Exhibit 4.2
SECURITY AGREEMENT
1. Identification.
This Security Agreement (the "Agreement"), dated October 26, 2001, is
entered into by and between Advanced Aerodynamics & Structures, Inc., a Delaware
corporation ("Debtor"), and Xxxxxxx Xxxxxxx, as collateral agent [acting in the
manner and to the extent described in the Collateral Agent Agreement defined
below] (the "Collateral Agent"), for the benefit of the parties identified on
Schedule A hereto (collectively, the "Lenders").
2. Recitals.
2.1 The Lenders have made or are making loans to Debtor (the "Loans").
2.2 The Loans are evidenced and will be evidenced by those certain Secured
Convertible Notes dated at or about October 26, 2001 and thereafter, some of
which are identified on Schedule A hereto ("Notes") and executed by Debtor as
the "Borrower" thereof, for the benefit of each individual Lender as the
"Holder" thereof which were or will be issued pursuant to Subscription
Agreements entered into or to be entered into between Debtor and each holder of
Notes ("Subscription Agreements"). Up to $10,000,000 of Notes to be issued in
the aggregate by the Company pursuant to Subscription Agreements are included in
the Loans.
2.3 In order to induce Lenders to make the Loans, and as security for
Debtor's performance of its obligations under the Notes and as security for the
repayment of the Loans and any and all other sums due from Debtor to Lender
whether arising under the Notes issued pursuant to a Subscription Agreement,
including all of the Debtor's obligations arising under the Notes and the
Subscription Agreement relating thereto (collectively, the "Obligations"),
Debtor, for good and valuable consideration, receipt of which is acknowledged,
has agreed to grant to the Collateral Agent, for the benefit of the Lenders, a
security interest in the Collateral (as such term is hereinafter defined), on
the terms and conditions hereinafter set forth.
2.4 The Lenders have appointed Xxxxxxx Xxxxxxx as Collateral Agent
pursuant to that certain Collateral Agent Agreement dated as of October 26, 2001
("Collateral Agent Agreement"), among the Lenders and Collateral Agent. Lenders
who become Lenders after the date of this Agreement shall have no rights
hereunder unless and until a signed copy of this Agreement and the Collateral
Agent Agreement is delivered to the Collateral Agent.
Defined Terms. The following defined terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
General Intangibles, Instruments, Inventory and Proceeds.
3. Grant of General Security Interest in Collateral.
3.1 As security for the Obligations, Debtor hereby grants the Collateral
Agent, for the benefit of the Lenders, a security interest in the Collateral.
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3.2 "Collateral" shall mean all of the following property of Debtor:
(a) All now owned and hereafter acquired right, title and interest
of Debtor in, to and in respect of all: Accounts, interests in goods represented
by Accounts, returned, reclaimed or repossessed goods with respect thereto and
rights as an unpaid vendor; contract rights; Chattel Paper; investment property;
General Intangibles (including but not limited to, tax and duty claims and
refunds, registered and unregistered patents, trademarks, service marks,
certificates [including but not limited to the United States of America,
Department of Transportation, Federal Aviation Administration, Type Certificate
Number A49NM], copyrights trade names, applications for the foregoing, trade
secrets, goodwill, processes, drawings, blueprints, customer lists, licenses,
whether as licensor or licensee, choses in action and other claims, and existing
and future leasehold interests in equipment, real estate and fixtures);
Documents; Instruments; letters of credit, bankers' acceptances or guaranties;
cash moneys, deposits; securities, bank accounts, deposit accounts, credits and
other property now or hereafter held in any capacity by Lender, its affiliates
or any entity which, at any time, participates in Lender's financing of Debtor
at any other depository or other institution; agreements or property securing or
relating to any of the items referred to above;
(b) All now owned and hereafter acquired right, title and interest
of Debtor in, to and in respect of goods, including, but not limited to:
(i) All Inventory, wherever located, whether now owned or
hereafter acquired, of whatever kind, nature or description, including all raw
materials, work-in-process, finished goods, and materials to be used or consumed
in Debtor's business; and all names or marks affixed to or to be affixed thereto
for purposes of selling same by the seller, manufacturer, lessor or licensor
thereof and all Inventory which may be returned to Debtor by its customers or
repossessed by Debtor and all of Debtor's right, title and interest in and to
the foregoing (including all of Debtor's rights as a seller of goods);
(ii) All Equipment and fixtures, wherever located, whether now
owned or hereafter acquired, including, without limitation, all machinery, motor
vehicles, furniture and fixtures, and any and all additions, substitutions,
replacements (including spare parts), and accessions thereof and thereto
(including, but not limited to Debtor's rights to acquire any of the foregoing,
whether by exercise of a purchase option or otherwise);
(c) All now owned and hereafter acquired right, title and
interests of Debtor in, to and in respect of any real or other personal property
in or upon which Debtor has or may hereafter have a security interest, lien or
right of setoff;
(d) All present and future books and records relating to any of the
above including, without limitation, all computer programs, printed output and
computer readable data in the possession or control of the Debtor, any computer
service bureau or other third party; and
(e) All products and Proceeds of the foregoing in whatever form and
wherever located, including, without limitation, all insurance proceeds and all
claims against third parties for loss or destruction of or damage to any of the
foregoing.
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3.3 The Collateral Agent is hereby specifically authorized, after an Event
of Default, to transfer any Collateral into the name of the Collateral Agent and
to take any and all action deemed advisable to the Collateral Agent to remove
any transfer restrictions affecting the Collateral.
4. Perfection of Security Interest.
Debtor shall execute and deliver to the Collateral Agent UCC-1 Financing
Statements ("Financing Statements") relating to the security interests in
Debtor's right, title and interest in and to the Collateral. The Collateral
Agent is instructed to file the Financing Statements in the following
jurisdictions: Los Angeles County, State of California, State of Delaware, State
of New York and New York County. These Financing Statements are deemed to have
been filed for the benefit of the Lenders identified on Schedule A hereto.
5. Distribution on Liquidation.
5.1 If any sum is paid as a liquidating distribution on or with respect to
the Collateral, Debtor shall deliver same to the Collateral Agent to be applied
to the Obligations then due, in accordance with the terms of the Notes.
5.2 Prior to any Event of Default (as defined herein), Debtor shall be
entitled to exercise all voting power pertaining to any of the Collateral,
provided such exercise is not contrary to the interests of the Lenders and does
not impair the Collateral.
6. Further Action By Debtor; Covenants and Warranties.
6.1 Collateral Agent at all times shall have a perfected security interest
in the Collateral. Subject to the security interest described herein, and
subject to a security interest granted by the Company pursuant to a Security
Agreement entered into by the Company and certain lenders at or about March 23,
2001, Debtor has and will continue to have full title to the Collateral free
from any liens, leases, encumbrances, judgments or other claims. Collateral
Agent's security interest in the Collateral constitutes and will continue to
constitute a first, prior and indefeasible security interest in favor of
Collateral Agent. Debtor will do all acts and things, and will execute and file
all instruments (including, but not limited to, security agreements, financing
statements, continuation statements, etc.) reasonably requested by Collateral
Agent to establish, maintain and continue the perfected security interest of
Collateral Agent in the Collateral, and will promptly on demand, pay all costs
and expenses of filing and recording, including the costs of any searches
reasonably deemed necessary by Collateral Agent from time to time to establish
and determine the validity and the continuing priority of the security interest
of Collateral Agent, and also pay all other claims and charges that, in the
opinion of Collateral Agent, exercised in good faith, is reasonably likely to
materially prejudice, imperil or otherwise affect the Collateral or its security
interest therein.
6.2 Other than in the ordinary course of business, and except for
Collateral which has become obsolete or is of inconsequential in value, Debtor
will not sell, transfer, assign or pledge those items of Collateral (or allow
any such items to be sold, transferred, assigned or pledged), without the prior
written consent of Collateral Agent. Although Proceeds of Collateral are covered
by this Security Agreement, this shall not be construed to mean that Collateral
Agent consents to any sale of the Collateral, except as provided herein.
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6.3 Debtor will, at all reasonable times, allow Collateral Agent or its
representatives free and complete access to all of Debtor's records which in
any way relate to the Collateral, for such inspection and examination as
Collateral Agent reasonably deems necessary.
6.4 Debtor, at its sole cost and expense, will protect and defend this
Security Agreement, all of the rights of Collateral Agent hereunder, and the
Collateral against the claims and demands of all other parties.
6.5 Debtor will promptly notify Collateral Agent of any levy, distraint or
other seizure by legal process or otherwise of any part of the Collateral, and
of any threatened or filed claims or proceedings that are reasonably likely to
affect or impair any of the rights of Collateral Agent under this Security
Agreement.
6.6 Debtor, at its own expense, will obtain and maintain in force
insurance policies covering losses or damage to those items of Collateral which
constitute physical personal property. The insurance policies to be obtained by
Debtor shall be in form and amounts reasonably acceptable to Collateral Agent.
Debtor shall make the Collateral Agent a loss payee thereon to the extent of its
interest. Collateral Agent is hereby irrevocably (until the Obligations are paid
in full) appointed Debtor's attorney-in-fact to endorse any check or draft that
may be payable to Debtor so that Collateral Agent may collect the proceeds
payable for any loss under such insurance. The proceeds of such insurance, less
any costs and expenses incurred or paid by Collateral Agent in the collection
thereof, shall be applied either toward the cost of the repair or replacement of
the items damaged or destroyed, or on account of any sums secured hereby,
whether or not then due or payable.
6.7 Collateral Agent may, at its option, and without any obligation to do
so, pay, perform and discharge any and all amounts, costs, expenses and
liabilities herein agreed to be paid or performed by Debtor, upon Debtor's
failure to do so, and all amounts expended by Collateral Agent in so doing shall
become part of the Obligations secured hereby, and shall be immediately due and
payable by Debtor to Collateral Agent upon demand and shall bear interest at 18%
per annum from the dates of such expenditures until paid.
6.8 Upon the request of Collateral Agent, Debtor will furnish within five
(5) days thereafter to Collateral Agent, or to any proposed assignee of this
Security Agreement, a written statement in form reasonably satisfactory to
Collateral Agent, duly acknowledged, certifying the amount of the principal and
interest then owing under the Obligations, whether to its knowledge any claims,
offsets or defenses exist against the Obligations or against this Security
Agreement, or any of the terms and provisions of any other agreement of Debtor
securing the Obligations. In connection with any assignment by Collateral Agent
of this Security Agreement, Debtor hereby agrees to cause the insurance policies
required hereby to be carried by Debtor, if any, to be endorsed in form
satisfactory to Collateral Agent or to such assignee, with loss payable clauses
in favor of such assignee, and to cause such endorsements to be delivered to
Collateral Agent within ten (10) calendar days after request therefor by
Collateral Agent.
6.9 The Debtor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, as the Collateral Agent may reasonably require to perfect its security
interest hereunder.
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6.10 Debtor represents and warrants that it is the true and lawful
exclusive owner of the Collateral, free and clear of any liens and encumbrances
except as described in Section 6.1 above.
6.11 Debtor hereby agrees not to divest itself of any right under the
Collateral absent prior written approval of the Collateral Agent.
7. Power of Attorney.
Debtor hereby irrevocably constitutes and appoints the Collateral Agent as
the true and lawful attorney of Debtor, with full power of substitution, in the
place and stead of Debtor and in the name of Debtor or otherwise, at any time or
times, in the discretion of the Collateral Agent, to take any action and to
execute any instrument or document which the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Agreement which Debtor fails to
take or fails to execute within five (5) business days of the Collateral Agent's
reasonable request therefor. This power of attorney is coupled with an interest
and is irrevocable.
8. Performance By The Collateral Agent.
If Debtor fails to perform any material covenant, agreement, duty or
obligation of Debtor under this Agreement, the Collateral Agent may, after any
applicable cure period, at any time or times in its discretion, take action to
effect performance of such obligation. All reasonable expenses of the Collateral
Agent incurred in connection with the foregoing authorization shall be payable
by Debtor as provided in Paragraph 12.1 hereof. No discretionary right, remedy
or power granted to the Collateral Agent under any part of this Agreement shall
be deemed to impose any obligation whatsoever on the Collateral Agent with
respect thereto, such rights, remedies and powers being solely for the
protection of the Collateral Agent.
9. Event of Default.
An event of default ("Event of Default") shall be deemed to have occurred
hereunder upon the occurrence of any event of default as defined in the Notes or
Subscription Agreement. Upon and after any Event of Default, after the
applicable cure period, if any, any or all of the Obligations shall become
immediately due and payable at the option of the Collateral Agent, for the
benefit of the Lenders, and the Collateral Agent may dispose of Collateral as
provided below. A default by Debtor of any of its obligations pursuant to this
Agreement shall be deemed an Event of Default hereunder and an event of default
as defined in the Obligations.
10. Disposition of Collateral.
Upon and after any Event of Default which is then continuing,
10.1 The Collateral Agent may exercise its rights with respect to each and
every component of the Collateral, without regard to the existence of any other
security or source of payment for the Obligations. In addition to other rights
and remedies provided for herein or otherwise available to it, the Collateral
Agent shall have all of the rights and remedies of a lender on default under the
Uniform Commercial Code then in effect in the State of New York.
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10.2 If any notice to Debtor of the sale or other disposition of
Collateral is required by then applicable law, five (5) days' prior notice (or,
if longer, the shortest period of time permitted by then applicable law) to
Debtor of the time and place of any public sale of Collateral or of the time
after which any private sale or any other intended disposition is to be made,
shall constitute reasonable notification.
10.3 The Collateral Agent is authorized, at any such sale, if the
Collateral Agent deems it advisable to do so, in order to comply with any
applicable securities laws, to restrict the prospective bidders or purchasers to
persons who will represent and agree, among other things, that they are
purchasing the Collateral for their own account for investment, and not with a
view to the distribution or resale thereof, or otherwise to restrict such sale
in such other manner as the Collateral Agent deems advisable to ensure such
compliance. Sales made subject to such restrictions shall be deemed to have been
made in a commercially reasonable manner.
10.4 All cash proceeds received by the Collateral Agent for the benefit of
the Lenders in respect of any sale, collection or other enforcement or
disposition of Collateral, shall be applied (after deduction of any amounts
payable to the Collateral Agent pursuant to Paragraph 12.1 hereof) against the
Obligations pro rata among the Lenders in proportion to their interests in the
Obligations. Upon payment in full of all Obligations, Debtor shall be entitled
to the return of all Collateral, including cash, which has not been used or
applied toward the payment of Obligations or used or applied to any and all
costs or expenses of the Collateral Agent incurred in connection with the
liquidation of the Collateral (unless another person is legally entitled
thereto). Any assignment of Collateral by the Collateral Agent to Debtor shall
be without representation or warranty of any nature whatsoever and wholly
without recourse. Each Lender may purchase the Collateral and pay for such
purchase by offsetting any sums owed to such Lender by Debtor arising under the
Obligations or any other source.
11. Waiver of Automatic Stay. The Debtor acknowledges and agrees that should a
proceeding under any bankruptcy or insolvency law be commenced by or against the
Debtor, or if any of the Collateral (as defined in this Security Agreement)
should become the subject of any bankruptcy or insolvency proceeding, then the
Collateral Agent should be entitled to, among other relief to which the
Collateral Agent may be entitled under the Note, Security Agreement,
Subscription Agreement and any other agreement to which the Debtor, Lenders or
Collateral Agent are parties, (collectively "Loan Documents") and/or applicable
law, an order from the court granting immediate relief from the automatic stay
pursuant to 11 U.S.C. Section 362 to permit the Collateral Agent to exercise all
of its rights and remedies pursuant to the Loan Documents and/or applicable law.
THE DEBTOR EXPRESSLY WAIVE THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11
U.S.C. SECTION 362. FURTHERMORE, THE DEBTOR EXPRESSLY ACKNOWLEDGES AND AGREES
THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE
OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105)
SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF
THE COLLATERAL AGENT TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN
DOCUMENTS AND/OR APPLICABLE LAW. The Debtor hereby consents to any motion for
relief from stay which may be filed by the Collateral Agent in any bankruptcy or
insolvency proceeding initiated by or against the Debtor, and further agrees not
to file any opposition to any motion for relief from stay filed by the
Collateral Agent. The Debtor represents, acknowledges and agrees that this
provision is a specific and material aspect of this Agreement, and that the
Collateral Agent would not agree to the terms of this Agreement if this waiver
were not a part of this Agreement. The Debtor further represents, acknowledges
and agrees that this waiver is knowingly, intelligently and voluntarily made,
that neither the Collateral Agent nor any person acting on behalf of the
Collateral Agent has made any representations to induce this waiver, that the
Debtor has
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been represented (or has had the opportunity to be represented) in the signing
of this Agreement and in the making of this waiver by independent legal counsel
selected by the Debtor and that the Debtor has had the opportunity to discuss
this waiver with counsel. The Debtor further agrees that any bankruptcy or
insolvency proceeding initiated by the Debtor will only be brought in the
Federal Court within the Southern District of New York.
12. Miscellaneous.
12.1 Expenses. Debtor shall pay to the Collateral Agent, on demand, the
amount of any and all reasonable expenses, including, without limitation,
attorneys' fees, legal expenses and brokers' fees, which the Collateral Agent
may incur in connection with (a) sale, collection or other enforcement or
disposition of Collateral; (b) exercise or enforcement of any the rights,
remedies or powers of the Collateral Agent hereunder or with respect to any or
all of the Obligations; or (c) failure by Debtor to perform and observe any
agreements of Debtor contained herein which are performed by the Collateral
Agent.
12.2 Waivers, Amendment and Remedies. No course of dealing by the
Collateral Agent and no failure by the Collateral Agent to exercise, or delay by
the Collateral Agent in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right, remedy or power of the Collateral Agent. No amendment, modification or
waiver of any provision of this Agreement and no consent to any departure by
Debtor therefrom, shall, in any event, be effective unless contained in a
writing signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The rights, remedies and powers of the Collateral Agent, not only
hereunder, but also under any instruments and agreements evidencing or securing
the Obligations and under applicable law are cumulative, and may be exercised by
the Collateral Agent from time to time in such order as the Collateral Agent may
elect.
12.3 Notices. Any notice or other communications under the provisions of
this Agreement shall be given in writing and delivered to the recipient in
person, by reputable overnight courier or delivery service, by facsimile machine
(receipt conformed) with a copy sent by first class mail on the date of
transmission, or by registered or certified mail, return receipt requested,
directed to its address set forth below (or to any new address of which a party
hereto shall have informed the others by the giving of notice in the manner
provided herein):
To Debtor: Advanced Aerodynamics & Structures, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to: Xxxx, Forward, Xxxxxxxx & Scripps, LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
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To Lenders: To the addresses and telecopier numbers
Set forth on Schedule A hereto
To the Collateral Agent: Xxxxxxx X. Xxxxxxx
Grushko & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Any party may change its address by written notice in accordance with this
paragraph.
12.4 Term; Binding Effect. This Agreement shall (a) remain in full force
and effect until payment and satisfaction in full of all of the Obligations; (b)
be binding upon Debtor, and its successors and permitted assigns; and (c) inure
to the benefit of the Collateral Agent, for the benefit of the Lenders and their
respective successors and assigns.
12.5 Captions. The captions of Paragraphs, Articles and Sections in this
Agreement have been included for convenience of reference only, and shall not
define or limit the provisions hereof and have no legal or other significance
whatsoever.
12.6 Governing Law; Venue; Severability. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to principles of conflicts or choice of law, except to the extent that
the perfection of the security interest granted hereby in respect of any item of
Collateral may be governed by the law of another jurisdiction. Any legal action
or proceeding against the Debtor with respect to this Agreement may be brought
in the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Debtor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Debtor hereby irrevocably waives any objection which they may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement brought in the aforesaid
courts and hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. If any provision of this Agreement, or
the application thereof to any person or circumstance, is held invalid, such
invalidity shall not affect any other provisions which can be given effect
without the invalid provision or application, and to this end the provisions
hereof shall be severable and the remaining, valid provisions shall remain of
full force and effect.
12.7 Counterparts/Execution. This Agreement may be executed in any number
of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
XXXXXX XXXXXX - "Lender" ZOCHRON XXXXXX XXXXXX - "Lender"
______________________________________ ________________________________________
XXXXXX XXXXX - "Lender" XXXXX XXXX - "Lender"
______________________________________ ________________________________________
XXXXXX XXXXXX - "Lender" XXXXXX XXXXXXXXXXX - "Lender"
______________________________________ ________________________________________
LUCRATIVE INVESTMENTS - "Lender" - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
XXXX XXXXXXXXXX - "Lender" BRIARBROOK TRUST NO: F17189 - "Lender"
______________________________________ ________________________________________
PAYSIDE TRADING LTD. - "Lender" XXXXXX X. XXXXXXX - "Lender"
______________________________________ ________________________________________
XXXXX XXXXXXXX - "Lender" KELP INVESTORS LTD. - "Lender"
______________________________________ ________________________________________
XXXXXX XXXXX - "Lender" RUTGERS CASUALTY INSURANCE
COMPANY - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
ALPHA CAPITAL AKTIENGESELLSCHAFT XXXXXXXXXXX LIMITED PARTNERSHIP
- "Lender" - "Lender"
______________________________________ ________________________________________
STATELAND LTD. - "Lender" BEAR XXXXXXX SECURITIES CORP., INC.
C/F XXXXXXX XXXXXXX - "Lender"
______________________________________ ________________________________________
XXXXXX XXXXXXX - "Lender" THE ENDEAVOUR CAPITAL
INVESTMENT FUND, S.A. - "Lender"
______________________________________ ________________________________________
AMRO INTERNATIONAL, S.A. - "Lender" THE SHAAR FUND LTD. - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
MM&CTW FOUNDATION INC. - "Lender" PERKMAN INVESTMENTS - "Lender"
______________________________________ ________________________________________
XXXXXXX X. XXXXXXX - "Lender" RNJA, COMPANY, LLC - "Lender"
______________________________________ ________________________________________
XXXXX HOLDINGS - "Lender" XXXXX XXXXXXXXX - "Lender"
______________________________________ ________________________________________
XXXX XXXXXXXXX - "Lender" - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
CONG. XXXX XXXXXXXX - "Lender" XXXXXXX XXXXXX - "Lender"
______________________________________ ________________________________________
XXXXXXXXX XXXXXXXXXX - "Lender" - "Lender"
______________________________________ ________________________________________
- "Lender" - "Lender"
______________________________________ ________________________________________
- "Lender" - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Security Agreement, as of the date first written above.
"DEBTOR" "THE COLLATERAL AGENT"
ADVANCED AERODYNAMICS & XXXXXXX X. XXXXXXX
STRUCTURES, INC.
a Delaware corporation
By: __________________________________ ________________________________________
Its: _________________________________
APPROVED BY "LENDERS":
______________________________________ ________________________________________
TCF INC. - "Lender" XXXXX INC. - "Lender"
______________________________________ ________________________________________
- "Lender" - "Lender"
______________________________________ ________________________________________
- "Lender" - "Lender"
______________________________________ ________________________________________
- "Lender" - "Lender"
This Security Agreement may be executed by facsimile signature and delivered by
confirmed facsimile transmission.
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SCHEDULE A TO SECURITY AGREEMENT
--------------------------------------------------------------------------------------------------------------
SUBSCRIBERS PRINCIPAL WARRANTS WARRANTS
AMOUNT OF PURCHASE PURCHASE
SECURED PRICE $.30 PRICE $.25
CONVERTIBLE
NOTES
--------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX $100,000.00 100,000 100,000
00 Xxxxxxxx Xxxx,
Xxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
ZOCHRON XXXXXX XXXXXX $100,000.00 100,000 100,000
C/o Xxx Xxxx
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
XXXXXX XXXXX $100,000.00 100,000 100,000
0 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
XXXXX XXXX $50,000.00 50,000 50,000
00 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXX $100,000.00 100,000 100,000
00X Xxxxxx Xxxx, Xxx. 000
Xxxxxxx, Xxxxxx X0X 0X0
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXXXXXX $75,000.00 75,000 75,000
0 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
LUCRATIVE INVESTMENTS $195,000.00 195,000 195,000
Ajeltake Island
X.X. Xxx 0000
Xxxxxx Xxxxxxxx Xxxxxx X.X 00000
Fax: 000-00000000
--------------------------------------------------------------------------------------------------------------
XXXX XXXXXXXXXX $250,000.00 250,000 250,000
0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------
BRIARBROOK TRUST NO: F17189 $75,000.00 75,000 75,000
--------------------------------------------------------------------------------------------------------------
-15-
-------------------------------------------------------------------------------------------------------------
C/x Xxxxxxxxx Trust Company Limited
Attn: Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx Xxxxx Xxxx
Xxxxxxxx XX0 0X0, Channel Islands
Fax: 00-0000-000-000
-------------------------------------------------------------------------------------------------------------
TAYSIDE TRADING LTD $250,000.00 250,000 250,000
50 Town Range
Gilbralta
Fax: 000-000-0-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXXX $100,000.00 100,000 100,000
00 Xxxx Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Phone: 000-000-0000
-------------------------------------------------------------------------------------------------------------
KELP INVESTORS LTD. $100,000.00 100,000 100,000
00-00 Xxx xx Xxxxx
XX-0000, Xxxxxx, Xxxxxxxxxxx
Fax: 0000-000-0000
-------------------------------------------------------------------------------------------------------------
RUTGERS CASUALTY INSURANCE COMPANY $50,000.00 50,000 50,000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXXX XXXXX $50,000.00 50,000 50,000
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
RNJA COMPANY, LLC $300,000.00 300,000 300,000
000 Xxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
ALPHA CAPITAL AKTIENGESELLSCHAFT $1,000,000.00 1,000,000 1,000,000
Xxxxxxxxx 0
0000 Xxxxxxxxxxx
Xxxxx, Lichtenstein
Fax: 000-00-00000000
-------------------------------------------------------------------------------------------------------------
ALPHA CAPITAL AKTIENGESELLSCHAFT $1,375,000.00 1,375,000 1,375,000
Xxxxxxxxx 0
0000 Xxxxxxxxxxx
Xxxxx, Lichtenstein
Fax: 000-00-00000000
-------------------------------------------------------------------------------------------------------------
XXXXXXXXXXX LIMITED PARTNERSHIP $550,000.00 550,000 550,000
C/o Canaccord Capital Corporation
-------------------------------------------------------------------------------------------------------------
-16-
-------------------------------------------------------------------------------------------------------------
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0, Xxxxxx
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
STATELAND LTD. $1,000,000.00 1,000,000 1,000,000
000 Xxxxxxx Xxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Tabbachi
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
BEAR XXXXXXX SECURITIES CORP., INC. $25,000.00 25,000 25,000
C/F XXXXXXX XXXXXXX
000 Xxxx 00xx Xxxxxx, Xxx. 00X
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXX $100,000.00 100,000 100,000
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
THE ENDEAVOUR CAPITAL INVESTMENT FUND, S.A. $370,000.00 370,000 370,000
Cumberland House
00 Xxxxxxxxxx Xxxxxx, Xxxxxx
Xxx Xxxxxxxxxx, The Bahamas
Fax: 0-000-000-0000
-------------------------------------------------------------------------------------------------------------
AMRO INTERNATIONAL, S.A. $700,000.00 700,000 700,000
C/o Ultra Finanz Ltd.
Xxxxxxxxxxxxxxxxxx 0, X.X. Xxx 0000
Xxxxxx, XX-0000, Xxxxxxxxxxx
Fax: 000-000-000-0000
-------------------------------------------------------------------------------------------------------------
THE SHAAR FUND LTD. $300,000.00 300,000 300,000
X/x Xxxxxxx Xxxxxxxxx, XXX
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Daniel Etna, Esq.
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
MM&CTW FOUNDATION INC. $100,000.00 100,000 100,000
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax:
-------------------------------------------------------------------------------------------------------------
PERKMAN INVESTMENTS $100,000.00 100,000 000,000
Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxx, B.V.I.
Fax: 000-00-00-0000000
-------------------------------------------------------------------------------------------------------------
XXXXXXX X. XXXXXXX $35,000.00 35,000 35,000
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
-------------------------------------------------------------------------------------------------------------
-17-
-------------------------------------------------------------------------------------------------------------
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXX XXXXXXXXX $50,000.00 50,000 50,000
0000 Xxxxx Xxxxxx, Xxxxx #0
Xxxxxxxx Xxxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXX XXXXXXXXX $50,000.00 50,000 50,000
00 Xxxxx Xxxxx
Xxxxx Xx., Xxx Xxxx 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
CONG. XXXX XXXXXXXX INC. $200,000.00 200,000 200,000
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXXXX XXXXXX $50,000.00 50,000 50,000
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXXXXXX $100,000.00 100,000 100,000
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
-------------------------------------------------------------------------------------------------------------
-18-
