EXHIBIT 10.2
Effective July 22, 2003
SECURITY AGREEMENT
FOR VALUE RECEIVED and intending to be bound, Robotic Workspace
Technologies, Inc., a Maryland corporation, authorized and registered as a
foreign corporation to do business in the State of Florida, (the "Debtor"),
whose principal address is 17105 San Xxxxxx Boulevard, A6151, Fort Xxxxx Xxxxx,
Xxxxxxx, 00000, hereby pledges, assigns and grants to Fifth Third Bank,
Florida., (the "Creditor"), its successors and assigns, as consideration for a
loan (the "Loan") of even date herewith in the amount of Two Hundred Twenty Five
Thousand and 00/100 Dollars ($225,000.00) to Debtor, security title to and a
security interest in the property described hereinafter (the "Collateral"):
1. "Accounts." Any and all of the Debtor's rights to payment for goods
sold, for goods leased and for services rendered, or any of such rights to
payment, whether now owned or hereafter acquired, to include, without
limitation, a right to payment under a contract or contracts, whether earned or
to be earned by further performance, together with any and all cash and non-cash
proceeds received or to be received when such a Collateral is sold, exchanged,
collected or otherwise disposed of, and accounts arising when the right to
payment is earned under a contract or contracts. Accounts shall also include
deposit accounts, which shall mean any demand, time, savings, passbook,
certificate of deposit or like account maintained by any Creditor, savings
Creditor, credit union or like organization.
2. "Inventory." Any and all goods held for sale car lease, or being
processed for sale or lease, in Debtor's business as now or hereinafter
conducted, whether now owned or hereinafter acquired, including all materials
goods and work in progress, finished goods, and other tangible property and held
for sale or lease or furnished or to be furnished under contracts of service or
used or consumed in Debtor's business, all documents (including documents of
title) covering inventory and all cash and non-cash proceeds from the sale of
inventory, including proceeds from insurance.
3. "Equipment." Any and all of the Debtor's furnishings, fixtures and
equipment, wherever located, whether now owned or hereafter acquired, together
with all increases, parts, fittings, accessories, equipment, and special tools
now or hereinafter affixed to any part thereof or used in connection therewith,
and all cash and non-cash proceeds, including proceeds from insurance, received
from the disposition thereof.
4. "Fixtures." All fixtures, equipment and other goods, whether now owned
or hereafter acquired, including the products, additions, Substitutions,
accessions, and all cash and non-cash proceeds, including proceeds from
insurance of and to such goods, of the Debtor that are or will become so related
to real estate that they are or may become part of real estate.
5. "General Intangibles." All general intangibles of the Debtor, whether
now owned or hereafter acquired.
1
The security interest is granted to the Creditor to secure the prompt and
unconditional payment and performance when due of any and all indebtedness,
obligations and liabilities to the Creditor of the Debtor, or of a party whose
indebtedness to the Creditor is being secured by the Collateral which is owned
by the Debtor, whether such indebtedness is now existing or hereafter arises,
whether absolute or contingent, direct or indirect, primary or secondary,
secured or unsecured, due or to become due, whether originally contracted with
the Creditor or subsequently acquired by the Creditor in any manner (the
"Indebtedness").
This Collateral is pledged to secure indebtedness of Robotic Workspace
Technologies, Inc., a Maryland corporation.
A. REPRESENTATIONS AND WARRANTIES
1. Debtor warrants and represents, and such representations and warranties
shall be continuing, as long as any indebtedness remains outstanding, that:
2. Debtor is the owner of the Collateral free and clear of all liens and
security interests except the security interest granted hereby.
3. Debtor has the right to make this agreement and all actions necessary
therefore have been duly taken.
4. Debtor has been duly incorporated and organized and is existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and is duly qualified and in good standing as a foreign corporation in those
jurisdictions where the conduct of its business or ownership of its properties
requires qualification.
5. Debtor is in compliance with all laws and regulations applicable and
necessary for the conduct of business by such entity.
6. The information contained herein is true and correct as of the date
hereof to the best of Debtor's knowledge and belief.
7. Each Account pledged to the Creditor hereunder represents, and each
Account arising hereafter will represent, the valid and legally enforceable
indebtedness of a bona fide account debtor and is not and will not be subject to
set-offs, counterclaims or defenses except as disclosed to Creditor in writing.
8. Each instrument pledged to Creditor hereunder is in full force and
effect without amendment or modification, and is binding upon and enforceable
against the obligor thereon in accordance with its terms, and there are no
setoffs, counterclaims or defenses except as disclosed to Creditor in writing
9. Debtor has filed all federal, state and local tax returns and other
reports it is required to file and has paid or made adequate provision for
payment of all such taxes, assessments, and other governmental charges.
10. Debtor uses no trade names in the conduct of its business, and has not
changed its name, except as disclosed to Creditor in writing.
2
11. Debtor acknowledges and warrants that Debtor has executed this
Agreement in order to induce the Creditor to extend the financing secured hereby
and Debtor has received or will receive same economic or other benefit from the
transaction(s) which the Collateral secures or will secure, and that Debtor's
grant of a security interest in the Collateral to the Creditor hereunder is
supported by adequate and sufficient legal consideration to make Debtor's
obligations hereunder legally enforceable.
B. COVENANTS.
As applicable, Debtor hereby agrees that:
1. As long as any Indebtedness to Creditor is outstanding, Debtor will
not, without the prior written consent of Creditor, borrow from anyone except
Creditor on the security of the Collateral.
2. All records pertaining to the Accounts will be kept at the address
indicated above, and Debtor will notify Creditor in writing not less than thirty
(30) days in advance of any intended change
3. Until Creditor directs otherwise, Debtor will collect the Accounts,
subject to the direction and control of Creditor. Any proceeds of Accounts
collected by Debtor will, upon the request of Creditor, be immediately delivered
to Creditor in the form received except for necessary endorsements to permit
collection.
4. Upon any request of Creditor, Debtor will furnish Creditor an aged
analysis of all outstanding Accounts, in form and substance satisfactory to
Creditor.
5. All inventory now owned or hereafter acquired will be, prior to sale,
in the possession of Debtor at the address indicated above, and all records
thereof are kept at such address; Debtor will give Creditor thirty (30) days'
written notice before changing the location of such Inventory or records.
6. Debtor will, at Creditor's request, deliver to Creditor any and all
evidence of ownership of any and all Collateral.
7. The Equipment is in the possession of Debtor at the address reflected
above. If that location is not owned by Debtor, or if any of the Collateral
constitutes Fixtures, Debtor will provide Creditor with disclaimers and waivers
necessary to make Creditor's security interest therein valid against any person
holding an interest in such real estate. Debtor will not change the location
address of any Equipment without giving the, Creditor reasonable prior written
notice.
8. Debtor will keep and maintain all Equipment in good operating condition
and repair, so that the value and operating efficiency thereof shall at all
times be maintained and preserved.
9. Debtor shall have and maintain with financially sound and reputable
insurers, insurance satisfactory in all respects to Creditor covering the
Collateral against liability and such other risks as Creditor may require,
including standard extended coverage in an amount at least equal to the value of
the Collateral. Policies evidencing any such property insurance shall contain a
standard loss-payee provision providing for payment of any loss to Creditor and
shall provide for a minimum of ten (10) days' prior written notice to Creditor
of any cancellation. Creditor may act as attorney for Debtor in obtaining,
adjusting, settling and canceling such insurance and endorsing any drafts
representing payments of claims under such policies. If Debtor at any time fails
to maintain the insurance required hereunder, Creditor may purchase the same and
assess the cost thereof against the Debtor. Debtor shall furnish Creditor with
certificates or other evidence of compliance with these insurance provisions.
3
10. Debtor agrees to pay to Creditor all advances, charges, costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Creditor in connection with the transaction giving rise to this Security
Agreement, in connection with confirming, perfecting and preserving the security
interest created hereunder, in connection with protecting Creditor against the
claims of any third person against the Collateral, and in exercising any right,
power or remedy granted to Creditor hereunder or by law, including, without
limitation, attorneys' fees incurred in litigation and administrative and
bankruptcy proceedings and appeals therefrom.
11. The term "Collateral" shall include the property described hereinabove
and the balance of every deposit account of Debtor with Creditor and any other
claim of Debtor against Creditor, whether now existing or hereafter arising.
12. Debtor will defend the Collateral against the claims and demands of
all persons at any time claiming the same or any interest therein
13. Debtor shall maintain its primary depository accounts with Creditor.
14. Debtor shall provide Creditor with quarterly financial statements (no
later than 30 days after the end of each quarter) and a copy of Debtors annual
tax return (which shall be provided no later than 30 days after such return has
been filed with the Internal Revenue Service). In addition, Debtor shall cause
any Guarantor of the Loan to furnish Creditor with an annual personal financial
statement and tax return (which shall be provided no later than 30 days after
each Guarantors tax return has been filed with the Internal Revenue Service).
Creditor hereby agrees that Creditor will subordinate this Security Agreement to
a Line of Credit loan granted to Creditor by an institutional lender so long as
the terms, conditions and amount of such loan are satisfactory to Creditor in
Creditor's sole and absolute discretion.
C. EVENTS OF DEFAULT.
1. Default in the payment of any principal, interest, or other charges
with respect to any of the Indebtedness as and when due.
2. Default in the observance or performance of any covenant or agreement
set forth herein or in any agreement, note or instrument heretofore, now, or
hereafter executed by Debtor in favor of Creditor.
3. Any representation, warranty, certificate, schedule or other
information made or furnished by Debtor to Creditor herein or pursuant hereto is
or shall be untrue or materially misleading.
4
4. Loss, theft, damage, or destruction of any material portion of the
Collateral for which there is either no insurance coverage or for which, in the
opinion of the Creditor, there is insufficient insurance coverage.
5. The making of any levy, seizure, or attachment upon any of the
Collateral.
6. The Debtor or Obligor or any Guarantor of the Indebtedness shall (a)
apply for or consent to the appointment of a receiver, trustee, or liquidator of
itself, or of all or a substantial part of its assets, (b) be unable or admit in
writing its inability to pay its debts as they fall due, (c) make a general
assignment for the benefit of its creditors, (d) be adjudicated a bankrupt or
insolvent, or (e) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors or to take
advantage of any insolvency law or an answer admitting the material allegations
of a petition filed against it in any bankruptcy, reorganization, or insolvency
proceeding, or any corporate action shall be taken by it far the purpose of
effecting any of the foregoing.
7. An order, judgment or decree shall be entered without the application,
approval or consent of the Debtor or Obligor by any court of competent
jurisdiction, approving a petition seeking reorganization of the Debtor or
Obligor or appointing a receiver, trustee, or liquidator of the Debtor or
Obligor of any or a substantial part of its assets and such order, judgment, or
decree shall continue unstayed and in effect for a period of more than thirty
(30) consecutive days.
8. The termination, dissolution or death of the Shareholders of Debtor,
Obligor or any Guarantor of the Indebtedness.
If any Event of Default shall occur, then or at any time thereafter, the
Creditor may declare all indebtedness of the Debtor or Obligor to be due ,and
payable, without notice, protest, presentment, or demand, all of which are
expressly waived by Debtor, and Creditor shall have any and all other rights and
remedies provided for herein.
D. RIGHTS AND REMEDIES.
The Creditor shall have, in addition to any other rights and remedies
contained in this Agreement, and any other agreements, guarantees, notes,
instruments and documents heretofore, now, or at any time hereafter executed by
Debtor and delivered to the Creditor, all the rights and remedies of a secured
party' under the Uniform Commercial Code or any other applicable law in force in
the State of Florida as of the date hereof, or as subsequently amended, all of
which rights and remedies shall be cumulative and nonexclusive, as permitted by
law.
During the life of this Agreement, Creditor shall have the following
rights and remedies:
1. Creditor, and any agent of Creditor, is hereby constituted and
appointed as true and lawful attorney-in-fact of Debtor with power:
(a) With regard to Accounts, to notify or require Debtor to notify any and
all account debtors or parties against which Debtor has a claim that the
Accounts have been assigned to Creditor and/or that Creditor has a security
interest therein and that all payments should be made to Creditor;
5
(b) To endorse the name of Debtor upon any instruments of payment
(including payments made under any policy of insurance) that may come into the
possession of Creditor in full or part payment of any amount owing to Creditor;
(c) To sign and endorse the name of Debtor upon any invoice, freight or
express xxxx, xxxx of lading, storage or warehouse receipt, draft against
account debtors or other obligors and with regard to Accounts, to sign and
endorse the name of Debtor on any assignment, verification, and notice in
connection therewith, and any instrument or document relating thereto or to the
rights of Debtor therein;
(d) To notify post office authorities to change the address for delivery
of mail of Debtor to an address designated by Creditor and to receive, open, and
dispose of all mail addressed to Debtor;
(e) With regard to Accounts, to send requests for verification of account
debtors or other obligors;
(f) To sell, assign, xxx for, collect or compromise payment of all or any
part of the Collateral in the name of Debtor or in its own name, or make any
other disposition of the Collateral, or any part thereof, which disposition may
be for cash, credit or any combination thereof; and
(g) To purchase all or any part of the Collateral at public or, if
permitted by law, private sale, and in lieu of actual payment of such purchase
price, to set off the amount of such price against the indebtedness.
2. Granting to Creditor, as the attorney-in-fact of Debtor, full power of
substitution and full power to do any and all things necessary to be done in and
about the premises as fully and effectually as Debtor might or could do but for
this appointment, and hereby ratifying all that said attorney-in-fact shall
lawfully do or cause to be done by virtue hereof, neither Creditor nor its agent
shall be liable for any acts or omissions or for any error of judgment or
mistake of fact or law in its capacity as such attorney-in-fact. This power of
attorney is coupled with an interest and shall be irrevocable as long as any
Indebtedness shall remain outstanding.
Creditor shall have the right to enter and/or remain upon the premises of
Debtor, without any obligation to pay rent to Debtor or others, or any other
place or places where any of the Collateral is located or kept, and:
(a) Remove Collateral therefrom to the premises of Creditor or any agent
of Creditor, for such time as Creditor may desire, in order to maintain, sell,
collect and/or liquidate the Collateral;
(b) Use such premises, together with materials, supplies, books and
records of Debtor; to maintain possession and/or the condition of the
Collateral, and to prepare the Collateral for selling, liquidating or
collecting;
6
(c) Creditor may require Debtor to assemble the Collateral and make if
available to Creditor at a place to be designated by Creditor which is
reasonably convenient to both parties; and
(d) Any notice required to be given to Creditor under law or by this
Agreement, when deposited in the United States mails addressed to Debtor at its
address above (or at such other address as shall have previously been provided
to Creditor in writing) at least five (5) days prior to any action Creditor
proposes to take, shall constitute reasonable notice to Debtor of any such
action.
The net proceeds realized by Creditor upon a sale or other disposition of
the Collateral, or any part thereof, after deduction of the expenses of
retaking, holding, preparing for sale, selling or the like, and reasonable
attorneys' fees end other expenses incurred by Creditor, shall be applied toward
satisfaction of the indebtedness hereunder. Creditor shall account to Debtor for
any surplus realized upon such sale or other disposition and Debtor or other
Obligor shall remain liable for any deficiency.
The commencement of any action, legal or equitable, shall not affect the
security interest of Creditor in the Collateral until the Indebtedness hereunder
or any judgment therefore are fully paid.
E. MISCELLANEOUS.
No waiver by Creditor of any default shall operate as a waiver of any
other default or of the same default on a future occasion. No delay or omission
on the part of Creditor in exercising any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by Creditor of any right or
remedy shall preclude or affect any other or further exercise thereof or the
exercise of any right or remedy. Time is of the essence in this Agreement. The
provisions of this Agreement are cumulative to the provisions of any
Indebtedness and any note or other writing evidencing any Indebtedness secured
by this Agreement, and Creditor shall have all the benefits, rights and remedies
of and under any Indebtedness and any note or other writing evidencing any
Indebtedness secured hereby. The singular pronoun, when used herein, shall
include the plural, and the neuter shall include the masculine and feminine. All
rights of Creditor hereunder shall inure to the benefit of its successors and
assigns; and all obligations of Debtor shall bind the heirs, executors,
administrators, successors and assigns of each Debtor.
This Agreement is delivered in and shall be construed under the internal
laws and judicial decisions of the State of Florida, and the laws of United
States as the same might be applicable. In any litigation in connection with or
to enforce this Agreement, Debtor irrevocably consents to and confers personal
jurisdiction on the courts of the State of Florida or the United States courts
located within the State of Florida, and expressly waives any objections as to
venue in any of such courts; and agrees that service of process may be made on
Debtor by mailing a copy of the summons and complaint by registered or certified
mail, return receipt requested, to Debtor's address. Nothing contained herein
shall, however, prevent the Creditor from bringing any action or exercising any
rights within any other state or jurisdiction or from obtaining personal
jurisdiction by any other means available by applicable law.
7
BORROWER HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON THIS
AGREEMENT OR ON ANY MATTER ARISING IN CONNECTION WITH THIS AGREEMENT.
IN WITNESS WHEREOF, this Agreement has been duly executed the 29th day of
August, 2003, effective July 22, 2003.
Witnesses:
Robotic Workspace Technologies, Inc.,
a Maryland corporation
/s/ Xxxxx X. Xxxxxx /S/ Xxxxxx X. Xxxxxx
--------------------- -----------------------
Print Name: /s/ Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
------------------- Its: President
/s/ Xxxxx Xxxxxx
---------------------
Print Name: Xxxxx Xxxxxx
------------
8
