Document:

f8k121609ex10xvi_swissinso.htm

     

     

    Exhibit 10.16

     

    
      SECURITY
AGREEMENT

      

      THIS SECURITY AGREEMENT (this
“Security Agreement”),
dated as of ___________________, 2009, by and between SwissINSO SA, a Swiss
corporation (“SwissINSO”), with an address
at Biopole, Route de la Corniche, 1066 Epalinges, Switzerland, and each of those
persons and entities whose names are set forth on the signature page hereto
(collectively, the “Secured
Parties”).

      

      W I T N E
S S E T H:

      

      WHEREAS,
SwissINSO Holding Inc. (the “Issuer”) has issued or will be
issuing to the Secured Parties secured promissory notes (the “Notes”), in the aggregate
maximum principal  amount of $15,000,000;

      

      WHEREAS,
SwissINSO is a wholly-owned subsidiary of the Issuer and will benefit directly
from the issuance of the Notes;

      

      WHEREAS,
as security for the prompt and complete payment and performance in full by the
Issuer of the Notes and the other Secured Obligations (as herein defined),
SwissINSO has agreed to enter into this Security Agreement assigning, pledging,
conveying, hypothecating, transferring, granting and delivering to the Secured
Parties a security interest in and to the Collateral (as defined
herein).

      

      NOW,
THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is hereby agreed as follows:

      

      1.           SECURITY
INTEREST.

      

      1.1           Grant of
Security.   As security for the prompt and complete
payment and performance in full by the Issuer of the indebtedness, together with
all interest, fees and other charges, arising under the Notes and including any
of its remedies under the Notes (the “Secured Obligations”),
SwissINSO hereby grants, assigns, conveys, mortgages, pledges, hypothecates and
transfers to the Secured Parties a first priority lien on and security interest
in, all of SwissINSO’s right, title and interest in, to and under, all of the
property and assets currently owned by or owing to, or hereafter acquired by or
arising in favor of, SwissINSO, wherever located, including, but not limited to,
all accounts, deposit accounts, chattel paper, instruments, documents,
securities, contract rights, receivables, equipment, goods, inventory,
investment property, goodwill, general intangibles, intellectual property,
patents, patent applications, trademarks, trademark applications, trade names,
copyrights, copyright applications, Internet domain names, service marks, trade
secrets, know-how, technology, software, hardware, commercial tort claims,
warranties and guarantees, as any of the foregoing terms may be defined in the
UCC, and including any products, proceeds (including insurance proceeds) or
income derived therefrom, whether by disposition or otherwise (all of the above,
collectively, the “Collateral”).  Notwithstanding
the foregoing, in the event that SwissINSO obtains commercial or equipment
financing for the purchase of water purification units, machinery and other
similar equipment in connection with its business and the lender requires a
first priority lien on and security interest in such property, the Secured
Parties agree that their lien on such property will be subordinate to that of
the lender.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      1.2           Continuing
Agreement.  This Security Agreement shall create a continuing
security interest in the Collateral and shall remain in full force and effect
until performance in full of the Secured Obligations.

      

      1.3           Termination. Upon
satisfaction of the Secured Obligations, whether by payment or conversion into
shares of the Common Stock of the Issuer pursuant to the terms and provisions of
the Notes, this Agreement shall automatically be null and void and have no
further force and effect without any action on the part of any
party.

      

      2.           PERFECTION
OF SECURITY INTEREST.

      

      2.1           Authorization to File
Financing Statements.  SwissINSO agrees to execute all such
financing statements pursuant to the Uniform Commercial Code or similar filings
as in effect from time to time in Switzerland or other foreign jurisdictions
(the “UCC”) or other
notices appropriate under applicable law.

      2.2           Collateral
Covenants.  To further insure the attachment, perfection
and  priority of, and the ability of the Secured Parties to enforce
the Secured Parties’ security interest in the Collateral, SwissINSO agrees to
take any and all other actions as the Secured Parties may determine to be
necessary or useful for the attachment, perfection, and priority of, and the
ability of the Secured Parties to enforce, the Secured Parties' security
interest in the Collateral, including, without limitation, (a) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the UCC, to the extent, if any, that SwissINSO's
signature is required therefor, (b) complying with any provision of any statute,
regulation or treaty of the United States or any foreign country as to the
Collateral if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of the Secured Parties to enforce, the
Secured Parties' security interest in such Collateral, (c) obtaining
governmental and other third party waivers, consents, and approvals in form and
substance satisfactory to the Secured Parties, and (d) taking all actions under
any other law, as reasonably determined by the Secured Parties to be
applicable.

      

      3.           EVENTS OF
DEFAULT.

      

      3.1           Event of
Default.  An Event of Default, as defined in the Notes, shall
constitute an automatic default hereunder.

      

      3.2           Rights upon Event of
Default.  Upon an Event of Default, the Secured Parties shall
have all the rights and remedies of a secured party under the UCC or with
respect to the Collateral, provided that Secured Parties holding at least eighty
percent (80%) of the aggregate amount of Notes elect to exercise such rights and
remedies.

       

       

      
        
           

        

        
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      4.           REPRESENTATIONS
AND WARRANTIES.

      

      4.1           Validity. The
security interest in the Collateral granted to the Secured Parties hereunder
constitutes and shall continue to constitute a legal, valid and, upon the filing
of a UCC financing statement, or similar statement in any foreign jurisdiction
applicable to the Collateral, fully perfected, security interest in the
Collateral.

      

      4.2           No Other
Liens.  Except for the liens granted hereunder, SwissINSO owns
and, as to all Collateral whether now existing or hereafter acquired, will
continue to own, the Collateral free and clear of any and all liens, rights or
claims, encumbrances, limitations or restrictions of all other persons or
entities; provided however that the foregoing restriction shall not prohibit
SwissINSO from obtaining a bank loan, revolving line of credit or similar
arrangements pursuant to which a security interest is customarily granted in the
ordinary course of business if, in connection therewith, the Secured Parties and
the new lender agree to an intercreditor agreement acceptable to the Secured
Parties and such new lender and provided further that the foregoing restriction
shall not prohibit SwissINSO from obtaining commercial or equipment financing as
contemplated in the last sentence of Section 1.1 hereof.

      

      4.3           Corporate
Representations.  SwissINSO (i) is a duly organized and validly
existing corporation in good standing under the laws of Switzerland, (ii) has
the corporate power and authority to own its property and assets and to transact
the business in which it is engaged or presently proposes to engage and (iii)
has duly qualified and is authorized to do business and is in good standing in
every jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified.  SwissINSO has
the corporate power and authority to execute, deliver and carry out the terms
and provisions of this Security Agreement and has taken all necessary corporate
action to authorize the execution, delivery and performance and filing of this
Security Agreement and any UCC financing or continuation statements, or
amendments thereto, and related agreements, instruments, endorsements, powers of
attorney or notices.  SwissINSO has duly executed and delivered this
Security Agreement, and this Security Agreement constitutes the legal, valid and
binding obligation of SwissINSO, enforceable in accordance with its
terms.

      

      5.           MISCELLANEOUS.

      

      5.1           Waiver.  No
course of dealing or usage of trade, and no oral or written representations or
agreement, between SwissINSO and the Secured Parties, whether or not relied on
or acted upon, and no act, delay or omission by Secured in exercising any right
or remedy hereunder or with respect to any Obligations shall operate as a waiver
thereof or of any other right or remedy, and no single or partial exercise
thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy.  The giving of notice or a demand by the
Secured Parties at any time shall not operate as a waiver in the future of the
Secured Parties’ right to exercise any right or remedy without notice or
demand.  The Secured Parties may remedy any default by SwissINSO in
any reasonable manner, without waiving the default remedied, and without waiving
any other prior or subsequent default by SwissINSO.

       

       

      
        
           

        

        
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      5.2           Amendment.  This
Agreement may be amended or modified only by a writing signed by all of the
parties hereto and any provision hereof may be waived only by a writing signed
by the Secured Parties.

      

      5.3           Severability.  The
provisions of this Security Agreement are severable, and if any clause or
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Security Agreement in any jurisdiction.

      

      5.4           Assignment.  The
benefits of this Security Agreement shall inure to the benefit of the successors
and assigns of the Secured Parties.  The rights and obligations of
SwissINSO under this Security Agreement shall not be assigned or delegated, by
operation of law or otherwise, without the prior consent of the Secured Parties,
and any such assignment or attempted assignment shall be void, of no force or
effect, and shall constitute a material default by SwissINSO.

      

      5.5           Headings.  The
headings contained herein shall be for convenience of reference only and shall
not have any bearing in the meaning of the provisions contained
herein.

      

      5.6           CHOICE OF
LAW.  THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SWITZERLAND.

      

      5.7          SWISSINSO WAIVES ANY AND ALL
RIGHTS TO A TRIAL BY JURY. ALL PARTIES TO THIS AGREEMENT UNCONDITIONALLY,
IRREVOCABLY, AND EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, SUIT, COUNTERCLAIM, OR CROSS-CLAIMS ARISING DIRECTLY OR INDIRECTLY
IN ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT, OR OTHERWISE) IN ANY WAY
ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT OR TRANSACTIONS OR THE
RELATIONSHIPS ESTABLISHED THEREUNDER. ALL PARTIES CONFIRM THAT THE FOREGOING
WAIVER OF A TRIAL BY JURY IS INFORMED AND FREELY MADE.

      

      [Remainder
of Page Intentionally Omitted; Signature Pages to Follow]

       

       

       

      
        
           

        

        
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      IN WITNESS WHEREOF, the undersigned
have executed this Security Agreement on the date first set forth
above.

      

       
 

      

      SWISSINSO
SA

       

      By:           __________________________

      Name:      Yves
Ducommun

      Title:        Chief
Executive Officer

       

       

       

      SECURED
PARTIES

       

      By:          __________________________

      Name:     __________________________

      Title:        __________________________

      

      

      
 

       5f8k121609ex10xvii_swissinso.htm

     

    Exhibit 10.17

     

    
      SWISSINSO
HOLDING INC.

       

      OUTSIDE
DIRECTORS’ AGREEMENT

       

      THIS OUTSIDE DIRECTORS’
AGREEMENT (the “Agreement”) is executed and entered into effective as of
_____________, 2009 (the “Effective Date”) by and between SwissINSO Holding
Inc., a Delaware corporation with offices at 590 Madison Avenue, 21st
Floor, New York, New York 10022 (the “Company”), and _________________, an
individual with offices at _______________________________ (the
“Director”).

      

      WHEREAS,
the Company has requested that Director serve on its Board of Directors as an
independent director;

      

      WHEREAS,
in order to induce Director to serve on the Board, the Company has agreed to pay
Director the compensation set forth below and to obligate itself contractually
to indemnify Director to the fullest extent permitted by applicable law;
and

      

      WHEREAS,
Director has agreed to serve on the Board in consideration of the
foregoing.

      

      NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Director hereby covenant and agree as follows:

      

      1. Service
By Director; Duties; Fiduciary Duty.  Director agrees to serve
as a member of the Board of Directors of the Company (the “Board”) during the
term of this Agreement (the “Term”).  Notwithstanding the foregoing,
Director may at any time and for any reason resign as a member of the Board,
subject to the provisions of this Agreement and any contractual or other
obligation imposed by operation of law.  As an independent member of
the Board, Director shall use his best efforts to perform the duties commonly
incident to the office, including, without limitation, attending or otherwise
participating in all regular and special meetings of the Board; reviewing the
performance of the officers of the Company; making himself reasonably available
for consultation with the officers of the Company immediately before and after
Board meetings, as needed; advising the Company in development and
implementation of its strategic development and business plans; assisting the
Company in the development of its capitalization plan; and doing all other
things reasonably requested by the Board in order to advance the business and
economic interests of the Company and its shareholders.  Director
acknowledges and agrees that, in his capacity as a member of the Board, he has a
fiduciary duty to the Company and its shareholders.  Accordingly,
Director agrees to use his best efforts to refrain from and avoid any action or
activity that would constitute or be likely to create a conflict of interest
with respect to his duties to the Company or a breach of his fiduciary duty to
the Company and its shareholders.  Director further covenants and
agrees to use his best efforts to comply with and abide by all policies,
procedures, guidelines and governing principles as may be adopted by the Board
from time to time, to serve the Company faithfully and to the best of his
ability and to devote that amount of time, attention and effort to the Company
which is reasonably necessary in order to satisfy the requirements of the
Board.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2. Term.  This
Agreement shall be effective as of the Effective Date and shall continue for a
period of one (1) year thereafter (the “Term”), terminating on the first
anniversary of the Effective Date (the “Termination Date”).  This
Agreement will terminate automatically without the necessity of further notice
or action of any kind upon the Termination Date, or earlier upon Director’s
resignation or removal from the Board for any reason.  Following the
expiration of the Term, Director may be elected to serve on the Board for
additional terms, subject to the approval of the shareholders of the Company,
and in such event, it is anticipated that the Company will enter into a new
agreement with Director.

       

      3. Director’s
Fee; Options; Expenses.  The Company shall pay Director an
annual director’s fee in the  amount of  $24,000, payable in
equal monthly installments in advance on or before the first day of each month
throughout the Term.  The Company shall also grant to Director a
non-qualified stock option (the “Option”) under a Stock Incentive Plan to be
adopted by the Company to purchase 300,000 shares (the “Option Shares”) of the
Company’s common stock (the “Common Stock”) at an exercise price equal to the
closing selling price of the Common Stock on the date of grant.  The
terms and conditions of the Option shall be set forth in a separate Stock Option
Agreement to be provided by the Company.  The Option Shares shall vest
as follows: 100,000 shares on the date of grant, 66,667 shares on the first
anniversary of the date of grant, 66,667 shares on the second anniversary of the
date of grant and 66,666 shares on the third anniversary of the date of grant,
assuming that Director is still a member of the Board on each of such
dates.  The Company will also reimburse Director promptly for all
reasonable, pre-approved business expenses reasonably incurred by Director in
the pursuit and furtherance of the Company’s business.  Such expenses
shall be reimbursed only upon presentation to the Company of appropriate
documentation substantiating such expense.

       

      4. Protection
of Company Property.  Director recognizes and acknowledges that
he will have access to Confidential Information (as defined below) relating to
the business of the Company or of persons with whom the Company may have
business relationships.  Except as permitted herein or as may be
approved by the Company from time to time, Director will not, during the Term or
at any time thereafter, use, disclose or permit to be known by any other person
or entity any Confidential Information of the Company (except as required by
applicable law or in connection with the performance of Director’s duties and
responsibilities hereunder).  If Director is requested or becomes
legally compelled to disclose any of the Confidential Information, he will give
prompt notice of such request or legal compulsion to the Company.  The
term “Confidential Information” means information relating to the Company’s
business affairs, proprietary technology, trade secrets, patented processes,
research and development data, know-how, market studies and forecasts,
competitive analyses, pricing policies, vendor and supplier lists, employee
lists, employment agreements (other than this Agreement), personnel policies,
the substance of agreements with customers, suppliers and others, marketing
arrangements, customer lists, commercial arrangements, or any other information
relating to the Company’s business that is not generally known to the public or
to actual or potential competitors of the Company (other than through a breach
of this Agreement).  This obligation shall continue until such
Confidential Information becomes publicly available, other than pursuant to a
breach of this Section 4 by Director, regardless of whether Director continues
to be employed by the Company.

       

      5. Indemnification;
D&O Insurance.  The Company shall indemnify Director to the
fullest extent permitted under, and otherwise in accordance with the provisions
of, Section 145 of the General Corporation Law of the State of Delaware in
effect on the Effective Date or as such laws may from time to time be
amended.  The Company shall at all times during the Term of this
Agreement maintain a standard policy of D&O insurance covering the actions
of the Board, including those of Director, on behalf of the Company, in an
amount to be determined by the Board.

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      6. General
Provisions.

       

      6.1 Modification
and Waiver.  No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

       

      6.2 Severability.  If
any provision of this Agreement (or any portion thereof) is held to be invalid,
illegal or unenforceable for any reason whatever, such provision shall be
limited or modified in its application to the minimum extent necessary to avoid
the invalidity, illegality or unenforceability of such provision, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby and to the fullest extent
possible, the provisions of this Agreement shall be construed so as to give
effect to the intent manifested by the provision (or portion thereof) held
invalid, illegal or unenforceable.

       

      6.3 Notices.  Any
notice or other communication in connection with this Agreement may be made and
is deemed to be given as follows: (i) if in writing and delivered in person or
by courier, on the date when it is delivered; or (ii) if sent by certified or
registered mail or the equivalent (return receipt requested), on the date such
mail is delivered.  Any such notice or communication given pursuant to
this section shall be addressed to the intended recipient at its or
his  address (which may be changed by either party at any time)
specified at the beginning of this Agreement.

       

      6.4 Governing
Law; Venue.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
conflicts of law principles thereof.  Venue for any suit or action to
enforce or interpret this Agreement shall lie exclusively in the State and
Federal courts of Delaware.

       

      6.5 Attorney
Fees.  If any suit or action is instituted to enforce or
interpret this Agreement, the prevailing party shall be entitled, in addition to
the cost of disbursements otherwise allowed by law, such sum as the court or
arbitrator may adjudge reasonable attorneys’ fees in such suit or
action.

       

      6.6 Entire
Agreement.  This Agreement constitutes the entire agreement of
the parties as it relates to the subject matter hereof and hereby supersedes all
other agreements and understandings of the parties relating to the subject
matter hereof.

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
 

      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

      

       

      SWISSINSO
HOLDING INC.

       

      By:______________________________

      Yves
Ducommun

      Chief
Executive Officer

       

       

       

      DIRECTOR

       

      __________________________________

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