EXHIBIT 10.4.6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made as of the 1st day of
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February, 2001, by E-COMMERCE SUPPORT CENTERS, INC., a North Carolina
corporation (the "Company" or the "Debtor"), and GIBRALTER PUBLISHING, INC., a
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North Carolina corporation ("Gibralter" or the "Creditor").
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WHEREAS, to secure the Secured Obligations (as defined below), Debtor has
agreed to grant to Creditor a security interest in and a lien upon the
Collateral (as defined below).
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
promises and covenants contained herein and other good and valuable
consideration, receipt of which are hereby acknowledged, the parties hereby
agree as follows (all capitalized terms used herein and not otherwise defined
shall have their respective meanings as set forth in that certain Option
Agreement dated as of April 13, 2000, as amended by that certain First Amendment
to Option Agreement dated as of the 1st day of February, 2001 (the "First
Amendment to Option Agreement") (the "Option Agreement")):
1. GRANT OF SECURITY. Debtor hereby grants to Creditor a security
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interest in the Collateral described in Section 2 of this Agreement to secure
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the prompt payment or performance of the Secured Obligations (as defined below).
2. DESCRIPTION OF COLLATERAL. Debtor hereby agrees that a security
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interest is granted in the following collateral: all those certain tangible and
intangible assets described on EXHIBIT A attached hereto and incorporated herein
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by reference (the "Collateral").
3. CONTINUING SECURITY INTEREST. This Agreement will create a
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continuing security interest in the Collateral and will (i) remain in full force
and effect until payment or performance in full of the Secured Obligations, (ii)
be binding upon Debtor, its successors and assigns, and (iii) inure to the
benefit of Creditor and its respective successors, transferees and assigns.
4. SECURED OBLIGATIONS. This Agreement is made and the security
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interests created hereby are granted to Creditor to secure the full and prompt
payment or performance of the following (collectively, the "Secured
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Obligations"): (a) the obligations of Debtor under that certain promissory note
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dated as of the 1st day of February, 2001 in the face amount of Three Million
Five Hundred Thousand and No/100 Dollars ($3,500,000) and executed by Debtor to
Creditor ("Promissory Note B") are satisfied in full and paid to Creditor; (b)
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the obligations of Debtor under that certain Promissory Note dated as of the 1st
day of February, 2001, in the face amount of One Million Five Hundred Thousand
and No/100 Dollars ($1,500,000) ("Promissory Note A"); (c) all reasonable costs
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incurred by Creditor to obtain, preserve, perfect and enforce the liens and
security interests created hereby; (d) any renewals, continuations,
modifications or extensions of any of the foregoing; and (e) all related
interest, fees, charges and expenses.
5. DEFAULT. Debtor will be in default hereunder upon the occurrence of
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any of the following (each an "Event of Default"): (a) the failure of Debtor to
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punctually perform and observe any of the terms and conditions contained or
referred to in this Agreement, in Promissory Note A or Promissory Note B
described or referred to in Section 4 of this Agreement (after expiration of the
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cure period, if any, stated therein) or pursuant to any of the Secured
Obligations; (b) loss, theft, damage or destruction of any material portion of
the Collateral for which there is no insurance coverage (for which there will be
no cure period); or (c) the making of any levy, seizure or attachment upon any
material part of the Collateral (for which there will be no cure period).
6. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default
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and at any time thereafter, Creditor may, with at least five (5) days notice to
and demand upon Debtor, declare any or all Secured Obligations of Debtor
immediately due and payable and Creditor will have the rights and remedies of a
Creditor under the Uniform Commercial Code ("UCC"), as amended and in force and
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effect in the State of North Carolina on the date of this Agreement.
7. NOTICES. All notices and other communications hereunder will be in
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writing and will be deemed to have been validly delivered (i) three (3) days
after deposit of same in the United States mails, designated as registered or
certified mail, return receipt requested, bearing adequate prepaid postage, or
(ii) on the date of delivery to such party if delivered by hand or by overnight
or other similar carrier, and addressed to the party to be notified at the
address set forth below or to such other address as each party may designate for
itself by like notice.
(a) If to Gibralter: Gibralter Publishing, Inc.
1650A Gum Branch Road
Jacksonville, North Carolina 28540
(b) If to the Company: e-commerce support centers, inc.
1650A Gum Branch Road
Jacksonville, North Carolina 28540
With a copy to: Kilpatrick Stockton LLP
3737 Glenwood Avenue, Suite 400
Raleigh, North Carolina 27612
8. FURTHER ASSURANCES. Debtor agrees that at any time and from time to
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time, at its sole expense, it will promptly take such action and execute and
deliver such additional conveyances, assignments, agreements and instruments,
including, without limitation, UCC-1 financing statements as Creditor may at any
time reasonably request in connection with the administration and enforcement of
this Agreement or relative to the Collateral.
9. MISCELLANEOUS. This Agreement will in all respects be construed in
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accordance with and governed by the laws of the State of North Carolina, without
regard to the principles of the conflict of laws or the choice of laws. This
Agreement may not be amended or modified, nor may Creditor's security interest
in the Collateral be released, except in a writing signed by all of the parties
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hereto. All terms used herein will have the meanings as defined in the UCC in
force and effect in the State of North Carolina on the date of this Agreement,
unless the context otherwise requires. This Agreement and the terms, covenants
and conditions hereof will be binding upon and inure to the benefit of the
parties hereto and to all holders of indebtedness secured hereby and their
respective successors and assigns. This Agreement is not assignable by Debtor
without the prior written consent of Creditor. No failure on the part of
Creditor to exercise, and no delay in exercising, any right, power or remedy
hereunder will operate as a waiver thereof, nor will any single or partial
exercise of any such right, power or remedy by Creditor preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies are cumulative and are not exclusive of any other remedies provided
herein or by law. If any provision(s) of this Agreement or the application
thereof to any person or circumstance will be invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision(s)
to other persons or circumstances will not be affected thereby and will be
enforced to the fullest extent permitted by law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal and delivered as of the day and year first written
above.
DEBTOR:
E-COMMERCE SUPPORT CENTERS, INC.,
a North Carolina corporation
ATTEST: By: /s/ Terrence J. Leifheit
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Terrence J. Leifheit, President
/s/ Clifford A. Clark
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Clifford A. Clark, Secretary
[CORPORATE SEAL]
GIBRALTER:
GIBRALTER PUBLISHING, INc.,
a North Carolina corporation
ATTEST By: /s/ Terrence J. Leifheit
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Terrence J. Leifheit, President
/s/ Edward A. Bohn
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Edward A. Bohn, Secretary
[CORPORATE SEAL]
PALADYNE:
PALADYNE CORP., a Delaware corporation
ATTEST By: /s/ John D. Foster
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John D. Foster, Chairman
/s/ Joseph, Landis
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Joseph, Landis, Secretary
[CORPORATE SEAL]
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EXHIBIT A
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COLLATERAL
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