Blueprint





 






Exhibit
10.3

 


 



SECURITY AGREEMENT


 


This
SECURITY AGREEMENT (this
“Agreement”),
dated as of June 28, 2018, is made by and among ENDRA Life Sciences
Inc., a Delaware corporation (the “Grantor”), and the secured parties
listed on the signature pages hereof (collectively, the
“Secured
Parties” and each, individually, a “Secured Party”).

 



RECITALS

 


WHEREAS, pursuant to that certain
Securities Purchase Agreement, dated of even date herewith (as may
be amended, restated, supplemented, or otherwise modified from time
to time, including all schedules and exhibits thereto,
collectively, the “Securities Purchase Agreement”), by and among
the Grantor and each of the Secured Parties, Grantor has agreed to
sell, and each of the Secured Parties have each agreed to purchase,
severally and not jointly, certain Notes; and

 


WHEREAS, in order to induce the Secured
Parties to purchase, severally and not jointly, the Notes as
provided for in the Securities Purchase Agreement, Grantor has
agreed to grant a continuing security interest in and to the
Collateral in order to secure the prompt and complete payment,
observance and performance of the Secured Obligations (as defined
below).

 



AGREEMENTS

 


NOW, THEREFORE, for and in consideration
of the recitals made above and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as
follows:

 

1. Defined Terms. All capitalized
terms used herein (including in the preamble and recitals hereof)
without definition shall have the meanings ascribed thereto in the
Notes. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless
otherwise defined herein or in the Notes; provided, however, if the
Code is used to define any term used herein and if such term is
defined differently in different Articles of the Code, the
definition of such term contained in Article 9 of the Code shall
govern. In addition to those terms defined elsewhere in this
Agreement, as used in this Agreement, the following terms shall
have the following meanings:

 

(a) “Account” means an
“account” (as that term is defined in Article 9 of the
Code).

 

(b) “Account Debtor” means an
“account debtor” (as that term is defined in Article 9
of the Code).

 

(c) “Bankruptcy Code” means title 11 of
the United States Code, as in effect from time to
time.

 


 




 

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(d) “Books” means books and records
(including, without limitation, the Grantor’s Records)
indicating, summarizing, or evidencing the Grantor’s assets
(including the Collateral) or liabilities, the Grantor’s
Records relating to its business operations (including, without
limitation, stock ledgers) or financial condition, and the
Grantor’s goods or General Intangibles related to such
information.

 

(e) “Chattel Paper” means
“chattel paper” (as that term is defined in Article 9
of the Code) and includes tangible chattel paper and electronic
chattel paper.

 

(f) “Code” means the New York Uniform
Commercial Code, as in effect from time to time; provided, however,
in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection, priority, or remedies with
respect to any Secured Party’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in
a jurisdiction other than the State of New York, the term
“Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.

 

(g) “Collateral” has the meaning set
forth in Section 2.

 

(h) “Commencement Notice” means a
written notice, given by any Secured Party to the other Secured
Parties in accordance with the notice provisions set forth in the
Securities Purchase Agreement, pursuant to which such Secured Party
notifies the other Secured Parties of the existence of one or more
Events of Default and of such Secured Party’s intent to
commence the exercise of one or more of the remedies provided for
under this Agreement with respect to all or any portion of the
Collateral as a consequence thereof, which notice shall incorporate
a reasonably detailed description of each Event of Default then
existing and of the remedial action proposed to be
taken.

 

(i) “Commercial Tort Claims” means
“commercial tort claims” (as that term is defined in
Article 9 of the Code), and includes those commercial tort claims
listed on Schedule 1
attached hereto.

 

(j) “Equipment” means all
“equipment” (as that term is defined in Article 9
of the Code) in all of its forms of the Grantor, wherever located,
and including, without limitation, all machinery, apparatus,
installation facilities and other tangible personal property, and
all parts thereof and all accessions, additions, attachments,
improvements, substitutions, replacements and proceeds thereto and
therefor.

 

(k) “Copyrights” means all
copyrights and copyright registrations, and also includes (i) all
reissues, continuations, extensions or renewals thereof, (ii) all
income, royalties, damages and payments now and hereafter due or
payable under and with respect thereto, including payments under
all licenses entered into in connection therewith and damages and
payments for past or future infringements or dilutions thereof,
(iii) the right to sue for past, present and future infringements
and dilutions thereof, (iv) the goodwill of Grantor’s
business symbolized by the foregoing or connected therewith, and
(v) all of Grantor’s rights corresponding thereto throughout
the world.

 


 




 

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(l) “Event of Default” has the meaning
set forth in the Notes.

 

(m) “GAAP” means United States
generally accepted accounting principles, consistently
applied.

 

(n) “General Intangibles” means
“general intangibles” (as that term is defined in
Article 9 of the Code) and, in any event, includes payment
intangibles, contract rights, rights to payment, rights arising
under common law, statutes, or regulations, choses or things in
action, goodwill, programming materials, purchase orders, customer
lists, monies due or recoverable from pension funds, route lists,
rights to payment under any royalty or licensing agreements
(including Intellectual Property Licenses), infringement claims,
commercial computer programs, information contained on computer
disks or tapes, software, literature, reports, catalogs, pension
plan refunds, pension plan refund claims, insurance premium
rebates, tax refunds, and tax refund claims, interests in a
partnership or limited liability company which do not constitute a
security under Article 8 of the Code, and any other personal
property other than Commercial Tort Claims, money, Accounts,
Chattel Paper, goods, Negotiable Collateral, and oil, gas, or other
minerals before extraction.

 

(o) “Governmental Authority” means any
domestic or foreign federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency
or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or
body.

 

(p) “Insolvency Proceeding” means any
proceeding commenced by or against any Person under any provision
of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law or any equivalent laws in any other
jurisdiction, assignments for the benefit of creditors, formal or
informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or
other similar relief.

 

(q) “Intellectual Property” means
Patents, Copyrights, Trademarks, the goodwill associated with such
Trademarks, trade secrets and customer lists, and Intellectual
Property Licenses.

 

(r) “Intellectual Property Licenses”
means rights under or interests in any patent, trademark, copyright
or other intellectual property, including software license
agreements with any other party, whether the applicable Grantor is
a licensee or licensor under any such license agreement, as may be
amended, restated, supplemented, or otherwise modified from time to
time.

 

(s)  “Inventory”
means all “inventory” (as that term is defined in
Article 9 of the Code) in all of its forms of the Grantor, wherever
located, including, without limitation, (i) all goods in which the
Grantor has an interest in mass or a joint or other interest or
right of any kind (including goods in which the Grantor has an
interest or right as consignee), and (ii) all goods which are
returned to or repossessed by the Grantor, and all accessions
thereto, products thereof and documents therefor.

 


 




 

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(t) “Lien” means any mortgage, deed of
trust, pledge, hypothecation, assignment for security, security
interest, encumbrance, levy, lien or charge of any
kind.

 

(u) “Negotiable Collateral” means
letters of credit, letter-of-credit rights, instruments, promissory
notes, drafts, and documents.

 

(v) “New Subsidiary” has the meaning
set forth in the Notes.

 

(w) “Notes” has the meaning set forth
in the Securities Purchase Agreement.

 

(x) “Patents” means all patents and
patent applications, and also includes (i) all renewals thereof,
(ii) all income, royalties, damages and payments now and hereafter
due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages
and payments for past or future infringements or dilutions thereof,
(iii) the right to sue for past, present and future infringements
and dilutions thereof, and (iv) all of Grantor’s rights
corresponding thereto throughout the world.

 

(y)  “Permitted
Liens” (i) any Lien for taxes not yet due or
delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the
ordinary course of business by operation of law with respect to a
liability that is not yet due or delinquent or that is being
contested in good faith for which adequate reserves have been
established in accordance with GAAP, (iii) any Lien created by
operation of law, such as materialmen’s liens,
mechanics’ liens and other similar liens, arising in the
ordinary course of business with respect to a liability that is not
yet due or delinquent or that is being contested in good faith by
appropriate proceedings, (iv) Liens on Equipment having a fair
market value of not more than $450,000 in the aggregate, but only
if the lien constitutes a purchase money security interest incurred
in connection with the purchase of such Equipment, and (v) Liens
securing the Company’s obligations under the Transaction
Documents.

 

(z) “Permitted Secured Party” means,
with respect to the exercise of any remedy provided for under this
Agreement, (A) any Secured Party that has delivered a Commencement
Notice with respect to the exercise of such remedy to the other
Secured Parties and has not received a Veto Notice with respect
thereto within the Veto Period or (B) any Significant Secured Party
that has in connection with a Commencement Notice delivered a Veto
Notice to a Secured Party within the Veto Period; provided,
however, there shall only be a single Permitted Secured Party that
may exercise any specific remedy at any one time (it being agreed
that if a Commencement Notice is delivered by more than one Secured
Party with respect to any remedy provided for under this Agreement,
then the first Secured Party to deliver a Commencement Notice and
not receive a Veto Notice within the Veto Period shall be the only
Secured Party that may exercise such remedy).

 


 




 

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(aa) “Permitted
Transfers” means (i) sales of Inventory in the
ordinary course of business, (ii) licenses for the use of
Intellectual Property in the ordinary course of business that could
not result in a legal transfer of title of the licensed property,
or (iii) dispositions of worn-out, obsolete or surplus Equipment at
fair market value in the ordinary course of business.

 

(bb) “Person”
has the meaning set forth in the Securities Purchase
Agreement.

 

(cc) “Proceeds”
has the meaning set forth in Section 2.

 

(dd) “Real
Property” means any estates or interests in real
property now owned or hereafter acquired by Grantor and the
improvements thereto.

 

(ee) “Records”
means information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in
perceivable form.

 

(ff) “Secured
Obligations” means all of the present and future
payment and performance obligations of Grantor arising under this
Agreement, the Notes and the other Transaction Documents,
including, without duplication, reasonable outside attorneys’
fees and out-of-pocket expenses and any interest, fees, or expenses
that accrue after the filing of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding.

 

(gg) “Security
Documents” means, collectively, this Agreement and
each other security agreement, control agreement pledge agreement,
assignment, mortgage, security deed, deed of trust, and other
agreement or document executed and delivered by the Grantor as
security for any of the Secured Obligations, as each may be
amended, restated, supplemented, or otherwise modified from time to
time.

 

(hh) “Security
Interest” and “Security Interests” have the
meanings set forth in Section 2.

 

(ii) “Significant
Secured Party” means, on any date of determination,
one or more Secured Parties holding alone or in the aggregate
fifteen percent (15%) or more of the aggregate principal amount of
Notes outstanding on such date.

 

(jj) “Supporting
Obligations” means “supporting
obligations” (as such term is defined in Article 9 of the
Code).

 

(kk) “Trademarks”
means all trademarks, trade names, trademark applications, service
marks, service mark applications, and also includes (i) all
renewals thereof, (ii) all income, royalties, damages and payments
now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements
or dilutions thereof, (iii) the right to sue for past, present and
future infringements and dilutions thereof, (iv) the goodwill of
Grantor’s business symbolized by the foregoing or connected
therewith, and (v) all of Grantor’s rights corresponding
thereto throughout the world.

 


 




 

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(ll) “Transaction
Documents” has the meaning set forth in the Securities
Purchase Agreement.

 

(mm) “URL”
means “uniform resource locator,” an internet web
address.

 

(nn) “Veto
Notice” means, with respect to any Commencement
Notice, a written notice given by any Significant Secured Party to
the other Secured Parties in accordance with the notice provisions
set forth in the Securities Purchase Agreement pursuant to which
such Significant Secured Party notifies the other Secured Parties
of its objection to the commencement of the remedial action
specified in such Commencement Notice and certifies that, to the
best of its knowledge, it is a Significant Secured
Party.

 

(oo)  “Veto
Period” means, with respect to any Commencement
Notice, the period of ten (10) consecutive calendar days following
the delivery of such Commencement Notice to the Secured
Parties.

 

2. Grant of Security. The Grantor
hereby unconditionally grants, assigns, and pledges to each Secured
Party a separate, continuing security interest (each, a
“Security
Interest” and, collectively, the “Security Interests”) in all assets
of the Grantor whether now owned or hereafter acquired or arising
and wherever located (collectively, the “Collateral”), including, without
limitation, the Grantor’s right, title, and interest in and
to the following, whether now owned or hereafter acquired or
arising and wherever located:

 

(a) Accounts;

 

(b) Books;

 

(c) Chattel
Paper;

 

(d) Equipment and
fixtures;

 

(e) General
Intangibles;

 

(f) Intellectual
Property;

 

(g) Inventory;

 

(h) Negotiable
Collateral;

 

(i) Real
Property;

 

(j) rights in respect
of Supporting Obligations;

 

(k) Commercial Tort
Claims;

 


 




 

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(l) all of the
Grantor’s money, cash, cash equivalents, or other assets of
the Grantor that now or hereafter come into the possession,
custody, or control of any Secured Party; and

 

(m) all of the proceeds
and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance or Commercial Tort
Claims covering or relating to any or all of the foregoing, and any
and all Accounts, Books, Chattel Paper, Equipment, General
Intangibles, Intellectual Property, Inventory, Negotiable
Collateral, Real Estate, Supporting Obligations, money, or other
tangible or intangible property resulting from the sale, lease,
license, exchange, collection, or other disposition of any of the
foregoing, the proceeds of any award in condemnation with respect
to any of the foregoing, any rebates or refunds, whether for taxes
or otherwise, and all proceeds of any such proceeds, or any portion
thereof or interest therein, and the proceeds thereof, and all
proceeds of any loss of, damage to, or destruction of the above,
whether insured or not insured, and, to the extent not otherwise
included, any indemnity, warranty, or guaranty payable by reason of
loss or damage to, or otherwise with respect to any of the
foregoing (the “Proceeds”).

 

3. Security for Obligations. This
Agreement and the Security Interests created hereby secures the
payment and performance of the Secured Obligations, whether now
existing or arising hereafter.

 

4. Grantor Remains Liable.
Anything herein to the contrary notwithstanding, (a) the Grantor
shall remain liable under the contracts and agreements included in
the Collateral, to perform all of the duties and obligations
thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Parties, or any of them, of
any of the rights hereunder shall not release the Grantor from any
of its duties or obligations under such contracts and agreements
included in the Collateral, and (c) no Secured Party shall have any
obligation or liability under such contracts and agreements
included in the Collateral by reason of this Agreement, nor shall
any Secured Party be obligated to perform any of the obligations or
duties of the Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder. Until an Event
of Default shall occur and be continuing, except as otherwise
provided in this Agreement or any other Transaction Document, the
Grantor shall have the right to possession and enjoyment of the
Collateral for the purpose of conducting the ordinary course of its
businesses, subject to and upon the terms hereof and the other
Transaction Documents.

 

5. Representations and Warranties.
The Grantor hereby represents and warrants as follows:

 

(a) The exact legal
name of the Grantor is set forth in the preamble this
Agreement.

 

(b) Schedule 2
attached hereto sets forth (i) all Real Property owned or leased by
the Grantor, together with all other locations of Collateral, as of
the date hereof, and (ii) the chief executive office of the Grantor
as of the date hereof.

 


 




 

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(c) This Agreement
creates a valid security interest in all of the Collateral of the
Grantor, to the extent a security interest therein can be created
under the Code, securing the payment of the Secured Obligations.
Except to the extent a security interest in the Collateral cannot
be perfected by the filing of a financing statement under the Code,
all filings and other actions necessary to perfect such security
interest have been duly taken or will have been taken upon the
filing of financing statements listing the Grantor, as a debtor,
and Secured Parties, as secured parties, in the jurisdictions
listed on Schedule 3
attached hereto. Upon the making of such filings, Secured Parties
shall each have a first priority perfected security interest in all
of the Collateral of the Grantor to the extent such security
interest can be perfected by the filing of a financing
statement.

 

(d) Except for the
Security Interests created hereby, no Collateral is subject to any
Lien as of the date hereof other than Permitted Liens.

 

(e) No consent,
approval, authorization, or other order or other action by, and no
notice to or filing with, any Governmental Authority or any other
Person is required for the grant of a Security Interest by the
Grantor in and to the Collateral pursuant to this Agreement or for
the execution, delivery, or performance of this Agreement by the
Grantor.

 

6. Covenants. The Grantor
covenants and agrees with each Secured Party that from and after
the date of this Agreement and until the date of termination of
this Agreement in accordance with Section 24 hereof:

 

(a) Possession of Collateral. In
the event that any Collateral with a value in excess of $50,000
individually or $200,000 in the aggregate, including proceeds, is
evidenced by or consists of Negotiable Collateral or Chattel Paper,
and if and to the extent that perfection or priority of Secured
Parties’ respective Security Interests is dependent on or
enhanced by possession, the Grantor, immediately upon the written
request of any Secured Party, shall execute such other documents
and instruments as shall be requested by such Secured Party or, if
applicable, endorse and deliver physical possession of such
Negotiable Collateral or Chattel Paper to such Secured Party,
together with such undated powers endorsed in blank as shall be
requested by such Secured Party.

 

(b) Chattel Paper.

 

(i) The Grantor shall
take all steps reasonably necessary to grant each Secured Party
control of all Chattel Paper in accordance with the Code and with
respect to any electronic Chattel Paper having an aggregate value
or face amount in excess of $50,000 all “transferable
records” as that term is defined in Section 16 of the Uniform
Electronic Transactions Act and Section 201 of the federal
Electronic Signatures in Global and National Commerce Act as in
effect in any relevant jurisdiction; and

 

(ii) If
the Grantor retains possession of any Chattel Paper or instruments
(which retention of possession shall be subject to the extent
permitted hereby and by the Securities Purchase Agreement),
promptly upon the written request of any Secured Party, such
Chattel Paper and instruments shall be marked with the following
legend: “This writing and the obligations evidenced or
secured hereby are subject to the Security Interests of [names of
Secured Parties].”

 


 




 

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(c) Letter-of-Credit Rights. In the
event that the Grantor is or becomes the beneficiary of one or more
letters of credit with a face amount of greater than $50,000
individually or $100,000 in the aggregate, the Grantor shall
promptly (and in any event within five (5) Business Days after
becoming a beneficiary) notify the Secured Parties thereof and,
upon the request by any Secured Party, enter into a multi-party
agreement with the Secured Parties and the issuing or confirming
bank with respect to letter-of-credit rights assigning such
letter-of-credit rights to the Secured Parties and directing all
payments thereunder to the Secured Parties, all in form and
substance satisfactory to the Secured Parties.

 

(d) Commercial Tort Claims. The
Grantor shall promptly (and in any event within five (5) Business
Days of receipt thereof) notify the Secured Parties in writing upon
incurring or otherwise obtaining a Commercial Tort Claim having a
value or involving an asserted claim, in excess of $50,000 in the
aggregate after the date hereof and, upon the written request of
any Secured Party, promptly amend Schedule 1
to this Agreement to describe such after-acquired Commercial Tort
Claim in a manner that reasonably identifies such Commercial Tort
Claim, and hereby authorizes the filing of additional financing
statements or amendments to existing financing statements
describing such Commercial Tort Claims, and agrees to do such other
acts or things deemed necessary by any Secured Party to give the
Secured Parties a first priority, perfected security interest
(subject to Permitted Liens) in any such Commercial Tort
Claim.

 

(e) Transfers and Other Liens. The
Grantor shall not (i) sell, lease, license, assign (by operation of
law or otherwise), transfer or otherwise dispose of, or grant any
option with respect to, any of the Collateral, except for Permitted
Transfers or as expressly permitted by this Agreement and the other
Transaction Documents, or (ii) except for Permitted Liens, create
or permit to exist any Lien upon or with respect to any of the
Collateral without the consent of Secured Parties holding at least
a majority of the aggregate principal amount of the then
outstanding Notes. The inclusion of Proceeds in the Collateral
shall not be deemed to constitute consent by any Secured Party to
any sale or other disposition of any of the Collateral except as
expressly permitted in this Agreement or the other Transaction
Documents.

 

(f) Preservation of
Existence.  The Grantor shall maintain and
preserve its existence, rights and privileges, and become or remain
duly qualified and in good standing in each jurisdiction in which
the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification
necessary.

 

(g) Maintenance of
Properties. The Grantor shall maintain and preserve all
of its properties which are necessary or useful in the proper
conduct of its business in good working order and condition,
ordinary wear and tear excepted, and comply at all times with the
provisions of all leases to which it is a party as lessee or under
which it occupies property, so as to prevent any loss or forfeiture
thereof or thereunder.

 


 




 

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(h) Maintenance of
Insurance. The Grantor shall maintain insurance with
responsible and reputable insurance companies or associations
(including, without limitation, comprehensive general liability,
property, hazard, rent and business interruption insurance) with
respect to all of its assets and properties (including, without
limitation, all real properties leased or owned by it and any and
all Inventory and Equipment) and business, in such amounts and
covering such risks as is required by any governmental authority
having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar
businesses similarly situated, in each case, reasonably acceptable
to the Secured Parties.

 

(i) Other Actions as to Any and All
Collateral. The Grantor shall promptly and in any event
within five (5) Business Days (or such longer period as agreed
to by the Secured Parties, in their reasonable
discretion) of (i)
acquiring or otherwise obtaining any Collateral after the date
hereof consisting of Chattel Paper (electronic, tangible or
otherwise), documents (as defined in Article 9 of the Code),
promissory notes (as defined in the Code) or instruments (as
defined in the Code) or (ii) any amount payable under or in
connection with any of the Collateral being or becoming evidenced
after the date hereof by any Chattel Paper, documents, promissory
notes, or instruments and, in each such case, of clauses (i) and
(ii) above, having an aggregate value with respect to Collateral of
the same type or an individual value (or face amount) in excess of
$50,000 and, upon the written request of any Secured Party,
promptly execute such other documents, or if applicable, deliver
such Chattel Paper and do such other acts or things reasonably
requested by any Secured Party to protect the Secured
Parties’ respective Security Interests therein.

 

7. Relation to Other Transaction
Documents. In the event of any conflict between any
provision in this Agreement and any provision in the Securities
Purchase Agreement or Notes, such provision of the Securities
Purchase Agreement or Notes shall control, except to the extent the
applicable provision in this Agreement is more restrictive with
respect to the rights of the Grantor or imposes more burdensome or
additional obligations on the Grantor, in which event the
applicable provision in this Agreement shall control.

 


 




 

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8. Further
Assurances.

 

(a) The Grantor agrees
that from time to time, at its own expense, it will promptly
execute and deliver all further instruments and documents, and take
all further action, that any Secured Party may reasonably request,
in order to perfect and protect the Security Interests granted or
purported to be granted hereby or to enable any Secured Party to
exercise and enforce its rights and remedies hereunder with respect
to any of the Collateral; provided, however, in no event shall the
Grantor be required to take any action to perfect a Security
Interest in any Collateral represented by a certificate of
title.

 

(b) The Grantor authorizes the filing by any Secured
Party of financing or continuation statements, or amendments
thereto, including, but limited to, the recordation of the security
interests granted hereunder in Patents, Trademarks and Copyrights
in the United States Patent and Trademark Office and the United
States Copyright Office, and Grantor will execute and deliver to
such Secured Party such other instruments or notices, as may be
necessary or as such Secured Party may reasonably request, in order
to perfect and preserve the Security Interests granted or purported
to be granted hereby. Upon the Satisfaction in Full of the Secured
Obligations, each Secured Party shall (at Grantor’s expense)
file a termination statement and/or other necessary documents
terminating and releasing any and all financing statements or Liens
on the Collateral pursuant to Section 24 within
five (5) Business Days following a written request therefor from
Grantor.

 

(c) The Grantor
authorizes any Secured Party at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements
and amendments (i) describing the Collateral as “all real and
personal property of debtor” or “all assets of
debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater
detail, or (iii) that contain any information required by part 5 of
Article 9 of the Code for the sufficiency or filing office
acceptance. The Grantor also hereby ratifies any and all financing
statements or amendments previously filed by any Secured Party in
any jurisdiction. Upon the Satisfaction in Full of the Secured
Obligations, each Secured Party shall (at Grantor’s expense)
file a termination statement and/or other necessary documents
terminating and releasing any and all financing statements or Liens
on the Collateral pursuant to Section 24 within five (5) Business
Days following a written request therefor from
Grantor.

 

(d) The Grantor
acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without
the prior written consent of each Secured Party affected thereby,
subject to the Grantor’s rights under Section 9-509(d)(2) of
the Code.

 

(e) Upon one (1)
Business Day (or such longer period as agreed to by the Secured
Parties, in their reasonable discretion) advance notice, the
Grantor shall permit each Secured Party or its employees,
accountants, attorneys or agents, access to examine and inspect any
Collateral or any other property of the Grantor at any time during
ordinary business hours, at such Secured Party’s
expense.

 


 




 

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9. Secured Parties’ Right to
Perform Contracts, Exercise Rights, etc. Upon the occurrence
and during the continuance of an Event of Default, any Secured
Party may proceed to perform any and all of the obligations of the
Grantor contained in any contract, lease, or other agreement and
exercise any and all rights of the Grantor therein contained as
fully as the Grantor itself could.

 

10. Secured Parties Appointed
Attorney-in-Fact. The Grantor, on behalf of itself and each
New Subsidiary of the Grantor, hereby irrevocably appoints each
Secured Party as the attorney-in-fact of the Grantor and each such
New Subsidiary upon the occurrence and during the continuance of an
Event of Default. In the event the Grantor or any New Subsidiary
fails to execute or deliver in a timely manner any Transaction
Document or other agreement, document, certificate or instrument
which the Grantor or New Subsidiary now or at any time hereafter is
required to execute or deliver pursuant to the terms of the
Securities Purchase Agreement or any other Transaction Document,
upon the occurrence and during the continuance of an Event of
Default and after advance written notice to the Grantor, each
Secured Party shall have full authority in the place and stead of
the Grantor or New Subsidiary, and in the name of the Grantor, such
New Subsidiary or otherwise, to execute and deliver each of the
foregoing. Without limitation of the foregoing, upon the occurrence
and during the continuance of an Event of Default, each Secured
Party shall have full authority in the place and stead of the
Grantor and each New Subsidiary, and in the name of any the
Grantor, any such New Subsidiary or otherwise, to take any action
and to execute any instrument which such Secured Party may
reasonably deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:

 

(a) to ask, demand,
collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in
connection with any Collateral of the Grantor or New
Subsidiary;

 

(b) to receive and open
all mail addressed to the Grantor or New Subsidiary and to notify
postal authorities to change the address for the delivery of mail
to the Grantor or New Subsidiary to that of such Secured Party
(provided such Secured Party shall promptly provide a copy of all
such mail to the Grantor);

 

(c) to receive,
indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;

 

(d) to file any claims
or take any action or institute any proceedings which such Secured
Party may deem necessary for the collection of any of the
Collateral of the Grantor or New Subsidiary or otherwise to enforce
the rights of any Secured Party with respect to any of the
Collateral; and

 

(e) to use any labels,
patents, trademarks, trade names, URLs, domain names, industrial
designs, copyrights, customer lists, advertising matter or other
industrial or intellectual property rights, in advertising for the
exclusive purpose of sale and selling Inventory and other
Collateral and to collect any amounts due under Accounts, contracts
or Negotiable Collateral of the Grantor or New
Subsidiary.

 


 




 

12








 






 

 


To the
extent permitted by law, the Grantor hereby ratifies, for itself
and each New Subsidiary, all that such attorney-in-fact shall
lawfully do or cause to be done by virtue hereof. Such
power-of-attorney granted pursuant to this Section 10 is coupled
with an interest and shall be irrevocable until this Agreement is
terminated.

 

11. Secured Parties May Perform. If
the Grantor fails to perform any agreement contained herein, upon
the occurrence and during the continuance of an Event of Default,
after advance written notice to the Grantor, any Secured Party may
itself perform, or cause performance of, such agreement, and the
reasonable out-of-pocket expenses of such Secured Party incurred in
connection therewith shall be payable by the Grantor.

 

12. Secured Parties’ Duties; Bailee
for Perfection. The powers conferred on the Secured Parties
hereunder are solely to protect the Secured Parties’
respective interests in the Collateral and shall not impose any
duty upon any Secured Party in favor of the Grantor or any other
Secured Party to exercise any such powers. Except for the safe
custody of any Collateral in its actual possession and the
accounting for moneys actually received by it hereunder and except
as provided in the Code, no Secured Party shall have any duty to
the Grantor or any other Secured Party as to any Collateral or as
to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. A
Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of any Collateral in its actual
possession if such Collateral is accorded treatment substantially
equal to that which such Secured Party accords its own property.
Each Secured Party agrees that, with respect to any Collateral at
any time or times in its possession and in which any other Secured
Party has a Lien, the Secured Party in possession of any such
Collateral shall be the bailee of each other Secured Party solely
for purposes of perfecting (to the extent not otherwise perfected)
each other Secured Party’s Lien in such Collateral, provided
that no Secured Party shall be obligated to obtain or retain
possession of any such Collateral. Without limiting the generality
of the foregoing, the Secured Parties and the Grantor hereby agree
that any Secured Party that is in possession of any Collateral at
such time as the Secured Obligations owing to such Secured Party
have been paid in full may re-deliver such Collateral to the
Grantor or, if requested by any Secured Party prior to such
re-delivery, may deliver such Collateral (unless otherwise
restricted by applicable law or court order and subject in all
events to the receipt of an indemnification of all liabilities
arising from such delivery) to the requesting Secured Party,
without recourse to or representation or warranty by the Secured
Party in such possession.

 

13. Collection of Accounts, General
Intangibles and Negotiable Collateral. At any time upon the
occurrence and during the continuation of an Event of Default, any
Secured Party may, following delivery of advance written notice to
the Grantor, (a) notify Account Debtors of the Grantor that the
Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral have been assigned to such Secured Party or that such
Secured Party has a security interest therein, and (b) collect the
Accounts, General Intangibles and Negotiable Collateral directly,
and any collection costs and expenses shall constitute part of the
Secured Obligations.

 


 




 

13








 






 

 

14. Reserved

 

15. Reserved.

 

16. Remedies. Upon the occurrence
and during the continuance of an Event of Default:

 

(a) Any Secured Party
may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein, in the other Transaction
Documents, or otherwise available to it, all the rights and
remedies of a secured party on default under the Code or any other
applicable law. Without limiting the generality of the foregoing,
the Grantor expressly agrees that, in any such event, any Secured
Party without any demand, advertisement, or notice of any kind
(except a notice specified below of time and place of public or
private sale) to or upon the Grantor or any other Person (all and
each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent permitted by the Code or by
any other applicable law), may take immediate possession of all or
any portion of the Collateral and (i) require the Grantor to, and
the Grantor hereby agrees that it will at its own expense and upon
request of such Secured Party forthwith, assemble all or part of
the Collateral as directed by such Secured Party and make it
available to such Secured Party at one or more locations of the
Grantor, and (ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public
or private sale, at any of such Secured Party’s offices or
elsewhere, for cash, on credit, and upon such other terms as such
Secured Party may deem commercially reasonable. The Grantor agrees
that, to the extent notice of sale shall be required by law, at
least 10 days’ notice of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification and specifically such notice
shall constitute a reasonable “authenticated notification of
disposition” within the meaning of Section 9-611 of the Code.
No Secured Party shall be obligated to make any sale of Collateral
regardless of notice of sale having been given. Any Secured Party
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.

 

(b) Any cash held by
any Secured Party as Collateral and all proceeds received by any
Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied
against the Secured Obligations in the order set forth in Section
17 hereof. In the event the proceeds of Collateral are insufficient
for the Satisfaction in Full of the Secured Obligations (as defined
below), the Grantor shall remain jointly and severally liable for
any such deficiency.

 

(c) The Grantor hereby
acknowledges that the Secured Obligations arose out of a commercial
transaction, and agrees that if an Event of Default shall occur and
be continuing any Secured Party shall have the right to an
immediate writ of possession without notice of a hearing. Each
Secured Party shall have the right to the appointment of a receiver
for the properties and assets of the Grantor, and the Grantor
hereby consents to such rights and such appointment and hereby
waives any objection it may have thereto or the right to have a
bond or other security posted by any Secured Party.

 


 




 

14








 






 

 

(d) Notwithstanding
anything in this Agreement to the contrary, each Secured Party
agrees that it will not exercise any remedy provided for under this
Agreement with respect to all or any portion of the Collateral
unless such Secured Party is a Permitted Secured Party (provided
that the foregoing shall not prevent any Secured Party from
commencing or participating in any Insolvency Proceeding or taking
any action (other than with respect to the Collateral) to enforce
the payment or performance of the Grantor’s obligations under
any of the Notes or other Transaction Documents). This Section
16(d) is not intended to confer any rights or benefits upon the
Grantor or any other Person except Secured Parties, and no Person
(including the Grantor) other than the Secured Parties shall have
any right to enforce any of the provisions of this Section
16(d). As between the Grantor and any Secured Party, any action
that such Secured Party may take under this Agreement shall be
conclusively presumed to have been authorized and approved by the
other Secured Parties.

 

(e) Each Secured Party
may, in addition to other rights and remedies provided for herein,
in the other Transaction Documents, or otherwise available to it
under applicable law and without the requirement of notice to or
upon the Grantor or any other Person (which notice is hereby
expressly waived to the maximum extent permitted by the Code or any
other applicable law).

 

17. Priority of Liens; Application of
Proceeds of Collateral. Each Secured Party hereby
acknowledges and agrees that, notwithstanding the time or order of
the filing of any financing statement or other registration or
document with respect to the Collateral and the Security Interests,
or any provision of this Agreement, any other Security Document,
the Code or other applicable law, solely as amongst the Secured
Parties, the separate Security Interests of the Secured Parties
shall have the same rank and priority; provided, that, the
foregoing shall not apply to any Security Interest of a Secured
Party that is void or voidable as a matter of law. In furtherance
thereof, all proceeds of Collateral received by any Secured Party
shall be applied as follows:

 


(a)           first,
ratably to pay any expenses due to any of the Secured Parties
(including, without limitation, the reasonable costs and
out-of-pocket expenses paid or incurred by any Secured Party to
correct any default under or enforce any provision of the
Transaction Documents, or after the occurrence of any Event of
Default in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated) or indemnities then
due to any of the Secured Parties under the Transaction Documents,
until paid in full;

 


(b)           second,
ratably to pay any fees or premiums then due to any of the Secured
Parties under the Transaction Documents, until paid in
full;

 


(c)           third,
ratably to pay interest due in respect of the Secured Obligations
then due to any of the Secured Parties, until paid in
full;

 




 

15








 






 

 


(d)           fourth,
ratably to pay the principal amount of all Secured Obligations then
due to any of the Secured Parties, until paid in full;

 


(e)           fifth,
ratably to pay any other Secured Obligations then due to any of the
Secured Parties; and

 


(f)           sixth,
to Grantor or such other Person entitled thereto under applicable
law.

 

18. Remedies Cumulative. Each
right, power, and remedy of any Secured Party as provided for in
this Agreement or in any other Transaction Document or now or
hereafter existing at law or in equity or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to
every other right, power, or remedy provided for in this Agreement
or in the other Transaction Documents or now or hereafter existing
at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by any Secured Party, of any one or more
of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by such Secured Party of any or all
such other rights, powers, or remedies. The Grantor acknowledges
that a breach by it of its obligations hereunder will cause
irreparable harm to each Secured Party and that the remedy at law
for any such breach may be inadequate. The Grantor therefore agrees
that, in the event of any breach or any threatened breach, each
Secured Party shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such
threatened breach, without the necessity of showing economic loss
and without any bond or other security being required.

 

19. Marshaling. No Secured Party
shall be required to marshal any present or future collateral
security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of
them or to resort to such collateral security or other assurances
of payment in any particular order, and all of its rights and
remedies hereunder and in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to
all other rights and remedies, however existing or arising. To the
extent that it lawfully may, the Grantor hereby agrees that it will
not invoke any law relating to the marshaling of collateral which
might cause delay in or impede the enforcement of any Secured
Party’s rights and remedies under this Agreement or under any
other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is
outstanding or by which any of the Secured Obligations is secured
or payment thereof is otherwise assured, and, to the extent that it
lawfully may, the Grantor hereby irrevocably waives the benefits of
all such laws.

 


 




 

16








 






 

 

20. Acknowledgment.

 


(a)           Each
Secured Party hereby agrees and acknowledges that no other Secured
Party has agreed to act for it as an administrative or collateral
agent, and each Secured Party is and shall remain solely
responsible for the attachment, perfection and priority of all
Liens created by this Agreement or any other Security Document in
favor of such Secured Party. No Secured Party shall have by reason
of this Agreement or any other Transaction Document an agency
or fiduciary relationship with any other Secured Party. No Secured
Party (which term, as used in this sentence, shall include
reference to each Secured Party’s officers, directors,
employees, attorneys, agents and affiliates and to the officers,
directors, employees, attorneys and agents of such Secured
Party’s affiliates) shall: (i) have any duties or
responsibilities except those expressly set forth in this Agreement
and the other Security Documents or (ii) be required to take,
initiate or conduct any enforcement action (including any
litigation, foreclosure or collection proceedings hereunder or
under any of the other Security Documents). Without limiting the
foregoing, no Secured Party shall have any right of action
whatsoever against any other Secured Party as a result of such
Secured Party acting or refraining from acting hereunder or under
any of the Security Documents except as a result and to the extent
of losses caused by such Secured Party’s actual gross
negligence or willful misconduct (it being understood and
agreed by each Secured Party that the delivery by any Significant
Secured Party of one or more Veto Notices shall not be deemed to be
or construed as gross negligence or willful misconduct on the part
of the Secured Party delivering any such Veto Notice). No Secured
Party assumes any responsibility for any failure or delay in
performance or breach by the Grantor or any other Secured Party of
its obligations under this Agreement or any other Transaction
Document. No Secured Party makes to any other Secured Party
any express or implied warranty, representation or guarantee with
respect to any Secured Obligations, Collateral, Transaction
Document or the Grantor. No Secured Party nor any of its officers,
directors, employees, attorneys or agents shall be responsible to
any other Secured Party or any of its officers, directors,
employees, attorneys or agents for: (i) any recitals,
statements, information, representations or warranties contained in
any of the Transaction Documents or in any certificate or other
document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability
of any of the Transaction Documents; (iii) the validity,
genuineness, enforceability, collectability, value, sufficiency or
existence of any Collateral, or the attachment, perfection or
priority of any Lien therein; or (iv) the assets, liabilities,
financial condition, results of operations, business,
creditworthiness or legal status of the Grantor or any Account
Debtor. No Secured Party nor any of its officers, directors,
employees, attorneys or agents shall have any obligation to any
other Secured Party to ascertain or inquire into the existence of
any default or Event of Default, the observance or performance by
the Grantor of any of its duties or agreements under any of
the Transaction Documents or the satisfaction of any conditions
precedent contained in any of the Transaction
Documents.

 




 

17








 






 

 


(b)           Each
Secured Party hereby acknowledges and represents that it has,
independently and without reliance upon any other Secured Party,
and based upon such documents, information and analyses as it has
deemed appropriate, made its own credit analysis of the Grantor and
its own decision to enter into the Transaction Documents and to
purchase the Notes, and each Secured Party has made such
inquiries concerning the Transaction Documents, the Collateral and
the Grantor as such Secured Party feels necessary and appropriate,
and has taken such care on its own behalf as would have been the
case had it entered into the Transaction Documents without any
other Secured Party. Each Secured Party hereby further acknowledges
and represents that the other Secured Parties have not made any
representations or warranties to it concerning the Grantor, any of
the Collateral or the legality, validity, sufficiency or
enforceability of any of the Transaction Documents. Each Secured
Party also hereby acknowledges that it will, independently and
without reliance upon the other Secured Parties, and based upon
such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own
credit decisions in taking or refraining to take any other
action under this Agreement or the Transaction Documents. No
Secured Party shall have any duty or responsibility to provide any
other Secured Party with any notices, reports or certificates
furnished to such Secured Party by the Grantor or any credit or
other information concerning the affairs, financial condition,
business or assets of the Grantor (or any of its affiliates) which
may come into possession of such Secured Party.

 

21. Indemnity and
Expenses.

 

(a) Without limiting
any obligations of the Grantor under the Securities Purchase
Agreement, the Grantor agrees to indemnify all Secured Parties from
and against all claims, lawsuits and liabilities (including
reasonable external attorneys’ fees) arising out of or
resulting from this Agreement (including enforcement of this
Agreement) or any other Transaction Document, except claims, losses
or liabilities resulting from the gross negligence or willful
misconduct of the party seeking indemnification as determined by a
final non-appealable order of a court of competent jurisdiction.
This provision shall survive the termination of this Agreement and
the Transaction Documents and the Satisfaction in Full of the
Secured Obligations.

 

(b) The Grantor shall,
upon demand, pay to each Secured Party all of the reasonable costs
and out-of-pocket expenses which such Secured Party may incur in
connection with (i) the custody, preservation, use or operation of,
or, upon an Event of Default, the sale of, collection from, or
other realization upon, any of the Collateral in accordance with
this Agreement and the other Transaction Documents, (ii) the
exercise or enforcement of any of the rights of such Secured Party
hereunder or (iii) the failure by the Grantor to perform or observe
any of the provisions hereof.

 


 




 

18








 






 

 

22. Merger, Amendments; Etc. THIS
AGREEMENT, TOGETHER WITH THE OTHER TRANSACTION DOCUMENTS,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES SOLELY WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS
BETWEEN THE PARTIES. No provision of this Agreement may be amended
other than by an instrument in writing signed by the Grantor and
Secured Parties holding at least a majority of the aggregate
principal amount of the then outstanding Notes, and any amendment
to any provision of this Agreement made in conformity with the
provisions of this Section 22 shall be binding on all Secured
Parties, provided that no such amendment shall be effective to the
extent that it (1) applies to less than all of the Secured Parties
or (2) imposes any obligation or liability on any Secured Party
without such Secured Party’s prior written consent (which may
be granted or withheld in such Secured Party’s sole
discretion). No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party,
provided that all of the single Significant Secured Parties (in a
writing signed by all such Significant Secured Parties) may waive
any provision of this Agreement, and any waiver of any provision of
this Agreement made in conformity with the provisions of this
Section 22 shall be binding on all Secured Parties, provided that
no such waiver shall be effective to the extent that it (1) applies
to less than all the Secured Parties (unless a party gives a waiver
as to itself only) or (2) imposes any obligation or liability on
any Secured Party without such Secured Party’s prior written
consent (which may be granted or withheld in such Secured
Party’s sole discretion).

 

23. Addresses for Notices. All
notices and other communications provided for hereunder (a) shall
be given in the form and manner set forth in the Securities
Purchase Agreement and (b) shall be delivered, (i) in the case of
notice to the Grantor, by delivery of such notice to the
Grantor’s address specified in the Securities Purchase
Agreement or at such other address as shall be designated by the
Grantor in a written notice to each of the Secured Parties in
accordance with the provisions thereof, and (ii) in the case of
notice to any Secured Party, by delivery of such notice to such
Secured Party at its address specified in the Securities Purchase
Agreement or at such other address as shall be designated by such
Secured Party in a written notice to the Grantor and each other
Secured Party in accordance with the provisions
thereof.

 

24. Separate, Continuing Security
Interests; Assignments under Transaction Documents. This
Agreement shall create a separate, continuing security interest in
the Collateral in favor of each Secured Party and shall (a) remain
in full force and effect until Satisfaction in Full of the Secured
Obligations, (b) be binding upon the Grantor, and its permitted
successors and permitted assigns, and (c) inure to the benefit of,
and be enforceable by, the Secured Parties and their respective
successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Secured Party may, in
accordance with the provisions of the Transaction Documents, assign
or otherwise transfer all or any portion of its rights and
obligations under the Transaction Documents to any other Person,
and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party herein or
otherwise. Upon Satisfaction in Full of the Secured Obligations,
the Security Interests granted hereby shall terminate and all
rights to the Collateral shall revert to the Grantor or any other
Person entitled thereto. At such time, each Secured Party will (i)
authorize the filing of appropriate termination statements to
terminate such Security Interests, (ii) return to the Grantor any
Collateral in its possession and (iii) execute and deliver such
other releases and terminations as may be reasonably requested by
the Grantor. No transfer or renewal, extension, assignment, or
termination of this Agreement or any other Transaction Document, or
any other instrument or document executed and delivered by the
Grantor to any Secured Party nor any additional loans made by any
Secured Party to the Grantor, nor the taking of further security,
nor the retaking or re-delivery of the Collateral to the Grantor,
or any of them, by any Secured Party, nor any other act of the
Secured Parties, or any of them, shall release the Grantor from any
obligation, except a release or discharge executed in writing by
all Secured Parties. No Secured Party shall by any act, delay,
omission or otherwise, be deemed to have waived any of its rights
or remedies hereunder, unless such waiver is in writing and signed
by such Secured Party and then only to the extent therein set
forth. A waiver by any Secured Party of any right or remedy on any
occasion shall not be construed as a bar to the exercise of any
such right or remedy which such Secured Party would otherwise have
had on any other occasion.

 


 




 

19








 






 

 

25. Governing
Law; Jurisdiction; Service of Process; Jury Trial. All
questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper; provided, however, any suit seeking
enforcement against any Collateral or other property may be
brought, at any Secured Party’s option, in the courts of any
jurisdiction where such Secured Party elects to bring such action
or where such Collateral or other property may be found. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

26. Miscellaneous.

 

(a) This Agreement may
be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains
a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding
obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such
signature page were an original thereof. Any party delivering an
executed counterpart of this Agreement by facsimile or other
electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver
an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement. The foregoing
shall apply to each other Security Document mutatis mutandis.

 

(b) Any provision of
this Agreement which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.

 


 




 

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(c) Headings used in
this Agreement are for convenience only and shall not be used in
connection with the interpretation of any provision
hereof.

 

(d) The pronouns used
herein shall include, when appropriate, either gender and both
singular and plural, and the grammatical construction of sentences
shall conform thereto.

 

(e) The language used
in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict
construction will be applied against any party. For clarification
purposes, the Recitals are part of this Agreement.

 

(f) Unless the context
of this Agreement or any other Transaction Document clearly
requires otherwise, references to the plural include the singular,
references to the singular include the plural, the terms
“includes” and “including” are not
limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase
“and/or.” The words “hereof,”
“herein,” “hereby,”
“hereunder,” and similar terms in this Agreement or any
other Transaction Document refer to this Agreement or such other
Transaction Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Transaction
Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement
unless otherwise specified. Any reference in this Agreement or in
any other Transaction Document to any agreement, instrument, or
document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein).
“Satisfaction in Full of the
Secured Obligations” shall mean the indefeasible
payment in full in cash and discharge, or other satisfaction in
accordance with the terms of the Transaction Documents and
discharge, of all Secured Obligations in full. Any reference herein
to any Person shall be construed to include such Person’s
permitted successors and permitted assigns. Any requirement of a
writing contained herein or in any other Transaction Document shall
be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to
the accuracy and completeness of the information contained
therein.

 

(g) All dollar amounts
referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts
owing under this Agreement and all other Transaction Documents
shall be paid in U.S. Dollars. All amounts denominated in other
currencies shall be converted into the U.S. Dollar equivalent
amount in accordance with the Exchange Rate on the date of
calculation. “Exchange
Rate” means, in relation to any amount
of currency to be converted into U.S. Dollars pursuant to this
Agreement, the U.S. Dollar exchange rate as published in The Wall
Street Journal on the relevant date of calculation.

 


[signature
pages follow]

 




 

21








 






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

 


	

GRANTOR:


 

	


ENDRA LIFE SCIENCES INC., a Delaware
corporation


By:                                                                 


      Francois
Michelon


      President
and CEO


 

 


 







 

 


 




 

22








 






 

 


	

SECURED
PARTIES:

	


[________________________]


By:                                                                 


      Name:


      Title:


 

 


 

	
 







 

 


 

 

 




 

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