in any electronic chattel paper or any
"transferable record", as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, Debtor shall promptly notify Secured Party thereof and, at the
request of Secured Party, shall take such action as Secured Party may reasonably
request to vest in Secured Party control under Section 9-105 of the UCC of such
electronic chattel paper or control under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. Secured Party agrees with Debtor that
Secured Party will arrange, pursuant to procedures reasonably satisfactory to
Secured Party and so long as such procedures will not result in Secured Party's
loss of control, for Debtor to make alterations to the electronic chattel paper
or transferable record permitted under Section 9-105 of the UCC or, as the case
may be, Section 201 of the federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to make without loss of control.
 
Section 3   REPRESENTATIONS AND WARRANTIES.
 
Debtor makes the following representations and warranties to Secured Party:
 
 
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3.1   Debtor Organization and Name. Debtor is a corporation duly organized,
existing  and in good standing under the laws of the State of Nevada, with full
and adequate power to carry on and conduct its business as presently conducted.
Debtor is duly licensed or qualified in all foreign jurisdictions wherein the
nature of its activities requires such qualification or licensing. Debtor's
Organizational Identification Number is set forth in the Credit Agreement. The
exact legal name of Debtor is as set forth in the first paragraph of this
Security Agreement, and Debtor currently does not conduct, nor has it during the
last five (5) years conducted, business under any other name or trade name other
than Hotel Management Systems, Inc.
 
3.2   Authorization. Debtor has full right, power and authority to enter into
this Security Agreement and to perform all of its duties and obligations under
this Security Agreement. The execution and delivery of this Security Agreement
and the other Loan. Documents will not, nor will the observance or performance
of any of the matters and things herein or therein set forth, violate or
contravene any provision of law or of the articles of incorporation or by-laws
of Debtor. All necessary and appropriate action has been taken on the part of
Debtor to authorize the execution and delivery of this Security Agreement.
 
3.3   Validity and Binding Nature. This Security Agreement is the legal, valid
and binding obligation of Debtor, enforceable against Debtor in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors' rights generally and to general principles of
equity.
 
3.4   Consent; Absence of Breach. The execution, delivery and performance of
this Security Agreement and any other documents or instruments to be executed
and delivered by Debtor in connection herewith, do not and will not (a) require
any consent, approval, authorization, or filings with, notice to or other act by
or in respect of, any governmental authority or any other Person (other than
filings or notices pursuant to federal or state securities laws or other than
any consent or approval which has been obtained and is in full force and
effect); (b) conflict with (i) any provision of law or any applicable
regulation, order, writ, injunction or decree of any court or governmental
authority except for such conflicts which would not result in a Material Adverse
Effect, (ii) the articles of incorporation, bylaws or other organic document of
Debtor, or (iii) any material agreement, indenture, instrument or other
document, or any judgment, order or decree, which is binding upon Debtor or any
of its properties or assets except for such conflicts which would not result in
a Material Adverse Effect; or (c) require, or result in, the creation or
imposition of any Lien on. any asset of Debtor, other than Liens in favor of
Secured Party created pursuant to this Security Agreement and Permitted Liens.
 
3.5   Ownership of Collateral; Liens. Debtor is the sole owner all of the
Collateral, free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like), other than Permitted Liens.
 
3.6   Adverse Circumstances.No condition, circumstance, event, agreement,
document, instrument, restriction, litigation or proceeding (or threatened
litigation or proceeding or basis therefor) exists which (a) would have a
Material Adverse Effect upon Debtor, or (b) would constitute an Event of Default
or an Unmatured Event of Default.
 
 
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3.7   Security Interest. This Security Agreement creates a valid security
interest in favor of Secured Party in the Collateral and, when properly
perfected by filing in the appropriate jurisdictions, or by possession or
Control of such Collateral by Secured Party or delivery of such Collateral to
Secured Party, shall constitute a valid, perfected, first-priority security
interest in such Collateral.
 
3.8   Place of Business. The principal place of business and books and records
of Debtor is set forth in the preamble to this Security Agreement, and the
location of all Collateral, if other than at such principal place of business,
as set forth on Schedule 3.8 attached hereto and made a part hereof, and Debtor
shall promptly notify Secured Party of any change in such locations. Debtor will
not remove or permit the Collateral to be removed from such location without the
prior written consent of Secured Party, except as permitted pursuant to the
Credit Agreement.
 
3.9   Complete Information. This Security Agreement and all financial
statements, schedules, certificates, confirmations, agreements, contracts, and
other materials and information heretofore or contemporaneously herewith
furnished in writing by Debtor to Secured Party for purposes of, or in
connection with, this Security Agreement and the transactions contemplated
hereby is, and all written information hereafter furnished by or on behalf of
Debtor to Secured Party pursuant hereto or in connection herewith will be, true
and accurate in every material respect on the date as of which such information
is dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading in light of the circumstances under which made (it being recognized
by Secured Party that any projections and forecasts provided by Debtor are based
on good faith estimates and assumptions believed by Debtor to be reasonable as
of the date of the applicable projections or assumptions and that actual results
during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).
 
Section 4   REMEDIES.
 
Upon the occurrence of any default in the payment or performance of any of the
covenants, conditions and agreements contained in this Security Agreement or any
other Event of Default, Secured Party shall have all rights, powers and remedies
set forth in this Security Agreement or the other Loan Documents or in any other
written agreement or instrument relating to any of the Obligations or any
security therefor, as a secured party under the UCC or as otherwise provided at
law or in equity. Without limiting the generality of the foregoing, Secured
Party may, at its option upon the occurrence of an Event of Default, declare its
commitments to Debtor to be terminated and all Obligations to be immediately due
and payable, or, if provided in the Loan Documents, all commitments of Secured
Party to Debtor shall immediately terminate and all Obligations shall be
automatically due and payable, all without demand, notice or further action of
any kind required on the part of Secured Party. Debtor hereby waives any and all
presentment, demand, notice of dishonor, protest, and all other notices and
demands in connection with the enforcement of Secured Party's rights under the
Loan Documents, and hereby consents to, and waives notice of release, with or
without consideration, of any Collateral, notwithstanding anything contained
herein or in the Loan Documents to the contrary. In addition to the foregoing:
 
 
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4.1   Possession and Assembly of Collateral. Secured Party may, without
notice, demand or initiate legal process of any kind, take possession of any or
all of the Collateral (in addition to Collateral of which Secured Party already
has possession), wherever it may be found, and for that purpose may pursue the
same wherever it may be found, and may at any time enter into any of Debtor's
premises where any of the Collateral may be or is supposed to be, and search
for, take possession of, remove, keep and store any of the Collateral until the
same shall be sold or otherwise disposed of and Secured Party shall have the
right to store and conduct a sale of the same in any of Debtor's premises
without cost to Secured Party. At Secured Party's request, Debtor will, at
Debtor's sole expense, assemble the Collateral and make it available to Secured
Party at a place or places to be designated by Secured Party which is reasonably
convenient to Secured Party and Debtor.
 
4.2   Sale of Collateral. Secured Party may sell any or all of the Collateral at
public or private sale, upon such terms and conditions as Secured Party may deem
proper, and Secured Party may purchase any or all of the Collateral at any such
sale. Debtor acknowledges that Secured Party may be unable to effect a public
sale of all or any portion of the Collateral because of certain legal and/or
practical restrictions and provisions which may be applicable to the Collateral
and, therefore, may be compelled to resort to one or more private sales to a
restricted group of offerees and purchasers. Debtor consents to any such private
sale so made even though at places and upon terms less favorable than if the
Collateral were sold at public sale. Secured Party shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. Secured Party may apply
the net proceeds, after deducting all costs, expenses, attorneys' and
paralegals' fees incurred or paid at any time in the collection, protection and
sale of the Collateral and the Obligations, to the payment of the Obligations,
returning the excess proceeds, if any, to Debtor. Debtor shall remain liable for
any amount remaining unpaid after such application, with interest at the Default
Rate. Any notification of intended disposition of the Collateral required by law
shall be conclusively deemed reasonably and properly given if given by Secured
Party at least ten (10) calendar days before the date of such disposition.
Debtor hereby confirms, approves and ratifies all acts and deeds of Secured
Party relating to the foregoing, and each part thereof, and expressly waives any
and all claims of any nature, kind or description which it has or may hereafter
have against Secured Party or its representatives, by reason of taking, selling
or collecting any portion of the Collateral. Debtor consents to releases of the
Collateral at any time (including prior to default) and to sales of the
Collateral in groups, parcels or portions, or as an entirety, as Secured Party
shall deem appropriate. Debtor expressly absolves Secured Party from any loss or
decline in market value of any Collateral by reason of delay in the enforcement
or assertion or nonenforcement of any rights or remedies under this Security
Agreement.
 
4.3   Standards for Exercising Remedies. To the extent that applicable law
imposes duties on Secured Party to exercise remedies in a commercially
reasonable manner, Debtor acknowledges and agrees that it is not commercially
unreasonable for Secured Party (a) to incur expenses deemed necessary by Secured
Party to prepare Collateral for disposition or otherwise 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
 
 
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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, (0 to contact other Persons, whether or not in the same
business as Debtor, 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, including any warranties of title, (k) to
purchase insurance or credit enhancements to insure Secured Party against risks
of loss, collection or disposition of Collateral or to provide to Secured Party
a guaranteed return from the collection or disposition of Collateral, or (1) to
the extent deemed appropriate by Secured Party, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist
Secured Party in the collection or disposition of any of the Collateral. Debtor
acknowledges that the purpose of this section is to provide non-exhaustive
indications of what actions or omissions by Secured Party would not be
commercially unreasonable in Secured Party's exercise of remedies against the
Collateral and that other actions or omissions by Secured Party shall not be
deemed commercially unreasonable solely on account of not being indicated in
this Section. Without limitation upon the foregoing, nothing contained in this
Section shall be construed to grant any rights to Debtor or to impose any duties
on Secured Party that would not have been granted or imposed by this Security
Agreement or by applicable law in the absence of this Section.
 
4.4   UCC and Offset Rights. Secured Party may exercise, from time to time, any
and all rights and remedies available to it under the UCC or under any other
applicable law in addition to, and not in lieu of, any rights and remedies
expressly granted in this Security Agreement or in any other agreements between
any Obligor and Secured Party, and may, without demand or notice of any kind,
appropriate and apply toward the payment of such of the Obligations, whether
matured or unmatured, including costs of collection and attorneys' and
paralegals' fees and costs, and in such order of application as Secured Party
may, from time to time, elect, any indebtedness of Secured Party to any Obligor,
however created or arising, including balances, credits, deposits, accounts or
moneys of such Obligor in the possession, control or custody of, or in transit
to Secured Party. Debtor, on behalf of itself and any Obligor, hereby waives the
benefit of any law that would otherwise restrict or limit Secured Party in the
exercise of its right, which is hereby acknowledged, to appropriate at any time
hereafter any such indebtedness owing from Secured Party to any Obligor.
 
4.5   Additional Remedies. Upon the occurrence of an Event of Default, Secured
Party shall have the right and power to:
 
(a)instruct Debtor, at its own expense, to notify any parties obligated on any
of the Collateral, including any Account Debtors, to make payment directly to
Secured Party of any amounts due or to become due thereunder, or Secured Party
may directly notify such obligors of the security interest of Secured Party,
and/or of the assignment to Secured Party of the Collateral and direct such
obligors to make payment to Secured Party of any amounts due or to become due
with respect thereto, and thereafter, collect any such amounts due on the
Collateral directly from such Persons obligated thereon;
 
 
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(b) enforce collection of any of the Collateral, including any Accounts, by suit
or otherwise, or make any compromise or settlement with respect to any of the
Collateral, or surrender, release or exchange all or any part thereof, or
compromise, extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder;
 
(c) take possession or control of any proceeds and products of any of the
Collateral, including the proceeds of insurance thereon;
 
(d) extend, renew or modify for one or more periods (whether or not longer than
the original period) the Obligations or any obligation of any nature of any
other obligor with respect to the Obligations;
 
(e) grant releases, compromises or indulgences with respect to the Obligations,
any extension or renewal of any of the Obligations, any security therefor, or to
any other obligor with respect to the Obligations;
 
(f)transfer the whole or any part of Capital Securities which may constitute
Collateral into the name of Secured Party or Secured Party's nominee without
disclosing, if Secured Party so desires, that such Capital Securities so
transferred are subject to the security interest of Secured Party, and any
corporation, association, or any of the managers or trustees of any trust
issuing any of such Capital Securities, or any transfer agent, shall not be
bound to inquire, in the event that Secured Party or such nominee makes any
further transfer of such Capital Securities, or any portion thereof, as to
whether Secured Party or such nominee has the right to make such further
transfer, and shall not be liable for transferring the same;
 
(g) vote the Collateral;
 
(h) make an election with respect to the Collateral under Section 1111 of the
Bankruptcy Code or take action under Section 364 or any other section of
Bankruptcy Code; provided, however, that any such action of Secured Party as set
forth herein shall not, in any manner whatsoever, impair or affect the liability
of Debtor hereunder, nor prejudice, waive, nor be construed to impair, affect,
prejudice or waive Secured Party's rights and remedies at law, in equity or by
statute, nor release, discharge, nor be construed to release or discharge,
Debtor, any guarantor or other Person liable to Secured Party for the
Obligations; and
 
(i) at any time, and from time to time, accept additions to, releases,
reductions, exchanges or substitution of the Collateral, without in any way
altering, impairing, diminishing or affecting the provisions of this Security
Agreement, the Loan Documents, or any of the other Obligations, or Secured
Party's rights hereunder, under the Obligations. Debtor hereby ratifies and
confirms whatever Secured Party may do with respect to the Collateral and agrees
that Secured Party shall not be liable for any error of judgment or mistakes of
fact or law with respect to actions taken in connection with the Collateral.
 
 
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4.6   Attorney-in-Fact. Debtor hereby irrevocably makes, constitutes and
appoints Secured Party (and any officer of Secured Party or any Person
designated by Secured Party for that purpose) as Debtor's true and lawful proxy
and attorney-in-fact (and agent-in-fact) in Debtor's name, place and stead, with
full power of substitution, to (i) take such actions as are permitted in this
Security Agreement, (ii) execute such financing statements and other documents
and to do such other acts as Secured Party may require to perfect and preserve
Secured Party's security interest in, and to enforce such interests in the
Collateral, and (iii) upon the occurrence of an Event of Default, carry out any
remedy provided for in this Security Agreement, including endorsing Debtor's
name to checks, drafts, instruments and other items of payment, and proceeds of
the Collateral, executing change of address forms with the postmaster of the
United States Post Office serving the address of Debtor, changing the address of
Debtor to that of Secured Party, opening all envelopes addressed to Debtor and
applying any payments contained therein to the Obligations. Debtor hereby
acknowledges that the constitution and appointment of such proxy and
attorney-in-fact are coupled with an interest and are irrevocable. Debtor hereby
ratifies and confirms all that such attorney-in-fact may do or cause to be done
by virtue of any provision of this Security Agreement.
 
4.7   No Marshaling. Secured Party shall not be required to marshal any present
or future collateral security (including this Security Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order. To the extent that it lawfully may, Debtor 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 Secured Party's rights under
this Security Agreement or under any other instrument creating or evidencing any
of the Obligations or under which any of the Obligations is outstanding or by
which any of the Obligations is secured or payment thereof is otherwise assured,
and, to the extent that it lawfully may, Debtor hereby irrevocably waives the
benefits of all such laws.
 
4.8   No Waiver. No Event of Default shall be waived by Secured Party except in
writing. No failure or delay on the part of Secured Party in exercising any
right, power or remedy hereunder shall operate as a waiver of the exercise of
the same or any other right at any other time; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
There shall be no obligation on the part of Secured Party to exercise any remedy
available to Secured Party in any order. The remedies provided for herein are
cumulative and not exclusive of any remedies provided at law or in equity.
Debtor agrees that in the event that Debtor fails to perform, observe or
discharge any of its Obligations or liabilities under this Security Agreement or
any other agreements with Secured Party, no remedy of law will provide adequate
relief to Secured Party, and further agrees that Secured Party shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
 
 
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4.9   Application of Proceeds. Secured Party will within three (3) Business Days
after receipt of cash or solvent credits from collection of items of payment,
proceeds of Collateral or any other source, apply the whole or any part thereof
against the Obligations secured hereby. Secured Party shall further have the
exclusive right to determine how, when and what application of such payments and
such credits shall be made on the Obligations, and such determination shall be
conclusive upon Debtor. Any proceeds of any disposition by Secured Party of all
or any part of the Collateral may be first applied by Secured Party to the
payment of expenses incurred by Secured Party in connection with the Collateral,
including reasonable attorneys' fees and legal expenses and costs as provided
for in Section 5.13 hereof.
 
Section 5   MISCELLANEOUS.
 
5.1   Entire Agreement. This Security Agreement and the other Loan Documents (i)
are valid, binding and enforceable against Debtor and Secured Party in
accordance with their respective provisions and no conditions exist as to their
legal effectiveness; (ii) constitute the entire agreement between the parties
with respect to the subject matter hereof and thereof; and (iii) are the final
expression of the intentions of Debtor and Secured Party. No promises, either
expressed or implied, exist between Debtor and Secured Party, unless contained
herein or therein. This Security Agreement, together with the other Loan
Documents, supersedes all negotiations, representations, warranties,
commitments, term sheets, discussions, negotiations, offers or contracts (of any
kind or nature, whether oral or written) prior to or contemporaneous with the
execution hereof with respect to any matter, directly or indirectly related to
the terms of this Security Agreement and the other Loan Documents. This Security
Agreement and the other Loan Documents are the result of negotiations between
Secured Party and Debtor and have been reviewed (or have had the opportunity to
be reviewed) by counsel to all such parties, and are the products of all
parties. Accordingly, this Security Agreement and the other Loan Documents shall
not be construed more strictly against Secured Party merely because of Secured
Party's involvement in their preparation.
 
5.2   Amendments; Waivers. No delay on the part of Secured Party in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by Secured Party of any right, power or remedy
preclude other or further exercise thereof, or the exercise of any other right,
power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Security Agreement or the other Loan Documents
shall in any event be effective unless the same shall be in writing and
acknowledged by Secured Party, and then any such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
 
5.3   WAIVER OF DEFENSES. DEBTOR WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE
OF ACTION, COUNTERCLAIM OR SETOFF WHICH DEBTOR MAY NOW HAVE OR HEREAFTER MAY
HAVE TO ANY ACTION BY SECURED PARTY IN ENFORCING THIS SECURITY AGREEMENT.
PROVIDED SECURED PARTY ACTS IN GOOD FAITH, DEBTOR RATIFIES AND CONFIRMS WHATEVER
SECURED PARTY MAY DO PURSUANT TO THE TERMS OF THIS SECURITY AGREEMENT. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY GRANTING ANY FINANCIAL
ACCOMMODATION TO DEBTOR.
 
 
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5.4   FORUM SELECTION AND CONSENT TO JURISDICTION. TO INDUCE SECURED PARTY TO
MAKE FINANCIAL ACCOMODATIONS TO DEBTOR, DEBTOR AGREES THAT ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS SECURITY AGREEMENT
OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
FEDERAL OR STATE COURTS OF MIAMI-DADE COUNTY, FLORIDA; PROVIDED THAT NOTHING IN
THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE SECURED PARTY
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.
DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF MIAMI-DADE COUNTY, FLORIDA, FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. DEBTOR AND SECURED PARTY FURTHER IRREVOCABLY CONSENT TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF FLORIDA. DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
 
5.5   WAIVER OF JURY TRIAL. DEBTOR AND SECURED PARTY, AFTER CONSULTING OR HAVING
HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS SECURITY AGREEMENT, ANY
NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY
COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH SECURED PARTY AND DEBTOR ARE
ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR SECURED PARTY GRANTING ANY FINANCIAL ACCOMMODATION TO DEBTOR.
 
5.6   Assignability. Secured Party, prior to the occurrence of an Event of
Default and with the consent of Debtor, which consent will not be unreasonably
withheld, and after the occurrence of an Event of Default without consent from
or notice to anyone, may at any time assign Secured Party's rights in this
Security Agreement, the other Loan Documents, the Obligations, or any part
thereof and transfer Secured Party's rights in any or all of the Collateral, and
Secured Party thereafter shall be relieved from all liability with respect to
such Collateral. This Security Agreement shall be binding upon Secured Party and
Debtor and its respective legal representatives and successors. All references
herein to Debtor shall be deemed to include any successors, whether immediate or
remote. In the case of a joint venture or partnership, the term "Debtor" shall
be deemed to include all joint venturers or partners thereof, who shall be
jointly and severally liable hereunder.
 
 
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5.7   Binding Effect. This Security Agreement shall become effective upon
execution by Debtor and Secured Party.
 
5.8   Governing Law. This Security Agreement shall be delivered and accepted in
and shall be deemed to be a contract made under and governed by the internal
laws of the State of Florida, without regard to conflict of laws principles.
 
5.9   Enforceability. Wherever possible, each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by, unenforceable or invalid under any jurisdiction, such provision
shall as to such jurisdiction, be severable and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
this Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
 
5.10   Time of Essence. Time is of the essence in making payments of all amounts
due Secured Party under the Loan Documents and in the performance and observance
by Debtor of each covenant, agreement, provision and term of this Security
Agreement and the other Loan Documents.
 
5.11   Counterparts; Facsimile Signatures. This Security Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Security Agreement. Receipt of an executed signature page to this Security
Agreement by facsimile or other electronic transmission shall constitute
effective delivery thereof. Electronic records of executed Loan Documents
maintained by Secured Party shall be deemed to be originals thereof.
 
5.12   Notices. Except as otherwise provided herein, Debtor waives all notices
and demands in connection with the enforcement of Secured Party's rights
hereunder. All notices, requests, demands and other communications provided for
hereunder shall be made in accordance with the terms of the Credit Agreement.
 
5.13   Costs, Fees and Expenses. Debtor shall pay or reimburse Secured Party for
all reasonable costs, fees and expenses incurred by Secured Party or for which
Secured Party becomes obligated in connection with the enforcement of this
Security Agreement, including search fees, costs and expenses and attorneys'
fees, costs and time charges of counsel to Secured Party and all taxes payable
in connection with this Security Agreement. In furtherance of the foregoing,
Debtor shall pay any and all stamp and other taxes, UCC search fees, filing fees
and other costs and expenses in connection with the execution and delivery of
this Security Agreement and the other Loan Documents to be delivered hereunder,
and agrees to save and hold Secured Party harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such costs and expenses. That portion of the Obligations consisting of
costs, expenses or advances to be reimbursed by Debtor to Secured Party pursuant
 
 
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to this Security Agreement or the other Loan Documents which are not paid on or
prior to the date hereof shall be payable by Debtor to Secured Party on demand.
If at any time or times hereafter Secured Party: (a) employs counsel for advice
or other representation (i) with respect to this Security Agreement or the other
Loan Documents, (ii) to represent Secured Party in any litigation, contest,
dispute, suit or proceeding or to commence, defend, or intervene or to take any
other action in or with respect to any litigation, contest, dispute, suit, or
proceeding (whether instituted by Secured Party, Debtor, or any other Person) in
any way or respect relating to this Security Agreement, or (iii) to enforce any
rights of Secured Party against Debtor or any other Person under of this
Security Agreement; (b) takes any action to protect, collect, sell, liquidate,
or otherwise dispose of any of the Collateral; and/or (c) attempts to or
enforces any of Secured Party's rights or remedies under this Security
Agreement, the costs and expenses incurred by Secured Party in any manner or way
with respect to the foregoing, shall be part of the Obligations, payable by
Debtor to Secured Party on demand.
 
5.14 Termination. This Security Agreement and the Liens and security interests
granted hereunder shall not terminate until the termination of the Credit
Agreement and the commitments to make Loans thereunder and the full and complete
performance and satisfaction and payment in full of all the Obligations (other
than contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted). Upon termination of this Security Agreement, Secured
Party shall also deliver to Debtor (at the sole expense of Debtor) such UCC
termination statements, certificates for terminating the liens on the Motor
Vehicles (if any) and such other documentation, without recourse, warranty or
representation whatsoever, as shall be reasonably requested by Debtor to effect
the termination and release of the Liens and security interests in favor of
Secured Party affecting the Collateral.
 
5.15 Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Debtor for liquidation or reorganization, should Debtor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of Debtor's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
 
[SIGNATURE PAGE FOLLOWS]
 
 
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IN WITNESS WHEREOF, Debtor and Secured Party have executed this Security
Agreement as of the date first above written.
 

  Debtor:           TOUCHIT TECHNOLOGIES, INC.,     a Nevada corporation        
 
 
By:
/s/ Andrew Brabin     Name: Andrew Brabin     Title: Chief Financial Officer    
     

 

 
Agreed and accepted:
          Secured Party:           TCA GLOBAL CREDIT MASTER FUND, LP          
 
By:
TCA Global Credit Fund GP, Ltd.     Its: General Partner             By: /s/
Robert Press     Name: Robert Press     Title: Director          

 
 
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Schedule 3.8
 
Collateral Locations/Places of Business
 
 
 
Istanbul Trakya Serbest Bölgesi Atatürk Bulvari Ali Riza Efendi cd. 
A4 Blok 
Çatalca/ISTANBUL
 
 
 
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