Exhibit 2.3
EXHIBIT D
SECURITY AGREEMENT
AGREEMENT, dated September 29, 1999, between Fanzine International, Inc.,
with an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fanzine"),
and Metro Global Media, Inc., with an office at 0000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxx Xxxxxx, Xxx Xxxx 00000 ("Secured Party").
W I T N E S S E T H:
WHEREAS, concurrently herewith Secured Party is lending to Goldtree
Publishing, Inc. the sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00), 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 owned by Fanzine as security
for the loan.
NOW THEREFORE, in consideration of Ten Dollars ($10.00), and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. The following terms as used in this Agreement shall have
the meanings set forth below:
(a) "Collateral" shall mean all of the property and assets of Debtor,
whether real, personal, tangible, intangible, contract rights,
intellectual property, accounts receivable, rights in action, or any
and all other property of whatever nature, whether presently existing
or hereafter acquired, 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.
(b) "Obligations" shall mean all principal and interest due or to become
due under the aforesaid Note.
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 as the same may become due according to their terms. In the event of
a an uncured default under the terms of the Note, Debtor shall be liable for,
and shall reimburse to Secured Party, all expenses, including reasonable
attorneys' fees, incurred or paid in connection with collecting the unpaid
balance of the Note and/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, other than any of the same incurred in the ordinary course of
business of Debtor, 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.
Debtor at all times shall maintain: (a) insurance covering all tangible
property of Debtor against loss or damage by fire and other hazards; (b)
insurance against liability on account of damage to persons and property; and
(c) all insurance required under applicable workmen's compensation laws in such
amounts and kinds as presently carried by Debtor with such carrier or carriers
as are presently being used by Debtor (or such other responsible insurance
carriers as Debtor may reasonably hereafter substitute).
5. Filing And Recording. Debtor, at its own cost and expense, shall execute
and deliver to Secured Party, any financing statements and/or other documents
prepared by Secured Party and accurately reflecting the terms of this Security
Agreement, which are necessary or appropriate to protect the security interest
granted to Secured Party hereunder against the rights and interests of third
patties. Secured Party 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 shall execute
and return to Secured Party such documents as are prepared by Secured Party and
accurately reflects the terms of this Security Agreement. Debtor hereby
authorizes Secured Party to file or refile any financing statements or
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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, as accurately reflects the terms of this Security
Agreement. Debtor hereby irrevocably designates Secured Party, its agents,
representatives and designees, as agent and attorney-in-fact for Debtor for the
aforesaid purposes, and for such purposes only; provided, however, that copies
of all such documents executed by Secure party must be delivered to Debtor in
advance of any filing of the same.
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 fail to cure any default under the Note within the
applicable cure period as set forth thereunder; or
(b) 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 (unless such proceeding was commenced
by the Secured Party); 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 (unless such action is taken at the
request of the Secured Party); or if there is commenced against Debtor
any proceeding for any of the foregoing relief by anyone other than
the Secured Party (which proceeding remains undismissed for a period
of ninety (90) days; or if Debtor by
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any act indicates its consent to, approval of, or acquiescence in any such
proceeding; or
(c) If any creditor of Debtor (who is not subordinated to the interests of
the Secured Party) 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 ninety days; or
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 in 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 notice to Debtor, foreclose the security interest created herein
by any available judicial procedure; or
(b) 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
(c) apply for an injunction to restrain a breach of this Agreement by
Debtor.
8. Cumulative Rights. All rights and 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 arid
warrants to Secured Party that:
(a) Debtor is not in default under any indenture, mortgage, or deed of
trust to which it is a parry 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
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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
arid 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 (other than those incurred in the ordinary
course of business). No financing statement covering the Collateral or
its proceeds is on file in any public office to the knowledge of
Debtor.
(d) No default exists, and no event exists which, with notice or the
passage of time, or both, would constitute a default under any
contract or agreement regarding the Collateral by any party thereto,
and there are no offsets, claims or defenses against the Debtor's
ownership of the Collateral which are presently known to the Debtor,
except as may be set forth in Debtor's contracts with various
distributors of its magazines (who have the right to offset any funds
due and owing against any receivables due to Debtor from such
distributors).
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 personally delivered or sent by facsimile transmission to the
party to receive such notice, with a copy sent to such party by registered or
certified mail, return receipt requested, addressed to the patties at their
respective addresses hereinabove set forth or at such other addresses as the
parties may hereafter designate in writing. Debtor immediately shall notify
Secured Party of all changes in the address of Debtor or discontinuance of the
place of business of Debtor.
11. Modification And Waiver. No modification or waiver of any provision of
this Agreement, and no consent by Secured Parry 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
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in exercising any fights 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. Applicable Law. 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. The parties
agrees to execute and deliver to the other such additional assurances, writings
and instruments as may be required 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.
13. Benefit. 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 Xxxxx may assign this Agreement, and if
assigned, the assignee shall be entitled, upon notice to the 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 Xxxxx hereunder. 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.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date first above written.
DEBTOR:
FANZINE INTERNATIONAL, INC.
By: ____________________________________
SECURED PARTY:
METRO GLOBAL MEDIA, INC.
By: /s/ Xxxxx Xxxx
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XXXXX XXXX,
TREASURER
0
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX
Xx the 29th day of September, in the year 1999, before me personally came
Xxxxxx Xxxxxxx, to me known, who being by me duly sworn, did depose and say that
he is resides at 00 Xxxxx Xxx, Xxxxxxxxxx, XX 00000; that he is the President of
Fanzine International, Inc., the corporation described in and which executed the
above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
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NOTARY PUBLIC
STATE OF RHODE ISLAND
COUNTY OF __________________
On the _____ day of September, in the year 1999, before me personally came
___________________________, to me known, who being by me duly sworn, did depose
and say that he is resides at _____________________________________; that he is
the President of Metro Global Media, Inc., the corporation described in and
which executed the above instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
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NOTARY PUBLIC
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