EXHIBIT 10.36
SECURITY AGREEMENT
This Security Agreement (this "Agreement"), dated as of April 14, 2003, is
made by and between, MigraTEC, Inc., a Delaware corporation (the "Debtor"), and
Xxxxxx X. Xxxxxxxxxx (the "Secured Party").
WHEREAS, pursuant to that certain Promissory Note dated as of even date
herewith in the original principal amount of One Hundred Twenty-Five Thousand
Dollars and No/100 ($125,000) (the "Note"), the Secured Party may extend credit
to the Debtor; and
WHEREAS, as a condition to extending credit to the Debtor under the Note,
the Secured Party has required the execution and delivery of this Agreement by
the Debtor.
NOW, THEREFORE, BE IT RESOLVED, in consideration of the mutual covenants
contained in the Note and herein, the parties hereby agree as follows:
1. Definitions. All terms defined in the recitals hereto and the Note
that are not otherwise defined herein shall have the meanings given them in the
recitals and the Note. All terms defined in the UCC and not otherwise defined
herein have the meanings assigned to them in the UCC. In addition, the following
terms have the meanings set forth below or in the referenced Section of this
Agreement:
"Collateral" means all of the Debtor's accounts, chattel paper,
deposit accounts, documents, equipment, financial assets, fixtures,
general intangibles, goods, instruments, Intellectual Property Rights,
inventory, investment property, letter-of-credit rights, letters of
credit, and all other personal property and assets, whether now owned or
hereafter acquired, together with (i) all substitutions and replacements
for and products of any of the foregoing; (ii) in the case of all goods,
all accessions; (iii) all accessories, attachments, parts, equipment and
repairs now or hereafter attached or affixed to or used in connection with
any goods; (iv) all warehouse receipts, bills of lading and other
documents of title now or hereafter covering such goods; (v) any money, or
other assets of the Debtor that now or hereafter come into the possession,
custody, or control of the Secured Party; and (vi) proceeds of any and all
of the foregoing.
"Event of Default" has the meaning given in Section 7.
"Intellectual Property Rights" means all actual or prospective
rights arising in connection with any intellectual property or other
proprietary rights, including all rights arising in connection with
copyrights, patents, service marks, trade dress, trade secrets,
trademarks, trade names or mask works.
"Lien" means any security interest, mortgage, deed of trust, pledge,
lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any
capitalized lease and the interest of any bondsman under any payment or
performance bond, in, of or on any assets or properties of a person,
whether now owned or hereafter acquired and whether arising by agreement
or operation of law.
"Obligations" means each and every debt, liability and obligation of
every type and description which the Debtor may now or at any time
hereafter owe to the Secured Party in relation to the Note.
"Permitted Liens" means (i) the Security Interest, (ii) covenants,
restrictions, rights, easements and minor irregularities in title which do
not materially interfere with the Debtor's business or operations as
presently conducted, and (iii) Liens in existence on the date hereof.
"Security Interest" has the meaning given in Section 2.
"UCC" means Uniform Commercial Code as in effect from time to time
in the State of Texas.
2. Security Interest. The Debtor hereby grants the Secured Party a
security interest (the "Security Interest") in the Collateral to secure payment
of the Obligations.
3. Representations, Warranties, Covenants and Agreements. The Debtor
hereby represents, warrants, covenants and agrees as follows:
(a) TITLE. The Debtor has absolute title to each item of
Collateral in existence on the date hereof, free and clear of all Liens
except Permitted Liens.
(b) CHIEF EXECUTIVE OFFICE; IDENTIFICATION NUMBERS. The Debtor's
chief executive office and principal place of business is located at the
address set forth under its signature below. The Debtor's federal employer
identification number and organizational identification number are
correctly set forth under its signature below.
(c) LOCATION OF COLLATERAL. As of the date hereof, the tangible
Collateral is located at the Debtor's chief executive office and principal
place of business at the address set forth under the Debtor's signature
below. The Debtor will not permit any tangible Collateral to be located in
any state (and, if county filing is required, in any county) in which a
financing statement covering such Collateral is required to be, but has
not in fact been, filed in order to perfect the Security Interest.
(d) MISCELLANEOUS COVENANTS. The Debtor will:
(i) at all reasonable times, permit the Secured Party or its
representatives to examine or inspect any Collateral, wherever
located, and to examine, inspect and copy the Debtor's books and
records pertaining to the Collateral and its business and financial
condition and to send and discuss with account debtors and other
obligors requests for verifications of amounts owed to the Debtor;
(ii) if the Secured Party at any time so requests (after the
occurrence of an Event of Default), promptly deliver to the Secured
Party any instrument, document or chattel paper constituting
Collateral, duly endorsed or assigned by the Debtor;
SECURITY AGREEMENT - PAGE 2
(iii) from time to time execute such financing statements as
the Secured Party may reasonably require in order to perfect the
Security Interest and, if any Collateral consists of a motor
vehicle, execute such documents as may be required to have the
Security Interest properly noted on a certificate of title;
(iv) pay when due or reimburse the Secured Party on demand
for all costs of collection of any of the Obligations and all other
reasonable out-of-pocket expenses (including in each case all
reasonable attorneys' fees) incurred by the Secured Party in
connection with the creation, perfection, satisfaction, protection,
defense or enforcement of the Security Interest or the creation,
continuance, protection, defense or enforcement of this Agreement or
any or all of the Obligations, including expenses incurred in any
litigation or bankruptcy or insolvency proceedings;
(v) execute, deliver or endorse any and all instruments,
documents, assignments, security agreements and other agreements and
writings which the Secured Party may at any time reasonably request
in order to secure, protect, perfect or enforce the Security
Interest and the Secured Party's rights under this Agreement; and
(vi) not use or keep any Collateral, or permit it to be used
or kept, for any unlawful purpose or in violation of any federal,
state or local law, statute or ordinance.
(e) SECURED PARTY'S RIGHT TO TAKE ACTION. The Debtor authorizes
the Secured Party to file from time to time where permitted by law, such
financing statements against Collateral described as "all personal
property" or "all assets" or describing specific items or categories of
Collateral as the Secured Party deems necessary or useful to perfect the
Security Interest. The Debtor will not amend any financing statements in
favor of the Secured Party except as permitted by law.
4. Continuing Liability. Debtor hereby expressly agrees that
notwithstanding anything contained herein or elsewhere to the contrary, Debtor
shall remain liable under each contract, agreement, interest and obligation
assigned to Secured Party and in which Secured Party is granted a security
interest hereunder to observe and perform all the conditions and obligations and
provisions thereof; it being expressly agreed and understood that Secured Party
shall have no obligation or liability of any kind whatsoever under any such
contract, agreement, interest and/or obligation by reason of, arising out of or
otherwise in connection with this Security Agreement, the assignments to Secured
Party herein contained, the granting to Secured Party of any security interest
hereunder or the receipt by Secured Party of any payment relating to any such
contract, agreement, interest and obligation pursuant hereto, nor shall Secured
Party be required or obligated in any manner whatsoever to perform or fulfill
any of the obligations of Debtor thereunder or pursuant thereto, or to make any
payment or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any such contract, agreement, interest and/or obligation, or to present or file
any claim, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or in which Secured
Party may have been granted a security interest to which it may be entitled at
any time or times. Further, Debtor hereby indemnifies, and
SECURITY AGREEMENT - PAGE 3
holds harmless Secured Party, against and from any and all liability, loss and
damage which Secured Party may incur under or by reason of this Security
Agreement or Secured Party's enforcing its rights hereunder and all claims and
demands whatsoever which may be asserted against it by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained under any such contract, agreement,
interest and/or obligations. If Secured Party should incur any such liability,
loss or damage and/or if Secured Party should incur any liabilities, costs or
expenses in the defense of any such claims or demands, the amount thereof,
including cost, expenses and reasonable attorneys' fees, shall be part of the
Secured Obligations, and Debtor shall reimburse Secured Party therefor
immediately upon demand, and Debtor's failure to do so shall constitute an Event
of Default hereunder.
5. No Other Encumbrances. Except as otherwise agreed by Secured Party,
Debtor shall maintain the Collateral free from any security interest, lien,
charge, encumbrance or other charge adverse to Secured Party, which is superior
to or pari passu with the Secured Party's Security Interest in the Collateral,
and shall defend the Collateral against all claims and demands of all persons at
any time claiming any interest therein adverse to Secured Party.
6. Power Of Attorney. Debtor hereby appoints Secured Party as its agent
and attorney-in-fact with full power in Debtor's name and behalf to do each and
every act and thing which Debtor may or is required to do under this Agreement;
however, Secured Party shall in no event be required to take any action
whatsoever hereunder, except with respect to the Secured Party's obligation to,
upon disposition of the Collateral, use its best efforts to maximize the
proceeds of such disposition and to consult and cooperate with the Debtor in
connection therewith, as provided in Section 8 hereof. Without limiting the
generality of the foregoing, Secured Party may execute, sign, endorse, transfer
or deliver in the name of Debtor or otherwise notes, checks, drafts and/or other
instruments for the payment of money and receipts, certificates of origin,
applications for certificates of title or any other documents appropriate to
evidence, perfect or realize upon the security interest and obligations created
by this Security Agreement.
7. Events of Default. Each of the following occurrences shall
constitute an event of default under this Agreement (herein called "Event of
Default"): (i) a default shall occur under the Note; or (ii) the Debtor shall
fail to pay the Obligations when due or (if payable on demand) on demand; or
(iii) the Debtor shall default in the payment of its obligations to Secured
Party pursuant to this Agreement; or (iv) the Debtor shall default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under this Agreement and/or the Note.
8. Remedies upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, the Secured Party may exercise and enforce
any or all rights and remedies available upon default to a secured party under
the UCC, provided, however, that with respect to any disposition of any
Collateral by the Secured Party, the Secured Party shall use its best efforts to
maximize the proceeds of such disposition and shall consult and cooperate with
the Debtor in connection therewith.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be (i) personally delivered, (ii) sent by first class United
States mail, (iii) sent by overnight courier of national reputation, or (iv)
transmitted by telecopy, in each case addressed or telecopied to the party to
whom notice is being given at its address or telecopier number as set
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forth below its signature or, as to each party, at such other address or
telecopier number as may hereafter be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section. All such notices, requests, demands and other communications shall be
deemed to have been given on (i) the date received if personally delivered, (ii)
when deposited in the mail if delivered by mail, (iii) the date sent if sent by
overnight courier, or (iv) the date of transmission if delivered by telecopy.
10. Termination of this Agreement. This Agreement shall remain in full
force and effect for so long as any Obligations remain owing to the Secured
Party by the Debtor. Upon the payment in full of all Obligations, this Agreement
shall terminate without further action by the Debtor or the Secured Party and
either party may file any financing statements necessary to reflect the
termination of the Security Interest.
11. Miscellaneous. This Agreement has been duly and validly authorized
by all necessary corporate action. This Agreement does not contemplate a sale of
accounts, or chattel paper. This Agreement can be waived, modified, or amended
only explicitly in a writing signed by the Secured Party, and, in the case of
amendment or modification, in a writing signed by the Debtor as well. A waiver
signed by the Secured Party shall be effective only in the specific instance and
for the specific purpose given. Mere delay or failure to act shall not preclude
the exercise or enforcement of any of the Secured Party's rights or remedies.
All rights and remedies of the Secured Party shall be cumulative and may be
exercised singularly or concurrently, at the Secured Party's option, and the
exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other. This Agreement
shall be binding upon and inure to the benefit of the Debtor and the Secured
Party and their respective successors and assigns and shall take effect when
signed by the Debtor and delivered to the Secured Party, and the Debtor waives
notice of the Secured Party's acceptance hereof. A carbon, photographic or other
reproduction of this Agreement or of any financing statement signed by the
Debtor shall have the same force and effect as the original for all purposes of
a financing statement. This Agreement shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of
Texas. If any provision or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations. The parties hereto hereby (i) consent to the
personal jurisdiction of the state and federal courts located in the State of
Texas in connection with any controversy related to this Agreement; (ii) waive
any argument that venue in any such forum is not convenient, (iii) agree that
any litigation initiated by the Secured Party or the Debtor in connection with
this Agreement or the Note may be venued in either the state or federal courts
located in Dallas County, Texas, and (iv) agree that a final judgment in any
such suit, action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
12. Entire Agreement. THIS AGREEMENT, TOGETHER WITH THE NOTE, REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND
THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
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SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED ON OR PERTAINING TO THIS AGREEMENT.
SECURITY AGREEMENT - PAGE 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
SECURED PARTY: DEBTOR:
Xxxxxx X. Xxxxxxxxxx MigraTEC, Inc.
/s/ Xxxxxx X. Xxxxxxxxxx By /s/ X. Xxxxxx Brechbuhl
----------------------------- -----------------------
X. Xxxxxx Xxxxxxxxx
President and Chief Executive Officer
Address: Address:
0000 X. Xxxxx Xxxxxxx 00000 Xxxx Xxxx, Xxxxx 000
Xxxxx 0000 Xxxxxx, Xxxxx 00000-0000
Xxxxx, Xxxxx 00000 Attention: X. Xxxxxx Xxxxxxxxx
Employer identification number: 00-0000000
Organizational identification number: 3255908
SECURITY AGREEMENT - PAGE 7
