EXHIBIT 10.72
SECURITY AGREEMENT
This Security Agreement (the "Security Agreement") is entered into this
7th day of May, 1998, between Xxxxxxxxx Investments, Ltd. (the "Secured Party")
and Galacticomm Technologies, Inc. (the "Borrower").
RECITALS:
A. Secured Party is loaning the principal amount of $125,000 to
Borrower, pursuant to the terms of that certain Secured Convertible Promissory
Note (the "Note"), from Borrower in favor of Secured Party, of even date
herewith;
B. Secured Party requires that Borrower grant a security interest in
the Collateral to Secured Party, and Borrower is willing to grant such a
security interest.
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following words shall have the
following meanings:
(a) "Accounts" means all accounts, instruments, documents,
chattel paper and obligations in any form owing to Borrower and which arise out
of the sale or lease of goods or the rendition of services by Borrower whether
or not earned by performance, as well as all guaranties, credit insurance,
letters of credit and other security for any of the foregoing.
(b) "Collateral" means the following described collateral,
whether now owned or hereafter acquired by Borrower, together with all
documents, records and information relating thereto:
(i) All of Borrower's Accounts (the "Accounts").
(ii) All of Borrower's "documents" (as defined in the
UCC) or other receipts covering, evidencing or representing goods that relate
to any Account;
(iii) All of Borrower's Inventory;
(iv) All of Borrower's Equipment;
(v) All of Borrower's General Intangibles;
(vi) All of Borrower's Instruments;
(vii) All monies on deposit in any bank account maintained
by Borrower;
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(viii) All of Borrower's other personal property not
otherwise described herein, including all currency held by or for the benefit of
Borrower;
(ix) All books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that any time evidence or contain information relating to any of the
property described above or are otherwise necessary or helpful in the collection
thereof or realization thereon; and
(x) All of the proceeds, products, renewals,
replacements, accessions, additions or replenishments of or to any of the above.
(c) "Equipment" means all equipment, fixtures, machinery,
machine tools, office equipment, furniture, furnishings, motors, motor vehicles,
tools, dies, parts, jigs, goods and all improvements thereto and all supplies
used in connection therewith.
(d) "General Intangibles" means all general intangibles,
causes of action and all other personal property of every kind (other than goods
and accounts) including, without limitation: (i) patents, trademarks, trade
names, service marks, copyrights and any applications for registration or
registrations of the foregoing; (ii) goodwill; (iii) trade secrets; (iv)
licenses; (v) franchises; (vi) contract rights; (vii) deposit accounts; and
(viii) tax refunds and tax refund claims.
(e) "Indebtedness" means the principal and interest due
hereunder.
(f) "Instrument" means a negotiable instrument, a certificated
security, or any other writing which evidences a right to the payment of money.
(g) "Inventory" means all goods, wares, merchandise and other
tangible personal property including, without limitation, raw materials, work in
process, supplies and components, finished goods, packing and shipping
materials, and all documents of title, whether negotiable or non-negotiable,
that represent any of the foregoing.
2. SECURITY INTEREST. Borrower hereby gives the Secured Party a
security interest in the collateral subordinate to Union Planters Bank, Union
Atlantic Partners and Xxxxx, Mandler, Croland, Bronstein, Garbett, Stiphany and
Xxxxxxxx, P.A.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER. In addition to such
other representations and warranties as Borrower may make to the Secured Party
pursuant to the Note, the Purchase Agreement and under the other documents
contemplated or referred to therein, the Borrower continuously represents and
warrants to the Secured Party, for so long as any portion of the Indebtedness
remains unpaid, that:
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(a) The Borrower is the owner of the Collateral free and clear
of all security interests, restrictions, claims, liens, or other encumbrances of
any kind, except for the Security Interest, except as otherwise disclosed in
writing to the Secured Party; and
(b) The Borrower is authorized to enter into this Security
Agreement.
4. COVENANTS OF BORROWER. So long as this Agreement has not been
terminated as provided hereunder, the Borrower:
(a) shall defend the Collateral against the claims and demands
of all other parties;
(b) shall keep the Collateral free from all security interests
or other encumbrances, except as noted in Section 2, and shall not sell,
transfer, assign, deliver or otherwise dispose of any of the Collateral, or any
interest therein except in the ordinary course of business or with the express
prior written consent of the Secured Party;
(c) shall notify the Secured Party promptly, in writing, of
any change in: (i) the Borrower's name; (ii) the Borrower's address; (iii) the
location(s) at which the Collateral is kept;
(d) shall execute and deliver to the Secured Party such
financing statements and other documents, pay all costs of UCC searches and
filing financing statements and other documents in all public offices requested
by the Secured Party and do such other things as the Secured Party may
reasonably request;
(e) shall not hide the Collateral or remove the Collateral
from the State of Florida;
(f) shall, at Borrower's expense, duly execute and deliver, or
cause to be duly executed and delivered, such further agreements, instruments
and documents, as requested by Secured Party, to evidence, perfect, maintain and
enforce Secured Party's security interest and the priority thereof in the
Collateral and to otherwise effectuate the provisions or purposes of the
Security Agreement, the Note and any other documents contemplated or referred to
therein.
5. DEFAULT.
(a) Each of the following events shall constitute an event of
default ("Event of Default"):
(i) if Borrower commits a breach of any of the
material terms and conditions of this Security Agreement; or
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(ii) if Borrower commits an event of default under
the Purchase Agreement or the Note.
(b) Upon the happening of an Event of Default, the Secured
Party may declare all or part of the unpaid Indebtedness to be immediately due.
(c) Upon the happening of an Event of Default, the Secured
Party's rights with respect to the Collateral shall be those of a secured party
under the Uniform Commercial Code and any other applicable law from time to time
in effect. The Secured Party shall also have any additional rights granted
herein and in any other agreement now or hereafter in effect between the
Borrower and the Secured Party. If requested by the Secured Party, the Borrower
shall assemble the Collateral and make it available to the Secured Party at a
place to be designated by the Secured Party.
6. MISCELLANEOUS.
(a) No delay or omission by the Secured Party in exercising
any right hereunder or with respect to any Indebtedness shall operate as a
waiver of that or any other right, and no single or partial exercise of any
right shall preclude the Secured Party from any other or future exercise of the
right or the exercise of any other right or remedy. All rights and remedies of
the Secured Party under this agreement and under the Uniform Commercial Code
shall be deemed cumulative.
(b) This Agreement may not be modified or amended nor shall
any provision of it be waived except by in writing signed by the Borrower and by
an authorized officer of the Secured Party.
(c) This Agreement shall be construed under the laws of the
State of Florida. If any part or provision of this Agreement is invalid or in
contravention of any applicable law or regulation, such part or provision shall
be severed without affecting the validity of any other part or provision of this
Agreement.
(d) This Security Agreement is a continuing agreement which
shall remain in force until all of the Indebtedness has been paid in full to the
Secured Party.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
GALACTICOMM TECHNOLOGIES, INC. XXXXXXXXX INVESTMENTS, LTD.
By: /s/ XXXXXXX XXXXXXX By:
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Name: Xxxxxxx Xxxxxxx Name:______________________
Title: President Title:_____________________
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