SECURITY AGREEMENT
EXHIBIT 10.13
THIS
SECURITY AGREEMENT (the "Agreement") is made this ___ day of March, 2008,
by and among XXX XXXXXX, BLUE RIDGE SERVICES,
L.P, XXXXXXX XXXXX AND (pro-rate to each of such persons money
contributed) (the "Lender") and GEN2MEDIA
CORPORATION, E360, LLC, XXXX SPIO, XXXX XXXXXXX AND XXX XXXXXXXX, Jointly
and Severally (All of suck parties shall hereinafter be individually referred to
as a "Debtor" and collectively, as the "Debtors:).
P R E A M B L E:
Debtors
have requested Lender to provide certain financing to Debtors (the "Loan").
Lender has agreed to do so, so long as, among other things, this Agreement is
executed and delivered by Debtors to Lender.
NOW, THEREFORE, in consideration of the
premises which are incorporated herein by this reference and constitute an integral part hereof, the
execution and delivery of this Agreement and in order to induce the Lender to
extend its financing to
Debtors, the parties agree as
follows:
ARTICLE ONE.
DEFINITIONS
SECTION
1.1. DEFINED
TERMS. In addition to terms defined elsewhere in this Agreement or any
Supplement
or Exhibit hereto, when used herein, the following terms shall have the
following meanings:
(A) "Collateral"
shall mean all assets of Gen2Media Corporation and E360, LLC, including,
without limitation, all furniture, fixtures, equipment, contract rights,
intellectual property, accounts, and all other assets, wherever located,
tangible or intangible, fixed or contingent, and any and all substitutions,
renewals, improvements, replacements, additions and proceeds thereof. The
Collateral shall also include all common or stock, including options, or the
right to receive same, owned by Spio, Argenti and/or XxXxxxxx, in Gen2Media
Corp.,
including
stock or options now owned, or later acquired. and whether now owned or existing
or hereafter existing or acquired
(C) "Documents"
shall mean this Agreement, the Note and any other instruments or
documents
required or contemplated hereunder or thereunder, whether now existing or at any
time hereafter arising.
(D) "Liabilities"
shall mean all liabilities, indebtedness and obligations of Debtors to
the Lender relating to the Note, this Agreement and all of the other Documents,
howsoever created, arising or evidenced, whether now existing or hereafter
arising, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, primary or secondary, joint or
several, whether existing or arising through discount, overdraft, purchase,
direct loan, participation, operation of law, or otherwise, including, but not
limited to, all reasonable outside
attorneys' and paralegals' fees or charges relating to the preparation of
the Documents and the enforcement of Lender's rights, remedies, powers and
security interests under this Agreement the Note or any of the other
Documents.
. •
'. •
(E) "Note"
shall mean that certain Promissory Note dated as of the date of this
Agreement given by Debtors to Lender in the principal amount of $150,000, as may
be amended, extended, renewed, supplemented, replaced and/or restated from time
to time.
(F) "Person"
shall mean individually, and "Persons"
shall mean collectively, any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal or otherwise including,
without limitation, any instrumentality, division, agency, body or department
thereof).
(G) "UCC" shall mean the Uniform
Commercial Code as enacted and amended in the State of Florida.
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ARTICLE TWO.
COLLA'T'ERAL
SECTION
2.1. SECURITY INTERESTS.
To secure payment of the Liabilities, Debtors hereby irrevocably pledge,
assign, transfer, convey and set over to the Lender and hereby grant to the
Lender a security interest in and to
the Collateral, howsoever arising, wherever located and whether now owned
or existing or hereafter existing or acquired.
SECTION
2.2. PERFECTION AND FILING
REQUIREMENTS, Debtors shall perform any and all acts requested by the
Lender to establish, maintain and continue the Lender's security interests and
liens in the Collateral, including, but not limited to, executing financing
statements and such other instruments and documents when and as reasonably
requested by the Lender. Debtors hereby authorize Lender through any of Lender's
employees, agents or attorneys to file any and all financing statements,
including, without limitation, any continuations, transfers or amendments
thereof required to perfect Lender's security interest and liens in the
Collateral under the UCC without authentication or execution by
Debtors.
SECTION
2.3. USE OF COLLATERAL.
Each Debtor shall at all times keep the Collateral in good condition and
repair and free and clear of all unpaid charges (including, but not limited to,
taxes), liens and encumbrances, and shall pay
or cause to be paid all obligations as they come due, including, but not limited
to, mortgage
payments, real estate taxes, assessments and rent due on the premises
where the Collateral is or may be located, except for charges, liens,
encumbrances and obligations being contested in good faith by such Debtor and
for which adequate reserves have been established. Each Debtor agrees that
(except as provided in the immediately preceding sentence) in the event such
Debtor fails to pay such obligations, the Lender may, at its sole and arbitrary
diseretion, pay such obligations for the account of such Debtor. The Lender may,
in its sole discretion, discharge faxes, liens or security interests or other
encumbrances at any time levied or placed on the Collateral and may, in its sole
and arbitrary discretion, pay for the maintenance and preservation of the
Collateral. Any payments made by the Lender
pursuant to
this Section shall be repayable to the Lender by Debtors immediately upon
the Lender's demand therefor, with interest at a rate equal to the highest
interest rate described in the Note in effect from time to time dUring the
period from and including the date funds are so expended by the Lender to the
date of repayment, and any such amounts due and owing the Lender shall be an
additional obligation of Debtors to the Lender secured hereunder.
ARTICLE THREE.
REPRESENTATIONS AND WARRANTIES
SECTION
3.1. DEBTORS. Each Debtor
represents and warrants to the Lender that:
(A) Organization, Etc. It
is duly organized, validly existing and in good standing under the laws of the
State of its incorporation and is duly qualified and in good standing or has
applied for qualification as a foreign corporation authorized to do business in
each jurisdiction where, because of the nature of its activities or properties,
such qualification is required.
(B)
Authorization: No Conflict.
The execution and delivery of the Documents are all within the corporate
powers of it, have been duly authorized by all necessary action, have, or by the
time of their execution and delivery shall have, received all necessary
governmental or regulatory approval (Wary shall be required), and do not and
will not contravene or conflict with any provision of (i) law, rule, regulation
or ordinance, (ii) the articles of incorporation or by-laws of it; or (iii) any
agreement binding upon it or any of their properties, as the case may
be.
(C) Validity and Binding Nature.
The Documents executed by it are the legal, valid and binding obligations
of it,
enforceable against it, in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization and
other similar laws of general application affecting the rights and remedies of
creditors and except as the availability of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefore may be brought.
ARTICLE FOUR. INTENTIONALLY
DELETED
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ARTICLE FIVE. EVENTS OF
DEFAULT
SECTION
5.1. EVENTS
OF DEFAULT.
Each of the following acts, occurrences or omissions shall constitute an
event of default under this Agreement (herein referred to as an "Event of
Default"), whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body or tribunal:
(A)
Debtors
shall default in the payment when due of any amount due and owing by Debtors to
the Lender under the Note; or
(B)
Except
for the Event of Default set forth in Section 7.1(A) of this Agreement, default
in the payment of any other amount owing by Debtors to the Lender pursuant to
the Documents or pursuant to any other
agreement, note, instrument or guarantee; or
(C)
Any
representation or warranty made by any Debtor contained in the Documents shall
at any time prove to have been incorrect in any material' respect when made;
or
(D)
Any
Debtor shall default in the performance or observance of
any term, covenant, condition or agreement on its part to be performed or
observed under the Documents (not constituting an Event of Default under any
other clause of this Section 5.1 of this Agreement); or
(E) Either:
(i) any
Debtor shall become insolvent or generally fail to pay, or admit in
writing its inability to pay, its debts as they become due, or a proceeding
under any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt or receivership law or statute is filed by or against such
Debtor or such Debtor makes an assignment for the benefit of creditors; provided, however,
that, no Event of Default shall exist pursuant to this Subsection E,
Clause (i) due to an involuntary bankruptcy case, proceeding or petition filed
against such Debtor unless such involuntary case,
proceeding or
petition shall not have been dismissed or withdrawn within 60 days after
the date of such involuntary filing; or (ii) corporate or other action shall be
taken by such Debtor for the purpose of effectuating any of the foregoing;
or
(F) If notice
is given that the Collateral or any part of the Collateral, is subject to levy,
attachment, seizure, or confiscation or uninsured loss; provided, however,
that the deductible amount on any insurance policy currently in effect on
the Collateral shall not be considered an uninsured loss pursuant to this
Subsection.
ARTICLE
SIX. REMEDIES
SECTION
6.1. REMEDIES UPON DEFAULT.
Upon the occurrence and continuance of any Event of Default, and the
expiration of any applicable cure period, and in every such event:
(A) notwithstanding
anything • in the Documents, Lender may, in its sole and arbitrary discretion,
declare the principal of and interest on the Note, and all other amounts owed
under the Documents, to be forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived; and
(B)
Lender
may, in its sole and arbitrary discretion, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived, exercise
all of the remedies of a secured party and mortgage holder under applicable law,
including, but not limited to, the UCC, and all of its rights and remedies under
the Documents; and
(C)
Lender may require Debtors to make the Collateral and the records pertaining to
the Collateral available to the Lender at a place designated by the Lender which
is reasonably convenient or may take repossession of the Collateral and the
records pertaining to the Collateral without the use of any judicial process and
without any prior notice thereof to Debtors; and
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(D)
Except as otherwise
provided by law, Lender may, at its option, and in its sole and arbitrary
discretion, sell the Collateral at public or private sale upon such terms and
conditions as Lender may reasonably deem proper, and Lender may purchase the
Collateral at any such sale, and apply the net proceeds, after deducting all
costs, expenses and attorneys' fees incurred at any time in the collection of
the indebtedness of Debtors to the Lender and in the protection and sale of
the.
Collateral, to the payment of said indebtedness, returning the remaining
proceeds, if any, to Debtors, with
Debtors remaining liable for any amount remaining unpaid after such
application; and
(E)
Lender may, at its
option, and in its sole and arbitrary discretion, use, in connection with any
assembly or disposition of the Collateral, any
trademark, trade name, trade style, copyright, patent right or technical
process used or utilized by Debtors; and
(G) Debtors shall,
upon the request of the Lender, forthwith upon receipt, transmit and deliver
to the
Lender in the form
received, all cash, checks, drafts and other instruments for the payment of
money (properly endorsed,
where required, so that such items may be collected by Lender) which may be
received by any Debtor at any time in full or partial payment of
any Collateral. Debtors shall not commingle any such items which may be so
received by Debtors with
any other of its funds or property but shall hold them separate and apart from
their own funds or
property and in trust for the Lender until delivery is made to
Lender.
SECTION
6.2. ATTORNEY-IN-FACT.
JJpon the occurrence and
during the continuation of an Event of Default, Debtors hereby appoint
Lender as such Perton's attorney-in-fact, with full authority in such Person's
place and stead and in such Person's name or otherwise, from time to time in
Lender's sole and arbitrary discretion, to
take any action and to execute any instrument which Lender may deem
necessary or advisable to accomplish the purpose of this Agreement.
SECTION
6.3. REMEDIES
ARE SEVERABLE AND CUMULATIVE. All
provisions contained herein pertaining to any remedy of the Lender shall
be and are severable and cumulative and in addition to all other rights and
remedies available in the Documents, at law and in equity, any one or more may
be exercised simultaneously or successively. Any notification required pursuant
to this Article or under applicable law shall be reasonably and properly given
to Debtors at the address and by any of the methods of giving such notice as set forth in Section 7.3
of this Agreement, at least 10
days before taking any action.
ARTICLE SEVEN.
MISCELLANEOUS
SECTION
7.1. NO
WAIVER,
MODIFICATIONS TN WRITING. No failure or delay on the part of Xxxxxx.xx
exercising any right, power or remedy pursuant to the Documents shall operate as
a waiver thereof, nor Shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof, or the exercise
of any other right, power or remedy. No amendment,
modification, supplement, termination or waiver of
any provision of the Documents, nor any consent by Lender to any departure
by Debtors therefrom, shall be effective unless the same shall be in
writing and signed by Lender. Any waiver of any provision of the Documents
and any consent by Lender to any departure by
Debtors from the terms of any provision of the
Documents
shall be effective only in the specific instance and for the specific purpose
for which given. No notice to or demand on Debtors in any case shall
entitle Debtors to any other or further notice or demand in similar or other
circumstances.
SECTION
7.2. SET-OFF. Lender shall have the right
to set-off, appropriate and apply toward payment of any of the Liabilities, in
such order of application as Lender may from time to time and at any time elect,
any cash, credit, deposits, accounts, securities and any other property of any
Debtor which is in transit. to or in the possession, custody or control of
Lender, or any agent, bailee, or Affiliate of Lender. Debtors hereby grant to
Lender a security interest in all such property.
SECTION
7.3. NOTICES,
ETC. All notices, demands, instructions and other communications required
or permitted to be given to or made upon any party hereto shall be in writing
personally delivered or sent by overnight courier or by facsimile machine, and
shall be deemed to be given for purposes of this Agreement on the day
that such writing is delivered or sent by facsimile machine or one (1) days
after such notice is sent by overnight courier to the intended recipient thereof
in accordance with the provisions of this Section 7.3. Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this. Section 7.3 of this Agreement, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses indicated for such
party below:
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If
to the Debtor(s)
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c/o
Gen2Media Corporation
0000 Xxxxx Xxxx
Xx
Xxxxxxx, XX
00000
Phone: (000) 000-0000
Fax No: (000) 000-0000
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If to the
Lender:
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c/o Xxx
Xxxxxx
Phone: ( )
Fax No.:
( )
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SECTION
7.4. COSTS,
EXPENSES AND TAXES. Debtors agree to pay all out-of-pocket fees and
expenses of Lender (including, but not limited to, UCC Filing and Search Fees
and fees and expenses of outside counsel to Lender and paralegals) in connection
with-the making of the loans which are the subject of the Note and preparation,
administration and enforcement of the Documents and the Liabilities. In
addition, Debtors shall pay any and all stamp, transfer and other taxes payable
or determined to be payable in connection with the execution and delivery of the
Documents and agrees to hold the Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes. If any suit or proceeding arising from any of the foregoing is
brought against Lender, Debtors, to the extent and
in the manner directed by Lender, will resist and defend such suit or
proceeding or cause the same to be resisted and defended by counsel approved by
Lender. If Debtors shall fail to do any act or thing which it has covenanted to
do under this Agreement or any representation or warranty on the part of Debtors
contained in this Agreement shall be
breached, Lender may, in its sole and arbitrary discretion, after 10 days
written notice is sent to Debtors, do the same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose; and any and all
amounts so expended by the Lender shall be repayable to the Lender by Debtors
immediately upon the Lender's demand therefor, with interest at a rate equal to
the highest interest rate set forth in the Note in effect from time to time
during the period from and including the date funds are so expended by Lender to
the date of repayment, and any such amounts due and owing Lender shall be deemed
to be part of the Liabilities secured hereunder, The obligations of Debtors
under this Section shall survive' the termination of this Agreement and the
discharge of the other obligations of Debtors under the Documents.
SECTION
7.5. FURTHER
ASSURANCES. Debtor agrees to do such further acts and things and to
execute and deliver to Lender such additional assignments, agreements, powers,
documents and instruments as Lender may reasonably require or deem advisable to
carry into effect the purposes of the Documents, or to confirm unto Lender its
rights, powers and remedies under the Documents.
SECTION
7.6. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which counterparts, once they
are executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement.
SECTION
7.7. BINDING
EFFECTS- ASSIGNMENT. This Agreement shall be binding upon, and inure to
the benefit of, Lender, Debtors and their respective successors, assigns,
representatives and heirs. Neither Debtor shall assign any of its rights nor
delegate any of its obligations under Documents without the prior written
consent of Lender and no such consent by Lender shall, in any event, relieve any
Debtor of any of its obligations under the Documents.
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SECTION
7.8. HEADINGS. Captions
contained in this Agreement are inserted only as a matter of convenience and in
no way define, limit or extend the scope or intent of this Agreement or
any provision
of this Agreement and shall not affect the construction of this
Agreement.
SECTION
7.9. ENTIRE AGREEMENT.
This Agreement, together with the Documents, contains the entire
agreement between the parties hereto with respect to the transactions
contemplated herein and supersede all prior representations, agreements,
covenants and understandings, whether oral or written, related to the subject
matter of the Agreement, Except as specifically set forth in this Agreement,
Lender makes no covenants to Debtors, including, but not limited to, any
commitments to provide any financing to Debtors.
SECTION
7.10. GOVERNING LAW. This
Agreement shall be deemed to be a contract made under the laws of the State of
Florida and for all purposes shall be construed in accordance with the laws of
the State of Florida.
SECTION
7.11. SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is Prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION
7.12. CONFLICT. In the
event of any conflict between this Agreement and any of the other Documents, the
terms and provisions of this Agreement shall govern and control.
SECTION
7.13. JURISDICTION; WAIVER.
DEBTOR ACKNOWLEDGES THAT THIS AGREEMENT IS BEING SIGNED BY THE LENDER IN
PARTIAL CONSIDERATION OF LENDER'S RIGHT TO ENFORCE IN THE JURISDICTION STATED
BELOW THE: TERMS AND PROVISION OF THIS AGREEMENT AND THE DOCUMENTS. DEBTOR
CONSENTS TO JURISDICTION IN THE STATE OF FLORIDA AND VENUE IN ANY FEDERAL OR
STATE COURT IN THE COUNTY OF ORANGE FOR SUCH PURPOSES AND WAIVES ANY AND ALL
RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND ANY OBJECTION THAT SAID COUNTY
IS NOT CONVENIENT. DEBTOR WAIVES ANY RIGHTS TO COMMENCE ANY ACTION AGAINST
LENDER IN ANY JURISDICTION EXCEPT THE AFORESAID COUNTY
AND STATE. LENDER AND DEBTOR HEREBY EACH EXPRESSLY WAIVE ANY AND ALL
RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY WITH RESPECT TO ANY MATTER WHATSOEVER
RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOANS, THE
DOCUMENTS AND/OR THE TRANSACTIONS WHICH ARE THE SUBJECT OF THE
DOCUMENTS.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered at Orlando, Florida, as of the date first above
written.
GEN2MEDIA CORPORATION, | E360, LLC, | ||||
A Nevada Corporation | a Florida Limited Liability Company | ||||
By:
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/s/
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By:
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/s/
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