SECURITY AGREEMENT
THIS SECURITY AGREEMENT (“Security
Agreement”) is made as of August 18, 2009 by and between
William C. Patridge (“Secured Party”), and
ecoSolutions, Intl. (“Debtor”), having its principal
place of business at 295 East Main Street, Suite 1, Ashland,
Oregon.
RECITALS
WHEREAS, Debtor is presently
indebted to Secured Party under the terms and conditions of the
Prior Debt Documents (as defined below);
WHEREAS, the Note (as defined
below) represents Debtor’s aggregate indebtedness to Secured
Party as of the date hereof, and replaces and is in lieu of any and all prior
instruments, promissory notes and agreements, written or otherwise,
evidencing Debtor’s indebtedness to Secured Party, including,
without limitation, that certain Convertible Promissory Note, dated
as of December 31, 2008 (all such prior instruments, promissory
notes and agreements, if any, the “Prior Debt
Documents”); and
WHEREAS, in consideration of
Secured Party’s extension of the maturity date of
Debtor’s obligations under the Prior Debt Documents and
Secured Party’s waiver of Debtor’s prior defaults
thereunder, Debtor has agreed to execute the Note and grant to
Secured Party the security interest contemplated by this Security
Agreement.
NOW, THEREFORE, in consideration of the mutual
terms, covenants and conditions herein, set forth, the parties
agree as follows:
1.
OBLIGATIONS SECURED . The security interest
granted by this Security Agreement shall secure payment and
performance of all indebtedness, obligations and liabilities of
Debtor to Secured Party (collectively the “Secured
Debt”) arising out of, connected with or related to each and
all of the following:
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the Secured
Promissory Note for $3,608,457.38 of even date herewith (the
“Note”);
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any additional
advances from Secured Party to Debtor;
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this Security
Agreement; and
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any instrument
now or hereafter evidencing or securing the foregoing;
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whether now
existing or hereinafter arising, direct or indirect, joint or
several, absolute or contingent, liquidated or unliquidated,
whether or not from time to time decreased or extinguished and
later increased, created or incurred (the Note, this Security
Agreement and any instrument, now or hereafter evidencing or
securing the foregoing are referred to collectively as the
“Loan Documents”).
2.
GRANT OF SECURITY INTEREST . Debtor does hereby
grant to Secured Party a security interest in the collateral
described or referred to in Section 3 to secure the Secured
Debt.
3.
COLLATERAL . Debtor’s collateral (the
“Collateral”) subject to the security interest shall
consist of: all right, title and interest of Debtor in
and to all of Debtor’s property, both real and personal, both
tangible and intangible, whether now owned or hereafter acquired,
including, but not limited to, all: (1) accounts;
(2) general intangibles; (3) goods; (4) documents;
(5) instruments; (6) vehicles; (7) chattel paper;
(8) deposit accounts; (9) fixtures; (10) licenses;
(11) patents; (12) trademarks (including associated
goodwill); (13) tradenames;
(14) franchises; (15) contract rights; and
(16) all rights under all insurance policies, together with all
products, proceeds, additions and accessions to the
foregoing.
4.
REPRESENTATIONS, WARRANTIES OF THE DEBTOR .
(a) Debtor
has good title to the Collateral and has full power and authority
to grant security interests in the Collateral, and to execute,
deliver, and perform in accordance with the terms of this Security
Agreement, without the consent or approval of any other person or
entity;
(b) The
Collateral is free and clear of all liens and adverse claims other
than those created hereunder, and the security interest created
hereby shall be a first lien on the Collateral; and
(c) This
Security Agreement constitutes the legal, valid and binding
obligation of Debtor enforceable against Debtor in accordance with
its terms and constitutes a good, valid and subsisting security
interest in all of the Collateral for the full amount of the
Secured Debt.
5.
COVENANTS OF THE DEBTOR .
Debtor hereby covenants that:
(a) Debtor
shall, at its own cost and expense, (i) take any and all
actions necessary to preserve, protect and defend the security
interest of the Secured Party in the Collateral created hereunder
and the priority thereof against any and all adverse claims, and
(ii) keep the Collateral free and clear of any and all liens,
security interests (except for any security created as part of this
Security Agreement) and/or adverse claims (including, without
limitation all taxes, assessments and other levies);
(b) Debtor
shall promptly reimburse the Secured Party for any and all sums,
including costs, expenses and attorneys’ fees, which the
Secured Party may pay or incur in defending, protecting or
enforcing the security interest of this Security Agreement or the
priority thereof, or in enforcing or collecting the Secured Debt,
or in discharging any prior or subsequent lien or adverse claim
against the Collateral or any part thereof, or by reason of
becoming or being made a party to or intervening in any action or
proceeding affecting the Collateral or the rights of the Secured
Party therein, all of which actions the Secured Party shall have
the right to take;
(c) Debtor
shall not, without the prior written consent of the Secured Party,
sell, assign, lease, or otherwise dispose of the Collateral, or any
part thereof or any interest therein;
(d) Debtor
shall not do, or permit or suffer to be done, anything that may
impair the value of the Collateral or the security intended to be
effected hereby and shall use its best efforts to preserve, protect
and enhance the value of the Collateral;
(e) Debtor
shall from time to time make, execute, acknowledge and deliver all
such further documents, instruments and assurances as may be
requested by the Secured Party to perfect or preserve the security
interest cre
