EXHIBIT 10.6
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SECURITY AGREEMENT
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dated June 30, 2005
between
BLAZING HOLDING, INC.
Debtor
and
XXXXXX INTERNATIONAL, INC.
Secured Party
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SECURITY AGREEMENT
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AGREEMENT, dated June 30, 2005, between BLAZING HOLDING, INC., an
Ontario corporation, having an address at 00 Xxxxxxx Xxxx, Xxxxxxxx Xxxx, XX
X0X 0X0 Xxxxxx, ("Debtor"), and XXXXXX INTERNATIONAL, INC., a Delaware
corporation, having an address at 000 Xxxxxxxx Xxxxxx Xx., Xxxx #000,
Xxxxxxxxx, XX X0X 0X0 Canada, ("Secured Party").
W I T N E S S E T H:
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WHEREAS, concurrently herewith Secured Party is lending to Debtor
the sum of US$3,000,000.00, as evidenced by a Promissory Note of even date
herewith (the "Note"); and
WHEREAS, in order to induce Secured Party to make said loan, Debtor
has agreed to pledge to Secured Party certain property as security for the
loan;
NOW THEREFORE, in consideration of Ten Dollars, and other valuable
consideration, the receipt and sufficiency of which hereby are acknowledged,
the parties hereto agree as follows:
1. Definitions. The following terms as used in this Agreement shall
have the meanings set forth below:
"Collateral" shall mean all of the property set forth in Exhibit A
attached hereto and made a part hereof, and all substitutions, replacements and
accessions thereto.
"Obligations" shall mean all principal and interest due or to become due
under the aforesaid Note.
2. Creation Of The Security Interest. Debtor hereby grants to
Secured Party a security interest in all of the right, title and interest of
Debtor in and to the Collateral to secure the full and prompt payment and
performance of all of the Obligations.
3. Debtor's Obligations To Pay. Debtor shall pay and perform all of
the Obligations of Debtor to Secured Party as the same may become due according
to their terms.
4. Protection Of The Collateral. Debtor shall defend the title to
the Collateral against all claims and demands whatsoever.
5. Filing And Recording. Debtor hereby authorizes Secured Party to
file or refile any financing statements or continuation statements with respect
to the security interest granted pursuant to this Agreement which at any time
may be required or appropriate, although the same may have been executed only
by Secured Party, and to execute such financing statement on behalf of Debtor.
6. Default. The occurrence of any one or more of the following
events (hereinafter referred to as "Events of Default") shall constitute a
default hereunder:
(a) If Debtor shall default in the payment of any principal or interest
due under the Note; or
(b) If Debtor shall fail to pay, perform or observe any material
covenant, agreement, term or provision of this Agreement; or
(c) If any representation, warranty or other statement of fact herein or
in any writing, certificate, report or statement at any time furnished to
Secured Party pursuant to or in connection with this Agreement shall be
false or misleading in any material respect; or
(d) If Debtor shall: admit in writing its inability to pay its debts
generally as they become due; file a petition for relief under the
bankruptcy laws or a petition to take advantage of any insolvency act;
make an assignment for the benefit of creditors; commence a proceeding for
the appointment of a receiver, trustee, liquidator or conservator of
itself or the whole or any substantial part of its property; file a
petition or answer seeking reorganization or arrangement or similar relief
under the Federal Bankruptcy Laws or any other applicable law or statute
of the United States or any State; or if Debtor shall be adjudged a
bankrupt or insolvent, or a court of competent jurisdiction shall enter
any order, judgment or decree appointing a receiver, trustee, liquidator
or conservator of Debtor or of the whole or any substantial part of the
property of Debtor or approves a petition filed against Debtor seeking
reorganization or similar relief under the Federal Bankruptcy Laws or any
other applicable law or statute of the United States or any State.
7. Rights And Remedies. Secured Party shall have all rights and
remedies provided by the Uniform Commercial Code in effect in the State of
Delaware on the date hereof.
8. Debtor's Representations And Warranties. Debtor hereby
represents and warrants to Secured Party that:
(a) Debtor is not in default under any indenture, mortgage, deed of
trust, agreement or other instrument to which it is a party or by which it
may be bound. Neither the execution nor the delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will violate any law or regulation,
or any order or decree of any court of governmental authority, or will
conflict with, or result in the breach of, or constitute a default under,
any indenture, mortgage, deed or trust, agreement or other instrument to
which Debtor is a party or by which Debtor may be bound, or result in the
creation or imposition of any lien, claim or encumbrance upon any property
of Debtor.
(b) Debtor has the power to execute, deliver and perform the provisions
of this Agreement and all instruments and documents delivered or to be
delivered pursuant hereto, and has taken or caused to be taken all
necessary or appropriate actions to authorize the execution, delivery and
performance of this Agreement and all such instruments and documents.
(c) Debtor is the legal and equitable owner of the Collateral, free and
clear of all security interests, liens, claims and encumbrances of every
kind and nature. Except as may be set forth in Exhibit A annexed hereto,
no financing statement covering the Collateral or its proceeds is on file
in any public office.
(d) No default exists, and no event which with notice or the passage of
time, or both, would constitute a default under the Collateral by any
party thereto, and there are no offsets, claims or defenses against the
obligations evidenced by the Collateral, except as may be expressly set
forth in Exhibit A annexed hereto.
9. Notices. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been
properly given if sent by Federal Express courier or by registered or certified
mail, return receipt requested, with postage prepaid, addressed to the parties
at their respective addresses herein above set forth, or at such other
addresses as the parties may designate in writing. Debtor immediately shall
notify Secured Party of any change in the address of Debtor or discontinuance
of the place of business or residence of Debtor.
10. Modification And Waiver. No modification or waiver of any
provision of this Agreement, and no consent by Secured Party to any breach
thereof by Debtor, shall be effective unless such modification or waiver shall
be in writing and signed by Secured Party, and the same shall then be effective
only for the period and on the conditions and for the specific instances and
purposes specified in such writing. No course of dealing between Debtor and
Secured Party in exercising any rights or remedies hereunder shall operate as a
waiver or preclude the exercise of any other rights or remedies hereunder.
11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
12. Miscellaneous. This Agreement shall be construed in accordance
with and shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
BLAZING HOLDING, INC.
Per /s/ Xxxxxxx Xxxxxxxx
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XXXXXXX XXXXXXXX, President
