SECURITY AGREEMENT
Exhibit
10.14
This Security Agreement (this
"Agreement") is made and entered into this 17th day of December 2010, by and
between Brooktide, LLC, a Nevada limited liability company ("Lender") , and
Latigo Shore Music, Inc., a Delaware corporation ("Borrower”), in respect of the
following:
RECITALS
A. Borrower
is obligated to Lender under that certain Convertible Note (the "Note") in the
principal sum of Sixteen Thousand Dollars ($16,000.00), with interest at the
rate of six percent (6.0%) per annum.
B. Borrower
and Lender desire for Borrower to provide to Lender, as additional security for
Borrower's obligations arising under the Note, and to induce Lender to make the
loan evidenced by the Note, the security interest hereinafter set
forth.
AGREEMENT
NOW, THEREFORE, in
consideration of the foregoing and the mutual promises, covenants, terms and
conditions contained herein, Borrower and Lender hereby agree as
follows:
1. Grant of Security
Interest. Borrower hereby grants to Lender, their respective
successors and assigns, a security interest in all of its rights, title and
interest in 50 musical compositions from the Xxxx Xxxxx music catalog, including
copyrights and publishing rights, together with any additions, attachments, and
accessions that may be placed thereon or products or proceeds thereof (together,
the "Collateral"). In addition to the Collateral, Borrower further
grants to Lender, its successor and assigns, a security interest in the proceeds
of all policies of casualty and fire insurance insuring the collateral, if
any.
2. Purpose of Security
Interest. The security interest is to secure payment of all
obligations of Borrower to Lender now owing or hereafter created, including
without limitation an indebtedness to Lender evidenced by a promissory note (the
"Note") in the principal sum of Sixteen Thousand Dollars ($16,000.00), with
interest at the rate of six percent (6.0%) per annum, which note is signed by
Borrower and delivered by Borrower to Lender simultaneously with Borrower's
execution of this Agreement.
3. Borrower's Warranties and
Covenants. Borrower represents, warrants and covenants as
follows:
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(a)
Title. Borrower is the owner of the Collateral
free from any lien, adverse claim, security interest, or encumbrance other
than those created hereunder. Borrower will defend the
Collateral against any claims and demands of other persons at any time
claiming the Collateral or any interest in it. The security
interest granted to Lender by this Agreement is a first, prior and
indefeasible security interest in the Collateral. Except for
financing statements made in favor of Borrower which are being assigned to
Lender in connection with this Agreement, no financing statement covering
the Collateral, or any part thereof, or any proceeds thereof, is on file
or of record in any public office. Borrower will, at its sole
cost and expense, defend any action, suit or proceeding which might affect
the Collateral or Lender's security interest in the
Collateral.
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(b) Location
of Collateral. The Collateral will be kept at Borrower's
principal business premises (the "Premises"). Borrower will not
remove the Collateral from the Premises without Lender's written
consent. Borrower will promptly notify Lender of any change in
the place where the Collateral is
kept.
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(c) Perfection
of Security Interest. Borrower agrees that Lender shall file
financing statements and do whatever may be necessary under applicable law
to perfect and continue Lender's interest in the Collateral, all at
Borrower's expense.
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(d) Sale
of Collateral Prohibited. Borrower will not sell, offer to
sell, or transfer the Collateral or any interest in it without Lender's
prior written consent.
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(e)
No Adverse Liens; Collateral to Be Kept in Good
Repair. Borrower will keep the Collateral free from any adverse
lien, security interest, or encumbrance and in good order and repair, and
will not waste or destroy the Collateral or any part of
it. Borrower will not use or permit anyone to use the
Collateral in violation of any statute, ordinance, or state or federal
regulation. Lender may examine and inspect the Collateral at
any time, wherever located.
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4. Lender's Right to Pay Taxes and
Maintain the Collateral. Should Borrower fail to make any
payment or do any act as herein provided, then Lender, but without obligation to
do so and without notice or demand upon Borrower and without releasing Borrower
from any obligation thereby, may at Lender's sole option discharge taxes, liens
or security interests, or other encumbrances at any time levied or placed on the
Collateral, may pay for insurance on the Collateral, and may pay for the
maintenance and preservation of the Collateral, in such manner and to such
extent as Lender may deem necessary, reasonable and convenient, and Borrower
shall immediately and without demand pay to Lender all costs, expenses, charges,
attorneys' fees, litigation expenses and other liabilities which Lender may
incur thereby.
5. Borrower's Right to Possession of
Collateral. Until default, Borrower may have possession of the
Collateral and use it in any lawful manner not inconsistent with this Agreement
and not inconsistent with any policy of insurance on the
Collateral.
6. Acts or Events of
Default. Borrower shall be in default under this Agreement
upon the happening of any of the following events or conditions:
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(a)
Default in Payment. Default in the payment of any
indebtedness, obligation, covenant, or liability contained or referred to
in this Agreement or in the Note, or in any note evidencing any such
indebtedness or obligation;
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(b) False
Warranty, Etc. If any warranty, representation, or statement
made or furnished to Lender by or on behalf of Borrower proves to have
been false in any material respect when made or
furnished;
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(c) Acceleration
of Maturity of Indebtedness to Others. Any event that
results in the acceleration of the maturity of Borrower's indebtedness to
others under any indenture, agreement, or
undertaking;
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(d) Loss,
Theft, Etc., of Collateral. The loss, theft, or damage
to, or the destruction, sale, or encumbrance of any of the Collateral, or
the making of any levy, seizure, or attachment of the Collateral;
or
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(e) Dissolution,
Insolvency, Etc., of Borrower. The dissolution,
termination of existence, insolvency, business failure, appointment of a
receiver of any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceeding under any bankruptcy
or insolvency laws by or against Borrower or any guarantor or surety for
Borrower, or the entry of any judgment against it, or the failure of any
guarantor or surety for Borrower to provide Lender with financial
information promptly when requested by
Lender.
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7. Rights of Lender Upon
Default. Upon the occurrence of any act or event of default,
Lender may declare Borrower's indebtedness secured by this Agreement and the
Note evidencing Borrower's indebtedness immediately due and payable and shall
have the remedies of a secured party under the Uniform Commercial Code of
California. Lender may require Borrower to assemble the Collateral
and make it available to Lender at a place designated by Lender that is
reasonably convenient to both parties. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender will give Borrower reasonable notice of the
time after which any private sale or any other intended disposition thereof is
to be made. The requirements of reasonable notice shall be met if the
notice is mailed, postage prepaid, to Borrower's address shown at the beginning
of this Agreement, at least five days before the time of the sale or
disposition. The expenses of retaking, holding, preparing for sale,
selling, or the like shall include Lender's reasonable attorney fees and legal
expenses.
8. Waiver of Lender's
Rights. Lender shall not be deemed to have waived any of
Lender's rights under this Agreement or under any other writing signed by
Borrower unless the waiver is in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right or remedy on
any future occasion.
9. Lender's Remedies
Cumulative. All of Lender's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be cumulative and in
addition to any other remedies which may be available at law or in
equity. Any such remedy may be exercised separately or concurrently,
and the exercise of any remedy shall not be deemed an election of
remedies. Any single or partial exercise of any right, power or
remedy hereunder shall not preclude the further exercise thereof and every
right, power and remedy of Lender shall continue in full force an effect unless
and until such right, power or remedy is specifically waived by an instrument in
writing as provided in paragraph 8 above.
10. Notice. All notices
and other communications required or permitted hereunder to be effective shall
be made in writing, and, unless otherwise expressly provided herein, shall be
deemed to have been duly given and received when delivered by hand, or, if
mailed, three (3) business days after deposit in the mail, with postage prepaid
for registered or certified mail, or, in case of faxed notice, when sent, if
answer back or confirmation received, and addressed to the party at its address
as follows:
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If to
Borrower:
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Latigo
Shore Music, Inc.
Attn.
Xxxxx Xxxxx, Chief Executive Officer
00 Xxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
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If to
Lender:
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Brooktide, LLC
000 Xxxx Xxx Xxxx, #000
Xxxxxx Xxxx, XX 00000
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11. Agreement
Binding. This Agreement and all rights and liabilities under
it and in the indebtedness secured by it and the Collateral described in it
shall inure to the benefit of Lender, their respective successors, heirs,
executors, administrators, and assigns, and shall be binding upon Borrower and
Borrower's successors and assigns.
12. Termination of
Agreement. This Agreement shall terminate immediately upon the
full payment of the indebtedness secured by this Agreement together with all
interest and other costs and fees provided for in the Agreement or in the Note
or in any other promissory note evidencing the indebtedness.
13. Lender's
Expenses. Borrower shall pay to Lender on demand, together
with interest at the highest rate allowed by law, any and all advances, charges,
costs and expenses, including, without limitation, legal expenses and attorneys'
fees, incurred or expended by Lender in exercising or enforcing any right, power
or remedy conferred by this Agreement, by the Note, by any other document made
by and between Lender and Borrower, or by law, or in any action to construe the
provisions hereof. If not so paid by Borrower, all such advances,
charges, costs and expenses shall become a part of the obligations secured
hereunder, shall bear interest at the same rate as the principal amount of the
Note, and shall be paid to Borrower immediately upon demand.
14. Illegality of Part of
Agreement. If any portion of this Agreement is held to be
illegal, then only that portion is void and not the entire
Agreement.
15. Governing Law. This
Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of California and of the
United States.
16. Transfer by
Lender. Upon the transfer of all or any part of the Lender's
interest in the Note and the security therefore, Lender may transfer the
Collateral and shall be fully discharged thereafter from all liability and
responsibility with respect to the Collateral, and the transferee shall be
vested with all the rights and powers of Lender hereunder with respect to the
Collateral so transferred.
IN WITNESS WHEREOF, the
Borrower and Lender have executed this Agreement as of the date first written
above.
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Borrower:
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LATIGO SHORE MUSIC, INC.
By:_____________________________________
Xxxxx
Xxxxx, Chief Executive Officer
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Lender:
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BROOKTIDE, LLC
BY:_____________________________________
Yale
Xxxxx, Manager
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