EXHIBIT 10.2
SECURITY AGREEMENT
This SECURITY AGREEMENT ("SECURITY AGREEMENT") is made this 2nd day of
April, 2007, by, between and among, PROGRESSIVE TRAINING, INC, a Delaware
corporation ("DEBTOR"), on the one hand, and XXXXX XXXXX, an individual,
("SECURED PARTY"), on the other hand, with respect to the following:
RECITALS
A. DEBTOR has borrowed the sum of up to Two Hundred Fifty
Thousand ($250,000) from Secured Party (the "DEBT");
B. DEBTOR and SECURED PARTY now mutually desire for DEBTOR to
secure the Loan in the principal sum of up to Two Hundred Fifty Thousand
($250,000) as evidenced by a SECURED PROMISSORY NOTE, dated of even date
herewith, and signed by DEBTOR in favor of SECURED PARTY (the "NOTE") in said
amount (the "DEBT") and for DEBTOR to pledge the personal property listed on
attached Exhibit "A" security\collateral or the repayment of the DEBT (the
"COLLATERAL") on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of and reliance on the mutual
covenants, conditions, promises, and representations contained herein, the
parties hereto agree as follows:
A) RECITALS. The recitals stated above are incorporated herein by
this reference as if set forth in full at this point.
B) DEFINITIONS. As used in this SECURITY AGREEMENT, the following
terms shall have the following meanings:
a. "COLLATERAL" and "SECURITY" mean the personal
property set forth and fully described in attached Exhibit "A".
b. "DEBTOR" means PROGRESSIVE TRAINING, INC., a Delaware
corporation.
c. "DEBT", "INDEBTEDNESS" and "LOAN" mean DEBTOR'S
obligations represented by the NOTE executed by DEBTOR and payable to the
SECURED PARTY as Holder.
d. "LIEN" means any security interest, mortgage, pledge,
lien, attachment, claim, charge, encumbrance, agreement retaining title, or
other interests in, to or covering the COLLATERAL.
e. "OBLIGATIONS" mean any and all existing and future
duties, obligations, indebtedness and liabilities of DEBTOR to SECURED PARTY,
including attorneys' fees incurred in enforcing this SECURITY AGREEMENT or
collecting payment due under the NOTE.
f. "BREACH" and "DEFAULT" mean an event or omission that
is or would be a breach or default under this SECURITY AGREEMENT or any other
document evidencing, creating or relating to the security for and performance of
the OBLIGATIONS.
g. "NOTE" means the SECURED PROMISSORY NOTE, of even
date herewith executed by DEBTOR for the benefit of SECURED PARTY, a true and
correct copy of which is attached hereto and marked as Exhibit "B".
h. Terms defined in the California Uniform Commercial
Code not otherwise defined in this Security Agreement are used in this Security
Agreement as defined in that Code on the date of this agreement.
i. "SECURED PARTY" and "HOLDER" mean XXXXX XXXXX, or his
nominee or order.
C) GRANT OF SECURITY INTEREST. For the purpose of providing
SECURED PARTY with security for the DEBTOR's payment of the NOTE, DEBTOR hereby
grants SECURED PARTY a security interest in and to the COLLATERAL, which is more
specifically described and set forth in attached Exhibit "A" and which is
incorporated herein by this reference. Further, DEBTOR shall execute any and all
other documents necessary to grant, perfect and otherwise effect notice that
SECURED PARTY has a first priority secured interest in the COLLATERAL. In this
regard, DEBTOR grants SECURED PARTY the limited power of attorney to sign such
documents on behalf of DEBTOR in the event DEBTOR is unable to or refuses to
sign such documents. Said documents include, without limitation, a UCC-1
Financing Statement to be filed with the California Secretary of State.
D) DEBTOR'S COVENANTS. DEBTOR shall:
a. make all payments to the SECURED PARTY as set forth
in the NOTE;
b. pay all expenses, including attorneys' fees, incurred
by SECURED PARTY in the perfection, preservation, realization, enforcement, and
exercise of its rights under this SECURITY AGREEMENT;
c. indemnify SECURED PARTY against loss of any kind,
including reasonable attorneys' fees, caused to SECURED PARTY by reason of its
interest in the COLLATERAL;
d. not sell, lease, transfer, or otherwise dispose of or
hypothecate the COLLATERAL, without the express prior written consent of the
SECURED PARTY;
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e. not permit liens on the COLLATERAL, except the lien
created by this SECURITY AGREEMENT;
f. not use the COLLATERAL for any unlawful purpose or in
any way that would void any effective insurance;
g. perform all acts necessary to maintain, preserve, and
protect the COLLATERAL;
h. notify SECURED PARTY promptly in writing of any
default, potential default, or any development that might have a material
adverse effect on the COLLATERAL;
E) DEBTOR'S REPRESENTATIONS AND WARRANTIES. DEBTOR covenants,
warrants, and represents as follows:
a. DEBTOR, has the full corporate capacity to understand
and enter into this SECURITY AGREEMENT and possesses all the necessary corporate
authority to conduct its businesses in the fashion now conducted and as
contemplated herein, wherever conducted;
b. The SECURITY AGREEMENT is a valid and binding
obligation of DEBTOR. This SECURITY AGREEMENT creates a perfected, first
priority security interest enforceable against the COLLATERAL in which DEBTOR'S
rights will be effected as this SECURITY AGREEMENT creates a perfected, first
priority security interest for the benefit of SECURED PARTY, which is
enforceable against the COLLATERAL;
c. Neither the execution and delivery of this SECURITY
AGREEMENT, nor the taking of any action in compliance with it, will (1) violate
or breach any law, regulation, rule, order, or judicial action binding on
DEBTOR, any agreement to which DEBTOR is a party, if such exist; or (2) result
in the creation of a lien against the COLLATERAL except that created by this
SECURITY AGREEMENT;
d. No default or potential default exists; and,
e. DEBTOR owns the COLLATERAL, subject only to those
liens and adverse claims created by this SECURITY AGREEMENT.
F) TERMINATION. This SECURITY AGREEMENT shall continue in effect
even though from time to time there may be no outstanding obligations or
commitments under this SECURITY AGREEMENT and/or the NOTE. This SECURITY
AGREEMENT shall terminate when (a) DEBTOR'S complete performance of all
obligations to SECURED PARTY, including without limitation the payment of all
INDEBTEDNESS by DEBTOR to SECURED PARTY; (b)
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SECURED PARTY has no commitment that could give rise to an obligation; and (c)
DEBTOR has notified SECURED PARTY in writing of the termination.
G) DEFAULT. DEBTOR shall be in default under this SECURITY
AGREEMENT if:
a. DEBTOR fails to make the payment, or any payment when
due, or the entire indebtedness to SECURED PARTY when due;
b. DEBTOR fails to make any remittances required by this
SECURITY AGREEMENT;
c. DEBTOR commits any breach of this SECURITY AGREEMENT,
or any present or future rider or supplement to this SECURITY AGREEMENT, or any
other agreement between DEBTOR and SECURED PARTY evidencing the obligation or
securing it;
d. Any warranty, representation, or statement, made by
or on behalf of DEBTOR in or with respect to the SECURITY AGREEMENT, is false;
e. The COLLATERAL is lost, stolen, or damaged; or,
f. There is a seizure or attachment of, or a levy on,
the COLLATERAL.
H) REMEDIES.
8.1 Upon an event of default, SECURED PARTY may, at its option,
to:
a. Declare the obligations immediately due and payable
without demand, presentment, protest, or notice to DEBTOR, all of which DEBTOR
expressly waives;
b. Terminate any obligations or to make future advances,
if any;
c. Exercise all rights and remedies available to a
secured creditor after default, including but not limited to the rights and
remedies of secured creditors under the California Uniform Commercial Code;
d. Perform any of DEBTOR's obligations under this
SECURITY AGREEMENT for DEBTOR's account; and,
e. SECURED PARTY's notice of the time and place of
public sale of the COLLATERAL, or the time on or after which a private sale or
other disposition of the COLLATERAL will be made, is reasonable if sent to
DEBTOR in the manner for giving notice at least five days before the public or
private sale.
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f. Any money expended or obligations incurred in doing
so, including reasonable attorneys' fees and interest at the highest rate
permitted by law, will be charged to DEBTOR and added to the obligation secured
by this SECURITY AGREEMENT.
8.2 Upon an event of a notice of default by the SECURED PARTY,
DEBTOR shall:
a. Assemble the COLLATERAL and make it and all records
relating to it available to SECURED PARTY as SECURED PARTY directs; and,
b. Allow SECURED PARTY, its representatives, and its
agents to enter the premises where all or any part of the COLLATERAL, the
records, or both may be, and remove any or all of it.
I) ATTORNEY'S FEES. In the event that SECURED PARTY is forced to
engage attorneys to enforce its rights under the SECURITY AGREEMENT and the
NOTE, including to collect payments due under the NOTE, DEBTOR shall be
responsible for the payment of his, her or its costs and expenses of collection,
including reasonable attorneys' fees.
J) SURVIVAL OF DEBTOR'S REPRESENTATIONS AND WARRANTIES. DEBTOR's
representations and warranties made in this SECURITY AGREEMENT shall survive its
execution, delivery, and termination.
K) ASSIGNMENT. This SECURITY AGREEMENT shall bind and enure to
the benefit of the parties successors, heirs and assigns. However, DEBTOR may
not assign its rights, duties and obligations under this SECURITY AGREEMENT or
the NOTE without SECURED PARTY's prior written consent.
L) NOTICES. Any communication to be given to any party to this
SECURITY AGREEMENT shall be in writing and deemed delivered when delivered in
person, sent by fax, or five (5) days after such is deposited in the United
States Mail, postage prepaid, certified, return receipt requested and addressed
to the party at its address set forth below:
If to DEBTOR:
Progressive Training, Inc.
00000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxx, XX 00000
If to SECURED PARTY:
Xxxxx Xxxxx
00000 XxXxxxxxx Xxxxxx
Xxxxxx, XX 00000
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M) BINDING EFFECT. The parties hereto hereby represent and
warrant, each for themselves, that they have the capacity to and are authorized
to enter into this SECURITY AGREEMENT on behalf of their respective party and
that this SECURITY AGREEMENT, when duly executed, will constitute a legal,
valid, and binding agreement, enforceable against each of the parties in
accordance with the terms hereof.
N) SEVERABILITY. In the event that any covenant, condition or
other provision herein contained is held to be invalid, void, or illegal by any
court of competent jurisdiction, the same shall be deemed severable from the
remainder of this SECURITY AGREEMENT and shall in no way affect, impair or
invalidate any other covenant, condition or other provision herein contained. If
such condition, covenant or other provision shall be deemed invalid due to its
scope or breadth, such covenant, condition, or other provision shall be deemed
valid to the extent of the scope or breadth permitted by law.
O) WAIVER, AMENDMENT AND XXXXXXXXXXXX.Xx breach of any provision
hereof can be waived unless in writing. Waiver of any one breach of any
provision hereof shall not be deemed to be a waiver of any other breach of the
same or any other provision hereof. This SECURITY AGREEMENT may only be amended
or modified by an instrument in writing executed by each of the parties hereto.
P) CONSTRUCTION. This SECURITY AGREEMENT shall not be construed
against the party preparing it, and shall be construed without regard to the
identity of the person who drafted it or the party who caused it to be drafted
and shall be construed as if all parties had jointly prepared this SECURITY
AGREEMENT and it shall be deemed their joint work product, and each and every
provision of this SECURITY AGREEMENT shall be construed as though all of the
parties hereto participated equally in the drafting hereof; and any uncertainty
or ambiguity shall not be interpreted against any one party. As a result of the
foregoing, any rule of construction that a document is to be construed against
the drafting party shall not be applicable.
Q) GOVERNING LAW. This SECURITY AGREEMENT shall be governed in
all respects, including validity, interpretation, effect and enforcement, by the
laws of the State of California.
R) COUNTERPARTS. This SECURITY AGREEMENT may be executed in
counterparts, each of which, when so executed and delivered, shall be an
original; however, such counterparts together shall constitute but one and the
same SECURITY AGREEMENT.
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S) HEADINGS. The headings used herein are for convenience of
reference only and do not constitute a part of this SECURITY AGREEMENT and shall
not be deemed to limit or effect any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this SECURITY
AGREEMENT effective as of the day and year above first written.
"DEBTOR":
PROGRESSIVE TRAINING MEDIA, INC., a Delaware corporation
By: /S/ L. XXXXXXX XXXXXXXX
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L. XXXXXXX XXXXXXXX, Secretary and Director
"SECURED PARTY":
By: /S/ XXXXX XXXXX
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XXXXX XXXXX
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