Exhibit 10-b
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of September 14, 2005, by and between
CENTALE, INC., a New York corporation (the "Company") and XXXXX X. XXXX (the
"Secured Party"). For value received, the Company hereby covenants for the
benefit of the Secured Party as follows:
SECTION 1. Definitions. The following terms shall have the meanings as
set forth in this Section except as otherwise indicated:
(a) "Account(s)" means all of the Company's existing and future-
created or future-acquired accounts, receivables, rights of any kind to
receive payment for property sold or leased or for services rendered,
contract rights, documents, bills, leases, rents, chattel paper,
licenses, rights to refunds or indemnification, notes, acceptances and
other forms of obligations, tax refunds, insurance proceeds and all
proceeds of the above including the right of stoppage in transit and all
books, records, computer programs, tapes, discs, software and guaranties
with respect to any of the above.
(b) "Equipment" means all of the Company's existing, future-created
and future-acquired equipment, machinery, trade fixtures, fixtures,
tools, appliances, office equipment, server equipment and peripherals,
computer software, furniture, motor vehicles and all proceeds and
products of the above as well as all related warranties, documents and
insurance policies.
(c) "Equipment Leases(s)" means all existing leases of any Equipment
or other personal property presently or in the future entered into or
acquired by the Company together with all renewal or purchase options.
(d) "Event of Default" means any event of default listed in Section 5.
(e) "General Intangible(s)" means all of the Company's existing,
future-acquired and future-created trade secrets, proprietary
information, know-how, inventions, good-will, patents, applications for
patents, renewals and continuation of patents, reissues, trademarks,
service marks, customer lists, distribution records and distributor
lists, sales materials and records, purchasing materials and records,
personnel records, sales order files, copyrights, manufacturing
processes, rights of payments from, or performance of, obligations by any
third party, software and computer programs and source code data relating
thereto (including all current and historical data bases) all intangible
property of any kind, all "general intangibles" of any kind as defined in
the New Jersey Uniform Commercial Code, and all rights, agreements,
records and documents relating to any of the property described in this
provision.
(f) "Instrument" means all of the Company's existing, future-created
and future-acquired "instruments" as that term is defined in the New York
Uniform Commercial Code.
(g) "Inventory" means all of the Company's existing, future-created
and future-acquired goods of every nature, kind and description, wherever
located including all livestock, raw materials, goods, work in process,
finished goods, materials and supplies of any kind used, or to be used in
the business of the Company, including all proceeds and products of the
above.
(h) "Pledged Collateral" means the collateral as so defined in Section 2.
(i) "Real Property" means all of the Company's interest (whether by
fee or leasehold) in existing and future-acquired real estate and
buildings, in leases thereon, and in leasehold improvements.
(j) "Indebtedness" means (i) the Note; (ii) all accrued but unpaid
interest on any of the indebtedness described in (i) above, (iii) all
costs and expenses incurred by Secured Party in connection with the
protection or preservation of, or realization upon, the Collateral,
including without limitation all reasonable attorneys' fees, and (iv) all
renewals, extensions, modifications and rearrangements of the
indebtedness and obligations described in (i), (ii) and (iii) above.
(k) "Note" means the 5% Secured Convertible Promissory Note dated
September 14, 2005 executed by the Company and payable to the order of
the Secured Party
SECTION 2. Pledge. As collateral security for the Indebtedness, the Com-
pany hereby grants to the Secured Party a security interest in, and does
hereby assign to the Secured Party all right, title and interest of the
Company in and to all of the following described property, whether now owned
or hereafter acquired:
(i) Accounts, Inventory, General Intangibles, Chattel Paper,
Documents, Instruments, Equipment, Equipment Leases, and
Fixtures;
(ii) Equipment Leases;
(iii) Real Property and Real Property leases;
(iv) proceeds and products of, and substitutions for, the
foregoing;
(v) insurance policies and proceeds relating to the foregoing
(collectively the "Pledged Collateral").
All property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the Company
and by such other instruments or documents as the Secured Party or his
counsel may from time to time reasonably request.
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, titles, interests, powers, privileges and preferences pertaining or
incidental thereto, unto the Secured Party and to his assigns, forever;
subject, however, to the terms, covenants and conditions hereinafter set
forth.
SECTION 3. Obligations Secured. This Security Agreement is made, and the
security interest created hereby is granted to the Secured Party, to secure
the Indebtedness.
SECTION 4. Remedies upon Default. If an Event of Default shall have
occurred and be continuing, the Secured Party may take any one or more of
the following actions, no one of which shall be deemed the Secured Party's
exclusive remedy:
(a) Acceleration. declare any Indebtedness immediately due and
payable, on notice to the Company.
(b) Repossession. proceed with judicial process, or with the
Company's consent, to take possession of all or any part of the
Pledged Collateral and the Company agrees immediately upon receipt of
notice from the Secured Party to do everything requested by such
persons to assemble, assign, transfer or deliver all Pledged
Collateral to the Secured Party and to provide the Secured Party
immediate access to the Company's principal place of business and to
every other place where any Pledged Collateral or any records of the
Company may be stored or where the Company may conduct any business;
(c) Sell Collateral. sell, assign, lease, transfer and deliver
all, or any part, of any Pledged Collateral at a private sale or
public auction for cash, upon credit or otherwise at such prices and
upon such terms as the Secured Party may deem advisable and any
requirement of reasonable notice to the Company shall be met if notice
is mailed, postage prepaid, to the Company at the address set forth
herein at least five (5) days prior to the sale or other disposition
and Secured Party may be the purchaser at any public sale of any
Pledged Collateral free of any right of redemption, which right the
Company hereby waives, and the Company further waives any claim that
any sale made in compliance with the notice provisions of this 4(c) as
commercially unreasonable;
(d) Collateral Proceeds. apply the proceeds of any sale,
collection or other disposition of any Pledged Collateral first to all
costs and expenses of sale or collection, including but not limited to
any attorneys' fees and disbursements at trial or on any appeal and,
then, to payment of any other Indebtedness in whatever order the
Secured Party may, in his discretion, elect;
(e) Direct Recourse. institute suit directly against the
Company to collect any Obligations without first foreclosing on or
liquidating any Pledged Collateral;
(f) Deficiency. hold the Company liable for any deficiency that
may remain after the sale of any Pledged Collateral;
(g) Appointment of Receiver. without regard to: (i) the adequacy of
the security for the obligations by virtue of this Security Agreement
or (ii) the solvency of the Company, seek the appointment of
a receiver or receivers to take possession of any or all of the
Pledged Collateral, with the power to preserve, protect, and operate
the Pledged Collateral preceding foreclosure or sale and apply the
proceeds, over and above the cost of the receivership, against the
Obligations. The receiver or receivers may serve without bond if
permitted by law;
(h) Other Creditor Remedies. exercise any right or remedy
available to a secured party under the Uniform Commercial Code or
under any other applicable law of any jurisdiction.
For purposes hereof, a written agreement to purchase all or any part of
the Pledged Collateral shall be treated as a sale pursuant to such agreement,
and the Company shall not be entitled to the return of any Pledged Collateral
subject thereto, notwithstanding the fact that after the Secured Party shall
have entered into such an agreement all Events of Default may have been
remedied or the Obligations may have been paid or performed in full. Any
sale pursuant to this Section 4 shall conform to commercially reasonable
standards as provided in Section 9-504(3) of the Uniform Commercial Code
as in effect in the State of Florida.
SECTION 5. Events of Default. For purposes of this Security Agreement, an
"Event of Default" shall exist hereunder upon the happening of any of the
following events:
(a) a failure by the Company to pay any principal or interest on the
Notes when due;
(b) all or any part of the Pledged Collateral shall be attached or
levied upon or seized in any legal proceedings or held by virtue of
any lien or distress;
(c) the Company shall fail to pay promptly all taxes and assessments
upon any of the Pledged Collateral; or
(d) the Company shall fail to comply with any other provision of this
Security Agreement.
It is understood and agreed that the occurrence of an event set
forth above shall constitute an Event of Default only if the Company fails
to cure such default within ten (10) days after notice of such default (the
"Default Notice") which may be given at any time after the occurrence of
such default.
SECTION 6. Return of Excess Proceeds of Sale and Cash. Any amounts
remaining from proceeds of sale of Collateral after application of proceeds
to Indebtedness under Section 4(d) shall be promptly remitted to the
Company, its successors and assigns, or as otherwise provided by law.
Application of any proceeds in accordance with the above provisions shall be
deemed to have been made at such time as cash is received.
SECTION 7. Further Assurances. The Company agrees to join with Secured
Party in executing, and to file or record, such notices, financing
statements or other documents as may be necessary to the perfection of the
security interests of Secured Party hereunder, and as Secured Party or his
counsel may reasonably request, such instruments to be in form and substance
satisfactory to Secured Party and his counsel. The Company agrees to do
such further acts and things and to execute and deliver to Secured Party
such additional conveyances, assignments, agreements and instruments as
Secured Party may at any time reasonably request in connection with the
administration and enforcement of this Security Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm
unto Secured Party the rights, powers and remedies hereunder.
SECTION 8. Governing Law. This Security Agreement has been executed and
delivered in the State of Florida and shall in all respects be construed in
accordance with and governed by the laws of such State.
SECTION 9. Binding Agreement; Assignment. This Security Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to
the benefit of Secured Party and his heirs, successors and assigns, and to
the Company and its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed as of the day and year first above written.
CENTALE, INC.
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxx
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Xxxxxxx X. Xxxxxx, C.E.O. XXXXX X. XXXX
