SECURITY AGREEMENT
(Consumer Goods, Equipment and Farm Products)
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )
That American NET Claims, Inc. whose address is X/X Xxxx X. Xxxxxxx,
Xxxxxxxxxx Xxxxx, 00000 Xxxxx Xxxxxxx Expressway, Suite 1400, Dallas, Xxxxxx
Xxxxxx, Xxxxx 00000, hereinafter called "Debtor" (whether one or more, hereby
GRANTS to American Medical Finance, Inc. whose address is 12801 N. Central
Expressway, Suite 1515, Dallas, Xxxxxx Xxxxxx, Xxxxx 00000, hereinafter called
"Secured Party" (whether one or more), a security interest in the following
described personal property now located and situated at: 00000 X. Xxxxxxx
Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxx Xxxxxx, Texas 75243, Texas, together with
all additions and accessions thereto (in the event such property be livestock,
then together with the increase, if any, therefrom), and proceeds thereof (the
inclusion of such proceeds does not authorize Debtor to sell, dispose of or
otherwise use the Collateral in any manner not authorized by this agreement),
all hereinafter called the "Collateral", to-wit:
All of the internet software, licenses, intellectual property rights,
internet technology and technology rights of that business owned by
American NET Claims, Inc. primarily located at 00000 X. Xxxxxxx
Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, but wherever
located, including but not limited to all additions, accessions and the
proceeds therefrom, which Collateral is of the following
classification(s):
[x] Consumer Goods [ ] Equipment (Farm Use)
[ ] Equipment (Business Use) [ ] Farm Products
and which Collateral is to be wholly or partly affixed to real estate or other
goods, a description of which real estate or other goods is as follows: (if not
to be so affixed, insert the word "None"): NONE
This security interest is to secure the payment of an indebtedness
owing by Debtor to Secured Party and evidenced by that one certain promissory
note, dated of even date herewith, in the original principal sum of three
million seven hundred forty thousand dollars ($3,740,000), executed by Debtor,
payable to the order of Secured Party as follows: As therein provided, and
bearing interest as therein stipulated, providing for acceleration of maturity
and for attorney's fees; and to secure all renewals and extensions of all or any
part of said indebtedness hereby secured.
Debtor warrants, covenants, represents and agrees as follows:
SECURITY AGREEMENT (Consumer Goods, Equipment and Farm Products) Page 1
(1) That Debtor is the full owner of said Collateral and has
authority to grant this security interest therein; that no Financing Statement
is on file covering the Collateral or its proceeds; and except for the security
interest granted hereby, there is no lien or encumbrance in or on the
Collateral, unless otherwise expressly stated herein.
(2) That Debtor's residence is the address shown at the beginning
hereof, and Debtor will immediately notify Secured Party in writing of any
change of such residence.
(3) That the Collateral will not be sold, transferred, rented,
leased, pledged, made subject to a security agreement, or removed from its
present location above named without the written consent of Secured Party and
that the Collateral will not be misused or abused, wasted or allowed to
deteriorate, except for ordinary wear and tear from its intended use. The
Collateral shall remain in Debtor's possession or control at all times at
Debtor's risk of loss.
(4) That the Collateral will be used primarily for the
classification of use above stated, and for no other use without the written
consent of Secured Party. The Collateral will not be affixed to any real estate
or other goods so as to become a fixture on real estate or accession to other
goods, unless such real estate or other goods be described herein above; if said
Collateral is to be so affixed, Debtor will upon demand of Secured Party furnish
written consent or consents to the security interest hereby created or
disclaimer or disclaimers signed by all persons having an interest in the real
estate or other goods.
(5) That Debtor will sign and execute, upon request of Secured
Party, any Financing Statement or other document or procure any documents and
pay all connected costs, necessary to protect the security interest granted
hereby against the rights or interests of third persons.
(6) That Debtor will protect the title and possession of the
Collateral and will pay promptly, when due and before becoming delinquent, all
taxes and assessments now existing or hereafter levied or assessed against said
Collateral or any part thereof, and will keep said Collateral insured, if
insurable, to the extent of the original amount of the indebtedness hereby
secured or to the full insurable value of said Collateral, whichever is the
lesser, against loss or damage by fire, windstorm and theft and any other hazard
or hazards as may be reasonably required from time to time by Secured Party, in
such form and with such insurance company or companies as may be approved by
Secured Party and will deliver to Secured Party the policies of such insurance,
having attached thereto such mortgage indemnity clause as Secured Party shall
direct, and will deliver renewals of such policies to Secured Party at least ten
(10) days before any such insurance policies expire; any sums which may become
due under any such policy, or policies, may be applied by Secured Party, at his
option, to reduce said indebtedness, whether due or not, or Secured Party may
permit Debtor to use said sums to repair or replace all Collateral damages or
destroyed and covered by such insurance.
SECURITY AGREEMENT (Consumer Goods, Equipment and Farm Products) Page 2
In the event Debtor shall fail to keep said Collateral in good
repair and condition, or to pay promptly when due all taxes and assessments, as
aforesaid, or to preserve the prior security interest hereby granted in said
Collateral, or to keep said Collateral insured, as aforesaid, or to deliver the
policy or policies of insurance or the renewal thereof to Secured Party, as
aforesaid, then Secured Party may, at his option, but without being required to
do so, make such repairs, pay such taxes and assessments, remove any prior liens
or security interests and prosecute or defend any suits in relation to the prior
security interest of this agreement in said Collateral, or insure and keep
insured said Collateral in an amount not to exceed that above stipulated; that
any sum which may be so paid out by Secured Party and all sums paid for
insurance premiums, as aforesaid, including the costs, expenses and attorney's
fees paid in any suit affecting said Collateral when necessary to protect the
security interest hereof shall bear interest from the dates of such payments at
the highest rate stated in said note or notes and shall be paid by Debtor to
Secured Party upon demand, at the same place at which said note or notes are
payable and shall be part of the indebtedness hereby secured and recoverable as
such in all respects.
Debtor shall be in default under this Security Agreement upon the
happening of any of the following events or conditions (herein called an "Event
of Default"):
(1) Debtor's failure to pay when due, or declared due, the
indebtedness hereby secured, or any installment thereof, principal or interest;
(2) Debtor's default in the punctual performance of any of the
obligations, covenants, terms or provisions contained herein or in the note or
notes hereby secured;
(3) If any warranty, covenant or representation made herein by
Debtor proves to have been false in any material respect when so made;
(4) Debtor's dissolution, termination of existence, insolvency or
business failure, or Debtor making an assignment for the benefit of creditors or
the commission of an act of bankruptcy, or the institution of voluntary or
involuntary bankruptcy proceedings, or the taking over of the Collateral or any
part thereof by a Receiver for Debtor or the placing of same in the custody of
any court or an officer or appointee thereof;
(5) Loss, theft, substantial damage, destruction, sale, abandonment
or encumbrance of or to the Collateral or any part thereof.
Upon the occurrence of an Event of Default, and at any time
thereafter, Secured Party may elect, Debtor hereby expressly waiving notice,
demand and presentment, to declare the entire indebtedness hereby secured
immediately due and payable.
In the event of default in the payment of said indebtedness when due
or declared due, Secured Party, without waiving any rights and remedies of a
Secured Party under the
SECURITY AGREEMENT (Consumer Goods, Equipment and Farm Products) Page 3
Uniform Commercial Code of Texas, shall have the right to require Debtor to
assemble the Collateral and make it available to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to both Parties, and
the right to take immediate possession of any and all of the Collateral and for
the purpose shall have the right to enter upon the premises where said
Collateral may be located and remove the same or may leave the same where it is
then located, and sell the Collateral or such part thereof as Secured Party may
elect (without exhausting the power to sell the remainder or any part thereof at
Public Sale as herein provided or at Public or Private Sale as provided in the
Uniform Commercial Code of Texas) at Public Sale to the highest bidder for cash
at the Courthouse door of the County herein above stated where the Collateral is
now located, after having first given notice of the time, place and terms of
such Public Sale by posting a written or printed notice (which notice shall also
show the then location of the Collateral to be sold) of said sale at the
Courthouse door of said County, at least ten days before the day of sale and
after sending reasonable notice to Debtor and to such other person or persons
legally entitled thereto under the Uniform Commercial Code of Texas, of the time
and place of the Public Sale; the Collateral to be sold may be sold as an
entirety or in such parcels as Secured Party may elect and it shall not be
necessary for Secured Party to have actual possession of the Collateral or to
have it present when the sale is made, but full and perfect title shall pass
wheresoever said Collateral may then be, and Secured Party thus selling said
Collateral shall deliver to the purchaser thereof a Xxxx of Sale or Transfer
therefor, binding Debtor to warrant and forever defend the title to such
Collateral, and out of the proceeds of the sale pay the reasonable expenses of
retaking, holding, preparing for sale, selling and the like, reasonable
attorney's fees and legal expenses so incurred by Secured Party, and the balance
remaining shall thereupon be applied toward the payment of the amount then owing
on the indebtedness hereby secured, including principal, interest and attorney's
fees as provided herein and in said Note, rendering the balance, if any, and
surplus, if any, to the person or persons legally entitled thereto under the
Uniform Commercial Code of Texas, but if there be any deficiency, Debtor shall
remain liable therefor. Secured Party shall have the right to purchase at such
Public Sale, being the highest bidder. The recitals in the Xxxx of sale or
Transfer to the purchaser at such sale shall be prima fade evidence of the truth
of the matters therein stated and all prerequisites to said sale required
hereunder and under the Uniform Commercial Code of Texas shall be presumed to
have been performed.
Secured Party, in addition to the rights and remedies provided for
in the preceding paragraph, shall have all the rights and remedies of a Secured
Party under the Uniform Commercial Code of Texas and Secured Party shall be
entitled to avail himself of all such other rights and remedies as may now or
hereafter exist at law or in equity for the collection of said indebtedness and
the enforcement of the covenants herein and the foreclosure of the security
interest created hereby and the resort to any remedy provided hereunder or
provided by the Uniform Commercial Code of Texas, or by any other law of Texas,
shall not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies.
The requirement of reasonable notice to Debtor of the time and place
of any Public Sale of the Collateral or of the time after which any Private
Sale, or any other intended
SECURITY AGREEMENT (Consumer Goods, Equipment and Farm Products) Page 4
disposition thereof is to be made, shall be met if such notice is mailed,
postage prepaid, to Debtor at the address of Debtor designated at the beginning
of this Security Agreement, at least five days before the date of any Public
Sale or at least five days before the time after which any Private Sale or other
disposition is to be made.
Secured Party may remedy any default, without waiving same, or may
waive any default without waiving any prior or subsequent default.
The security interest herein granted shall not be affected by nor
affect any other security taken for the indebtedness hereby secured, or any part
thereof; and any extensions may be made of the indebtedness and this security
interest and any releases may be executed of the Collateral, or any part
thereof, herein conveyed without affecting the priority of this security
interest or the validity thereof with reference to any third person, and the
holder of said indebtedness shall not be limited by any election of remedies if
he chooses to foreclose this. security interest by suit. The right to sell under
the terms hereof shall also exist cumulative with said suit; and one method so
resorted to shall not bar the other, but both may be exercised at the same or
different times, nor shall one be a defense to the other
The pronouns used in this agreement are in the masculine gender but
shall be construed as feminine or neuter as occasion may require. "Secured
Party" and "Debtor" as used in this agreement include, shall bind and shall
inure to the benefit of the respective heirs, executors or administrators,
successors, representatives, receivers, trustees or assigns of such parties. If
there be more than one Debtor, their obligations shall be joint and several.
The law governing this secured transaction shall be the Uniform
Commercial Code of Texas and other applicable laws of the State of Texas. All
terms used herein which are defined in the Uniform Commercial Code of Texas
shall have the same meaning herein as in said Code.
The security interest granted herein is a purchase money security
interest.
EXECUTED on July 31, 1996.
Secured Party: Debtor:
American Medical Finance, Inc. American Net Claims, Inc.
/s/ C. Xxxxx Xxxxxxxx /s/ Xx X. Xxxxx
----------------------------------- -----------------------------------
C. Xxxxx Xxxxxxxx, Vice President Xx X. Xxxxx, President
SECURITY AGREEMENT (Consumer Goods, Equipment and Farm Products) Page 5
