EXHIBIT 10.3
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SECURITY AGREEMENT
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dated June 30, 2005
between
BROOKSTREET CAPITAL CORP.
Debtor
and
XXXXXX INTERNATIONAL, INC.
Secured Party
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SECURITY AGREEMENT
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AGREEMENT, dated June 30, 2005, between BROOKSTREET CAPITAL CORP., a
Delaware corporation, having an address at c/o Xxxxxxx X. Xxxxxx, Esq., 000
Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 ("Debtor"), and XXXXXX INTERNATIONAL,
INC., a Delaware corporation, having an address at 000 Xxxxxxxx Xxxxxx Xxxxx
Xxxx, #000, Xxxxxxxxx, XX X0X 0X0 Canada, ("Secured Party").
W I T N E S S E T H:
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WHEREAS, concurrently herewith Secured Party is lending to Debtor the
sum of US$250,000.00, 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 substitutions,
replacements and accessions thereto.
"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 of Debtor to Secured Party as the same may become due according
to their terms.
4. Protection Of The Collateral. Debtor shall defend the title to
the Collateral against all claims and demands whatsoever.
5. Filing And Recording. 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.
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:
(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 material
covenant, agreement, term or provision of this Agreement; 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 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.
7. Rights And Remedies. Secured Party shall have all rights and
remedies provided by the Uniform Commercial Code in effect in the State of
Delaware on the date hereof.
8. 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.
9. 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.
10. 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.
11. 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.
12. Miscellaneous. This Agreement shall be construed in accordance
with and shall be governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
BROOKSTREET CAPITAL CORP.
ATTEST:
Per /s/ Xxxxx Xxx
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XXXXX XXX, President
Per /s/ Xxxxx Xxx
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Secretary
XXXXXX INTERNATIONAL, INC.
ATTEST:
Per /s/ Xxxxxx Xxxx
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XXXXXX XXXX, Chairman
Per /s/ Xxxx-Xxxx Xxxx
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Secretary
