SECURITY AGREEMENT
EXHIBIT 10.84
THIS
SECURITY AGREEMENT ("Agreement") is made and effective this August 25, 2005, by
and between, CMARK International, Inc., a SC Corporation ("Borrower") and
Sterling Management, LLC ("Secured Party)
Borrower
is in the debt of Secured Party.
Borrower
desires to give, and Secured Party desires to receive, a security interest in
certain tangible personal property of Borrower to secure such debt.
NOW,
THEREFORE, Secured Party and Borrower agree as follows:
1. Definitions.
A. "Collateral": The
following described tangible, personal property of Borrower: (i) accounts
receivable, office fixtures, furniture, inventory or equipment, good will and
all other assets of Borrower and (ii) all additions and substitutions
to or for the items referred to in Section 1.(A)(i) above, and all proceeds
therefrom. Also, if the Collateral is, any after acquired inventory
or equipment shall also be considered Collateral.
B. "Obligation": All
of the interest, principal and other amounts payable under that certain
promissory note dated August 25, 2005, payable by Borrower to Secured Party for
an amount of $750,000.00 , bearing interest at a rate of 18% Annual if timely
paid , and any future advances under the promissory note or any other monetary
obligations owed by the Borrower to the Secured Party.
2. Security
Interest.
Borrower
hereby grants to Secured Party a security interest in the Collateral in order to
secure payment of the Obligation.
Both
Parties acknowledge a first security position presently exists with Xxxxxx
Gardens , Inc., dba Contractor Funding executed on August 18, 2000.
3. Books and
Records; Inspection.
Borrower
shall keep and maintain, at its expense, complete records of the
Collateral. Secured Party shall have the right at any time and from
time to time, without notice, to call at Borrower's place of business during
normal business hours to inspect the Collateral and to inspect the
correspondence, books, and records of Borrower relating to the
Collateral.
4. Representations
and Warranties of Borrower.
Borrower
represents and warrants to Secured Party that, with respect to the Collateral,
Borrower possesses and shall possess at all times while this Security Agreement
is in effect, full, complete and unencumbered title to such goods, subject only
to Secured Party's security interest hereunder, and liens, if any, for current
taxes, assessments and other governmental charges are not
delinquent.
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10.84 - continued
5. Covenants
of Borrower.
The
Borrower agrees and covenants with Secured Party that:
A. The
title and documentation to all Collateral shall be kept at 0000 Xxx Xxxxx Xx,
Xxxxxxxx, Xxxxx Xxxxxxxx 00000, and Borrower shall not change the location of
the Collateral without the prior written consent of Secured Party.
B. Borrower
shall not at any time cause or suffer any part of the Collateral, or any
interest in any of Collateral to be subject to any Security Interest other than
that of Secured Party.
C. Borrower
shall defend the Collateral against the claims and demands of all persons other
than Secured Party.
D. Borrower
shall at all times promptly pay and discharge, at Borrower's expense, all taxes,
assessments and other governmental charges which constitute or may become liens
on the Collateral.
E. At
the request of Secured Party, at any time and from time to time, Borrower shall
execute such financing statements and other documents, pay such filing,
recording and other fees, and do or cause to be done such other acts or things
as Secured Party deems reasonably necessary to establish, perfect, and continue
its security interest hereunder.
F. Borrower
shall pay all costs, expenses, charges and other obligations, including, without
limitation, reasonable attorneys' fees, suffered or incurred by Secured Party to
protect, preserve, maintain and obtain possession of or title to the Collateral,
to perfect, protect, preserve and maintain the security interest granted by this
Security Agreement, and to enforce or assert any one or more of its rights,
powers, remedies and defenses under this Security Agreement.
6. Events of
Default.
Borrower
shall be in default under this Security Agreement if Borrower fails timely to
observe and perform any covenants, conditions or agreements required to be
observed or performed by Borrower under this Security Agreement, or if Borrower
defaults upon any material promise in the obligation.
7. Remedies
upon Event of Default.
At any
time upon or following the occurrence of one or more of the events of default
under Section 6 hereof, Secured Party may, at its option, assert or avail itself
of any one or more of the rights, powers, remedies and defenses conferred upon
Secured Party under the Uniform Commercial Code and other laws of the State of
South Carolina, which laws shall generally govern the construction and
interpretation of this Agreement, or assert or avail itself of any one or more
of the rights, powers, remedies and defenses conferred upon Secured Party under
any other appropriate law or regulation, whether federal or state.
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10.84 - continued
8. Application
of Proceeds.
Any and
all proceeds resulting from the disposition of all or any part of the Collateral
following the occurrence of one or more events of default shall be applied to
pay and provide for the Obligations of Borrower to Secured Party, with any
balance remaining to be paid to Borrower or its successors and assigns, as their
respective interests may appear.
9. Notices.
Any
notice required by this Agreement or given in connection with it, shall be in
writing and shall be given to the appropriate party by personal delivery or by
certified mail, postage prepaid, or recognized overnight delivery
services.
If to
Borrower:
CMARK
International, Inc.. 0000 Xxx Xxxxx Xx, Xxxxx
0, Xxxxxxxx, XX 00000 Attn: Xxxxxxx
X. Xxxxx, Xx.
If to Secured
Party:
Sterling
Management, LLC, 000 Xxxxx Xxxx Xxxx, Xxxxxxx Xxxxxxx,
XX 00000
10. Severability.
The
invalidity or unenforceability of any provision in this Agreement shall not
cause any other provision to be invalid or unenforceable.
11. Final
Agreement.
This
Agreement constitutes the final agreement and understanding between the parties
on the subject matter hereof and supersedes all prior understandings or
agreements whether oral or written. This Agreement may be modified
only by a further writing that is duly executed by both parties.
12. Headings.
Headings
used in this Agreement are provided for convenience only and shall not be used
to construe meaning or intent.
IN
WITNESS WHEREOF, Borrower and Secured Party have executed this Security
Agreement on the date first above written.
BY: CMARK
International, Inc. Xxxxxxx X. Xxxxx,
Xx. /s/ Xxxxxxx X. Xxxxx,
Xx.
Date:
August 25, 2005
BY: Sterling Management,
LLC Xxxxx
X. Xxxxxxxx
/s/ Xxxxx
X. Xxxxxxxx
Date:
August 25, 2005
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