Document:

exhibit_10-11.htm

    
      

    
EXHIBIT
10.11

    SECURITY
AGREEMENT

    

    This
Security Agreement (this "Agreement") is made
as of APRIL 7, 2008, by and among Secured Financial Network, Inc., a Nevada
corporation (“Debtor”), VPS Virtual Payment Solutions, Inc. a
Florida corporation and wholly-owned subsidiary of Debtor (“VPS,” and
together with Debtor “Obligors”) and Commercial Holding, AG (“Secured
Party”).

    

    BACKGROUND:

     

    A.                 Secured
Party and Debtor has entered into that certain Credit and Loan Agreement of even
date herewith (the “Loan Agreement”), and VPS will receive a direct benefit from
any loans provided to Debtor under the Loan Agreement.

     

    B.                 As
a condition to making any loans under the Loan Agreement, Secured Party requires
the Obligors to grant to Secured Party a security interest in the Collateral (as
defined below).

     

    AGREEMENTS:

    

    In consideration of the premises herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Obligors hereby agree with the Secured Party
as follows:

    

    1.        
    Certain
Definitions. Unless otherwise defined herein, or the context hereof
otherwise requires, each term defined in the Texas Uniform Commercial Code
("UCC") is used
in this Agreement with the same meaning; provided, that if any
definition given a term in Chapter 9 of the UCC conflicts with the definition
given that term in any other chapter of the UCC, the Chapter 9 definition shall
prevail. Capitalized terms otherwise used but not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the Loan Agreement
(as defined below). As used herein, the following terms have the meanings
indicated:

    

    "Collateral" has the
meaning set forth in Section 3.

    

    "Copyrights License"
means any and all rights now owned or hereafter acquired by VPS under any
written agreement granting any right to use any Copyright or Copyright
registration.

    

    "Copyrights" means all
of the following now owned or hereafter adopted or acquired by VPS: (a) all
copyrights and General Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof, and (b) all reissues, extensions or renewals
thereof.

    

    "Default" means the
occurrence of any Event of Default.

    

    "Notes" means any
promissory notes issued pursuant to the Loan Agreement (as amended, modified,
supplemented, or restated from time to time).

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    "General Intangibles"
means all "general intangibles," as such term is defined in the UCC, now owned
or hereafter acquired by VPS, including (i) all Intellectual Property Rights,
(ii) all tax refunds, (iii) all licenses, permits, concessions and
authorizations, and (iv) all insurance policies.

    

    "Indebtedness" means
(a) all indebtedness, obligations and liabilities of Debtor to the Secured Party
under the Note, the Loan Agreement, this Agreement, and the other Loan
Documents, (b) all indebtedness, obligations and liabilities to the Secured
Party under the Notes, (c) interest accruing on, and attorneys' fees, court
costs, and other costs of collection incurred in the collection or enforcement
of any of the indebtedness, obligations and liabilities described in clauses (a)
and (b) above, and (d) any and all renewals and extensions of, or amendments to,
any of the indebtedness, obligations and liabilities described in clauses (a),
(b) and (c) above.

    

    "Intellectual Property
Right" means (a) any Patent, Patent License, Copyright, Copyright
License, Trademark, Trademark License, customer list, trade secret or other
intellectual property right or proprietary information, (b) all registrations
and applications to register any such Patent, Copyright, Trademark or other
intellectual property right with any governmental authority and all renewals and
extensions thereof, and (c) the goodwill of the business associated with or
relating to any such Trademark or other intellectual property
right.

    

    "Lien" means any lien,
mortgage, security interest, charge, or encumbrance of any kind, including,
without limitation, the rights of a vendor, lessor, or similar party under any
conditional sales agreement or other title retention agreement or lease
substantially equivalent thereto, any production payment, and any other right of
or arrangement with any creditor to have his claim satisfied out of any property
or assets, or the proceeds therefrom, prior to the general creditors of the
owner thereof.

    

    "Loan Agreement" is
defined in the Background section of this Agreement, and includes any amendment,
modification, supplement or restatement thereof, made from time to
time.

    

    "Loan Documents" means
this Agreement, the Loan Agreement, the Notes, any UCC financing statements and
all other documents and instruments heretofore, now or hereafter evidencing,
describing, guaranteeing or securing the Indebtedness contemplated hereby or in
the Loan Agreement or delivered in connection with this Agreement.

    

    "Patent License" means
rights under any written agreement now owned or hereafter acquired by VPS
granting any right with respect to any invention on which a Patent is in
existence.

    

    "Patents" means all of
the following in which VPS now holds or hereafter acquires any interest: (a) all
letters patent of the United States or of any other country, all registrations
and recordings thereof, and all applications for letters patent of the United
States or of any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions
thereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    "Person" shall mean
any natural person, corporation, unincorporated organization, trust, joint-stock
company, joint venture, association, company, limited or general partnership,
any government, or any agency or political subdivision of any
government.

    

    "Security Interest"
means the security interest granted and the pledge and assignment made under
Article 2.

    

    "Trademark License"
means rights under any written agreement now owned or hereafter acquired by
Debtor granting any right to use any Trademark.

    

    "Trademarks" means all
of the following now owned or hereafter existing or adopted or acquired by VPS:
(a) all trademarks, trade names, corporate names, business names, trade styles,
service marks, logos, other source or business identifiers, prints and labels on
which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof, (b) all reissues, extensions or renewals thereof,
and (c) all goodwill associated with or symbolized by any of the
foregoing.

    

    "Tribunal" means any
court or governmental department, commission, board, bureau, agency or
instrumentality of the United States or of any state, commonwealth, nation,
territory, possession, county, parish or municipality, whether now or hereafter
constituted or existing.

    

    2.          
  Security
Interest. In order to secure the full and complete payment and
performance of the Indebtedness when due, Debtor hereby grants to Secured Party,
for its benefit and the ratable benefit of the Secured Party, a security
interest in the Collateral and pledges and assigns the Collateral to Secured
Party, all upon and subject to the terms and conditions of this Agreement, the
Loan Agreement, and the Notes. Such Security Interest is granted and the pledge
and assignment are made as security only and shall not subject Secured Party to,
or transfer or in any way affect or modify, any obligation of Debtor with
respect to any of the Collateral or any transaction involving or giving rise
thereto.

    

    3.      
      Collateral. As used herein,
the term "Collateral" means (a)
all of Debtor’s equity interest in and to VPS, and (b) all of the assets and
property of VPS whether now owned or hereinafter acquired by Debtor, including
but not limited to the following items and types of property:

     

    3.1           all
documents and instruments in the name of VPS.

    

    3.2           all
accounts, General Intangibles, chattel paper, commercial tort claims, deposit
accounts, goods, investment property, letters of credit, letter-of-credit
rights, money, as-extracted collateral, and instruments however evidenced or
acquired, or in which VPS now has or hereafter acquires any rights (or any
successor or assign of such obligors).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.3           all
of Debtor's fixtures, equipment and inventory and all parts thereof and all
accessions, additions, attachments, improvements, substitutions, and
replacements thereto and therefor.

    

    3.4           all
rights to use any software installed on the equipment and inventory identified
in Section 3.3.

    

    3.5           all
cash and noncash proceeds and other rights arising from or by virtue of, or from
the voluntary or involuntary sale or other disposition of, or collections with
respect to, or other claims against any other Person or entity with respect to,
all or any part of the foregoing Collateral.

     

    3.6           all
books and records concerning any of the Collateral.

    

    4.       
     Representations and
Warranties. Obligors jointly and severally represent and warrant to
Secured Party that:

    

    4.1            debtor
is a corporation organized and existing in the State of Nevada and VPS is a
corporation organized and existing in the State of Florida.

    

    4.2            obligors’
place of business and chief executive office is where each Obligor is entitled
to receive notices hereunder; and the present and foreseeable location of VPS'
books and records concerning any of the Collateral is at 1180 SW 36th Ave.,
Suite 204 Pompano Beach, Fl 33069  (but the failure of such
description to be accurate or complete shall not impair the Security Interest in
such Collateral); and all such books, records, and Collateral are in VPS'
possession except for inventory leased to VPS’ customers in the ordinary course
of business.

    

    4.3          
the delivery at any time by an Obligor to Secured Party of Collateral or of
additional specific descriptions of certain Collateral shall constitute a
representation and warranty by Obligors to Secured Party that the
representations and warranties of this Article are true and correct with respect
to each item of such Collateral.

    

    5.        
    Certain
Covenants. Until the Indebtedness is paid and performed in full, Obligors
each covenant and agree with Secured Party that Obligors will:

    

    5.1           maintain,
at the place where Debtor is entitled to receive notices under the Loan
Agreement, and permit representatives of any Secured Party at any time during
normal business hours to inspect and make abstracts from such records, and
furnish to Secured Party, at such intervals as Secured Party may reasonably
request, such documents, lists, descriptions, certificates and other information
as may be necessary or proper to keep Secured Party informed with respect to the
identity, location, status, condition and value of the Collateral.

    

    5.2           promptly
notify Secured Party of any material claim, action, or proceeding affecting
title to all or any portion of the Collateral or the Security Interest and, at
the request of a Secured Party, appear in and defend, at Obligors’ expense, any
such action or proceeding, except with respect to Permitted
Liens.  Promptly notify Secured Party of any material change in any
fact or circumstances represented or warranted by Obligors with respect to any
of the Collateral or the Indebtedness.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    5.3           not
sell or otherwise dispose of, or permit the sale or disposition of, any of the
Collateral, except inventory sold or abandoned in the ordinary course of
business. Not create, incur or suffer or permit to be created or incurred or to
exist any charge or Lien upon or against any of the Collateral, except for
Permitted Liens.

    

    5.4           after
the occurrence and during the continuation of a Default, hold in trust for
Secured Party, as property of Secured Party, all collections and proceeds of, or
payments made in respect of, all Collateral at any time received by Obligors and
immediately deliver same to Secured Party; provided that Secured Party at its
option permits Obligors to retain such collections and proceeds of, or payments
made in respect of, all Collateral.

    

    5.5           at
Obligors' expense and Secured Party's request, before or after a Default, file
or cause to be filed such applications and take such other actions as Secured
Party may reasonably request to obtain the consent or approval of any Tribunal
to the Secured Party's rights hereunder, including, without limitation, the
right to sell all the Collateral upon a Default without additional consent or
approval from such Tribunal.

    

    5.6           from
time to time promptly execute and deliver to Secured Party all such other
assignments, certificates, supplemental documents and financing statements, and
do all other acts or things as Secured Party may reasonably request in order to
more fully create, evidence, perfect, continue and preserve the priority of the
Security Interest.

    

    5.7           keep
Collateral that is inventory or equipment in good repair, working order, and
condition, normal wear and tear excepted.

    

    5.8           keep
the Collateral insured, in accordance with the past practices of the business
prior to the Closing date, with financially sound and reputable insurance
companies, and in at least such reasonable amounts and against at least such
normal risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar
businesses.

    

    5.9           not
cause or permit any change to be made in any Obligors’ name, identity or
corporate structure, or any change to be made to any Obligors’ jurisdiction of
organization or the address of its chief executive office, unless such Obligor
shall have first (1) notified Secured Party of such change at least thirty (30)
days prior to the effective date of such change, and (2) taken all action
requested by Secured Party for the purpose of further confirming and protecting
Secured Party' security interests and rights under this Agreement and the
perfection and priority thereof.  In any notice furnished pursuant to
this subsection, each Obligor will expressly state that the notice is required
by this Agreement and contains facts that may require additional filings of
financing statements or other notices for the purposes of continuing perfection
of Secured Party's security interest in the Collateral.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    5.10          the
Obligors authorizes the Secured Party to file at any time and from time to time
any financing statement, amendments thereto and continuation statements relating
to the Collateral that Secured Party deems necessary to maintain a perfected
first-priority security interest in the Collateral, subject to Permitted Liens.
Obligors shall, at their own expense, make, execute, endorse, acknowledge, file
and deliver to Secured Party from time to time such financing statements, lists,
descriptions and designations of its Collateral, acknowledgements of the
security interest created hereby to third parties vouchers, invoices, control
agreements, confirmatory assignments, conveyances, transfer endorsements, powers
of attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interests hereby granted, which Secured Party may
reasonably request, in a form reasonably satisfactory to Secured Party, to
create, preserve, protect and perfect the security interests and the priority
thereof granted by Obligors to Secured Party in and to the
Collateral.  Obligors shall pay any applicable filing fees and related
expenses. Each Obligor authorizes the Secured Party at any time and from time to
time to file any financing statements related to the Collateral without the
signature of any Obligor.

    

    5.11          hold
in trust for Secured Party all Collateral that is chattel paper, instruments, or
documents at any time received by Obligors and promptly deliver same to Secured
Party unless Secured Party at its option (which may be evidenced only by a
writing signed by Secured Party stating that Secured Party elects to permit
Debtor to so retain) permits an Obligor to retain the same, but any chattel
paper, instruments, or documents so retained shall be marked to state that they
are assigned to Secured Party (but the failure of same to be so marked shall not
impair the Security Interest thereon).

    

    5.12          for
any Collateral (other than inventory leased to VPS’ customers in the ordinary
course of business) that is a fixture or an accession which has been attached to
real estate or other goods prior to the perfection of the Security Interest,
furnish Secured Party, upon demand, a disclaimer of interest in each such
fixture or accession and a consent in writing to the Security Interest of
Secured Party therein, signed by all Persons having any interest in such fixture
or accession by virtue of any interest in the real estate or other goods to
which such fixture or accession has been attached.

    

    5.13          if
certificates of title are issued or outstanding with respect to any of the
Collateral, cause the Security Interest to be properly noted
thereon.

    

    5.14          use
its best efforts to obtain as promptly as possible, and in any event within 30
days, any consents which may be required under any office or warehouse lease to
which VPS is party; provided, that if such a consent with respect to any lease
is not obtained within such 30-day period, VPS may not store Collateral at the
locations subject to such lease in excess of an aggregate book value of
$100,000.

    

    6.        
    Events
of Default; Remedies.  Upon the occurrence of a Default,
Obligors shall be in default under this Agreement and a Default shall exist
hereunder.  Should a Default occur, Secured Party may, at its
election, exercise any and all rights and remedies available to a secured party
under the UCC, in addition to any and all other rights and remedies afforded by
the Loan Agreement and Notes or any related document thereto, at law, in equity
or otherwise, including, without limitation, (a) reducing any claim to judgment;
(b) foreclosing the Security Interest and any other Liens that Secured Party may
have or otherwise realize upon any and all of the rights Secured Party may have
in and to the Collateral, or any part thereof; (c) requiring Obligors to
assemble all or part of the Collateral and make it available to Secured Party at
a place to be designated by Secured Party which is reasonably convenient to
Obligors and Secured Party; and (d) applying by appropriate judicial proceedings
for appointment of a receiver for all or part of the Collateral (and each
Obligor hereby consents to any such appointment).

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    6.1           Notice. Reasonable
notification of the time and place of any public sale of the Collateral, or
reasonable notification of the time after which any private sale or other
intended disposition of the Collateral is to be made, shall be sent to Obligors
and to any other Person entitled to notice under the UCC; provided, that if any
of the Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or otherwise
dispose of the Collateral without notification, advertisement or other notice of
any kind. It is agreed that notice sent or given not less than ten (10) calendar
days prior to the taking of the action to which the notice relates is reasonable
notification and notice for the purposes of this section.

    

    6.2           Application of
Proceeds. Secured Party shall apply the proceeds of any sale or other
disposition of the Collateral under this Section in the following order: first
to the payment of all its expenses incurred in retaking, holding, and preparing
any of the Collateral for sale(s) or other disposition, in arranging for such
sale(s) or other disposition, and in actually selling or disposing of the same
(all of which are part of the Indebtedness); second, toward repayment of amounts
expended by Secured Party under Section 7 hereof, and third, toward payment of
the balance of the Indebtedness in such order and manner as Secured Party, in
its discretion, may deem advisable. Any surplus remaining shall be delivered to
the applicable Obligor or as a court of competent jurisdiction may
direct.  If the proceeds are insufficient to pay the Indebtedness in
full, Debtor shall remain liable for any deficiency.

    

    7.        
    Other Rights of Secured Party.

    

    7.1           Performance.  In
the event Obligors shall fail to keep the Collateral in good repair, working
order, and condition as required in this Agreement, or to pay when due all taxes
on any of the Collateral, or to preserve the priority of the Security Interest
in any of the Collateral, or to keep the Collateral insured as required by this
Agreement, or otherwise fail to perform any of its obligations under any Loan
Documents with respect to the Collateral, then Secured Party may, at its option,
but without being required to do so, make such repairs, pay such taxes,
prosecute or defend any suits in relation to the Collateral, or insure and keep
insured the Collateral in any amount deemed appropriate by Secured Party, or
take all other action which Obligors are required, but has failed or refused, to
take under the Loan Documents. Any sum which may be expended or paid by Secured
Party under this section (including, without limitation, court costs and
reasonable attorneys' fees) shall bear interest from the dates of expenditure or
payment at the Maximum Legal Rate until paid and, together with such interest,
shall be payable by Debtor to Secured Party for the account of the Secured Party
upon demand and shall be part of the Indebtedness.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    7.2           Collection. During
the existence of a Default, upon notice from Secured Party, each Obligor with
respect to any payments on any of the Collateral (including, without limitation,
insurance proceeds payable by reason of loss or damage to any of the Collateral)
is hereby authorized and directed by each Obligor to make payment directly to
Secured Party, regardless of whether an Obligor was previously making
collections thereon.  Each Obligor hereby appoints Secured Party as
its attorney-in-fact, and during the existence of a Default, Secured Party shall
have the right in its own name or in the name of an Obligor to compromise or
extend time of payment with respect to all or any portion of the Collateral for
such amounts and upon such terms as Secured Party may determine; to demand,
collect, receive, receipt for, sue for, compound and give acquittance for any
and all amounts due or to become due with respect to Collateral; to take control
of cash and other proceeds of any Collateral; to endorse the name of such
Obligor on any notes, acceptances, checks, drafts, money orders, or other
evidences of payment on Collateral that may come into the possession of Secured
Party, and to deposit or otherwise handle the same; to sign the name of Obligor
on any invoice or bill of lading relating to any Collateral, on any drafts
against Persons making payment with respect to Collateral, on assignments and
verifications of accounts or other Collateral and on notices to Persons making
payment with respect to Collateral; to receive, open, and dispose of all mail
addressed to the Company relating to Collateral; to send requests for
verification of obligations to any Person obligated thereunder; and to do all
other acts and things necessary to carry out the intent of this Agreement. If
any Person fails or refuses to make payment on any Collateral when due, Secured
Party is authorized, in its sole discretion, either in its own name or in the
name of Obligor, to take such action as Secured Party shall deem appropriate for
the collection of any amounts owed with respect to Collateral or upon which a
delinquency exists. Regardless of any other provision hereof, however, Secured
Party shall never be liable for their failure to collect, or for their failure
to exercise diligence in the collection of, any amounts owed with respect to
Collateral, nor shall they be under any duty whatever to anyone except Debtor to
account for funds that it shall actually receive hereunder. Without limiting the
generality of the foregoing, Secured Party shall have no responsibility for
ascertaining any maturities, calls, conversions, exchanges, offers, tenders or
similar matters relating to any Collateral, or for informing Obligors with
respect to any of such matters (irrespective of whether Secured Party or any
Secured Party actually has, or may be deemed to have, knowledge thereof). The
release of Secured Party to any Person shall be a full and complete release,
discharge and acquittance to such Person, to the extent of any amount so paid to
Secured Party. The power granted under this Section 7.2, being coupled with an
interest, is irrevocable while any Collateral or Indebtedness remains
unpaid.

    

    7.3           Certain Proceeds.
During the existence of a Default, any cash proceeds of Collateral which come
into the possession of Secured Party (including, without limitation, insurance
proceeds) may, at Secured Party's option, be applied in whole or in part to the
Indebtedness (to the extent then due), be released in whole or in part to or on
the written instructions of an Obligor for any general or specific purpose, or
be retained in whole or in part by Secured Party as additional
Collateral.  Any cash Collateral in the possession of Secured Party
may be invested by Secured Party in certificates of deposit issued by any state
or national bank having combined capital and surplus greater than $10,000,000,
or in securities issued or guaranteed by the United States of America or any
agency thereof. Secured Party shall never be obligated to make any such
investment and shall never have any liability to any Obligor for any loss which
may result therefrom. All interest and other amounts earned from any investment
of Collateral may be dealt with by Secured Party in the same manner as other
cash Collateral.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    7.4           Use of Collateral.
During the existence of a Default, should any Collateral come into the
possession of Secured Party, such party may use such Collateral for the purpose
of preserving it or its value pursuant to the order of a court of appropriate
jurisdiction or in accordance with any other rights held by the Secured Party in
respect of such Collateral.  Each Obligor covenants to promptly
reimburse and pay to Secured Party, at such party's request, the amount of all
reasonable expenses (including, without limitation, the cost of any insurance
and payment of taxes or other charges) incurred by such party in connection with
its custody and preservation of Collateral, and all such expenses, costs, taxes
and other charges shall bear interest at the maximum rate permitted by law until
repaid and, together with such interest, shall be payable by Obligor to the
Secured Party upon demand and shall become part of the Indebtedness. However,
the risk of accidental loss or damage to, or diminution in value of, Collateral
is on Obligors, and Secured Party shall have no liability whatever for failure
to obtain or maintain insurance, nor to determine whether any insurance ever in
force is adequate as to amount or as to the risks insured. With respect to
Collateral that is in the possession of Secured Party, such party shall have no
duty to fix or preserve rights against prior parties to such Collateral and
shall never be liable for any failure to use diligence to collect any amount
payable in respect of such Collateral, but shall be liable only to account to
Obligors for what they may actually collect or receive thereon.

    

    7.5           Subrogation. If any
of the Indebtedness is given in renewal or extension or applied toward the
payment of indebtedness secured by any Lien, Secured Party shall be, and are
hereby, subrogated to all of the rights, titles, interests, and Liens securing
the indebtedness so renewed, extended, or paid.

    

    8.            
Power of Attorney.

    

    8.1           Power of
Attorney.  Each Obligor hereby irrevocably constitutes and
appoints Secured Party (and all officers, employees or agents designated by
Secured Party), with full power of substitution, as Obligors' true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Obligors and in the name of Obligors or in its own name, from time to
time in Secured Party's discretion, with or without notice to or assent by
Obligors, to take any and all of the following actions permitted by Obligors in
the Loan Documents and to enforce any and all rights of Obligors pursuant to the
Loan Documents.  Obligors hereby ratify, to the extent permitted by
law, all that Secured Party shall lawfully do or cause to be done by virtue
hereof.  Secured Party, as authority for Obligors to take any action
or actions contemplated hereby, shall not be required to inquire into or seek
confirmation from Obligors as to the authority of Obligors to take any action
described above, or as to the existence of or fulfillment of any condition to
this power of attorney, which is intended to grant to Secured Party
unconditionally the authority to take and perform the actions contemplated
herein, and each Obligor irrevocable waives any right to commence any suit or
action, in law or equity, against any person or entity which acts in reliance
upon or acknowledges the authority granted under this power of attorney. The
power of attorney granted hereby is coupled with an interest, and may not be
revoked or canceled by an Obligor without Secured Party's written consent prior
to the payment in full of all of the Indebtedness owed to Secured Party pursuant
to the Loan Agreement, or until such time as all of the Collateral has been
exhausted in the satisfaction or partial satisfaction of the
Indebtedness.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    9.          
  Miscellaneous.

    

    9.1           Term. Upon full and
final payment and performance of the Indebtedness, this Agreement shall
thereafter terminate and the Security Interest will be released; provided that
no Obligor, if any, on any of the Collateral shall ever be obligated to make
inquiry as to the termination of this Agreement, but shall be fully protected in
making payment directly to Secured Party.

    

    9.2           Actions Not Releases.
The Security Interest and each Obligor's obligations and Secured Party's rights
hereunder shall not be released, diminished, impaired or adversely affected by
the occurrence of any one or more of the following events: (a) the taking or
accepting of any other security or assurance for any or all of the Indebtedness;
(b) any release, surrender, exchange, subordination or loss of any security or
assurance at any time existing in connection with any or all of the
Indebtedness; (c) the insolvency, bankruptcy or lack of corporate or trust power
of any party at any time liable for the payment of any or all of the
Indebtedness, whether now existing or hereafter occurring; (d) any renewal,
extension or rearrangement of the payment of any or all of the Indebtedness, or
any adjustment, indulgence, forbearance or compromise that may be granted or
given by Secured Party to an Obligor; (e) any neglect, delay, omission, failure
or refusal of Secured Party to take or prosecute any action in connection with
any other agreement, document, guaranty or instrument evidencing, securing or
assuring the payment of all or any of the Indebtedness; (f) any failure of
Secured Party to notify an Obligor of any renewal, extension or assignment of
the Indebtedness or any part thereof, or the release of any security, or of any
other action taken or refrained from being taken by Secured Party against an
Obligor or any new agreement between an Obligor and Secured Party, it being
understood that Secured Party shall not be required to give any Obligor any
notice of any kind under any circumstances whatsoever with respect to or in
connection with the Indebtedness, including, without limitation, notice of
acceptance of this Agreement, or any Collateral ever delivered to or for the
account of Secured Party; (g) the illegality, invalidity or unenforceability of
all or any part of the Indebtedness against any party obligated with respect
thereto by reason of the fact that the Indebtedness, or the interest paid or
payable with respect thereto, exceeds the amount permitted by Law, the act of
creating the Indebtedness, or any part thereof, is ultra vires, or the officers,
partners or trustees creating same acted in excess of their authority, or for
any other reason; (h) if any payment by any party obligated with respect thereto
is held to constitute a preference under applicable laws or for any other reason
Secured Party is required to refund such payment or pay the amount thereof to
someone else; or (i) the modification of, amendment to, or waiver of compliance
with any terms of the Notes or any of the Loan Documents without the
notification or consent of an Obligor, except as required therein (the right to
such notification and consent being herein specifically waived by the
Obligor).

    

    9.3           Waivers. Each Obligor
waives (a) any right to require Secured Party to proceed against any other
Person, to exhaust its rights in the Collateral, or to pursue any other right
which Secured Party may have; (b) with respect to the Indebtedness, presentment
and demand for payment,
protest, notice of protest and nonpayment, and notice of the intention to
accelerate; and (c) all rights of marshaling in respect of any and all of the
Collateral.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    9.4           Financing Statement.
Secured Party shall be entitled at any time to file this Agreement or a carbon,
photographic, or other reproduction of this Agreement, as a financing statement,
but the failure of Secured Party to do so shall not impair the validity or
enforceability of this Agreement.

    

    9.5           Captions; Arrangements;
References. The headings, captions and arrangements used herein are,
unless specified otherwise, for convenience only and shall not be deemed to
limit, amplify or modify the terms hereof nor affect the meaning thereof.
Whenever herein the singular number is used, the same shall include the plural
where appropriate, and vice versa and words of any gender herein shall include
each other gender where appropriate. The words "herein," "hereof," and
"hereunder," and other words of similar import refer to this Agreement as a
whole and not to any particular part or subdivision hereof. Reference herein to
"Articles" and "Sections" are to articles and sections of this
Agreement.

    

    9.6           Notices. All notices,
requests, demands, claims, and other communications hereunder will be in writing
and shall be given in accordance with the terms of the Loan
Agreement.

    

    9.7           Exceptions to
Covenants. Obligors shall not be deemed to be permitted to take any
action or fail to take any action which is permitted as an exception to any of
the covenants contained herein if such action or omission would result in the
breach of any other covenant contained herein.

    

    9.8           Survival.  All
covenants, agreements, undertakings, representations and warranties made herein
shall survive all closings hereunder and, except as otherwise indicated, shall
not be affected by any investigation made by any party.

    

    10.           Governing Law. This Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of Florida without giving effect to any choice or conflict of law
provision or rule (whether of the State of Florida or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Florida.

    

    11.           Invalid Provisions. If any
provision hereof is held to be illegal, invalid or unenforceable under present
or future applicable laws effective during the term hereof, such provision shall
be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof;
and the remaining provisions hereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part hereof a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and
enforceable.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    12.           Entirety and Amendments. This
Agreement, the Loan Agreement, and the Loan Documents embody the entire
respective agreements between the parties, supersede all prior agreements and
understandings, if any, relating to the subject matter hereof, and may be
amended only by an instrument in writing executed jointly by an authorized
officer of each party hereto and supplemented only by documents delivered or to
be delivered in accordance with the express terms hereof.

    

    13.           Multiple Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together will constitute one and the same
instrument.

    

    14.           Parties Bound; Assignment.
This Agreement shall be binding upon and shall inure to the benefit of Debtor,
VPS and Secured Party, and their respective successors and assigns; provided, however, that
Obligors may not assign any of their respective rights hereunder without the
prior written consent of the Secured Party, and any such assignment made without
such consent will be void.

    

    15.           Indemnification.  Other
than the exercise of reasonable care by Secured Party in the physical custody of
the Collateral, Debtor hereby assumes all liability for the Collateral, for the
Security Interest, and for any use, possession, maintenance, and management of,
all or any of the Collateral, including, without limitation, any taxes arising
as a result of, or in connection with, the transactions contemplated herein, and
agrees to assume liability for, and to indemnify and hold Secured Party harmless
from and against, any and all claims, causes of action, or liability, for
injuries to or deaths of Persons and damage to property, howsoever arising from
or incident to such use, possession, maintenance, and management, whether such
Persons be agents or employees of any Obligor or of third parties, or such
damage be to property of any Obligor or of others.  Each Obligor
agrees to indemnify, save, and hold Secured Party harmless from and against, and
covenants to defend Secured Party against, any and all losses, damages, claims,
costs, penalties, liabilities, and expenses, including, without limitation,
court costs and attorneys' fees, howsoever arising or incurred because of,
incident to, or with respect to Collateral or any use, possession, maintenance,
or management thereof, except losses, damages, claims, costs, penalties,
liabilities, and expenses resulting from Secured Party's gross negligence or
willful misconduct.

    

     

    

     

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO IMMEDIATELY
FOLLOW.]

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, Debtor, VPS and
Secured Party have caused this Agreement to be duly executed on the date set
forth below.

    

    

    SECURED
PARTY:

     

    COMMERCIAL HOLDING AG

    

    

    

    By:
________________________________________

    Title:
_______________________________________

    Address:                2201 Lakeside
Dr.

    Lexington, KY 40502-3020

    Attention:             
Frank Barker, Managing Partner

    Phone:                    859.455.9255

    Fax:                         859.455.8355

    

    DEBTOR

    

    SECURED FINANICAL NETWORK,
INC.

    

    

    

    By:
_________________________________________

    Title:
________________________________________

    Address:                1180
SW 36th Ave., Suite 204

    Pompano
Beach, Fl 33069

    Attention:              Jeffrey
Schultz, President/CEO

    Phone:                    954.376.5611

    Fax:                         
954.337.2835

    

    VPS                                                                        
VPS VIRTUAL PAYMENT SOLUTIONS,
INC.

    

    

    

    By: /s/  Jeffrey L.
Schultz                                                          

         JEFFREY L.
SCHULTZ                                                        

         TITLE:
CEO

    Address:                1180
SW 36th Ave., Suite 204

    Pompano
Beach, Fl 33069

    Attention:              Jeffrey
Schultz, CEO

    Phone:                    954.376.5611

    Fax:                         
954.337.2835

     

     

     

     

    13The Tirex Corporation: Form 8-K - Prepared by TNT Filings Inc.

  

Exhibit 4.1

AMENDED CERTIFICATE OF DESIGNATION OF 

SERIES A CONVERTIBLE PREFERRED STOCK 

OF 

THE TIREX CORPORATION 

Pursuant to Sections 141, 151 and 152 of
Title 8, Chapter 1 of the Delaware Code 

The Tirex Corporation, a corporation organized
and existing under the laws of the state of Delaware (the "Corporation"), hereby
certifies that, pursuant to (i) the authority conferred upon the Board of
Directors by the Amended and Restated Articles of Incorporation of the
Corporation, (ii) the provisions of Sections 141, 151 and 152 of Title 8,
Chapter 1 of the Delaware Code, and (iii) the resolutions adopted by the Board
of Directors of the Corporation by unanimous written consent dated May 12, 2008,
the Board of Directors duly adopted resolutions providing for the adoption of
the Amended Certificate of Designation (the "Amended Certificate") of Series A
Convertible Preferred Stock of the Corporation and creating the number of votes
to which each share of Series A Convertible Preferred Stock is entitled, which
resolutions are as follows: 

RESOLVED, that
pursuant to the authority vested in the Board of Directors of the Corporation by
the Articles of Incorporation, the Board of Directors does hereby approve the
issuance of up to three million (3,000,000) shares of Series A Convertible
Preferred Stock, par value $.001 per share, of the Corporation, to be designated
"Series A Convertible Preferred Stock" of the presently authorized shares of
Preferred Stock. The voting powers, designations, preferences, and other rights
of the Series A Convertible Preferred Stock authorized hereunder and the
qualifications, limitations and restrictions of such preferences and rights are
as follows: 

1.     Cash
Dividends. No cash dividends shall be paid with respect to the shares of Series
A Convertible Preferred Stock. 

2.    
Voting. The holders of Series A Convertible Preferred Stock ("Holders") shall
bear the right to one hundred (100) votes per share on any matter properly
before the shareholders for a vote. The voting rights shall be subject to all
splits. 

3.    
Conversion. The Series A Convertible Preferred Stock shall become convertible
upon the earlier of: (i) the Holders’ election, or (ii) January 8, 2009. The
following provisions shall apply after the Series A Convertible Preferred Stock
becomes convertible: 

(a) Upon the election
of the holders to convert the Series A Convertible Preferred Stock, the holders
of said shares of Series A Convertible Preferred Stock shall surrender the
certificate or certificates for such shares at the office of the Corporation (or
at such other place as the Corporation may designate by notice to the holders of
shares of Series A Convertible Preferred Stock) during regular business hours,
duly endorsed to the Corporation or in blank, or accompanied by instruments of
transfer to the Corporation in blank, in form satisfactory to the Corporation
and shall give written notice to the Corporation at such office that said holder
has been instructed that the Corporation has elected to convert the shares of
Series A Convertible Preferred Stock. The Corporation shall, as soon as
practicable after such deposit of certificates for shares of Series A
Convertible Preferred Stock, accompanied by the written notice above prescribed,
issue and deliver at such office to the holder for whose account such shares
were surrendered, or to his nominee, certificates representing the number of
shares of common stock to which such holder is entitled upon such conversion.

(b) Conversion shall
be deemed to have been made as of the date of surrender of certificates for the
shares of Series A Convertible Preferred Stock to be converted and the delivery
of written notice as hereinabove provided; and the person entitled to receive
the common stock issuable upon such conversion shall be treated for all purposes
as the record holder of such common stock on such date. 

(c) Conversion shall be as follows:

(i) The holders of all
shares of Series A Convertible Preferred Stock shall be entitled to five (5)
shares of common stock of the Corporation (the "Common Stock") for each share of
Series A Convertible Preferred Stock surrendered for conversion. Fractional
shares of common stock shall be rounded up to the nearest share. 

(ii) The Corporation
shall pay any and all issue or transfer taxes that may be payable in respect of
any issuance or delivery of shares of common stock on conversion of shares of
Series A Convertible Preferred Stock pursuant hereto. The Corporation shall not,
however, be required to pay any tax which is payable in respect of any transfer
involved in the issue or delivery of common stock in a name other than that in
which the shares of Series A Convertible Preferred Stock so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Corporation the amount of such tax,
or has established, to the satisfaction of the Corporation, that such tax has
been paid. 

(iii) The holders of
all shares of Series A Convertible Preferred Stock shall not be subject to any
non-cash distributions to holders of shares of Common Stock, including without
limitation, stock dividends, stock splits and securities issued in a
recapitalization.

4.
    Fractional
Shares. The Series A Preferred Stock may not be issued in fractional shares.

5.    
Liquidation, Dissolution, Winding Up. In the event of the liquidation or winding
up of the Corporation, the holders of the Series A Convertible Preferred Stock
will be entitled to receive, prior and in preference to the holders of Common
Stock, an amount up to but not greater than the original purchase price per
share of Series A Convertible Preferred Stock, notwithstanding the par value of
the Series A Convertible Preferred Stock. The holders may choose by majority
vote to treat a merger of the Corporation in which the Corporation is not the
surviving entity, or a sale of all or substantially all of the Corporation’s
assets, as a liquidation or winding up for purposes of this liquidation
preference if (i) the amount of consideration received would be less than the
amount of the holders’ liquidation preference or (ii) the consideration consists
solely or in part of securities that are not readily marketable. 

Amended Certificate of 

Designation of Series A Convertible 

Preferred Stock 

2

IN WITNESS WHEREOF, the Corporation has caused this Amended
Certificate to be signed by John Threshie, Jr., its Chief Executive Officer,
this 12th day of May, 2008. 

THE TIREX CORPORATION 

By: /s/ John Threshie, Jr.            

     Name: John Threshie, Jr. 

     Its: Chief Executive Officer 

 

 

 

Amended Certificate of 

Designation of Series A Convertible 

Preferred Stock 

3

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