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SECURITY AGREEMENT
This Security Agreement is entered into as of the 5th day of
January, 1999 by RMS TITANIC, INC., a Florida corporation (the "Pledgor") and
Xxxxxx Xxxxxxx, c/o RMS Titanic, Inc., Xxxxx 000, 00 Xxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the "Pledgee") for the purpose of granting a security interest
to the Pledgee in connection with a promissory note of even date herewith in the
principal amount of $72,367.00 (hereinafter called the "Promissory Note") from
the Pledgor to the Pledgee.
1. COLLATERAL. All accounts and accruals for past salary and
any other funds that are or may be due and owing by the Pledgee to the Pledgor
(the "Accounts").
2. SECURITY INTEREST. To secure the payment and performance of
the Promissory Note, and all expenditures made or incurred by the Pledgee to
protect and maintain the Accounts and to enforce the rights of the Pledgee under
the Promissory Note, the Pledgor hereby grants to the Pledgee a security
interest in the Accounts. Pledgor agrees to use its best efforts to defend the
validity and perfection of the security interest granted hereunder and to
perfect such security interest.
3. WARRANTY REPRESENTATIONS. The Pledgor warrants and
represents to the Pledgee that it has title to the Accounts free and clear of
all liens and security interests and shall not cause, permit or create any
security interest or restriction to accrue or attach to the Accounts, except
with the prior written consent of the Pledgee. The Pledgor warrants and
represent that it has the authority to pledge the Accounts to the Pledgee in
accordance with the terms set forth herein.
4. RIGHTS OF THE PLEDGEE. The Pledgee shall be under no duty
to exercise or to withhold the exercise of any of the rights, powers, privileges
and options expressly or implicitly granted to the Pledgee in this Security
Agreement and shall not be responsible for any failure or delay to do so.
Pledgor hereby appoints Pledgee attorney-in-fact, and empowers the Pledgee to
make, execute and file any financing statement in respect of this Security
Agreement which may at any time be reasonably required or desirable in the
reasonable opinion of Pledgee.
5. EVENTS OF DEFAULT. Subject to the provisions of paragraph
"2" hereof, the Pledgor shall be in default under this Pledge Agreement upon the
happening of any of the following events or conditions (the "Events of
Default"):
(a) Any default under the Promissory Note;
(b) Any default under this Security Agreement.
6. REMEDIES. Subject to all the terms and conditions contained
in Section 2 hereof, the Pledgee may, upon advance notice of thirty (30) days
given to the Pledgor, declare this Pledge Agreement in default. In the event
that such default is not cured within such thirty (30) day period, the Pledgee
shall have the remedies of a secured party under the Uniform Commercial Code as
then in effect in the State of New York. The Pledgor agrees that state and
federal securities laws place substantial restrictions on the disposition of the
Accounts through foreclosure, and it therefore agrees that a sale of the
Accounts at a public sale will be a commercially reasonable sale if notice
thereof is
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sent to the Pledgee at least ten (10) days prior to the date of such sale. No
other notice or publicity in connection therewith shall be necessary, except as
may be provided by law. The Pledgor and any persons affiliated with the Pledgor
shall have a reasonable opportunity to attend the sale and bid on and purchase
the Accounts.
7. NO WAIVER. No Event of Default shall be waived by the
Pledgee except in writing, and no waiver of any payment or other right under
this Pledge Agreement shall operate as a waiver of any other payment or right.
The failure of the Pledgee to assert any Event of Default upon the occurrence of
such Event of Default shall not be deemed to be a waiver thereof, and the
Pledgee may assert any Event of Default and claim its remedies thereunder at any
time from and after the Pledgor fails to cure such default within thirty (30)
days' after notice thereof is given in accordance with Section 7 hereof. Such
default shall not be deemed to have been waived until the Pledgee has received
and accepted payment in full of the Promissory Note and of all other amounts due
from the Pledgor to the Pledgee in connection therewith.
8. NOTICES. Any consent, notice, or other communication
required or contemplated by this Pledge Agreement shall be in writing and shall
be deemed given if delivered in person or upon receipt by the addressee if
mailed by registered or certified mail, return receipt request, postage prepaid,
as follows:
(a) If to the Pledgor:
Xx. Xxxxxx Xxxxxxx
c/o RMS Titanic, Inc.
00 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
(b) If to the Pledgee:
RMS Titanic, Inc.
00 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Any party may change their respective addresses by giving notice as herein
provided.
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9. ENTIRE AGREEMENT; GOVERNING LAW; BENEFIT. This Pledge
Agreement sets forth the entire understanding between the parties concerning the
subject matter hereof, and supersedes all prior negotiations and understandings
with respect thereto. This Pledge Agreement shall be construed under and
governed in accordance with the laws of the State of New York, without recourse
to its conflict of laws principles. Unless the context otherwise requires, all
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York shall have the meaning therein stated. All the rights
of the Pledgee under this Pledge Agreement shall inure to the benefit of its
successor and assigns. All obligations of the Pledgor hereunder shall be binding
upon their legal representatives, successors and assigns.
10. SEVERABILITY. If any provision of this Agreement shall be
held invalid or unenforceable, the remainder of this Agreement which can be
given effect without such invalid or unenforceable provision shall remain in
full force and effect, and the court or agency having competent jurisdiction
over the parties and the subject matter shall be empowered to revise and/or
construe said provisions of the agreement so as to accomplish the intention of
the parties within the bounds of permissible legal limits. If any provision is
held invalid or unenforceable with respect to particular circumstances, it shall
remain in full force and effect in all other circumstances.
11. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience, and shall not be
used to construe, define, limit or describe the scope or intent of the
provisions of this Agreement.
12. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed by the parties hereto shall be deemed
an original and all of which together shall be deemed the same Agreement.
IN WITNESS WHEREOF, this Pledge Agreement is effective the 5th
day of January, 1999.
RMS TITANIC, INC.
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
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