SECURITY AGREEMENT
This
Security Agreement (this “Agreement”) is made
as of the ___ day of February, 2009, by and between Organic To Go Food
Corporation, a Delaware corporation (the “Company” or the
“Securing
Party”), and X.Xxxxxx L.P., a limited partnership organized under the
laws of the Bahamas (the “Secured
Party”).
RECITALS
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A.
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The
Securing Party and the Secured Party are parties to a Note Purchase
Agreement, dated February 11, 2009 (the “Purchase
Agreement”), pursuant to which the Secured Party shall purchase the
Note (as defined in the Purchase Agreement);
and
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B.
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The
parties intend that the Securing Party’s obligations to repay the Note
(whether now owned or hereafter purchased by the Secured Party) and any
other obligation in favor of Secured Party arising under the Purchase
Agreement and the Note be secured by all of the tangible and intangible
assets of the Securing Party, and shall be governed by the terms and
conditions of this Agreement.
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AGREEMENT
In
consideration of the purchase of the Note by the Secured Party and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Grant of
Security Interest.
(a) To
secure the Securing Party’s full and timely performance of the Obligations, the
Securing Party hereby grants to the Secured Party a continuing Lien on and
security interest (the “Security Interest”)
in, all of the Securing Party’s right, title and interest in and to all of its
personal property and assets (both tangible and intangible), including, without
limitation, the following, whether now owned or hereafter acquired and wherever
located: (a) all Receivables; (b) all Equipment; (c) all Fixtures; (d) all
General Intangibles; (e) all Inventory; (f) all Investment Property; (g) all
Deposit Accounts; (h) all Cash; (i) all other Goods of the Securing Party; (j)
all Intellectual Property; and (k) all Proceeds of each of the foregoing and all
accessions to, and replacements for, each of the foregoing (collectively, the
“Collateral”).
Notwithstanding
the foregoing, the grant, assignment and transfer of a Security Interest as
provided herein shall not extend to, and the term “Collateral” shall not
include: (a) “intent-to-use” trademarks at all times prior to
the first use thereof, whether by the actual use thereof in commerce, the
recording of a statement of use with the United States Patent and Trademark
Office or otherwise, or (b) any Account, Chattel Paper, General Intangible, or
Promissory Note in which Securing Party has any right, title or interest if and
to the extent such Account, Chattel Paper, General Intangible, or
Promissory Note includes a provision containing a restriction on assignment such
that the creation of a security interest in the right, title or interest of
Securing Party therein would be prohibited and would, in and of itself, cause or
result in a default thereunder enabling another person party to such Account,
Chattel Paper, General Intangible, or Promissory Note to enforce any remedy with
respect thereto; provided
that the foregoing exclusion shall not apply if (i) such prohibition has
been waived or such other person has otherwise consented to the creation
hereunder of a security interest in such Account, Chattel Paper,
General Intangible, or Promissory Note or (ii) such prohibition would be
rendered ineffective pursuant to Sections 9-406(d), 9-407(a) or 9-408(a) of the
UCC, as applicable and as then in effect in any relevant jurisdiction, or any
other applicable law (including the Bankruptcy Code) or principles of equity;
provided further that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and the Securing Party shall be deemed
to have granted a security interest in, all its rights, title and interests in
and to such Account, Chattel Paper, General Intangible, or Promissory
Note as if such provision had never been in effect; and provided further that
the foregoing exclusion shall in no way be construed so as to limit, impair or
otherwise affect the Secured Party’s unconditional continuing security interest
in and to all rights, title and interests of Securing Party in or to any payment
obligations or other rights to receive monies due or to become due under any
such Account, Chattel Paper, General Intangible, or Promissory Note
and in any such monies and other proceeds of such Account, General Intangible,
Contract, Promissory Note or Chattel Paper.
(b) The
following terms shall have the following meanings for purposes of this
Agreement:
“Account” means any “Account,”
as such term is defined in the UCC now owned or hereafter acquired by the
Securing Party or in which the Securing Party now holds or hereafter acquires
any interest and, in any event, shall include, without limitation, all accounts
receivable, book debts, rights to payment and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments)
now owned or hereafter received or acquired by or belonging or owing to the
Securing Party whether or not arising out of goods or software sold or services
rendered by the Securing Party or from any other transaction, whether or not the
same involves the sale of goods or services by the Securing Party and all of the
Securing Party’s rights in, to and under all purchase orders or receipts now
owned or hereafter acquired by it for goods or services, and all of the Securing
Party’s rights to any goods represented by any of the foregoing, and all monies
due or to become due to the Securing Party under all purchase orders and
contracts for the sale of goods or the performance of services or both by the
Securing Party or in connection with any other transaction (whether or not yet
earned by performance on the part of the Securing Party), now in existence or
hereafter occurring, including, without limitation, the right to receive the
proceeds of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the
foregoing.
“Bankruptcy Code” means Title
XI of the United States Code.
“Cash” means all cash, money,
currency, and liquid funds, wherever held, in which the Securing Party now or
hereafter acquires any right, title, or interest.
“Chattel Paper” means any
“Chattel paper,” as such term is defined in the UCC, now owned or hereafter
acquired by the Securing Party or in which the Securing Party now holds or
hereafter acquires any interest.
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“Contracts” means all
contracts (including any customer, vendor, supplier, service or maintenance
contract), leases, licenses, undertakings, purchase orders, permits, franchise
agreements or other agreements (other than any right evidenced by Chattel Paper,
Documents or Instruments), whether in written or electronic form, in or under
which Securing Party now holds or hereafter acquires any right, title or
interest, including, without limitation, with respect to an Account, any
agreement relating to the terms of payment or the terms of performance
thereof.
“Deposit Accounts” means any
“Deposit accounts,” as such term is defined in the UCC, and includes any
checking account, savings account, or certificate of deposit, now owned or
hereafter acquired by the Securing Party or in which the Securing Party now
holds or hereafter acquires any interest.
“Documents” means any
“Documents,” as such term is defined in the UCC, now owned or hereafter acquired
by the Securing Party or in which the Securing Party now holds or hereafter
acquires any interest.
“Equipment” means any
“Equipment,” as such term is defined in the UCC, now owned or hereafter acquired
by the Securing Party or in which the Securing Party now holds or hereafter
acquires any interest and any and all additions, upgrades, substitutions and
replacements of any of the foregoing, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto, now owned
or hereafter acquired by the Securing Party or in which the Securing Party now
holds or hereafter acquires interest.
“Event of Default” shall have
the meaning given that term in the Purchase Agreement.
“Fixtures” means any
“Fixtures,” as such term is defined in the UCC, together with all right, title
and interest of the Securing Party in and to all extensions, improvements,
betterments, accessions, renewals, substitutes, and replacements of, and all
additions and appurtenances to any of the foregoing property, and all
conversions of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case may be, now
owned or hereafter acquired by the Securing Party or in which the Securing Party
now holds or hereafter acquires any interest.
“General Intangible” means any
“General intangible,” as such term is defined in the UCC, now owned or hereafter
acquired by the Securing Party or in which the Securing Party now holds or
hereafter acquires any interest and, in any event, shall include, without
limitation, all right, title and interest that the Securing Party may now or
hereafter have in or under any contracts, rights to payment, payment
intangibles, confidential information, interests in partnerships, limited
liability companies, corporations, joint ventures and other business
associations, permits, goodwill, claims in or under insurance policies,
including unearned premiums and premium adjustments, uncertificated securities,
deposit, checking and other bank accounts, but shall not include any
Intellectual Property (including the right to receive all proceeds and damages
therefrom), rights to receive tax refunds and other payments and rights of
indemnification.
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“Goods” means any “Goods,” as
such term is defined in the UCC, now owned or hereafter acquired by the Securing
Party or in which the Securing Party now holds or hereafter acquires any
interest.
“Instruments” means any
“Instrument,” as such term is defined in the UCC, now owned or hereafter
acquired by the Securing Party or in which the Securing Party now holds or
hereafter acquires any interest.
“Intellectual Property” means
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with the Company’s respective
businesses as described in the SEC Reports (as defined in the Purchase
Agreement).
“Inventory” means any
“Inventory,” as such term is defined in the UCC, now owned or hereafter acquired
by the Securing Party or in which the Securing Party now holds or hereafter
acquires any interest, and, in any event, shall include, without limitation, all
inventory, goods and other personal property that are held by or on behalf of
the Securing Party for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process or
materials used or consumed or to be used or consumed in the Securing Party’s
business, or the processing, packaging, promotion, delivery or shipping of the
same, and all finished goods, whether or not the same is in transit or in the
constructive, actual or exclusive possession of the Securing Party or is held by
others for the Securing Party’s account, including, without limitation, all
goods covered by purchase orders and contracts with suppliers and all goods
billed and held by suppliers and all such property that may be in the possession
or custody of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents or other Persons.
“Investment Property” means
any “Investment property,” as such term is defined in the UCC, and includes
certificated securities, uncertificated securities, money market funds and U.S.
Treasury bills or notes, now owned or hereafter acquired by the Securing Party
or in which the Securing Party now holds or hereafter acquires any
interest.
“Letter of Credit Right” means
any “Letter of credit right,” as such term is defined in the UCC, now owned or
hereafter acquired by the Securing Party or in which the Securing Party now
holds or hereafter acquires any interest, including any right to payment or
performance under any letter of credit.
“Lien” means any mortgage,
deed of trust, pledge, hypothecation, assignment for security, security
interest, encumbrance, xxxx, xxxx or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, against any property, any
conditional sale or other title retention agreement, any lease in the nature of
a security interest, and the filing of any financing statement (other than a
precautionary financing statement with respect to a lease that is not in the
nature of a security interest) under the UCC or comparable law of any
jurisdiction.
“Obligations” shall mean and
include all loans, advances, debts, liabilities and obligations, howsoever
arising, owed by the Securing Party to the Secured Party of every kind and
description (whether or not evidenced by any note or instrument and whether or
not for the payment of money), direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter owed by the Securing Party to the
Secured Party, under or in connection with the Purchase Agreement and the Note,
including without limitation all interest, fees, charges, expenses, attorneys’
fees and accountants’ fees chargeable to the Securing Party or payable by the
Securing Party thereunder.
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“Permitted Lien” means: (a)
Liens in favor of the Secured Party; (b) any Liens existing on the date of this
Agreement and set forth on Exhibit A attached
hereto; (c) Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by appropriate
proceedings; (d) Liens (i) upon or in any Equipment acquired or held by Securing
Party to secure the purchase price of such Equipment or indebtedness (including
capital leases) incurred solely for the purpose of financing the acquisition of
such Equipment or (ii) existing on such Equipment at the time of its
acquisition, provided that the Lien is confined solely to the Equipment so
acquired, improvements thereon and the Proceeds of such Equipment; (e) leases or
subleases and licenses or sublicenses granted to others in the ordinary course
of the Securing Party’s business; (f) any right, title or interest of a licensor
under a license; (g) Liens arising from judgments, decrees or attachments; (h)
easements, reservations, rights-of-way, restrictions, minor defects or
irregularities in title and other similar Liens affecting real property not
interfering in any material respect with the ordinary conduct of the business of
the Securing Party; (i) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (j) Liens arising solely by virtue of any
statutory or common law provision relating to banker’s liens, rights of setoff
or similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; (k) Liens in favor of a depository bank
or a securities intermediary pursuant to such depository bank’s or securities
intermediary’s customary customer account agreement; provided that any such
Liens shall at no time secure any indebtedness or obligations other than
customary fees and charges payable to such depository bank or securities
intermediary; (l) statutory or common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other similar
Liens, arising in the ordinary course of business and securing obligations that
are not yet delinquent or are being contested in good faith by appropriate
proceedings; (m) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, surety and appeal
bonds, government contracts, performance and return-of-money bonds, and other
obligations of like nature, in each case, in the ordinary course of business;
(n) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security; and (o) pledges and deposits securing liability for
reimbursement or indemnification obligations in respect of letters of credit or
bank guarantees for the benefit of landlords.
“Person” means any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department
thereof).
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“Proceeds” means “Proceeds,”
as such term is defined in the UCC and, in any event, shall include, without
limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash or other
forms of money or currency or other proceeds payable to the Securing Party from
time to time in respect of the Collateral, (b) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Securing Party from
time to time with respect to any of the Collateral, (c) any and all payments (in
any form whatsoever) made or due and payable to the Securing Party from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any Person acting under color of governmental authority), (d) the proceeds,
damages, or recovery based on any claim of the Securing Party against third
parties (i) for past, present or future infringement of any copyright,
patent or patent license or (ii) for past, present or future infringement or
dilution of any trademark or trademark license or for injury to the goodwill
associated with any trademark, trademark registration or trademark licensed
under any trademark license and (e) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
“Receivables” means all of the
Securing Party’s Accounts, Instruments, Documents, Chattel Paper, Supporting
Obligations, and letters of credit and Letter of Credit Rights.
“Supporting Obligation” means
any “Supporting obligation,” as such term is defined in the UCC, now owned or
hereafter acquired by the Securing Party or in which the Securing Party now
holds or hereafter acquires any interest.
“UCC” means the Uniform
Commercial Code as the same may, from time to time, be in effect in the State of
Delaware; provided, that in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, the Secured
Party’s Lien on any Collateral is governed by the Uniform Commercial Code as
enacted and in effect in a jurisdiction other than the State of Delaware, the
term “UCC” shall mean the Uniform Commercial Code as enacted and in effect, from
time to time, in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
Unless
otherwise defined herein, all capitalized terms used herein and defined in the
Purchase Agreement shall have the respective meaning given to those terms in the
Purchase Agreement, and the terms that are defined in the UCC and used herein
shall have the meanings given to them in the UCC.
2. Representations
and Warranties. The Securing
Party hereby represents and warrants to the Secured Party that:
(a) Ownership
of Collateral. The Securing
Party is the legal and beneficial owner of the Collateral (or, in the case of
after-acquired Collateral, at the time the Securing Party acquires rights in the
Collateral, will be the legal and beneficial owner thereof). Except
for Permitted Liens, the Securing Party has rights in or the power to transfer
the Collateral free and clear of any Lien, security interest or
encumbrance.
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(b) Valid
Security Interest. The Security
Interest granted pursuant to this Agreement will constitute a valid and
continuing perfected security interest in favor of the Secured Party in the
Collateral for which perfection is governed by the UCC or filing with the United
States Copyright Office or United States Patent and Trademark
Office. The Security Interest will be prior to all other Liens on the
Collateral except for Permitted Liens.
(c) Organization
and Good Standing. The Securing
Party has been duly incorporated, and is validly existing and in good standing,
under the laws of the State of Delaware.
(d) Receivables.
Each Receivable is genuine and enforceable against the parties obligated to pay
the same free from any right of rescission, defense, setoff or
discount.
(e) Insurance. Each insurance
policy maintained by the Securing Party is validly existing and is in full force
and effect. The Securing Party is not in default under the provisions
of any insurance policy, and there are no facts which, with the giving of notice
or passage of time (or both), would result in such a default under any provision
of any such insurance policy.
(f) Valid
Lien. This
Agreement is effective to create a valid and continuing Lien upon the
Collateral. All action by the Securing Party necessary or desirable
to protect and perfect such Lien on each item of the Collateral has been duly
taken, to the extent that a security interest in the Collateral can be perfected
under the Code by the filing of a UCC-1 financing statement in the filing office
of the Secretary of State of the State of Delaware.
3. Covenants. Unless the
Secured Party otherwise consents, Securing Party covenants and agrees that, from
and after the date of this Agreement until the Obligations are paid in
full:
(a) Other
Liens. The Securing
Party will defend the Collateral against the claims and demands of all persons
at any time claiming the same or any interest therein, except Permitted
Liens.
(b)
Further
Documentation. At any time and
from time to time, upon the written request of the Secured Party, and at
the sole expense of the Securing Party, the Securing Party will promptly and
duly authenticate and deliver such further instruments and documents and take
such further action as such Secured Party determines necessary or desirable for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted including, without limitation, filing any financing or
continuation statements under the UCC in effect with respect to the Liens
created hereby. The Securing Party also hereby authorizes the Secured
Party to file any such financing, amendment or continuation statement without
the authentication of the Securing Party to the extent permitted by applicable
law. A reproduction of this Agreement shall be sufficient as a
financing statement (or as an exhibit to a financing statement on form UCC-1)
and for filing in any jurisdiction. Within five (5)
business days following the date hereof, the Securing Party will file
appropriate financing statements on form UCC-1 in the State of
Delaware.
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(c) Indemnification. The Securing Party agrees to
defend, indemnify and hold harmless the Secured Party against any and all
liabilities, costs and expenses (including, without limitation, reasonable legal
fees and expenses) (“Liabilities”):
(i) with respect to, or resulting from, any delay in paying, any and all
excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral, excluding any taxes based on or measured
by the net income of the Secured Party, except to the extent the validity
thereof is being contested in good faith and adequate reserves are being
maintained in connection therewith, (ii) with respect to, or resulting
from, any delay in complying with any law, rule, regulation or order of any
governmental authority applicable to any of the Collateral, or (iii) in
connection with any of the transactions contemplated by this Agreement, except
in each case for Liabilities directly caused by the gross negligence or willful
misconduct of the Secured Party.
(d) Maintenance
of Records. The Securing
Party will keep and maintain at its own expense complete and satisfactory records of the
Collateral.
(e) Inspection
Rights. The Secured Party
shall have full access during normal business hours, and upon prior reasonable
notice, to all the books, correspondence and other records of the Securing Party
relating to the Collateral. The Secured Party or its
representative may examine such records and make photocopies or otherwise
take extracts from such records. The Securing Party agrees to render
to the Secured Party, at the Securing Party’s expense, such clerical and other
assistance as such Secured Party may reasonably request with regard to the
exercise of its rights pursuant to this paragraph.
(f) Compliance
with Laws, etc. The Securing Party (i) will comply in all
material respects with all laws, rules, regulations and orders of any
governmental authority applicable to any part of the Collateral
or to the operation of the Securing Party’s business and (ii) shall not use
or permit any Collateral to be used in violation of any provision of the
Purchase Agreement and the Note, any law, rule or obligation or order of any
governmental authority, or any policy of insurance covering the
Collateral.
(g) Payment
of Taxes, Etc. The Securing Party will pay promptly when due
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or with respect to any of its income or profits derived from the
Collateral, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except to the extent the validity thereof is being contested in good
faith and adequate reserves are being maintained in connection
therewith.
(h) Limitation
on Liens on Collateral. The Securing
Party will not create, incur or permit to exist, will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien or
claim on or to the Collateral, other than Permitted Liens, and will defend the
right, title and interest of the Secured Party in and to any of the Collateral
against the claims and demands of all other persons other than Permitted
Liens.
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(i) Limitations
on Dispositions of Collateral. The Securing
Party will not sell, transfer, lease, or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so, other than in the ordinary
course of business.
(j) Further
Identification of Collateral. The Securing
Party will furnish to the Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as such Secured Party may reasonably
request, all in detail reasonably acceptable to such Secured Party.
(k) Insurance. The
Securing Party shall (i) maintain and keep in force insurance of the types
and in amounts customarily carried from time to time during the term of this
Agreement in its lines of business, including fire, public liability, property
damage and worker’s compensation, such insurance to be carried with companies
and in amounts satisfactory to the Secured Party, (ii) deliver to the
Secured Party from time to time, as the Secured Party may reasonably request,
schedules setting forth all insurance then in effect, and (iii) deliver to
the Secured Party copies of each policy of insurance which replaces, or
evidences the renewal of, each existing policy of insurance at least 15 days
prior to the expiration of such policy. The Secured Party shall be
named as additional insured or additional loss payee, as appropriate, on all
liability and property insurance of the Securing Party and such policies shall
contain such additional endorsements as shall be reasonably required by the
Secured Party.
(l) Intellectual
Property Matters. The Securing Party shall notify the Secured
Party immediately if it knows or has reason to know (i) that any application or
registration relating to any of its Intellectual Property may become abandoned
or dedicated, or (ii) of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding the Securing Party’s ownership of any
Intellectual Property.
(m)
Intellectual
Property Applications. In no event shall
the Securing Party, either by itself or through any agent, employee, licensee or
designee, file an application for the registration of any patent, trademark or
copyright with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency without giving the Secured
Party prior written notice thereof, and, upon request of the Secured Party, the
Securing Party shall execute and deliver any and all security documents as such
Secured Party may request to evidence such Secured Party’s Lien on such
Intellectual Property and the general intangibles of the Securing Party relating
thereto or represented thereby. The Securing Party hereby authorizes
the Secured Party to amend this Agreement (without any further action or consent
from the Securing Party) to include any such patent, trademark or copyright as
Collateral hereunder.
(n) Intellectual
Property Abandonment. The Securing
Party shall take all actions reasonably necessary or requested by the Secured
Party to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of its Intellectual Property,
including the filing of applications for renewal, affidavits of use, affidavits
of noncontestability and opposition and interference and cancellation
proceedings, unless the Secured Party shall determine that such Intellectual
Property is not material to the conduct of its business.
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4. Rights
with Respect to Collateral
(a) Accounts,
General Intangibles, etc. Secured Party
hereby authorizes Securing Party to collect any Accounts, Chattel Paper and
General Intangibles in which Secured Party has been granted a security interest
hereunder, and Securing Party agrees to use its best efforts to effect the
prompt collection thereof. Secured Party hereby further authorizes Securying
Party to use the proceeds of any such collections in the conduct of its business
in the ordinary course.
(b) Deposit
Accounts and Securities Accounts. The
Secured Party agrees that it will not send a notice of exclusive control or
otherwise exercise control regarding any of the Securing Party’s Deposit
Accounts or Securities Accounts unless an Event of Default shall have occurred
and be continuing.
(c) Investment
Collateral. With respect to any Collateral
consisting of securities, partnership interest, joint venture interest,
investments or the like (referred to collectively and individually in this
Section 4(c) as the “Investment
Collateral”), so long as no Event of Default has occurred and
is continuing (i) Securing Party shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Investment Collateral, or
any part thereof, for any purpose not inconsistent with the terms of this
Agreement, the Purchase Agreement or the Note; and (ii) Securing Party shall be
entitled to receive and to retain and use any and all dividends and
distributions paid in respect of the Investment Collateral.
(d) Attorney-In-Fact. Without limiting
in any way the responsibility and obligations of the Securing Party and not as
substitute to such obligations, and without derogating from Section 5 below, the
Securing Party hereby appoints the Secured Party and any officer or agent of the
Secured Party, with full power of substitution, as its attorney-in-fact with
full irrevocable power and authority in the place of the Securing Party and in
the name of the Securing Party or its own name, from time to time in the Secured
Party’s discretion so long as an Event of Default has occurred and is
continuing, for the purpose of carrying out the terms of this Agreement, to take
any appropriate action and to authenticate any instrument which may be necessary
or desirable to accomplish the purposes of this Agreement. Without
limiting the foregoing, so long as an Event of Default has occurred and is
continuing, the Secured Party shall have the right, without notice to, or the
consent of, the Securing Party, to do any of the following on the Securing
Party’s behalf:
(i) to
pay or discharge any taxes or Liens levied or placed on or threatened against
the Collateral;
(ii) to
direct any party liable for any payment under any of the Collateral to make
payment of any and all amounts due or to become due thereunder directly to the
Secured Party or as the Secured Party directs;
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(iii) to
ask for or demand, collect, and receive payment of and receipt for, any payments
due or to become due at any time in respect of or arising out of any
Collateral;
(iv) to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to enforce any right in respect of any
Collateral;
(v) to
defend any suit, action or proceeding brought against the Securing Party with
respect to any Collateral;
(vi) to
settle, compromise or adjust any suit, action or proceeding described in
subsection (v) above and to give such discharges or releases in connection
therewith as the Secured Party may deem appropriate;
(vii) to
assign any patent right included in the Collateral of the Securing Party (along
with the goodwill of the business to which any such patent right pertains),
throughout the world for such term or terms, on such conditions, and in such
manner, as the Secured Party shall in its sole discretion determine;
and
(viii)
generally, to sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral and to take, at the Secured Party’s
option and the Securing Party’s expense, any actions which the Secured Party
deems necessary to protect, preserve or realize upon the Collateral and the
Secured Party’s Lien on the Collateral and to carry out the intent of this
Agreement, in each case to the same extent as if the Secured Party was the
absolute owner of the Collateral for all purposes.
The
Securing Party hereby ratifies whatever actions the Secured Party shall lawfully
do or cause to be done in accordance with this Section 4. This power
of attorney shall be a power coupled with an interest and shall be
irrevocable.
(e) No Duty
on the Secured Party’s Part. The powers
conferred on the Secured Party by this Section 4 are solely to protect the
Secured Party’s interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. The Secured Party shall be accountable
only for amounts that they actually received as a result of the exercise of such
powers, and no action taken by the Secured Party or any of its officers,
directors, employees or agents or omitted to be taken by any such Persons
pursuant to this Section 4 shall give rise to any defense, counterclaim or
offset in favor of Securing Party or affect any of the Obligations.
5. Filing
Agent.
(a) Appointment. The
Secured Party hereby appoints any of Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxxxxxx
and Xxxx X. Xxxxx as agent for filing purposes for the Secured Party under this
Agreement (in such capacity, the “Filing Agent”) to serve from the date
hereof until the termination of this Agreement.
11
(b) Powers
and Duties of Filing Agent, Indemnity by the Secured Party. The Secured
Party hereby irrevocably authorizes the Filing Agent to take any action and to
exercise any power in the name of the Secured Party and on its behalf, as shall
be required and as shall be requested by the Securing Party, solely for the
purpose of filing any registration or application at or with any governmental
authority, together with such powers as are reasonably incidental thereto.
Filing Agent may execute any of its duties hereunder by or through agents or
employees and shall be entitled to request and act in reliance upon the advise
of counsel concerning all matters pertaining to its duties hereunder and shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance therewith.
Neither the Filing Agent nor any of its
directors, officers or employees shall be liable or responsible to the Secured
Party or to the Securing Party for any action taken or omitted to be taken by
the Filing Agent or any other such person hereunder or under any related
agreement, instrument or document, except in the case of gross negligence or
willful misconduct on the part of the Filing Agent, nor shall the Filing Agent
or any of its directors, officers or employees be liable or responsible for
(A) the validity, effectiveness, sufficiency, enforceability or enforcement
of the Note, this Agreement or any instrument or document delivered hereunder or
relating hereto; (B) the title of the Company to any of the Collateral or
the freedom of the Collateral from any prior or other liens or security
interests; (C) the determination, verification or enforcement of the
Company’s compliance with any of the terms and conditions of this Agreement;
(D) the failure by the Company to deliver any instrument or document
required to be delivered pursuant to the terms hereof; or (E) the receipt,
disbursement, waiver, extension or other handling of payments or proceeds made
or received with respect to the Collateral, the servicing of the Collateral or
the enforcement or the collection of any amounts owing with respect to the
Collateral.
In the
case of this Agreement and the transactions contemplated hereby and any related
document relating to any of the Collateral, the Secured Party agrees to pay to
the Filing Agent, on demand, all fees and all expenses incurred in connection
with the operation and enforcement of this Agreement, the Note or any related
agreement to the extent that such fees or expenses have not been paid by the
Company. In connection to this Agreement, and each instrument and
document relating to any of the Collateral, the Secured Party and the Securing
Party hereby agree to hold the Filing Agent harmless, and to indemnify the
Filing Agent from and against any and all loss, damage, expense or liability
which may be incurred by the Filing Agent under this Agreement and the
transactions contemplated hereby, unless such liability shall be caused by the
willful misconduct or gross negligence of the Filing Agent; provided, however, that the
Secured Party shall only be required to indemnify the Filing Agent for up to an
amount equal to the amount paid by the Secured Party pursuant to the Note issued
to the Secured Party.
6. Performance
by the Secured Party of the Securing Party’s Obligations. If the Securing
Party fails to perform or comply with any of its representations,
warranties, covenants or agreements contained in this Agreement and the Secured
Party performs or complies, or otherwise causes performance or compliance, with
such representation, warranty, covenant or agreement in accordance with the
terms of this Agreement, then the reasonable expenses of the Secured Party
incurred in connection with such performance or compliance shall be payable by
the Securing Party to the Secured Party on demand and shall constitute
Obligations secured
by this Agreement.
12
7. Remedies. If an Event of
Default has occurred and is continuing, the Secured Party may exercise, in
addition to all other rights and remedies granted to it in this Agreement and in
any other instrument or agreement relating to the Obligations, all rights and
remedies of a secured party under the UCC. Without limiting the
foregoing, the Secured Party, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law or expressly required herein) to or upon the Securing Party or
any other person (all of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances exercise any and all of the following
rights and remedies, all of which shall be cumulative and not mutually
exclusive:
(a) The Secured Party may declare by
written notice to the Company the Note, including principal plus any accrued
interest and any other amounts owing thereunder, immediately due and
payable;
(b) The Secured Party may collect,
receive, appropriate and realize upon any or all of the Collateral;
and/or
(c) The Secured Party may sell, lease,
assign, give an option or options to purchase, or otherwise dispose of and
deliver any or all of the Collateral (or contract to do any of the foregoing),
in one or more parcels at a public or private sale or sales, at any exchange,
broker’s board or office of the Secured Party or elsewhere upon such terms and
conditions as the Secured Party may deem advisable, for cash or on credit or for
future delivery without assumption of any credit risk. The Secured
Party shall have the right upon any such public sale or sales and, to the extent
permitted by law, upon any such private sale or sales, to purchase all or any
part of the Collateral so sold, free of any right or equity of redemption in the
Securing Party, which right or equity is hereby waived or released.
8. Application
of Proceeds. The Secured Party shall apply the net
proceeds of any collection, recovery, receipt, appropriation, realization, sale
or other sum received or collected by the Secured Party, whether before or after
an Event of Default, on account of the Collateral, after deducting all
reasonable expenses incurred therein or in connection with the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Secured Party under this Agreement (including, without
limitation, reasonable attorneys’ fees and expenses), to the payment in whole or
in part of the Obligations, in such order as the Secured Party may elect, and
only after such application and after the payment by the Secured Party of any
other amount required by any provision of law. Any remaining surplus shall be
paid to the Securing Party without demand. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten days before
such sale or other disposition. The Securing Party shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay the Obligations and the reasonable fees
and disbursements of any attorneys employed by the Secured Party to collect such
deficiency.
9. Limitation
on Duties Regarding Preservation of Collateral. The Secured
Party’s sole duty with respect to the custody, safekeeping and preservation of
the Collateral, under Section 9207 of the UCC or otherwise, shall be to use
reasonable care in the custody and preservation thereof. Neither the
Secured Party nor any of its respective directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon all or any part
of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of the Securing
Party or otherwise.
13
10. No
Waiver; Cumulative Remedies. The Secured Party
shall not by any act (except by a written instrument pursuant to
Section 12(a) hereof), delay, indulgence, omission or otherwise be deemed
to have waived any right or remedy hereunder or to have acquiesced in any
default under the Note or in any breach of any of the terms and conditions of
this Agreement. No failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Secured Party of any right or remedy under
this Agreement on any one occasion shall not be construed as a bar to any right
or remedy which the Secured Party would otherwise have on any subsequent
occasion. The rights and remedies provided in this Agreement are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
11. Termination
of Security Interest. Upon satisfaction
of the Securing Party’s Obligations pursuant to the Note and this Agreement, the
security interest granted herein shall terminate and all rights to the
Collateral shall revert to the Securing Party. Upon any such
termination, the Secured Party shall authenticate and deliver to the Securing
Party such documents as the Securing Party may reasonably request to evidence
such termination.
12. Miscellaneous.
(a) Amendments
and Waivers. This Agreement
may be amended or terminated and the observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the
Secured Party.
(b) Transfer;
Successors and Assigns. The terms and conditions
of this Agreement shall be binding upon the Securing Party and its successors
and assigns, as well as all persons who become bound as a Securing Party to this
Agreement and inure to the benefit of the Secured Party and its successors and
assigns. Nothing in this Agreement, express or implied, is intended
to confer upon any parties other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement, except as expressly provided in this
Agreement.
(c) Arbitration.
Each party agrees that any dispute, controversy, or claim arising in relation to
this Agreement, including with regard to its validity, invalidity, breach,
enforcement or termination, shall be resolved by binding arbitration in London,
England, in accordance with the rules of arbitration which are in force in the
United Kingdom on the date when the notice of arbitration is
submitted. The arbitrability of such dispute, claim or controversy
shall also be determined in such arbitration. Such arbitration proceeding shall
be conducted in the English language before one (1) arbitrator agreed to by the
parties. Both the foregoing agreement of the parties to arbitrate any and all
such disputes, claims and controversies, and the results, determinations,
findings, judgments and/or awards rendered through any such arbitration shall be
final and binding on the parties hereto and may be specifically enforced by
legal proceedings.
14
(d) Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument. Either or
all parties may execute this Agreement by facsimile signature or scanned
signature in PDF format, and any such facsimile signature or scanned signature,
if identified, legible and complete, shall be deemed an original signature and
each of the parties is hereby authorized to rely thereon.
(e) Titles
and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.
(f) Notices.
All notices and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given:
(i) in
the case of hand delivery to the address set forth below, on the next Business
Day after delivery;
(ii) in
the case of delivery by an internationally recognized overnight courier to the
address set forth below, freight prepaid, on the next Business Day after
delivery and signed receipt by the recipient; and
(iii) in
the case of a notice sent by facsimile transmission to the number and addressed
as set forth below, on the next Business Day after delivery, if receipt of such
facsimile transmission is confirmed.
For all
notices given pursuant to one of the methods listed above, a copy of the notice
should also be sent by email to the email address set forth below.
Contact
details
If to the Secured
Party:
Address for notices being delivered
by hand/courier:
c/o
Inventages Whealth Management Inc.
Winterbotham
Place, Marlborough & Queen Streets
P. O. Box
N-3026
Nassau,
The Bahamas, Attn: Xx. Xxxxxx Xxxxxxx
Always
with a copy to: IVC SA, Xxxxx xx Xxxxxx 00X, 0000 - Xxxxxxxx,
Xxxxxxxxxxx, Attn: Xx. Xxxxxx xxx Xxxxxxxxx
Always
with a copy to: xxxxxxx@xxxxxxxxxx.xxx
and xxxxxxxxx@xxxxxxxxxx.xxx
15
Number for notices being delivered by
facsimile transmission:
To: IVC SA,
Attn: Xx. Xxxxxx xxx Xxxxxxxxx, at: x00 00 000
0000
Always
with a copy to: xxxxxxx@xxxxxxxxxx.xxx
and xxxxxxxxx@xxxxxxxxxx.xxx
If to the
Company:
Address for notices being delivered
by hand/courier:
Organic
To Go Food Corporation
0000
Xxxxx Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxxxx 00000
Attn:
Chief Financial Officer
Always
with a copy to:
Loeb
& Loeb LLP
00000
Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx
0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxxx Xxxxxx, Esq.
Number
for notices being delivered by facsimile transmission:
To:
Organic To Go Food Corporation, Attn: Chief Financial Officer, at: x0 000 000
0000
Always
with a copy to: Loeb & Loeb LLP, Attn: Xxxxxxxx Xxxxxx, Esq, at: x0 000 000
0000
A party
may change or supplement the contact details for service of any notice pursuant
to this Agreement, or designate additional addresses, facsimile numbers and
email addresses for the purposes of this Section 8(h) by giving the other
parties written notice of the new contact details in the manner set forth
above.
(g) Payments
Free of Taxes, Etc. All payments made by the Securing Party
under this Agreement shall be made by the Securing Party free and clear of and
without deduction for any and all present and future taxes, levies, charges,
deductions and withholdings excluding any taxes based on or measured by the net
income of the Secured Party. In addition, the Securing Party shall
pay upon demand any stamp or other taxes, levies or charges of any jurisdiction
with respect to the execution, delivery, registration, performance and
enforcement of this Agreement. Upon request by the Secured Party, the
Securing Party shall furnish evidence satisfactory to such Secured Party that
all requisite authorizations and approvals by, and notices to and filings with,
governmental authorities and regulatory bodies have been obtained and made and
that all requisite taxes, levies and charges have been paid except to the extent
the validity thereof is being contested in good faith and adequate reserves are
being maintained in connection therewith.
16
(h) Severability. If one or more
provisions of this Agreement are held to be unenforceable under applicable law,
the parties agree to renegotiate such provision in good faith, in order to
maintain the economic position enjoyed by each party as close as possible to
that under the provision rendered unenforceable. In the event that
the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this
Agreement, (ii) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (iii) the balance of the Agreement
shall be enforceable in accordance with its terms.
(i) Entire
Agreement. This Agreement,
and the documents referred to herein constitute the entire agreement between the
parties hereto pertaining to the subject matter hereof.
(j) Confidentiality. The
Secured Party agrees to use the same degree of care as Secured Party uses to
protect its own confidential information to keep confidential any information
furnished to such Secured Party pursuant to the Purchase Agreement, the Note or
this Agreement that the Company identifies as being confidential or proprietary
(so long as such information is not in the public domain), except that the
Secured Party may disclose such proprietary or confidential information (i) to
any partner, subsidiary or parent of such Secured Party as long as such partner,
subsidiary or parent is advised of and agrees or has agreed to be bound by the
confidentiality provisions of this Section 11(j) or comparable
restrictions; (ii) at such time as it enters the public domain through no fault
of such Secured Party; (iii) that is communicated to it free of any obligation
of confidentiality; (iv) that is developed by such Secured Party or its agents
independently of and without reference to any confidential information
communicated by the Company; or (v) as required by applicable law.
(k) Governing
Law. This Agreement
and all actions arising out of or in connection with this Agreement shall be
governed by and construed in accordance with the laws of the State of
California, without regard to the conflicts of law provisions of the State of
California or of any other state.
[Signature Page
Follows]
17
The
Securing Party and the Secured Party have caused this Agreement to be duly
executed and delivered as of the date first above written.
|
ORGANIC
TO GO FOOD CORPORATION
a
Delaware corporation
|
|||
|
By:
|
|||
|
Name:
Xxxxx Xxxxx
Title:
Chief Executive Officer
|
|||
|
X.XXXXXX
L.P.
|
|||
|
By:
|
|||
|
Xx.
Xxxxxx Xxxxxxx
Director,
Inventages Whealth Management, Inc., as General Partner of X.Xxxxxx
L.P.
|
|||
|
By:
|
|||
|
Xx.
Xxxxxxxx Xxxxxxxxxxxxx
Director, Inventages
Whealth Management, Inc., as General Partner of X.Xxxxxx
L.P.
|
|||
Exhibit
A
List of Existing
Liens
