EXHIBIT 10.10
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made as of December
6, 2004, by and between Strategic Equity Corp., or its assigns ("Secured
Party"), and Swiss Medica, Inc., a Delaware corporation ("Debtor").
1. Obligations Secured. The security interest granted by this Security
Agreement shall secure payment of all sums due to Secured Party ("Secured Debt")
under the Secured Promissory Note in the principal amount of $300,000 CAD
("Note") issued by Debtor in favor of Secured Party dated on or about the date
hereof, and payment of all sums due to Secured Party under the Secured
Promissory Note to be issued by Debtor to Secured Party on or before January 3,
2005, as provided in that certain Note and Warrant Purchase Agreement (the
"Purchase Agreement") entered into between Debtor and Secured Party on or about
the date hereof, if such Note is issued (the "January Note").
2. Grant of Security Interest. Debtor does hereby grant to Secured Party a
security interest in all of Debtor's real and personal property, including, but
not limited to, its cash deposits, accounts receivables, patents, trademarks,
general intangibles, inventory and equipment (the "Collateral"). The Debtor
grants this security interest as priority over any other parties that may seek
similar security from the Debtor until such time that the Note or any other sums
due to Secured Party are repaid in full.
3. Covenants of Debtor. Debtor hereby covenants that:
(a) Debtor shall not, without the prior written consent of Secured
Party, sell, assign, lease, or otherwise dispose of the Collateral, or any part
thereof or any interest therein, except in the ordinary course of business;
(b) Debtor shall not do, or permit or suffer to be done, anything
that may impair the value of the Collateral or the security intended to be
effected hereby and shall use its best efforts to preserve, protect and enhance
the value of the Collateral;
(c) Debtor shall from time to time make, execute, acknowledge and
deliver all such further documents, instruments and assurances as may be
requested by Secured Party to perfect or preserve the security interest created
by and to carry out the intent of this Security Agreement, and hereby authorizes
Secured Party to file financing statements and amendments thereto, copies of
which Secured Party will provide to Debtor upon filing, relating to all or any
part of the Collateral where desirable in Secured Party's judgment to perfect
the security interest granted herein without the signature of Debtor (where
permitted by law);
(d) Debtor shall keep and cause to be kept accurate and complete
records of the Collateral and its proceeds, which Collateral and records will be
made available for inspection at Debtor's premises by Secured Party.
4. Events of Default. Upon default by Debtor under the Note or the January
Note (if issued), Secured Party may declare all amounts due under such note
immediately due and payable, and may exercise all rights granted to secured
parties under applicable law.
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5. Successors and Assigns. This Security Agreement shall be binding upon
successors and assigns of Debtor, and shall inure to the benefit of the
successors and assigns of Secured Party.
6. Severability. The unenforceability or invalidity of any provision or
provisions of this Security Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.
7. Notice. Any notice or communication required to be given hereunder may
be delivered by hand, deposited with an overnight courier, sent by confirmed
facsimile, or mailed by registered or certified mail, to the addresses or
facsimile numbers of the parties set forth in the signature pages below. Notice
shall be deemed received on the date sent if sent by facsimile or personal
delivery; three days after the date sent if sent by registered or certified
mail; and one day after the date it is sent by overnight courier.
8. Entire Agreement. This Agreement contains the entire and complete
understanding between the parties concerning its subject matter and all
representations, agreements, arrangements and understandings between or among
the parties, whether oral or written, have been fully merged herein and are
superseded thereby, except for representations, agreements, arrangements and
understandings between or among the parties made pursuant to the Note, the
January Note (if issued), the Purchase Agreement and any other agreements
entered into in connection therewith and herewith. This Agreement may be
modified only by a writing signed by both parties.
9. Governing Law; Attorney's Fees. This Security Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to its principles regarding conflicts of law. Upon default
the breaching party agrees to pay to the non-breaching party reasonable
attorneys' fees, plus all other reasonable expenses, incurred by the
non-breaching party in exercising any of the non-breaching party's rights and
remedies.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement.
(Signatures on following page)
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(Signature page to Security Agreement)
Debtor and Secured Party have caused this Security Agreement to be duly
signed and delivered as of the date first written above.
SWISS MEDICA, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Xxxxx Xxxxxxx, Chief Executive Officer
Swiss Medica, Inc.
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxx
STRATEGIC EQUITY CORP.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Xxxxx Xxxxxxx,
Strategic Equity Corp.
Xxxxx 000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxxx Xxxxxxx
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