Exhibit 6.8
SECURITY AGREEMENT dated June 27th, 2002, by and between Xxxx X. Xxxxxxx,
an individual having his principal place of business at 00 Xxxxxx Xxxx Xxxxx,
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 (hereinafter, "Secured Party") and E-data
Corporation (hereinafter, "Debtor").
RECITALS
WHEREAS, Debtor has previously delivered to Secured Party a Grid Note dated
April 11th, 2001 (the "First Note"), pursuant to which Secured Party has made a
loan to Debtor in the amount of Three Hundred Thousand Dollars ($300,000); and
WHEREAS, Debtor has previously delivered to Secured Party a Grid Note dated
November 28th, 2001 (the "Second Note"), pursuant to which Secured Party has
made a loan to Debtor in the amount of Three Hundred Thousand Dollars
($300,000); and
WHEREAS, Debtor has entered into a Note Modification Agreement with Secured
Party dated November 28, 2001, which modifies the First Note to the extent set
forth in such Agreement. The First Note, the Second Note, and the Note
Modification Agreement are referred to herein as the "Financing Documents;" and
WHEREAS, simultaneously with the execution and delivery hereof, Debtor is
executing and delivering to Secured Party its Promissory Note in the principal
amount of One Hundred Thousand Dollars ($100,00) (the "Third Note"), evidencing
an additional loan from Secured Party to Debtor on the date hereof; and
WHEREAS, in consideration of the foregoing and in consideration of the loan
by Secured Party to Debtor on the date hereof of One Hundred Thousand Dollars
($100,000) as evidenced by the Third Note, and of other good and valuable
consideration, this Security Agreement is executed and delivered by Debtor to
Secured Party for the purposes, among other things, of securing all obligations
owing from Debtor to Secured Party pursuant to the Financing Documents and the
Third Note, and granting a security interest to Secured Party in the
"Collateral" as hereafter defined;
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Security Interest. As security for the repayment of amounts due
under the Financing Documents and the Third Note and as security for the full
payment and performance of any and all other debts, obligations and liabilities
of Debtor to Secured Party now or hereafter existing (the "Obligations"), Debtor
hereby grants to Secured Party a lien upon and a continuing security interest
in:
(a) all accounts, goods, fixtures, instruments, documents, chattel paper
(as such terms are defined in Article 9 of the New York Uniform Commercial Code
(the "UCC") as now in existence or hereafter amended) and motor vehicles,
whether now owned or hereafter created or acquired by Debtor, wherever located,
and all replacements and substitutions therefor, accessions thereto, and
products and proceeds thereof.
(b) all general intangibles (as such term is defined in Article 9 of the
UCC as now in existence or hereafter amended) now owned or hereafter acquired or
created, including but not limited to the Xxxxxx Patent (as defined in Article 5
hereof), trade secrets, special formulas and formats, together with all
renewals, replacements and substitutions therefor or accessions thereto, all
rights accruing therefrom and all proceeds thereof. Secured Party does not
hereby assume nor shall it become liable for the performance of any obligation
or duty with regard to any such general intangible.
The property described in paragraphs (a) and (b) above is hereinafter
referred to as the "Collateral".
2. Representations. Debtor hereby represents and warrants to Secured Party
as follows:
(a) There are no liens, pledges, security interests or other
encumbrances on any of the Collateral that are prior to the security
interests granted hereunder.
(b) As to the Collateral: (i) the Collateral, or evidence of ownership
of the Collateral, is presently located at Debtor's address set forth
above, and Debtor will notify Secured Party in writing thirty (30) days
prior to the movement of the Collateral, or evidence of ownership of the
Collateral, to any new location; (ii) Debtor will at its own cost and
expense maintain the value of the Collateral; and (iii) Debtor will not
sell, exchange, lease or otherwise dispose of the Collateral, nor will it
license any rights or interests in the Collateral except in the ordinary
course of business.
(c) Debtor's chief place of business is presently located at 00 Xxxxxx
Xxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000, and Debtor will notify Secured
Party promptly of any change in the location of Debtor's chief place of
business.
(d) This Security Agreement has been duly authorized by all necessary
corporate action, has been duly executed and delivered, and constitutes the
valid and legally binding obligation of the Debtor, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or moratorium laws, now
or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally.
3. Covenants.
(a) Debtor agrees to take such further action and to execute such
additional agreements, documents and instruments as Secured Party shall
reasonably request to effectuate or confirm the security interests granted
hereunder. Debtor will, at Secured Party's expense, from time to time execute,
file and record such financing statements and documents and take such action,
including without limitation segregation of records, as Secured Party shall
reasonably request to create and maintain the priority and status of the
security interests created hereunder. Debtor will defend the Collateral against
dilution or infringement, and all claims and demands of all persons and will
keep the Collateral free and clear of all attachments, levies, taxes, liens,
security interests, and encumbrances of any kind and nature. Debtor will furnish
Secured Party from time to time upon request with written statements and
schedules identifying and describing the Collateral in such detail as Secured
Party may reasonably require.
(b) During the term of this agreement, Debtor shall not, without the
written consent of Secured Party, grant any security interest in any Collateral
to anyone other than Secured Party.
4. Remedies. If at any time any liability under any of the Financing
Documents or the Third Note shall be due and payable, whether due to maturity,
acceleration or otherwise, or if an Event of Default (as defined in any of the
Financing Documents or the Third Note) shall have occurred, Secured Party itself
or by its attorney may exercise with respect to the Collateral all of the rights
and remedies set forth herein or otherwise available to a secured party under
the applicable provisions of the UCC, or any other applicable law (including,
without limitation, the right without notice to or demand upon Debtor, to make
such payments and do such acts as Secured Party considers necessary or
reasonable to protect its security interest in the Collateral) and, in
conjunction with or in addition to such rights and remedies may, to the extent
permitted by applicable law, with or without process of law and without notice
or liability for loss or damage, sell or dispose of all or any part of the
Collateral, free and clear of all claims. Notwithstanding the foregoing, Secured
Party agrees that Debtor shall have thirty (30) days from the date of this
Agreement in which to cure any Event of Default that may exist, or to make any
payment that is due and payable, as of the date of this Agreement.
5. Miscellaneous.
(a) Notices. All notices and other communications provided for hereunder
shall be in writing and shall be delivered in person, mailed, or delivered by
overnight courier to Debtor or Secured Party at their respective addresses set
forth on page one. All such notices and communications shall be effective when
deposited in the mails or delivered.
(b) Performance. If Debtor is in default in the performance or fulfillment
of any of the terms, conditions, or provisions on its part to be performed or
fulfilled hereunder, Secured Party may, at its option (without waiving its right
to enforce this agreement according to its terms) immediately or at any time
thereafter and without notice to Debtor, perform or fulfill the same or cause
the performance or fulfillment of same for Debtor's account, and the cost and
expense thereof (including reasonable attorneys fees) shall be added to the
Obligations and shall be payable on demand with interest thereon at the rate of
interest set forth in the Third Note.
(c) Construction Against Drafter. Each party acknowledges that it or he has
been represented by counsel, or has been afforded the opportunity to be
represented by counsel, in connection with this Security Agreement and the
transactions contemplated hereby. Accordingly, any rule or law or any legal
decision that would require the interpretation of any claimed ambiguities in
this security Agreement against the party that drafted it has no application and
is expressly waived by the parties. The provisions of this Security Agreement
shall be interpreted in a reasonable manner to give effect to the intent of the
parties hereto.
(d) Assignment. The terms and provisions of this agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Debtor shall not assign its rights and obligations under the
Agreement without the prior consent of Secured Party.
(e) Governing Law. This Agreement and all rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the State of
New York.
(f) Waiver. No delay or failure on the part of Secured Party in exercising
any right, privilege, remedy or option hereunder shall operate as a waiver of
such right, privilege, remedy or option, or of any other, and no waiver whatever
shall be valid unless in writing and signed by Secured Party. No waiver by
Secured Party of any Event of Default (as such term is defined in the Financing
Documents and the Third Note) shall operate as a waiver of any other Event of
Default or of the same Event of Default on a future occasion. THE UNDERSIGNED
HEREBY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED HEREON.
(g) Termination. At such time as Debtor shall completely and finally
satisfy all Obligations, this Security Agreement shall terminate and Secured
Party shall execute and deliver to Debtor all assignments, UCC termination
statements and other instruments as may be required to reflect the termination
of Secured Party's interest in the Collateral.
(h) Modification. This Agreement cannot be changed or terminated orally.
(i) The "Xxxxxx Patent." The "Xxxxxx Patent" means U.S. Patent Registration
Number 4,258,643, granted in 1985, covering any process that transmits
information from a central source to any type of point of sale terminal, and
embodies that information in a material object that is then bought by the
consumer. The "Xxxxxx Patent" also includes the related rights for Canada and
the European Union (Registration Numbers 1,240,390 and 0195098 (85103199.7),
respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
E-Data Corporation (Debtor)
By:/s/Xxxxx Xxxxxx
Xxxxx X. Xxxxxx, President
/s/Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx (Secured Party)
