SECURITY AGREEMENT ACCOUNTS, GENERAL INTANGIBLES, CONTRACT RIGHTS
Exhibit
10.6
ACCOUNTS,
GENERAL INTANGIBLES, CONTRACT RIGHTS
This
Agreement is made and entered into this 30th day of September, 2009, between
XXXXXXXX X. XXXXX, as Trustee
of the Pak-It Members’ Trust, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000
hereinafter referred to as "Secured Party" and PAK-IT, LLC of 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000, hereinafter referred to as "Debtor."
1. To
secure the payment of indebtedness evidenced by a promissory note or notes
executed by 310 HOLDINGS,
INC. to Secured Party and any and all extensions or renewals thereof and
any and all liabilities or obligations of the 310 HOLDINGS, INC. or Debtor to the Secured
Party, direct or indirect, absolute or contingent now existing or hereafter
arising, now due or after to become due, Debtor does hereby grant a continuing
security interest in all of the accounts, notes receivable, general intangibles
and contract rights of the Debtor and all proceeds thereof.
2. Debtor
warrants that the location of the office where it keeps all of its accounts,
general intangibles and contract rights is:221 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000.
3. Debtor
warrants that it will not change the location of or the place where it keeps its
records concerning its accounts, general intangibles and contract rights without
first obtaining the written consent of the Secured Party.
4. The
security interest granted hereby shall extend to all of the property described
in paragraph 1 now owned by the Debtor or hereafter acquired by the Debtor or
that come into the existence during the term of this agreement. In
addition, Debtor does hereby grant to the Secured Party a continuing security
interest in all proceeds of all of the foregoing collateral.
5. Debtor
does hereby authorize the Secured Party to perfect the security interest granted
hereby by filing financing statement(s), in form satisfactory to the Secured
Party, covering all of the above described collateral which the Secured Party
may file in the appropriate filing offices as reasonably determined by
it. Debtor specifically agrees that unless such financing statement
is the only financing statement on file which affects or may be applicable to
the type of collateral described in this agreement, it will immediately secure
the termination of a conflicting financing statement and will not request a loan
or advance from the Secured Party under this agreement until the financing
statement in favor of the Secured Party is the only financing statement on file
covering collateral of the type described in this agreement. THE EXISTING FINANCING STATEMENT
PREVIOUSLY GRANTED TO USAMERIBANK IS PERMITTED TO REMAIN OF RECORD AND ENTITLED
TO PRIORITY TO THE FINANCING STATEMENT FILED TO PERFECT THE SECURITY INTEREST
GRANTED HEREBY.
6. After
default by the Debtor, Account debtors obligated on Debtor's accounts shall be
directed by Debtor's invoice to make payments directly to Secured Party at such
address as Secured Party shall direct. Such address is initially
designated to be 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxx. Secured Party shall take control
of all proceeds of these accounts by depositing the same in a holding account
for a period of two (2) days after which such proceeds shall be first applied to
reimburse the Secured Party for any outstanding costs to which it is entitled to
be reimbursed and thereafter to be applied to the repayment of the obligations
of the Debtor secured hereby. The costs of collection and enforcement, including
attorney's fees and out-of-pocket expenses, and all other expenses and
liabilities resulting from collection and enforcement shall be borne by Debtor
whether incurred by Secured Party or Debtor.
7. All
checks, drafts, cash and other remittances received on account of Debtor's
accounts will be immediately deposited by Secured Party in a bank account of the
Debtor maintained at USAmeribank over which Secured Party, or its agents, shall
have power of withdrawal. The Secured Party holds these funds in the
account as security for loans and indebtedness. The proceeds shall be
deposited in precisely the form received except for the endorsement by Debtor
where necessary to permit collection of items. Debtor agrees to make
any necessary endorsements and authorizes Secured Party to make same on Debtor's
behalf. Should payment be received directly by Debtor, Debtor agrees
that it will not commingle the checks, drafts, cash or other remittances so
received by it with any of its own funds or property but will immediately hold
them separate and apart for the Secured Party for deposit into the special
account. Secured Party may determine the order and method of
application. Any portion of funds on deposit in the special account
which Secured Party elects not to apply, may be paid over by Secured Party, to
Debtor.
8. So
long as the loan and indebtedness to Secured Party secured hereunder remains
unpaid, debtor will not, without the consent of Secured Party, borrow from
anyone except the Secured Party, or pledge or grant a security interest to
anyone except the Secured Party in an account or contract right or note
receivable or general intangible or permit a lien or encumbrance to attach to
any of the foregoing, or a levy to be made, or a financing statement (except
Secured Party's statement and that previously granted to USAmeribank, expressly
acknowledged to have priority) to be on file.
9. Representations
and Warranties of Debtor. The Debtor represents and warrants and so
long as the Indebtedness remains unpaid shall be deemed continuously to
represent and warrant that:
(a) the
Debtor is the owner of the Collateral free of all security interests or other
encumbrances, except the Security Interest;
(b) Each
account, general intangible, and chattel paper constituting the Collateral is
genuine and enforceable in accordance with its terms against the party obligated
to pay the same (the “Account Debtor”);
(c) The
amount represented by the Debtor to the Secured Party as owing by each Account
Debtor or by all the Account Debtors is the correct amount actually and
unconditionally owing by such Account Debtor or Debtors, except for normal cash
discounts where applicable;
(d) No
Account Debtor has any defense, set-off, claim or counterclaim against the
Debtor which can be asserted against the Security Party, whether in any
proceeding to enforce the Collateral or otherwise;
(e) The
Debtor's records concerning that part of the Collateral constituting accounts,
general intangibles or chattel paper are kept at the address specified
above;
(f) The
Debtor operates under no trade names except the name(s) set forth above and the
following names, if any:
10. Covenants
of Debtor. So long as this Agreement has not been terminated, the
Debtor: (a) will defend the Collateral against the claims and demands
of all other parties, including without limitation defenses, set-offs, claims
and counterclaims asserted by any Account Debtor against the Debtor or the
Secured Party; will keep the collateral free from all security interests or
other encumbrances except the Security Interest and will not sell, transfer,
assign, deliver or otherwise dispose of any of the Collateral or any interest
therein without the prior written consent of the Secured Party; (b) will not
without the written consent of the Secured Party create in favor of anyone other
than the Secured Party a security interest in any of its accounts, general
intangibles or contract rights nor will it sell or assign, with or without
recourse to anyone other than the Secured Party any of its accounts, chattel
paper or general intangibles; (c) will keep in accordance with generally
accepted accounting principles consistently applied, accurate and complete
records concerning the Collateral; upon the Secured Party's request will xxxx
any of such records and all or any of the Collateral to give notice of the
Security Interest; and will permit the Secured Party or its agents to inspect
the Collateral and to audit and make abstracts of such records or any of the
Debtor's book, ledgers, reports, correspondence and other records; (d) upon
demand will deliver to Secured Party any documents of title and any chattel
paper representing or relating to the Collateral or any part thereof, schedules,
invoices, shipping or delivery receipts, purchase orders, contracts or other
documents representing or relating to purchases or other acquisitions or sales,
or leases or other dispositions of the Collateral and proceeds thereof and any
and all other schedules, documents, statements which the Secured Party may from
time to time request; (e) will notify the Secured Party promptly in
writing of any change in the Debtor's address, name or identity specified above,
of any change in the location or of any additional locations at which the
Collateral is kept and of any change in the address at which records concerning
the Collateral are kept; (f) will notify the Secured Party immediately of any
default by any Account Debtor in payment or other performance of his obligations
with respect to any collateral; (g) without the Secured Party's written consent
will not make or agree to make any alteration, modification or cancellation of
or substitution for or credits, adjustments or allowances on any Collateral; (h)
in connection herewith will execute and deliver to the Secured Party such
financing statements and other documents and do such other things as the Secured
Party may request; (i) will pay or cause to be paid all taxes, assessments and
other charges of every nature which may be levied or assessed against the
Collateral; (j) will insure the Collateral against risks by obtaining policies
(none of which shall be cancelable without the written consent of the Secured
Party) in coverage, form and amount and with companies satisfactory to the
Secured Party such policies to contain a loss payee provision exercised in favor
of the Secured Party and at the Secured Party's request will deliver each policy
or certificate of insurance therefor to the Secured Party; and (k) will not
remove the Collateral from the state nor change the location of its chief
executive office without the written consent of Secured Party.
11. Verification
of Collateral. The Secured Party shall have the right to verify any
Collateral in any manner and through any medium which the Secured Party may
consider appropriate and the Debtor shall furnish such assistance and
information and perform such acts as the Secured Party may require in connection
therewith.
12. Default. (a)
Any of the following events or conditions shall constitute an event of default
("Event of Default"): (i) non-payment when due whether by
acceleration or otherwise of the principal of or interest on any
Indebtedness, time being of the essence, or failure by the Debtor to perform any
material obligations under this Agreement or under any other material agreement
between the Debtor and the Secured Party; (ii) death or incompetency of a
Debtor; (iii) filing by or against the Debtor of a petition in bankruptcy or for
reorganization under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or similar law of any
jurisdiction; (iv) making a general assignment by the Debtor for the benefit of
creditors; the appointment of or taking possession by a receiver, trustee,
custodian or similar official for the Debtor or for any of the Debtor's assets;
or the institution by or against the Debtor of any kind of insolvency
proceedings or any proceeding for the dissolution or liquidation of the Debtor;
(v) entry of any judgment or other order for payment of money against Debtor or
any of its affiliates which remains unsatisfied for a period of thirty (30) days
without a stay of execution and will have a material adverse effect on the
business of the Debtor; (vi) the occurrence of any event described in this
paragraph with respect to any endorser or guarantor or any party liable for
payment of any Indebtedness or (vii) material falsity in any certificate,
statement, representation, warranty or audit at any time furnished to the
Secured Party by or on behalf of the Debtor or any endorser or guarantor or any
other party liable for payment of any Indebtedness, pursuant to or in connection
with the Security Agreement or otherwise (including warranties in this
Agreement) and including any omission to disclose any substantial contingent or
liquidated liabilities or any material adverse change in facts disclosed by any
certificate, statement, representation, warranty or audit furnished to the
Secured Party; (viii) any attachment or levy against the Collateral or any other
occurrence which inhibits the Secured Party's free access to the Collateral;
(ix) Debtor's concealment, removal or its approval of the concealment or removal
of any part of its properties, with intent to hinder, delay or defraud its
creditors, or any of them, or a transfer or any of its properties which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law, or any
transfer of its properties to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid, or the suffering or
permitting, while insolvent, any creditor to obtain a lien upon any of its
properties through legal proceedings or distraint which is not vacated within
thirty (30) days from the date thereof; or (x) should any guarantors attempt to
cancel, limit or terminate their guaranty, or should any guarantor fail to
fulfill a separate obligation of the guarantor to Secured Party.
(b) The
Secured Party may declare all or any part of the Indebtedness to be immediately
due without notice upon the happening of any Event of Default or if the Secured
Party in good faith believes that the prospect of payment of all or any part of
the Indebtedness or the performance of the Debtor's obligations under this
Agreement or any other agreement now or hereafter in effect between the Debtor
and the Secured Party is impaired. This paragraph is not intended to
affect any rights of the Secured Party with respect to any Indebtedness which
may now or hereafter be payable on demand.
(c) Upon
the happening of any Event of Default the Secured Party's rights with respect to
the Collateral shall be those of a secured party under the Uniform Commercial
Code and any other applicable law from time to time in effect. The
Secured Party shall also have any additional rights granted herein and in any
other agreement now or hereafter in effect between the Debtor and the Secured
Party. If requested by the Secured Party, the Debtor will assemble
the Collateral and make it available to the Secured Party at a place to be
designated by the Secured Party.
(d) The
Debtor agrees that any notice by the Secured Party of the sale or disposition of
the Collateral or any other intended action hereunder, whether required by the
Uniform Commercial Code or otherwise, shall constitute reasonable notice to the
Debtor if the notice is mailed by regular or certified mail, postage prepaid, at
least ten days before the action to the Debtor's address as specified in this
Agreement or to any other address which the Debtor has specified in this
Agreement or to any other address which the Debtor has specified in writing to
the Secured Party as the address to which notices shall be given to the
Debtor.
(e) The
Debtor shall pay all reasonable costs and expenses incurred by the Secured Party
in enforcing this Security Agreement, realizing upon any Collateral and
collecting any Indebtedness (including a reasonable attorneys' fee) whether suit
is brought or not and whether incurred in connection with collection, trial,
appeal or otherwise, and shall be liable for any deficiencies in the event the
proceeds of disposition of the Collateral does not satisfy the Indebtedness in
full.
13. Miscellaneous: (a)
The Debtor authorizes the Secured Party to file any financing statement or
statements relating to the Collateral (without the Debtor's signature thereon)
which the Secured Party deems appropriate, and the Debtor irrevocably appoints
the Secured Party as the Debtor's attorney-in-fact to execute any such financing
statement or statements in the Debtor's name and to perform all other acts which
the Secured Party deems appropriate to perfect and to continue perfection of the
Security Interest.
(b) The
Debtor hereby irrevocably consents to any act by the Secured Party or its agents
in entering upon any premises for the purpose of either: (1)
inspecting the Collateral or (2) taking possession of the collateral after any
Event of Default; and the Debtor hereby waives his right to assert against the
Secured Party or its agents any claim based upon trespass or any similar cause
of action for entering upon any premises where the Collateral may be
located.
(c) Before
or after any default by the Debtor under this Security Agreement the Secured
Party may notify any party obligated to pay proceeds, of the existence of the
Security Interest and may also direct them to make payments of all proceeds to
the Secured Party.
(d) The
Secured Party may demand, collect and xxx for all proceeds (either in the
Debtor's name or the Secured Party's name at the latter's option) with the right
to enforce, compromise, settle or discharge any proceeds. The Debtor
irrevocably appoints the Secured Party the Debtor's attorney-in-fact to endorse
the Debtor's name on all checks, commercial paper and other instruments
pertaining to the proceeds.
(e) The
Debtor authorizes the Secured Party to collect and apply against the
Indebtedness any refund of insurance premiums or any insurance proceeds payable
on account of the loss or damage to any of the Collateral and irrevocably
appoints the Secured Party as the Debtor's attorney-in-fact to endorse any check
or draft representing such proceeds.
(f) (i)
As further security the Debtor grants to the Secured Party a security interest
in all property of the Debtor which is or may hereafter be in the Secured
Party's possession in any capacity including all monies owed or to be owed by
the Secured Party or any affiliate thereof to the Debtor; and with respect to
all of such property, the Secured Party shall have the same rights as it has
with respect to the Collateral. (ii) Without limiting any other right
of the Secured Party whenever the Secured Party has the right to declare any
Indebtedness to be immediately due and payable (whether or not it has so
declared), the Secured Party may set off against the Indebtedness all monies
then owed to the Debtor by the Secured Party in any capacity whether due or not
and the Secured Party shall be deemed to have exercised its right to set off
immediately at the time its right to such election accrues.
(g) Upon
the Debtor's failure to perform any of its duties hereunder the Secured Party
may, but it shall not be obligated to, perform any of such duties and the Debtor
shall forthwith upon demand reimburse the Secured Party for any expense incurred
by the Secured Party in doing so. As further security the Debtor
hereby assigns and gives a security interest in accounts, chattel paper, and
general intangibles including factory credits or bonuses now or hereafter owned
by or due to the Debtor by any of its suppliers under any franchise or other
agreement currently or hereafter in effect, or any modification or replacement
thereof, or however otherwise due the Debtor. The Debtor will hold in
trust for the Secured Party and forthwith remit to the Secured Party all the
proceeds of such accounts, chattel paper, and general intangibles received by
the Debtor, or the Secured Party may make direct collection thereof and credit
the Debtor with all sums received.
(h) No
delay or omission by the Secured Party in exercising any right hereunder or with
respect to any Indebtedness shall operate as a waiver of that or any other
right, and no single or partial exercise of any right shall preclude the Secured
Party from any other or future exercise of the right or the exercise of any
other right or remedy. The Secured Party may cure any Event of
Default by the Debtor in any reasonable manner without waiving the Event of
Default so cured and without waiving any other prior or subsequent Event of
Default by the Debtor. All rights and remedies of the Secured Party
under this Agreement and under the Uniform Commercial Code shall be deemed
cumulative.
(i) The
Secured Party shall have no obligation to take and the Debtor shall have the
sole responsibility for taking any steps to preserve rights against all prior
parties to any instrument or chattel paper in the Secured Party's possession as
proceeds of the Collateral. The Debtor waives notice of dishonor and
protest of any instrument constituting Collateral at any time held by the
Secured Party on which the Debtor is in any way liable and waives notice of any
other action taken by the Secured Party.
(j) The
rights and benefits of the Secured Party under this Agreement shall, if the
Secured Party agrees, inure to any party acquiring an interest in the
Indebtedness or any part thereof.
(k) The
terms "Secured Party" and "Debtor" as used in this Agreement include the heirs,
personal representatives, and successors or assigns of those
parties.
(l) If
more than one Debtor executes this Security Agreement, the term "Debtor"
includes each of the Debtors as well as all of them, and their obligations under
this Agreement shall be joint and several.
(m) This
Agreement may not be modified or amended nor shall any provision of it be waived
except by in writing signed by the Debtor and by an authorized officer of the
Secured Party.
(n) This
Agreement shall be construed under the Uniform Commercial Code and any other
applicable Florida laws in effect from time to time.
(o) This
Security Agreement is a continuing agreement which shall remain in force until
the Secured Party shall actually receive written notice of its termination and
thereafter until all of the Indebtedness contracted for or created before
receipt of the notice and any extensions or renewals of that Indebtedness
(whether made before or after receipt of the notice) together with all interest
thereon both before and after the notice shall be paid in full.
14. Waiver. The
Debtor hereby waives any rights Debtor may have to notice and a hearing before
possession or sale of collateral is effected by Secured Party by self-help,
replevin, attachment or otherwise.
Executed
at Clearwater, Florida, on the day and year first written above.
PAK-IT, LLC, a
Florida
Limited
Liability Company
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By:
/s/
Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X.
Xxxxx
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Title:
Manager "Debtor"
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Dated: 09/30/09
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XXXXXXXX X. XXXXX, as Trustee
of Pak-It Members’ Trust "Secured Party"
