Exhibit 10.09
SECURITY AGREEMENT
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SECURITY AGREEMENT (the Security Agreement), dated as of September 26 2001
by and between XXXXXXX & GREEN. INC., a New York Corporation having an office at
Xxx Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxx Xxxx, 00000 (the Secured Party),
and IMAGENETIX, INC. a Nevada corporation having an office at 00000 Xxxx
Xxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (the Company).
WITNESSETH:
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WHEREAS, the Secured Party intends to make loans (Advances) to the Company
in an aggregate amount of up to One Million Dollars ($1 ,000,OQO) (the
Indebtedness), as evidenced by that certain promissory note dated as of
September 26th 2001 made by the Company in favor of the Secured Party (the
Note); and
WHEREAS, in order to induce the Secured Party to make said Advances, and to
make additional Advances in the future pursuant to the Note, the Company has
agreed to pledge to the Secured Party certain property as security for the loan;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1. Definitions. The following terms as used in this Security Agreement
shall have the meanings set forth below:
Account Debtor means the party who is obligated on or under an Account.
Accounts mean any account as defined in Section 9-106 of the UCC,
including, without limitation, all present and future rights of the Company
to payment for goods sold or leased or for services rendered by any person,
including, without limitation, all receivables, which are not evidenced by
Instruments or Chattel Paper, and whether or not they have been earned by
performance.
Chattel Paper means any chattel paper, as such term is defined in Section
9105(1)(b) of the UCC, now owned or hereafter acquired by the Company.
Contracts means all contracts, undertakings, or other agreements, rights
evidenced by Chattel Paper, Documents or Instruments in or under which the
Company may now or hereafter have any right, title or interest, including,
without limitation, with respect to an Account, any agreement relating to
the terms of payment or the terms or performance thereof.
Documents means any documents, as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by the Company.
Equipment means all of the Companys now owned or hereafter acquired
machinery, equipment (including, without limitation, motor vehicles),
furniture, furnishings, fixtures and all tangible personal property similar
to any of the foregoing (other than Inventory), together with tools and
machine parts of every kind and description, and all improvements,
accessions and appurtenances thereto, and any Proceeds thereof, including
insurance proceeds and condemnation awards.
General Intangibles means all choses in action, causes of action and all
other intangible personal property of the Company of every kind and nature
(other than Accounts) now owned or hereafter acquired by the Company,
including, without limitation, corporate, partnership, limited liability
company or other business records, proprietary rights, inventions, designs,
trade secrets, goodwill, registrations, permits, licenses, contract rights
(including, without limitation, the right to any rents, issues, or profits
from any source), customer lists, tax refund claims, rights and claims
against carriers and shippers, rights to indemnification, and any letter of
credit, guaranty, security interest or other security held by or granted to
the Company to secure payment by an Account Debtor.
Instruments means any instrument, as such term is defined in Section
9-105(1)(i) of the UCC, now owned or hereafter acquired by the Company,
other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
Inventory means any and all inventory and goods, including, without
limitation, goods in transit, wheresoever located, whether now owned or
hereafter acquired by the Company, which are held for sale or lease,
furnished under any contract of service or held as raw materials, work in
process or supplies, and all materials used or consumed in the Companys
business.
Liens mean any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible, securing an obligation owed to,
or a claim by, a person other than the owner of such property or asset,
whether such interest is based on the common law, statute or contract, and
including but not limited to, the security interest, charge, claim, or lien
arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, security agreement, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes.
The term Lien shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances affecting property.
Proceeds means proceeds, as such term is defined in Section 9-306(1) of the
UCC.
Secured Obligations means the obligations of the Company under the Note,
all costs and expenses incurred with the collection of the Indebtedness,
all future advances made by the Secured Party for taxes, levies, insurance
and repairs to or maintenance of the Collateral (as hereinafter defined)
and all other amounts and other sums at any time due and owing from or
required to be paid by the Company under any promissory note or loan
document to or for the benefit of the Secured Party.
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UCC shall mean the Uniform Commercial Code (or any successor statute) of
the State of New York or of any other state the laws of which are required
by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
2. Security Interest. As collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Company hereby assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Secured Party, and hereby
grants to the Secured Party a first priority, perfected security interest in,
all of the Companys right, title and interest in, to and under the following,
whether tangible or intangible, contingent or otherwise, whether now owned or
existing or hereafter acquired, and wherever located (all of which being
hereinafter collectively called the Collateral):
a. all Accounts;
b. all Chattel Paper;
c. all Contracts;
d. all Documents;
e. all Equipment;
f. all General Intangibles;
g. all Instruments;
h. all Inventory;
i. to the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements
for, and profits and products of, each of the foregoing.
Standard of Care: Non assignment. (a) Under no circumstances shall the
Secured Party be deemed to assume any responsibility for or obligation or duty
with respect to any part or all of the Collateral of any nature or kind, or any
matter, litigation, suit, claim or other proceeding of any nature or kind
arising out of, or relating thereto, but the same shall be at the Companys sole
and exclusive risk at all times. The Secured Party shall not be required to take
or refrain from taking any action of any kind to collect, preserve or protect
its or the Companys rights in the Collateral or against other parties thereto.
The Secured Partys prior recourse to any part or all of the Collateral shall not
constitute a condition of any demand, litigation, suit, claim or other
proceeding of any nature or kind for payment or collection of the Secured
Obligations. The Company agrees to indemnify the Secured Party from and against
any and all claims, losses and obligations under this Security Agreement
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(including without limitation enforcement of this Security Agreement against the
Company), except claims, losses or liabilities arising from the Secured Partys
gross negligence or willful misconduct.
(b) Notwithstanding Section 2 hereof, to the extent the grant of the
security interest contemplated hereunder in any General Intangible or Contract
or the Proceeds thereof shall be prohibited by the terms thereof or any
applicable governmental law or regulation or rule of a self-regulated entity, or
requires the consent or waiver, of or the filing of notice with any person,
governmental agency or self-regulated entity, where the effect of such
prohibition or the failure to obtain such consent, waiver or notice would result
in the loss or termination of such General Intangible or Contract or would have
a material adverse effect on the Company, then in such event, but subject to
Sections 9 and 13 hereof, the grant of security interest hereunder shall not
attach to any such General Intangible or Contract, but the Company nevertheless
shall hold such General Intangible or Contract free and clear of Liens and for
the benefit of the Secured Party.
3. The Companys Obligations To Pay. The Company shall pay and perform all
of the Secured Obligations of the Company to the Secured Party as the same may
become due according to their terms.
4. Title to The Collateral. The Company shall defend the title to the
Collateral against all claims and demands whatsoever.
5. Protection of The Collateral. The Company represents and covenants that
the Collateral is, and shall at all times be and remain, owned by the Company
free and clear of any Liens, except for such Liens which are in favor of the
Secured Party or specifically consented to in writing by the Secured Party. The
Company warrants and shall defend the Secured Partys right, title, property and
security interest in and to the Collateral against the claim of any person or
entity.
6. Disposition or Encumbrance of Collateral. Except for the Inventory in
the ordinary course of business, the Company will not sell, exchange or
otherwise dispose of, or encumber (except pursuant to this Security Agreement)
or incur or permit to exist any Liens with respect to any of the Collateral, or
any rights thereto, without having obtained the Secured Partys prior written
consent in each instance.
7. Discharge of Liens. The Company shall promptly pay and cause the
discharge of, bond off or otherwise contest in good faith pursuant to applicable
law, any Liens, taxes or assessments which may be levied upon the Collateral.
8. Filing And Recording. At any time and from time to time, upon request of
the Secured Party, the Company will, at its own cost and expense, execute and
deliver to the Secured Party one or more financing statements pursuant to the
applicable UCC or amendments or continuations thereof, and any other documents,
consents, waivers, filings or notices required by the Secured Party to further
evidence, effect or perfect the security interest granted herein or to otherwise
effectuate the purposes of this Security Agreement, including, without
limitation, using its best efforts to obtain to the extent consistent with
applicable law, all consents and approvals necessary or appropriate for the
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assignment to the Secured Party of any Account, General Intangible, Contract or
Instrument held by the Company or in which the Company has any rights not
heretofore assigned, and, to the extent permitted by applicable law, the Company
hereby authorizes the Secured Party to execute and file at any time or times one
or more financing statements pursuant to the applicable UCC with respect to any
or all of the Collateral, signed only by the Secured Party. The Company hereby
agrees that a carbon, photographic or other reproduction of this Security
Agreement or of a financing statement shall be sufficient as a financing
statement. The Company hereby appoints the Secured Party as its attorney-in-fact
to file or refile any financing statements or continuation statements with
respect to the security interest granted pursuant to this Security Agreement
which at any time may be required or appropriate, although the same may have
been executed only by the Secured Party, to execute such financing statement on
behalf of the Company and to protect the Collateral. The Company shall pay all
costs of filing any such financing, continuation or termination statements..
9. Default. The occurrence of any one or more of the following events
(hereinafter referred to as Events of Default) shall constitute a default
hereunder:
(a) If an Event of Default (as defined in the Note) shall occur and be
continuing under the Note; or
(b) If the Company shall fail to pay, perform or observe any material
covenant, agreement, term or provision of this Security Agreement; or
(c) The Company shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or (ii) the Company
shall (A) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (B) make a general assignment
for the benefit of its creditors, (C) commence a voluntary case under the
bankruptcy law of the relevant jurisdiction; (D) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts, (E)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
bankruptcy law of the relevant jurisdiction, (F) take any corporate action
for the purpose of effecting any of the foregoing; or (iii) a proceeding or
case shall be commenced, without the application or consent of the Company,
in any court of competent jurisdiction, seeking (A) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, or (B) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Company or of all or any
substantial part of its assets; or (iv) an order for relief against the
Company shall be entered in an involuntary case under the bankruptcy law of
the relevant jurisdiction seeking (A) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
or (B) any other of the actions described in clauses (i) through (iv)
hereof.
(d) If all or any part of the Collateral shall be further encumbered,
hypothecated, mortgaged, or made subject to any other Lien without the
prior written consent of the Secured Party.
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10. Rights And Remedies. Upon the occurrence and during the continuance of
any Event of Default pursuant to Section 10 of this Security Agreement the
Secured Party shall:
(a) Have all rights and remedies provided by the UCC in effect in the
states in which UCC filings are made; and
(b) Any rights and remedies provided to the Secured Party pursuant the
Note; and
(c) Without limiting the generality of the foregoing, the Company without
demand of performance or the demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private
sale) to or upon Secured Party or any other person (all and each of which
demands, advertisements and/or notices are hereby expressly waived to the
maximum extent permitted by the UCC and other applicable law), may
forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give an option
or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in a commercially
reasonable manner and otherwise in compliance with the UCC and other
applicable law, in one or more parcels at public or private sale or sales
for cash or on credit or for future delivery without assumption or any
credit risk. The Secured Party shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase in whole or any part of the Collateral so sold.
The Company hereby waives to the full extent permitted by law all right and
redemption or appraisal whether before or after sale. The Company agrees,
at the Secured Partys request, to assemble the Collateral and make it
available to the Company at places which the Secured Party shall reasonably
select, whether at the Companys premises or elsewhere. The Secured Party
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, as provided in Section 11(f) hereof,
the Company remaining liable for any deficiency remaining unpaid after such
application, including, the reasonable fees of any attorneys employed by
the Secured Party to collect such deficiency, and only after so paying over
such net proceeds and fees and after the payment by the Company of any
other amount required by any provision of law, including Section 9-504
(1)(c) of the UCC, need the Secured Party account for the surplus, if any,
to the Company. To the maximum extent permitted by applicable law, the
Company waives all claims, damages and demands against the Secured Party
arising out of the repossession, retention or sale of the Collateral except
such as arise out of the gross negligence or willful misconduct of the
Secured Party. The Company agrees that the Secured Party need not give more
than ten (10) days notice (which notification shall when mailed, telecopied
or delivered, respectively, be effective when deposited in the mails,
telecopied with confirmation of receipt, delivered by hand to the addressee
or its agent or delivered to the overnight courier, addressed to the
Company at its address referred to herein) of the time and place of any
public sale or of the time after which a private sale may take place and
that such notice is reasonable notification of such matter.
(d) The Company also agrees to pay all reasonable costs to the Secured
Party, including, without limitation, reasonable attorneys fees, incurred
in connection with the enforcement of any of its rights and remedies
hereunder.
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(e) Except as provided in paragraph (c) above, the Company hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted
by applicable law) of any kind in connection with this Security Agreement
or any Collateral.
(f) The Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care or safekeeping of any of the Collateral or in any way relating
to the Collateral or the rights of the Secured Party hereunder, including,
without limitation, reasonable attorneys fees and disbursements, to the
payment in whole or in part of the Indebtedness, in such order as the
Secured Party may elect, and only after such application and after the
payment by the Secured Party of any other amount required by any provision
of law, including, without limitation, of the UCC, should the Secured Party
be required to account for the surplus, if any, to the Borrower.
(g) The rights and remedies of the Lender under this Security Agreement are
cumulative, may be exercised singly or concurrently and are not exclusive
of any rights and remedies provided by law; nor shall the giving, taking or
enforcement of any other or additional security, collateral or guaranty for
the payment of the Secured Obligations operate to prejudice, waive or
affect the security of this Security Agreement or any rights, powers or
remedies hereunder, nor shall the Secured Party be required to first look
to, enforce or exhaust such other or additional security, collateral or
guaranties.
(h) The Secured Partys sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession shall be to
deal with it in the same manner as the Secured Party deals with similar
property for its own account. Neither the Secured Party nor any of its
employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Company or otherwise.
11. The Companys Representations And Warranties. The Company hereby
represents and warrants to the Secured Party that:
(a) The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Nevada.
(b) The Company is not in default under any indenture, mortgage, deed of
trust, agreement or other instrument to which the Company is a party or by
which the Company may be bound. Neither the execution nor the delivery of
the Note, this Security Agreement, nor the consummation of the transactions
herein contemplated, nor compliance with the provisions hereof, will
violate any law or regulation, or any order or decree of any court of
governmental authority, or will conflict with, or result in the breach of,
or constitute a default under, any indenture, mortgage, deed or trust,
agreement or other instrument to which the Company is a party or by which
the Company may be bound, or result in the creation or imposition of any
Lien or claim upon any property of the Company.
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(c) The Company has taken all action necessary to authorize the execution,
delivery and performance of the Note, this Security Agreement and all other
agreements and instruments necessary to complete the transactions
contemplated by the Note and this Security Agreement, and has full power
and authority to enter into such agreements and carry out the terms hereof
without the consent of any party except as disclosed in this Security
Agreement. The Companys execution of this Security Agreement constitutes a
valid binding and enforceable obligation enforceable in accordance with its
terms.
(d) No authorization, approval, order, license, permit, franchise, or
consent and no registration, declaration or filing by or with any
governmental authority, and no consent of any third party, is required in
connection with the execution and delivery by the Company of this Security
Agreement and the consummation of the transactions contemplated hereby.
(e) The Company will comply, in all material respects, with all acts,
rules, regulations, orders, decrees and directions of any governmental
authority applicable to the Collateral or any part thereof or to the
operation of the Companys business.
(f) There is no pending, or to the best knowledge of the Company,
threatened action or proceeding affecting the Company before any court,
governmental agency or arbitrator, which would materially adversely affect
the ability of the Company to perform its obligations under the Note or
this Security Agreement or which may materially adversely affect the
financial condition or operations of the Company.
(g) Except for the security interest granted pursuant to this Security
Agreement, the Company is the sole owner of each item of the Collateral in
which it purports to grant i security interest hereunder, having good and
marketable title thereto, free and clear of any and all Liens.
(h) No effective security agreement, financing statement, equivalent
security or lien instrument or continuation covering all or any part of the
Collateral is on file or of record in any public office which has not been
terminated concurrently with the execution hereof.
(i) No default exists, and no event which with notice or the passage of
time, or both, would constitute a default under any Contract included in
the Collateral by any party thereto, exists, and there are no offsets,
claims or defenses against the obligations evidenced by the Collateral.
(j) No consent is required in order for the Company to grant the Lien given
to the Secured Party hereunder.
12. Covenants. The Company covenants and agrees with the Secured Party that
from and after the date of this Security Agreement and until the Secured
Obligations are indefeasibly paid in full:
(a) Maintenance of Records. The Company will keep and maintain at its own
cost and expense satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all
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credits granted with respect to the Collateral and all other dealings with
the Collateral. The Company will xxxx its books and records pertaining to
the Collateral to evidence this Security Agreement and the security
interests granted hereby. For the Secured Partys security, the Company
agrees that the Secured Party shall have a special property interest in all
of such the Companys books and records pertaining to the Collateral and,
upon the occurrence and during the continuation of any Event of Default,
the Company shall deliver and turn over any such books and records to the
Secured Party or to its representatives at any time on demand of the
Secured Party prior to the occurrence an Event of Default and upon
reasonable notice from the Secured Party, the Company shall permit any
representative of the Secured Party to inspect such books and records and
will provide photocopies thereof to the Secured Party.
(b) Indemnification. In any suit, proceeding or action brought by the
Secured Party relating to any Account, Contract or any Instrument for any
sum owing thereunder, or to enforce any provision of any Account, Contract
or Instrument, the Company will save, indemnify and keep the Secured Party
harmless from and against all expense, loss or damage suffered by reason or
any defense, setoff, counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder, arising out of a breach by the
Company of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such
obligations or the Company shall be and remain enforceable against and only
against the Company and shall not be enforceable against the Secured Party.
(c) Complaince with Laws, Etc. The Company will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions
of any governmental authority applicable to the Collateral or any part
thereof or to the operation of the Companys business,
(d) Maintenance and Taxes. The Company will maintain the Inventory,
Equipment, real property or other tangible property now or from time to
time included in the Collateral in good condition and repair; reasonable
wear and tear excepted. The Company will pay promptly when due all taxes,
assessments and governmental charges or levies imposed upon the Collateral
or in respect of its income or profits therefrom and all claims of any kind
(including, without limitation, claims for labor, materials and supplies),
except that no such charge need be paid if such non-payment does not, in
the reasonable judgement of the Secured Party, involve any danger of the
sale, forfeiture or loss of any of the Collateral or any interest therein.
If the Company fails to pay such sums, the Secured Party may do so for the
Companys account. In such event, the Company will promptly reimburse the
Secured Party for the amounts expended.
(e) Compliance with Terms of Accounts, Etc. The Company will perform and
comply with all obligations in respect of Accounts, Contracts and all other
agreements to which it is a party or by which it is bound except for such
non-compliance as has, individually or in the aggregate, no reasonable
likelihood of having a material adverse effect.
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(f) Limitations on Modifications of Accounts. Upon the occurrence and
during the continuation of any Event of Default, the Company will not,
without the Secured Partys prior written consent, grant any extension of
the time of payment of any of the Accounts, Contracts or Instruments,
compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other than
trade discounts granted in the ordinary course of business of the Company.
(g) Further Identification of Collateral. The Company will, if so requested
by the Secured agent, furnish to the Secured Party, as often as the Secured
Party reasonably requests, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Secured Party may reasonable request, all in reasonable
detail.
(h) Notices. The Company will advise the Secured Party promptly upon
becoming aware, in writing and in reasonable detail, (i) of any material
Lien (other than Liens permitted hereby) on, or claim asserted against, any
of the Collateral, (ii) of any material change in the composition of the
Collateral, and (iii) of the occurrence of any other event which would have
a material adverse effect on the aggregate value of the Collateral or on
the Liens created hereunder.
(i) Right of Inspection. Upon reasonable notice of the Company (unless an
Event of Default has occurred and is continuing, in which case no notice is
necessary), the Secured Party shall at all times have full and free access
during normal business hours to inspect the Collateral and to review all
the books and records and correspondence of the Company and the Secured
Party or its representatives may examine the same, take extracts therefrom
and make photocopies thereof, and the Company agrees to render to the
Secured Party at the Companys cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.
(j) Continuous Perfection. The Companys will not change its name, identify
or corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith seriously misleading
within the meaning of Section 9-402(7) of the UCC (or any other then
applicable provision of the UCC) unless the Company shall have given the
Secured Party at least thirty (30) days prior written notice thereof and
shall have taken all action (or made arrangements to take such action
substantially simultaneously with such.change if it is impossible to take
such action in advance) necessary or reasonably requested by the Secured
Party to amend such financing statement or continuation statement so that
it is not seriously misleading. The Company will not change such principal
place of business, the place where its Equipment and Inventory is located
or remove its records unless it has taken such action as is necessary to
cause the security interest of the Secured Party in the Collateral to
continue to be perfected
13. Actions by the Secured Party. The Secured Party may, in his sole
discretion and at any time, for the account and expense of the Company, pay any
reasonable amount or do any reasonable act required of the Company hereunder or
requested by the Secured Party to preserve, protect, maintain or enforce the
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Secured Obligations, the Collateral or the security interest granted herein, and
which the Company fails to do or pay, after seven days prior written notice,
including, without limitation, payment of any judgment against the Company, any
insurance premium, any licensing fee and any lien, claim or encumbrance upon or
with respect to the Collateral, and any such payment shall be added to the
Secured Obligations and shall be payable upon demand. The Company hereby
irrevocably constitutes and appoints the Secured Party and any representative
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Company and in the name of the Company or in its own name, from
time to time in the Secured Partys discretion to carry out the terms of this
Security Agreement, to take all appropriate action, including the actions
described in the foregoing sentence, and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Security Agreement. This power of attorney is a power coupled with an
interest and shall be irrevocable.
14. Release of Lien. Upon the indefeasible payment in full of the Secured
Obligations, this Security Agreement and the obligations hereunder shall
terminate and, upon the request of the Company, the Secured Party will, at the
sole cost and expense of the Company, provide to the Company executed copies of
UCC termination statements and all other instruments and documents, and take
such other action as may be required, without any representation or warranty
with respect thereto, to evidence the release of the security interest paid
hereunder.
15. Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforcabilty without
invalidating the remaining provisions hereof, and any such prohibition or
unenforcability in any jurisdiction shall not invalidate or render unenforceable
such provisions in any other jurisdiction.
16. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE
COMPANY OR THE SECURED PARTY ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT OR ANY OBLIGATION HEREUNDER MAY BE BROUGHT IN ANY STATE OF FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND, BY EXECUTION AND
DELIVERY OF THIS SECURITY AGREEMENT, THE COMPANY AND THE SECURED PARTY ACCEPT
FOR THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES, GENERALLY AND
UNCONDITIONTALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVE THE DEFENSE OF FORUM NON CONVENTENS.
17. Notices. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been
properly given if sent by registered or certified mail, return receipt
requested, addressed to the parties at their respective addresses herein above
set forth, or at such other addresses as the parties may designate in writing.
The Company immediately shall notify the Secured Party of any change in the
address of the Company or discontinuance of the place of business or residence
of the Company.
18. Modification and Waiver. No modification or waiver of any provision of
this Security Agreement, and no consent by the Secured Party to any breach
thereof by the Company, shall be effective unless such modification or waiver
11
shall be in writing and signed by the Secured Party, and the same shall then be
effective only for the period and on the conditions and for the specific
instances and purposes specified in such writing. No course of dealing between
the Company and the Secured Party in exercising any rights or remedies hereunder
shall operate as a waiver or preclude the exercise of any other rights or
remedies hereunder. Without in any way affecting the liability of the Company
hereunder, the Secured Party may extend the time for payment of any amount due
hereunder, accept additional Collateral or release any portion of the Collateral
now or hereafter securing the Secured Obligations without in any other way
affecting the remaining Collateral or remaining liability and obligations of the
Company.
19. Successors and Assigns. This Security Agreement and all obligations of
the Company hereunder shall be binding upon the successors and assigns of the
Company, and shall, together with the rights and remedies hereunder of the
Secured Party inure to the benefit of the Secured Party and their respective
successors and assigns.
20. Governing Law. This Security Agreement shall be construed in accordance
with and shall be governed by the laws of the State of New York without regard
to New Yorks principles of conflicts of laws.
21. Captions. The captions and headings hereunder are for convenience only
and shall not affect the interpretation of this Security Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Security
Agreement on the date first above written.
XXXXXXX & GREEN, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx, President
IMAGENETIX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
President
12
STATE OF NEW YORK, COUNTY OF , SS.:
On the 26th day of September, 2001, before me personally came Xxxxx
Xxxxxxxx to me known, who, being by me duly sworn did depose and say that he
resides at 0000 Xxx Xxxxx, Xxxxxxx, XX , that he is the President of XXXXXXX &
GREEN, INC. and who executed the foregoing Security Agreement, and acknowledged
that he signed his name thereto by authority of the President of such
corporation.
/s/ Xxx Xxxxxxxxx
----------------------------------
Xxx Xxxxxxxxx
Notary Public
My commission expires on:
Xxx Xxxxxxxxx
Notary Public, State of New York
No. 4809886
Qualified in Nassau County
Commission Expires 10-31-02
See Attached
STATE OF CALIFORNIA COUNTY OF , SS.:
On the 24th day of September, 2001, before me personally came Xxxxxxx X.
Xxxxxxx to me known who, being by me duly sworn did depose and say that he
resides at 00000 X. Xxxxxxxx Xx. #000 Xxx Xxxxx, XX 00000, that he is the
President of IMAGENETIX, INC. and who executed the foregoing Security Agreement,
and acknowledged that he signed his name thereto by authority of the President
of such corporation.
See Attached
----------------------------------
Notary Public
My commission expires on:
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxx xx Xxxxxxxxxx
----------
Xxxxxx of San Diego
---------
On September 24, 2001 before me, Xxxxx X. Xxxxx, Notary Public,
--------------------------------------------
NAME, TITLE OF OFFICER E.G."XXXX XXX" NOTARY
PUBLIC
personally appeared Xxxxxxx X. Xxxxxxx
---------------------------------------------------------
NAME(S) OF SIGNERS
[X]personally known to me - OR - [ ] proved to me on the basis of
satisfactory evidence to be the
person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s), or the entity
upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
SIGNATURE OF NOTARY
====================================OPTIONAL====================================
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[ ] INDIVIDUAL
[X] CORPORATE OFFICER SECURITY AGREEMENT
---------------------------------
PRESIDENT TITLE OR TYPE OF DOCUMENT
--------------------------
TITLE(S) 14 INCL. ACK
[ ] PARTNER(S) [ ] LIMITED ---------------------------------
[ ] GENERAL NUMBER OF PAGES
[ ] ATTORNEY.IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: 9/01
------------------- ---------------------------------
----------------------------- DATE OF DOCUMENT
-----------------------------
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES) ---------------------------------
SIGNER(S) OTHER THAN NAMED ABOVE
-----------------------------
-----------------------------
================================================================================
SECURED PROMISSORY NOTE COPY
-----------------------
$1,000,000 Lake Success, New York
As of Sept 26th, 2001
FOR VALUE RECEIVED, the undersigned, IMAGENETIX, INC., a Nevada corporation
(the Debtor), hereby unconditionally promises to pay to the order of XXXXXXX &
GREEN, INC., a corporation doing business in the State of New York (the Payee),
in lawful money of the United States in immediately available funds, on
September 30, 2002 or such earlier date as the Payee shall designate (the
Maturity Date), at such place as the Payee or any holder hereof may from time to
time designate, the principal sum up to ONE MILLION DOLLARS ($1,000,000) or, if
less, the aggregate amount of the unpaid principal amount from time to time
owing by Debtor as recorded on the payment grid appended hereto as Schedule 2,
the whole in accordance with the terms contained in this Note, together with
unpaid interest thereon at the rate of twelve percent (12%) per annum. Payment
of interest shall become due on the first day of each month and on the Maturity
Date of this Note. Interest shall be calculated on the basis of a 365-day year
and actual days elapsed. In no event shall the rate of interest hereunder exceed
the maximum interest rate permitted by applicable law.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and any interest hereon and the respective dates thereof
shall be endorsed by the Payee on the grid appended hereto as Schedule 2 or any
continuation thereof; provided, however, that the failure of the Payee to make
such a notation or any error in such a notation shall not affect the obligations
of the Debtor under this Note.
For so long as no Event of Default (as set forth on Schedule 1) has
occurred, this Note may be repaid in whole or in part prior to the Maturity Date
on any business day, without premium or penalty, in amounts of at least $1,000.
All payments shall be made to the Payee at its principal office in Lake Success,
New York or such other designated place. Repayments of principal shall be
credited to the earliest advances still outstanding.
Upon the occurrence of an Event of Default and for so long as such Event of
Default shall continue, the aggregate unpaid principal amount under this Note,
accrued interest thereon and all other amounts payable hereunder may be declared
to be, or may automatically become, forthwith due and payable.
The Debtor hereby waives diligence, presentment, protest and notice of any
kind, and assents to extensions of the time of payment, release, surrender or
forbearance or other indulgence, all in the sole discretion of the Payee and
without notice and without affecting the liability of the Debtor hereunder.
This Note may not be changed, modified or terminated orally, but only by an
agreement in writing signed by the party to be charged.
In the event the Payee or any holder hereof shall refer this Note to an
attorney for collection, the Debtor agrees to pay, in addition to unpaid
principal and interest, all the costs and expenses incurred in attempting or
effecting collection hereunder, including reasonable attorneys fees, whether or
not suit is instituted.
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In the event of any litigation with respect to this Note, the Debtor waives
all rights of setoff and rights to interpose counterclaims and cross-claims. The
Debtor hereby irrevocably consents to the jurisdiction of the Courts of New York
State in connection with any action or proceeding arising out of or relating to
this Note. If any term or provision of this Note shall be held invalid, illegal
or unenforceable, the validity of all other terms and provisions hereof shall in
no way be affected thereby. This Note shall be governed and construed by the
laws of the State of New York.
No delay on the part of the Payee in the exercise of any right, power or
remedy under this Note shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power or right preclude other or further right.
No waiver of any such right, power or remedy shall exist or be effective unless
such waiver is made in writing and signed by the Payee. All rights and remedies
under this Note shall be cumulative. The exercise of any right, power or remedy
hereunder or under applicable law shall not be deemed an election of remedies or
waiver of any other right.
This Note shall be binding upon the maker and its successors and assigns.
This Note is secured by a Security Agreement dated as of September 26,
2001 between the Debtor and the Payee (the Security Agreement).
IMAGENETIX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
President
Copy
2
Schedule 1
----------
Events of Default
-----------------
If one or more of the following events (herein each referred to as an Event
of Default) shall occur and be continuing:
(1) The Debtor shall fail to pay when due (i) any portion of or interest
accrued on the aggregate principal amount due under this Note when due and
such failure shall continue unremedied for five (5) business days, or (ii)
any other amount payable (whether at stated maturity on the Maturity Date,
by acceleration or otherwise) by it to the Payee hereunder, under the
Security Agreement or under any other Promissory Note in favor of the Payee
to which it is a party, and such failure shall continue unremedied for five
(5) business days;
(2) The Debtor shall fail to perform any of its obligations, covenants or
agreements under this Note, under the Security Agreement or under any other
Promissory Note in favor of the Payee to which it is a party, and such
failure materially adversely affects the Payee and (if capable of being
remedied) shall continue unremedied for a period of thirty (30) days after
notice thereof to the Debtor by the Payee (or any person acting on behalf
of the Payee);
(3) (i) The Debtor shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or (ii) the Debtor shall
(A) apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (B) make a general assignment for the
benefit of its creditors, (C) commence a voluntary case under the
bankruptcy law of the relevant jurisdiction; (D) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts, (E)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
bankruptcy law of the relevant jurisdiction, (F) take any corporate action
for the purpose of effecting any of the foregoing; or (iii) a proceeding or
case shall be commenced, without the application or consent of the Debtor,
in any court of competent jurisdiction, seeking (A) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, or (B) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Debtor or of all or any
substantial part of its assets; or (iv) an order for relief against the
Debtor shall be entered in an involuntary case under the bankruptcy law of
the relevant jurisdiction seeking (A) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
or (B) any other of the actions described in clauses (i) through (iv)
hereof.
3
Schedule 2
----------
Date Principal Amount Outstanding
---- ----------------------------
10/3/2001 100,000
4
