EXHIBIT 10.2
SECURITY AGREEMENT
This Security Agreement ("Agreement") dated November 30, 1999, by and
between GLOBAL MEDIA CORP., a [Nevada corporation] ("Borrower") and ROLLING OAKS
ENTERPRISES, LLC, a California limited liability company ("Secured Party").
RECITALS
A. Secured Party has made a loan to Borrower in the original principal
amount of Five Hundred Thousand Dollars ($500,000.00), which loan is evidenced
by that certain Promissory Note, executed by the Borrower in favor of Secured
Party, dated November __, 1998, in the original amount of Five Hundred Thousand
Dollars ($500,000) (the "Note").
B. Borrower desires to guarantee and secure Borrower's obligations
under the Note by, among other collateral the pledge of the personal property,
more particularly described in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. GRANT OF SECURITY INTEREST. Borrower, in consideration of Secured
Party advancing the Loan to Borrower, hereby grants, conveys, and assigns to
Secured Party as security for Borrower's faithful performance of its obligations
under the Note, all of Borrower's existing and future right, title and interest
in,, to and under the property listed in Section 2 of this Agreement.
2. PROPERTY. The property subject to the security interest granted in
Section 1 (the "Collateral") is the personal property, as described in more
detail on EXHIBIT A attached hereto.
3. COVENANTS OF BORROWER. Borrower agrees and covenants as follows:
3.1 OWNERSHIP OF COLLATERAL. Borrower is the sole owner of the
Collateral and will defend the Collateral against the claims and demands of all
other persons at any time claiming the same or any interest therein.
3.2 SALE OR REMOVAL OF COLLATERAL PROHIBITED. Borrower shall
not sell, encumber, pledge, mortgage, assign, grant a security interest in, or
otherwise transfer the Collateral without the prior written consent of Secured
Party which consent may be given or withheld by Secured Party in its sole and
absolute discretion.
3.3 PERFECTION OF SECURITY INTEREST. Borrower agrees to execute
and file financing statements, and do whatever may be necessary under the
applicable Uniform Commercial Code in the state where the Collateral is located,
to perfect and continue Secured Party's interest in the Collateral, all at the
Borrower's expense. Borrower hereby constitutes and appoints Secured Party as
its true and lawful attorney, irrevocably, with the full power, but not
obligation to take any action, which Secured Party may deem necessary or
advisable, including, but not limited to filing of a financial statement in
connection with the Collateral.
4. FORBEARANCE BY SECURED PARTY NOT A WAIVER. Any forbearance by
Secured Party in exercising any right or remedy hereunder, or otherwise afforded
by applicable law, shall not be a waiver of or preclude the exercise of any
other right or remedy. The acceptance by Secured Party of payment of any sum
secured by this Agreement and the Loan Documents after the due date of such
payment shall not be a waiver of Secured Party's right to either require prompt
payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The payment of taxes or other liens or charges
by Secured Party shall not be a waiver of Secured Party's right to accelerate
the maturity of the indebtedness secured by this Agreement.
5. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Agreement is
intended to be a security agreement pursuant to the Uniform Commercial Code for
any of the items specified above as part of the Collateral which, under
applicable law, may be subject to a security interest pursuant to the Uniform
Commercial Code, and Borrower hereby grants Secured Party a security interest in
said items. Borrower agrees that Secured Party may file any appropriate
document in the appropriate index as a financing statement for any of the items
specified above as part of the Collateral. In addition, Borrower agrees to
execute and deliver to Secured Party, upon Secured Party's request, any
financing statements, as well as extensions, renewals and amendments thereof,
and reproductions of this Agreement in such form as Secured Party may require to
perfect a security interest with respect to said items. Borrower shall pay all
costs of filing such financing statements and any extensions, renewals,
amendments, and releases thereof, and shall pay all reasonable costs and
expenses of any record searches for financing statements Secured Party may
reasonably require. Without the prior written consent of Secured Party,
Borrower shall not create or suffer to be created pursuant to the Uniform
Commercial Code any other security interest in the Collateral, including
replacements and additions thereto. Upon the occurrence of an event of default
under the Loan Documents, Secured Party shall have the remedies of a secured
party under the Uniform Commercial Code and, at Secured Party's option, may also
invoke the other remedies provided in this Agreement as to such items. In
exercising any of said remedies, Secured Party may proceed against any items
specified above as part of the Collateral separately or together and in any
order whatsoever, without in any way affecting the availability of Secured
Party's remedies under the Uniform Commercial Code or of the other remedies
provided in this Agreement or the Note.
6. DEFAULT BY BORROWER. Upon and at any time following any default of
the Borrower under the Note, Secured Party may, at its option, proceed directly
and at once, without notice, against Borrower to collect and recover the full
amount of the liability under the Note, or any portion thereof, without
proceeding against any other person, (i) the right to have other property of
Borrower first applied to the discharge of such indebtedness, and (ii) the
pleading of any statute of limitations as its defense to the obligation
hereunder.
7. INDEBTEDNESS. The word "indebtedness" as used in this Agreement
includes not only debts voluntarily contracted, but every debt, obligation or
liability however arising and whether the same be due or owing absolute or
contingent, determined or inchoate, and this Agreement shall extent to and cover
all renewals and extensions of any claims or demands guaranteed under this
instrument.
2
8. RIGHTS OF SECURED PARTY.
8.1 Upon Borrower's default Secured Party may sell all or any
part of the Collateral. Secured Party shall give Borrower reasonable notice of
the time and place of any sale or of the time which any private sale or other
disposition of the Collateral is to be made, and notice given at least 10 days
before the time of the sale or other disposition shall be conclusively presumed
to be reasonable.
8.2 Payment shall be in cash or by certified check immediately
following the close of the sale.
8.3 Notwithstanding any provision of this Agreement, Secured
Party shall be under no obligation to offer to sell the Collateral. In the
event Secured Party offers to sell the Collateral, Secured Party will be under
no obligation to consummate a sale of the Collateral if, in its reasonable
business judgment, none of the offers received by it reasonably approximates the
fair value of the Collateral.
8.4 In the event Secured Party elects not to sell the
Collateral, Secured Party may elect to follow the procedures set forth in the
Uniform Commercial Code for retaining the Collateral in satisfaction of
Borrower's obligation, subject to the Borrower rights under such procedures.
9. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interest in the Collateral held by Secured Party or by any other party,
Secured Party shall have the right to determine the order in which any or all of
the Collateral shall be subjected to the remedies provided by this Agreement.
Secured Party shall have the right to determine the order in which any or all
portions of the indebtedness secured by this Agreement are satisfied from the
proceeds realized upon the exercise of the remedies provided in this Agreement.
Borrower and any party who consents to this Agreement, and any party who now or
hereafter acquires a security interest in the Collateral and who has actual or
constructive notice of this Agreement, hereby waives any and all right to
require the marshalling of assets in connection with the exercise of any of the
remedies permitted by applicable law or by this Agreement.
10. REMEDIES CUMULATIVE. Each remedy provided in this Agreement is
distinct and cumulative to all other rights or remedies under this Agreement or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
11. MISCELLANEOUS.
11.1 HEADINGS. All headings herein are inserted only for
convenience and each of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
11.2 SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under the present or future laws effective
during the term of this Agreement, such provision will be fully severable; this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement will remain in full force and effect
3
and will not be affected by the illegal, invalid, or unenforceable provision or
by its severance from this Agreement.
11.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement with respect to the subject matter hereof between the parties hereto
and shall supersede and completely replace any prior agreement or
understandings, written or oral, between the parties hereto regarding the
subject matter hereof, and any such prior agreements or understanding shall be
of no further force or effect. This Agreement may only be modified by an
agreement or understanding in writing executed by all parties hereto.
11.4 MULTIPLE COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute one and the same instrument. In making proof
hereof, it will be necessary to produce only one copy hereof signed by the party
to be charged.
11.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with, the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date first set forth above.
BORROWER: GLOBAL MEDIA CORP., a __________
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxxx
President
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
Secretary
SECURED PARTY: ROLLING OAKS ENTERPRISES, LLC, a
California limited liability company
By:
----------------------------------------
Xxxxx X. Xxxxxxxx
Manager
4
EXHIBIT A
GLOBAL MEDIAL CORP.
SCHEDULE OF CAPITAL ASSETS
JULY 31, 1998
---------------------------------------------------------------------------------------------------------------------------
ITEM 1 Capital Assets CAN EXCHANGE US
--------------------- EQUIVALENT RATE EQUIVALENT
---------------------------------------------------------------------------------------------------------------------------
Office Equipment
---------------------------------------------------------------------------------------------------------------------------
Call Center Furniture (20
partitioned desks) 13,498.52
---------------------------------------------------------------------------------------------------------------------------
Island Business Products - file
cabinets 2,248.97
---------------------------------------------------------------------------------------------------------------------------
Island Business Products - chairs
257.55
---------------------------------------------------------------------------------------------------------------------------
Island Business Products - desk
802.50
---------------------------------------------------------------------------------------------------------------------------
Island Business Products - misc
213.06
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx - book rack 140.19
---------------------------------------------------------------------------------------------------------------------------
Promark Construction - boardroom
table, lunch benches, lockers,
glass partition, 20 chairs, 2
building signs 8,144.10
---------------------------------------------------------------------------------------------------------------------------
Panasonic Photocopier 2,241.65
---------------------------------------------------------------------------------------------------------------------------
4-Drawer Filing Cabinet 255.72 27,802.26 1,450.39 19,168.82
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Office Equipment 27,802.26 1,450.39 19,168.82
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Leasehold Improvements
---------------------------------------------------------------------------------------------------------------------------
From Reception Area 2,795.94
---------------------------------------------------------------------------------------------------------------------------
Promark Construction -
partitions, doors, lighting,
lumber, ceiling tiles 5,561.05
---------------------------------------------------------------------------------------------------------------------------
Promark Construction - carpeting
and tiles 4,284.12 12,541.11 1,459.39 8,715.66
-------- ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Leasehold Improvements 12,541.11 1,450.39 8,715.66
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Computer Hardware
---------------------------------------------------------------------------------------------------------------------------
2 IBM Aptiva Computers and
Monitors (Pentium) 6,148.94
---------------------------------------------------------------------------------------------------------------------------
2 AST Computers and Monitors
(486) 3,540.00
---------------------------------------------------------------------------------------------------------------------------
AST Computer and Monitor
(Pentium) 2,054.00
---------------------------------------------------------------------------------------------------------------------------
1 Okidata Printer 406.00
---------------------------------------------------------------------------------------------------------------------------
1 Printer (Brother HL-730 Plus) 785.00
---------------------------------------------------------------------------------------------------------------------------
XxXxxxxx & St. Xxxxxxxx -
Computer 785.00
---------------------------------------------------------------------------------------------------------------------------
Citibank - VISA - satellite
internet downlink 691.46
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - 10 modems for
progressive dialer 360.35
---------------------------------------------------------------------------------------------------------------------------
Network Router Hub 2,187.87
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx - Computer Backup
System, 3 Fax Modems,
---------------------------------------------------------------------------------------------------------------------------
5
---------------------------------------------------------------------------------------------------------------------------
ITEM 1 Capital Assets CAN EXCHANGE US
--------------------- EQUIVALENT RATE EQUIVALENT
---------------------------------------------------------------------------------------------------------------------------
Network Systems Rack, 1
Pentium Computer 3,598.00 20,406.61 1,450.39 14,069.74
-------- ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Computer Hardware 20,406.61 14,069.74
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Computer Software
---------------------------------------------------------------------------------------------------------------------------
Data Base Management 3,271.00
---------------------------------------------------------------------------------------------------------------------------
Abacus Accounting 1,895.00
---------------------------------------------------------------------------------------------------------------------------
Microsoft Office - Multi Office
License 2,250.00
---------------------------------------------------------------------------------------------------------------------------
Customer Ordering System 901.50
---------------------------------------------------------------------------------------------------------------------------
Quick Books 175.00
---------------------------------------------------------------------------------------------------------------------------
PC Quote 1,058.23
---------------------------------------------------------------------------------------------------------------------------
Mastercard - Extractor Pro 605.47 10,156.20 1,450.39 7,002.39
------ ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Computer Software 10,156.20 1,450.39 7,002.39
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Call Center - Development
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - 3 telephones 184.73
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - install phone
lines 40.00
---------------------------------------------------------------------------------------------------------------------------
Orion 2000 Technologies - install
virtual server 500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - internet design 1,000.00
---------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxxx - reconfigure server 500.00
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - hook up lines 2,584.60
---------------------------------------------------------------------------------------------------------------------------
X. Xxxxxx Consulting - computer 1,920.00
---------------------------------------------------------------------------------------------------------------------------
ProNet Communications - internet
set up 502.90
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - internet design 1,000.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - internet design 2,000.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - internet design 1,389.02
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - internet design 1,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - team of testers
for system 11,424.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - team of testers
for system 1,000.00
---------------------------------------------------------------------------------------------------------------------------
Promark Construction - computer
consultant 6,000.00
---------------------------------------------------------------------------------------------------------------------------
Simmer Systems Mgmt - misc
supplies 475.77
---------------------------------------------------------------------------------------------------------------------------
CTI Telephone - testing 1,801.52
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 2,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 1,500.00
---------------------------------------------------------------------------------------------------------------------------
Simmer Systems Mgmt - misc
supplies 323.92
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - ISDN line 2,566.59
---------------------------------------------------------------------------------------------------------------------------
CTI Telephone - testing system 1,453.99
---------------------------------------------------------------------------------------------------------------------------
CTI Telephone - testing system 861.90
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 1,750.00
---------------------------------------------------------------------------------------------------------------------------
6
---------------------------------------------------------------------------------------------------------------------------
ITEM 1 Capital Assets CAN EXCHANGE US
--------------------- EQUIVALENT RATE EQUIVALENT
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 1,750.00
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - testing system 2,329.39
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 2,000.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - misc parts 597.70
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - software
development 1,459.16
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - software
development 4,200.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - software
development 1,400.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx - database design 3,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - software
development 1,500.00
---------------------------------------------------------------------------------------------------------------------------
Promark Construction
- running wiring for network 3,560.50
- database development 5,000.00
- network cards 1,800.13
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - Telephone System
Layout 4,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - Wiring Telephone
Systems 10,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - Computer System
Layout 4,500.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - Wiring Telephone
System 2,437.50
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx - Wiring Telephone
System with Computers 3,000.00
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx - Data Base Spec
Design - Software 25,850.00
---------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx - Wiring Computer
outlets from Server 25,850.00
---------------------------------------------------------------------------------------------------------------------------
0.00 133,363.32 1,450.39 91,949.97
----
---------------------------------------------------------------------------------------------------------------------------
Total Call Center - Development 133,363.32 1,450.39 91,949.97
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxx - 10 computers,
printers, scanner, 10 telephones
with control box 39,088.50
---------------------------------------------------------------------------------------------------------------------------
BC Telephone - 3 telephones 802.50
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx Consulting - 2 computers 4,299.26
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx Consulting - Panasonic
main telephone system 5,143.53
---------------------------------------------------------------------------------------------------------------------------
The Communication Connection -
headsets 802.50
---------------------------------------------------------------------------------------------------------------------------
Canadian Communication - headsets 1,588.80
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx Consulting - 1 computer 2,204.76
---------------------------------------------------------------------------------------------------------------------------
J Xxxx - 40 telephones and 2
---------------------------------------------------------------------------------------------------------------------------
7
---------------------------------------------------------------------------------------------------------------------------
ITEM 1 Capital Assets CAN EXCHANGE US
--------------------- EQUIVALENT RATE EQUIVALENT
---------------------------------------------------------------------------------------------------------------------------
control boxes 12,000.00
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx - Hard Drive 479.94
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx - 4 Pentium Computers
with Monitors 7,587.84
---------------------------------------------------------------------------------------------------------------------------
J Xxxxxx - Computer Fax Server 3,060.90
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx - 1 Pentium Computer
with Monitor 2,228.62 80,287.15 1,450.39 55,355.56
-------- ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Call Center - Equipment/Hardware 80,287.15 1,450.39 55,355.56
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Call Center - Equipment/Software
---------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxxxx - 10 stations
user/licenses for (NT Windows,
Goldmine, Faxrush, Call Comando) 17,628.25
---------------------------------------------------------------------------------------------------------------------------
Citibank - VISA - proxy server
software 580.72
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx 1,532.26
---------------------------------------------------------------------------------------------------------------------------
Simmer Systems - upgrade to 20
users for Goldmine 4,092.60 24,033.83 1,450.39 16,570.60
-------- ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Call Center - Equipment/Software 24,033.83 1,450.39 16,570.60
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Web Site - Software
---------------------------------------------------------------------------------------------------------------------------
2 B's Communications 2,000.00
---------------------------------------------------------------------------------------------------------------------------
2 B's Communications 3,093.00 5,093.00 1,450.39 3,511.47
-------- ---------- ----------
---------------------------------------------------------------------------------------------------------------------------
Total Web Site - Software 5,093.00 1,450.39 3,511.47
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 313,783.48 1,450.39 216,344.21
---------- ----------
---------------------------------------------------------------------------------------------------------------------------
ITEM 2
---------------------------------------------------------------------------------------------------------------------------
1,000,000 Global Media Shares
---------------------------------------------------------------------------------------------------------------------------
8
GLOBAL MEDIA CORP.
RENTAL SUMMARY
LEASE: 5 year term began Oct. 1, 1997 at the end of 2 month fixturing
period, and has 5 year option to renew.
RATE: 1. BASE RENT -- $8.00 per sq. ft. beginning Oct. 1, 1997 to be
paid as follows:
YEAR 1 AND 2
a) $16,000 annual base rent portion to be paid monthly in advance
at $1,333.33 per month.
b) $29,736 annual base rent portion to be paid in advance by
company stock at $0.50 per share and due upon company registration
with a stock exchange and share issuance.
YEAR 3 THROUGH 5
Base rent at $8.00 per sq. ft. due monthly in advance at $3,811.33
per month.
2. TRIPLE NET expenses to be paid monthly in advance concurrently
with the base rent figure above, with estimated expenses for 1998
as per lease clause 2, 4 and 6 estimated at $6.00 per sq. ft., or
$34,302.00 annually or $2,858.50 monthly.
3. GST on the whole of base rent and triple net expenses as above,
totaling 7% of $4,191.83 or $293.43 monthly.
MONTHLY RENT AMOUNT DUE
Base $1,333.33
Triple Net $2,858.50
GST $ 293.43
---------
Total $4,485.26
