EXHIBIT
10.1
SECURITY
AGREEMENT
1.
Identification
.
This Security Agreement (the
“Agreement”), dated as of March 4, 2009, is entered
into by and between Money4Gold Holdings, Inc., a Delaware
corporation (“Parent”), Money4Gold, Inc., a Delaware
corporation, Money4Gold W.Y., Inc., a Wyoming corporation, HD
Capital Holdings, LLC, Inc., a Delaware limited liability company,
Money4Gold Precious Metals, Inc., a Canadian corporation (each a
“Guarantor” and together with Parent, each a
“Debtor” and collectively the “Debtors”),
and Whalehaven Capital Fund Limited (the
“Lender”).
2.
Recitals
.
2.1
At or about the date
hereof, the Lender is making a loan (the “Loan”) to
Parent. Each Guarantor is a direct or indirect Subsidiary (as
defined in Section 6.12) of Parent. It is beneficial to each
Debtor that the Loan is made. Guarantor has or will deliver a
“Guaranty” of Parent’s obligations to
Lender.
2.2
The Loan will be
evidenced by a promissory note (“Note”) issued by
Parent on or about the date of this Agreement pursuant to
subscription agreement (the “Subscription Agreement”)
to which Parent and Lender are parties. The Note is in the
principal amount of $250,000 and was or will be executed by Parent
as “Borrower” or “Debtor” for the benefit
of each Lender as the “Holder” or “Lender”
thereof.
2.3
In consideration of the
Loan made and to be made by Lender to Parent and for other good and
valuable consideration, and as security for the performance by
Parent of its obligations under the Note, by Guarantor of its
obligations under the Guaranty, and as security for the repayment
of the Loan and all other sums due from Debtor to Lender arising
under the Transaction Documents (as defined in the Subscription
Agreement) and any other agreement between or among them
(collectively, the “Obligations”), each Debtor, for
good and valuable consideration, receipt of which is acknowledged,
has agreed to grant to the Lender a security interest in the
Collateral (as such term is hereinafter defined), on the terms and
conditions hereinafter set forth. Obligations include all
future advances and loans by Lender to Debtor that may be made
pursuant to the Subscription Agreement or any other
agreements.
2.4
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.
Other capitalized terms employed herein shall have the
meanings attributed to them in the Subscription
Agreement.
3.
Grant of General
Security Interest in Collateral .
3.1
As security for the
Obligations of Debtors, each Debtor hereby grants the Lender, a
security interest in the Collateral.
3.2
“Collateral” shall mean
all of the following property of Debtors:
(A)
All now owned and
hereafter acquired right, title and interest of Debtors in, to and
in respect of all Accounts, Goods, real or personal property, all
present and future books and records relating to the foregoing and
all products and Proceeds of the foregoing, and as set forth
below:
(i)
All now owned and
hereafter acquired right, title and interest of Debtors 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;
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investment property;
General Intangibles (including but not limited to, tax and duty
claims and refunds, registered and unregistered patents,
trademarks, service marks, certificates, copyrights trade names,
applications for the foregoing, trade secrets, URLs and domain
names set forth on Schedule 3.2 hereto, goodwill, processes,
drawings, blueprints, customer lists, licenses, whether as licensor
or licensee, choses in action and other claims, and existing and
future leasehold interests and claims in and to 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 owned or held in any capacity by Debtors,
as well as agreements or property securing or relating to any of
the items referred to above;
(ii)
Goods:
All now owned and
hereafter acquired right, title and interest of Debtors in, to and
in respect of goods, including, but not limited to:
(a)
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 Debtors’ business; finished goods, timber cut or
to be cut, oil, gas, hydrocarbons, and minerals extracted or to be
extracted, 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 any Debtor by its customers or repossessed by any Debtor and all
of Debtors’ right, title and interest in and to the foregoing
(including all of a Debtor’s rights as a seller of
goods);
(b)
All Equipment and
fixtures, wherever located, whether now owned or hereafter
acquired, including, without limitation, all machinery, furniture
and fixtures, and any and all additions, substitutions,
replacements (including spare parts), and accessions thereof and
thereto (including, but not limited to Debtors’ rights to
acquire any of the foregoing, whether by exercise of a purchase
option or otherwise);
(iii)
Property:
All now owned and
hereafter acquired right, title and interests of Debtors in, to and
in respect of any other personal property in or upon which a Debtor
has or may hereafter have a security interest, lien or right of
setoff;
(iv)
Books and
Records: 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 Debtors, any
computer service bureau or other third party; and
(v)
Products and
Proceeds: 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.
(B)
All now owned and
hereafter acquired right, title and interest of Debtors in, to and
in respect of the following:
(i)
the shares of stock of
each Guarantor, which the Debtor represents, equal 100% of the
equity ownership and right to receive equity of each Guarantor, the
certificates representing such shares together with an executed
stock power, and other rights, contractual or otherwise, in respect
thereof and all dividends, distributions, cash, instruments,
investment property and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such shares;
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(ii)
all additional shares of
stock, partnership interests, member interests or other equity
interests from time to time acquired by Debtor, in any Subsidiary
that is not a Subsidiary of the Debtor on the date hereof
(“Future Subsidiaries”), the certificates representing
such additional shares, and other rights, contractual or otherwise,
in respect thereof and all dividends, distributions, cash,
instruments, investment property and other property from time to
time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such additional shares, interests or
equity; and
(iii)
all security
entitlements of Debtor in, and all Proceeds of any and all of the
foregoing in each case, whether now owned or hereafter acquired by
Debtor and howsoever its interest therein may arise or appear
(whether by ownership, security interest, lien, claim or
otherwise).
3.3
The Lender is hereby
specifically authorized, after the Maturity Date (defined in the
Note) accelerated or otherwise, and after the occurrence of an
Event of Default (as defined herein) and the expiration of any
applicable cure period, to transfer any Collateral into the name of
the Lender and to take any and all action deemed advisable to the
Lender to remove any transfer restrictions affecting the
Collateral.
4.
Perfection of
Security Interest .
4.1
Each Debtor shall
prepare, execute and deliver to the Lender UCC-1 Financing
Statements. The Lender is instructed to prepare and file at
each Debtor’s cost and expense, financing statements in such
jurisdictions deemed advisable to Lender, including but not limited
to the States of Delaware and Wyoming.
4.2
Upon the execution of
this Agreement, Parent shall deliver to Lender stock certificates
representing all of the shares of outstanding capital stock of each
Guarantor (the “Securities”). All such
certificates shall be held by or on behalf of Lender pursuant
hereto and shall be delivered in suitable form for transfer by
delivery, and shall be accompanied by duly executed instruments of
transfer or assignment or undated stock powers executed in blank,
all in form and substance satisfactory to Lender.
4.3
All other
certificates and instruments constituting Collateral from time to
time required to be pledged to Lender pursuant to the terms hereof
(the “Additional Collateral”) shall be delivered to
Lender promptly upon receipt thereof by or on behalf of Debtors.
All such certificates and instruments shall be held by or on
behalf of Lender pursuant hereto and shall be delivered in suitable
form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment or undated stock
powers executed in blank, all in form and substance satisfactory to
Lender. If any Collateral consists of uncertificated
securities, unless the immediately following sentence is applicable
thereto, Debtors shall cause Lender (or its custodian, nominee or
other designee) to become the registered holder thereof, or cause
each issuer of such securities to agree that it will comply with
instructions originated by Lender with respect to such securities
without further consent by Debtors. If any Collateral
consists of security entitlements, Debtors shall transfer such
security entitlements to Lender (or its custodian, nominee or other
designee) or cause the applicable securities intermediary to agree
that it will comply with entitlement orders by Lender without
further consent by Debtors.
4.4
Within five (5) business
days after the receipt by a Debtor of any Additional Collateral, a
Pledge Amendment, duly executed by such Debtor, in substantially
the form of Annex I hereto (a “Pledge Amendment”),
shall be delivered to Lender in respect of the Additional
Collateral to be pledged pursuant to this Agreement. Each Debtor
hereby authorizes Lender to attach each Pledge Amendment to this
Agreement and agrees that all certificates or instruments listed on
any Pledge Amendment delivered to Lender shall for all purposes
hereunder constitute Collateral.
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4.5
If Debtor shall receive,
by virtue of Debtor being or having been an owner of any
Collateral, any (i) stock certificate (including, without
limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of
capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off),
promissory note or other instrument, (ii) option or right,
whether as an addition to, substitution for, or in exchange for,
any Collateral, or otherwise, (iii) dividends payable in cash
(except such dividends permitted to be retained by Debtor pursuant
to Section 5.2 hereof) or in securities or other property or
(iv) dividends or other distributions in connection with a
partial or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in surplus, Debtor
shall receive such stock certificate, promissory note, instrument,
option, right, payment or distribution in trust for the benefit of
Lender, shall segregate it from Debtor’s other property and
shall deliver it forthwith to Lender, in the exact form received,
with any necessary endorsement and/or appropriate stock powers duly
executed in blank, to be held by Lender as Collateral and as
further collateral security for the Obligations.
5.
Distribution .
5.1
So long as an Event of
Default does not exist, Debtors 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 Lender and does
not impair the Collateral.
5.2.
At any time an Event of
Default exists or has occurred and is continuing, all rights of
Debtors, upon notice given by Lender, to exercise the voting power
and receive payments, which it would otherwise be entitled to
pursuant to Section 5.1, shall cease and all such rights shall
thereupon become vested in Lender, which shall thereupon have the
sole right to exercise such voting power and receive such
payments.
5.3
All dividends,
distributions, interest and other payments which are received by
Debtors contrary to the provisions of Section 5.2 shall be received
in trust for the benefit of Lender as security and Collateral for
payment of the Obligations shall be segregated from other funds of
Debtors, and shall be forthwith paid over to Lender as Collateral
in the exact form received with any necessary endorsement and/or
appropriate stock powers duly executed in blank, to be held by
Lender as Collateral and as further collateral security for the
Obligations .
6.
Further Action By
Debtors; Covenants and Warranties .
6.1
Lender at all times
shall have a perfected security interest in the Collateral.
Each Debtor represents that, other than the security
interests described on Schedule 6.1, it has and will
continue to have full title to the Collateral free from any liens,
leases, encumbrances, judgments or other claims. The
Lender’s security interest in the Collateral constitutes and
will continue to constitute a first, prior and indefeasible
security interest in favor of Lender, subject only to the security
interests described on Schedule 6.1 . Each 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
Lender to establish, maintain and continue the perfected security
interest of Lender in the perfected 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
Lender from time to time to establish and determine the validity
and the continuing priority of the security interest of Lender, and
also pay all other claims and charges that, in the opinion of
Lender are reasonably likely to materially prejudice, imperil or
otherwise affect the Collateral or Lender’s security
interests therein.
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6.2
Except in connection
with sales of Collateral, in the ordinary course of business, for
fair value and in cash, and except for Collateral which is
substituted by assets of identical or greater value (subject to the
consent of the Lender) or which is inconsequential in value, each
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 Lender
other than a transfer of the Collateral to a wholly-owned United
States formed and located subsidiary or to another Debtor on prior
notice to Lender, and provided the Collateral remains subject to
the security interest herein described. Although Proceeds of
Collateral are covered by this Agreement, this shall not be
construed to mean that Lender consents to any sale of the
Collateral, exce
