EXHIBIT 10.58
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EXHIBIT C
SECURITY AGREEMENT
AGREEMENT, dated as of October 22, 2002, between Universal Media
Holdings, Inc., a Delaware corporation, having an address at 000 Xxxxxxxxxxx
Xxxx, Xxxxxxxx, XX 00000 ("Debtor"), and CDKNet, Inc., a Delaware corporation,
having an address at New York, ("Secured Party").
W I T N E S S E T H:
WHEREAS, concurrently herewith Secured Party is lending to Debtor the
sum of $550,000.00, as evidenced by a Promissory Note of even date herewith (the
"Note"); and
WHEREAS, in order to induce Secured Party to make said loan, Debtor
has agreed to pledge to Secured Party certain property as security for the loan;
NOW THEREFORE, in consideration of Ten Dollars, and other 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
Agreement shall have the meanings set forth below:
"Collateral" shall mean all of the property set forth in Exhibit A attached
hereto and made a part hereof, and all property of the same class or
character acquired by Debtor subsequent to the date hereof, and all
proceeds thereof, and all substitutions, replacements and accessions
thereto.
"Obligations" shall mean all principal and interest due or to become due
under the aforesaid Note, and any other indebtedness or liability of Debtor
to Secured Party, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising.
2. CREATION OF THE SECURITY INTEREST. Debtor hereby grants to Secured
Party a security interest in all of the right, title and interest of Debtor in
and to the Collateral to secure the full and prompt payment and performance of
all of the Obligations.
3. DEBTOR'S OBLIGATIONS TO PAY. Debtor shall pay and perform all of
the Obligations of Debtor to Secured Party as the same may become due according
to their terms. Debtor shall be liable for, and shall reimburse to Secured
Party, all expenses, including reasonable attorneys' fees, incurred or paid in
connection with establishing, perfecting, maintaining, protecting or enforcing
any of Secured Party's rights and remedies hereunder.
4. PROTECTION OF THE COLLATERAL. Debtor shall defend the title to the
Collateral against all claims and demands whatsoever. Debtor shall keep the
Collateral free and clear of all liens, charges, encumbrances, taxes and
assessments, and shall pay all taxes, assessments and fees relating to the
Collateral. Upon request by Secured Party, Debtor shall furnish further
assurances of title, execute any further instruments and do any other acts
necessary to effectuate the purposes and provisions of this Agreement. The risk
of loss of the Collateral at all times shall be borne by Debtor. Debtor shall
keep the Collateral in good repair and condition and shall not misuse, abuse or
waste the Collateral or allow the Collateral to deteriorate except for normal
wear and tear.
The Collateral shall be kept at Debtor's place of business set forth
above, except for temporary removal in connection with its ordinary use or
unless Debtor shall have obtained the prior written consent of Secured Party for
its removal to another location. Secured Party shall have the right to enter
upon Debtor's premises at any reasonable time, and from time to time, to inspect
the Collateral.
5. FILING AND RECORDING. Debtor, at its own cost and expense, shall
execute and deliver to Secured Party any financing statements, and shall procure
for Secured Party any other documents, necessary or appropriate to protect the
security interest granted to Secured Party hereunder against the rights and
interests of third parties, and shall cause the same to be duly recorded and
filed in all places necessary to perfect the security interest of Secured Party
in the Collateral. In the event that any recording or refiling thereof (or
filing of any statements of continuation or assignment of any financing
statement) is required to protect and preserve such security interest, Debtor,
at its own cost and expense, shall cause the same to be re-recorded and/or
refiled at the time and in the manner requested by Secured Party. Debtor hereby
authorizes Secured Party to file or refile any financing statements or
continuation statements with respect to the security interest granted pursuant
to this Agreement which at any time may be required or appropriate, although the
same may have been executed only by Secured Party, and to execute such financing
statement on behalf of Debtor. Debtor hereby irrevocably designates Secured
Party, its agents, representatives and designees, as agent and attorney-in-fact
for Debtor for the aforesaid purposes.
6. DEFAULT. The occurrence of any one or more of the following events
(hereinafter referred to as "Events of Default") shall constitute a default
hereunder, whether such occurrence is voluntary or involuntary or comes about or
is effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental authority:
(a) If Debtor shall default in the payment of any principal or interest due
under the Note; or
(b) If Debtor shall fail to pay, perform or observe any covenant,
agreement, term or provision of this Agreement, or any other agreement or
arrangement now or hereafter entered into between the parties hereto or
with respect to any Obligation of Debtor to Secured Party; or
(c) If any representation, warranty or other statement of fact herein or in
any writing, certificate, report or statement at any time furnished to
Secured Party pursuant to or in connection with this Agreement or the Note
shall be false or misleading in any material respect; or
(d) If Debtor shall: admit in writing its inability to pay its debts
generally as they become due; file a petition for relief under the
bankruptcy laws or a petition to take advantage of any insolvency act; make
an assignment for the benefit of creditors; commence a proceeding for the
appointment of a receiver, trustee, liquidator or conservator of itself or
the whole or any substantial part of its property; file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal Bankruptcy Laws or any other applicable law or statute of the
United States or any State; or if Debtor shall be adjudged a bankrupt or
insolvent, or a court of competent jurisdiction shall enter any order,
judgment or decree appointing a receiver, trustee, liquidator or
conservator of Debtor or of the whole or any substantial part of the
property of Debtor or approves a petition filed against Debtor seeking
reorganization or similar relief under the Federal Bankruptcy Laws or any
other applicable law or statute of the United States or any State; or if,
under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of Debtor
or the whole or any substantial part of its property; or if there is
commenced against Debtor any proceeding for any of the foregoing relief; or
if Debtor by any act indicates its consent to, approval of, or acquiescence
in any such proceeding; or
(e) If any creditor of Debtor for any reason whatsoever hereafter shall
accelerate payment in whole or in part of any outstanding obligation owed
to it by Debtor under any agreement or arrangement, or if any judgment
against the Debtor or any execution against any of its property for any
amount remains unpaid, unstayed or undismissed for a period in excess of
ten days; or
(f) If Debtor or any guarantor or surety of any Obligation shall die or
cease to exist; or
(g) If there occur any reduction in the value of the Collateral or any act
of Debtor which imperils the prospect of the full performance or
satisfaction of the Obligations.
7. RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default,
the Obligations shall immediately become due and payable in full without notice
or demand. Secured Party shall have all rights and remedies provided by the
Uniform Commercial Code in effect in the State of New York on the date hereof.
In addition to, or in conjunction with, or substitution for such rights and
remedies, Secured Party may at any time and from and after the occurrence of an
Event of Default hereunder:
(a) with or without notice to Debtor, foreclose the security interest
created herein by any available judicial procedure, or take possession of
the Collateral, or any portion thereof, with or without judicial process,
and enter any premises where the Collateral may be located for the purpose
of taking possession of or removing the same, or rendering the same
unusable, or disposing of the Collateral on such premises, and Debtor
agrees not to resist or interfere therewith;
(b) require Debtor to prepare, assemble or collect the Collateral, at
Debtor's own expense, and make the same available to Secured Party at such
place as Secured Party may designate, whether at Debtor's premises or
elsewhere;
(c) sell, lease or otherwise dispose of all or any part of the Collateral,
whether in its then condition or after further preparation, in Debtor's
name or in its own name, or in the name of such party as Secured Party may
designate, either at public or private sale (at which Secured Party shall
have the right to purchase), in lots or in bulk, for cash or for credit,
with or without representations or warranties, and upon such other terms as
Secured Party, in its sole discretion, may deem advisable; and ten days'
written notice of such public sale date or dates after which private sale
may occur, or such lesser period of time in the case of an emergency, shall
constitute reasonable notice hereunder;
(d) execute and deliver documents of title, certificates of origin, or
other evidence of payment, shipment or storage of any Collateral or
proceeds on behalf of and in the name of Debtor;
(e) remedy any default by Debtor hereunder, without waiving such default,
and any monies expended in so doing shall be chargeable with interest to
Debtor and added to the Obligations secured hereby; and
(f) apply for an injunction to restrain a breach or threatened breach of
this Agreement by Debtor.
8. CUMULATIVE RIGHTS. All rights, remedies and powers granted to
Secured Party herein, or in any instrument or document related hereto, or
provided or implied by law or in equity shall be cumulative and may be exercised
singly or concurrently on any one or more occasions.
9. DEBTOR'S REPRESENTATIONS AND WARRANTIES. Debtor hereby represents
and warrants to Secured Party that:
(a) Debtor is not in default under any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it may be
bound. Neither the execution nor the delivery of this 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 Debtor is a party or by which Debtor
may be bound, or result in the creation or imposition of any lien, claim or
encumbrance upon any property of Debtor.
(b) Debtor has the power to execute, deliver and perform the provisions of
this Agreement and all instruments and documents delivered or to be
delivered pursuant hereto, and has taken or caused to be taken all
necessary or appropriate actions to authorize the execution, delivery and
performance of this Agreement and all such instruments and documents.
(c) Debtor is the legal and equitable owner of the Collateral, free and
clear of all security interests, liens, claims and encumbrances of every
kind and nature. Except as may be set forth in Exhibit A annexed hereto, no
financing statement covering the Collateral or its proceeds is on file in
any public office.
(d) No default exists, and no event which with notice or the passage of
time, or both, would constitute a default under the Collateral by any party
thereto, and there are no offsets, claims or defenses against the
obligations evidenced by the Collateral, except as may be expressly set
forth in Exhibit A annexed hereto.
10. 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 Federal Express courier or by registered or certified
mail, return receipt requested, with postage prepaid, addressed to the parties
at their respective addresses herein above set forth, or at such other addresses
as the parties may designate in writing. Debtor immediately shall notify Secured
Party of any change in the address of Debtor or discontinuance of the place of
business or residence of Debtor.
11. MODIFICATION AND WAIVER. No modification or waiver of any
provision of this Agreement, and no consent by Secured Party to any breach
thereof by Debtor, shall be effective unless such modification or waiver shall
be in writing and signed by 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 Debtor and
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. All
such rights and remedies shall continue unimpaired, notwithstanding any delay,
extension of time, renewal, compromise or other indulgence granted with respect
to any of the Obligations. Debtor hereby waives all notice of any such delay,
extension of time, renewal, compromise or indulgence, and consents to be bound
thereby as fully and effectually as if Debtor expressly had agreed thereto in
advance. The aforesaid Note may be negotiated by Secured Party, without
releasing Debtor or the Collateral.
12. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Secured Party may assign this Agreement,
and if assigned, the assignee shall be entitled, upon notifying Debtor, to the
payment and performance of all of the Obligations and agreements of Debtor
hereunder and to all of the rights and remedies of Secured Party hereunder, and
Debtor will assert no claims or defenses Debtor may have against Secured Party
against the assignee. The gender and number used in this Agreement are used for
reference term only and shall apply with the same effect whether the parties are
masculine, feminine, neuter, singular or plural.
13. MISCELLANEOUS. This Agreement shall be construed in accordance
with and shall be governed by the laws of the State of New York. The invalidity
or unenforceability of any provision of this Agreement shall not effect the
validity or enforceability of any other provision of this Agreement. Debtor
covenants and agrees to execute and deliver to Secured Party on demand such
additional assurances, writings and instruments as may be required by Secured
Party for purposes of effectuating the intent of this Agreement. The captions in
this Agreement are for convenience only, and shall not be considered in
construing this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
UNIVERSAL MEDIA HOLDINGS, INC.
By /s/ Xxxxx X. Xxxxxxx
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President
CDKNET, INC.
By /s/ Xxxxxx Xxxxxxxx
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President
