This Security Agreement involves
Title: SECURITY AGREEMENT ACCOUNTS, GENERAL INTANGIBLES, CONTRACT RIGHTS
ACCOUNTS, GENERAL INTANGIBLES, CONTRACT RIGHTS
This Agreement is made and entered into this 30th day of September, 2009, between GEOFFREY C. WEBER, as Trustee of the Pak-It Members’ Trust, 221 Turner Street, Clearwater, Florida 33756 hereinafter referred to as "Secured Party" and PAK-IT, LLC of 221 Turner Street, Clearwater, Florida 33756 , hereinafter referred to as "Debtor."
1. To secure the payment of indebtedness evidenced by a promissory note or notes executed by 310 HOLDINGS, INC. to Secured Party and any and all extensions or renewals thereof and any and all liabilities or obligations of the 310 HOLDINGS, INC. or Debtor to the Secured Party, direct or indirect, absolute or contingent now existing or hereafter arising, now due or after to become due, Debtor does hereby grant a continuing security interest in all of the accounts, notes receivable, general intangibles and contract rights of the Debtor and all proceeds thereof.
2. Debtor warrants that the location of the office where it keeps all of its accounts, general intangibles and contract rights is: 221 Turner Street, Clearwater, Florida 33756.
3. Debtor warrants that it will not change the location of or the place where it keeps its records concerning its accounts, general intangibles and contract rights without first obtaining the written consent of the Secured Party.
4. The security interest granted hereby shall extend to all of the property described in paragraph 1 now owned by the Debtor or hereafter acquired by the Debtor or that come into the existence during the term of this agreement. In addition, Debtor does hereby grant to the Secured Party a continuing security interest in all proceeds of all of the foregoing collateral.
5. Debtor does hereby authorize the Secured Party to perfect the security interest granted hereby by filing financing statement(s), in form satisfactory to the Secured Party, covering all of the above described collateral which the Secured Party may file in the appropriate filing offices as reasonably determined by it. Debtor specifically agrees that unless such financing statement is the only financing statement on file which affects or may be applicable to the type of collateral described in this agreement, it will immediately secure the termination of a conflicting financing statement and will not request a loan or advance from the Secured Party under this agreement until the financing statement in favor of the Secured Party is the only financing statement on file covering collateral of the type described in this agreement. THE EXISTING FINANCING STATEMENT PREVIOUSLY GRANTED TO USAMERIBANK IS PERMITTED TO REMAIN OF RECORD AND ENTITLED TO PRIORITY TO THE FINANCING STATEMENT FILED TO PERFECT THE SECURITY INTEREST GRANTED HEREBY.
6. After default by the Debtor, Account debtors obligated on Debtor's accounts shall be directed by Debtor's invoice to make payments directly to Secured Party at such address as Secured Party shall direct. Such address is initially designated to be 221 Turner Street, Clearwater, Florida . Secured Party shall take control of all proceeds of these accounts by depositing the same in a holding account for a period of two (2) days after which such proceeds shall be first applied to reimburse the Secured Party for any outstanding costs to which it is entitled to be reimbursed and thereafter to be applied to the repayment of the obligations of the Debtor secured hereby. The costs of collection and enforcement, including attorney's fees and out-of-pocket expenses, and all other expenses and liabilities resulting from collection and enforcement shall be borne by Debtor whether incurred by Secured Party or Debtor.
7. All checks, drafts, cash and other remittances received on account of Debtor's accounts will be immediately deposited by Secured Party in a bank account of the Debtor maintained at USAmeribank over which Secured Party, or its agents, shall have power of withdrawal. The Secured Party holds these funds in the account as security for loans and indebtedness. The proceeds shall be deposited in precisely the form received except for the endorsement by Debtor where necessary to permit collection of items. Debtor agrees to make any necessary endorsements and authorizes Secured Party to make same on Debtor's behalf. Should payment be received directly by Debtor, Debtor agrees that it will not commingle the checks, drafts, cash or other remittances so received by it with any of its own funds or property but will immediately hold them separate and apart for the Secured Party for deposit into the special account. Secured Party may determine the order and method of application. Any portion of funds on deposit in the special account which Secured Party elects not to apply, may be paid over by Secured Party, to Debtor.
8. So long as the loan and indebtedness to Secured Party secured hereunder remains unpaid, debtor will not, without the consent of Secured Party, borrow from anyone except the Secured Party, or pledge or grant a security interest to anyone except the Secured Party in an account or contract right or note receivable or general intangible or permit a lien or encumbrance to attach to any of the foregoing, or a levy to be made, or a financing statement (except Secured Party's statement and that previously granted to USAmeribank, expressly acknowledged to have priority) to be on file.
9. Representations and Warranties of Debtor. The Debtor represents and warrants and so long as the Indebtedness remains unpaid shall be deemed continuously to represent and warrant that:
(a) the Debtor is the owner of the Collateral free of all security interests or other encumbrances, except the Security Interest;
(b) Each account, general intangible, and chattel paper constituting the Collateral is genuine and enforceable in accordance with its terms against the party obligated to pay the same (the “Account Debtor”);
(c) The amount represented by the Debtor to the Secured Party as owing by each Account Debtor or by all the Account Debtors is the correct amount actually and unconditionally owing by such Account Debtor or Debtors, except for normal cash discounts where applicable;
(d) No Account Debtor has any defense, set-off, claim or counterclaim against the Debtor which can be asserted against the Security Party, whether in any proceeding to enforce the Collateral or otherwise;
(e) The Debtor's records concerning that part of the Collateral constituting accounts, general intangibles or chattel paper are kept at the address specified above;
(f) The Debtor operates under no trade names except the name(s) set forth above and the following names, if any:
10. Covenants of Debtor. So long as this Agreement has not been terminated, the Debtor: (a) will defend the Collateral against the claims and demands of all other parties, including without limitation defenses, set-offs, claims and counterclaims asserted by any Account Debtor against the Debtor or the Secured Party; will keep the collateral free from all security interests or other encumbrances except the Security Interest and will not sell, transfer, assign, deliver or otherwise dispose of any of the Collateral or any interest therein without the prior written consent of the Secured Party; (b) will not without the written consent of the Secured Party create in favor of anyone other than the Secured Party a security interest in any of its accounts, general intangibles or contract rights nor will it sell or assign, with or without recourse to anyone other than the Secured Party any of its accounts, chattel paper or general intangibles; (c) will keep in accordance with generally accepted accounting principles consistently applied, accurate and complete records concerning the Collateral; upon the Secured Party's request will mark any of such records and all or any of the Collateral to give notice of the Security Interest; and will permit the Secured Party or its agents to inspect the Collateral and to audit and make abstracts of such records or any of the Debtor's book, ledgers, reports, correspondence and other records; (d) upon demand will deliver to Secured Party any documents of title and any chattel paper representing or relating to the Collateral or any part thereof, schedules, invoices, shipping or delivery receipts, purchase orders, contracts or other documents representing or relating to purchases or other acquisitions or sales, or leases or other dispositions of the Collateral and proceeds thereof and any and all other schedules, documents, statements which the Secured Party may from time to time request; (e) will notify the Secured Party promptly in writing of any change in the Debtor's address, name or identity specified above, of any change in the location or of any additional locations at which the Collateral is kept and of any change in the address at which records concerning the Collateral are kept; (f) will notify the Secured Party immediately of any default by any Account Debtor in payment or other performance of his obligations with respect to any collateral; (g) without the Secured Party's written consent will not make or agree to make any alteration, modification or cancellation of or substitution for or credits, adjustments or allowances on any Collateral; (h) in connection herewith will execute and deliver to the Secured Party such financing statements and other documents and do such other things as the Secured Party may request; (i) will pay or cause to be paid all taxes, assessments and other charges of every nature which may be levied or assessed against the Collateral; (j) will insure the Collateral against risks by obtaining policies (none of which shall be cancelable without the written consent of the Secured Party) in coverage, form and amount and with companies satisfactory to the Secured Party such policies to contain a loss payee provision exercised in favor of the Secured Party and at the Secured Party's request will deliver each policy or certificate of insurance therefor to the Secured Party; and (k) will not remove the Collateral from the state nor change the location of its chief executive office without the written consent of Secured Party.