Exhibit 10.4
SECURITY AGREEMENT
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This is a Security Agreement between Debtor and Secured Party identified
below dated the 13 day of January, 2006.
Debtor: GLOBAL TECHNOLOGY COMPONENTS, LLC
------ 0000 00xx Xxx., X., Xxxxxxxxx, XX 00000
Secured Party: TELESIS TECHNOLOGY CORPORATION
-------------- 0000 00xx Xx. X., Xxxxxxxx, XX 00000
1. Obligations:
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a. The payment and performance of those certain Promissory Note
dated January 13, 2006 in the original principal amount of
$165,000.00, executed by GLOBAL TECHNOLOGY COMPONENTS, LLC, a Florida
limited liability company, and personally guaranteed by XXXXX X. XXXXX
AND XXXXXXXX X. XXXXX, and delivered to Secured Party (hereinafter the
Promissory Note referred to herein will be referred to as "Note")
together with any and all future advances made in accordance with the
provisions of the Note.
b. All other liabilities or obligations of Debtor to Secured Party
due or to become due or arising hereafter whether direct, indirect,
primary, secondary, absolute or contingent and relating to the
indebtedness secured hereby.
c. Performance of all agreements contained in this Security Agreement.
2. Collateral. See Exhibit "A" attached hereto.
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3. Debtor's Place of Business: Debtor warrants that its principal place
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of business in this state is located in Manatee County, Florida and that
the records concerning Debtor's accounts and contract rights are located at
such place of business.
4. Location of Collateral: Debtor warrants and covenants that all the
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Collateral shall at all times be located at the address shown above, except
as the same may be otherwise located temporarily during the ordinary course
of business.
5. Grant of Security Interest. Debtor grants to Secured Party a security
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interest, "Security Interest", in the Collateral, products of the
Collateral, proceeds of the Collateral and replacements of the Collateral,
where applicable. The Security Interest shall secure the payment and
performance of all Obligations.
6. Debtor's Warranties. Debtor warrants:
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a. Debtor is the owner of the Collateral free of all claims,
encumbrances, liens and security interests, except for the Security
Interest granted hereby.
b. Debtor has the right to make this agreement.
c. Debtor will not sell, lease or otherwise dispose of any of the
Collateral, (except that as to inventory, Debtor may dispose of the
Collateral in the ordinary course of business, provided Debtor shall
replace the Collateral by like goods of equal or greater value.)
7. Debtor's Agreements. Debtor agrees:
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a. It will pay the Secured Party all the amounts payable on the Note
and all other amounts due Secured Party whether evidenced by the Note
or not, as and when the same shall be due and payable, whether at
maturity, by acceleration or otherwise, and will perform all terms of
the Note.
b. It will defend the Collateral against the claims and demands
of all persons.
c. In the event the Collateral is insurable, it will insure the
Collateral against all hazards requested by Secured Party in form and
amount satisfactory to Secured Party. If Debtor fails to obtain
insurance, Secured Party shall have the right to obtain it at Debtor's
expense. Debtor assigns to Secured Party all rights to receive
proceeds of insurance not exceeding the unpaid balance under the Note,
directs any insurer to pay all sums directly to Secured Party,
authorizes the Secured Party to endorse any draft for the proceeds and
settle any claim with the insurer. If, while any of the Obligations
are outstanding, any return premiums, dividends, other amounts or
proceeds are paid to Secured Party under any insurance policy required
hereby, Secured Party may at its election apply such amounts to
payment of the Note or pay such proceeds to the Debtor for the repair
or replacement of the Collateral. All insurance policies shall provide
for ten (10) days' notice of cancellation to Secured Party, shall be
payable to the Secured Party in the event of loss, and shall be
deposited with Secured Party upon request.
d. Debtor shall preserve the Collateral for the benefit of Secured
Party. Without limiting the generality of the foregoing, the Debtor
shall, where appropriate:
(i) make all repairs, replacements, additions and improvements
necessary to maintain any equipment in good working order and
condition;
(ii) maintain an inventory sufficient to meet the needs of its
business;
(iii) take commercially reasonable steps to collect all accounts;
and
(iv) pay or cause to be paid all taxes, assessments, or other
charges on the Collateral when due.
e. It will pay as part of the debt hereby secured all amounts,
including reasonable attorneys' fees, paralegal, legal assistant and
similar fees and costs, with interest thereon, paid by Secured Party
(1) for taxes, levies, insurance, repairs to, or maintenance of the
Collateral, and (2) in taking possession of, disposing of or
preserving the Collateral after any default hereinafter described.
f. In the event the Collateral consists of tangible personal
property, it will not permit any of the Collateral to be removed from
the above-mentioned location without the prior written consent of
Secured Party, except as to inventory and equipment, when replaced by
like goods of equal or greater value.
g. It will immediately advise Secured Party in writing of any change
in Debtor's place of business.
h. It will not:
(i) permit any liens or security interests to attach to any
Collateral,
except as created hereby;
(ii) permit any of the Collateral to be levied upon under any
legal process; permit anything to be done that may impair the
value of any of the Collateral or the Security intended to be
afforded by this Agreement;
i. It will do all acts and things which Secured Party may deem
necessary to perfect and continue perfected the security interest
granted by this Agreement and to protect the Collateral, including the
execution of financing statements, continuation, amendment and
termination statements, and the procurement of waivers or disclaimers
of interest in the Collateral by the owners of real estate upon which
any Collateral is located, and Debtor appoints Secured Party it
attorney in fact, with full power of substitution, to do all such acts
and all other acts Debtor may be required to do under this Agreement.
8. Possession of Collateral. If at any time the Collateral shall decrease
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in either market or intrinsic value or Secured Party shall reasonably and
in good faith, deem itself insecure, Debtor will immediately upon demand
deposit additional Collateral to meet the same value as the original
equipment list attached hereto. Until default Debtor may retain possession
of the Collateral and use it in any lawful manner not inconsistent with the
agreements herein, or with the terms and conditions of any policy of
insurance thereon.
9. Default. It shall be a default hereunder if any of the following
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events occur:
a. Any representation or warranty made by Debtor in this Agreement
is untrue or is not fulfilled.
b. Debtor fails to pay any Obligation when due.
c. Debtor fails to observe or perform any material covenant,
warranty or agreement to be performed by Debtor under this Agreement
or any of the Obligations or other agreements with Secured Party.
d. Debtor or any guarantor of any Obligation is involved in any
financial difficulty as evidenced by:
(i) an assignment, composition or similar device for the benefit
of creditors'
(ii) inability to pay debts when due;
(iii) an attachment or receivership of assets, not dissolved
within forty-five (45) days;
(iv) the voluntary filing of a petition in bankruptcy or the
institution of any other proceeding under the law relating to
bankruptcy, bankruptcy reorganization, insolvency or relief of
Debtor; or
(v) the involuntary filing of a petition in bankruptcy or the
institution of any other proceeding under any law relating to
bankruptcy, bankruptcy reorganization, insolvency or relief of
Debtor.
e. Death, dissolution, or other termination of Debtor's existence or
merger or consolidation of Debtor with another entity.
10. Secured Party's Remedies on Default:
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a. Upon default by Debtor, Secured Party shall have all of the
rights and remedies of a lender under the Uniform Commercial Code or
other applicable law and all rights provided herein, in the Note, or
in any other applicable security or loan agreement, including, without
limitation, the right to retain, sell, lease or otherwise dispose of
any or all of the Collateral, all of which rights and remedies shall,
to the full extent permitted by law, be cumulative. Secured Party may
require Debtor to assemble the Collateral and make it available at a
place to be designated by Secured Party which is reasonably convenient
to Secured Party and Debtor. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, five (5) days' notice of sale,
disposition or other intended action by Secured Party sent to Debtor
shall constitute reasonable notice to Debtor. The waiver of any
default hereunder shall not be a waiver of any subsequent default.
b. After deducting all costs and expenses of every kind incurred in,
or incidental to, the retaking, holding, advertising, preparing for
sale, or the selling, leasing or otherwise disposing of the
Collateral, including, without limitation, attorneys' fees, paralegal,
legal assistant and similar fees and costs and costs of any repairs
considered necessary by Secured Party, all of which costs and expenses
Debtor agrees to pay, Secured Party may apply the net proceeds of any
sale, lease or other disposition of the Collateral to payment of the
Obligations hereby secured, whether due or not, in such order as
Secured Party may elect. At any such sale, Secured Party may, if
Secured Party is the highest bidder, purchase any or all of the
Collateral so sold, free from any right of redemption in Debtor, which
right of redemption is hereby expressly waived. Only after full
payment of all Obligations, and any other payments Secured Party may
be required by law to make, need Secured Party account to Debtor for
any surplus. Debtor shall remain liable to Secured Party for the
payment of any deficiency with interest at the highest rate allowable
by law.
11. Notices. All notices under this Security Agreement shall be in writing
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and shall be deemed delivered twenty-four (24) hours after being deposited
in the U.S. mails, postage prepaid, addressed to Debtor at the address
specified above or, at such other address as may be designated by Debtor,
provided Secured Party is in receipt of such change of address.
12. Binding Effect. All rights of the Secured Party hereunder shall inure
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to the benefit of its successors and assigns; and all obligations of Debtor
shall bind its heirs, executors, administrators, successors and assigns.
13. Waiver by Debtor. Debtor hereby waives presentment, notice of dishonor
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and protest of all instruments included in or evidencing any of the
Obligation or the Collateral and any and all other notices and demands
whatsoever (except as expressly provided herein) whether or not relating to
such instruments. In the event of any litigation at any time arising with
respect to any matter connected with this Agreement or the Obligations,
Debtor hereby waives the right to a trial by jury and waives any and all
defenses, rights of set off and rights to interpose counterclaims of any
nature.
14. Release of Collateral. Provided that Debtor is not in default of its
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obligations hereunder or under any other documents executed in connection
herewith, Secured Party will, upon request of Debtor, release any
collateral for the Note as described on Exhibit "A" attached to this
Security Agreement, upon payment to Secured Party the lesser of the amount
realized on a sale of said collateral those amounts allocated to said
collateral by Debtor or Secured Party at the closing of Debtor's purchase
of same.
15. Miscellaneous.
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a. If more than one (1) Debtor signs this Agreement, the liability
of each Debtor shall be joint and several.
b. The laws of the State of Florida shall govern the construction of
the interest, rights and duties of the parties under this Agreement.
c. A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement.
d. If any term of this Agreement shall be held to be invalid,
illegal or unenforceable the validity of all other terms hereof shall
in no way be affected thereby.
e. In the event of any inconsistency between the terms of this
Security Agreement and the terms of the Promissory Note secured
hereby, the terms of the Promissory Note will prevail.
In witness whereof, the undersigned has executed this Security Agreement
the day and year first above written.
WITNESSES: GLOBAL TECHNOLOGY
COMPONENTS, LLC
/s/ Xxxxxxx Xxxxx /s/ Xxxxx X. Xxxxx
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Print Name: Xxxxxxx Xxxxx BY: XXXXX X. XXXXX
------------------ ITS MANAGING MEMBER
/s/ Xxxxxxx X. Xxxxxx
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Print Name: Xxxxxxx X. Xxxxxx
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