Exhibit 10.37
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is entered into as of July
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25, 2001, by and between Xxxxxx X. Xxx Xxxxxxxx ("Debtor"), and ACT
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Teleconferencing, Inc., a Colorado corporation ("Secured Party").
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RECITALS
A. Secured Party has accepted a promissory note in the amount of
$347,875 (the "Note") as full consideration for a loan to Debtor, pursuant to a
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resolution by the Board of Directors of even date herewith.
B. In order to induce Secured Party to accept the Note, Debtor
has executed and delivered a this Security Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Debtor and Secured
Party hereby agree as follows:
1. Grant of Security Interest. Subject to the terms
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and provisions contained herein, Debtor hereby grants to Secured Party a
security interest in all tangible personal property and receivables in which
Debtor holds an ownership interest (the "Collateral").
2. Covenants and Agreements of Debtor. Debtor hereby
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covenants and agrees:
(a) to promptly pay all taxes and assessments
of every nature which may be levied or assessed against the Collateral.
(b) to maintain and preserve ownership of the
Collateral.
(c) to not transfer or attempt to transfer any
interest in such Collateral.
(d) from time to time to execute such additional
documents and take such other action as Secured Party may deem
necessary to effectuate, maintain and preserve its security interest
in the Collateral and the perfection of the same and shall indemnify
Secured Party from and against all reasonable costs and expenses
incurred in connection therewith, including reasonable attorneys'
fees. Without limitation on the generality of the foregoing, to the
extent any of the Collateral or proceeds therefrom constitutes cash
or other property for which a security interest under the Colorado
Uniform Commercial Code may be perfected only by possession, upon
written request
from Secured Party, Debtor shall forthwith deliver the same to
Secured Party upon Debtor's receipt thereof.
3. Events of Default. The following shall constitute
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"Events of Default" hereunder, and each such Event of Default shall also
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constitute an Event of Default under the Note, entitling Secured Party to
exercise all or any of the remedies available to Secured Party under the terms
of the Note and this Agreement:
(a) Any default by Debtor under the Note,
including the failure by Debtor to pay any sum when due and payable
under the Note; or
(b) The failure of Debtor to perform or observe,
or other breach of, any other covenant, obligation, agreement,
condition, prohibition, representation, warranty or any other term or
provision hereunder.
4. Cure by Secured Party. Debtor agrees that Secured
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Party shall have the right, but not the obligation, to take any action
reasonably necessary to maintain, protect and preserve the Collateral. The
amount due under the Note shall be increased by any amounts so paid by Secured
Party. Payment or action by the Secured Party under this Section 4 shall not be
deemed to cure any default by Debtor under the Note or this Agreement.
5. Secured Party's Right Upon an Event of Default.
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(a) Upon the occurrence of an Event of Default
hereunder, Secured Party shall have all of the remedies of a secured
party under the Uniform Commercial Code as enacted by the State of
Colorado and then in effect. Without limiting the foregoing, Secured
Party shall be entitled to recover all of its costs and expenses
incurred in enforcing its rights hereunder and under the Note,
including reasonable attorneys' fees and costs.
(b) For any Collateral which constitutes
proceeds resulting from liquidated proceeds or sums of any nature,
Secured Party may, without being obligated to sell or attempt to sell
any Collateral, giving rise to the proceeds or sums, collect such
proceeds or sums from the Debtor and apply the same in reduction of
the indebtedness secured hereby in such order and manner as Secured
Party shall determine in its discretion. Debtor hereby authorizes any
such account debtor or obligor to perform for Secured Party upon
receiving notice from Secured Party that it is entitled to such
performance, regardless of any dispute between Debtor and Secured
Party concerning the existence of the requisite Event of Default or
any other matter, and the Debtor hereby releases any such debtor or
obligor from any liability for so performing. In connection
therewith, such indebtedness shall be reduced only to the extent that
such liquidated sums are actually received and actually applied by
Secure Party as aforesaid.
(c) The rights and remedies of Secured Party
hereunder are cumulative and are not in lieu of, but are in addition
to, any other rights or remedies which Secured Party may have under the
Note, at law or in equity.
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6. Further Assurances. Debtor hereby agrees to execute
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such other documents and perform such other acts as may be deemed necessary or
appropriate by Secured Party to perfect, protect or enforce the rights
hereunder.
7. Binding Effect. The provisions of this Agreement
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shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and permitted assigns.
8. Amendment. This Agreement may not be amended,
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modified, or changed, nor shall any waiver of any provision hereof be
effective, except only by an instrument in writing and signed by the party
against whom enforcement of any waiver, amendment, change, modification, or
discharge is sought.
9. Notices. All notices permitted under this Agreement
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shall be in writing signed by the party giving same and shall be deemed
effective upon personal delivery or telefacsimile transmission or three days
after mailing by certified or registered mail, postage prepaid, as follows:
If to Debtor:
Xxxxxx X. Xxx Xxxxxxxx
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Secured Party:
ACT Teleconferencing, Inc.
Attn: Xxxxx X. Xxxxxxx
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. Governing Law. This Agreement shall be governed by
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and construed in accordance with the laws of the State of Colorado.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
DEBTOR:
___________________________________________________
Xxxxxx X. Xxx Xxxxxxxx
SECURED PARTY:
ACT TELECONFERENCING, a Colorado
corporation
By: ___________________________________________
Xxxxx X. Xxxxxxx, Chief Financial Officer
CONSENT:
I consent to the terms of this Security
Agreement as applicable to any portion of
the Collateral of which I am the owner
with Debtor in joint tenancy.
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Xxxxxxx X. Xxx Xxxxxxxx
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