Exhibit 10.3
SECURITY AGREEMENT
Security Agreement, dated as of April 13, 2007 between Cy E. Hammond and Irene
Lebovics ("Secured Parties"), and Pro Tech Communications, Inc., a Florida
corporation ("Debtor").
1. Security Interest. Debtor hereby grants to Secured Parties a continuing,
first priority security interest (the "Security Interest") in all of the
collateral described in Exhibit A hereto (collectively, the "Collateral").
The Security Interest in the Collateral shall secure the payment and
performance of the Secured Promissory Notes, dated as the date hereof, from
Debtor to each of the Secured Parties, each in the principal amount of Two
Thousand Eight Hundred Seventy-Two Dollars and Fifty Cents ($2,872.50)
along with the payment and performance of all other liabilities and
obligations of Debtor to Secured Parties of every kind and description,
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising; provided, however, that such liabilities and
obligations shall not include any liabilities or obligations arising out
of, or in connection with, either of the Secured Parties employment by, or
service as an officer or a member of the Board of Directors of, Debtor
(collectively, the "Obligations"). The parties intend that the Collateral
is and will at all times remain personal property despite the fact that,
and irrespective of the manner in which, it may be attached to realty.
2. Debtor Covenants. Debtor hereby warrants and covenants that (a) Debtor's
chief place of business is at 375 Bridgeport Avenue, 2nd Floor, Shelton,
Connecticut 06484 (the "Premises") and Debtor will give each of the Secured
Parties prior written notice of any change in Debtor's chief place of
business; (b) the Collateral will be kept at the Premises and will not be
removed therefrom other than in the ordinary course of business to another
location within the State of Connecticut, or with each of the Secured
Parties' prior written consent; (c) Debtor will not sell, dispose, or
otherwise transfer the Collateral or any interest therein, other than in
the ordinary course of business for fair consideration, or with each of the
Secured Parties' prior written consent; (d) Debtor shall keep the
Collateral free and clear from all other liens or encumbrances, including
but not limited to those relating to unpaid charges (including rent) or
taxes; (e) Debtor shall upon request of either of the Secured Parties
execute, alone or with Secured Parties, any Financing Statement or other
documents to record or evidence the Security Interest, and shall cooperate
with Secured Parties in the filing of same in all public offices in which
filing is deemed by Secured Parties to be necessary or appropriate; (f)
Debtor shall maintain insurance with respect to all physical Collateral at
all times against risks of fire, theft and other similar risks, in such
amounts as Secured Parties may reasonably require; and (g) Debtor shall
make all repairs, replacements, additions and improvements necessary to
maintain any equipment Collateral in good working order and condition.
3. Secured Parties Payments. At their option, Secured Parties may discharge
any taxes, charges, liens or other encumbrances that may at any time be
levied or placed on the Collateral, may pay rent or insurance premiums due
on the Collateral and may pay for the maintenance and preservation of the
Collateral. Debtor shall promptly reimburse Secured Parties, upon demand,
for any such payment made or expense incurred.
4. Default and Remedies. Debtor shall be in default under this Agreement (a
"Default") upon the happening of any of the following events: (a) any
misrepresentation by Debtor in connection with this Agreement; (b) any
noncompliance with or nonperformance of any of the Obligations; (c) the
institution of bankruptcy proceedings against Debtor (but in the case of
involuntary proceedings, only if such proceedings are not dismissed within
30 days); (d) an assignment for the benefit of creditors of Debtor; or (d)
a receivership of assets of Debtor not dissolved within 30 days. Upon a
Default and at any time thereafter, Secured Parties may declare all
Obligations immediately due and payable and, without limitation to any
other remedies Secured Parties may have, Secured Parties shall have all the
remedies of a secured party under the Uniform Commercial Code as in effect
in the State of Connecticut (the "Code"). Upon a Default and at any time
thereafter, Secured Parties may require that Debtor make available to
Secured Parties all of the Collateral, at a place that is mutually
convenient to the parties.
5. Miscellaneous. No waiver by Secured Parties of any Default shall operate as
a waiver of any other default or of the same default on a future occasion.
This Agreement shall inure to the benefit of and be binding upon the heirs,
executors, administrators, successors and assigns of the parties. This
Agreement shall be governed by the laws of the State of Connecticut. This
Agreement may be signed in counterparts. This Agreement shall have the
effect of an instrument under seal.
IN WITNESS WHEREOF, the parties have duly executed this Security Agreement as of
the date first written above.
PRO TECH COMMUNICATIONS, INC.
By: /s/ Michael J. Parrella
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Michael J. Parrella
Director
/s/ Cy E. Hammond
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Cy E. Hammond
/s/ Irene Lebovics
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Irene Lebovics
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Exhibit A
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DESCRIPTION OF COLLATERAL
All of Debtor's current and non-current assets, including but not limited to all
of the following Property, and interests in Property, of Debtor, whether now
owned and existing or hereafter acquired or arising, and wheresoever located:
(a) all personal and fixture property of every kind and nature including but not
limited to all goods (including but not limited to inventory, equipment and
accessions thereto), instruments (including but not limited to promissory
notes), accounts (including but not limited to all receivables), deposit
accounts, documents and chattel paper (whether tangible or electronic), contract
rights (including but not limited to the payment of money, insurance claims and
proceeds), letter of credit rights (whether or not the letter of credit is
evidenced by writing), commercial tort claims, securities and other investment
property, and general intangibles (including but not limited to intellectual
property and payment intangibles), together with all accessions to,
substitutions for and replacements, products and proceeds thereof, all as those
terms are defined in the Code; (b) all right, title and interest of Debtor in
and to all files, surveys, certificates, correspondence, appraisals, computer
programs, tapes, disks, cards, accounting records and other books, records,
information and data of Debtor relating to the Collateral as well as that as may
be necessary to identify and locate the Collateral and protect or enforce
Secured Parties' rights therein; (c) the proceeds of the sale or other
disposition of any Collateral; and (d) any and all replacements or proceeds
whether now existing or hereafter arising and wherever located, now owned or
hereafter acquired by Debtor or in which Debtor has an interest or which now or
hereafter are at any time in the possession or control of Secured Parties or in
transit by mail or carrier to or in possession of any third party acting on
behalf of Secured Parties, without regard to whether Secured Parties receives
the same in pledge, for safekeeping, as agent for collection or transmission or
otherwise, whether or not Secured Parties has conditionally released the same.
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