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Exhibit 7.2 Security Agreement
3248
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is entered into and effective
as of November 20, 1996 by and between XXXXX X. XXXXXXXX (the "DEBTOR"), EFM
VENTURE GROUP, INC., a California corporation ("EFM") and COMPLETE SECURITY
SERVICE DEFINED BENEFITS PENSION TRUST ("CSS") (collectively the "SECURED
PARTY") and XXXXXXX X. XXX, III, ESQ. ("ESCROW HOLDER").
1. RECITALS
This Agreement is entered into with reference to and in contemplation
of the following facts, circumstances and representations:
1. DEBTOR is desirous of obtaining financing in the amount of ONE
HUNDRED SIXTY THOUSAND DOLLARS ($160,000.00) from the SECURED
PARTY as evidenced by that certain Promissory Note attached
hereto as Exhibit "A" (the "Note").
2. In consideration of the Note, the DEBTOR agrees to grant to
the SECURED PARTY a security interest in the property
described herein in this Agreement and hereinafter referred to
as the "Collateral".
3. The parties further desire to direct the ESCROW HOLDER to
retain the Collateral pursuant to the terms of this Agreement.
2. CREATION OF SECURITY INTEREST
2.1 GRANT OF SECURITY INTEREST: The DEBTOR hereby grants to the SECURED
PARTY a security interest in the Collateral in the 6,793,243 shares of common
stock of HIGHTEC, INC., a Delaware corporation (the "Shares").
2.2 PERFECTION OF SECURITY INTEREST: In order to perfect the security
interests with respect to the Collateral and to comply with the terms and
conditions of this Agreement with respect to the obligations of the ESCROW
HOLDER, the DEBTOR agrees to deposit with the ESCROW HOLDER: (1) the HIGHTEC,
INC. Share Certificates, evidencing the Shares and (2) duly endorsed and
signature guaranteed stock powers with respect to the Shares (the "Stock
Powers").
3. PAYMENT AND DEFAULT ON NOTE
3.1 PAYMENT OF NOTE: Upon payment of the Note in full, the ESCROW
HOLDER shall return the Shares and the Stock Powers to the DEBTOR.
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3.2 DEFAULT REMEDIES WITH RESPECT TO THE SHARES: In the event that the
DEBTOR defaults in the performance of any of the terms of this Agreement, or in
the payment at maturity of the principal or interest of the Note, the SECURED
PARTY shall have in addition to the specific remedies enumerated in this
Agreement, all of the rights and remedies provided in the California Commercial
Code.
3.3 REQUIREMENT TO PAY NOTE: The SECURED PARTY shall have the sole
option in the event the DEBTOR fails to pay the Note in full by its due date to
legally enforce payment of the Note without looking to or utilizing the
collateral for satisfaction of the Note obligation.
3.4 ADDITIONAL SPECIFIC REMEDY FOR DEFAULT: In the event the DEBTOR
fails to pay the Note in full by its due date, then and in that event the
SECURED PARTY shall have the sole option to cancel the underlying transaction
that gave rise to the Note and direct the ESCROW HOLDER to return the Shares to
the SECURED PARTY. The SECURED PARTY shall have the further sole option to
extend the payment due date or otherwise modify the payment terms of the Note.
4. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
4.1 COOPERATION OF PARTIES: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
4.2 ARBITRATION: The parties hereby submit all controversies, claims
and matters of difference arising out of this Agreement to arbitration in San
Diego, California according to the rules and practices of the American
Arbitration Association from time to time in force. This submission and
agreement to arbitrate shall be specifically enforceable. The Agreement shall
further be governed by the laws of the State of California.
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4.3 INTERPRETATION OF AGREEMENT: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonable in accordance with their generally
accepted meaning.
4.4 MODIFICATION OF AGREEMENT: This Agreement may be amended or
modified in any way at any time by an instrument in writing stating the manner
in which it is amended or modified and signed by each of the parties hereto. Any
such writing amending or modifying this Agreement shall be attached to and kept
with this Agreement.
4.5 ATTORNEY FEES: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
4.6 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement
and understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
4.7 COUNTERPARTS: This Agreement may be signed in one or more
counterparts.
4.8 FACSIMILE TRANSMISSION SIGNATURES: A signature received pursuant
to a facsimile transmission shall be sufficient to bind a party to this
Agreement.
DATED: November 20, 1996 /s/ XXXXX X. XXXXXXXX
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XXXXX X. XXXXXXXX
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EFM VENTURE
GROUP, INC.
DATED: November 20, 1996 BY: /s/ XXXXX X. XXXXX
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XXXXX X. XXXXX President
COMPLETE SECURITY SERVICE
DEFINED BENEFITS PENSION TRUST
DATED: November 20, 1996 BY: /s/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
Trustee
ACCEPTANCE BY ESCROW HOLDER
I, XXXXXXX X. XXX, III, ESQ., do hereby accept this appointment as
ESCROW HOLDER herein and agree to abide by the terms and directions set forth in
this Agreement.
ESCROW HOLDER
DATED: November 20, 1996 /s/ XXXXXXX X. XXX, III
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XXXXXXX X. XXX, III
