EXHIBIT 10.11
SECURITY AGREEMENT
AGREEMENT made this 23rd day of December, 1996, between INTRANET SOLUTIONS,
INC., a Minnesota corporation, as debtor (herein called "DEBTOR") and CIRCLE F
VENTURES, LLC (herein called "LENDER"), as secured party.
For good and valuable consideration, Debtor hereby agrees for the benefit
of Lender as follows:
1.01 Debtor hereby grants Lender a security interest (the "SECURITY
INTEREST") in the property described below, as security for the payment
and performance of the Promissory Note of even date in the amount of
$750,000 (the "NOTE"). The Security Interest shall attach to the
following property of Debtor (the "COLLATERAL"), and all products and
proceeds thereof:
All accounts, instruments, documents, chattel paper, general
intangibles, contract rights, securities and certificates of
deposit of Debtor and all funds of Debtor on deposit,
whether now existing or hereafter arising; all inventory of
Debtor, whether now owned or hereafter acquired; and all
equipment and fixtures of Debtor, whether now owned or
hereafter acquired.
1.02 Debtor represents, warrants and agrees that:
(a) Debtor has full authority and power to enter into this Security
Agreement.
(b) Other than liens on the Collateral and proceeds thereof in favor
of Diversified Business Credit, Inc. and on certain equipment and
proceeds thereof in favor of Access Graphics, Inc. and other
currently existing lenders or lessors (the "PRIOR LENDERS"),
Debtor has absolute title to each item of Collateral and all
proceeds thereof, free and clear of all interests, liens,
attachments, encumbrances and security interests.
(c) Debtor agrees to keep the Collateral in good order and repair, and
will not waste or destroy the Collateral.
(d) Debtor will promptly pay when due all taxes and assessments upon
the Collateral, which are or may become liens against the
Collateral.
(e) Debtor will keep the Collateral insured at all times against loss
by fire and other hazards as to which, in the judgment of the
Lender, insurance protection is reasonably necessary, by a company
or companies satisfactory to Lender and in amounts sufficient to
protect Lender against loss or damage to the collateral and
will pay the premiums therefor.
(f) Debtor from time to time will execute and deliver any and all
security agreements, financing statements and other agreements and
writings which Lender may reasonably request in order to secure,
protect, perfect or enforce the Security Interest or the rights of
Lender under this Agreement.
1.03 Each of the following occurrences shall constitute an Event of Default
hereunder (an "Event of Default"): (i) Debtor shall fail to pay the
Note when due; (ii) breach of any representation, warranty or covenant
made by Debtor hereunder; or (iii) insolvency or bankruptcy of Debtor,
inability of Debtor to pay its debts as they mature, Debtor's
assignment for the benefit of creditors or the institution of any
proceeding based on any of the foregoing. Debtor shall pay all costs
and expenses, including attorneys' fees, of Lender in connection with
Debtor's default under this Security Agreement, the Note or any action
to enforce Lender's rights hereunder or thereunder.
1.04 Upon the occurrence of any Event of Default under Section 1.03 and at
any time thereafter, Lender may exercise one or more of the following
rights and remedies: (i) declare any unmatured portion of the Note to
be immediately due and payable, and the same shall thereupon be
immediately due and payable, without presentment or other notice or
demand; (ii) subject to the rights of the Prior Lenders, exercise and
enforce any and all rights and remedies available upon default to a
secured party under the Uniform Commercial Code as enacted by the State
of Minnesota. If notice to Debtor of any intended disposition of
Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially
reasonable if given (in the manner specified in Section 1.05) at least
ten (10) calendar days prior to the date of intended disposition or
other action; (iii) exercise or enforce any and all other rights or
remedies available by law or agreement against the Collateral, against
Debtor, or against any other person or property.
1.05 This Agreement can be waived, modified, amended, terminated or
discharged, and the Security Interest can be released, only explicitly
in a writing signed by Lender. Mere delay or failure to act shall not
preclude the exercise or enforcement of any rights or remedies
available to Lender. All notices to be given to Debtor shall be deemed
sufficiently given if delivered or mailed by registered, certified or
ordinary mail, postage prepaid, to Debtor at its address set forth
above or at its most recent address shown on Lender's records.
1.06 This Agreement, and the Security Interest granted hereby, shall be
binding upon Debtor, its successors and assigns, and shall inure to the
benefit of and be enforceable by Lender and its successors and assigns,
and shall be effective when executed by Debtor and delivered to Lender
whether or not this Agreement is executed by Lender. Except to the
extent otherwise required by law, this Agreement and the transaction
evidenced hereby shall be governed by the laws of the state of
Minnesota. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications
which can be given
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effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein
or prescribed hereby.
IN WITNESS WHEREOF, this Security Agreement has been duly executed
and delivered by the proper officers thereunto duly authorized on the day and
year first above written.
DEBTOR: INTRANET SOLUTIONS, INC.
By /s/Xxxxxx X. Xxxxx
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Its: Chief Executive Officer
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LENDER: CIRCLE F VENTURES, LLC
By /s/Xxxxxx X. Xxxxxxx
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Its: President
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